The Communications Function in a Global Market

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The globalization of business has been one of the buzz words of the past decade. Yet despite the considerable discussion, for much of the past ten years "being international" was a grand theme that in reality often meant more in theory than in practice.

International marketing was discussed with much excitement and some skepticism as marketers mulled over how the same brand could be sold with common images across the globe, much as Marlboro cigarettes universally used the western, macho Marlboro Man. Naively, many marketers simply tried to translate ad copy into Spanish, French and German with often disastrous consequences.

In truth, in the conference rooms of many U.S. companies, international strategies and tactics were frequently the last bullet on the overhead or the last set of slides in a presentation. Embracing a broadly international perspective seemed an elusive goal for many American managers.



Nevertheless, internationalization is suddenly upon us, symbolized by the 1992 harmonization of the European market. Structural changes in the world economy due to direct foreign investment, increasing alliances, and foreign acquisitions and mergers have increasingly made the internationalization of the business community a reality. In the words of Harvard's Professor Robert Reich, "We no longer know what the pronoun 'we' means or 'us' is."

For the world of public relations, growing globalization has profound implications. In this new environment, corporations must amend their corporate values and visions and expand the scope of day-to-day information distribution. In short, internationalization affects the way a corporation perceives itself, how it defines its primary audiences, and how it communicates with them. Since the communications function is an essential part of this evolutionary process, public relations takes on a new role as a key means of helping a corporation communicate, think, and act on a global basis.

At the outset of any international communications program, public relations in this new environment must address three important questions.

Who Are We?

Companies expanding rapidly in new markets need to consider how they will be viewed. In a new setting, a corporation will always be seen through a different set of lenses, creating often vastly diverse impressions than those that exist in a home market.

Within every market, it is essential to build understanding of the company's history and traditions, breadth of operations and expertise. Perhaps it is important to demonstrate commitment and involvement in local communities.

Public relations programs that convey corporate values are often complicated by the web of relationships and the structure of operations in foreign countries. In order to survive in today's competitive environment, companies are pressured to find international allies and partnerships. These alliances are valuable in establishing teams to share costs in the development of expensive new technologies and products, and to achieve the scale necessary for survival amongst increasing worldwide competition.

However, joint ventures and cooperation pose distinct communications challenges, particularly as companies strive to form a corporate profile that evolves in the face of cooperative efforts, yet retains a stamp of independence and individuality.

Furthermore, statistics now show that 40% of these joint ventures and other collaborative relationships last less than four years. The joint venture relationship, therefore, provides a springboard for establishing a strong profile in a foreign market rather than a reason not to create an independent stance.

Even in large industrial deals, concern must be given to retain the intrinsic values of each company's name and trademarks. The Volvo-Renault alliance, signed in 1990, which created the world's largest truck maker and a motor industrial concern with sales of $45 billion, is an excellent example. P.G. Gyllenhammar, chairman of AB Volvo, stressed the importance of retaining the Volvo name and the quality values associated with Volvo. The association with Renault will facilitate access to the European market, increase joint investment in research and development and advanced electronics, and provide the ability to closely monitor and develop environmental and safety issues. Gyllenhammar is making certain that Volvo continues to be associated with high quality and is well developed set of corporate values.

Communications, cultural sensitivity and flexibility are critical elements in furthering the chances of an alliance in a new market. Whether going alone or in the context of a joint venture, developing solid relationships with foreign employees, suppliers, customers, government officials and local communities are essential for success. Public relations professionals must be intimately involved in developing programs that facilitate reaching out to each of these groups. An open and integrated corporate culture, consistent in all national markets where the company operates, has to be developed.

Who Are Our Primary Audiences?

As corporations grow and invest in widely diverse markets, they face vastly diverse audiences which can have a profound impact on the success of business endeavors. Many large corporations operating in multiple countries readily admit that they often think first and respond best to their home market. This should come as no surprise. After all, proximity, habit, understanding, and the size of headquarters operations are strong factors influencing this attention.

Yet in order to be responsible and responsive to key target groups, changes must be made to provide equal access to information on a global basis. This requires the public relations function to be organized efficiently so that information can not only be distributed simultaneously in all markets, but much more important, that the sensitivities unique to a specific market will be addressed independently of the overall global message. It is also crucial to attend to details such as the timing of information distribution; e.g., distributing a release at 3:00 p.m. in continental Europe, 9:00 a.m. in the U.S., and 10:00 p.m. in Japan.

The short circuit of information flow means that details given to a local paper in Paris can quickly end up in the Wall Street Journal or the New York Times and be syndicated all over the world in less than 12 hours. For a company headquartered in Paris, a release should be appropriate for Paris as well as for Fort Wayne, Indiana, if operations are located there as well.

In the case of the financial community, as share purchasing in foreign markets has increased, even those companies whose shares are not traded in the major international equity markets should consider an investor relations program to inform opinion leaders, key portfolio managers and industry analysts about the company's results and growth strategies.

It is not uncommon for companies to be confronted with the demands of small, local communities with narrow, domestic interests. The needs of all these audiences must be effectively met. Sir James Hoylake in his bid for BAT, one of the largest hostile takeover bids in history, found himself and his investment allies mired in a battle in the U.S. fought in nine Midwestern and Western states. Regulatory approval in states such as Kansas, Idaho and Arizona were influenced by community xenophobia as well as job security concerns.

In another instance, Carrefour, a major French hypermarket chain, experienced considerable difficulty in breaking ground and opening operations in the United States as it strove to open its first store just outside Philadelphia. The company found itself embroiled in a nasty public battle with unions that absorbed considerable funds and curtailed the company's business development and success, at least in the short term.

Priorities need to be reordered so key target audiences wherever the company conducts its business are considered primary audiences.

How Will We Market Across Cultures?

It is widely recognized that there are vast difficulties in communicating a common theme across cultures. Just because a public relations or advertising campaign is successful in one doesn't mean it will work unchanged in another. Campbell, for example, doesn't market its soups the same way in a country like France, where soup is considered an important and accepted part of the meal, as in countries where it is only viewed as a way to keep warm. Even packaging requirements can reveal critical differences. Fiery red, for example, is considered an effective color in Mediterranean countries but not in northern Europe. And in certain areas of France and Belgium, the Flemish colors yellow and black aren't appropriate. Communications professionals must understand all the many nuances and cultural sensitivities around the globe.

Despite these obstacles, however, as our world becomes increasingly homogeneous, marketers are having increasing success in developing core programs that can guide the introduction and marketing of products across borders. Products in all countries, for example, are more and more impacted by such issues as environmental concern and safety. Lifestyle polls show that consumer values have shifted from a focus on luxury and the trappings of Yuppie-ism to a concern with buying "green" and other value-oriented purchase decisions.

As cross-national consumers begin to share common values, coordination of product campaigns can contribute greatly to international sales. Strategic planning and international product managers will increasingly work to develop brand images and common concepts that can guide local market programs. As companies extend the reach of their operations, cost constraints will additionally demand some central planning, coupled with operational control in local markets. For this process to be successful, a considerable degree of communications expertise will be necessary.

Conclusion

We have entered a world in which there is a proliferation of information, transmitted quickly around the globe. Information and news available in an increasing number of media outlets has facilitated the ability of people to form perceptions and the means of influencing target groups outside their traditions and their cultures.

In a dynamic international news environment with growing interlocking of economies and trans-border business activity, the public relations professional has a great opportunity to help companies introduce themselves and operate effectively in an ever-widening band of national and cultural diversity.
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