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BUSI 2702B

October 23, 2013

How is North American Marketing Impacted? Presented By: Asia Administration

There is more to marketing than presenting an organization’s products in order to sell them to customers. It is essential businesses consider all aspects of their target market including demographics, gender roles, traditions and holidays, and culture and arts. Furthermore, as a large, multinational organization that develops, manufactures and sells sports equipment, we must understand important environmental factors that impact marketing strategies, unique to each country, such as politics and government, business laws and economy. This newsletter edition will provide you with a better understanding of marketing in North America, broken down into three countries: Canada, United States and Mexico

US Demographics : 2 US Culture : 3 US Gender Roles : 4/5

Canadian Traditions : 5/6

Mexico Children’s Ads : 8

Canada Politics : 6/7

Mexican Economy : 9


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Spring 2016

Demographics in the United States An Asia Administration Feature

The majority of people aged 15+ who engage in exercise choose walking over other forms of exercise. (20032006)

Percentages of people 15+ engaged in physical activity. 13,15,16,18,20%

As we all know, marketing does not enter a business world alone. It enters hand in hand with demographics. There are certain things investors should weigh and examine. For example, who are our customers? Where and how do we reach them? To begin with, investors should know that the people living in the Pacific, New England, and Mountain Regions of the country are more likely to participate in sports or exercise activities than those in other regions. People living in the Pacific region of the United States are 50% more likely to exercise on an average day than people in the East South Central or West South Central regions of the country.1 In addition to that, walking is the most popular sport in America having been done by 30% of the

people ages 15+. However, when it comes to team sports, basketball is the most played sport.2 When trying to advertise their products, managers should make sure they know where to reach consumers. Online shopping has recently become the most popular and convenient way to shop. It has been reported that 32.7 million mothers in the U.S. use the internet for shopping on at least a monthly basis. Companies will certainly target their customers better via the internet rather than on television or magazines, because we live in a world where we are tethered to the internet.3 The estimated size of the entire sports industry in the U.S. is $470 billion and the annual company spending for sports advertising in the U.S. is $31.5 billion.4

Sports Industry Overview

Estimated Size of the Entire Sports Industry, U.S. 1

Amount Units

Year/Season Source

470

2013

Bil. US$

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"Sports and exercise." (online forum message). Spotlight on statistics. 05, 2008. http://www.bls.gov/spotlight/2008/sports/ (accessed October 13, 2013). 2 "Sports and exercise." (online forum message). Spotlight on statistics. 05, 2008. http://www.bls.gov/spotlight/2008/sports/ (accessed October 13, 2013). 3 "Demographics." (online forum message). New Media, Trend Watch. June 29, 2013. http://www.newmediatrendwatch.com/markets-by-country/17-usa/123-demographics?start=1 (accessed October 13, 2013). 2 4 "Sport Industry Overview." (online forum message).Plunkett Research. http://www.plunkettresearch.com/sportsrecreation-leisure-market-research/industry-statistics (accessed October 13, 2013).


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Spring 2016

A Europe Sales Feature As in any market, culture is the most important aspect in marketing a product or service. The American market has always been notorious for being hard to crack due to its diverse nature and highly polarized society. Nevertheless, many have succeeded in advertising their business in the American market. Successful marketers have taken into account ongoing cultural movements in the American society along with strong American principles. One such example would be the recent Nike Ad featuring celebrity professional basketball player Kobe Bryant. This ad touched on popular themes like the fact that everyone has heroic potential inside them. This ad is both inspirational and evokes strong positive emotions that make consumers have a “feel good”5 moment. This ad also appeals to customers that belong to the current movement of living an active, healthy life by exercising, playing sports, etc. One more important point is that of the influence of celebrities on the American culture. Celebrities can make or break products by endorsing or denouncing products. Each year, as the world becomes more Americanized, it becomes harder to discern the key components of the American culture. Many stereotypes exist about American culture, but in reality it is a very heterogeneous country with few cultural

aspects shared across the nation. Those include the aforementioned obsession with celebrities, the focus on personal freedom and the new healthy eating craze popularized by the controversial movie “Super Size Me”6. As with any culture, religion plays a large role and such is the case in American culture. Many advertisements are not aired due to their explicit nature that costumers find inappropriate. For example, although TV networks are legally allowed to have explicit content aired, they choose not to due to socially conservative views Americans have regarding public expression. On a smaller cultural scale, where factors like ethnic and racial diversity to income disparity between states, counties and cities come into play, different subcultures arise. Although culture varies between countries, subcultures arise within them due to other factors including ethnic and racial diversity. For example, the above Nike ad would be more successful with young basketball playing teenage males due to its inspiring tone and its written style used to make the reader feel like they fit in with the basketball culture. On the contrary, the progressive commercial featuring “Flo” would be more successful with middle aged females as the bright setting and enthusiastic host puts the consumer in a good mood making car insurance into something that “you can touch and feel”.

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Team USA & Ralph Lauren Ambassadors Get Set For London 2012 Games. N.p.: power play magazine, 2012. http://thepowerplayermag.com/team-usa-ralph-lauren-ambassadors-get-set-for-london-2012-games/. 6 “Holiday Marketing: 8 trending tactics and tips for 2012” Marketing Sherpa, accessed on October 15 2013, last modified August 30 2012 http://www.marketingsherpa.com/article/how-to/2012-holiday-trending-tactics

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The Influence of Gender Roles on Marketing in the United States An America’s Sales Feature As a large foreign sports equipment company starting a business in the United States, there are various aspects that one should know in regards to a culture’s gender roles and how it affects marketing. The most important aspect of marketing sports equipment in the United States is to cater to both the male and female 7

genders. It is important to note that the number of females in sport has risen exponentially over the past few years7 where in 2012, for the first time in U.S. Olympic history, there were more female athletes competing than men8. Young females are becoming more involved in sports activities. The total number of boys (aged

5 – 18) playing in organized sports was 66%, compared to the total number of girls (aged 5 – 18), at 52% in 2013.9 Despite increasing female sports involvement, different gender sport preferences affect the company’s marketing. In the table below, interests are fairly contrasted; marketing should be targeted to the target market10. However, these

statistics are not reflective in the media, where ESPN broadcasts reached almost 98M households11. Yet ESPN’s nationally televised program SportsCentre devoted men’s sports at 96.3% of airtime contrasting to women’s sports of 1.6%, contributing to the stereotypes of female athletes in sports12. Thus, as a

CIA World Factbook. “Mexico: Economy”. 2013. https://www.cia.gov/library/publications/the-world-factbook/geos/mx.html 8 Title IX and the Growth of Women’s Athletics. New York: the City University of New York http://www1.cuny.edu/ portal_ur/content/womens_leadership/title_athletics.html. 9 More women than men on U.S. team. N.p.: Associate Press, 2012. http://espn.go.com/olympics/summer/2012/ story/_/id/8154418/2012-olympics-women-outnumber-men-us-olympic-team. 10 Youth Sports Statistcs. N.p.: Minnesota Amateur Sports Commission, 2013. http://www.statisticbrain.com/youthsports-statistics/. 11 Nyad, Diana. Gender In televised Sports. N.p.: Center For Feminist Research, University of Southern California, 2010 12 Seidman, Robert (August 23, 2013). "List of How Many Homes Each Cable Networks Is In - Cable Network Coverage Estimates As Of August 2013". TV by the Numbers. Zap2it. Retrieved August 25, 2013. 4 http://thepowerplayermag.com/team-usa-ralph-lauren-ambassadors-get-set-for-london-2012-games/.


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sports Lorem equipment Ipsum Dolorcompany expanding to the United States, it is very important to not only target the male athlete stereotypes, but also cater to the rising demand of females in sports; nonetheless, the current sports marketing in the United States is a fundamental detriment towards this cause. In conclusion, gender roles play an integral part in the current marketing of sports equipment and how it is represented through the media. Being able to use both male and female athletes as role models to represent and showcase the foreign sports equipment company in the United States will increase the market share that is obtained. Undoubtedly, the knowledge of gender roles is paramount to the success of the company’s expansion. The change in culture for American athletes is portrayed of the top American Hopefuls in 2012, with 7 woman and only 6 males.13

Spring 2016

The Influence Traditions and Holidays Have on Marketing in Canada An Asia Sales Feature Time A company’s marketing schedule is highly affected by traditions and holidays. Companies must have a timeline outlining when they advertise certain products/services according to holidays. For example in Canada, flower and spa companies market their services throughout the end of April in anticipation of Mother’s day. Another example is any unofficial traditions there are throughout Canada, for instance New Year’s Resolutions. Many resolutions include becoming more active and being healthier, which influences holiday gift buying. In 2011, sporting good sales increased up to 70% from November 2011 to December 2011. It would be beneficial for sporting goods companies to market heavily at this time. Audience It is important to keep in mind that, though Canada is a large country with many diverse cultures that celebrate many holidays, it is still dominated by Western and Roman Catholic (67.30% of Canadians are Christian14) holidays like Christmas and Easter. A sporting company that wishes to maximize its profits must think of whom they are marketing to. On Christmas, for example, there is tradition that gifts are exchanged between loved ones, so sporting goods companies emphasize the suitability of their products as gifts to multiple audiences. 13

Team USA & Ralph Lauren Ambassadors Get Set For London 2012 Games. N.p.: power play magazine, 2012. http://thepowerplayermag.com/team-usa-ralph-lauren-ambassadors-get-set-for-london-2012-games/. 14 “Holiday Marketing: 8 trending tactics and tips for 2012” Marketing Sherpa, accessed on October 15 2013, last modified August 30 2012 http://www.marketingsherpa.com/article/how-to/2012-holiday-trending-tactics

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; Lorem Ipsum Dolor Spring 2016 Trends A new trend in Holiday marketing is the move towards using Internet and social media to boost sales. As more people are using their mobiles to search for their holiday needs, companies must move towards marketing their products and services with mobile friendly sites. Companies will be moving from just having an online presence, to actually improving their numbers through sites like Facebook, Twitter, Pinterest, and Google. In summary, any company wishing to do business in Canada must have an eye on the calendar for the Holiday sales “boom times�, keep in mind the audience and who celebrates what holidays and not fall behind the holiday market trends like e-commerce.

Holiday online savings, great marketing strategy.

Christmas is the biggest "marketing play" to sell products/services during the year in Canada.

Canadian Government and Politics A Europe Administration Feature

In the North American region, governments play a significant role in marketing. They put out messages to the public that they want society to be shaped around. They do this through segmentations of demographics such as age and gender and psychographic segments, which focus on things like lifestyle and personality. One popular demographic the government targets is teenagers and young adults. Substance abuse is one of the greatest issues that this group faces

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deal with this problem. The “Above the Influence Campaign” targets teenagers and young adults by surfacing commercials and ads that increase awareness on substance abuse, give initiative to stop abusing drugs and getting help, as well as encourage parents and adults to talk to their children and peers about the dangers of illegal drug abuse. In all, the governments in North American countries generally try to target children and youth more so than other age groups because of the prevalence they hold in shaping future society.15 North American governments have also made a point of protecting all demographics from potentially false and misleading advertising initiatives. The misleading representations and deceptive marketing practices provisions of the “Competition Act” contain a general prohibition against materially false or misleading representations. They also prohibit making performance representations which are not based on adequate and proper tests, misleading warranties and guarantees, false or

misleading ordinary selling price Spring 2016 representations, untrue, misleading or unauthorized use of tests and testimonials, bait and switch selling, double ticketing and the sale of a product above its advertised price.16 Along with these strict guidelines there are also an abundance of government-funded programs to aid with the advertising of new products or operations. Depending on the intentions of the multi-national enterprise, programs exist regarding all major aspects for both expanding, new and existing businesses. When attempting to advertise through written promotions, literary support is offered by the government to aid marketing. The government also offers subsidizing for foreign market expansion allowing for easier marketing of new products and bursaries. These government endorsements offer the ability to save large amounts of money while gaining access to various marketing and advertising services.17

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Drug Facts,” Above the Influence , last accessed October 11,2013, http://www.abovetheinfluence.com/facts/drugfacts 16 “Misleading Advertising and Labeling,” Competition Bureau, Last accessed October 11,2013, http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/02776.html 17 "Canadian Government Money Is Now Available For Your Small Business,” Centre for Small Business Financing, last accessed October 11, 2013, http://www.grants-loans.org/grants-loans-calculator/grant-finder.php

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Spring 2016

Children’s Advertising Laws in Mexico An Asia Production Feature

Mexico inherited their legal system from Spain based on statutory law. Specifically, their advertising laws are enforced at the federal level. Federal administrative agencies have jurisdiction over advertising and are allowed to press allegations against any firms or organizations that break advertising laws. Other local regulations contain specific provisions relating to the marketing of alcohol and tobacco to children, [as well as] the use of crude language and sexual content in advertising.18 The first law regulating children’s advertising is The Federal Law on radio and television. This law covers things like offending national heroes or religious beliefs, racial discrimination, criminal acts, violence, and images that

promote consumption of alcohol, tobacco, or illicit drugs. The second law that protects children from offensive advertising is The Federal Health Code. This law restricts pharmaceutical products, tobacco, and alcohol. It is not illegal to advertise these items, however, technical information must be verifiable, content must be educational, and it must not promote bad habits from the use of these substances like prescription drug addiction. The final law that restricts children’s advertising is The Federal Consumer Protection Law. This law is the most important of them all. It explains provisions to publicity and special offers. In short, the law protects

consumers from false advertising or advertising that creates confusion among its audience. If any of these three laws are broken, organizations may be taken to federal court and may face fines of $500 to $252,000 USD.19 The federal government of Mexico is serious about protecting children from risqué advertising and has a clear cut mission statement: “Moral values, consumer protection, and public health are the cornerstones of advertising regulation in Mexico, especially in respect to children, who are recognized as a vulnerable consumer group.”20

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Hurtado , Marina . "Advertising To Children in Mexico." Global Advertising Lawyer Alliance. www.galamarketlaw.com.previewdns.com/files/RSChilMex.pdf (accessed October 12, 2013). 19 Clients Guide to the best Law firms, top Lawyers, Attorneys, Advocates, Solicitors and Barristers.. http://www.legal500.com/c/mexico/developments/5271 (accessed October 17, 2013). 20 Hurtado, Maria, Roberto Arochi, Karl H. Tessman, and Oliver Galindo. "Mexico: Advertising to Children in Mexico." Global Advertising Lawyers Alliance. http://www.gala-marketlaw.com/mexico-63573 (accessed October 18, 2013).

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Marketing in Mexico’s Recovering Economy

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A Europe Production Feature scale marketing campaign with celebrity endorsement to raise the product’s credibility.

With the current economy in Mexico, there is plenty of opportunity to make a profit selling sports equipment. It is important that brand names are advertised and promoted, since Mexicans are very loyal to time tested brands.21 If a company is selling lesser-known brands, it could potentially use a large-

During the recent recession, the majority of Mexicans have chosen to cut back on purchases rather than switching to inferior brands.22 Should the financial need arise to switch to a less expensive alternative, Mexican consumers would then become and remain loyal to the new less expensive brand regardless of future economic upturn.23 Brand loyalty seems to be a reoccurring trend in Mexican consumer culture. Since over 70% of Mexicans have cut spending in comparison to 45% of Americans, it is important to be cautious of overpricing.24 To encourage Mexicans to try a new product, money back guarantees and contact information for the complaints department should be placed on the packaging. 21

Mexican consumers are shifting from family owned small businesses to modern retail stores, so it is better to sell product in large well known institutions.25 A fantastic market to target with sporting goods in Mexico would be the travel and tourism industry. The top 20% of income earners account for 55% of income in Mexico, and a large part of this money is located in the hotel industry.26 Hotels need large quantities of sporting gear for their guests to enjoy on vacation. It would be lucrative to consider selling water sports goods, such as snorkeling gear and wetsuits. To work with the free-market economy in Mexico, offer premium and less expensive alternatives and think mainstream retailers.27 The economy in Mexico proves a challenging but rewarding opportunity with the right marketing approach.

Friesen, Jillian. GEI. “Mexican Consumption Patterns” August 19, 2012, http://econintersect.com/b2evolution/blog1.php/2012/08/19/mexicanconsumers 22 Oscar Garcia, et al. “Understanding Mexicos’s Evolving Consumers” August 2012, http://www.mckinsey.com/insights/consumer_and_retail/understanding_mexic os_evolving_consumers 23 Baja Quest. “Economy Breakdown” 2011, http://bajaquest.com/faq/economy.htm 24 CIA World Factbook. “Mexico: Economy”. 2013. 9 https://www.cia.gov/library/publications/the-world-factbook/geos/mx.html


A Letter from Julia Belliveau: As I read through our first newsletter, I was extremely proud of our hard work and resulting accomplishments throughout the past few weeks. I think we can agree that collaborating on this project has been and will continue to be a learning experience for all of us. As Henry Ford said, "Coming together is a beginning. Keeping together is progress. Working together is success." This first newsletter is definitely the first of many successes. I am already seeing themes I expect will be repeated; for instance, organizations’ focus on children and teenagers, the leaders of tomorrow. It is also interesting to read about concepts studied in class, such as heterogeneous cultures, reflected in our research. Finally, thank you to everyone for your contributions. This is the first of many newsletters which will be a great resource for expanding our cross-cultural knowledge, both for our purpose and hopefully for the larger Carleton community.



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