International Marketer’s Blog

Starbucks has seen its profits soar by more than a third in the last quarter, thanks to a major investment in its international marketing activities.

Store traffic increased by 6% in the US, and by 4% internationally, lifting quarterly profits by 37% to $207.9 million (£136 million) in the 13 weeks to June 27th.

Overseas growth is a high priority for the business, with the majority of new store openings (250 this year and 500 planned for 2011) happening outside of the US. Revenue rose by nearly 9% to $2.61 billion in Q3, despite 144 under-performing US stores being closed.

“Starbucks’ third quarter results reflect a continuation of the strong performance and momentum we have been driving across our businesses around the world,� said Howard Schultz, chairman, president and CEO of the group.

He added that the recent success is largely down to the “most significant marketing investment in the company’s history�.

Much of this was ploughed into launching Starbucks Via, an instant coffee variety, in US grocery outlets. Since its September debut, the product has performed strongly and is now on track to hit $100 million in sales in its first year. (more…)

According to a report in Advertising Age this week, oil giant Shell has gone ahead with an international advertising campaign despite the ongoing environmental crisis in the Gulf of Mexico and harsh criticism of the oil industry because of BP.

With other oil companies currently remaining silent, Shell has launched a campaign which focuses on a new energy future powered by multiple energy sources and cleaner fossil fuels that the Brand is “unlockingâ€�, The campaign promotes the idea of the world moving towards sustainable mobility with Shell ready to meet the challenge.

Patricia Singer, brand manager for Shell Oil, said “We realized that in spite of the situation in the Gulf being ongoing, we wanted to launch our campaign as planned because we believe that now is an important time to engage with our customers and stakeholders.”

Marketing collateral includes print, TV, online, outdoor executions and two websites, energygalaxy.com and shell.us/letsgo and launched on May 28. The international campaign has been planned for nearly a year and was created by the London office of WPP’s JWT .

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Facebook’s vice-president of global sales Mike Murphy has said that the site has more than quadrupled the number of its advertiser clients since the start of 2009. He has also described Facebook as having become “absolutely core to marketing campaignsâ€�.

Murphy, speaking to Bloomberg, did not reveal actual figures, though he did say that Facebook has doubled the number of sales people over 2009 compared to 2008.

Murphy said: “We’re very well positioned as people come out of this current economic situation.â€�

The social networking site has offices dotted across the globe to handle international marketing campaigns, and global brands have been exploiting its extensive user base. Among those that have been attracted to the site are Adidas, Procter & Gamble, Sony Pictures and Honda to name but a few. Only last week, the Freedman blog reported Diet Coke’s new pan-European Facebook push, for its international ‘Love it Light’ campaign.

According to US advertising data supplied by comScore, the site ran 176 billion display ads in the first quarter of 2010 in the US alone, up from 70.7 billion in the previous year’s quarter. (more…)

Asian brands aren’t yet making their mark on the global landscape, but China and India in particular are poised to launch the next batch of global brands as their marketing processes develop.

A mere eight Asian companies appeared in the league of the 100 most valuable brands, compiled by Interbrand, despite the region’s booming economy and manufacturing expertise.

The Asian brands that did make it into the league – Toyota, Honda, Samsung, Canon, Nintendo, Hyundai, Panasonic and Lexus – are all from Japan and South Korea. Of these, only Toyota appears in the top ten (at number six).

Why are there so few globally recognised brands from this region, which accounts for 20% of global gross domestic product according to Nomura?

Marketing experts say it could be because it takes years of development for companies to acquire a reputation for quality, which is followed by creating a name for softer qualities, such as design. (more…)

It was reported in our blog last week that research firm Forrester has found that the majority of CMOs – 75% to be precise – are looking to revamp their marketing functions by the end of next year.

On the subject of this necessary organizational change, Steven Noble, an analyst at Forrester, has aired his views in trade journal Advertising Age – discussing the theme of how CMOs can “rise to the challengesâ€� of global marketing.

Noble describes three, separate contexts for global brand management and implementation. Within each of these contexts, Freedman is ideally placed to help, by identifying and providing the necessary resources to implement global brand solutions which will streamline the marketing process.

Noble sees the first context as being when most marketing is local – for instance when a global firm like Kraft manages a local brand like Vegemite – a household name in Australia, but, in the UK, just a distant relation to Marmite. In this context, he says, the CMO must provide “assetsâ€� that help their local marketing teams to make better decisions. (more…)

Research firm Forrester interviewed senior executives from 13 corporations including Anheuser-Busch InBev, Kimberley-Clark, Levi-Strauss, Mercedes-Benz and Pernod-Ricard recently to establish their current views on marketing. It found that the vast majority (75%) were expecting to undertake substantial reforms to their marketing functions by the end of 2011, due to factors such as the economic downturn, the rise of digital media, and increased media fragmentation.

Coca-Cola and Vodafone are just two global players which have already embarked upon such plans to improve marketing efficiency. According to Forrester, brands looking to transform their frequently “maladaptive� structures will have to identify the most appropriate overarching business model, whether that be “totally global�, “totally local� or “somewhere in between.�

This will involve in-depth analysis of the marketing process and international brand implementation. “This will be the year in which marketers get their house in order by forging internal consensus around a global strategy,â€� predicted Steven Noble, an analyst at Forrester. He suggested that most brands with an international reach have failed to leverage what this can provide in terms of efficiencies – within marketing supply chain management, for example. (more…)

Following the news last month that airline Bmi will begin using its former British Midland International branding in marketing collateral within overseas markets, it has now been reported that the carrier is to launch a social media strategy as part of its overall marketing overhaul.

The airline’s expanding social media presence will include a series of Twitter, Facebook and YouTube pages. It has already rolled out a destination guide widget with Wallpaper magazine, which features live Twitter feeds. According to Callum Anderson, Bmi’s head of search and social media, the “newly restructured” digital team is aiming to add value and to ensure “sustainability of interaction.”

Bmi’s decision to revert to its original British Midland International brand name in some international markets has been driven by a desire to increase recognition. It is hoped that being known by its full moniker will help to raise brand awareness, and therefore the effectiveness of its international marketing activities – particularly in certain long-haul destinations where awareness is low, such as the Middle East. According to Chief Executive Wolfgang Prock-Schauer, consumers in this key market did not know what Bmi stood for. It is also hoped that the use of the word “British” in the airline’s global brand marketing will help to emphasize quality. (more…)

Last Autumn Mars announced that it had embarked upon a strategic plan to designed to align its core global brands in major markets under a single creative agency. The moves form part of an overall drive to increase the efficiency of its international marketing campaigns.

As part of these plans, Twix has handed its global brand duties to TBWA\London. Previously the business was split between SapientNitro, which handled Asia, Eastern Europe, Latin America and the US, and TBWA, which covered Western and Central Europe.

Bruce McColl, global chief marketing officer of Mars, explained that the latest move towards a more consolidated marketing approach would help with the multinational’s international brand implementation. “We feel that aligning each core brand under a dedicated global agency will more effectively build global communication platforms,� he said.

Mars and its myriad brands once had different agencies representing it in different parts of the world. According to a report in Advertising Age this week, Marlene Machut, a Mars spokesperson, has said that the company is still examining its agency roster in order to determine its next moves. It hopes to complete the efficiency drive by the end of next year.

International sportswear brand, Speedo, is aiming to engage health-conscious consumers in key country markets with a pan-European integrated advertising campaign which has been designed to drive emotional engagement with the brand.

International marketing activities are due to break this week and will include online content such as rich media ads. Other online marketing tools will include social media elements such as a targeted drive on Facebook.

The three-year brand campaign has been created by Iris and will feature in national and regional press ads. It focuses on personal relationships with swimmers, positioning Speedo as a brand which understands that each individual is different. The campaign has been shot by underwater videographer Martin Brent, in an attempt to drive emotional engagement.

Speedo International Head of Marketing Communications Chris MacDonald commented: “Our objective for this campaign is to engage with our consumers and explore their relationships with swimming.â€� (more…)

Global soft-drinks giant Coca-Cola is overhauling its European marketing operation as part of a review of the wider business. It has said that it has informed employees of “plans to simplify the structure of the business to improve efficiency and effectiveness.�

Up to 150 staff could be affected in the consultation, which covers the 38 countries in which Coca-Cola Europe operates. Dominique Reiniche, president of Coca-Cola Europe, said that the changes were designed to simplify operations and to make the multinational more efficient. He said that the restructure would allow the international brand to become faster to market, and allow it to increase the scale of its activities across Europe.

One expected outcome – according to Brand Republic – is that Coca-Cola will make London the hub of its European marketing operations, with some Great Britain and European roles, which are currently carried out separately, becoming the responsibility of one person. The efficiency drive could also lead the company to seek full service marketing agencies, thereby helping it to streamline the marketing process. The brand currently works with several advertising and marketing agencies – such as Carlson Marketing, Mother and VCCP – but increased centralisation could help it to drive the efficiency of international brand management and campaigns.