Standardization and Adaptation (Localization) of Advertising in Different Regions of the World – Russia

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Overview of literature on standardization and adaptation of advertising: their main task, advantages and disadvantages. Trends in consumer behavior in Russia. Distribution media advertising budgets in the country, the laws and rules regarding promotion.

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University of Nicosia

Strategic Marketing

Semester Assessed Work

Re: Standardization and Adaptation (Localization) of Advertising in Different Regions of the World - Russia

Spring 2011

1. Introduction (Ms. Petronella Charalambidou)

2. Up to Date General Literature Review on Standardization and Adaptation of Advertising (Ms. Petronella Charalambidou)

2.1 The main objectives of standardization in the USSR

2.2 Advantages of Standardization

2.3 Disadvantages of Standardization

2.4 Advantages of Adaptation

2.5 Disadvantages of Adaptation

3. Trends in Consumer Behavior in Russia (Ms. Gyuzel Zarieva)

4. Advertising Industry of Russia (Mr. Anton Yakovyschenko)

4.1 Brief History

4.2 Current Advertising Industry

4.3 Biggest product categories ( mln. rubles) 2008

4.4 Distribution of Media Advertising Budgets

4.5 The Biggest Advertisers in 2009

4.6 Russian Largest Advertising Groups

5. What are the major laws and regulations affecting Advertising and Promotion in Russia (Ms. Marina Nasedkina)

5.1 Introduction to Russian Advertising Law

5.2 Basic Principle of Federal Law "On Advertising"

5.3 Regulatory control over Advertising activity

6. Which current US or global trends have an impact on the advertising Industry of Russia (Ms. Gyuzel Zarieva)

7. Practical Case of IKEA doing Advertising in Russia (Ms. Marina Nasedkina)

7.1 Brief History of the Company

7.2 Expansion on Russian Market

7.3 Standardized Adaptation of IKEA in Russia

8. Recommendations and Conclusion (Ms. Olga Vasilyeva)

References

1. Introduction

Standardization is an establishment and application of the rules in order to streamline activities in a certain area for the benefit and participation of all stakeholders, in particular, to achieve overall optimal cost functional subject to the conditions and safety requirements.

The objects of standardization are specific products, standards, requirements, methods, terminology, symbols, with the prospect of multiple applications that are used in science, engineering, industrial and agricultural production, construction, transport, culture, health and other sectors of the national economy, as well as in international trade.

Standardization affects the pace of development and production level. Based on the latest developments in science, technology and practical experience, standardization largely not only determines the current level of production, but is one of the drivers of progress in science and technology.

Standardization is one of the most important organizational and technical foundations of substantive and technological specialization and industrial cooperation at the local, regional, national and international levels.

Adaptation - an adaptation of an organism and its structures to the changing external environment. Adaptation ensures the preservation of homeostasis and prevents damage in terms of environmental factors. Localization is a part of the integration-local responsiveness debate. The integration or global integration strategy is based on achieving efficiency and synergy by coordinating, integrating, and standardizing operations and products across foreign markets. Therefore, companies pursuing the global integration strategy expect to increase their performance capitalizing on coordination and integration. However, the local responsiveness or localization strategy (also called multidomestic or multilocal strategy) argues that markets differ and products should be localized rather than standardized to better serve local consumers and meet the local demand.

2. Up to Date General Literature Review on Standardization and Adaptation of Advertising

2.1 The main objectives of standardization in the USSR

Establishing requirements for the technical level and quality of products, raw materials, intermediate products and components, as well as rules, requirements and methods of design and production, allowing for optimum quality and to eliminate inefficient variety of types, brands and sizes;

Development of standardization and aggregation of industrial production as a key condition of specialization of production, complex mechanization and automation of production processes, improve interoperability, efficiency, operation and maintenance of products;

Ensuring the unity and reliability of measurements in the country, the creation and improvement of national standards of units of physical quantities, as well as methods and tools for high-precision measurements;

Establishment of standardized systems of documentation, classification and coding of technical and economic information;

Establishment of common terms and symbols in the critical areas of science, technology, sectors of the economy;

Establishment of a system of safety standards.

2.2 Advantages of Standardization

Economies on the scale of design, creation of advertising, and production of advertisements (and therefore lowering the fees of the agency);

Faster set up time for advertising campaigns and a more rapid penetration of markets due to good international co-ordination. This characteristic is particularly useful when launching a product simultaneously in several countries;

Reinforces the image of the product or company as a consequence of the international co-ordination resulting from an international campaign;

Single coherent global image. An identical advertising standpoint in many markets allows the product, company and brand to possess a uniform image. This limits confusions as the consumer is internationally mobile and there are possible overlaps in the media (cable television enables consumers to watch foreign television programmers).

2.3 Disadvantages of Standardization

Possible loss of advertising effectiveness. Communication, based on the lowest common denominator of the target markets is rather poor. But standardization can prove to be unadoptable if it holds on to local specifications. It can create negative reactions on the part of the consumers as it does not cater to them, which risks them turning to local competitors. It can result in losses in important shares of the market, and damage to the image of the product in the long term;

Lack of motivation for local agencies. As the personnel at the company and the agencies have no connection with the development of the communication they can consider this campaign as being irrelevant to them. And often they will not be effectively committed to its production and establishment.

2.4 Advantages of Adaptation

Respect for local specifications and expectations. A company which uses the concept of systematic adaptation increases its chances of better responding to the expectations of local consumers and legislation;

Excellent local image due to the company catering for the specific needs of the local market;

Motivation for local agencies. They become more responsible as they participate in the construction of the communication policy;

Flexibility and strong reactivity to the actions of local competitors.

2.5 Disadvantages of adaptation

Higher costs. Adapting the strategy to each target market does not allow cost cutting measures to be made;

Risk of disparity, of the company's image in international markets. The global policy of the company can suffer;

Difficulties in controlling advertising;

No synergy of actions between markets. The differences between communication policies do not allow undertakings to be aligned, even in markets which are close geographically.

3. Trends in Consumer Behavior

As many Eastern European countries, Russia had chocking changes at the begin of 90's. Until the mid 80's Russia being one of world's leaders superpower countries, but at the end of 80'crashed by Perestroika and reduced Iron Curtain after Cold War, empowered after losing control over Eastern European countries, as well as with separation of many soviet republics, which proclaimed their independence - all this changes was influenced for all aspects of people's lives.

One of the earliest influences of process of changing political and economic system from communism to capitalism was Identification Crisis of nation, as well as each human entity. The process of reassessment of national history events, especially Soviet period's event became harmful, because most of beliefs were destroyed.

Sociological studies show that pragmatism process of life values, sharply increasing role of material and monetary factor in modern life is start happening. Health, family and material values took first three places in the value orientations of the Russians in the mid-90's. Thus, if previously (Sovie...