Fdireg1 module 4 by Ceddet

TOWARD THE NEXT GENERATION OF IPAS

1ST EDITION

MODULE 4

COMMUNICATIONS STRATEGY

Toward the Next Generation of IPAs. 1st Edition

Module 4

Course author Inter-American Development Bank (IDB) (www.iadb.org), through its Integration and Trade Sector (INT). Course coordinator Inter-American Development Bank (IDB) (www.iadb.org), through its Integration and Trade Sector (INT), the Institute for the Integration of Latin America and the Caribbean (INTAL) (www.iadb.org/en/intal) and the Inter-American Institute for Economic and Social Development (INDES) (www.indes.org). Module author Andreas Dressler Pedagogical and editorial coordination The Inter-American Institute for Economic and Social Development (INDES) (www.indes.org) in collaboration with CEDDET Foundation (Economic and Technological Development Distance Learning Centre Foundation) (www.ceddet.org).

1st edition Copyright © 2017 Inter-American Development Bank. This work is licensed under a Creative Commons IGO 3.0 Attribution-NonCommercial-NoDerivatives (CC-IGO BY-NC-ND 3.0 IGO) license (http://creativecommons.org/licenses/by-nc-nd/3.0/igo/legalcode) and may be reproduced with attribution to the IDB and for any non-commercial purpose. No derivative work is allowed. Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules. The use of the IDB’s name for any purpose other than for attribution, and the use of IDB’s logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this CC-IGO license. Note that link provided above includes additional terms and conditions of the license. The opinions expressed in this publication are those of the authors and do not necessarily reflect the views of the Inter-American Development Bank, its Board of Directors, or the countries they represent.

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Table of Contents List of Figures .................................................................................................................. 4 List of Boxes .................................................................................................................... 4 Glossary ........................................................................................................................... 4 Module Introduction ....................................................................................................... 5 General Objectives of the Module.................................................................................. 5 Learning-Oriented Questions ......................................................................................... 5 UNIT I. COMMUNICATION IN INVESTMENT PROMOTION ........................................... 7 Learning Objectives ........................................................................................................ 7 I.1. Why IPAs Communicate ............................................................................................ 7 I.2. Audiences for IPA Communication ........................................................................... 9 I.3. Objectives of IPA Communication .......................................................................... 10 I.4. Responsibility for IPA Communication ................................................................... 11 SYNTHESIS OF THE UNIT ...............................................................................................14 UNIT 2. TARGETED COMMUNICATION ......................................................................... 15 Learning Objectives ....................................................................................................... 15 II.1. The Importance of Being Targeted......................................................................... 15 II.2. Selecting Target Groups ......................................................................................... 17 II.3. Value Propositions ................................................................................................. 20 SYNTHESIS OF THE UNIT .............................................................................................. 23 UNIT 3. COMMUNICATIONS CHANNELS ..................................................................... 24 Learning Objectives ...................................................................................................... 24 III.1. Types of Communications Channels ..................................................................... 24 III.2. Advantages and Disadvantages of Different Channels ....................................... 27 III.3. The Role of Multipliers .......................................................................................... 34 SYNTHESIS OF THE UNIT .............................................................................................. 36

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List of Figures Figures are provided in a separate attachment.

List of Boxes Box 1. Communications channels ................................................................................. 25 Box 2. Advantages and disadvantages of different channels ..................................... 27

Glossary n Business attraction: all activities conducted by the IPA that involve com-

municating directly with potential investors in order to attract them to the location. n Marketing: activities conducted by the IPA designed to strengthen aware-

ness or improve the image of the location. n Target groups: a clearly defined group of organizations or decision makers

that the IPA wishes to attract or engage with. n Targeted communication: communication that is focused specifically on se-

lected target groups, based on an understanding of the characteristics and requirements of those groups. n Value proposition: a description of the advantages that a location offers po-

tential investors from a specific target group.

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Module Introduction Communication is a key function in investment promotion and the majority of an IPA’s activities involve communicating with “audiences” outside of the organization. The most important audience consists of potential investors, but IPAs must also communicate with other relevant audiences both within their own territory and internationally. This module will focus on the different methods or “channels” that IPAs can use to communicate, providing practical guidelines for their use and comparing their effectiveness.

General Objectives of the Module This module will provide participants with an understanding of the range of channels or methods available to communicate with potential investors and other important target groups. Participants will learn about the relative effectiveness of these methods and the key success factors for effective communication. Through this module, participants will: n Understand why communication plays an important role in several key IPA

functions. n Learn about various communications channels and their relative effective-

ness. n Determine the best methods for reaching potential investors and other tar-

get groups.

Learning-Oriented Questions n What do we mean by “communication” in the context of investment pro-

motion? n Who do IPAs communicate with? n What is the objective of this communication? 5

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n Who within the IPA is responsible for communication? n What types of messages do IPAs communicate? n How can an IPA select target groups for communication? n What are value propositions and why are these important? n What different channels can an IPA use to communicate? n What are the advantages and disadvantages of these channels? n What are multipliers and what role do they play in IPA communication?

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UNIT I COMMUNICATION IN INVESTMENT PROMOTION

Learning Objectives This unit will cover the following points: n Why IPAs communicate. n Who they communicate with. n The objectives of this communication. n Who is responsible for the communication.

I.1. Why IPAs Communicate Unlike many other government agencies, the main function of an IPA is not to administrate. Although some IPAs may manage government programs, the main function of an IPA is to engage with the outside world with the aim of attracting investment to their location. Communication is therefore a fundamental aspect of an IPAâ&#x20AC;&#x2122;s activities and is essential to achieving the IPAâ&#x20AC;&#x2122;s objectives. To be effective, communication by IPAs must be proactive, meaning that it originates from the IPA and does not only occur in response to external enquiries. IPAs must

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constantly communicate with different audiences at different geographic levels, and it is essential for the IPA to manage this communication effectively. At the broadest level, IPAs communicate to promote their location and to establish contact to potential investors. Increasingly, IPAs also communicate to raise awareness of the benefits of foreign direct investment (FDI) to their location as well as their own role and value in attracting FDI. The activities that IPAs conduct to communicate are often carried out by separate functions (or departments) within the organization, such as business attraction, marketing and public relations. While smaller IPAs may not have separate departments for each of these functions, they will typically have staff designated to business attraction and marketing. In some IPAs, functions such as marketing or public relations are shared with other agencies (for example, tourism or trade promotion). Although it may be helpful for these activities to be separated within the organization from an operational perspective, the messages that are communicated by each group should be consistent and reinforce one another. This implies that the IPA must have an overall communications strategy, which lays out the target audiences for communication, the messages that will be communicated, and the channels that will be used for communication. The IPA should also have influence over the various individuals, departments or organizations that communicate on its behalf. In practice, there is no distinction between “communication” and other aspects of an IPA’s promotional and business attraction activities. Communication results directly from an IPA’s overall investment attraction strategy, which should determine the target groups for investment attraction, the methods that will be used to approach these groups and the “value propositions” that will be used to attract them to the location. In other words, communication as defined in this module refers to all outward-facing activities that an IPA conducts as part of its promotional and business attraction efforts, regardless of who is responsible for these within the organization.

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I.2. Audiences for IPA Communication In keeping with the broad definition of communication provided above, this module will consider communication with a variety of audiences. The audiences that an IPA communicates with most frequently are: n Decision-makers of selected individual companies that the IPA is seeking to

attract to the location. n Decision-makers of several companies within industry or geographic mar-

kets that the IPA is targeting. n Influencers of corporate-location decisions, often referred to as “multipli-

ers”. n The business community in general, either globally or within a specific geo-

graphic region or market. n Key stakeholders within the IPA’s own territory, such as government offi-

cials and representatives of government ministries. n The IPA’s partners, including other government agencies, industry associa-

tions or academic institutions. n The business community and population within the IPA’s own territory.

For purposes of developing a communications strategy, these audiences can also be referred to as “target groups”. The objectives of the IPA’s communication are different for each of these target groups. Although there is some degree of overlap, the specific messages for each target group will need to be tailored to the individual requirements of each group. The geographic location of the target groups also needs to be taken into consideration, since this ranges from global in scope to groups located only in the IPA’s own jurisdiction. Figure 1 in the Attachment provides an overview of the different groups and the main messages that an IPA should aim to communicate to each of them.

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I.3. Objectives of IPA Communication As Figure 1 indicates, the key messages to be communicated to each target group are different but also overlap to some degree. The key messages also reflect the main objectives of an IPAâ&#x20AC;&#x2122;s communication, which can be summarized as follows: n To convince individual companies to select the jurisdiction for an invest-

ment. Communication is critical in the early stages of establishing contact and engaging with a company as part of the IPAâ&#x20AC;&#x2122;s business attraction activities. It also remains crucial once an IPA is actively competing for a companyâ&#x20AC;&#x2122;s investment and is providing support through facilitation. n To convey the advantages of the location for companies from a specific in-

dustry or country. All IPAs focus on selected target industries and sectors as well as specific geographic markets and must communicate the benefits of their location to these groups. For example, this could include communicating why the location is an attractive location for Japanese companies or for companies that provide Business Process Outsourcing (BPO) services. n To create positive awareness globally of the jurisdiction as an investment

location. This type of awareness-raising communication is intended to enhance the overall image of the location, without focusing on a specific target group. n To strengthen the reputation and relationship of the IPA with key stakehold-

ers and partners. Communication is essential in order for important stakeholders and partners in the private and public sector to understand the value of the IPA and the benefits of supporting its activities. n To raise understanding of the benefits of FDI for the jurisdiction and the role

of the IPA. On a broader level, it is helpful for the IPA if both the domestic/local business community and the general public understand why FDI is beneficial and why it is important for the jurisdiction to have an IPA.

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These objectives show that communication comprises several important IPA functions, including business attraction (seeking to attract investment) and promotion (marketing the location). In addition to helping to attract investment and creating positive awareness of the location, communication also plays a key role in helping the IPA manage relationships with important stakeholders and partners, thus securing support for its activities. This reinforces the point that communication is a key factor in an IPA’s effectiveness and success.

I.4. Responsibility for IPA Communication As mentioned above, an IPA’s communication is typically carried out by separate departments within the organization, including business attraction, marketing and public relations. In addition to staff in the IPA’s main office, IPAs may also utilize individuals or organizations in international markets to carry out some aspects of communication on their behalf. These include: n International offices: some IPAs have dedicated offices for investment at-

traction in specific countries. In many cases, these offices conduct both trade promotion and investment-attraction activities. While some IPAs have sufficient budgets to be able to afford stand-alone offices, other (national) IPAs may colocate their overseas staff with their country’s embassies or consulates. n Diplomatic/commercial services: some (national) IPAs utilize their country’s

network of diplomatic and commercial officers to help with communication in international markets. While this provides additional coverage and resources around the world, it is difficult to manage in practice since commercial officers usually report to another branch of government than the IPA and have a range of other responsibilities.

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n Third-party representation and support: IPAs may also choose to engage

outside consultants to assist them in selected international markets. The types of services provided range from full representation (the equivalent to having an own international office, but managed by an outside service provider) to ad hoc support with roadshows or organizing meetings at trade shows. A common approach is to engage consultants for “lead generation”, whereby the IPA pays the consultant to identify a specific number of companies with potential investment plans (“leads”). IPAs may also engage public relations (“PR”) companies to help them communicate with key groups and gain visibility in certain markets. Engaging consultants in this way can be very effective provided that the IPA defines a clear scope of services and is realistic in terms of what it expects the consultant to deliver. In addition to selecting a consulting firm with the right level of experience and capabilities, it is also important for the IPA to manage the relationship with the consultant and work closely with them to ensure that the project achieves the desired results. n Ambassadors/diaspora: some IPAs have been able to effectively mobilize

nationals of their own country or region that live or work in specific countries to assist with certain communications activities. These activities often take the form of “ambassador” programs, in which individuals living overseas (e.g. an executive from the home jurisdiction working in a specific foreign country) agree to represent the IPA on certain occasions (e.g. at events). Ambassadors also try to be aware of any companies that might be planning international investments and use their networks for accessing corporate decision-makers. IPAs may also seek to mobilize larger groups of individuals from the country living overseas (diaspora) to help promote the location and identify potential investors. The Scottish government, for example, runs a diaspora initiative designed to promote international trade and investment called GlobalScot1. While programs of this type are relatively 1

www.globalscot.com/

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inexpensive to implement they are typically less effective compared to other channels described in unit 3 of this module. n Testimonials: one of the most effective ways of communicating is through

existing investors in the location that are willing to report positively about their experience. These types of “testimonials” can consist of a short quote by a corporate executive or a short video message in which the executive explains why they selected the location and are satisfied with their choice. Testimonials can be used on the IPA’s website, printed materials and social media. The national IPA of Lithuania, for example, makes extensive use of testimonials and case studies on their website2. Corporate executives can also provide further support, including speaking on behalf of the IPA at events or meeting with potential investors that are considering the location. It is important for the IPA to build relationships with existing investors as part of a formal aftercare program. Aftercare is covered in module 5 of this course. The larger the number of individuals and groups that are actively communicating on behalf of the IPA, the more important it becomes for the IPA to develop a clear communications strategy that defines both the messages that should be communicated, as well as the role of various individuals in delivering this communication. This should reduce the risk of different groups communicating conflicting messages or—in the worst case—messages that are not accurate or potentially damaging to the IPA or the location (for example, disclosing the identity of a potential investor that is considering the location when this should have been kept confidential). Some IPAs therefore have clear policies on who is able to communicate on the agency’s behalf, including rules on who is able to speak with the media or communicate on social media on behalf of the agency.

www.investlithuania.com/stories-to-share/

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SYNTHESIS OF THE UNIT The main function of an IPA is to communicate in order to raise awareness of the location and to attract investors. This communication takes place with different target groups and the message communicated by the IPA is usually different depending on the target group. Within the IPA, different departments or individuals are responsible for communicating and the IPA may also use third parties based overseas for other aspects of communication. It is therefore essential for the IPA to develop an overall communications strategy that clearly defines who will be communicating on behalf of the IPA as well as the messages to be communicated to specific groups.

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UNIT 2 TARGETED COMMUNICATION

Learning Objectives This unit will cover the following points: n Why it is important for IPA communication to be targeted. n How IPAs can select and define target groups for communication. n Developing â&#x20AC;&#x153;value propositionsâ&#x20AC;? to communicate to each target group.

II.1. The Importance of Being Targeted Targeting in IPA communication means adapting the messages that the IPA wishes to communicate to the requirements of specific target groups or audiences. For example, it means creating separate messages for companies from different industries to reflect the different requirements of these industries and the information that the IPA wishes to communicate to them. Defining target groups is an essential prerequisite for IPAs to communicate effectively. IPAs cannot develop a targeted communications strategy without first clearly defining the target audiences for the communication. Targeting is important for a number of reasons:

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n Without targeting, the IPA will communicate the same messages to differ-

ent groups, regardless of whether these messages are relevant to all of them. n IPAs that do not follow a targeted approach usually develop broad and ge-

neric messages that lack impact and are not effective. n Targeted messages that are relevant to a specific target group are more

likely to be noticed and understood and therefore to achieve their objective. n Targeted messages show that the IPA understands the requirements of a

particular audience, which reflects positively on the IPA and provides the credibility necessary to engage with potential corporate investors. Targeting is a commonly used concept in all areas of communication, including consumer marketing and advertising. However, it is not always applied in investment promotion, either because IPA professionals are not familiar with the concept or because of the difficulties associated with implementing a targeted approach. The main challenge faced by IPAs in developing a targeted approach is usually a lack of knowledge about their target groups. Developing targeted messages requires detailed and accurate knowledge about how each target group operates, what is important to them and what information is likely to be more relevant and interesting to them. This type of knowledge about a target group is usually not easily available to the IPA, and requires conducting research about the target groups. Sources of information about the target group include discussions or interviews with representatives of the target group (e.g. domestic companies or existing investors from the industry) and/or individuals within the IPA or other organizations (e.g. industry associations) that are most familiar with the group. Before the IPA can conduct this type of research, however, it must first clearly define the target groups with which it plans to communicate. This is an essential first step that also often represents a challenge for IPAs, and is dealt with in more detail in the following section.

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II.2. Selecting Target Groups IPAs often address their communication to very broad target groups, such as “potential corporate investors” or “corporate executives of large companies”. However, these types of definitions are far too broad to enable a targeted approach, since they include numerous entities that have vastly different requirements. In an effort to be more targeted, most IPAs have selected target industries on which to focus their investment attraction and communication efforts. However, even these industries are often defined too broadly and may include a range of separate sectors with distinct activities and needs. Consider the automotive industry as an example. At a basic level, this can be divided into two groups: 1) vehicle manufacturers and 2) component suppliers. However, each of these two groups can be further divided. “Vehicle manufacturers”, for example, includes companies that produce passenger cars, as well as companies that produce buses, which both have very different manufacturing processes (car production is highly automated whereas bus manufacturing is largely manual). The category of “component suppliers” can be broken down into numerous subgroups, either based on the type of component being supplied (e.g. chassis, brakes, interior, electronics), the type of material used (e.g. plastic parts, forged metal parts, glass) or the position of the supplier in the automotive supply chain (e.g. tier-1, tier-2). Each of these subgroups will differ in terms of their investment behavior and location requirements, and will therefore respond more positively to communication that reflects an awareness of their specific requirements. Figures 2 and 3 in the Attachment provide examples of how industries can be broken down into different subgroups. In the wind energy industry for example, the selection of the subgroup “manufacturers of ball and roller bearings” means that an IPA must communicate messages that are important to traditional manufacturers of metal products. This includes low energy costs, low labor costs and ideally lower thresholds for environmental permits. These are very different requirements from

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other segments of the renewable or wind energy industries, which are often seen as “clean” industries. These examples show very clearly why it is important for IPAs not to use generic messages but to tailor their communication to specific target groups. Without this level of targeting, the IPA’s messages may completely miss the point or even be counterproductive in terms of communicating the wrong messages. In addition to different industries and sectors, other factors that IPAs should consider in defining target groups include: n Geographic origin: should communication be focused on groups from a par-

ticular geography? For example, do Chinese investors have different requirements than German investors, even if they are in the same industry? n Organizational roles: who is the IPA targeting within an organization? Does

the IPA want to develop messages that are relevant to chief executives, finance managers, supply chain executives or other functional groups, each of which will have very different needs and interests? n Common interests: do the organizations within the target group share the

same interests or is the group too broad and therefore too diverse to enable a targeted approach? The same principles apply to defining target groups for communication with multipliers or stakeholders within the IPA’s own jurisdiction. The IPA must clearly define the target group that it wishes to communicate with, based on an understanding of the characteristics and requirements of these groups. Regardless of whether the target groups consist of corporate decision makers, multipliers or other stakeholders, the same principles in determining a target group should apply: n The group consists of entities that conduct similar activities and share simi-

lar requirements and interests.

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n The entities within the group can be addressed in a concentrated and coor-

dinated way (see the following unit on “Communications Channels”). n The group is relevant or significant to the IPA, meaning that the IPA has a

valid reason to be communicating with this group. n The IPA can communicate a meaningful and attractive message to the

group, based on an understanding of the group’s shared requirements (see the next section on “value propositions”). Depending on the IPA’s objectives and focus, there are many potential target groups that the IPA can select. One of the goals and prerequisites of effective IPA communication is to select those target groups that are most relevant to the IPA’s overall goals and strategy and around which an effective communications strategy can be built. For purposes of illustration, the following are examples of the types of target groups that an IPA might define, depending on its overall strategy and goals: n Producers of plastic packaging for the food industry. n Developers and operators of solar photovoltaic plants. n Chinese manufacturers of agricultural machinery and equipment. n Chief Financial Officers of publicly listed companies from the USA. n Directors/Heads of Shared Services responsible for the Americas region. n Medical device industry associations in EU member states. n Heads of government departments in our jurisdiction involved in workforce

training. n Heads of engineering departments at universities in our jurisdiction.

Selecting target groups at this level will enable IPAs to develop messages that are tailored to the needs of each group and therefore more likely to be positively received. Despite the clear benefits of a targeted approach, there are cases where an IPA may prefer to communicate more general messages to a broad audience. This includes

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efforts to “brand” the location overall as a favorable business location as well as efforts to communicate the benefits of FDI to the population at large. Even in these cases, the IPA may still select target groups, although the large size of these groups means that they can be addressed with less focused messages.

II.3. Value Propositions In the context of investment promotion, a “value proposition” is defined as a statement that describes the advantages that a location offers potential investors. Most IPAs have statements of this kind, often expressed as a list of “reasons for investing” in their particular location. However, the majority of these lists are similar (if not identical) and IPAs from very diverse locations from different parts of the world often use the same arguments or statements to describe their advantages to potential investors. Typical arguments used by investment promotion agencies include the following: n A “strategic” or “central” geographic location. n Market size or market access. n Workforce availability. n Modern infrastructure. n Pro-business government and regulations. n Favorable taxes and other cost advantages. n Incentives for investors. n An attractive quality of life.

Although these are all valid arguments that reflect factors of importance to investors, they are expressed in the broadest possible terms and therefore appear generic. Since most locations use the same arguments, they fail to differentiate one location

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from another. These arguments are expressed so broadly that they do not communicate any specific benefit to the potential investor and therefore have little promotional value. The main reason why these arguments are too generic is that they address the perceived requirements of the “typical corporate investor”, rather than focusing on a particular target group. In reality, there is no such thing as a “typical” corporate investor since companies have very different requirements depending on their industry, the nature of their product or service as well as their current situation and reason for considering international investment. The same factor can have very different meanings for different companies. “Workforce availability”, for example, can mean unskilled and low-wage assembly workers for one company whereas another company requires highly qualified information technology specialists with experience in specific types of programming languages. The claim that a location has “workforce availability” is meaningless to both companies unless it relates directly to the particular type of workforce that the company requires. In defining value propositions, an IPA must therefore understand what type of workforce companies in their particular target group require, and then make this information part of the value proposition. This illustrates the importance of selecting target groups. Put simply: it is impossible to develop meaningful value propositions without defining target groups. Once target groups have been selected, the IPA requires knowledge about the target group to develop focused value propositions. This includes knowledge about: n Current developments and trends affecting the target group. n Business models (how do companies in the target group make money?). n Operational requirements of companies in the target group. n Supply chains and other linkages between companies within and outside

the target group. n Recent investment trends and location decisions by companies in the group.

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This type of industry knowledge can by gained from a number of sources, including the IPAâ&#x20AC;&#x2122;s previous project experience, discussions with industry specialists (e.g. associations, journalists) as well as discussions with companies in the target group itself. Based on this knowledge, as well as information about the characteristics of the location itself, the IPA should be able to develop value propositions that are focused on the requirements of a specific target group. Value propositions can consist of several arguments addressing different needs of the target group. They can also be narrow and focused on only one specific issue (e.g. availability of a certain type of raw material) that is very important to the target group. In either case, the value proposition should be expressed in a manner that is both convincing as well as easy to understand. This requires using language that shows that the IPA understands the requirements of the target group, while clearly articulating the benefits that investing in the location would provide the company. When formulating value propositions, it helps to illustrate key points by using examples of other companies that have benefited from a particular advantage of the location. It is also useful to substantiate any â&#x20AC;&#x153;claimsâ&#x20AC;? with specific information (e.g. relevant statistics) as well as sources for the information. This provides additional credibility and helps to differentiate the location from its competitors. The value proposition that an IPA develops becomes the foundation for its communication with potential investors, regardless of the channels that are used for the communication. The value propositions need to be updated regularly to ensure that they continue to be relevant and to reflect the needs of the target group.

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SYNTHESIS OF THE UNIT Effective communication requires focusing on specific target groups. Without this focus, IPAs will communicate generic messages that do not contribute to promoting the location or attracting investors. This is the main reason that many IPAs say almost exactly the same things as part of their communication. The first step in targeted communication is to define and select target groups that reflect the IPA’s investment attraction priorities. The IPA must then obtain a clear understanding of these target groups as a basis for developing “value propositions” that are appealing to them.

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UNIT 3 COMMUNICATIONS CHANNELS

Learning Objectives This unit will cover the following topics: n Types of communication channels. n The advantages and disadvantages of different channels. n The role of multipliers. n Selecting the most effective channel for different target audiences.

III.1. Types of Communications Channels IPAs can communicate with their target audiences using a diverse range of channels. These include activities that are often considered part of other key IPA functions, such as marketing, business development or public relations. As described earlier in the module, while these activities may be performed by different groups or departments within an IPA, they all represent a form of communication and are therefore included in this module. Each channel is particularly suited to communicating with a particular type or types of target audiences. The following table shows the various communication channels

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as well as the audiences they are most effective for communicating with. The individual channels are described in more detail in the following section. Box 1. Communications channels Channel

Brief description

Target audiences

Direct contact

Direct calls or emails

Corporate decision-makers

Roadshows

Meetings in overseas markets

Corporate decision-makers Influencers/multipliers

Own events

Events organized by the IPA

Corporate decision-makers Influencers/multipliers IPA stakeholders IPA partners

Conferences

Industry conferences or events

Corporate decision-makers Influencers/multipliers

Trade shows

Industry trade shows

Corporate decision-makers

Social media

LinkedIn, Twitter, Facebook

Corporate decision-makers Influencers/multipliers IPA stakeholders IPA partners

Media

Articles and publications

Corporate decision-makers Influencers/multipliers Business community IPA stakeholders IPA partners Local businesses and public

Website

IPAâ&#x20AC;&#x2122;s internet page

Corporate decision-makers Business community Influencers/multipliers IPA stakeholders IPA partners

Advertising

TV, online, print or public space Business community

Branding

Image creation / enhancement 25

Business community

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These channels can be categorized as “direct” or “indirect”. Direct channels are those where communication takes place directly with a specific audience, whereas “indirect” channels may or may not reach the intended audience (and may also reach other audiences that are not relevant for the IPA). In the table above, the channels are listed from the most direct (direct contact) to the most indirect (branding). Another way of differentiating between channels is to distinguish between “targeted” channels (which are focused on a very specific target group) and “general” channels (which address a broad audience). Figure 4 in the Attachment shows the various channels on the two dimensions of “direct to indirect” and “targeted to general”. An IPA will typically use a mix of various channels in its communication, with a balance of both direct/indirect and targeted/general channels. The exact mix, as well as the weight of the individual channels in the mix, will depend on a number of factors including: n The resources available to the IPA, including staff and budgets, as well as

the ability of the IPA to implement activities using each channel. n The current priorities of the IPA (e.g. business attraction vs. stakeholder

management). n How well-known the location is internationally. n The focus of the IPA in terms of target audiences. n The effectiveness of each channel for the particular target groups that the

IPA is focusing on. n The IPA’s previous experience with each channel.

In general, a large IPA with an experienced and diversified staff will be able to employ a mix of all the channels described in this module, whereas a smaller IPA with more limited budgets will need to select those that best help it to meet its current objectives. The following section provides an outline of the key advantages and disadvantages of the various channels, which can serve as a guide to IPAs that need to decide which channels to utilize. 26

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III.2. Advantages and Disadvantages of Different Channels Box 2. Advantages and disadvantages of different channels Channel

Direct contact

Description

This includes a range of activities that involve establishing direct contact with decision-makers of selected companies. Key methods are making cold calls or sending emails or letters. These activities may be conducted by staff in the IPAâ&#x20AC;&#x2122;s home office or international representatives. The IPA may also engage a lead generation service provider to establish contact with potential investors and introduce them to the IPA. This is the most direct form of communication that an IPA can conduct and falls under the business attraction function of an IPA. One of the keys to effective direct contact is selecting the right companies and individuals to approach, meaning that the companies actually have potential for an investment. Many IPAs lack the tools (e.g. for company research) and skills (e.g. for cold calling) to implement direct contact.

Example

The Japan External Trade Organization (JETRO), the national IPA of Japan, regularly uses lead generation consultants to establish direct contact with corporate decision-makers in specific target groups (both sectors and geographic markets). The contact takes place in the form of a meeting, telephone call or videoconference. More information about the nature of these contacts is provided in the requests for proposal for lead generation services that JETRO publishes online (for example: https://www.jetro.go.jp/usa/topics/rfp-lead-generation-promotion-fdi-japan-environment-cleantech-energy.html).

Advantages

Direct contact can be very efficient if conducted effectively. It is also easy to measure results and the return on the IPAâ&#x20AC;&#x2122;s expenditure using this channel.

Disadvantages Depending on the resources available to the IPA, direct contact may be too narrow (i.e. not enough companies are contacted) to generate results.

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Channel

Roadshows

Description

Roadshows involve representatives of the IPA traveling to overseas markets to meet with potential investors. In some cases, the roadshows include a combination of meetings at companies’ offices as well as other activities such as organizing an event and/or the attendance of a trade show, both of which are described below. Roadshows sometimes also cover multiple countries on a single visit. Some form of direct contact is required in advance of the roadshow to schedule meetings with companies.

Example

The Invest in Italy agency held a “Global Roadshow” in 2015 and 2016, visiting Istanbul, Tokyo, New York, San Francisco, London, Beijing, Hong Kong, Singapore and Dubai for a combination of events and meetings. More information on the roadshow is provided on Invest in Italy’s website (http://www.investinitaly.com/en/global-roadshow/).

Advantages

Roadshows provide an opportunity to meet with corporate decision makers in person, which is generally more effective than phone calls or emails, especially when the IPA does not have an international presence. They also provide an opportunity to conduct multiple activities in a specific market.

Disadvantages Roadshows can be time-consuming and complicated to organize. Depending on the number of participants and destinations included, they can also be quite expensive.

Channel

Own events

Description

This refers to events organized by the IPA to promote itself to a selected audience. These are usually held overseas in selected target markets, although increasingly IPAs are also organizing large promotional events in their own country. Own events typically fall into two categories: 1) large promotional events, which have a broader promotional theme and are designed to attract a large audience consisting of company representatives, multipliers and other participants, and 2) focused events, such as roundtables or seminars, which are targeted at a smaller group of selected participants, such as executives from a specific target sector.

Example

Several IPAs targeting the mining sector attend the “Prospectors & Developers Association of Canada” conference, held annually in Toronto, Canada. In 2017, the IPAs of both Peru and Chile held different events, including a CEO luncheon and 28

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an investment seminar, targeted at executives from the mining industry attending the conference. More information about the events can be found in the press release issued by ProInversión Peru (http://www.proinversion.gob.pe/modulos/NOT/NOT_DetallarNoticia.aspx?ARE=0&PFL=1&NOT=3723) and a separate website created for the event by InvestChile and its partners (http://www.prochile.gob.cl/difusion/varios/landing-pdac/index.html). Advantages

Events can be a useful way of generating attention, since the IPA controls the messages that are communicated and (to some degree) the participants attending the event. Focused events can be a very effective method of communicating a value proposition to a carefully selected target audience.

Disadvantages Large promotional events are often expensive and challenging to organize, while the results are difficult to predict and measure. Focused events require significant preparation to develop a convincing value proposition and secure the right participants.

Channel

Conferences

Description

Many IPAs attend industry conferences to communicate with potential investors as well as other industry players. In addition to simply attending to meet companies, conferences provide opportunities for IPAs to gain additional visibility through sponsorship or a speaking slot on the conference program. In some cases, sponsoring a conference may also provide opportunities for direct access to specific conference participants (e.g. through an exclusive reception hosted by the IPA or an individual program of meetings organized for the IPA by the conference organizers).

Example

The Aviation Forum in Hamburg, Germany, is an annual conference focusing on the aerospace industry and particularly the Airbus supply chain. The sponsors usually include several IPAs (mostly from North America). Confirmed sponsors and “cooperation partners” for the 2017 conference (https://www.aviationforumhamburg.com/partners-sponsors/) include the IPAs for the US states of Georgia and Washington as well as ProMéxico. The main sponsors receive several benefits such as the ability to place a speaker on the program as well as articles in the conference materials.

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Carefully selected conferences can offer valuable opportunities to interact with senior level corporate decision-makers and to raise the profile of the location with a target group.

Disadvantages Attending conferences is expensive and sponsorship is a costly option that many IPAs are not able to afford.

Channel

Trade shows

Description

This category includes both huge industry trade shows that are attended by companies from around the world as well as smaller trade shows that attract a more regional or local group of participants. Many IPAs attend trade shows as visitors, often scheduling meetings with companies in advance. However, IPAs may also choose to exhibit at the trade show, which provides greater visibility and the opportunity to host meetings and receptions at the booth.

Example

Numerous IPAs attend and exhibit at the world’s largest aerospace industry trade shows, held in Farnborough (UK) and Paris (France) in alternate years. The trade and investment promotion agency of Mexico, ProMéxico, regularly exhibits at these airshows, bringing in partners from Mexico as well as Mexican companies that ProMéxico is assisting with trade promotion. More information on the ProMéxico’s participation in the 2015 Paris Airshow is provided on the Mexican government website: https://www.gob.mx/promexico/prensa/mexico-participa-enel-international-paris-air-show?idiom=es

Advantages

Trade shows provide access to a concentration of corporate representatives and other industry participants in a specific industry. They also provide a method for integrating trade promotion and FDI attraction activities and resources.

Disadvantages Corporate representatives at trade shows are sometimes not responsible for international expansion or not interested in meeting with IPAs, since they are attending the show to promote their own companies. Attending trade shows requires many weeks of planning, and participation can be expensive if the IPA wishes to exhibit.

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Channel

Social media

Description

Social media have become important communication channels in recent years. While platforms such as Facebook, Twitter and Instagram are more suited to general promotion and branding, business networking platforms such as LinkedIn (and national variations such as WeChat in China) represent an alternative to phone calls and emails for establishing direct contact to decision-makers. Communications through social media channels such as Twitter must be continuous to be effective, which means that the IPA requires a constant flow of new and interesting content that reflects target group requirements.

Example

Scottish Development International is one of the most proficient users of social media, with an active presence on LinkedIn and Twitter (https://twitter.com/scotdevint).

Advantages

Social media provide an effective way for communicating with younger, more technology-oriented companies, as well as an increasingly used alternative to traditional communication channels.

Disadvantages Social media must be carefully managed to ensure that content is effective and coordinated with the IPA’s overall communication strategy. This means that the IPA must have fulltime professional social media specialists on its staff or use a specialized service provider.

Channel

Media

Description

Media includes traditional channels such as newspapers, magazines, television and—to a lesser degree—films and radio. It also includes specialized online portals that provide industry news and analysis for a particular sector. These types of portals are available for virtually every sector, no matter how focused or specialized. IPAs have several options for gaining exposure in media, including paying to be featured in publications in the form of “advertorials” (which are distinct from advertising mentioned below) or developing relationships with journalists and other media representatives to secure coverage at no cost. This can be done by inviting journalists to visit the location as part of a tour focusing on a specific aspect of the location’s economy.

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Media also includes content produced by the IPA itself, such as newsletters, magazines, thought leadership (e.g. industry studies) or online blogs. Increasingly, IPAs are also publishing reports and presentations about the results generated by the IPA and the importance of FDI for the jurisdiction, which can be used for communication with local stakeholders. The key for effective media is the availability of interesting “content”, meaning stories or news about the location that are interesting to media and not purely promotional. Example

The Financial Times newspaper publishes regular “Special Reports”, which are distributed along with the main newspaper. These are usually sponsored by organizations interested in promoting a specific topic, although the FT claims that the journalism in its sponsored reports is unbiased. Numerous IPAs have sponsored reports in the FT, including Argentina in September 2016 (https://www.ft.com/reports/new-argentina). A full list of the special reports produced by the FT is available on the FT’s website (https://www.ft.com/reports-library).

Advantages

Media can provide an IPA with credible and well-produced promotional material and—depending on the channel—can be an effective route to decision-makers.

Disadvantages Media coverage can be expensive to obtain and developing relationships with journalists is a time-consuming process.

Channel

Website

Description

Websites are no longer optional but an essential tool for all IPAs. In addition to enabling the IPA to be found online, the website provides a method for potential investors to engage with the IPA and is therefore a source of potential projects. IPAs must ensure that the website content is available in perfect English and easy to navigate, and that the site communicates key messages for specific target groups. The site should contain sector-specific information as well as testimonials from existing investors. Search Engine Optimization (SEO) is required for the website to be found by companies searching the web for specific information (e.g. “outsourcing in Latin America”). The website provides a critical “first-impression” of the IPA and the location and should therefore be professional and reflect the image that the IPA wishes to communicate. 32

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Example

The new website of IPA of Nicaragua is well structured, contains useful information about specific target sectors and is also designed in a professional way that reflects positively on the IPA (http://pronicaragua.gob.ni/en/).

Advantages

Websites are arguably the main communication channel for IPAs and should not be neglected. Nowadays, creating a professional-looking website does not need to be expensive.

Disadvantages Maintaining a website requires creating and constantly updating relevant content, which can be time-consuming.

Channel

Advertising

Description

Advertising is similar to media (see above), with the exception that the IPA pays for a clearly designated advertisement. In addition to the channels mentioned under media, this can include online advertising, public advertising (e.g. billboards in public spaces) or specialized channels such as screens in airport executive lounges. Advertising agencies can provide many creative options for visual promotion.

Example

India has embarked on a massive promotional campaign for its â&#x20AC;&#x153;Make in Indiaâ&#x20AC;? strategy to attract manufacturing to the country. The campaign includes widespread online advertising, television commercials, banners and other media. More information about the campaign and some of the promotional initiatives is provided on the Make in India website (http://www.makeinindia.com/about).

Advantages

If professionally produced and placed in the right media, advertising can boost awareness and create a positive image of a location.

Disadvantages Advertising must be ongoing to be effective and can be counterproductive if it is not well-produced. Advertising is the most expensive of the communications channels available to IPAs and requires large ongoing budgets to sustain it.

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Channel

Branding

Description

Branding is an exercise in creating an overall image or brand for a location. The image or brand should be associated with specific attributes that make the location easily identifiable by potential investors and other target groups. Branding sometimes encompasses different promotional aspects including tourism and trade, in an effort to communicate a unified country-brand. Brands often have a strong visual component, which is supposed to make the brand easily recognizable and provide consistency to different visual communications channels (e.g. website, publications). The key method for promoting a brand is usually advertising. However, the brand also affects all of the IPAâ&#x20AC;&#x2122;s other communications activities, which should ideally reflect the overall country brand both visually and in terms of the messages communicated.

Example

Costa Rica created a new country brand (Esencial Costa Rica) a few years ago, which is intended to position the country as an attractive location for investment, tourism and trade. The countryâ&#x20AC;&#x2122;s IPA CINDE uses the brand on its website and in its promotional materials. More information about the overall brand is provided on the official website (http://www.esencialcostarica.com/).

Advantages

A well-executed brand can enhance a locationâ&#x20AC;&#x2122;s image and create strong promotional benefits.

Disadvantages Location branding is very difficult to implement in practice and the messages are often generic and fail to differentiate the location. In addition to the costs and effort of creating and communicating the brand, branding requires sustained advertising and other measures, which are very expensive. Branding initiatives can also be the subject of criticism by the public and media at home, who often consider the large expenditures associated with branding to be wasteful.

III.3. The Role of Multipliers Multipliers are a special case, since they are both target audiences for an IPA as well as a channel through which to communicate key messages to potential investors. In

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the context of foreign investment attraction, “multipliers” are defined as organizations or individuals that can provide access to companies with foreign investment plans. Multipliers may also provide opportunities for raising awareness of a location with a specific target group. In this case, the multipliers act as “influencers” whose opinion is respected within a certain sector or market. A list of different types of multipliers and influencers is provided in figure 5 in the Attachment. This includes a wide range or organizations, each of which will play a different role depending on the target groups that the IPA is focusing on. Multipliers can provide a useful channel for IPAs to identify and gain contact to a potential investor. However, it may be just as challenging for an IPA to gain access to a multiplier as it would be to contact a corporate decision-maker directly and IPAs should not rely on multipliers exclusively for access to companies. Multipliers will also need to be convinced that recommending a particular location or introducing an IPA to their corporate contacts is beneficial. This means that the IPA must create value propositions for different types of multipliers. It is therefore important to recognize that multipliers do not provide a guaranteed route to potential investors and that a direct contact to a specific corporate target should generally be the preferred approach. With these reservations in mind, multipliers can play an important part of a comprehensive communications strategy. By providing an alternative route to potential corporate investors and helping to improve the reputation of a location, they can enhance an IPA’s investment attraction efforts and contribute to generating results. The keys for an IPA to engage successfully with multipliers include realistic expectations, a careful selection of organizations and individuals to engage with and preparation to ensure that this engagement is as effective as possible.

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Another category of “multiplier” that is not covered in the description above includes international organizations such as the Inter-American Development Bank, the World Bank, UNCTAD, the OECD or the World Association of Investment Promotion Agencies. While these organizations are not multipliers in the sense of providing access to potential investors, they can provide other benefits to IPAs. These include capability building programs, benchmarking with global or regional best practices, access to data and information, funding for specific projects or programs as well as other types of support for the IPA’s operations. The potential benefits of interacting with these types of organizations means that they should be included in an IPA’s overall communications strategy.

SYNTHESIS OF THE UNIT IPAs can use many different channels for communicating with their selected target audiences. These channels vary in terms of their effectiveness for different audiences as well as their costs and ease of implementation. While some channels involve direct communication with a target group, others are broader and more general in terms of content. An IPA will need to select the right combination of channels, based on its strategy as well as the financial and personnel resources available for implementation.