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Part Seven Special Topics and Perspectives
Belch: Advertising and
Promotion, Sixth Edition
VII. Special Topics and
Perspectives
20. International
Advertising and Promotion
© The McGraw−Hill
Companies, 2003
often a function of its stage of development. More competition is likely in well-developed
mature markets, which will influence the types of sales promotion tools used.
For example, there may be competitive pressure to use trade allowances to maintain
distribution or consumer promotions that will maintain customer loyalty, such as
bonus packs, price-off deals, or coupons.
• Consumer perceptions. An important consideration in the design of sales promotion
programs is how they are perceived by consumers as well as the trade. Consumer perceptions
of various sales promotion tools vary from market to market. For example,
Japanese women are less likely to take advantage of contests, coupons, or other
promotions than are women in the United States. 99 Premium offers in particular must
be adapted to the tastes of consumers in various markets. A recent study by Huff and
Alden examined consumers’ opinions toward the use of coupons and sweepstakes in
three Asian countries: Taiwan, Malaysia, and Thailand. The study found differences
among the three countries with consumers in Taiwan having more negative attitudes
and lower levels of use of both sweepstakes and coupons than consumers in Malaysia
and Thailand. 100
• Trade structure. In areas with highly concentrated retailing systems, such as northern
Europe, the trade situation is becoming much like the United States and Canada as
pressure grows for more price-oriented trade and in-store promotions. In southern
Europe, the retail industry is highly fragmented and there is less trade pressure for
promotions. The willingness and ability of channel members to accommodate sales
promotion programs must also be considered. Retailers in many countries do not want
to take time to process coupons, post promotional displays, or deal with premiums or
packaging that require special handling or storage. In countries like Japan or India,
where retailing structures are highly fragmented, stores are too small for point-ofpurchase
displays or in-store sampling.
• Regulations. An important factor affecting the use of sales promotions in foreign
countries is the presence of legal restrictions and regulations. Laws affecting sales
promotions are generally more restrictive in other countries than in the United States.
Some countries ban contests, games, or lotteries, while others restrict the size or
amount of a sample, premium, or prize. For example, fair-trade regulations in Japan
limit the maximum value of premiums to 10 percent of the retail price; in France the
limit is 5 percent. Canada prohibits games of pure chance unless a skill element is
used to determine the winner. In Japan the amount of a prize offer is limited to a
certain percentage of the product tied to the promotion. 101 In some countries, a free
premium must be related to the nature of the product purchased. Many countries have
strict rules when it comes to premium offers for children, and some ban them
altogether. The appendix at the end of this chapter shows the restrictions on various
sales promotion tools in a number of different countries.
Variations in rules and regulations mean marketers must often develop separate
consumer sales promotion programs for each country. Many companies have found
it difficult to do any promotions throughout Europe because sales promotion rules
differ so from one country to another. While the treaty on European Union may
result in a more standardized legal environment in Europe, laws regarding sales promotion
are still likely to vary. This is why many companies use local agencies or
international sales promotion companies to develop sales promotion programs for
foreign markets.
Management of Sales Promotion in Foreign Markets Although
sales promotion programs of multinational companies have traditionally been managed
locally, this is changing somewhat as marketers create global brands. Many
global marketers recognize the importance of giving local managers the autonomy to
design and execute their own sales promotion programs. However, the ways local promotions
influence and contribute to global brand equity must also be considered.
Kashani and Quelch developed a framework for analyzing the role of centralized
(headquarters) versus local management in sales promotion decisions based on various
stages of globalization (Figure 20-5). This model suggests headquarters’ influence
will be greatest for global brands and least for local brands. Since global brands