Promotion Issues

Legal challenges Taxes Language Barriers Cultural issues Media Limitations

Legal Challenges

Comparison advertising may be prohibited “Better than the leading brand” An ad showing chimps choosing Pepsi

over Coke was banned from satellite tv

Products may be prohibited from tv ads

Australia: cigarettes, slimming products Canada: drugs, use of cartoons in ads

for children, margarine Chile: toothpaste, aspirin Sweden: use of fictitious characters to

endorse products Switzerland: Use of actors to represent

consumers Kuwait: indecent items, airlines,

chocolates, cigarettes, lighters, alcohol ads

In the Netherlands, children may not appear in ads for candy and companies must put a little toothbrush symbol at the end of the commercials as a reminder for people to brush their teeth.

Promotions may be limited Mail-in offers and purchase with a

purchase promotions are prohibited in Germany

Cash rebates are prohibited in Italy Sweepstakes may not be permitted in

Spain, France and Italy

Taxes

Austria has a 10% tax on ad insertions, radio and tv ads

Language

Language and dialects may cause a problem

“tomato paste” was translated to tomato glue in Arabic

Coors put its slogan “Turn it loose” into Spanish, where it was read as “Suffer from diarrhea”

Among Arab countries there are at least 30 dialects which affect translation

Literacy may be a problem Multiple languages:

Switzerland recognizes four, Israel recognizes 50 and Canada recognizes two

An outdoor ad used by a company had dirty clothes on the left, laundry detergent in the middle, and clean clothes on the right. In countries where people read from right to left, this meant that soap takes clean clothes and makes them dirty.

Cultural Diversity

Affects customer perceptions of items Colors – white is purity (Europe) or

death (Asia) Diversity – When General Mills first

introduced a cake mix, it was not popular in the U.S. because women felt guilty about not baking. It also flopped in Japan, because cakes are not a popular desert

Tradition – In China, cheese is for foreigners

Pampers tried an ad in Japan with a stork delivering diapers to new parents. The ad failed because in Japanese folklore, giant peaches that float on the river bring babies to deserving parents, not storks

Subcultures – in Hong Kong there are 10 different patterns of breakfast eating

Japan has traditionally not bought coffee, however it has become a fashionable drink for younger people who think of themselves as European and sophisticated

Media Limitations

Time/Amount In Italy, an advertiser can have 10

showings of a commercial a year, with none closer than 10 days

In Brazil, TV commercials are shown together in a string of 10 to 50 within one station break

In Germany, TV scheduling for an entire year must be arranged by August 30 of the preceding year, with no guarantee that commercials intended for summer viewing will not be run in the middle of winter

Kuwait - Only 32 minutes of advertising per day is available and it’s all in the evening

Availability – In some parts of Africa, television and radio are not available for advertising. Companies have used boats that go up and down rivers with loudspeakers to broadcast commercials.

National coverage for some countries means using as many as 40 to 50 different media

Newspapers: Level of competition varies Uruguay has 21 newspapers with circulation

of 553,000 (population = 3 million) Turkey has 380 newspapers which each

have a political affiliation that must be considered

Japan has 5 papers but each are only 16-20 pages long

Delays – In India and Indonesia, paper shortages delay ads for up to 6 months

Magazines – many do not have reliable circulation figures

Ads may not always run due to space limitations – In Britain it is common practice for a raffle to decide which ads run in a magazine issue

Television Issues

Many countries have government influence over television stations

South Korea has two television companies, both government-owned, which broadcast only a few hours a day. They do not broadcast from midnight - 6 am, and 10 am – 5:30 pm on weekdays. Commercials are shown in clusters at the beginning and end of programs, with total advertising limited to 8 percent of air time

Direct Mail – may be helpful if there are no other media

Nestle and Dell have used this effectively in Japan

May have local issues, such as in Chile, where both senders and receivers of mail pay part of the fee

Billboards – helpful for populations with low literacy rates

Cinema is an important media for many countries

Sound trucks with loudspeakers have been used successfully in Haiti to promote products

In the Ukraine, faxing ads has been successful because the postal service is unreliable

In Romania, transit advertising on buses has become more effective that television advertising.

Famous Flops

The singing raisins

The U.S. Department of Agriculture gave the California Raisin Advisory Board a $3 million grant to promote raisins in Japan. The commercials were not translated into Japanese because of their success. The result?

The misshapen figures frightened children.

People were not able to discern what product was being advertised and guessed it to be chocolate or potatoes

The promotion cost $3,000 per ton of raisins sold and U.S. producers earned $1,583 per ton

Maytag Company in Europe Company offered free airline

tickets to New York or Orlando from U.K. for customers who purchased more that $375 worth of Hoover appliances

As many as 200,000 customers responded, because the airlines tickets were more than the appliances.

Company wasn’t prepared to handle 200,000 ticket applications, which lead to customer frustration and anger

The more the company sold, the more it lost on the promotion. Total losses were estimated at 48.8 million dollars for the promotion.

Famous Successes

Nestle Baby Stops When Nestle introduced a new infant

formula, they built rest stops which had hostesses, free diapers, and samples of their foods and new formula

As people went on holiday, they got to know Nestle

Market share increased to 45% from 17%