Nike is a global sports shoe giant company.

It is the largest seller of athletic footwear in the

world, holding the lion share of 33% of the global market. The company has production facilities
in Asia, sales facilities in almost 200 countries, and customer service and other operational units
worldwide.

The marketing mix or the 4 Ps of Marketing are Product, Price, Place (distribution) and
Promotion. Nike's 4Ps are the following:

1. Product

Nike offers a wide range of shoe, apparel and equipment products, all of which are currently its
top-selling product categories. Nike started selling sports apparel, athletic bags and accessory
items in 1979. Their brand Cole Haan carries a line of dress and casual footwear and accessories
for men, women and children.

They also market head gear under the brand name Sports Specialties, through Nike Team Sports,
Inc. They sell small amounts of plastic products to other manufacturers through Nike IHM, Inc.
Bauer Nike Hockey Inc. manufactures and distributes ice skates, skate blades, in-roller skates,
protective gear, hockey sticks and hockey jerseys and accessories.

2. Price

Nike’s pricing is designed to be competitive to the other fashion shoe retailers. The pricing is
based on the basis of premium segment as target customers. Nike as a brand commands high
premiums. Nike’s pricing strategy makes use of vertical integration in pricing wherein they own
participants at differing channel levels or take part in more than one channel level operations.
This can control costs and influence product pricing.

3. Place

Nike shoes are carried by multi-brand stores and the exclusive Nike stores across the globe. Nike
sells its product to about 20,000 retail accounts in the U.S. and in almost 200 countries around
the world. In the international markets, Nike sells its products through independent distributors,
licensees and subsidiaries. Independent distributors need not adapt to local pressures because the
4Ps of marketing are managed by distributors.

4. Promotion

Promotion is largely dependent on finding accessible store locations. It also avails of targeted
advertising in the newspaper and creating strategic alliances. Nike has a number of famous
athletes that serve as brand ambassadors such as the Brazilian Soccer Team (especially
Ronaldino, Renaldo, and Roberto Carlos), Lebron James and Jermane O’Neal for basketball,
Lance Armstrong for cycling, and Tiger Woods for Golf.

Nike also sponsors events such as Hoop It Up and The Golden West Invitational. Nike’s brand
images, the Nike name and the trademark swoosh, make it one of the most recognizable brands
in the world. Nike’s brand power is one reason for its high revenues. Nike’s quality products,
loyal customer base and its great marketing techniques all contribute to make the shoe empire a
huge success.

Read more: "Audit on Nike's Marketing Strategies: The 4Ps - Product, Price, Place and
Promotion" - http://corporate-marketing-
branding.suite101.com/article.cfm/audit_on_nikes_marketing_strategies#ixzz09vdpUzS0

Product Issues in International Marketing

Products and Services. Some marketing scholars and professionals tend to draw a strong
distinction between conventional products and services, emphasizing service characteristics such
as heterogeneity (variation in standards among providers, frequently even among different
locations of the same firm), inseperability from consumption, intangibility, and, in some cases,
perishability—the idea that a service cannot generally be created during times of slack and be
“stored” for use later. However, almost all products have at least some service component—
e.g., a warranty, documentation, and distribution—and this service component is an integral part
of the product and its positioning. Thus, it may be more useful to look at the product-service
continuum as one between very low and very high levels of tangibility of the service. Income
tax preparation, for example, is almost entirely intangible—the client may receive a few
printouts, but most of the value is in the service. On the other hand, a customer who picks up
rocks for construction from a landowner gets a tangible product with very little value added for
service. Firms that offer highly tangible products often seek to add an intangible component to
improve perception. Conversely, adding a tangible element to a service—e.g., a binder with
information—may address many consumers’ psychological need to get something to show for
their money.

On the topic of services, cultural issues may be even more prominent than they are for tangible
goods. There are large variations in willingness to pay for quality, and often very large
differences in expectations. In some countries, it may be more difficult to entice employees to
embrace a firm’s customer service philosophy. Labor regulations in some countries make it
difficult to terminate employees whose treatment of customers is substandard. Speed of service
is typically important in the U.S. and western countries but personal interaction may seem more
important in other countries.

Product Need Satisfaction. We often take for granted the “obvious” need that products seem to
fill in our own culture; however, functions served may be very different in others—for example,
while cars have a large transportation role in the U.S., they are impractical to drive in Japan, and
thus cars there serve more of a role of being a status symbol or providing for individual
indulgence. In the U.S., fast food and instant drinks such as Tang are intended for convenience;
elsewhere, they may represent more of a treat. Thus, it is important to examine through
marketing research consumers’ true motives, desires, and expectations in buying a product.
Approaches to Product Introduction. Firms face a choice of alternatives in marketing their
products across markets. An extreme strategy involves customization, whereby the firm
introduces a unique product in each country, usually with the belief tastes differ so much
between countries that it is necessary more or less to start from “scratch” in creating a product
for each market. On the other extreme, standardization involves making one global product in
the belief the same product can be sold across markets without significant modification—e.g.,
Intel microprocessors are the same regardless of the country in which they are sold. Finally, in
most cases firms will resort to some kind of adaptation, whereby a common product is modified
to some extent when moved between some markets—e.g., in the United States, where fuel is
relatively less expensive, many cars have larger engines than their comparable models in Europe
and Asia; however, much of the design is similar or identical, so some economies are achieved.
Similarly, while Kentucky Fried Chicken serves much the same chicken with the eleven herbs
and spices in Japan, a lesser amount of sugar is used in the potato salad, and fries are substituted
for mashed potatoes.

There are certain benefits to standardization. Firms that produce a global product can obtain
economies of scale in manufacturing, and higher quantities produced also lead to a faster
advancement along the experience curve. Further, it is more feasible to establish a global brand
as less confusion will occur when consumers travel across countries and see the same product.
On the down side, there may be significant differences in desires between cultures and physical
environments—e.g., software sold in the U.S. and Europe will often utter a “beep” to alert the
user when a mistake has been made; however, in Asia, where office workers are often seated
closely together, this could cause embarrassment.

Adaptations come in several forms. Mandatory adaptations involve changes that have to be
made before the product can be used—e.g., appliances made for the U.S. and Europe must run
on different voltages, and a major problem was experienced in the European Union when hoses
for restaurant frying machines could not simultaneously meet the legal requirements of different
countries. “Discretionary” changes are changes that do not have to be made before a product
can be introduced (e.g., there is nothing to prevent an American firm from introducing an overly
sweet soft drink into the Japanese market), although products may face poor sales if such
changes are not made. Discretionary changes may also involve cultural adaptations—e.g., in
Sesame Street, the Big Bird became the Big Camel in Saudi Arabia.
Another distinction involves physical product vs. communication adaptations. In order for
gasoline to be effective in high altitude regions, its octane must be higher, but it can be promoted
much the same way. On the other hand, while the same bicycle might be sold in China and the
U.S., it might be positioned as a serious means of transportation in the former and as a
recreational tool in the latter. In some cases, products may not need to be adapted in either way
(e.g., industrial equipment), while in other cases, it might have to be adapted in both (e.g.,
greeting cards, where the both occasions, language, and motivations for sending differ). Finally,
a market may exist abroad for a product which has no analogue at home—e.g., hand-powered
washing machines.

Branding. While Americans seem to be comfortable with category specific brands, this is not
the case for Asian consumers. American firms observed that their products would be closely
examined by Japanese consumers who could not find a major brand name on the packages,
which was required as a sign of quality. Note that Japanese keiretsus span and use their brand
name across multiple industries—e.g., Mitsubishi, among other things, sells food, automobiles,
electronics, and heavy construction equipment.
The International Product Life Cycle (PLC). Consumers in different countries differ in the
speed with which they adopt new products, in part for economic reasons (fewer Malaysian than
American consumers can afford to buy VCRs) and in part because of attitudes toward new
products (pharmaceuticals upset the power afforded to traditional faith healers, for example).
Thus, it may be possible, when one market has been saturated, to continue growth in another
market—e.g., while somewhere between one third and one half of American homes now contain
a computer, the corresponding figures for even Europe and Japan are much lower and thus, many
computer manufacturers see greater growth potential there. Note that expensive capital
equipment may also cycle between countries—e.g., airlines in economically developed countries
will often buy the newest and most desired aircraft and sell off older ones to their counterparts in
developing countries. While in developed countries, “three part” canning machines that solder
on the bottom with lead are unacceptable for health reasons, they have found a market in
developing countries.

Diffusion of innovation. Good new innovations often do not spread as quickly as one might
expect—e.g., although the technology for microwave ovens has existed since the 1950s, they
really did not take off in the United States until the late seventies or early eighties, and their
penetration is much lower in most other countries. The typewriter, telephone answering
machines, and cellular phones also existed for a long time before they were widely adopted.

Certain characteristics of products make them more or less likely to spread. One factor is
relative advantage. While a computer offers a huge advantage over a typewriter, for example,
the added gain from having an electric typewriter over a manual one was much smaller. Another
issue is compatibility, both in the social and physical sense. A major problem with the personal
computer was that it could not read the manual files that firms had maintained, and birth control
programs are resisted in many countries due to conflicts with religious values. Complexity refers
to how difficult a new product is to use—e.g., some people have resisted getting computers
because learning to use them takes time. Trialability refers to the extent to which one can
examine the merits of a new product without having to commit a huge financial or personal
investment—e.g., it is relatively easy to try a restaurant with a new ethnic cuisine, but investing
in a global positioning navigation system is riskier since this has to be bought and installed in
one’s car before the consumer can determine whether it is worthwhile in practice. Finally,
observability refers to the extent to which consumers can readily see others using the product—
e.g., people who do not have ATM cards or cellular phones can easily see the convenience that
other people experience using them; on the other hand, VCRs are mostly used in people’s homes,
and thus only an owner’s close friends would be likely to see it.

At the societal level, several factors influence the spread of an innovation. Not surprisingly,
cosmopolitanism, the extent to which a country is connected to other cultures, is useful.
Innovations are more likely to spread where there is a higher percentage of women in the work
force; these women both have more economic power and are able to see other people use the
products and/or discuss them. Modernity refers to the extent to which a culture values
“progress.” In the U.S., “new and improved” is considered highly attractive; in more traditional
countries, their potential for disruption cause new products to be seen with more skepticism.
Although U.S. consumers appear to adopt new products more quickly than those of other
countries, we actually score lower on homiphily, the extent to which consumers are relatively
similar to each other, and physical distance, where consumers who are more spread out are less
likely to interact with other users of the product. Japan, which ranks second only to the U.S., on
the other hand, scores very well on these latter two factors.

International Promotion
Promotional tools. Numerous tools can be used to influence consumer purchases:

• Advertising—in or on newspapers, radio, television, billboards, busses, taxis, or the

Internet.
• Price promotions—products are being made available temporarily as at a lower price, or
some premium (e.g., toothbrush with a package of toothpaste) is being offered for free.
• Sponsorships
• Point-of-purchase—the manufacturer pays for extra display space in the store or puts a
coupon right by the product
• Other method of getting the consumer’s attention—all the Gap stores in France may
benefit from the prominence of the new store located on the Champs-Elysees

Promotional objectives. Promotional objectives involve the question of what the firm hopes to
achieve with a campaign—“increasing profits” is too vague an objective, since this has to be
achieved through some intermediate outcome (such as increasing market share, which in turn is
achieved by some change in consumers which cause them to buy more). Some common
objectives that firms may hold:

• Awareness. Many French consumers do not know that the Gap even exists, so they
cannot decide to go shopping there. This objective is often achieved through advertising,
 but could also be achieved through favorable point-of-purchase displays. Note that since
advertising and promotional stimuli are often afforded very little attention by consumers,
potential buyers may have to be exposed to the promotional stimulus numerous times
before it “registers.”
• Trial. Even when consumers know that a product exists and could possibly satisfy some
of their desires, it may take a while before they get around to trying the product—
especially when there are so many other products that compete for their attention and
wallets. Thus, the next step is often to try get consumer to try the product at least once,
with the hope that they will make repeat purchases. Coupons are often an effective way
of achieving trial, but these are illegal in some countries and in some others, the
infrastructure to readily accept coupons (e.g., clearing houses) does not exist. Continued
advertising and point-of-purchase displays may be effective. Although Coca Cola is
widely known in China, a large part of the population has not yet tried the product.
• Attitude toward the product. A high percentage of people in the U.S. and Europe has
tried Coca Cola, so a more reasonable objective is to get people to believe positive things
about the product—e.g., that it has a superior taste and is better than generics or store
brands. This is often achieved through advertising.
• Temporary sales increases. For mature products and categories, attitudes may be fairly
well established and not subject to cost-effective change. Thus, it may be more useful to
work on getting temporary increases in sales (which are likely to go away the incentives
are removed). In the U.S. and Japan, for example, fast food restaurants may run
temporary price promotions to get people to eat out more or switch from competitors, but
when these promotions end, sales are likely to move back down again (in developing
countries, in contrast, trial may be a more appropriate objective in this category).

Note that in new or emerging markets, the first objectives are more likely to be useful while, for
established products, the latter objectives may be more useful in mature markets such as Japan,
the U.S., and Western Europe.

Constraints on Global Communications Strategies. Although firms that seek standardized

positions may seek globally unified campaigns, there are several constraints:
 • Language barriers: The advertising will have to be translated, not just into the generic
language category (e.g., Portuguese) but also into the specific version spoken in the
region (e.g., Brazilian Portuguese). (Occasionally, foreign language ads are deliberately
run to add mystique to a product, but this is the exception rather than the rule).
• Cultural barriers. Subtle cultural differences may make an ad that tested well in one
country unsuitable in another—e.g., an ad that featured a man walking in to join his wife
in the bathroom was considered an inappropriate invasion in Japan. Symbolism often
differs between cultures, and humor, which is based on the contrast to people’s
experiences, tends not to travel well. Values also tend to differ between cultures—in the
U.S. and Australia, excelling above the group is often desirable, while in Japan, “The nail
that sticks out gets hammered down.” In the U.S., “The early bird gets the worm” while
in China “The first bird in the flock gets shot down.”
• Local attitudes toward advertising. People in some countries are more receptive to
advertising than others. While advertising is accepted as a fact of life in the U.S., some
Europeans find it too crass and commercial.
• Media infrastructure. Cable TV is not well developed in some countries and regions, and
not all media in all countries accept advertising. Consumer media habits also differ
dramatically; newspapers appear to have a higher reach than television and radio in parts
of Latin America.
• Advertising regulations. Countries often have arbitrary rules on what can be advertised
and what can be claimed. Comparative advertising is banned almost everywhere outside
the U.S. Holland requires that a toothbrush be displayed in advertisements for sweets,
and some countries require that advertising to be shown there be produced in the country.

Some cultural dimensions:

• Directness vs. indirectness: U.S. advertising tends to emphasize directly why someone
would benefit from buying the product. This, however, is considered too pushy for
Japanese consumers, where it is felt to be arrogant of the seller to presume to know what
the consumer would like.
• Comparison: Comparative advertising is banned in most countries and would probably
be very counterproductive, as an insulting instance of confrontation and bragging, in Asia
even if it were allowed. In the U.S., comparison advertising has proven somewhat
effective (although its implementation is tricky) as a way to persuade consumers what to
buy.
 • Humor. Although humor is a relatively universal phenomenon, what is considered funny
between countries differs greatly, so pre-testing is essential.
• Gender roles. A study found that women in U.S. advertising tended to be shown in more
traditional roles in the U.S. than in Europe or Australia. On the other hand, some
countries are even more traditional—e.g., a Japanese ad that claimed a camera to be “so
simple that even a woman can use it” was not found to be unusually insulting.
• Explicitness. Europeans tend to allow for considerably more explicit advertisements,
often with sexual overtones, than Americans.
• Sophistication. Europeans, particularly the French, demand considerably more
sophistication than Americans who may react more favorably to emotional appeals—e.g.,
an ad showing a mentally retarded young man succeeding in a job at McDonald’s was
very favorably received in the U.S. but was booed at the Cannes film festival in France.
• Popular vs. traditional culture. U.S. ads tend to employ contemporary, popular culture,
often including current music while those in more traditional cultures tend to refer more
to classical culture.
• Information content vs. fluff. American ads contain a great deal of “puffery,” which was
found to be very ineffective in Eastern European countries because it resembled
communist propaganda too much. The Eastern European consumers instead wanted
hard, cold facts.

Advertising standardization. Issues surrounding advertising standardization tend to parallel

issues surrounding product and positioning standardization. On the plus side, economies of scale
are achieved, a consistent image can be established across markets, creative talent can be utilized
across markets, and good ideas can be transplanted from one market to others. On the down
side, cultural differences, peculiar country regulations, and differences in product life cycle
stages make this approach difficult. Further, local advertising professionals may resist
campaigns imposed from the outside—sometimes with good reasons and sometimes merely to
preserve their own creative autonomy.

Legal issues. Countries differ in their regulations of advertising, and some products are banned
from advertising on certain media (large supermarket chains are not allowed to advertise on TV
in France, for example). Other forms of promotion may also be banned or regulated. In some
European countries, for example, it is illegal to price discriminate between consumers, and thus
coupons are banned and in some, it is illegal to offer products on sale outside a very narrow
seasonal and percentage range.
Pricing Issues in International Marketing
Price can best be defined in ratio terms, giving the equation

resources given up
price = ———————————————
goods received

This implies that there are several ways that the price can be changed:

• "Sticker" price changes—the most obvious way to change the price is the price tag— you
get the same thing, but for a different (usually larger) amount of money.
• Change quantity. Often, consumers respond unfavorably to an increased sticker price, and
changes in quantity are sometimes noticed less—e.g., in the 1970s, the wholesale cost of
chocolate increased dramatically, and candy manufacturers responded by making smaller
candy bars. Note that, for cash flow reasons, consumers in less affluent countries may
need to buy smaller packages at any one time (e.g., forking out the money for a large tube
of toothpaste is no big deal for most American families, but it introduces a greater strain
on the budget of a family closer to the subsistence level).
• Change quality. Another way candy manufacturers have effectively increased prices is
through a reduction in quality. In a candy bar, the "gooey" stuff is much cheaper than
chocolate. It is frequently tempting for foreign licensees of a major brand name to use
inferior ingredients.
• Change terms. In the old days, most software manufacturers provided free support for
their programs—it used to be possible to call the WordPerfect Corporation on an 800
number to get free help. Nowadays, you either have to call a 900 number or have a credit
card handy to get help from many software makers. Another way to change terms is to do
away with favorable financing terms.

Reference Prices. Consumers often develop internal reference prices, or expectations about
what something should cost, based mostly on their experience. Most drivers with long commutes
develop a good feeling of what gasoline should cost, and can tell a bargain or a ripoff.

Reference prices are more likely to be more precise for frequently purchased and highly visible
products. Therefore, retailers very often promote soft drinks, since consumers tend to have a
good idea of prices and these products are quite visible. The trick, then, is to be more expensive
on products where price expectations are muddier.

Marketers often try to influence people's price perceptions through the use of external reference
prices—indicators given to the consumer as to how much something should cost. Examples
include:
 • Manufacturer's Suggested Retail Price (MSRP). This is often pure fiction. The suggested
retail prices in certain categories are deliberately set so high that even full service
retailers can sell at a "discount." Thus, although the consumer may contrast the offering
price against the MSRP, this latter figure is quite misleading.
• "SALE! Now $2.99; Regular Price $5.00." For this strategy to be used legally in most
countries, the claim must be true (consistency of enforcement in some countries is, of
course, another matter). However, certain products are put on sale so frequently that the
"regular" price is meaningless. In the early 1990s, Sears was reported to sell some 55% of
its merchandise on sale.
• "WAS $10.00, now $6.99."
• "Sold elsewhere for $150.00; our price: $99.99."

Reference prices have significant international implications. While marketers may choose to
introduce a product at a low price in order to induce trial, which is useful in a new market where
the penetration of a product is low, this may have serious repercussions as consumers may
develop a low reference price and may thus resist paying higher prices in the future.
Selected International Pricing Issues. In some cultures, particularly where retail stores are
smaller and the buyer has the opportunity to interact with the owner, bargaining may be more
common, and it may thus be more difficult for the manufacturer to influence retail level pricing.

Two phenomena may occur when products are sold in disparate markets. When a product is
exported, price escalation, whereby the product dramatically increases in price in the export
market, is likely to take place. This usually occurs because a longer distribution chain is
necessary and because smaller quantities sold through this route will usually not allow for
economies of scale. "Gray" markets occur when products are diverted from one market in which
they are cheaper to another one where prices are higher—e.g., Luis Vuitton bags were
significantly more expensive in Japan than in France, since the profit maximizing price in Japan
was higher and thus bags would be bought in France and shipped to Japan for resale. The
manufacturer therefore imposed quantity limits on buyers. Since these quantity limits were
circumvented by enterprising exchange students who were recruited to buy their quota on a daily
basis, prices eventually had to be lowered in Japan to make the practice of diversion unattractive.
Where the local government imposes price controls, a firm may find the market profitable to
enter nevertheless since revenues from the new market only have to cover marginal costs.
However, products may then be attractive to divert to countries without such controls.

Transfer pricing involves what one subsidiary will charge another for products or components
supplied for use in another country. Firms will often try to charge high prices to subsidiaries in
countries with high taxes so that the income earned there will be minimized.
Antitrust laws are relevant in pricing decisions, and anti-dumping regulations are especially
noteworthy. In general, it is illegal to sell a product below your cost of production, which may
make a penetration pricing entry strategy infeasible. Japan has actively lobbied the World Trade
Organization (WTO) to relax its regulations, which generally require firms to price no lower than
their average fully absorbed cost (which incorporates both variable and fixed costs).
Alternatives to "hard" currency deals. Buyers in some countries do not have ready access to
convertible currency, and governments will often try limit firms’ ability to spend money abroad.
Thus, some firms have been forced into non-cash deals. In barter, the seller takes payment in
some product produced in the buying country—e.g., Lockheed (back when it was an independent
firm) took Spanish wine in return for aircraft, and sellers to Eastern Europe have taken their
payment in ham. An offset contract is somewhat more flexible in that the buyer can get paid but
instead has to buy, or cause others to buy, products for a certain value within a specified period
of time.

Psychological issues: Most pricing research has been done on North Americans, and this raises
serious problems of generalizability. Americans are used to sales, for example, while consumers
in countries where goods are more scarce may attribute a sale to low quality rather than a desire
to gain market share. There is some evidence that perceived price quality relationships are quite
high in Britain and Japan (thus, discount stores have had difficulty there), while in developing
countries, there is less trust in the market. Cultural differences may influence the extent of effort
put into evaluating deals (potentially impacting the effectiveness of odd-even pricing and
promotion signaling). The fact that consumers in some economies are usually paid weekly, as
opposed to biweekly or monthly, may influence the effectiveness of framing attempts—"a dollar
a day" is a much bigger chunk from a weekly than a monthly paycheck.

International Distribution
Promotional tools. Numerous tools can be used to influence consumer purchases:

• Advertising—in or on newspapers, radio, television, billboards, busses, taxis, or the

Internet.
• Price promotions—products are being made available temporarily as at a lower price, or
some premium (e.g., toothbrush with a package of toothpaste) is being offered for free.
• Sponsorships
• Point-of-purchase—the manufacturer pays for extra display space in the store or puts a
coupon right by the product
• Other method of getting the consumer’s attention—all the Gap stores in France may
benefit from the prominence of the new store located on the Champs-Elysees.

Promotional objectives. Promotional objectives involve the question of what the firm hopes to
achieve with a campaign—“increasing profits” is too vague an objective, since this has to be
achieved through some intermediate outcome (such as increasing market share, which in turn is
achieved by some change in consumers which cause them to buy more). Some common
objectives that firms may hold:

• Awareness. Many French consumers do not know that the Gap even exists, so they
cannot decide to go shopping there. This objective is often achieved through advertising,
but could also be achieved through favorable point-of-purchase displays. Note that since
advertising and promotional stimuli are often afforded very little attention by consumers,
potential buyers may have to be exposed to the promotional stimulus numerous times
before it “registers.”
• Trial. Even when consumers know that a product exists and could possibly satisfy some
of their desires, it may take a while before they get around to trying the product—
especially when there are so many other products that compete for their attention and
wallets. Thus, the next step is often to try get consumer to try the product at least once,
with the hope that they will make repeat purchases. Coupons are often an effective way
of achieving trial, but these are illegal in some countries and in some others, the
infrastructure to readily accept coupons (e.g., clearing houses) does not exist. Continued
advertising and point-of-purchase displays may be effective. Although Coca Cola is
widely known in China, a large part of the population has not yet tried the product.
• Attitude toward the product. A high percentage of people in the U.S. and Europe has
tried Coca Cola, so a more reasonable objective is to get people to believe positive things
 about the product—e.g., that it has a superior taste and is better than generics or store
brands. This is often achieved through advertising.
• Temporary sales increases. For mature products and categories, attitudes may be fairly
well established and not subject to cost-effective change. Thus, it may be more useful to
work on getting temporary increases in sales (which are likely to go away the incentives
are removed). In the U.S. and Japan, for example, fast food restaurants may run
temporary price promotions to get people to eat out more or switch from competitors, but
when these promotions end, sales are likely to move back down again (in developing
countries, in contrast, trial may be a more appropriate objective in this category).

Note that in new or emerging markets, the first objectives are more likely to be useful while, for
established products, the latter objectives may be more useful in mature markets such as Japan,
the U.S., and Western Europe.

Constraints on Global Communications Strategies. Although firms that seek standardized

positions may seek globally unified campaigns, there are several constraints:

• Language barriers: The advertising will have to be translated, not just into the generic
language category (e.g., Portuguese) but also into the specific version spoken in the
region (e.g., Brazilian Portuguese). (Occasionally, foreign language ads are deliberately
run to add mystique to a product, but this is the exception rather than the rule).
• Cultural barriers. Subtle cultural differences may make an ad that tested well in one
country unsuitable in another—e.g., an ad that featured a man walking in to join his wife
in the bathroom was considered an inappropriate invasion in Japan. Symbolism often
differs between cultures, and humor, which is based on the contrast to people’s
experiences, tends not to travel well. Values also tend to differ between cultures—in the
U.S. and Australia, excelling above the group is often desirable, while in Japan, “The nail
that sticks out gets hammered down.” In the U.S., “The early bird gets the worm” while
in China “The first bird in the flock gets shot down.”
• Local attitudes toward advertising. People in some countries are more receptive to
advertising than others. While advertising is accepted as a fact of life in the U.S., some
Europeans find it too crass and commercial.
• Media infrastructure. Cable TV is not well developed in some countries and regions, and
not all media in all countries accept advertising. Consumer media habits also differ
dramatically; newspapers appear to have a higher reach than television and radio in parts
of Latin America.
• Advertising regulations. Countries often have arbitrary rules on what can be advertised
and what can be claimed. Comparative advertising is banned almost everywhere outside
the U.S. Holland requires that a toothbrush be displayed in advertisements for sweets,
and some countries require that advertising to be shown there be produced in the
country.

Some cultural dimensions:

• Directness vs. indirectness: U.S. advertising tends to emphasize directly why someone
would benefit from buying the product. This, however, is considered too pushy for
 Japanese consumers, where it is felt to be arrogant of the seller to presume to know what
the consumer would like.
• Comparison: Comparative advertising is banned in most countries and would probably
be very counterproductive, as an insulting instance of confrontation and bragging, in Asia
even if it were allowed. In the U.S., comparison advertising has proven somewhat
effective (although its implementation is tricky) as a way to persuade consumers what to
buy.
• Humor. Although humor is a relatively universal phenomenon, what is considered funny
between countries differs greatly, so pre-testing is essential.
• Gender roles. A study found that women in U.S. advertising tended to be shown in more
traditional roles in the U.S. than in Europe or Australia. On the other hand, some
countries are even more traditional—e.g., a Japanese ad that claimed a camera to be “so
simple that even a woman can use it” was not found to be unusually insulting.
• Explicitness. Europeans tend to allow for considerably more explicit advertisements,
often with sexual overtones, than Americans.
• Sophistication. Europeans, particularly the French, demand considerably more
sophistication than Americans who may react more favorably to emotional appeals—e.g.,
an ad showing a mentally retarded young man succeeding in a job at McDonald’s was
very favorably received in the U.S. but was booed at the Cannes film festival in France.
• Popular vs. traditional culture. U.S. ads tend to employ contemporary, popular culture,
often including current music while those in more traditional cultures tend to refer more
to classical culture.
• Information content vs. fluff. American ads contain a great deal of “puffery,” which was
found to be very ineffective in Eastern European countries because it resembled
communist propaganda too much. The Eastern European consumers instead wanted
hard, cold facts.

Advertising standardization. Issues surrounding advertising standardization tend to parallel

issues surrounding product and positioning standardization. On the plus side, economies of scale
are achieved, a consistent image can be established across markets, creative talent can be utilized
across markets, and good ideas can be transplanted from one market to others. On the down
side, cultural differences, peculiar country regulations, and differences in product life cycle
stages make this approach difficult. Further, local advertising professionals may resist
campaigns imposed from the outside—sometimes with good reasons and sometimes merely to
preserve their own creative autonomy.

Legal issues. Countries differ in their regulations of advertising, and some products are banned
from advertising on certain media (large supermarket chains are not allowed to advertise on TV
in France, for example). Other forms of promotion may also be banned or regulated. In some
European countries, for example, it is illegal to price discriminate between consumers, and thus
coupons are banned and in some, it is illegal to offer products on sale outside a very narrow
seasonal and percentage range.