The authors of one study noted that Nestlé and other large companies that once had a polycentric approach to consumer and trade sales promotions have redesigned their efforts

Question

Based on a study by Kashani and Quelch, identify factors that contribute to more headquarters involvement in the sales promotions effort.

Answer 1

As with other aspects of marketing communication, a key issue is whether headquarters should direct promotion efforts or leave it to local country managers. Kashani and Quelch identified four factors that contribute to more headquarters involvement in the sales promotion effort, namely, cost, complexity, global branding, and transnational trade as follows: 1. as sales promotions command ever-larger budget allocations, headquarters naturally takes a greater interest; 2. the formulation, implementation, and follow-up of a promotion program may require skills that local managers lack; 3 . the increasing importance of global brands justifies headquarters involvement to maintain consistency from country to country and ensure that successful local promotions programs are leveraged in other markets; and 4. as mergers and acquisitions lead to increased concentration in the retail industry and as the industry globalizes, retailers will seek coordinated promotional programs from their suppliers.