After political changes during the late 1980s, the economic climate in Eastern Europe changed radically and presented new opportunities for the big Western investors. The giants in the tobacco industry were among the first to explore the possibilitiesof the Eastern European markets, Several factors must be considered in order to define these markets. The first significant factor is the "local color," i.e. each market in the region possesses unique features and, therefore, a different marketing approach is required for each country. Second, these markets are characterized by high price elasticity, and the consumers' purchasing power is of utmost importance. Even a high level of advertising for a premium-priced brand cannot generate big sales in Bulgaria or Romania. Table 1 shows the recent developments in per capita income, growth in GNP, and inflation in several Eastern European countries.
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