Influence of Localized Industrial Advertising on Buyer Behavior in the European Union: Shock Them with Their Own Culture, The
Cooperman, Ronald A
Executive Summary
Understanding the influence of national culture is critical to the effectiveness of international advertising. The study discussed here investigated whether localized or standardized advertising would be more effective for industrial supply products in the European Union. The study compares differences in attitudes toward cross-cultural advertising content in the United Kingdom, Germany and Spain, for supply products among buyers in the electrical power generation industry. The findings supported the hypotheses when aggregated data was used. Thus, it appeared that localized international advertising for industrial supply products would be more effective than standardized advertising across borders in the European Union. However, a different indication emerged when the individual cultures were tested. The findings are compared and recommendations are made for the management of advertising content in these markets. Suggestions for future research are offered.
As a 15-nation community, the European Union (EU) is a market of over 370 million consumers and approximately 16 million businesses. With applications from eight more countries to be decided upon by the end of 2004, these metrics will expand, as will the potential for marketers. In spite of formidable accomplishments in bringing the EU countries together into a quasi-united Europe, cultural differences persist. Indeed, they are intensified by the fact that “The EU is built on a strong tradition of cultural diversity” (European Commission, 1996, p. 28). And, according to Hofstede (1997), national and regional differences in culture are quite permanent.
While some products may find a uniform market in the EU, decisions to buy may be affected by cultural variations. Cross-border marketers must know if and how their products will be affected by these cultural differences. Therefore, it is imperative that US and other foreign firms doing business in this multi-cultural market advertise to organizational buyers there in an efficient and effective manner. Marketing strategies may need to be developed to meet the needs of global, as well as national markets reflecting their individual ethnic and cultural perspectives.
Much research has been performed to demonstrate that consumer behavior is not purely economic but is also substantially influenced by psychology, sociology, anthropology and, equally or more so, by culture. Shiftman and Kanuk (2000) define culture as, “…the sum of learned beliefs, values and customs that serve to direct the consumer behavior of members of a particular society” (p. 322; see also McCarty, 1994). The concept that culture is linked directly to purchasing decisions forms a basic underpinning of the study discussed here. Buyer motivation is stimulated by advertising that promises to satisfy the purchaser’s needs. However, it is generally accepted that industrial marketing methods, including advertising, are less developed than consumer marketing techniques.
According to several models of cognitive purchasing behavior, buyers rationally assess all options and expected payoffs associated with each alternative (Schiffman & Kanuck, 2000; Hoyer & Maclnnis, 2001). The purchasing decision is then made to maximize expected gain. This is the basis upon which industrial purchasing has typically been explained. In general, this analysis supports the contention that industrial purchasing is rational and consumer goodspurchasing is irrational. However, all is not what it seems as the apparent rationality of business buying decisions may be profoundly influenced by social, cultural, individual idiosyncratic and behavioral characteristics, just as consumer purchasing decisions are. In fact, we cannot assume that the individual behaves fundamentally differently in the context of a business organization as compared to his or her social environment (Wilson, 2000).
The Subject Study
The focus of this present study was to test specific hypotheses relevant to a more effective form of advertising with which to influence purchasing decisions of organizational buyers of industrial supply products in the cross-cultural environment of the EU. As a category, industrial supply products are used up quickly, must be replaced frequently, and are relatively inexpensive. As such, they are analogous to consumer convenience goods (Armstrong & Kotler, 2003; Boone & Kurtz, 2003; Futrell, 1997). Indeed, “Supplies are the convenience products of the industrial field” (Armstrong & Kotler, 2003 p. 284).
It is therefore suggested that industrial supply items are purchased as a result of some of the same motivations as consumer convenience goods; and, therefore, the purchase of industrial supply items can be influenced by advertising from the cultural perspective (de Mooij, 1998). A useful way to understand the differences required in advertising appeals between different cultural environments is to study the advertising of a single product category across all countries in which it is advertised (Caillat & Mueller, 1996).
Supply items are frequently purchased by an individual rather than by a committee. Individually made purchasing decisions for consumable items eliminate or reduce the impediments of peer and business pressure to the influence of culturally oriented content in advertisements for those products. Individual purchasers are believed to be more susceptible to cultural motivation and can, therefore, be more effectively influenced by advertising for supply items that includes localized appeals. According to Caillât and Mueller (1996) an international advertiser has a much greater probability of success in foreign markets where the cultural values are examined. In their study of British advertising, for example, they found that tradition and history, important elements of nationalism, played a significant role in purchase decisions. This is opposed to the predominantly standardized technical and/or business approach taken by most advertisements for industrial supply items.
A considerable amount has been written on the use of globalized versus localized advertising for consumer products. However, empirical research studies attempting to measure how cultural values are applied in the formulation of advertising are very limited, even for consumer products (Frith & Wesson, 1991). What has been written on cross-cultural advertising for business-to-business products makes little distinction between capital goods and supply products. The purpose of this study was to extend the existing knowledge of international, cross-cultural advertising management from its present domains in consumer products and capital goods, to include the field of industrial supply items.
Literature Review
The underlying theory for the thesis presented here is that localized international advertising is more effective than standardized advertising for consumer goods. Authors such as Blinder (1961), Fatt (1964), Levitt (1983), Clark (1990), Onkvisit and Shaw (1987), Mueller (1991), Boddewyn (1981,1983) provide the original core literature from which that underlying theory is formed.
The objective of an advertisement may not be to generate purchase of the product, but perhaps only to stimulate awareness, or a favorable attitude toward the product, brand, or the advertisement itself (Shiftman & Kanuck, 2000). Thus, if a positive attitude is exhibited toward localized elements for use in international advertising it is considered that these advertisements would be viewed with a more favorable attitude and, therefore, would be more effective in achieving a favorable attitude toward the brand or product. The available research on international industrial products advertising indicates, that print advertising is the most common media for industrial products (Duncan & Ramaprasad, 1995).
“One of the most important strategic decisions an international advertiser must make when designing advertising campaigns destined for foreign countries is whether to standardize worldwide or to specialize the advertising for each market or region to be entered” (Caillat & Mueller, 1996). Evidently, an inherent presumption has been that whichever of the two approaches is employed most frequently is the most effective. This conclusion does not follow. For example, standardization is frequently employed to take advantage of economies of scale in production of the advertisements (Duncan & Ramaprasad, 1995; Huszagh et al., 1986). “It boils down to trade-offs between the cost savings of standardization and increased revenues generated by market segmentation,” (Graham et al., 1993, p. 13). On the other hand, “The cost savings of standardized campaigns are easily offset by a less effective advertising message” (de Mooij, 1998, p. 9).
Perhaps the arch-proponent of standardization theory, Theodore Levitt (1983) contends that everyone wants the same things from a particular product, and products in general, no matter where in the world the people live: “Different cultural preferences, national tastes and standards, and business institutions are vestiges of the past” (p. 96). According to Levitt, “A successful global marketing strategy consists of having a common brand name, packaging and communications [that achieves] tremendous cost advantages over competitors that just sell and produce in narrow segments” [italics added] (AMA Marketing News, March 15, 1985, cited in Boddewyn et al, 1986, p. 72).
A number of other researchers have also found that international advertising for industrial goods is considered more effective when standardized than that for consumer products (Kahler, 1983; Cundiff & Hilger, 1984, cited in Day, et al, 1988; and Keegan, 1984, cited in Onkvisit & Shaw, 1987). Boddewyn and Grosse (1995) found that in practice, adaptation of advertising for industrial goods, which would include supply items, was projected by the respondents to their study to be up by 31.7 percent from 1983 in 1998.
According to Costa and Bamossy (1995), in every culture there is a set of subconscious beliefs that members of that society take so much for granted that those beliefs fall far below the threshold of awareness. The language of a society or ethnic group is the primary method by which a culture is learned, participated in, and through which cultural information is conveyed. Pictures and words are both symbols that represent things and ideas, which serve as vehicles by which advertising concepts are communicated (Shiftman & Kanuk, 2000). Cultural researchers such as Onkvisit and Shaw (1987), and Meffert and Althans, (1986, cited in Mueller, 1991) found support for the idea that differences between countries generally seemed to grow with geographical distance.
However, “Cultural borders and barriers are rising between nations in the EU even as economic borders begin to fall” (Costa & Bamossy, 1995, p. viii). Business buyers are subject to these influences. Such inter-country differences in cultural parameters have implications for the design and effectiveness of all advertising, including that which is addressed to buyers of industrial supply products.
No empirical studies relevant to international advertising for industrial supply items, as such, were found in the literature. Therefore, this study attempted to extend the knowledge of international industrial advertising to determine how to more effectively advertise industrial supply items in multi-national programs.
Methodology
The study sought an answer to the following research question:
Can industrial supply products, as opposed to other industrial products such as capital equipment, be more effectively advertised on a localized rather than a standardized basis, across cultural and/or national borders -within the EU?
Effectiveness in the context of this study was defined as the level of preference for culturally oriented advertising text and graphics as opposed to non-culturally oriented elements (de Mooij, 1998).
The study was concerned with magazine advertising for supply products purchased by the electric power generation industry, such as greases, temperature probes, welding rods and gases. The concept of the study was operationalized in three countries with comparatively different cultures: Spain, Germany and the United Kingdom (Hofstede, 1997).
The power industry was selected because of the necessity of electricity to all other industries and consumers alike, and the increasingly competitive environment in which it operates. Suppliers to the power producers will need to be more competitive as well. In the long run, companies will have to offer added-value, which can be defined as those benefits not conveyed by a physical feature of the product. These include rapid delivery, advantageous credit terms, service and warrantees, as well as symbolic and other attributes in the total bundle of benefits offered for purchase (Boone & Kurtz, 2003). Perceived added-value can be established in the potential buyer’s mind through advertising (Kotler, 2003), indeed, “In marketing, peoples perceptions are more important than reality” (p. 197). The responses desired in the study were not to a specific ad or campaign, but rather to various elements, the independent variables, that might be utilized as content in international advertisements for the products and venues specified.
Relevant to the research question, three hypotheses were developed.
Hypothesis 1 (H1)
H1 addresses international advertising specifically with regard to the way such print advertisements are presented in words. An assumption commonly made is that any advertisement that is effective in one language will be effective in another if the reader is able to linguistically understand the message. Underlying this notion is that both the writer and the reader share the same cultural conventions. In fact, responses can occur only if the sender and receiver share the same culture, either by birth or through the author’s intentional use of stimuli, including words and expressions that are known to be motivating within the cultural conventions of the target audience (de Mooij, 1998; Caillat & Mueller, 1996). The testable null hypothesis of Hl (H1^sub o^) is stated as:
There is no significant difference in the effectiveness of country-oriented cultural appeals versus standardized international advertising across those national boundaries.
The alternative hypothesis (H1^sub A^) of a difference is therefore believed valid, within the context of this study, because industrial supply items, can be viewed as similar to consumer convenience goods. Hence, localized international advertising utilizing content elements and/or creative themes derived from the national culture in which the advertising appears may be more effective for industrial supply products.
Hypothesis 2 (H2)
Because the visual element of a print advertisement is critical in getting the reader’s attention, H2 specifically addresses the need for culturally oriented graphics in international advertising.
The testable null hypothesis (H2^sub 0^) is:
There is no difference in the effectiveness of localized international advertising using countryoriented graphics for the principal visual element of the advertisement as compared to those that use standardized subject matter, such as images reflective of other cultures or a picture of the product.
The alternative hypothesis (H2^sub A^) holds that international advertising is more effective when localized culturally oriented graphics are used for the principal visual element of an advertisement than when using visual subject matter reflective of other cultures, or simply a picture of a product. Localized culturally oriented graphics, as used here include photographic images, or other kinds of illustrations, of people, landmarks, monuments, and other subject matter typically identified with that culture.
Hypothesis 2^sub A^ is believed valid because people of any nation are generally more familiar with the symbols of their own cultures than those of other cultures. Moreover, if the product can be associated with the national culture in which it is marketed, over time it may be perceived as more closely associated with that culture. Hypothesis 2^sub A^ is also believed to be valid because, in most cases, the category of supply product being advertised will be known to the viewer of the advertisement. By definition, supply products are purchased frequently and many of the items in any one category will be similar in appearance. The culturally oriented graphic is therefore expected to have greater attention-getting value, leave a greater positive impression toward the brand and product as well as be more memorable than the standardized visual that is comprised of product alone.
Hypothesis 3 (H3)
The perception of a product as foreign may have an adverse influence rather than a positively motivating affect on the reader of an advertisement (Shiftman & Kanuk, 2000). Hypothesis 3 therefore specifically addresses the possibility of greater added-value attributed to supply products advertised with localized culturally oriented appeals as compared to those products promoted with standardized international advertising.
The testable null hypothesis (H3^sub 0^) is thus:
There is no difference in the perception of added-value resulting from a localized international advertisement for a product produced by the culturally oriented content of the advertisement, than would result from a standardized international advertisement for the same product. The alternative hypothesis (H3^sub A^) is that advertisements, by foreign-based firms, that are culturally oriented to a given market will result in a perception of greater added-value for the product being advertised.
Instrument
To gather data with which to test the above hypotheses, a survey questionnaire was prepared based on a review of existing research, previous study instruments (Boddewyn & Grosse, 1995; Duncan & Ramaprasad, 1995), and personal interviews with selected industry professionals. The “core” questions were principally concerned with the respondents’ attitudes toward hypothetical content of advertisements for industrial supply products. Each of three groups of core questions is related to a specific one of the three hypotheses of the study. The final instrument contained eight core questions related to H1, six to H2, and ten to H3. In addition, questions were asked to qualify the respondents and to determine their demographic profile. The English questionnaire was translated into Spanish and German. Back-translations were executed to ensure that each question conveyed the same meaning and intent in each language. The instrument was pre-tested for validity with randomly selected industry experts. The reliability of the questions to measure what they were intended to was tested with the Spearman-Brown statistical procedure, as discussed below.
Sample Design
The population for the study was comprised of persons directly influential on the purchase of supply items in the electrical power generation industry in the three countries. The study sample was selected in two ways. The first method was to randomly select persons by name and job title from the subscriber list of a prominent international professional journal, Power. Titles such as purchasing agent or other functions that typically reflect influence on purchasing decisions were used. Out of the total of 3,000 subscribers in the three specified countries, 325 persons were included as part of the sample in this manner.
In the second method, another 375 persons were randomly selected one each from plant sites listed in a directory of electric utilities. Thus, the total population surveyed was comprised of approximately 700 functionally defined potential respondents. A total of 92 or 13.0% useable questionnaires were obtained with approximately 30 completed questionnaires obtained from each country. The useable response rates from the UK, Spain and Germany were 13.6%, 12.9% and 12.9% respectively.
Statistical Analysis
The Spearman Coefficient of Correlation was computed and used in the SpearmanBrown formula to arrive at a coefficient of reliability for each group of core questions. A generally acceptable level of the Spearman-Brown coefficient of reliability at 0.6000 (Scannell & Tracy, 1975) was the criterion adopted.
T-tests were used to test the three null hypotheses. The sample was first examined as an aggregate. The data were then disaggregated and the hypotheses tested country by country, using the same procedure. Means required for the t-tests were derived from the scores of the questions in each of the three groups. A single weighted mean for each group was calculated. A t-test was then performed on each of these three weighted means, to test each of the three null hypotheses.
Results
The results are categorized in three ways: First, qualifications of the respondents to answer the questions, i.e., they did have purchasing responsibility for supply items. Secondly, the respondents’ demographic characteristics were tabulated in order to further identify the profile of the sample. And most importantly, the results were categorized by the responses to the core questions relating to the respondents’ attitudes toward standardized versus localized international advertising elements for supply products in the power generation industry for purposes of testing the hypotheses.
Qualifications & Demographics
All 92 respondents were qualified through the unaided and aided recall questions included in the instrument. These asked the respondents what supply products they purchased. Among the respondents the average time each had been in the position mentioned was 4.7 years. Seventy-eight percent had university degrees or higher. The mean age was approximately 44 years. Thus, the respondents were generally mature and well educated. Ninety-six percent were born in the countries in which they were employed. It is therefore reasonable to say that their responses reflected their native cultural sentiments toward the advertising content suggested by the core questions.
Evaluating the Core Questions
The questions were arranged in split-halves of four questions each, rank-ordered by their Spearman rho coefficients of correlation. The Spearman rho was then used to calculate the Spearman-Brown Coefficients of Reliability for each group.
The Group 1 questions, dedicated to H1, yielded a coefficient of reliability of 0.6410. Based on this computation and the pilot inquiry, it is reasonable to accept these questions as a basis, for testing H1.
Group 2 of the core questions, is dedicated to H2. When tested with the SpearmanBrown procedure this group revealed a coefficient of reliability of 0.5534. The Spearman rho Coefficients of Correlation between pairs of questions in Group 2 ranged from 0.5395 to – 0.0032. Thus, the pairs of questions tend to be related.
The same statistical procedures were applied to Group 3. The Spearman-Brown Coefficient of Reliability was determined to be 0.8041, an appreciably higher score than for either Group 1 or Group 2. Thus, the validity of these questions for use in testing H3 was established.
The weighted mean (x^sub w^)for Group 1 was used in calculating the standard deviation of the mean for the Group 1 questions and the t value with which to test the null hypothesis H1^sub o^. The means, weighted means, and standard deviation of the mean, were computed for the Group 2 and Group 3 questions in the same way as for Group 1. Because the number of respondents answering each question in the group varied, in the t-test calculations the degrees of freedom (df) used was the average number of respondents minus one, i.e., n-1, for each group of questions. The statistical values for all of the above functions are presented in Table 1.
Hypothesis Testing
One-tailed Student t-tests were run at the 95 percent confidence level (α
H1^sub o^ was rejected at the α
Cultural Comparisons
In the preceding sections, the data and results were treated as a whole without distinction as to the separate cultures. To examine the effectiveness of localized versus standardized international advertising in each country, the three hypotheses were also tested relative to each country individually. The same procedures were used to arrive at each of the statistics for the individual country samples as were used for all the countries taken together. The results of the hypotheses tests for each country were compared to each other and to the results from the aggregated sample. In the tests of the individual countries the few non-native respondents were eliminated. The results of the null hypotheses tests, and the supporting statistics for each country are presented in Table 1.
For the Group 2 questions, the coefficients of reliability were all above the lower limit of 0.6, with the exception of Spain. Based on the aggregated samples of all three countries, the coefficient for H2 is also below the 0.6 level. Notably, the coefficients of reliability for the H3 questions are the highest in all three countries. Also, the coefficient for H3 for the aggregated sample is higher than for any of the individual countries. The results of testing each of the three hypotheses for each country are compared to the results for the aggregated samples below.
Null Hypothesis Tests With the Disaereeated Data
Testing with the data from the United Kingdom reveals that H1^sub o^ is rejected at the α
In the UK the null hypothesis H2^sub o^ could not be rejected at the α
The null hypothesis H3^sub o^ is rejected in all three countries, with the results significant at the α
Summary, Conclusions and Recommendations
The study explored the potential influence of culturally localized international advertising compared to standardized advertising for supply products in the three EU countries, the United Kingdom, Spain and Germany. The expectation of greater effectiveness for localized international industrial magazine advertising was expressed in three related hypotheses. These were tested employing aggregated as well as disaggregated sample data from the three countries collected via a validated survey instrument.
Based on the results of the overall study, localized international advertising for supply products in the power generation market in the countries investigated appears to be more effective. The results of the tests of H3^sub o^ indicate that the perception of added value associated with a foreign product advertised cross-culturally in a localized manner should be greater than from employing standardized international advertising. Likewise, as set out by H2, using visual elements drawn from the local culture should produce a more favorable attitude toward the advertisement and ultimately the products. Similarly, as suggested by H1, wording of the advertisement should also be localized to achieve maximum effectiveness.
Regarding the disaggregated data, it can be inferred from the results of testing the sample data from the United Kingdom and Germany that a difference in the effectiveness of the two approaches does exist. In contrast to the fact that H1^sub o^ was rejected when tested with the aggregated data, H1 relative to Spain could not be rejected. From an applied marketing management perspective, this raises questions as to underlying factors.
Testing of H2^sub 0^ in the individual countries yielded somewhat different findings. Relative to the UK, H2^sub 0^ could not be rejected at the α
Hypothesis H3^sub 0^ was rejected in all three countries at α
Lessons Learned and Implications of the Study
Early in the study, a critical lesson learned was that the use of back-translations in the design of the instrument were indispensable to obtaining comparable responses from the different language groups with whom the study was implemented.
The study sample included many persons who influence purchases of supply products. The data shows that the majority is more favorably affected by localized content in advertisements for these products, as compared to standardized international advertisements. However, an important lesson learned is that while buyers in individualistic cultures may make their purchase decisions for supply products unilaterally, in the cultures tested the data indicates that in a majority of cases they make these decisions in concert with other persons in the company. It is valuable to know that industrial buyer behavior in the countries studied with regard to supply items does not necessarily support the notion that purchasing decisions are made alone.
Suggested Future Research
One of the greatest values of the research discussed here may lie in the country-specific issues it raises for future studies. In particular, a question arises as to why the respondents in the Spanish sample seemed to express a preference for standardized international advertising rather than the localized advertising which was apparently preferred in England and Germany? Likewise further research might be conducted to determine why H2^sub 0^ could not be rejected in the UK but was greatly rejected in Spain and Germany as well.
Another study suggested by the present research is one of comparisons to determine the relative effectiveness of various individual attributes of localized advertising in the different countries. Moreover, other future studies may apply the concept operationalized, implications and lessons learned here, to other countries or industries. Thus, it is suggested that the usefulness of the study as a business tool is potentially increased, as a point of departure toward future knowledge with which to address industrial advertising in the European Union.
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Ronald A. Cooperman, Nova Southeastern University
About the Author
Ronald A. Cooperman is a doctoral candidate at Nova Southeastern University, in the International Management program. Cooperman earned an MBA from the Baruch School of the City University of New York, in Marketing and a BA in Economics from the City College of NY. Ron has had an accomplished career in major corporations and advertising agencies. Since 1988 he has been employed in his own consulting practice, Research & Communication Associates, Inc. of Wayne, NJ, while teaching as an adjunct faculty member at the Borough of Manhattan Community College of the City University of NY.
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