charles r. taylor new directions in international advertising research advances in international...

LIST OF CONTRIBUTORS

Hae-Kyong Bang

P. Greg Bonner

Les Carlson

Albert Caruana

Aruna Chandra

Patrick De Pelsmacker

Kanwalrooop Kathy Dhanda

Michael Dolezal

Michael T. Ewing

Maggie Geuens

David A. Griffith

Ronald Paul Hill

Cameron James Hughes

Chad M. Johnson

Dimitri Kapelianis

Villanova University, USA


Clemson University, USA

University of Malta, Msida, Malta

Indiana State University, USA

Universiteit Antwerpen Management School and Ghent University, Belgium

University of Portland, USA

Masaryk University, Czech Republic

Monash University, Australia

Vlerick Leuven Gent Management School and Ghent University, Belgium

University of Hawaii, USA

University of Portland, USA

Millward Brown International, United Kingdom


Arizona State University, USA

ix

X

Stephen Keysuk Kim

Wei-Na Lee

Jong Won Lim

Dominika Maison

Gordon E. Miracle

Changho Oh

Sak Onkvisit

Michael Jay Polonsky

Andrea Prothero

Mary Anne Raymond

John K. Ryans, Jr.

Trina Sego

John J. Shaw

Charles R. Taylor

Andy Teo

Fei Xue

TaiWoong Yun

Shuhua Zhou

Peiqin Zhou

LIST OF CONTRIBUTORS

Oregon State University, Corvallis, OR, USA

The University of Texas at Austin, USA

Seoul National University, South Korea

University of Warsaw, Poland

Michigan State University, USA

Hanshin University, Osan, South Korea

San Jose University, USA

Victoria University, Australia

University College Dublin, Ireland

Clemson University, USA

Kent State University, USA

Bosie State University, USA

Providence College, USA


PSB Corporation, Singapore

University of Alabama, USA

The University of Texas at Austin, USA



PREFACE

This special volume of Advances in International Marketing is devoted to exploring new perspectives on international advertising - a generally under- researched area. It is guest edited by Charles R. Taylor of Villanova University.

The idea for devoting a separate volume on international advertising came from Professor Taylor. He issued a call for papers, which then attracted a variety of submissions of high quality. We owe gratitude to him for screening and evaluating these submissions, and for preparing the final set of chapters. We are also indebted to many colleagues who assisted in the review process. The resulting selections draw from a variety of perspectives and offer rich insights on international advertising issues.

Our thanks to Dr. Taylor for his efforts in creating this volume. Finally, we express our appreciation to Ms. Alison Evans and other staff at JAI/Elsevier Science who saw the volume through the production process.

S. Tamer Cavusgil Series Editor

xi

INTRODUCTION- NEW DIRECTIONS

IN INTERNATIONAL ADVERTISING

RESEARCH

Charles R. Taylor

International advertising is an area in need of more quality research. While this need is somewhat surprising given the large amount of attention focused on advertising in many parts of the world, one needs only to look at chapters on international advertising in International Marketing or Advertising textbooks to see the problem. In comparison to well-researched areas such as foreign market entry modes, country of origin perceptions of products, pricing strategies, and global branding strategies, there is far too little that is managerially actionable in international advertising discussions. Too often, we are left to give our advertising students vague advice, such as "you need to search for multi~market target audience similarities," in spite of not knowing a lot about how it can be done due to a paucity of research.

Another example of a failure to deliver value to managers, (and our students), stems from being preoccupied with the "debate" over standardization vs. specialization. Too often, the discussion is positioned as a controversy rather than providing managers with specific advice on how to deal with the decision. We also know too little about setting advertising budgets and measuring advertising effectiveness in foreign markets. Research focusing on allowing us a better understanding of the impact of culture on advertising effectiveness and on client-agency relationships is also urgently needed. While the work of early international advertising scholars such as Gordon Miracle and John Ryans, who are among the contributors to this volume, did an excellent job of setting the

New Directions in International Advertising Research, Volume 12, pages 1-5. Copyright © 2002 by Elsevier Science Ltd. All rights of reproduction in any form reserved. ISBN: 0-7623-0950-4

2 CHARLES R. TAYLOR

stage for additional research, too often we have fallen short. Some recent key studies suggest promising things are ahead, but more is needed.

There are some understandable reasons why international advertising research has not advanced as far as it might. As noted by Zinkhan (1994), it is simply more difficult to collect data from multiple countries. Taking on multiple co-authors is not viewed as desirable at many universities though it may often be necessary in a large international study. Another issue related to the difficulty of collecting data in multiple markets is that a disproportionately high number of content analyses have been published, perhaps to the neglect of other research techniques such as surveys and experiments. It will be especially important for researchers of the future to build on descriptive research with experiments that focus more on the underlying reasons why various executional techniques are effective in a market as opposed to simply describing the existing content of ads.

Another issue facing international advertising researchers is that elite journals frequently frown on studies from countries other than the United States that do not collect comparable data from the U.S. Even when the U.S. is included, the second country in a study had better be of interest to the "general readership" of the journal if the author hopes to publish it. An additional problem for researchers is that studying multiple countries adds noise to data sets, yet international studies are held to the same reliability levels as domestic studies. Collectively, all of these problems associated with conducting research in international advertising have led to a situation where we have only a very limited number of scholars pursuing programmatic research, and even fewer who have been able to publish their work in the top journals in the field.

While the above problems do, indeed, make it difficult to conduct international advertising research they are not insurmountable, as illustrated by the articles in this volume. Several different methodologies, including experiments, surveys, qualitative research, and content analysis are used in the papers offered here. Moreover, the studies are conducted in several countries from various parts of the world and several delve into neglected areas of inquiry.

The opening section provides some guidance in terms of implementing procedures to ensure that survey data compared in multiple countries is equivalent. The two articles in the Methodological Advances section build on prior work on ensuring that equivalent data are being compared in cross-cultural studies. In the first article, Miracle and Bang discuss procedures for making sure equivalent measurement instruments are produced prior to data collection, including guidelines for effective translations and procedures for training coders when content analysis is used. In the second article, Ewing, Caruana, and Teo build on Steenkamp and Baumgartners's (1998) analytical procedures for

Introduction 3

assessing whether data are equivalent by developing the eric Multicultural Advertising Response Scale (MARS). Collectively, these studies demonstrate how it is now possible for researchers to eliminate much of the noise in cross- national research. Employing the types of procedures illustrated in these studies, both before and after the data is collected, will enhance the chances of an international advertising study being accepted in high-level journals.

The second section of the volume is titled "Standardization vs. Specialization Issues." These studies examine the advances that have been made in recent advertising research on standardization and reflect the need to see the issue from a managerial perspective, as opposed to becoming preoccupied with the "debate." In a review of the literature on standardization vs. specialization in the 1990s, Taylor and Johnson stress the growing consensus that brand positioning or the main selling message can often be standardized while individual country executions must be carefully analyzed when making a decision whether to standardize. Thus, at a general level, the decision to standardize should become a matter of "what"and "how," as opposed to whether. The authors also call for more research on the client-agency relationship vis-a-vis standardization and on inter-market segmentation.

The second article in this section, by Chandra, Griffith, and Ryans, investigates the relationship of process standardization to program standardization using results from a survey of U.S. multinationals operating in India. This study provides an excellent country-specific example of the level of analysis recommended by Taylor and Johnson for determining whether specific programs (or executions) can be standardized. The third contribution to this section is a fascinating piece by Onkvisit and Shaw in which the universality of theories and concepts contained in U.S. textbooks is examined and questioned. As textbook authors, their call for more research evaluating and replicating advertising concepts in other cultural contexts should be taken especially seriously, as they have first hand the need to summarize the state of knowledge on international advertising. In the final article in this section, Raymond and Lim provide a detailed case study that, again, illustrates the level of depth of analysis needed in making the decision of what can be standardized. Their case study of Hyundai's Santa Fe SUV shows how country of origin effects and other factors need to be considered in deciding whether adaptation is necessary.

The third section of the volume is entitled "Advertising in Central/Eastern Europe." The two articles here focus on two transitional economies, Poland and the Czech Republic, that have seen substantial growth in advertising over the past decade. De Pelsmacker, Maison, and Geuens conduct an experiment which examines how emotional vs. rational advertising appeals work in positive versus negative media contexts. Experimental studies of this type are too rare

4 CHARLES R. TAYLOR

in advertising research in general, but especially in transitional economies. The second article, by Taylor, Bonner, and Dolezal provides evidence on two issues. First, it reports on a survey of Czech perception of advertising clutter in various media. Second, it analyzes Czech consumers' perceptions of what types of advertising executions are effective, using data from both a survey and personal interviews.

The fourth section is rifled, "Global Advertising, Social Responsibility, and Country of Origin Effects." Polonsky, Carlson, Prothero and Kapelianis start the section off with a study of environmental information contained on packaging in four countries - Australia, South Africa, the United Kingdom, and the U.S. Using a new methodology in which judges in each country determine the categories for coding as well as performing the actual coding, the study finds that some types of information not traditionally classified as environmental were identified. The authors also provide implications for advertisers. The next study, authored by Hill and Dhanda, analyzes secondary data in order to assess the impact of differential access to the internet on the ability to promote goods and services worldwide. Macro-level implications for advertisers are provided. The final paper in this section, by Yun, Lee, and Sego, conducts an experiment in which the impact of hybrid vs. non-hybrid country of origin effects on response to an ad are analyzed. The study, conducted over the Intemet, also examines the effect of indirect foreign language cues in the form of foreign language slogans.

Advertising in Asia Pacific is the title of the final section of the volume. Oh and Kim lead off the section with a study of how power impacts on client- agency relationships. Drawing on theory that is often applied in a channels context but seldom in an ad agency context, they find that differential power between clients and agencies can actually play a constructive role. The second paper, by Zhou, Xue, and Zhou, examines advertising and its relationship with materialism, self-esteem and life-satisfaction. Their results, from a student sample, clearly demonstrate that Chinese students are optimistic in terms of their future and that the relationship between the tested variables is complex. In the final paper, Hughes and Polonsky compare the information content in the advertising of Australian, Japanese, and U.S. MNEs in Australia. Their findings suggest that Japanese and U.S. firms use different levels of information in Australia than they do in their home markets.

Collectively, these studies provide a basis on which to build new directions in advertising research, or to continue to build on existing trends in areas in need of research. I would like to thank S. Tamer Cavusgil, the Series Editor, for his encouragement and for the opportunity to edit this issue, and Kathy Waldie of Michigan State University for her support throughout the process.

Introduction 5

Special thanks are also due to Alison Evans of Elsevier who served as Administrative Editor of the Volume and Kyong Ryul (Kevin) Koo, my graduate assistant at Villanova University who worked hard on this project. Finally, I very much thank the Editorial Board members who reviewed the papers for this issue, thereby ensuring its quality.

REFERENCES

Steenkamp, J. E. M., & Baumgartner, H. (1998). Assessing measurement equivalence in cross- national consumer research. Journal of Consumer Research, 25(3), 78-90.

Zinkhan, G. M. (1994). International advertising: A research agenda. Journal of Advertising, 23(1), 11-15.

ACHIEVING RELIABLE AND VALID

CROSS-CULTURAL RESEARCH

RESULTS IN CONTENT ANALYSIS

Gordon E. Miracle and Hae-Kyong Bang

A B S T R A C T

Cross-cultural research presents unique challenges due to language and cultural differences. Based on a large-scale research project involving television advertisements from Japan, Korea, and the U.S., the article identifies a number of problems encountered in developing equivalent research instruments in, and discusses ways to achieve reliable and valid results in cross-cultural content analysis research. The importance of understanding the languages and culture, selecting, training and supervising coders in a consistent manner and the practical value of back-translation process in cross-cultural research in achieving reliable and valid research results are emphasized. Specific guidelines for ensuring equivalent research instruments are provided.

I N T R O D U C T I O N

Many products and services are produced in one country and sold in distant and culturally different markets. Often international marketers depend mainly on judgment to adjust advertising for differences in foreign markets. Some even

New Directions in International Advertising Research, Volume 12, pages 9-23. Copyright © 2002 by Elsevier Science Ltd. All rights of reproduction in any form reserved. ISBN: 0-7623.0950-4

10 GORDON E. MIRACLE AND HAE-KYONG BANG

attempt to find globally acceptable advertising that can be used in all markets. Cross-cultural research methods guide such decisions. Such research requires specialized techniques to overcome cross-national problems of functional, conceptual and linguistic equivalence (Miracle, 1988). In fact, ensuring equivalence is essential to producing useful research (Douglas & Craig, 2000; Kumar, 2000). However, results of a meta-analysis of major studies of the information content of advertising suggest that, all too often, appropriate measures are not taken to ensure that the results of research conducted in two countries are equivalent (Abernethy & Franke, 1996). Notably, the Abemethy and Franke study suggested that studies that followed training procedures for coders produced different, and one can surmise, more accurate, results than those that did not.

The article describes selected research design ideas, techniques, and lessons that have been found to be useful in doing cross-cultural research in Japan, Korea and the USA. These lessons may also be useful to those who would do research to guide advertising in other cultures. Many o f the ideas are not expensive to implement, and can be helpful to both academics and practitioners conducting research in international markets.

The study that provided the experience for this methodology article was a large content analysis of television commercials in three countries: Japan, Korea and the USA. A number of articles and papers have been written, and some are already in print or in press (Miracle et al., 1992a, b; Taylor et al., 1992; Miracle et al., 1992). Subsequent data collection and analysis also resulted in articles (Taylor et al., 1997; Taylor et al., 1994).

Cross-cultural research encompasses not only the entire range of problems encountered when doing research within one culture, but also problems that arise from differences in cultures. Although this article is based on lessons learned from content analysis, some of these methods may also be useful for survey research. Indeed some of the interpersonal communication problems encountered and resolved when preparing data coding forms, when training and using translators, and when training supervisors and coders, may be similar to those encountered when preparing interviewers, and training them to handle telephone or personal interviews.

The Concept of Culture

The concept of culture is elusive. Although culture has been defined in many ways, it is not appropriate here to deal comprehensively with the many definitions and components of culture. For our purposes it seems suitable to use Hofstede's (1984) definition: " . . . culture is the collective programming of the

Achieving Reliable and Valid Cross-Cultural Research Results 11

mind which distinguishes the members of one group or society from those of another . . , culture is reflected in the meaning that people attach to the various aspects of their life; their way of looking at the world and their role in it; in their values, that is, in what they consider as 'good' and as 'evil'; in their collective beliefs, what they consider as 'true' and as 'false'; in their artistic expressions, what they consider as 'beautiful' and as 'ugly'."

Advertising reflects culture. Differences in culture between societies suggest measurement problems. The central issue addressed in this paper is how to define and measure culturally influenced characteristics of Japanese, Korean and U.S. television advertising systematically, objectively and quantitatively so as to achieve reliable and valid research results. As alluded to earlier, many of these lessons are applicable to advertising research in other cultures.

The Emic-Etic Distinction An emic generalization is one that is valid within a single culture. An etic generalization is the one that is valid in two or more cultures. Cross-cultural research is concerned with identifying and distinguishing emic from etic generalizations. Etic generalizations depend on the equivalence of culture between two or more societies.

Equivalence There are differences and similarities between cultures and the ways in which language is used to express ideas and information. These differences and similarities can be grouped into functional, conceptual or linguistic characteristics of a culture and language. These similarities or differences can be important influences on setting advertising objectives, deciding advertising strategy, or doing advertising creative executions.

Functional differences and similarities of cultures relate to behavioral phenomena. From the standpoint of advertising, an important question is whether or not habits and customs with respect to consumer purchasing behavior or product usage are the same or different in the culture under study. For example, it may or may not be appropriate to discuss business at meals, to eat a particular food for breakfast, or to use a bicycle for the same purpose (e.g. for pleasure or for basic transportation).

Conceptual differences and similarities of culture relate to the existence or non-existence of certain ideas or ways of thinking in a culture. Of importance to advertising is whether certain concepts of consumer purchasing behavior or product usage are the same or different in the cultures under study. For example, the meaning of certain colors may or may not have the same


connotations; white may be the color of purity in one country or the color of death in another. The concepts of "ethnic" and "foreign" may be different in the USA, but virtually identical in Korea. What is humorous in one nation may not be at all humorous in another.

Linguistic differences and similarities relate to the translatability of function and concepts from one language into another. For example, Eskimos may have many more words to express different kinds of snow than are available in English. Sometimes idioms or metaphors are meaningful in one language but not in another. An example is the U.S. expression: it is as easy as rolling off of a log. This expression, if translated, may be entirely meaningless in many languages. Such words as "marketing," "computer" and "television" have been incorporated into many languages in which there is no word that is exactly equivalent. When such a word is adopted into a language, there may remain a difference in the meaning for an extended period of time. Additionally, some words are translatable but require lengthy explanation to express the full idea.

Determining Reliability In its simplest form, reliability is the "degree of correspondence between two sets of frequencies of classified symbol data when the analysis of the same communication is done by two independent analysts or groups of analysts." (Janis et al., 1943, p. 293)

Three types of reliability have been identified in the literature, First, stability: the degree to which a process is invariant or unchanging over time when measured at different times by one observer. It is also known as consistency or intraobserver reliability. This is also the weakest form of reliability. Secondly, reproducibility: the degree to which a process can be recreated under varying circumstances at different locations by different coders. It is also known as intercoder reliability. Finally, accuracy: the degree to which a process functionally conforms to a known standard, or yields what it is designed to yield. This is the strongest reliability test available, surpassed only by a measure of validity that assumes the known standard must be true (Krippendorf, 1980). In this project, we were concerned with reproducibility and accuracy.

In creating equivalent coding or data collection instruments across two or more cultures, the translation process may pose a problem either by decreasing reliability or by increasing reliability. Unlike the common belief that the reliability level may only diminish in cross-culture studies, several factors may actually create seeming equivalence: (1) translators may have a shared set of rules for translating certain non-equivalent words and phrases; (2) some back-translators may be able to make sense out of a poorly written target


language version; or (3) the bilingual person translating from the source to the target may retain many of the grammatical forms of the source (Brislin, 1970). Should this take place, the result may be higher reliability but lower validity. In order to secure consistent measures, translations and back-translations should be done by those who are knowledgeable not only about the languages, but also about the subject of research, in this case, advertising.

While a full discussion of the best measures for reporting reliability is beyond the scope of this paper, it should be noted that there is now a widespread consensus among marketing and advertising researchers that reported reliability figures should be corrected for chance agreement (Taylor & Stem, 1994). Perrault and Leigh (1989), Hughes and Garrett (1990), Franke (1992), and Rust and Cooil (1994) all provide excellent discussions of this issue.

Determining Validity As Holsti (1969) points out, the meaning of validity can vary from study to study, depending on the investigator's purposes. According to the American Psychological Association Committee on psychological tests, four types of validity can be distinguished such as content validity, predictive validity, concur- rent validity, and construct validity. Content validity, also sometimes referred to as face validity, has most frequently been relied upon by content analysis. If the purpose of the research is a purely descriptive one, content validity is normally sufficient, and this type of validity is usually established through the informed judgment of the investigator.

Since the research on which this article is based was descriptive, it was deemed sufficient to rely on content validity. The researcher's judgments on validity depend on the research methods used and the care with which they are employed. The main thrust of this article is to illustrate such methods.

RESEARCH METHODS

The Translation~Back-Translation Process

The data coding instruments for this study were prepared initially in English. They were based largely on the review of the U.S. literature (see references in Miracle, 1988), but also on several cross-national and non-U.S, studies. Additional adaptations were based on the language and advertising experiences of the researchers in Japan and Korea. Many uncertainties were encountered and resolved as to which items on the data coding instrument were emic or eric.

In view of the importance of problems of equivalence, it was important to devise a method to: (1) identify differences when they exist; and (2) resolve


them when possible, especial ly to discover i f they are an artifact of a particular translator rather than a genuine difference.

One technique to deal with problems of equivalence is to: (1) use one or more persons to translate material from the original language into a second language; (2) translate it back into the original language; and (3) compare the original with the back-translated version.

This study involved three languages: Japanese, Korean and U.S. English. Thus it was more complex than i f only two languages had been involved. The scheme is shown in Fig. 1.

In each language, it is important for a competent translator to translate into his or her own native language. It is not only easier and quicker to translate into one ' s own native language, but more accurate as well. A translator should have a current knowledge of his or her own native language from recent experience, since languages evolve continuously and the translator must be up to date. The cultural, economic and social backgrounds of translators are also important regarding their perspectives on functions, concepts and language. Addit ional ly it was important for this part icular project that the translators should know the technical language of advertising. Miracle (1988) reported more fully on the requirements for effective translations of advertising and related material.

When each back-translation was compared with the original in that language, many differences were discovered. A few apparently genuine emic concepts were identified, as well as a number of differences that arose from what appeared

E . . . . . . . . . . . . . . ~ K . . . . . . . . . . . . . . . ~ E, compare E

K . . . . . . . . . . . . . . . " ~ J, and compare with J from below

E . . . . . . . . . . . . . . " ~ J . . . . . . . . . . . . . . . "liP" E, compare E

J . . . . . . . . . . . . . . . " ~ K, and compare with K from above

Notes: 1. E = English, K = Korean, J = Japanese 2. The direction of the arrows shows the translation from one language into the other. 3. In each case the end product back-translated must be compared with the original in that

language - for purposes of identifying and resolving problems of functional, conceptual and linguistic equivalence.

4. At each stage, one or more independent translators must be utilized.

Fig. 1. Translation and Back-Translation Performed on the Data Coding Instruments and Codebook.


at first to be linguistic non-equivalence. These were subsequently resolved by improving the translations.

Special Problems of Translations Between Japanese and English

Written Japanese is a combination of three symbol systems: (1) Chinese characters or symbols known as kanji; (2) indigenous Japanese symbols known as hiragana; and (3) indigenous Japanese symbols known as katakana. The latter are used primarily for transliterating foreign words so they can be pronounced in Japanese. All three symbols may be used in the same sentence. If a kanji or hiragana symbol is not available to express a foreign concept, the Japanese can write a word in katakana so that they can pronounce it. For example, the word "television" becomes a three syllable word "te-re-bi," "beer" becomes a two syllable word, "bi-ru," and the word "Miracle" becomes a four syllable word, "Mi-ra-ku-ru." The interesting feature of this practice is that someone reading the transliterated katakana can render it back into the original language, without understanding the meaning of the word. In our study, such a problem arose when a translator used katakana to translate a few "difficult" words from English into Japanese. Some of the back-translations from this Japanese into English showed remarkable agreement with the original English, suggesting the false conclusion that there were no problems of equivalence. The problem was compounded by the fact that even though such transliterated words have become a part of the Japanese language, these words often take on new connotations, or lose part of the original meaning. For example, the katakana rendering of skeleton (se-ke-ru-ton) carries the meaning of "outline" (as used when referring to an outline of an article).

With all languages, virtually all translations suffer at least a little from a partial rather than full correspondence in the meaning of words. For example, the Japanese expression for "computer graphics" carries the meaning of a picture - a drawing, an illustration or sketch, but not a graph. Another example is the Japanese word for "animation" which in translation carries the meaning of "comics" or "cartoons".

Although the items on the data coding instrument originated largely from U.S. literature and experience, Japanese and Korean literature searches provided a few information and executional variables that had not arisen in English. However, the review of the Japanese literature was necessarily not as comprehensive as the review of the U.S. literature, and some Japanese emic concepts were probably missed.


Special Problems of Translations Between Korean and English

An example of a problem with the translation of "English to Korean and back to English" occurred with the use of the words "ethnic and "foreign". Although they have two separate meanings in English, there is only one word for both of them in Korean, and ethnic is considered to be identical to foreign. Koreans believe they are one ethnic group, so whoever comes from a different ethnic group is considered by them to be foreign.

Training and Using Translators In this study there were four main types of items to be translated: (1) data coding instruments; (2) code books of operational definitions of the items on the data coding instruments; (3) instructions for coders; and (4) sampling specifications and procedural instructions.

The initial translations from English into Japanese and from English into Korean were done in the USA. These native Japanese and Korean translators were a part of the research team and therefore met regularly with the entire research team during the planning and discussion of all phases of the project. They participated first in the pilot study, learning from this early testing. They participated in the early discussion of probable emic and eric concepts, and the discussion of probable difficulties with equivalence. They helped to develop the research design. Therefore they were prepared to translate the real meaning of the concepts on the data coding instruments and the definitions in the code books.

After these translations were followed by back-translations, the research group discussed in detail the problems of equivalence that were found. The data coding instruments and code books in English, Japanese and Korean were then revised.

At this point, a pilot study was done to test the data coding instruments and code books. This experience led to further improvements in the data coding instruments, and in the code books, as well as in the plans for training supervisors and for recruiting and training data coders. These improved data coding instruments and code books, after the pilot test, were then put though the back-translation processes from the English to Japanese to English, and from the English to Korean to English. Translators were used who had had no prior exposure to this research. Both comparisons of the back-translated English with the original English indicated that equivalence had been achieved.

The next step in preparing the data coding instruments and code books was to: (1) translate the revised Japanese version into Korean and then back into Japanese; and (2) translate the revised Korean version into Japanese and back into Korean. These two tasks were accomplished in Japan and Korea respectively. These back-translations were then compared with the original


versions by members of the research team. These comparisons provided additional input into the final versions of the research instruments and especially to guide the training of the native Japanese and Korean coders who did the coding in their respective countries.

Sampling In order to obtain random samples that are comparable and representative, carefully designed specifications were followed in each country. In selecting a sample of television commercials, it was important at the outset to learn about differences in government and media policies with regard to program times, number and timing of airing of commercials, and so forth. The sampling method led to samples in each country that were comprised of a comprehensive range of product categories normally advertised on national television. These samples of national brand commercials from each country contained a similar proportion of products advertised. Therefore, differences in research results could not be attributed to differences in the types of products advertised.

Recruiting Coders For the pilot study, six each of Japanese, Korean and U.S. coders were recruited from students at a U.S. university. From this pilot study it became clear that it was important to find coders with an interest in and knowledge of advertising. It was not possible to train those with little knowledge of advertising to code as accurately as those who had substantial knowledge of advertising.

In the pilot study it also became clear that native Japanese and Koreans who had lived in the USA for several months had become knowledgeable about the U.S. culture. They apparently internalized some of this knowledge in ways that caused them to have difficulty in coding commercials in their native language in the same way that "uncontaminated" natives of each country would do the job. They had a tendency to judge commercials in their native languages according to characteristics or standards of U.S. commercials. Moreover, after even a few months, there were brands, products and commercials in their native countries that were unfamiliar to them - those that had been introduced since they had left. Some of these commercials had new expressions or ideas, and coders said they had difficulty in understanding or interpreting them accurately. Therefore it became clear that the best alternative was to recruit uncontaminated coders living in their native countries, i.e. in Japan, Korea and the USA.

Training Coder Supervisors and Coders It was recognized at the outset that the reliability and validity of the research findings would depend directly on comparable coding in all three countries.


Therefore coder training, supervising and control necessarily had to ensure that the coding would be done in the same way and according to the same rules and standards in each country, while still consistent with the culture of all three nations. Therefore every effort was made to train, supervise and control the coders so that their output would be comparable. Many of the procedures followed were consistent with the recommendations of Kolbe and Burnett (1991), an article that provides excellent guidelines for training coders.

Sixteen U.S. coders were trained by the principal investigator. Three other members of the research team, one American, one Japanese and one Korean, were also present. The American was the one who would later supervise and control the coders and the coding process for U.S. commercials. The Japanese and Korean researchers were the ones that would go to Japan and Korea to train the Japanese and Korean coders respectively.

After each training session, the principal investigator discussed the training with the Japanese, Korean and U.S. research assistants who would later train and supervise coders in their respective countries. The discussion continued until it was clear that the Japanese and Korean trainer/supervisors felt they would be able to train coders in their countries equivalently to the way U.S. coders were trained.

Reliability Testing Procedures The next step was to conduct a reliability test. All U.S. coders working in one room coded 30 commercials, with no discussion among them, except that any coder could ask to see or hear part or all of the commercial as often as needed. This reliability testing process required nine sessions totaling a little more than 13 hours. This same process was later followed by the Japanese and Korean coders in their respective countries.

Coder Supervision and Control After the training and reliability testing was completed in the USA, written instructions, forms for weekly productivity reports, and a schedule of weekly meetings of coders with their supervisor were prepared. The U.S. supervisor collected the completed data coding forms each week, answered coder questions, resolved difficulties, informed other coders of relevant details, and prepared a log of all activities. This log was then used as the basis for a sununary report at the end of the coding to evaluate the entire process. This experience was then shared with the Japanese and Korean trainers/supervisors so that they would supervise and control their coders using the same process in a comparable manner.

After the U.S. coding was completed, the native speaker Japanese and Korean trainer/supervisors traveled to Tokyo and Seoul respectively. There they met with


local Japanese and Korean research colleagues respectively and together they trained the coders.

Reliability Calculation Methods A review of previous communication studies revealed that a reliability coefficient is often expressed as correlations among coders' classifications (Hughes & Garrett, 1990). In many cases, a correlation among the coders' responses is interchangeably used to mean an agreement among the coder responses. However, it is important to note that it is the degree of agreement, not of correlation, that should be measured in order to achieve both reliable and valid results. An important distinction was made by Robinson (1957) regarding the validity of this kind of interchangeability. He stated that agreement requires that paired values must be linked by a linear relationship, or if one defines correlation more broadly, that the paired values be linked according to some mathematical function. Thus, agreement is a special case of correlation, or a narrower form of correlation, in that two variables that agree must be correlated, but variables which are correlated need not necessarily agree.

Determination of an acceptable reliability level depends on the complexity of the research task (Hornik, 1988). Those who best know the whole process of research should decide which level is acceptable because the problems of reliability and validity involve every phase of the content analysis process. Therefore, the analyst must determine what level of agreement is satisfactory to him (Budd & Thorp, 1963). The current consensus among many researchers is that 0.85 is an acceptable level of reliability (Kassarjian, 1977; Krippendorff, 1980). In our study, it had been determined that the 85 percentage level of agreement is sufficient. In our study, the intercoder percentages of agreement exceeded 90% within each country. Additional tests to correct for chance agreement were undertaken, and, again, the categories exceeded the Kassarjian standard.

E V A L U A T I O N O F R E L I A B I L I T Y R E S U L T S

Some possible explanation for the high mean percentages of agreement achieved in this study are: (1) adequate coder training, and (2) accurate and precise definitions of variables. Since the analysis was done by groups of 10 Japanese, 12 Korean and 16 U.S. coders (not just by two or three coders as in many previous content analysis studies), the high percentages of agreement can be considered as especially noteworthy.

The achievement of equivalence through translation and back-translation in this study was designed to identify both emic and eric characteristics of the


three countries' advertising. The research was designed to measure the same thing across the three countries. Therefore, the satisfactory level of percentage of agreement demonstrated in our study supports the conclusion that our research methods and measuring instruments yielded valid results.

C O N C L U S I O N S

Cross-cultural research encompasses not only the entire range of problems encountered when doing research within one country, but also problems that arise from differences across cultures. This study reports methodology lessons from cross-cultural research in three countries. It is hoped that these lessons are applicable also to cross-cultural research conducted in other countries.

The major methodological lessons from this study are as follows:

(1) The translation/back-translation process is a practical, useful, indeed necessary technique to identify emic and etic distinctions to overcome problems of equivalence and to achieve reliable and valid results. This process is useful not only for data coding instruments and code books, but also for coder training materials and other documents that must be strictly equivalent in two or more languages. Any cross-cultural or cross-national study that does not employ the back-translation technique should be an immediate candidate to be judged unacceptably flawed.

(2) Translators should translate into their native languages. Someone with many years of residence in a country, with substantial professional experience, can probably substitute reasonably well for a native speaker; but in this case it is important to use more than one translator on the same material to serve as a check. Less stringent requirements would make the results of a cross-cultural research study suspect.

(3) Special problems can arise when languages employ different symbol systems and types of alphabets. Transliteration is a special problem with Japanese katakana that can confound the translation/back-translation process, and lead to serious problems of equivalence in research instruments. Researchers should be alert to the possibility of similar types of problems with other languages.

(4) Literature reviews of appropriate theoretical and methodological topics should be done not only in the originating nation, but also in each nation in which the cross-cultural research is done. If not done properly, the research instruments will likely be biased toward the culture of the nation in which the literature was reviewed. The consequence may be coder


misunderstandings, lack of comparable coding, large numbers of "other" answer categories, and unreliable and invalid results.

(5) There are likely to be special problems of equivalence associated with doing cross-cultural research in just about every country. These problems probably are not unique to any country, and they are also not the same in all countries. Therefore they need to be identified separately in every cross- cultural research project.

(6) Coders who are "uncontaminated" by foreign experience are necessary to achieve accurate work. After only a few months in another country coders begin unknowingly to adopt some of the standards of the host country, and become incapable of doing as accurate work in their own language as can be done by uncontaminated coders.

(7) In a three-country study, translations and back-translations should be done between all three languages. It is not adequate to design research instruments in one language and only do the back-translation process between that language and the other two languages. Additional problems of equivalence, and solutions to resolve them surface when doing the process between the second and third languages.

(8) In each country it is important to recruit coders who are as similar as possible to the coders in the other countries. When research instruments are designed that are appropriate for coders with certain characteristics, problems of equivalence can arise if these research instruments are used by others, i.e. by those with different socioeconomic backgrounds, different educations, and so forth. They are therefore different in the way they are likely to be able to use the research instruments. In this study we recruited coders of similar age, educational level and knowledge of advertising in their countries. Although small differences in coders were detected, they were deemed acceptable. However, if we had used coders that were substantially different, our experience suggests that the research results may have been much less reliable and valid.

(9) Always do a pilot study to pretest the sampling plan, research instruments, coder training/supervision/control, and other aspects of the research process. This need is even greater in cross-cultural research than it is in one-country research.

(10) Train the multi-country research staff together in one country before they work in another country. The reason is that some of the modifications in instructions to coders that are necessary to achieve comparable results, may have to be made in the first country rather than only in second or third countries.


(11) Special procedures are necessary to code both verbal and visual cues accurately. While this problem is especial ly acute for analysis of television commercials , it probably is necessary also for the differences in the verbal and visual content and executions in other advertising media, especial ly magazines. Do not make the assumption that most or all of the information in the advertising is in the verbal part of the advertising. This point is particularly important in cross-cultural research, since some cultures are more visually oriented than others, for example, Japan compared with the USA.

ACKNOWLEDGMENTS

The authors gratefully acknowledge research grants and services contributed by the fol lowing organizations: the Michigan State University Development Fund, the Hoso Bunka Foundation (Japan), the Korea Broadcast Advert is ing Corp., ASI Market Research (Japan), the Yoshida Hideo Memorial Foundation (Japan), and the Youngshin Academy (Korea).

REFERENCES

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Brislin, R. W. (1970). Back-translation for Cross-Cultural Research. Journal of Cross-Cultural Psychology, 1(3), 185-216.

Budd, R. W., & Thorp, R. K. (1963). An Introduction to Content Analysis. A publication of the University of Iowa School of Journalism.

Douglas, S. P., & Craig, C. S. (2000). International Marketing Research: Concepts and Methods. Chichester, U.K.: Wiley & Sons.

Franke, G. R. (1992). Reliability and Generalizability in Coding the Information Content of Advertising. Asian Journal of Marketing, 1, 7-25.

Hofstede, G. (1984). Cultural Dimensions in Management and Planning. Asia Pacific Journal of Management, January, 81-99.

Holsti, O. R. (1969). Content Analysis for the Social Sciences and Humanities (pp. 94-149). Addison-Wesley Publishing Company.

Hornik, J. (1988). The Delta Binomial Test for Interjudge Reliability. Current Issues & Research in Advertising, 11, 67-74.

Hughes, M. A., & Garrett, D. (1990). Intercoder Reliability Estimation Approaches in Marketing: A Generalization Theory Framework for Quantitative Data. Journal of Marketing Research, 27(May), 185-195.

Janis, I. L., Fadner, R. H., & Janowitz, M. (1943). The Reliability of a Content Analysis Technique. Public Opinion Quarterly, 7, 293-296.

Kassarjian, H. H. (1977). Content Analysis in Consumer Research. Journal of Consumer Research, 4, 8-18.


Kolbe, R., & Burnett, M. S. (1991). Content Analysis Research: An Examination of Applications with Directives for Improving Research Reliability and Objectivity. Journal of Consumer Research, 18(September), 243-250.

Krippendorf, K. (1980). Content Analysis: An Introduction to Its Methodology. Sage Publication. Kumar, V. (2000). International Marketing Research. Upper Saddle River, NJ: Prentice Hall. Miracle, G. E. (1988). An Empirical Study of the Usefulness of the Back-Translation Technique

for International Advertising Messages in Print Media. In: J. D. Leckenby (Ed.), Proceedings of the 1988 Conference of the American Academy of Advertising (RC51-56). Austin: The University of Texas at Austin.

Miracle, G. E., Taylor, C. R., & Chang, K. Y. (1992a). Culture and Advertising Executions: A Comparison of Selected Characteristics of Japanese and U.S. Televisions Commercials. Journal of International Consumer Marketing, 4(4), 89-113.

Miracle, G. E., Taylor, C. R., & Chang, K. Y. (1992b). Culture and Advertising Executions: A Comparison of Selected Characteristics of Korean and U.S. Television Commercials. International Marketing Review, 5-17.

Miracle, G. E., Maenaka, H., & Chang, K. Y. (1993). Information in Japanese and U.S. Television Advertising. In: E. Thorson (Ed.), Proceedings of the 1993 Conference of the American Academy of Advertising (pp. 245-246). Columbia, MO: American Academy of Advertising.

Parmeswaran, R., Greenberg, B. A., Bellenger, D. N., & Robertson, D. H. (1979). Measuring Reliability: A Comparison of Alternative Techniques. Journal of Marketing Research, 16, 18-25.

Perreault, W. D., & Leigh, L. E. (1989). Reliability of Nominal Data Based on Qualitative Judgments. Journal of Marketing Research, 26(May), 135-148.

Robinson, W. S. (1957). The Statistical Measurement of Agreement. America Sociological Review, 22, 1717-1725.

Rust, R., & Cooil, B. (1994). Reliability Measures for Qualitative Data: Theory and Implications. Journal of Marketing Research, 31(February), 1-14.

Taylor, C. R., Miracle, G. E., & Wilson, R. D. (1994). The Impact of Brand Differentiating Messages on Effectiveness in Korean Advertising. Journal of International Marketing, 2(December), 31-52.

Taylor, C. R., & Stern, B. B. (1997). Asian-Americans: Television Advertising and the Model Minority. Journal of Advertising, 26(Summer), 1-15.

Taylor, C. R., Wilson, R. D., & Miracle, G. E. (1997). Culture's Consequences in Advertising: The Impact of Information Level Strategies on the Effectiveness of Korean vs. U.S. Television Commercials. Journal of Advertising, 26(Spring), 1-18.

TOWARDS THE DEVELOPMENT OF

A SCALAR EQUIVALENT ETIC

MULTICULTURAL ADVERTISING

RESPONSE SCALE (MARS)

Michael T. Ewing, Albert Caruana and Andy Teo

ABSTRACT

While considerable prior research has focused on the development of standardized viewer response scales in advertising, such studies have, without exception, taken an emic approach. In other words, the scales have first been developed in one country, often the U.S., and then validated or replicated in other countries. Emic approaches have obvious limitations in an increasingly multicultural environment. By contrast, we offer a simple uni-dimensional advertising response scale developed following an etic approach, in which a universal measurement structure across cultures is sought using multiple cultures simultaneously. Psychometric tests demonstrate that the new scale is reliable, valid, parsimonious and generalizable across cultures and product categories. Theory-building and managerial implications of the approach are discussed, limitations noted and future research directions outlined.

New Directions in International Advertising Research, Volume 12, pages 25-41. © 2002 Published by Elsevier Science Ltd. ISBN: 0-7623-0950-4

25

26 MICHAEL T. EWING, ALBERT CARUANA AND ANDY TEO


Advertising response scales offer a useful procedure whereby consumers' aggregated responses to television commercials can be quantitatively compared and meaningful interpretations made. A number of popular advertising response scales have been developed over the past 30 years. However, most, if not all, have North American origins. The advertising function is increasingly being confronted with new and varied challenges resulting from the inexorable forces of globalization. Cross-cultural research and instruments that can be used with confidence across cultures are thus highly relevant to both academics and practitioners of advertising.

Knowledge of similarities or differences in the ways that consumers within a multi-cultural market perceive advertising communications would provide regional marketers with valuable information regarding the standardization/ adaptation question. However, meaningful cross-cultural comparisons cannot be established if there is a lack of measurement invariance, and measurement instruments developed with ethnocentric (emic) approaches are bound to find little relevance in other cultures. The applicability of measurement instruments to other countries is also seriously questioned in an increasingly pluralistic marketplace. One cannot detract from the fact that the fundamental purpose of cross-cultural research should be to test whether concepts and consumer theories developed in one culture are equally valid and applicable in other cultures. In this respect, the ultimate goal of quantitative cross-cultural research lies in the equivalence of data. If data equivalence and evidence supporting a measure's invariance are lacking, then research should be confined to qualitative interpretation rather than conducting questionable quantitative comparisons because conclusions drawn are at best ambiguous and at worst erroneous.

The primary objective of this study is to develop a Multi-cultural Advertising Response Scale (MARS) that is equivalent across cultures. Building on the popular method pioneered by Churchill (1979) for development of marketing constructs, we follow the Object-Attitude-Rater (O-A-R) procedure recently recommended by Rossiter (2000). Research is conducted among samples of Australian and Asian respondents for five standardized (global) television commercials. Results are reported, implications discussed, limitations are noted and future research directions suggested.

Advertising Response Scales

Before the development of a new advertising response scale can be justified, it is necessary to review the various scales developed thus far. A review of the

Equivalent Multicultural Advertising Response Scale: MARS 27

literature highlights a wide array of measures that seek to capture viewers' responses to television advertising in particular. Among the most popular and frequently cited instruments are the Emotional Quotient (EQ) scale (Wells, 1964a, b; Wells, Leavitt & McConville, 1971), the Likeability scale (Leavitt, 1970) and the Viewer Response Profile (Schlinger, 1979). Work by Aaker and colleagues in this area, is also well regarded (see for example: Aaker & Norris, 1982; Aaker & Bruzzone, 1985; Aaker & Stayman, 1990).

However, it was the pioneering work of Wells (1964) in particular that led to the popularization and use of rating scales in advertising. His Emotional Quotient scale originally consisted of 12 items that sought to measure the emotional appeal to print adverts. Subsequent work saw the development of 'Son of EQ' that consisted of twenty-six items that split into three factors: Attractiveness, Meaningfulness and Vitality that were shown to be significant predictors of recognition and recall. Wells, Leavitt and McConville (1971) developed an EQ scale version for TV commercials. The final analysis revealed six stable factors: Humour, Vigour, Sensuousness, Uniqueness, Personal relevance and Irritation. Leavitt (1970) focused on likeability of an ad as a means of predicting its attention getting ability. The seventy-one-item instrument that was developed resulted in seven 'attention getting' factors of a commercial, namely: Energetic, Personal relevance, Sensual, Familiar, Novel, Authoritative and Disliked.

Schlinger's (1979) Viewer Response Profile (VRP) seeks to quantify consumers' subjective and affective reactions to advertisements. Unlike measurements of learning and comprehension, the VRP does not directly concern itself with the retention of claims, slogans, or other factual material but focuses instead on the emotional component of communication effects. The final thirty-two item scale consists of seven broad dimensions, namely: Entertainment, Confusion, Relevant news, Brand reinforcement, Empathy, Familiarity and Alienation.

Puto and Wells (1984) proposed a theoretical structure of advertising effects based on the cognitive and affective elements of informational and transformational advertising that was used as the basis for their twenty-three-item scale. Ads can concurrently be informational and transformational in different degrees and the two dimensions are not mutually exclusive. For an advertisement to be deemed informational, it must present factual, relevant information about the brand, present information that is important to the potential consumer, and present data that the consumer accepts as being verifiable. An advertisement is judged to be transformational if it makes the experience of using the product richer, warmer, more exciting, and/or more enjoyable and it connects the experience of the advertisement to the extent that consumers cannot remember the brand without recalling the experience generated by the advertisement.


Aaker and Stayman, (1990) focus on television advertising and in looking at the factors that result from the instruments by Wells, Leavitt and McConville (1970), Schilinger (1979) and Aaker and Bruzzone (1981) recognise a remarkable degree of consistency across these studies. Four factors, namely: Informative, Dislikable, Warm, and Entertaining always seem to emerge, while factors labeled Familiar and Credible appear twice. Other factors such as Novel, Confusing, Stimulating, Brand reinforcing, and Clear are less consistent because items were not always included to tap them.

Most advertising scales have been developed using exploratory procedures. Lastovicka (1983) first noted the paucity of published evidence of convergent and discriminant validity for any set of measures of viewer reaction to television commercials scales developed to date. He therefore set out to test this type of validity for three of the most popular copy-testing concepts, namely: Relevance, Confusion and Entertainment, using a 16-item scale. Lastovicka (1983) concludes that the underlying concepts, which the empirical measures were designed to tap, seem related to one another in a manner consistent with expectations. Zinkhan and Fornell, (1985) looked at the Wells EQ scale and Leavitt's commercial profile and examined the hypothesized factor structure and their predictive validity with respect to attitude and purchase intention. The EQ scale was found to be consistent with its postulated structure whereas the commercial profile was not (Zinkhan & Fomell, 1985). Nonetheless, the two profiles predicted attitude toward the brand equally well, but the reaction profile was superior with respect to purchase intention (Zinkhan & Fornell, 1985). In a later study, Zinkhan and Burton (1989) examined the dimensional structure and validity of the Wells' Reaction Profile, Leavitt's Multi-dimensional Profile and Schlinger's VRP. Findings indicated that the dimensions underlying Wells' Reaction Profile appeared stable, the Leavitt profile displayed acceptable stability, but the Schlinger profile did not appear sufficiently stable.

E Q U I V A L E N C E I N C R O S S - C U L T U R A L R E S E A R C H

A review of the principal advertising instruments has indicated no universally agreed set of dimensions but a significant variety with some overlap at times. A further point is that all the research instruments have been developed within a U.S. context. While the importance of the U.S. market is not in doubt, the opening of previously sealed international borders, large migration streams, international tourism, increased cross-cultural communications, China's recent admittance into the WTO, and the general globalization of the economy all underline the increasing importance of multicultural marketing communications.


All too often, researchers have assumed that United States-based concepts and models were relevant to other countries without actual validation of model constructs or linkages and this assumption could lead to invalid cross-national inferences (Durvasula et al., 1993). Many studies have been exported from the West to non-Western countries but some of the issues examined in these studies can be of little relevance to non-Western cultures (Sin, Cheung & Lee, 1999; Van de Vijver & Leung, 1997). Measurement instruments developed with ethnocentric (eric) approaches are often bound to find little relevance in other cultures. There has often been a failure to realize that the very meaning of a scale might change and classical quality indicators such as reliability and validity might be strongly influenced by cultural factors (Salzberger, Sinkovics & Schelegelmilch, 1999). The same sentiment has been echoed by Steenkamp and Baumgartner (1998) who note that assessing the applicability of frameworks developed in one country to other countries is an important step in establishing the generalizability of consumer behavior theories. Indeed, it is common to find that all items of an instrument are assumed to be equivalent across cultures without any statistical checks to support this claim (van de Vijver & Leung, 1997). However, for such comparisons to be meaningful, the instruments used to measure the theoretical constructs of interest, must first exhibit adequate cross-national equivalence (Steenkamp & Baumgartner, 1998). For meaningful cross-cultural comparisons to take place it is necessary to undertake appropriate equivalence comparability and generalizability checks to establish measurement invariance. The resulting advertising instruments will be relevant across countries and will prove increasingly useful to both practitioners and academics.

Scale Development Procedures

Rossiter (2000) argues that Churchill's (1979) popular scale development method is but one 'cell' in a greater schema for measure development and has recently proposed an alternative Object-Attribute-Rater (O-A-R) procedure that focuses on first assessing content validity. In order to determine whether single items measures are sufficient, Rossiter (2000) specifies the need to follow a systematic content analysis procedure. This procedure also assists the researcher to decide whether unidimensionality and internal consistency are relevant. It is argued that the universally accepted practice of 'pruning' of items to improve a measure in the name of reliability could in fact detract from its validity. Perhaps the recommendation to compute reliability as a first assessment of an instrument is in part driven by the ease with which this can be computed. Of the three types of validity (content, predictive and construct validity),


Rossiter (2000) maintains that content validity is the most important as it has theoretically logical priority over construct validity.

For Rossiter (2000), a 'concrete' object has a closely uniform meaning across respondents while a 'singular' object refers to either a single object or a set of reasonably homogenous objects. Attributes can also be either 'concrete' (such as age) or 'abstract' (such as Social Class or Personal Involvement). Constructs can result from abstract formed attributes (such as occupation, income, education and residence type in Social Class) or abstract eliciting attributes (such as: Important, Interesting, etc in Personal Involvement). The Response Profile type of measures used in advertising represents abstract formed attributes, that in the case of the VRP would include components such as Entertainment, Relevant news, Confusion, etc. Rossiter, (2000) argues that there is no need to employ factor analysis of many items to derive the components in the case of such constructs as these are 'concrete,' and can be represented by a single item. Rossiter (2000) further argues that the notion that single items must be unreliable is a misconception, and it is respondents, not items, that are unreliable. The use of multiple items to measure a construct results in over-measurement that can cause unwanted measurement interactivity with the true score, and thus reduce the validity of the measure (Rossiter, 2000).

S T A G E S I N D E V E L O P M E N T O F M A R S

Phase One: Obtaining Qualitative Data About Feelings Toward TV Commercials

The first stage in the development of MARS consisted of obtaining qualitative data from a convenience sample of undergraduates from fourteen class sections of a university business school in Western Australia and Hong Kong (the Australian university runs programs in Hong Kong, Singapore and Malaysia). A total of 159 subjects were qualified and separated into two groups on the basis that they were: (a) international students from Asian countries; or (b) local Australian students of Western heritage. Local Australian students with an Asian heritage were excluded from this study as they could have assimilated into the local culture but still retained some of the traits from their country of origin. Their omission was primarily due to the consideration that the extent of assimilation was unknown and was beyond the scope of this study, and they could also possibly effect the survey results. The two final groups of students consisted of ninety-four and sixty-five respectively. In the first group, twenty- six percent were male and seventy-four percent female, while the latter group consisted of forty-seven percent males and fifty-three percent female.


The initial ten commercials selected in this phase of the research covered a variety of goods and services such as computers (IBM and Apple), apparel (Levi Strauss and Nike), shaving needs (Gillette Sensor), air travel (Singapore Airlines), financial services (Visa), entertainment (Sony Playstation), automotive (Volvo) and soft drinks (Pepsi). These commercials were chosen as the subjects would have adequate experience with the various product categories. The specific commercials were chosen on the basis that they are global or standardised commercials which were developed to be shown all over the world (see Belch & Belch, 2001). According to de Mooij (1998), a worldwide brand name and uniform communication strategy is most appropriate and effective for culture-free products such as computers, wristwatches, pocket calculators, perfumes and credit cards. Current literature provides ample support that the ten commercials selected are indeed of a standardised and global nature (Belch & Belch, 2001; Campbell, 2000; Cardona, 1999; Cozens, 1998; Halliday & Petreeca, 1998; Jensen, 1998; Jensen & Cuneo, 1998; Lenihan & Kelly, 1998; Merrill & McCarthy, 1998).

Each commercial used can be considered as a 'concrete' and 'singular' object (Rossiter, 2000). An open-ended questionnaire (see Appendix) was administered and the respondents were asked to describe how they felt with their own words after viewing each commercial. The words entertaining, confusing, relevant and likable were used as prompts as these words appeared consistently across the different scales by Schlinger (1979), Leavitt (1970), and Lastovicka (1983). Furthermore, subjects were told that they could use their native language or any language they felt comfortable with in expressing their feelings toward the commercials. It was beneficial to the international students from Asia as this facilitated the subjects' ease in expressing how they felt as English is generally not their first language. It also prevented the subjects from trying too hard to think of an appropriate word, and in the process lose their first spontaneous feeling toward the commercials.

Phase Two: Selection of Scale Items

A list of all the words used by the respondents without any attempt at changing or rephrasing them was compiled. A total of thirteen questionnaires were translated from Mandarin to English. This resulted in an initial yield of 300 words from both groups. To reduce the study to a more manageable size, duplications, slang, and synonyms were eliminated which resulted in a total of 142 words. A thesaurus was also used to assist in the refinement of words and phrases employed by the respondents. This procedure follows that employed by Wells (1964) in developing the EQ scale.

32 MICHAEL T. EWlNG, ALBERT CARUANA AND ANDY TEO

The list was then tabulated and words that appeared most frequently across the two groups of subjects were used as scale items. The resultant scale consisted of eight items with two of the scale statements worded negatively so as to reduce irresponsible or lazy response pattern tendencies (Churchill, 1979; Rossiter, 2000). A five-point graphical scale ranging from 'Strongly Disagree' (1) to 'Strongly Agree' (5) was added. The use of a five-point scale for MARS is in line with that employed in the pioneering work of Wells, Leavitt & McConville (1971) in the EQ for TV commercials. The fact that the questionnaire must be understood by the general public necessitates that the vocabulary must not be fancy, and the usual requirements of brevity and comprehensiveness urge that the questionnaire be as short as possible without omitting any important ideas (Wells, Leavitt & McConville, 1971; van de Vijver & Leung, 1997) The resultant draft scale comprising eight items has its origins in the Schlinger (1979) factors, but with some additions and modifications emanating from the series of fourteen focus groups conducted with students in Western Australia and Hong Kong.

Phase Three: Use of Experts

The draft scale was then reviewed by a group of ten international advertising practitioners (two each from: Australia, Hong Kong, Singapore, South Africa and the United States). The experts were asked to examine the draft scale, thinking about how well it will translate into the different languages that they are familiar with, the potential problems they could foresee, and whether any changes should be made. The experts thought the draft scale was suitable, and in the context of testing a commercial against those criteria, it would travel well no matter the culture. There was also a general consensus that while the definition as to what is considered 'entertaining' or 'inspiring' may vary between cultures, the validity of those measures in the overall appeal of a commercial would generally transcend cultural barriers. The instrument appears in the Appendix.

Phase Four: Scale Administration

Convenience sampling was used as MARS was administered to students enrolled in an undergraduate Commerce program. A total of 243 valid responses were collected that consisted of 124 Asian students and 119 Australian students. Sixty-six percent of respondents were female and thirty-four percent were male for the Asian students group, while the Australian students group consisted of 64% female and 36% male respondents. This procedure is similar to the earlier


work by Lastovicka (1983) and Puto & Wells (1984) where data was collected from undergraduates after a forced exposure to an advertisement in a theatre setting.

It has been suggested that the use of student subjects in measurement development research threatens the external validity and generalizability of findings due to the non-representativeness and unique characteristics of the population (e.g. Well, 1993). However, in a cross-cultural study, well-matched (i.e. maximally homogenous within and between cultures) samples are more useful than representative samples because they allow more exact theoretical predictions and reduce the confounding effects of other factors (Hofstede, 1991). More importantly, students are accepted theory testing research subjects where the multivariate relationships among constructs, not the univariate differences between samples are being examined (Calder et al., 1981). Accordingly, students have been used as effective surrogates for non-students in a wide and diverse array of marketing and advertising studies (Yoo & Donthu, 2001).

Respondents were qualified based on the fact that they were either Australians or ethnic Chinese of Southeast Asian origin. The subjects were shown a total of five commercials (Singapore Airlines, Visa, Nike, Sony Playstation and Pepsi), with each of the commercials played twice in accordance with industry copy-testing practices. The five commercials used for the administration of the scale were retained because they were thought to be most relevant to the target samples, and they would have adequate product usage experience.

R E S U L T S

Metric Properties of the MARS Instrument

Confirmatory factor analysis was undertaken on the two covariance matrices that resulted from the Australian (pop 1) and Asian (pop 2) population. In line with Rossiter (2000) the CFA undertaken on the data assumed unidimensionality. Results (Table 1) show a good fit when a unidimensional construct is assessed but inspection of items indicated errors for the negatively worded items 3 and 11. If these negatively worded items are treated as composing a second separate factor, the fit obtained for the CFA for both groups improves. Although use is being made of a two-factor model, the 'second' factor made up of the negatively worded items is a separate factor only because of the negative wording of the items and the construct is still unidimensional (Christie & Geis, 1970; Robinson & Shaver, 1973; Saxe & Weitz, 1982; Welsh, 1956). A look at the Composite ot indicates that these are all greater than 0.5 providing support

34

Table 1.

M I C H A E L T. E W I N G , A L B E R T C A R U A N A A N D A N D Y T E O

R e s u l t s o f C E A f o r F i v e A d s S h o w n to T w o P o p u l a t i o n s U s i n g a

O n e - F a c t o r a n d T w o - F a c t o r M o d e l .

Population 1 Ad 1 Ad 2 Ad 3 Ad 4 Ad 5

One factor

×2 45.11 32.53 40.76 35.40 58.19

df 20 20 20 20 20

p 0.0007 0.038 0.004 0.018 0.000

SRMR 0.076 0.062 0.055 0.056 0.065

GFI 0.91 0.94 0.92 0.94 0.90

AGFI 0.84 0.89 0.85 0.89 0.82

CFI 0.90 0.96 0.96 0.95 0.91

IFI 0.90 0.96 0.96 0.95 0.91 Coefficient ot 0.799 0.766 0.901 0.822 0.842

Composite ot 0.799 0.814 0.903 0.828 0.845

VE 0.343 0.374 0.547 0.390 0.422 Two factors

×2 28.57 16.24 28.17 25.17 48.53

df 19 19 19 19 19

p 0.073 0.640 0.080 0.150 0.0002

SRMR 0.057 0.034 0.040 0.042 0.052

GFI 0.94 0.97 0.94 0.95 0.92

AGFI 0.89 0.94 0.89 0.91 0.84

CFI 0.96 1.00 0.98 0.98 0.93

IFI 0.96 1.00 0.98 0.98 0.93

Coefficient etl 0.813 0.843 0.915 0.832 0.884 Coefficient ct2 0.594 0.580 0.663 0.592 0.4948

Composite etl 0.865 0.851 0.917 0.830 0.887

Composite or2 0.710 0.626 0.664 0.594 0.553

VE 1 0.518 0.496 0.651 0.460 0.569

VE 2 0.571 0.473 0.498 0.424 0.407


One factor ×2 35.45 27.77 49.96 41.77 35.92

df 20 20 20 20 20

p 0.018 0.11 0.0002 0.003 0.016

SRMR 0.063 0.055 0.066 0.062 0.043

GFI 0.93 0.94 0.90 0.92 0.94

AGFI 0.87 0.90 0.83 0.85 0.89 CFI 0.95 0.97 0.92 0.93 0.96

IFI 0.95 0.97 0.92 0.93 0.96

Equivalent Multicultural Advertising Response Scale: MARS

Table 1. Continued.

35


Coefficient ct 0.813 0.811 0.867 0.824 0.878

Composite ct 0.818 0.817 0.867 0.831 0.880

VE 0.373 0.372 0.453 0.393 0.482


T w o factors ×2 20.06 19.57 28.62 30.62 32.56

df 19 19 19 19 19

p 0.39 0.42 0.072 0.044 0.027

SRMR 0.05 0.043 0.046 0.054 0.040

GFI 0.96 0.96 0.94 0.94 0.94

AGFI 0.92 0.93 0.89 0.89 0.89

CFI 1 .IX) 1.00 0.97 0.96 0.97

IFI 1.00 1.00 0.98 0.96 0.97

Coefficient txl 0.790 0.827 0.867 0.779 0.864

Coefficient et2 0.663 0.496 0.717 0.718 0.661

Composite etl 0.788 0.831 0.867 0.768 0.864

Composite ct2 0.733 0.693 0.731 0.587 0.662

VE 1 0.394 0.453 0.522 0.370 0.519

VE 2 0.602 0.591 0.581 0.422 0.496

Table 2. Test for Discriminant Validity.

Population 1

(factor 1 with 2)

Ad 1 A d 2 A d 3 A d 4 A d 5

Correlation 0.368 0.341 0.566 0.453 0.377

Correlation squared 0.135 0.116 0.320 0.205 0.142

VE 1 0.518 0.496 0.651 0.460 0.569

VE 2 0.571 0.473 0.498 0.424 0.407

Population 2 (factor 1 with 2)

Ad 1 A d 2 A d 3 A d 4 A d 5

Correlation 0.476 0.433 0.523 0.739 0.661

Correlation squared 0.227 0.187 0.274 0.546 0.436

VE 1 0.394 0.453 0.522 0.370 0.519

VE 2 0.602 0.591 0.581 0.422 0.496

36 MICHAEL T. EWlNG, ALBERT CARUANA AND ANDY "lEO

for convergent validity. All loadings to dimensions are acceptable and t-values are high. The variance extracted (VE) is at times less than 0.5. However, this need not be of too much concern since: (1) we are not arguing for the independence of the two factors and although the factors are primafacie separate they are artifacts and the construct is unidimensional; (2) the VE test is sensitive to sample size and we have a sample size that is on the low side. Table 2 indicates that the squared correlations between the two factors was less than the average variance extracted for the scale therefore providing general support for discriminant validity (Yoo & Donthu, 2001).

Equivalence

Multiple Group LISREL is appropriate for comparing measurement models from mutually exclusive groups of respondents that are clearly defined (J6reskog & S6rbom, 1989). We seek to investigate the equivalence of a measure of advertising across two different populations. The null hypothesis is that there are no differences between the perceptions across the different populations and that the resulting matrices are equivalent, i.e.:

HEadx: E(popl) = E(pop2)

Acceptance of the null hypothesis can be interpreted as evidence of invariance across groups. Rejection of the null hypothesis necessitates the testing of increasingly restrictive hypotheses in order to identify the source of non- equivalence. Testing of the null hypotheses for the five different ads provides support for their acceptance - Table 3.

Table 3. Results of Tests of Equivalence.

Hypotheses HEadl HEad2 I-l~ad3 HI~ad4 HEad5

×z 57.94 47.07 46.45 51.03 93.01 df 36 36 36 36 36 p 0.012 0.100 0.110 0.050 0.00 SRMR 0.075 0.078 0.150 0.095 0.097 GFI 0.94 0.96 0.95 0.94 0.91 CFI 0.96 0.98 0.99 0.98 0.93 IF I 0.96 0.98 0.99 0.98 0.93


DISCUSSION

The purpose of this research was to develop a psychometrically robust and cross-culturally generalizable measure of viewers' responses to standardized television commercials. Our etic multicultural advertising response scale (MARS) comprises eight items loading onto a single dimension. This study has important practical and theory-building implications that benefit advertising evaluation in several ways. These are discussed shortly.

MARS was applied to samples of Asian and Australian students using five global commercials to test for equivalence of the advertising response scale. Multiple-sample LISREL analysis was carried out on data from the two sample groups. Results indicate the presence of data equivalence, which contributes to the advancement and answers the call for meaningful cross-cultural comparisons. Evidence supporting the validity and reliability of MARS was also established, affirming Rossiter's (2000) claim that the applied quest in the real world was to find the shortest empirical measure, often a single-item measure that would predict well, in contrast to 'over-measurement' in the ill-advised pursuit of multi-item reliability.

The MARS scale has considerable but qualified implications for multinational marketers and their advertising agencies. For the first time, a simple, culturally equivalent unidimensional advertising response scale has been developed and validated. Managers can therefore employ MARS to check for the 'standardiz- ability' of television advertising campaigns. The scale can also be used by local managers who for example may have been given the option of choosing one of a number of campaigns developed by Head Office, i.e. those organizations practicing what Belch and Belch (2001) call 'pattern advertising.' However, it is important to point out that MARS is not detailed enough to be used in copy- testing and advertising development (pre-testing) research. With only eight items, it simply does not offer the same diagnostic power of Schlinger's 32-item VRP for example. In fact, it has more in common with Schlinger's factors, than with her individual items. So, for example, one might establish, through the use of MARS, that a particular advertisement is not entertaining (item 1), and/or confusing (item 6). The researcher could then employ either the full 32-item VRP, or only the items associated with the 'Entertainment' and 'Confusion' dimensions. This way, the researcher is able to more precisely pinpoint the source of the confusion. MARS then, is a tool best suited for post-testing and tracking. In particular, multinational advertisers could employ MARS to establish normative post-test databases.

Like most studies of a similar nature and scope, ours is not without limitations. Our sample size, while psychometrically acceptable, was still somewhat modest.


Moreover, while we feel that, like many researchers before us, we can justify student samples for this type of study, we acknowledge that a non-student sample would have various advantages. For example, older consumers ' psychological attachments to brands (and hence advertising) may vary markedly from students, for several reasons (e.g. differences in length of exposure to the brand, nostalgic associations with the brand, information processing abilities). In addition, while our ads and product categories were quite diverse, they were certainly not exhaustive, and this could also be a limitation. Lastly, our choice of population groups (ethnic Chinese and Australians) is a further limitation. In a strict sense, the scale may be generalizable across only the two samples involved in this study. However, Ewing, Caruana and Zinkhan (2002) recently provided evidence of the cross-national equivalence of three of the Schlinger dimensions across five countries (Australia, England, Hong Kong, Singapore and Malaysia), but not of the U.S., so we would argue that MARS is generalizable in at least those same five countries.

Despite these limitations, we hope our study will spur researchers to revise and validate our scale. In particular, we would be pleased to see further attention paid to MARS ' external generalizability. Additional research should validate the measure using different ads for different product categories from different countries. In particular, we would like to see the instrument applied in the U.S. In addition, the measure needs to be validated among non-student samples. So, an agenda for future research might include: (i) translating the scale into different languages; (ii) collaborating with a global advertising research firm (such as Millward Brown); and (iii) applying the scale across more countries and product categories. There is also perhaps a need to validate the scale items through the use of focus groups, for example. Again, this would be expensive and logistically challenging, leading us to suggest it would only be possible in collaboration with an industry partner.

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Equivalent Multicultural Advertising Response Scale: MARS

APPENDIX: MARS ITEMS

1. This commercial is entertaining. 2. I feel inspired watching this commercial. 3. This commercial is interesting. 4. This commercial is annoying (R). 5. I find this commercial memorable. 6. I did not understand this commercial (R). 7. I feel happy watching this commercial. 8. This commercial is unique.

(R) indicates negatively worded item.

STANDARDIZED vs. SPECIALIZED

INTERNATIONAL ADVERTISING

CAMPAIGNS: WHAT WE HAVE

LEARNED FROM ACADEMIC

RESEARCH IN THE 1990s.

Charles R. Taylor and Chad M. Johnson

ABSTRACT

This paper provides a review of the academic literature regarding examining the standardization vs. specialization debate during the 1990s. While numerous studies have examined the validity of both strategies, it is clear that many companies are adopting an approach where broad strategy is standardized but actual advertising executions are localized as necessary. There is a need for future researchers to focus on how to effectively develop and implement standardized strategies as opposed to examining whether advertising should be standardized. Suggestions for further research are provided.

INTRODUCTION

The issue of whether advertising should be standardized vs. adapted to local cultures has been a major focus in the advertising literature. While the debate


45

46 CHARLES R. TAYLOR AND CHAD M. JOHNSON

regarding standardization of international advertising has been particularly heated since Theodore Levitt's 1983 article in Harvard Business Review, the argument has existed in international advertising circles for almost fifty years (Agrawal, 1995). Some believe that Levitt's assertion that the world is moving towards becoming a "global village" is questionable. Proponents of standardization cite that "worldwide transportation and communication are making consumer demands universal and cultural differences inconsequential." Specialization (or local adaptation) supporters believe that the true trend is towards micro-marketing and advertising campaigns that reach target customers on a more individual level (Moriarty & Duncan, 1990).

Levitt's argument in favor of standardization is strikingly concise. Technological convergence is the driving force behind his argument in favor of standardization. The world is becoming increasingly cosmopolitan; therefore, people throughout the world are increasingly demanding the same things from their products, advertisements, etc. As the world becomes increasingly global, it is imperative that international marketers give customers what they want, not what they say. Cost savings, the globalization of markets and the need for global brands have been cited as key arguments for standardization (Levitt, 1983). In addition to Levitt's article, a great deal of early international advertising research provides support for the proponents of standardization (Elinder, 1965; Fatt, 1967).

However, there is another side to the argument. Many international advertisers do not wholly concur with Levitt's assertion that the world is increasingly homogeneous. These marketers believe that differences and segments exist throughout the world. Different usage conditions, regulatory differences and varying consumer tastes all provide rationale for the specialization strategy. Many researchers have warned of the dangers regarding standardization and provided support for specialization strategies (Buzzell, 1968; Ricks et al., 1974; Reichal, 1989).

Because of the differences of opinion described above, numerous researchers have turned to examining questions related to whether, and/or under what conditions it is appropriate, to standardize advertising programs. This research is generally deemed to be important for a few reasons. First is the clear need for multinational firms to engage in effective advertising in order to be successful. Regardless of cultural influences, advertising is effective when it elicits positive customer response, when it gains the customer's attention, creates some empathy and effectively communicates a message (Meyers, 1996). A second key issue related to advertising is that it is generally regarded to be the most difficult component of the marketing mix to standardize (Mueller, 1996). Among those holding a middle ground view on the standardization debate, there is an acknowledgement that standardized strategies must be carefully planned out.

Standardized vs. Specialized International Advertising Campaigns 47

For these reasons, the wide volume of research on standardization is warranted. The purpose of this paper is to analyze the academic research that has

occurred during the 1990s regarding the debate of whether international advertisers should standardize or specialize their advertising campaigns. The goal of the paper is to provide a summary of knowledge accumulated in the academic research and to provide directions for future research. To perform this analysis an extensive review of the literature was conducted. Special emphasis was placed on studies focusing on variables that affect the decision to standardize or specialize international advertising campaigns. Among the areas that have attracted considerable attention are control issues, cultural factors (including individual cultural variables as well as general studies of the acculturation process and reaction to country of origin effects), and other factors including media effects and the impact of specific executional variables such as the use of humor and music on advertising effectiveness.

The remainder of the paper will be composed of a review of the literature followed by a discussion of key findings from research conducted in the 1990s. Two issues that have received considerable attention - control issues and cultural issues - will be discussed separately. The paper will conclude with a discussion of directions for future research.

R E V I E W O F L I T E R A T U R E

Control Issues Affecting International Advertising Strategy

One area that has attracted considerable research in the 1990s is implementing organizational control when embarking on international advertising campaigns. While control is important to varying degrees throughout the organization, it has been found to be a particularly important consideration for advertising decisions (Samiee & Roth, 1992). Many managers of MNCs are finding the span of control associated with making advertising decisions affecting regions all around the world to be almost unbearable (Gould et al., 1999). The ability of companies and their ad agencies to maintain some semblance of control over information and implementation of strategies has been positively affected by trends such as new forms of information technology, enhanced usage of databases, media fragmentation, client desires for interaction/synergy and global and regional coordination (Kitchen & Schultz, 1999).

The emergence of global integrated marketing communications has played a role in making control more complex. Technology and globalization trends continue at dramatic rates (Kitchen & Schultz, 1999), yet it has been asserted


that completely integrated communications may be nearly unattainable due to uneven media availability (Gould et al., 1999). While global integrated marketing communications is rapidly becoming a powerful tool at the disposal of international advertisers, it too creates control issues, as one must acknowledge that different cultures are at different stages of grasping its capabilities (Griffin et al., 1998).

The client-agency relationship has received a lot of attention in recent literature on standardization as it relates to control. Certain cultures seem to readily accept the notion of delegating power to ad agencies. For instance, the Japanese utilize their ad agencies somewhat like a full-service marketing company to a greater extent than companies in Chile and the United States. Some of the other marketing services that the agencies can provide include sales promotion, public relations and marketing research. The main reason why many companies are unwilling to delegate more responsibilities to their agencies is that they fear a loss of control (Griffin et al., 1998).

There has been a significant trend towards more integration between the client and the ad agency, but it has been observed that clients need to be careful of suffocating the creativity of the agencies (Kitchen & Schultz, 1999). Despite their experience, many ad agencies feel as if their ability to influence the standardization-specialization decision is "negligible" (Rosenthal, 1994). While many clients are reluctant to relinquish control to the agencies (Griffin et al., 1998), agencies tend to have a different perspective in regards to delegating to their affiliates. Due in large part to expenses and coordination issues, most ad agencies are regional. It has been argued that few agencies feel comfortable executing globally; therefore, most parent agencies have a "hands ofF' approach to supervising their foreign affiliates (Hill & Shao, 1994; Tai, 1997).

The structures of the advertising agency and the corporate client are critical components that determine the effectiveness of international advertising. The unwillingness to centralize management is one of the biggest impediments to successful standardization strategies. The "not made here" phenomenon often plays a detrimental role in the coordination and planning of global campaigns. The outlook for the future of international advertising suggests that a few "mega-agencies" will hold a majority of international advertising accounts (Moriarty & Duncan, 1990). At least one study concluded that, ultimately, international advertisers need to consider how the client-agency relationship will impact the targeted audience, and these considerations need to influence relationship decisions (Gould et al., 1999).

The power and influence of the advertising agency plays a crucial role in whether an international advertising campaign is ultimately standardized. A direct correlation has been found between the level of client pressure and the


overall use of standardized techniques. Ad agencies often strongly believe that creative impact should play the decisive role in the standardization-specialization decision rather than client pressures. However, client pressures (both cost and time-oriented) are increasing and appear to be leading to more standardized international campaigns than used to be the case (Duncan & Ramaprasad, 1995). In many ways, this makes perfect sense, as global strategic planning for large MNCs needs to be centralized at some level.

Another control issue associated with standardized ad campaigns is measuring effectiveness. While overall ad agency performance is important, the most crucial measurement of interest to clients is the effectiveness of the advertisements that have been implemented (Davison & Grab, 1993; Meyers, 1996; Rice & Bennett, 1998). Evaluating international advertising effectiveness is a formidable task, and one that presents special challenges for standardized campaigns. International advertisers must deal with inherent country inconsistencies at the start of the advertising research process. Notably, it has been asserted that differences in what is affordable and what is possible in a given market must be established. It is simply not realistic, for example, to compare the same measures of effectiveness for a product that is new to a market versus one that is at the mature life cycle stage in another. Moreover, the country's advertising infrastructure in terms of level of development of a research industry as well as media penetration and availability must be taken into account. It has also been observed that it is imperative to anticipate the impact of the country's culture on the data (Meyers, 1996).

Clearly, many global advertisers recognize the difficulty in measuring and comparing the success of global advertising campaigns. Some attempts are being made by the advertising industry to standardize measurement principles, as evidenced by five international advertising and television trade groups joining together in the most ambitious effort to date to standardize measurement principles for global television advertising (Ross, 1996). Nevertheless, the ability to measure the success of standardized campaigns in different countries remains a significant challenge.

In summary, the 1990s saw research pay increased attention to control issues, which have become more complex as more firms have conducted standardized campaigns. The trend toward integrated marketing communications along with different levels of media and research infrastructures has made control an increasingly challenging issue. The research suggests that these challenges are even more difficult for those ad agencies that are located regionally and that the structure of the advertising industry often leads to clients driving the push toward standardization in spite of greater integration between clients and agencies. In fact, it has been found that the level of client pressure is closely linked to the use of standardized programs. Finally, it has been found that


measuring effectiveness also creates a control challenge in that it is often difficult to use common effectiveness measures as a result of differences in market characteristics and research infrastructure.

The Role of Culture and the Environment

Culture is a critical issue in the standardization-specialization debate, yet it is difficult to define it and even more arduous to determine its impact (Roth, 1992; Harris, 1994). It has been suggested that classifying markets based on cultural assumptions is useful (Roth, 1992). Marketing is an extremely powerful force that can create significant change within cultures, and the issue of cultural imperialism arises as advertising originating in the dominant countries of the global business landscape infiltrate all corners of the globe. (Moriarty & Duncan, 1990).

General Perceptions of Advertising It has been noted that even countries that share geographic proximity can be quite different on a cultural level (Huff & Alden, 1998). International advertisers need to be sensitive to the far-reaching effects of their campaigns. In sharp contrast from the classical view of economic theory, some believe that dependency theory better describes the impact of international advertising on developing economies. Dependency theory suggests that developing countries are dominated by the messages of established countries, which results in the transfer of some of the dominant countries' cultural beliefs (Tansey & Hyman, 1994). Western advertising professionals have been accused of relying upon Western assumptions and erroneously believing that Western practices will automatically translate to foreign lands (Wells, 1994). It has been suggested that countries like China are "melting pots" for Eastern and Western cultural values (Cheng & Schweitzer, 1996). This phenomenon can also be seen in Japan because their advertising depicts both Eastern and Western values (Ford et al., 1998).

Several studies have confirmed the notion that other cultures throughout the world do not necessarily share the same sentiments regarding advertising as Americans do. Therefore, global advertisers need to be keenly aware of these differing perceptions because they will affect how various cultures perceive advertisements. Thus, global advertisers must assess the cross-national applicability of advertising messages (Durvasula et al., 1993). Even a country like Great Britain that is quite similar to the United States in many ways has some distinctly different values from those that Americans embrace. To


illustrate this point, American ads deploy direct speech and emotional appeals, yet British ads more often utilize indirect language and humor (Caillat & MueUer, 1996).

Rapidly changing countries such as Russia present particularly interesting challenges for international advertisers. In general, the Russian culture is more receptive to advertising than are Americans (Andrews et al., 1994). Great Britain also has a more favorable impression of advertising than its American counterparts (Nevett, 1992). On the other hand, a country like Saudi Arabia has many citizens who are not very receptive to certain types of Westem advertisements (AI-Makaty et al., 1996). The clear differences across countries that have been found in terms of general attitudes toward advertising point out the need to carefully finesse standardized approaches. In developing countries, advertisers may need to be sensitive to possible perceptions of excessive foreign influence on the culture. Even in more developed countries such as Japan and Taiwan, advertisers need to consider the impact of using "Western" approaches in societies characterized by the mingling of Eastern and Western values in advertising in recent years.

Per capita ad expenditures also play a critical role in determining how different cultures view advertising. Countries, such as Greece and India, with low per capita ad expenditures are more concerned with the overall economic and social impacts of advertising than are people in the United States. People in cultures with high levels of advertising spending like the United States are more concerned with advertising practices. The net result is that individuals in countries with low levels of advertising expenditures view ads in a much more function-related manner (Andrews et al., 1991).

Cultural Factors and Their Impact on the Ability to Use Standardized Advertising Numerous studies have hypothesized that cultural factors lead to differences in the types of advertising that are effective in different countries. Various cultural variables have been proposed to lead to differences in reactions to advertising executions: gender roles, Edward T. Hall's concept of context, and individualism vs. collectivism.

Japan has had a long history of tradition-bound gender stereotypes. However, recent research suggests that these gender stereotypes are becoming less frequently utilized in advertisements. The net result is a more egalitarian view of the genders (Ford et al., 1998). Nevertheless, Maynard and Taylor (1999) found that portrayals of young Japanese females depicted in Seventeen magazine ads differed from portrayals of American females in the version of the magazine published in the United States. While the Japanese females were presented


as more traditionally "girlish," the American models were shown in more avant- garde, mysterious, or contrary poses.

Cultures can be classified as either high or low context. High context cultures, such as South Korea and Japan, are intuitive and prefer indirect messages (Miracle, Chang & Taylor, 1992). Johanson's (1994) observation that the Japanese prefer a soft-sell approach is consistent with this cultural dimension. On the other hand low context cultures, such as the United States and some Western European countries, rely heavily on explicit communication (Taylor et al., 1997). The consequence for international advertisers is that they must consider these fundamental differences in how different types of cultures respond to the levels of information content. The United States is a country that is receptive to information-laden appeals. However, other countries such as France have been found to respond relatively more favorably to emotional appeals (Biswas et al., 1992; Taylor et al., 1996). Meanwhile, the Indian culture has been found to have a higher need for formality in persuasive communications than do citizens of the United States (Bandyopadhyay et al., 1994).

The type of culture is very important in determining the persuasive effect of emotional appeals in international advertising. Numerous studies have focused on the impact of cultures being either collectivist or individualistic in nature (Wilcox et al., 1996). The individualism-collectivism variable depicts how individuals in a culture construe their concept of self. "Ego-focused" and "other- focused" are terms that can be used in order to distinguish the type of emotions that a society's individuals rely upon. Ego-focused emotions, which tend to be focused on one's internal state, include feelings such as pride and anger. Other- focused emotions, which tend to be associated with others in a social context, include emotions such as empathy and indebtedness. Ego-focused appeals lead to more favorable attitudes within individualistic cultures. Other-focused appeals lead to more favorable reactions within collectivist cultures (Aaker & Williams, 1998). It is important to note that in collectivist cultures, consumer behavior is determined in large part by social normative factors (Huff & Alden, 1998). The role of culture type is imperative for international advertisers to understand as they seek to determine which cultures are compatible enough to standardize advertising campaigns.

It has been established that the relationship between culture and communication is important in determining the success of international advertising. Advertising creates a "transfer of value through communicative connections between what a culture conceives as desirable states of being and products" (Tansey et al., 1990). Cultures express their purposes and conduct their affairs via communication. The common symbols of communication are often not obvious to those outside of the culture (Moriarty & Duncan, 1990). Additionally,


the extent to which a culture is familiar with a brand should significantly impact how the message of an advertisement is communicated to the market. It has been suggested that a market that has previous experience with a brand will be more likely to receive it favorably than those who have not been previously exposed to the brand (Rice & Bennett, 1998). Therefore, it is obvious that international advertisers need to make concerted efforts to understand foreign cultures and properly tailor their communications to create the most effective advertisement.

The Acculturation Process and Standardization The acculturation process describes the process of two or more cultures being assimilated together. As the world becomes increasingly global and transient, it has been posited that the notion of acculturation will become more relevant to international advertisers as they seek to target more diverse markets. It has been suggested that the process of acculturation is somewhat slow, and the rate at which immigrants become accustomed to their new culture depends largely on the compatibility with their original culture. Language barriers and different processing styles are two possible causes of the slow rate of acculturation (Lee & Tse, 1994).

International marketers seek to determine how consumer needs should impact their advertising strategies. A depth strategy is utilized when marketers base their images on a single set of consumer needs. On the other hand, a multiple set of needs is used in breadth strategies. The normative model of brand image management suggests that images should be based on a single set of consumer needs thus providing support for the depth strategy. However, generalizations regarding depth strategies should be limited because effectiveness does vary based upon the environment. There are some indications that breadth strategies may be more effective in low context cultures because explicit information plays a pivotal role in this type of culture (Roth, 1992).

Country of Origin and Standardization It has been well documented in the 1990s that the country of origin's image can have a significant impact on the how cultures throughout the world perceive the advertising message (Tse & Lee, 1993; Parameswaran & Pisharodi, 1994; Klein et al., 1998). It has been suggested that the level of animosity towards the producer country can predict consumers' likelihood of purchasing products. The consequence for international marketers is that they must understand the military, economic and diplomatic relationships between the producer's country and the target market's country. It is noted that while the United States is a largely admired country throughout the globe, there are some countries that do not hold


the United States i/a high esteem. Hiroshima and Hanoi are two markets in particular that have been questioned regarding the viability of American marketing opportunities (Klein et al., 1998). There are ways for marketers to override or at least mitigate the effects of negative country of origin effects by decomposing the "made in" statement into separate component and assembly information (Tse & Lee, 1993). On the other hand, there are potential opportunities that are created by the country of origin variable, yet these advantages have been underutilized due to "deficiencies in the definition and measurement of its facets." Enhanced knowledge of the country of origin effects can enable international advertisers to better understand the market, improve product positioning and develop more effective messages (Parameswaran & Pisharodi, 1994).

Other Pertinent Issues Affecting International Advertising Strategy

Media Issues Even in similar magazines, print ads often vary across cultures (Tansey et al., 1990; Biswas et al., 1992). For example, French print ads typically deploy sex appeal and humor in the form of jokes. On the other hand, American print ads tend to rely on information and humor stemming from puns and satire (Biswas et al., 1992). However, research has shown that there are some areas in magazine advertising which support standardization. For instance, the magazine ads from the United States and Sweden both tend to portray their models as being very young and in a very positive manner. Additionally, American advertisements are quite Similar to magazine ads run in the Unites States more than twenty years ago (Wiles et al., 1996). Thus, significant opportunities for longstanding standardized campaigns seem to exist under the aforementioned circumstances.

It would seem logical that many print ads would contain a significant influence from the home-country culture. However, research has shown that this home- country effect is not very influential in Japanese advertisements. On the contrary, one study found that German advertisers are much more likely to allow their own culture to affect their print ads. The international advertising impact is that Japanese firms are much more likely to deploy specialization strategies, and German firms are more likely to use standardization techniques (Graham et al., 1993).

Television advertisements are a dominant component of domestic and global marketing campaigns for American companies. Due to the fact that "few things are seen by more of a country's population than TV advertising," the significance of television advertising cannot be emphasized enough (Meyers, 1996). While television is virtually a global phenomenon, cultures have distinct ways of presenting programming and advertisements. Even in similar cultures such


as the United States and Great Britain differences exist. For instance, the British culture responds more favorably to ads that contain less information, deploy a soft sell approach and attempt to entertain the audience (Nevett, 1992). Also several attractive markets such as Japan have fewer network affiliates than the United States. Fewer network affiliates and little or no cable penetration serve to produce fewer media alternatives than are available in the United States (Johansson, 1994).

Consistent with the aforementioned differences in attitudes toward advertising in general, there are some countries that are less receptive to television advertising. For example, some Saudi Arabians view television advertisements as threats to their social infrastructure and economic development, and there are other Saudis who feel that television advertising can help to accelerate modernization. It is clear to see that in a country such as Saudi Arabia where television advertising has only been permitted since 1986, global advertisers need to be sensitive to the local market's perception of television ads (A1-Makaty et al., 1996).

In some cases, fundamental differences in how television ads are portrayed exist based upon the advertisement's country of origin. For instance, Chinese television commercials utilize symbolic cultural values. On the other hand, American commercials tend to rely on both symbolic and utilitarian values. However, there is some room for common ground between Chinese and American commercials. Western values like "modernity" and "youth" are utilized more frequently in Chinese commercials than Western values like "enjoyment" and "sex" (Cheng & Schweitzer, 1996).

Executional Factors: Humor and Music Humor plays a significant role in advertising, and it has been shown to often be particularly effective in television advertising. Script-based semantic theory suggests that humor often creates incongruity for the audience on a global level. In other words, the basic cognitive structure approach may not be "culture- bound" and, consequently, humor has the potential to be quite effective for international advertisers. It has been noted that international advertisers should consider grouping different countries based upon their value sets in order to determine what type of humor would be most effective (Alden et al., 1993). A possible way to group countries is based upon the level of informativeness and the level of emotion (Biswas et al., 1992).

Music plays a pivotal role in adolescent consumer socialization, and music television in particular plays a critical role in consumption imagery. The genre of music video influences the type of imagery utilized. Dance videos use fashion-oriented imagery. Heavy metal videos contain the most direct references to brands. Rap videos contain the most frequent use of a blend of verbal and


visual references to consumption. Consumption imagery in music videos also varies across cultures. This is evidenced by the fact that there is more consumption imagery in American music television than in Sweden's (Englis et al., 1993). It is critical for international advertisers to recognize the significance of the interrelationship between music and culture. For instance, television ads in the Dominican Republic are "more likely to contain music, to have lyrics, to have extensive lyrics and to have self-related meaning" than American advertisements. Research indicates that these differences can be attributed to indigenous differences between the two cultures (Murray & Murray, 1996).

FINDINGS

This section examines insight that has been gained on the general debates on whether, and when, to standardize.

Analyses of the Standardization Approach to International Advertising

While the literature is beginning to converge on the notion that standardization of broad strategy or main selling proposition is often desirable, the issue of the level to which specific executional techniques can be standardized still gains attention. Research indicates that partial standardization is widespread, yet total standardization is quite rare (Harris, 1994). Harris' study is particularly important in that it effectively makes the case that most multinationals do use standardized advertising but that the extent to which they do it varies. International advertising managers who are "non-culturally" oriented use the standardized strategy quite frequently (Kanso, 1992). Markets that do not differ cross-nationally regarding a range of cultural variables lend themselves to standardization strategies (Roth, 1995). It has been recommended that practitioners should place a greater emphasis on how they standardize rather than whether they do. The "how" refers to decisions such as the type of creative format that should be used to convey the message (Harris, 1994).

Economies of scale, message consistency and the ability to attract cross- national market segments have predominated the rationale for seeking to standardize over the years (Levitt, 1983). Other benefits include control over advertising content, stronger brand images and simplified strategic planning (Tansey et al., 1990). International advertisers of the 21st century must seek to ascertain when global campaigns using similar executions can be effective. It


has been asserted that standardized campaigns are effective when multicultural segments perceive the messages in "semiotically-equivalent ways" (Domzal & Kernan, 1993). Segments that share a common ethos should be the targets of standardized campaigns. The world's economically elite consumers and the post- World War II generations in Western cultures are two segments in particular that are becoming increasingly homogeneous across the globe (Domzal & Kernan, 1993). However, only a limited number of studies have focused on reaching cross-national market segments. Clustering techniques have become quite popular methods to enhance standardization strategies by grouping countries (Sriram & Gopalakrishna, 1991; Zandpour & Harich, 1996). Countries that are not part of a common geographic region may still exhibit similar preferences in spite of cultural differences and a lack of regional proximity and, thus, are candidates for standardized campaigns derived from clustering (Zandpour & Harich, 1996). While these clustering techniques have proven to be of some use, it is notable that very little insight on how to develop and communicate to segments that cut across markets was developed in the 1990s.

There are certain market conditions that favor the standardization approach for international advertising. Some researchers believe that global consumer segments are continually emerging and becoming more homogeneous. In fact, global consumer culture positioning is a construct that has received wide acceptance because it associates a brand with a distinct set of symbols that represent the emerging global culture (Alden et al., 1999). Industry factors such as high rates of technological change and short product life cycles also favor standardization (Samiee & Roth, 1992). Standardization opportunities have been found to be quite attractive in less affluent, developing markets as well (James & Hill, 1991).

As has been known for some time, the product category is one of the most important factors in the standardization-specialization debate. Universal products, upscale products and state-of-the-art technology lend themselves to attractive standardization opportunities (Moriarty & Duncan, 1990). Product universality has been labeled a "necessary but not sufficient condition" for standardization (Tansey et al, 1990). Other product categories that are particularly conducive to standardized appeals are industrial products as well as new products (Moriarty & Duncan, 1990). Research has suggested that products that enable consumers to demonstrate a certain amount of self-expression are often viewed in similar ways across various cultures and are consequently attractive standardization candidates. Based upon their relationship to an individual's self-expression, food and fashion are two product categories in particular that seem to appeal to some consumer segments across cultures (Domzal & Kernan, 1993).


Global finns and those with a market extension philosophy are better suited to standardize their campaigns (Samiee & Roth, 1992). Standardized strategies also seem to be appropriate for low information content and image advertisements (Tansey et al., 1990). A message in which the principal message stresses a unique benefit of the product that is distinct from that offered by any competitor is a brand differentiating message. Based upon the fact that brand differentiating messages may not be a culture-bound phenomenon (Taylor et al., 1994), advertisements that utilize brand differentiating messages that can be perceived similarly across cultures are sound candidates for standardized campaigns.

Analyses of the Specialization Approach to International Advertising

The question of the level to which specific executions need to be localized remains important. General proponents of specialization note significant differences in customers, cultural and socioeconomic conditions and market structures as evidence for the attractiveness of specialized campaigns (Roth, 1995). Other arguments for specialized techniques revolve around the notion that specialization is essential to the basic principle of the marketing concept. Supporters of specialization strategies insist that marketers must be sensitive to individual needs and advertising that portrays values of the indigenous culture tends to be more effective (Tansey et al., 1990). "Culturally" oriented international advertising managers are more likely to utilize the specialization strategy (Kanso, 1992). In fact, one study estimated that two out of every three international advertising campaigns are specialized for local market conditions (James & Hill, 1991).

Some argue that the globalization debate is "empty" because individual managers must make individual decisions (Graham et ai., 1993). Enhanced technologies, such as integrated marketing communications, are enabling international marketers to gain a more complete understanding of the idiosyncrasies that differentiate markets. The result is that specialization strategies are more viable via these technologies (Kitchen & Schultz, 1999).

Product categories that are most culturally bound, and subsequently difficult to standardize, include consumer products, established products and products with simple technologies (Moriarty & Duncan, 1990). Specialization has been deemed to be more necessary when the status and positioning of local brands are quite varied (Davison & Grab, 1993). The rationale for utilizing specialized advertising strategies with consumer goods is based upon the fact that consumers infer "psychological meaning" from goods to reflect their own values (Tansey et al., 1990).


Determining Which Strategy is Appropriate

Cho et al. (1999) found that the content of Korean ads suggests that while a broad global theme could be effective for the Korean market, adjustments linked to culture are likely to be needed to be successful. In summary, they state that their findings support the arguments of James and Hill (1991), Duncan and Harris (1995) and Tai (1997) that the design of international advertising should be based on a common global theme, but the executions often have to be modified. This thinking represents the prevailing view among leading academics and practitioners.

The literature of the 1990s suggests that companies have standardized their advertising campaigns to varying extents. Coke utilizes a truly global strategy. After deciding that a specialized advertising strategy resulted in a fragmented global image, Kodak recently embarked on a truly global standardized campaign for the first time in its history (Kim, 1998). By virtue of its western European campaign for example, Levi's deploys a less comprehensive standardized approach than does Coke (Hill & Shao, 1994). Levi's carefully considers the varying importance of social status and affiliation across cultures when advertising its Dockers (Roth, 1995). Colgate-Palmolive, Gillette and Philips are examples of companies that use regional campaigns (Hill & Shao, 1994). However, it is clear that many companies are shifting to using a general theme globally while making necessary adjustments (Harris, 1994). Studies have long analyzed the impact of culture when deciding whether to standardize or specialize advertising campaigns; however, it has been suggested that companies need to place greater emphasis on understanding the effects that their strategies have on their brand's image (Roth, 1995).

One of the key issues regarding the debate of whether to standardize or specialize international advertising campaigns is definitional (Moriarty & Duncan, 1990; Samiee & Roth, 1992). Levitt's initial definition of standardization was "selling the same product the same way everywhere" (Levitt, 1983). On a strictly literal basis, standardization critics have compelling argument. Very few, if any, products are capable of being standardized based upon Levitt' s perhaps "idealistic" definition (Moriarty & Duncan, 1990; Tansey et al., 1990).

Of course, standardization of any aspect of the marketing mix in its truest form is difficult. Most finns that embrace the idea of standardization seek a reasonable facsimile (Hill & Shao, 1994). McDonald's Corporation operates in fifty-nine countries on a relatively standardized platform. The company has standardized positioning strategies (Samiee & Roth, 1992). However, it still pays attention to local tastes. For example, the company offers beer on its menu in many markets throughout Europe, and it offers the new "bulgogi burger" in South Korea and pork-based sandwiches in the Czech Republic.


In terms of advertising, it has been noted that certain phases of the international advertising process are more apt to be standardized than are others. For instance, strategy is the component of the process in which standardization is most often deployed. Standardization is utilized less often in execution and least often in language (Duncan & Ramaprasad, 1995).

On the other hand, researchers have pointed out that companies that ignore a market's fundamental cultural and religious beliefs will do so at their own peril (A1-Makaty, 1996). In most cases well-designed general strategies do not violate such beliefs. However, numerous studies do suggest that even when targeting similar segments across cultures variations in receptiveness to advertising styles and content exist and need to be taken into consideration. This is due to the fact that cultures vary among dimensions such as Hofstede's individualism, uncertainty, avoidance, power distance and masculinity (Albers- Miller & Gelb, 1996). Many advertisers believe that countries that share geographical proximity present opportunities for standardization; however, it has been found that this generality is often invalid (Keillor et al., 1996; Huff & Alden, 1998). Even when dealing with the youth segments in two neighboring countries such as the United States and Mexico, close attention must be paid to inherent differences in culture and attitudes. In fact, some research suggests that specialization is advisable when attempting to advertise to youth in both the United States and Mexico (Keillor et al., 1996).

One study analyzing the relatedness of advertisements in the United States and Great Britain supports the view that specialization is more often the proper decision when attempting to advertise on an international basis (Calliat & Mueller, 1996). The consumers of these two cultures are exposed to distinctly different value sets and styles of advertisements. Therefore, despite the strikingly similar marketing factors of the United States and Great Britain, the study concluded that differences in culture alone are significant enough to force companies to utilize specialized campaigns (Caillat & Mueller, 1996).

An analysis of the footwear industry provides evidence that standardized and specialized strategies can both be effective, even in the same industry. Nike maintains a standardized fitness and performance image in all of the markets that it operates. Nike leverages its singular functional image throughout the world. On the other hand, Reebok customizes its image on the basis of differences it perceives in customer preferences. Reebok's management believes that important differences exist not only across continents but also within countries and regions (Roth, 1995).

It is clear that companies must carefully study each national market before making its decision regarding the level of adaptation, if any, that needs to be made (Tansey et al., 1990). It is pertinent to note that many international adver-


tisers lack specific guidelines regarding the instances when they should seek to standardize and when they should choose to specialize their campaigns (James & Hill, 1991). A clear need exists for some sort of framework to help guide decision makers through the difficult process of international advertising. To date, no widely accepted contingency framework to guide advertisers in making the decision on the extent of standardization to employ exists.

The Standardization~Specialization Continuum

It is fairly obvious that, at least in some respects, global consumers are converging, yet substantial differences between cultures still exist. In reality the standardization-specialization dilemma is a complex decision because it can be used in varying degrees across different components of the campaign and in different regions (Duncan & Ramaprasad, 1995). The result is that an increasing number of finns have adopted the notion of global strategies, but regional or local executions (if needed). Most finns seek to standardize as much as possible because they seek to gain economies of scale (Moriarty & Duncan, 1990). It has also been suggested that standardization is a "matter of degree" (Samiee & Roth, 1992). When international advertising practitioners cannot decide on either standardization or specialization entirely, they must choose from what has been called the "contingency perspective" (Agrawal, 1995).

A perfect example of a company embracing a standardization strategy, but simultaneously fine-tuning its ads to appeal to local taste is IBM. The company has recently embraced the notion of becoming a global marketer by merging its business and marketing communications strategies into a singular worldwide strategic and marketing campaign. IBM utilizes the same footage in each country, but they add the local language to their advertisements via subtitles. IBM has discovered that customers throughout the world respond very similar to these campaigns that utilize a standardized appeal (McCullough, 1996).

Often the standardization-specialization debate becomes a functional struggle. At the most basic level, the debate revolves around tradeoffs between cost savings of standardization and increased revenues generated by market segmentation. Managers with cost responsibilities may push for standardization while marketing managers might argue for specialization and more narrow segmentation (Graham et al., 1993). Many practitioners believe that there are many potential combinations of ways that executional elements can be standardized. In practice, even those who embrace standardization strategies, like IBM, do not adhere to Levitt's strict definition of standardization. Instead, standardization is often a "flexible and adaptive" policy (Harris, 1994).



Major Findings Regarding the Debate

After researching and assessing a representative collection of the international advertising academic literature of the 1990s, it is apparent that MNCs have moved toward combination approaches in which broad strategies of selling propositions are standardized but specific executions are adapted when it is needed and some aspects of advertisements such as language and nationality of the models utilized are almost always adapted. Historically, much of the academic research regarding this ongoing debate takes one of the two bipolar positions. Clearly, it is time to get past such thinking and focus more on the circumstances in which global strategies and global executions are prone to work. While some may continue the debate regarding whether standardization or specialization techniques are more effective, it is time to conceptualize this debate in terms of the Standardization-Specialization Continuum. More work on developing a widely accepted framework that delineates key situational factors relevant to the standardization decision and incorporates the various components of the process (strategy, execution, language) is needed.

Directions for Future Research

Due to the volatile and dynamic nature of international marketing, it is important that research regarding the various components of the international advertising mix continue. A pitfall that many international advertising researchers seem- ingly fall prey to is the temptation to often look exclusively for the differences between cultures. However, knowledge of cultural similarities is quite significant as well. Continued research regarding the similarities and differences of cultures throughout the world is advisable. Research on inter-market segmentation (i.e. segmenting similar consumers across national borders) is badly needed. Empirical evidence on the extent to which practitioners have had success in developing marketing to cross-national segments is needed to provide additional insight. Frameworks that help explain the circumstances in which various inter- market bases of segmentation may be effective need to be put forward.

It is also clear that more research on control issues as they influence standardization is required. In terms of control, research on the client-agency relationship in a multinational context may provide insight regarding whether client strategies are maximizing global brand equity. A comparative study of advertising effectiveness among clients that demand control over a standardized strategy versus clients that allow agencies more latitude could be enormously


insightful. However, such a study would need to address another key issue - how to measure the effectiveness of standardized campaigns in different markets. An even loftier, though important, goal would be to develop a method of measuring an advertising campaign's contribution to cross-national brand equity, in addition to the impact in individual markets,

Experimental research on cultural factors and their impact on advertising effectiveness in various markets is needed. As noted by Taylor, Miracle and Wilson (1997), content analyses have provided the basis for some hypotheses, but to really understand why individual cultural factors affect advertising effectiveness, experimental studies are required. Additionally, testing the importance of various executional factors in various markets could provide very valuable insights for advertisers. For example, studies following an approach similar to Stewart and Furse's (1986) study of U.S. television commercials in other markets could do much to develop our knowledge regarding the extent that standardization of executional variables is desirable.

International advertising research regarding the standardization-specialization debate does not need to be akin to a political debate with both sides arguing at the other 's expense. Standardization and specialization research in the next century should focus more on the applicability issues than justifications. Practical applications regarding how international marketers can and should make tough decisions, and ultimately implement them, is needed as opposed to the research which focuses on which strategy is always the best to utilize is needed to further knowledge.

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THE ASSOCIATION BETWEEN

PROCESS AND PROGRAM

ADVERTISING STANDARDIZATION:

AN ILLUSTRATION OF U.S.

MULTINATIONALS OPERATING

IN INDIA

Aruna Chandra, David A. Griffith and

John K. Ryans, Jr.

ABSTRACT

For well over forty years, academics have debated the effectiveness of the standardization~adaptation of international advertising, with practitioners beginning four decades earlier. As the debate has progressed, a critical distinction in the literature has developed related to this issue, that of process and program standardization. In this study, we examine the association of process and program standardization, inclusive of consumer market and environmental similarity, within a sample of U.S. multinationals operating in India. Results indicate a positive association between process and program advertising standardization of U.S. multinationals operating in India. Implications for academics and practitioners are presented.


67

68 ARUNA CHANDRA, DAVID A. GRIFFITH AND JOHN K. RYANS, JR.


For nearly eight decades, international advertising standardization has been the central focus of academics and practitioners (Agarwal, 1995). Most notably, in the last forty years, a tremendous growth in academic conjecture and research has focused on this topic (e.g. Agarwal, 1995; Baalbaki & Malhotra, 1993, 1995; Laroche et al., 2001; Levitt, 1983; Solberg, 2000). As the communication revolution, inclusive of the Internet, shrinks the world and minimizes the cost of market access to both consumers and firms, the discussion over the standardization of advertising has intensified (e.g. Culter et al., 2000; Hu & Griffith, 1997; Onkvisit & Shaw, 1999; Sirisagul, 2000). The present day dominance of the world media coupled with a shift in focus of multinationals from saturated Western markets to the Big Emerging Markets (BEMs), such as India and China, necessitates a re-examination of the issue of the standardization/adaptation of advertising. For example, recent efforts by Culter et al. (2000) and Srivastava and Schoenbachler (1999) have suggested that advertising in India and the BEMs may require unique adaptations, thus suggesting that the simple extension of prior research may not be applicable.

Clearly, the tremendous growth opportunity in India, and the other newly developing market areas constitute major opportunities in the world economic order. While the BEMs are generally characterized by relatively low per capita income, economic (and in many cases political) instability, and antiquated infrastructure, they often contain vast resources and largely untapped consumer potential. As such, BEMs have become a strategic area for market expansion, especially for multinational companies (MNCs). India, in particular, provides an excellent context for examining the use of advertising standardization within an emerging market for MNCs. While there are clear and obvious differences between India and the U.S., India offers some of the greatest opportunities of all BEMs as the consumer middle class grows in size and purchasing power. From a U.S. multinational perspective, India's liability of foreignness is mitigated by the country's numerous similarities to the U.S. market. For example, India has a well- developed legal system, a democratic political system, a mixed economy with well-developed capitalistic traditions (Chandrasekaran & Ryans, 1996), and a substantial middle class. It is in this context, i.e. the emerging market of India, that the advertising standardization issue for U.S. MNCs is considered.

Underlying the advertising standardization debate is the issue of balancing the cost efficiencies of standardized approaches across markets with the benefits

The Association Between Process and Program Advertising Standardization 69

of locally responsive strategies tailored to particular markets (Baalbaki & Malhotra, 1993, 1995; Jain, 1989; Levitt, 1983; Ozomer & Prussia, 2000; Szymanski et al., 1993). Researchers contend that managers can standardize or adapt programs and/or processes (Griffith et al., 2000; Jain, 1989; Sorenson & Wiechmann, 1975). In general, program refers to the elements of the marketing mix, whereas process refers to the outline of activities that occur prior to, and during the development and implementation of the marketing program. While a significant amount of program-related research, i.e. specific tactics used, has been conducted (e.g. Baalbaki & Malhotra, 1993, 1995; Cavusgil & Zou, 1994; Jain, 1989; Kotabe & Omura, 1989; Samiee & Roth, 1992; Szymanski et al., 1993), little research has examined process-related issues, i.e. the tasks that aid in program development and implementation (Griffith et al., 2000; Shoham, 1995; Waiters, 1986). This is a critical omission within the literature as process standardization and its association with program standardization provides the foundation for achieving advertising standardization effectiveness.

The purpose of this study is to empirically examine the association between process and program advertising standardization in India. In this study, the associations of process standardization, consumer market similarity and environmental similarity with program standardization of advertising are explored. First, a discussion of advertising standardization is presented followed by the development of hypotheses related to each key variable. A method section specifies the sample, the pre-testing, and the variable measurements. The hypotheses are tested using responses from a sample of U.S. multinational managers operating in India. A discussion of the results, their academic and managerial implications and directions for future research are then presented.

S T A N D A R D I Z A T I O N

The issue of standardization has been the subject of intense academic debate for several decades (cf., Baalbaki & Malhotra, 1993; Onkvisit & Shaw, 1999; Solberg, 2000). The topic, first noted in the 1920s, garnered widespread disagreement, most notably in the divergent views of Goodyear's David Brown and Bausch and Lomb's Carl Propson in 1923. Whereas Brown (1923) viewed humanity as possessing common attributes, thus allowing for standardization, Propson (1923) argued that adaptation was necessary to appeal to divergent local markets. Subsequent examples in the early years established a pattern of disagreement on this fundamental issue, with some advertising agency and corporate advertising executives perceiving adaptation to be key to global success (Bari, 1979; Delaforce, 1964; Lindsey, 1964; Marcus, 1964; Sutton,


1974; Theophilopoulos, 1979; Vladimir, 1950), while others viewed standardization as appropriate (Barnes, 1968; Cornejo, 1958; Deschampsneufs, 1967; Elinder, 1964; Ettinger, 1969; Patterson, 1967; Peebles, 1967).

Given the great importance of this debate to practitioners, academics began actively engaging in the study of the issue in the late 50s (Pratt, 1956, etc.) and 60s (Buzzell, 1969; Miracle, 1968; Ryans, 1969). From this time, research has continued to proliferate on the topic and has remained unabated (e.g. Agarwal, 1995; Donnelly & Ryans, 1969; Green et al., 1975; Harvey, 1993; James & Hill, 1991; Kanso, 1992; Kernan & Domzal, 1993; Onkvisit & Shaw, 1999; Shao et al., 1993; Solberg, 2000).

In reality, a variety of external and internal factors impinge on the standardization decision, which involves an inherent trade-off between the economic benefits of leveraging a global brand identity via standardized strategies with the performance gains achieved when adapting to local market conditions and consumer preferences (Baalbaki & Malhotra, 1993, 1995; Bharadwaj & Varadarajan, 1993; Jain, 1989; Ozomer & Prussia, 2000; Szymanski et al., 1993). As such, the standardization/adaptation debate converges on the perception of, or movement toward consumer as well as environmental homogeneity/heterogeneity (Donnelly & Ryans, 1969; Hu & Griffith, 1997; Levitt, 1983; Shoham, 1995). Those researchers who view markets, as being homogeneous argue that the standardization of advertising is more "effective" as it allows the firm to capture cost efficiencies and thus increasing margins (Jain, 1989; Levitt, 1983; Peebles et al., 1978). Thus far, at least in theory, the standardization issue has been considered unidimen- sionally (exploring program standardization); in this study we contend that it is important to differentiate the types of standardization when exploring this issue.

Standardization has two fundamental aspects, i.e. program standardization, such as the individual advertising tactics, employed within and across markets, and process standardization, inclusive of the development of a common method through which programs are implemented (Griffith et al., 2000; Jain, 1989; Sorenson & Wiechmann, 1975). While a significant amount of program-related research has been conducted (e.g. Baalbaki & Malhotra, 1993, 1995; Cavusgil & Zou, 1994; Jain, 1989; Kotabe & Omura, 1989; Samiee & Roth, 1992; Szymanski et al., 1993), little research has examined process-related issues (Griffith et al., 2000; Shoham, 1995). This is a critical limitation within the literature as Sorenson and Weichmann (1975) note that while the benefits of standardizing marketing programs may be situational or context-specific, MNCs can gain the greatest economies by standardizing the process through which they devise these programs.


Process Standardization

Process standardization, in the context of advertising, refers to the commonality in the method of advertising development and implementation, inclusive of the ad campaign development process, approach to media selection, pre-testing/ post-testing of an ad, etc. Through the standardization of a firm's advertising development and implementation processes, a firm can capitalize on economies of scale and scope. The theory underlying the drive toward process standardization in today's highly competitive business environment is best signified under the business axiom of "Think Global, Act Local."

The axiom of "Think Global Act LocaL" suggests that firms can maximize the benefits of standardization and adaptation by developing consistent global processes across markets (i.e. think global), while simultaneously adapting programs to specific markets (i.e. act local). Through process standardization a firm is able to capitalize on the cost advantages of the development and implementation of worldwide best practices, while adapting its specific program elements to local markets, thus allowing it to increase its local responsiveness thereby allowing the firm to earn above normal rents. While a firm's processes may tend toward standardized best practices, the association between process and program standardization will vary by market context (under the noted assumption of 'Think Global, Act Local").

When firms operate in relatively similar markets a positive association exists between the two elements of standardization (i.e. a firm operating in the U.S. and Canada would tend to have both standardized processes and programs), while firms operating in dissimilar markets would tend to observe a negative association (i.e. a firm operating in the U.S. and Japan will tend to have a standardized process yet a localized program). Thus, an underlying assumption of this argument is that firms attempt to maximize standardization of processes regardless of market, and adapt programs when external conditions require it. As such, the relationship between process and program standardization is context specific. In this study, given the relative similarities between the U.S. and India markets stated earlier, it is theorized that:

HI: The association between process standardization and program standardization of U.S. MNCs operating in India is positive.

Consumer Market Similarity

The feasibility of advertising program standardization is reliant on the identification of homogeneous market segments across countries (BlackweU


et al., 1992). Market similarity exists when consumers in the finn's cross- national target market react similarly to marketing stimuli, thus sharing common behavioral response patterns and preference structures (Harvey, 1993; Hu & Griffith, 1997; Jain, 1989; Levitt, 1983; Ryans, 1969). Levitt (1983) identifies this phenomenon as "segment simultaneity," which refers to parallel segments across markets. This tenet would have validity, if a firm is able to identify and target a similar segment in India and the United States. The existence of simultaneous segments makes standardization a feasible strategy in this context. If, for example, a finn approaches two widely divergent target markets with the same product, differences in underlying consumer preference structures and response patterns would necessitate adaptation of the finn's advertising program to effectively match the needs of the market (Kanso, 1992; Kernan & Domzal, 1993). Yet, even if "a limited measure of homogeneity" (Onkvisit & Shaw, 1987) could be identified between the United States and India, the two countries could be targeted with similar, if not identical approaches. Hence, the greater the similarity of consumer markets targeted by a finn across countries, i.e. common behavioral response patterns and preference structures, the greater the economic and administrative benefits of advertising program standardization. As such, it is theorized that:

H2: The association between consumer market similarity and program standardization of U.S. MNCs operating in India is positive.

Environmental Similarity

Environmental similarity refers to the similarity of legal, political, economic, regulatory and marketing infrastructure a firm confronts in its international marketing efforts. Environmental elements often vary markedly from country to country and can dramatically influence a finn's ability to standardize its advertising programs (Donnelly & Ryans, 1969; Green et al., 1975; JaJn, 1989). Whereas similarities in environmental factors can facilitate standardization, differences across markets can substantially hinder standardization. For example, differences in laws governing advertising across countries, such as the use of mass communications, can significantly limit standardization, since adaptation is a precondition for advertising in the market (Boddewyn, 1982; Harvey, 1993). To illustrate, some countries tightly regulate advertising directed to children. Similarly, differences in political and economic systems may directly influence the firm's ability to standardize its message, since these inherent differences may result in differences in message interpretation. Further, marketing infrastructure differences, such as type of media available, will necessitate


adaptation of a finn's advertising program (Harvey, 1993; Jain, 1989). While no two countries are completely identical, the focal issue is whether the two countries are environmentally similar enough to support a standardized advertising program. Given the political and economic similarities between India and the U.S. mentioned earlier, it is hypothesized that:

H3: The association between environmental similarity and program standardization of U.S. MNCs operating in India is positive.

METHODS

Sample A systematic random selection method was used to draw 250 U.S. multinationals listed in the Hoover Directory of Fortune 750 finns and the Fortune 500 listing operating in India. Individuals identified in the source directories were contacted via mail and asked to have the person most involved with the advertising strategy in India complete the English language survey. Sixty-three surveys were returned yielding a 25.2% response rate. Partially completed surveys were discarded. Fifty- one usable surveys were retained for analysis (21.4% effective usable response rate). Respondents represented finns averaging $7.014 billion dollars in annual sales, employing on average 32,504 individuals and personally averaging 14.45 years of international experience. Early vs. late respondents were compared in relation to annual sales, number of employees, years of international experience, program standardization, process standardization, consumer market similarity and environmental similarity, using Armstrong and Overton's (1977) procedure. No significant differences (p < 0.05) were observed.

Measures Measures were developed for this study based upon the conceptualizations brought forth in the literature in the context of advertising standardization. Program standardization was measured via a 7-item, 5-point Likert scale, assessing the degree of similarity of the finn's: (1) creative copy of an ad; (2) ad slogan; (3) brand; (4) setting of ad; (5) package appearance; (6) labeling; and (7) product image, in India and the U.S. (t~ = 0.82). Process standardization was assessed through a 4-item, 5-point, Likert scale, assessing the degree of similarity of the finn's: (1) ad campaign development process; (2) approach to media selection; (3) pre-testing of an ad; and (4) post-testing of an ad, in India and the U.S. (et = 0.81). Consumer market similarity was measured on an 8-item, 5-point, Likert scale regarding similarity in consumer segments in India and the U.S. (et = 0.82). Respondents were asked to rate India in comparison


to the U.S. on similarity of: (1) purchasing power and buying preferences; (2) business-to-business buying products; (3) idioms; (4) awareness of major brands; (5) consumer mobility; (6) response to basic appeals; (7) country-of- origin effects; and (8) market segments. Environmental similarity was operationalized via a 5-item, 5-point scale from "very dissimilar" to "very similar" (or = 0.75). Respondents were asked to rate India in comparison to the U.S. on similarity of: (1) political system; (2) free enterprise; (3) distribution system; (4) competitive environment; and (5) management style.

A N A L Y S I S

To initially test each hypothesis we examined the pair-wise correlations between the antecedent variables and advertising program standardization (see Table 1). As hypothesized, all antecedent variables are significantly related to program standardization. The correlations ranged from -0.316 to 0.493 and were each statistically significant at the 0.05 level. Both the statistical significance (p < 0.05) and the size (greater than 0.316) of the correlations, between the variables and advertising program standardization, suggests that each variable is both theoretically and managerially important to understanding advertising program standardization.

Since the variables of process standardization and consumer market similarity are themselves interrelated we used multiple regression to partial out the individual association of each of the variables with advertising program standardization. This analysis (Table 2) provides a more rigorous

Table 1. Means, Standard Deviations and Correlations.

Std Program Process Environmental Mean Dev. Standardization Standardization Similarity

Program 3.15 0.67 Standardization Process 3.41 0.80 0.473* Standardization Environmental 2.59 0.63 -0.316" Similarity Consumer 3.36 0.61 0.493* Market Similarity

-0.123

0.391" 0.173

Note: *p<0.05, **p<0.01

The Association Between Process and Program Advertising Standardization

Table 2. Multiple Regression Results. (Dependent Variable: Program Standardization.)

75

Independent Standardized Variable Coefficient t-value p-value VIF

H1 Process Standardization 0.310 2.348 0.024 1.245 H2 Environmental Similarity -0.353 -2.828 0.007 1.109 H3 Consumer Market Similarity 0.417 3.095 0.004 1.295

Note: F(3, 42) = 10.803, p < 0.000, R 2 = 0.454, Adjusted R 2 = 0.412.

test and thorough understanding of the association of the variables to process standardization.

Given that the variables are themselves intercorrelated, the variance inflation factor (VIF) was used to assess multicollinearity. VIF scores ranged between 1.109 and 1.295. While a degree of multicollinearity does exist among the independent constructs, VIF scores of less than 10 suggest that it will not significantly influence the stability of the parameter estimates (Chatterjee & Price, 1991; Dielman, 1991; Stine, 1995).

The regression equation reported in Table 2 explains 45.4% of the variation in advertising program standardization. Results indicate that a finn's degree of process standardization was positively associated with the finn's degree of program standardization (B = 0.310, t = 2.348, p = 0.024). Thus supporting HI. Consistent with H2, consumer market similarity was found to be positively associated with the degree of program standardization (B = 0.417, t = 3.095, p < 0.004). In contrast to H3, environmental similarity was found to be negatively associated with the degree of program standardization adopted by a firm (B = -0.353, t = -2.828, p < 0.007). Thus, H3 was not supported.

Additionally, a stepwise multiple regression analysis was conducted to more thoroughly examine the association of each antecedent variable within the regression model. All three variables were included in the model (see Table 3).

The results of the stepwise regression analysis are consistent with the initial multiple regression analysis. Analysis of entry sequence indicates that process standardization (HI) contributed the most to explaining the variance in advertising program standardization. Process standardization was followed by consumer market similarity (H2) and then environmental similarity (H3).


Table 3. Stepwise Regression Results. (Dependent Variable: Advertisinn Program Standardization.)

Equation I Maximum Likelihood Estimate t-value p-value

Process Standardization 0.513 3.83 0.000

F(1,41) = 14.66, p < 0.000, R2= 0.263.

Equation 2 Maximum Likelihood Estimate t-value p-value

Process Standardization 0.394 2.82 0.004 Consumer Market Similarity 0.304 2.18 0.018

F(2,40) = 10.39, p < 0.000, R 2 = 0.342.

Equation 3 Maximum Likelihood Estimate t-value p-value

Process Standardization 0.310 2.35 0.012 Consumer Market Similarity 0.304 3.10 0.002 Environmental Similarity -0.353 -2.83 0.004

F(3,39) = 10.803, p < 0.000, R 2 = 0.454.

DISCUSSION

In this study, the issue under consideration was the association between process and program standardization, with the inclusion of consumer market similarity and environmental similarity to provide a robust model. The findings indicate a unique set of associations to advertising program standardization of U.S. multinationals operating in India. Results are suggestive of theoretical and managerial strategy insights into the dominant issue of the association between process and program advertising standardization as well as inconsistencies with prior research relating to the association between environmental similarity and program standardization.


First, the statistical association between process and program standardization, as hypothesized, was positive. Two interpretations could be proffered. First, when market conditions are similar for a firm, a positive association between the two elements will result. This would suggest that Indian and U.S. markets are perceived to share certain similarities (a case supported by the second of the three hypotheses, but not by the third), thus suggesting the importance of consumer market similarity over environmental similarity when examining the process-program relationship. Alternatively, one could argue that when a firm standardizes its processes, a carry-over effect occurs, thus stimulating standardization of its programs as well (i.e. once a finn centralizes its processes, whereas centralization is a key element of standardization, it tends to centralize its programs). This is of critical potential importance and relates directly to the issue of management adherence to a specific advertising direction (adaptation or standardization) and the inability to effectively treat the two facets of standardization - program and process - as discrete issues. Theoretically, the relationship between process and program standardization has not been a central topic of study for academics. In all, few researchers have even mentioned the issue of process standardization (e.g. Griffith et al., 2000; Jaln, 1989; Shoham, 1992; Sorenson & Weichmann, 1975;), preferring to explore program standardization. However, given the importance of process standardization (cf., Griffith et al., 2000; Sorenson & Weichmann, 1975), understanding it, and its association with program standardization, is critical for the advancement of the field. Most recently, Onkvisit and Shaw (1999) noted the lack of substantial advancement in the understanding of international advertising standardization. The movement toward understanding the association between process and program elements provides a foundation for advancement (as suggested by the explained variance of process standardization on program standardization).

Second, the results indicate that cross-national consumer market similarity encourages U.S. MNCs to standardize its advertising programs in India. Consistent with the theory put forth by Jaln (1989), the findings empirically validate that as similarity in consumer markets increases a firm employs a greater degree of program standardization. Specifically, the findings of this study indicate that similarity in consumer market segments across India and the U.S. is associated with the employment of standardized advertising programs. Consistency in underlying consumer behavior and preference structures may influence firms to employ standardized advertising programs. While not necessarily suggesting that the consumer market in India is similar to that in the United States, the findings here do suggest that U.S. multinationals have been able to segment the Indian consumer market to a level in which they are able to identify consumer market segments similar to those in the U.S. As such,

78 ARUNA CHANDRA, DAVID A. GRIFFITH AND JOHN K. RYANS, JR,

through segmentation, U.S. multinationals are able to leverage their existing advertising programs when operating in India. Further, it is interesting to note that a strong positive correlation was present between consumer market similarity and process standardization, validating the importance of segmentation. While not theorized, the positive association between these two variables is suggestive of the fact that economies of scope are more easily obtainable in global markets composed of similar consumer segments, thus providing new insights into process standardization.

In contrast to H3, environmental similarity was found to be negatively associated with the degree of program standardization adopted by a firm. The statistical association between environmental similarity and program standardization is negative, which suggests that as markets become less environmentally similar finns tend toward program standardization. This suggests that a firm employs a standardized advertising program when confronted with environmental dissimilarities. While this finding is in contrast to Jain (1989) who theorizes that differences in environmental conditions result in program adaptation as well as contradictory to the empirical findings of Baalbaki and Malhotra (1995), it is consistent with James and Hill (1991) who found that program standardization was more likely when economic differences exist and the programs are being executed in a lesser developed market. This is broadly consistent with the belief that when finns operate in less economically developed markets (as is the case in this study), little competition exists and thus finns opt for standardization, forfeiting the added benefits of localization (cf. James & Hill, 1991) in the belief that the market potential is simply not there to incur the costs of localization. However, with the increasing reach of global communication media, such as the Internet, and the proliferation of regional and global networks, such as CNN, as well as alternative media sources, a drive toward advertising standardization may be underway. Clearly, the rapid rise and spread of global advertising agencies could be another factor accelerating the trend toward advertising standardization. One possible explanation could be that these technology- driven market trends facilitate advertising standardization, in spite of differences in general market and environmental conditions. Alternatively, the drive to standardize in spite of environmental differences could very well be motivated by low levels of commitment made by the U.S. MNCs to the Indian market, or it may be a response to the identification of similar consumer market segments in the two countries. As such, the fact that the findings of this study indicate that environmental differences are associated with a higher degree of advertising program standardization is open to interpretation and should be viewed with caution.


Managerially, the results of this study suggest that when U.S. multinationals operate in India, economies are gained through process and program advertising standardization. Since this study encompassed a number of the most successful global firms, their advertising standardizing approach seems to suggest that this is a viable alternative for other recent MNCs entrants as well. This further suggests that management closely examine its intended association between processes and programs in order to decide on the optimal mix of process and program standardization. This, of course, may be contingent on key enabling factors in the given market environment. For example, the use of a global advertising agency with an Indian brand or subsidiary will most likely facilitate a standardized approach.

In general, firms have historically tended toward standardized approaches, whereas academics have favored adaptation to local consumer needs (Agarwal, 1995). In practice, however, firms have failed to use complete standardization in favor of some degree of adaptation, whether it be specific to a single market or regional in nature. These firms are driven by the belief that the costs of adaptation are justified by the increased benefits of responding to local consumer tastes and preferences. The results of this study suggest that multinational firms operating in India may be able to profitably standardize processes and programs simultaneously, or at least capture the efficiencies of standardized approaches by standardizing processes, while catering to local tastes with modified programs. Moreover, the spread of global communication technology, such as satellite and cable television, which in turn exerts a homogenizing influence on consumers in developed and developing markets alike, may lend further support to this approach.

Further, the association between process and program standardization may be as related to firm size as to the general market context issues (particularly given the association between environmental similarity and advertising program standardization). In general, larger firms tend to operate under a centralized structure. Since larger firms were employed as the sample frame in this research, the association between process and program standardization in relationship to advertising may be attributed to firm size and higher levels of centralization. As such, when large firms advance in global markets, the question to ask is, "is one truly thinking globally while acting locally, or is the firm simply expanding the reach of its centralized processes and practices?" Given the importance of success to these firms, however, one clearly expects the answer to be the former.

R E S E A R C H D I R E C T I O N S

These findings of advertising program standardization in India are significant because of the importance of the Indian market to the future economic growth


of many global companies as well as their theoretical and managerial contribution to the understanding of advertising program standardization in developing markets. Building on the conceptual work of Sorenson and Weichmann (1975), Jain (1989), Shoham (1995) and others, this study empirically explored the underlying association between process and program standardization, while also addressing key theoretical variables associated with the underling tenets of program standardization, finding both support and inconsistencies with prior literature.

While the findings of this study provide new insights, as with prior research, it has its limitations. The limitations will be addressed with directions for future research. Advertising program standardization is a complex, multi-dimensional concept that serves as a driver to competitive positioning. Although this study explored factors associated with advertising program standardization, it did so at the general level rather than the individual tactical decision level, e.g. media, message, execution, etc. As such, while this study serves to enhance our understanding of the factors associated with the standardization of advertising programs of U.S. multinationals when operating in India, it falls short of clearly delineating the specific dimensions along which U.S. multinationals are standardizing their advertising programs. Future research, exploring the individual elements of a U.S. MNC's advertising program would be beneficial to the field.

This study is also limited from its use of just one market context. Here, only the strategies of U.S. MNCs operating in India were examined. Although providing significant insights into the variables associated with the standardization of advertising programs of U.S. MNCs operating in India, the findings should not be generalized beyond the sample, since India does not share many of the characteristics of other emerging markets. Further, the restriction to a single country illustration, did not allow for the full examination of the process-program standardization relationship (i.e. where contexts are similar and distinct). Moreover, another limitation derives from using U.S. multinationals exclusively in the study. For example, would one question whether alternative variables would be associated with advertising program standardization for German or Japanese multinationals operating in India? Greater market diversity in respondents and respondent firm characteristics would strengthen the findings.

Finally, a fundamental limitation of this study derives from its cross-sectional design. Although the results of this study strongly suggest that these variables are associated with U.S. multinational advertising program standardization, it by no means causally establishes this fact given the limitations of the data set. Thus, examining this issue longitudinally would be extremely beneficial.


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MARKETING/ADVERTISING

CONCEPTS AND PRINCIPLES IN

THE INTERNATIONAL CONTEXT:

UNIVERSAL OR UNIQUE?

Sak Onkvisit and John J. Shaw

ABSTRACT

American business curricula, theories, textbooks, and teaching methods have been widely disseminated and copied all over the world. This whole- sale acceptance has violated a scientific principle that requires a systematic evaluation and replication to establish the external validity of the theories and concepts in question. This paper discusses the degree of universality of the marketing discipline, concepts, and strategies. In particular, there is a critical examination of the advertising principles commonly found in marketing and advertising textbooks. Based on the validity (or the lack of it) of these principles and assumptions, advertising and research implications are offered.

DISCIPLINE-BASED VS. INTERNATIONAL COURSES: A QUESTION OF EXTERNAL VALIDITY

Some of the best known business schools in the United States want to emphasize discipline-based (i.e. functional) courses and eliminate international courses, based on the rationale that marketing and management principles are applicable


85

86 SAK ONKVISIT AND JOHN J. SHAW

everywhere. To put it the other way, the basic disciplines and principles of marketing, management, and so on are universal. As such, they argue that marketing is marketing, and there should be nothing which is domestic or international about it.

The shortfall with the discipline-based approach is that the discipline-based courses as designed and taught in American business schools are ethnocentric. As a rule, such courses invariably consider the U.S. perspective. As commented by Thorelli (1983), "to the extent that what we teach is U.S.-oriented, it's literally specious, lacking in external validity." To make the matter worse, knowingly or not, many professors may have fooled themselves and their students into believing that their U.S.-centric courses and contents have international applicability.

U.S. M A R K E T I N G vs. UNIVERSAL M A R K E T I N G

It is a matter of luck rather than a well thought-out plan that American business textbooks have gained worldwide acceptance. This development has led to an indiscriminate memorization and dissemination of the marketing concepts and theories that were pioneered by American scholars. The reality is that U.S. textbooks merely focus on the U.S. subset of world business. More recently, a number of U.S. business textbooks have begun to apply the "international" or "global" label to their titles. Yet, as far as these textbooks are concerned, being "global" means adding a few non-U.S, examples.

Even in the case of Philip Kotler's Marketing Management (Kotler, 2000), the world's most popular marketing textbook now has an Asian edition (Kotler et al., 1999). Unfortunately, the Asian version has simply replaced American examples with Asian ones - without critically examining the validity of the concepts that are supposedly relevant to those examples in the first place. Table 19.1 (Kotler, 2000, p. 588) and Fig. 21-2 (Kotler et al., 1999, p. 692) are essen- flatly the same in describing the "profiles of major media types." Both state that newspapers have "good local market coverage" and that they have "small pass-along audience." Actually, in Asia, newspapers are national, and the pass- along rates are significantly higher than that in the United States. Likewise, both books state that radio provides "high geographic and demographic selectivity," even though Asian countries have numerous national radio networks. Similarly, it is also questionable for the books to claim that magazines have "high geographic and demographic selectvitiy."

M A R K E T I N G ASSUMPTIONS: FOR AMERICANS ONLY

Several aspects of the 4 Ps of marketing as described in U.S. textbooks are highly debatable. Regarding product strategies, the U.S. market has been segmented in

Marketing/Advertising Concepts and Principles in the International Context 87

every conceivable way because of the market's very high degree of diversity. Japan, in contrast, is much more homogeneous and does not require that high degree of segmentation. When describing the new product development process, U.S. textbooks invariably discuss a number of steps, and test marketing is one of these steps. For the very large U.S. market, it may make sense to test market a new product in a few cities before deciding whether to go nationwide later on. But for most other countries, the capital city is "the" market, and there is no test marketing to be made. If a new product cannot succeed in the capital market, it is not going to make it anywhere else within that country (Onkvisit & Shaw, 2000).

In the case of place (distribution) strategies, according to Berman and Evans (1998, p. 313), "a central business district (CBD) is the hub of retailing in a city. It is the largest shopping area in that city and is synonymous with the term downtown. The CBD exists in the part of a town or city with the greatest concentration of office buildings and retail stores." However, numerous metropolitan areas outside the United States have several spots within the same city that easily fit this description. One should realize that the concepts of downtown and Main Street are unfamiliar concepts in many countries. That explains why EuroDisney and Disneyland Japan do not have the Main Street area.

One area of the 4 Ps that has attracted the greatest attention has to do with promotion in general and advertising in particular. Several of the advertising concepts and principles that look universal on surface may be more American than realized. This important point will be discussed in depth later.

MARKETING: D I S C I P L I N E , P R I N C I P L E S , A N D S T R A T E G I E S

Knowingly or not, some U.S. textbooks may mislead both American and foreign students into believing that the various marketing concepts are global in nature even though some are actually culture specific (i.e. unique to the U.S. market). If their assumption of universality is not valid, they may be doing a great deal of disservice to the marketing discipline in general and their students in particular.

Marketing, as a discipline of study, is universal. Within the marketing discipline, there are marketing theories, principles, and concepts. Based on these theories, principles, and concepts, specific marketing strategies are derived. Logically, the various marketing theories, principles, and concepts are not as universal as the discipline of marketing; yet they are going to still be significantly more universal than multinational firms' marketing mix strategies (see Fig. 1).


marketing marketing theories/ marketing mix discipline . . . . . ~ principles/ . . . . . ~ strategies

concepts universal ~ . . . . . . . . . . . . . . . . . . . . ~ unique

Fig. 1. The Universality-Uniqueness Scale.

Sound marketing principles are universal. One basic principle states that marketers should adopt the marketing concept (i.e. using the integrated marketing approach to satisfy both customers' and corporate goals). Regardless of their nationalities, marketers everywhere should definitely be customer oriented. But customer orientation does not mean that consumers in all parts of the world must or should be satisfied in exactly the same way. Let 's consider KFC and its U.S. birthplace as an example. Just because Americans do not eat KFC chickens until 11 a.m. or so, it does not mean that Asian consumers cannot do it at 8 o 'clock in the morning.

Consumers from various countries are significantly different because of varying culture, income, level of economic development, and so on. Therefore, they do not necessarily have the same consumption needs. As in the case of women's leg-shaving habits, Gillette's razors are not going to be relevant to most women outside the U.S. market. Furthermore, consumers across countries may use the same product without having the same need or motive and in turn may use different products to satisfy the same need. Inevitably, the advertising messages will need to be adjusted accordingly.

According to Dalrymple and Cron (1998, p. 3), "the principles of sales management are universal and can be used in North and South America, Europe, and Asia. We believe that the fundamentals of personal selling and sales management are basically the same the world over." This proclamation undoubtedly has a significant amount of truth to it. On the other hand, the assertion is also debatable. While individual success and monetary reward may motivate American sales representatives, it may be group survival, group conformity, and group success that are of a greater concern to salespeople in, say, Japan.

While market differences and their unique aspects along with the subsequent marketing strategies have to be acknowledged, it is equally important to recognize market commonality and universal behavior. For example, Baumgartner and Steenkamp (2001, p. 153) have found that response styles, as a source of contamination in questionnaire ratings, threaten the validity of marketing research data. Yet "compared with the variation across scales, the variation across countries was small. This provides evidence for the robustness of response style


effects across different countries, cultural settings, and languages." In any case, since their study used large, representative samples of consumers from 11 countries of the European Union, a replication is still necessary to see whether the validity of this conclusion can be established in the Asian or Latin context.

In sum, as explained by Sharma et al. (1995, p. 34), "theoretical relationships generally are not true under all circumstances but depend on the specifics of the situation." Therefore, there is always a possibility that a particular marketing theory or measurement method is culture-specific.

A D V E R T I S I N G M E D I A I N T H E I N T E R N A T I O N A L C O N T E X T : A R E A D V E R T I S I N G M E D I A U N I V E R S A L ?

Advertising media can be broadly classified in terms of their degree of selectivity. This attribute is important to advertisers who want to match the media to their target markets so as to not waste their time, money, and message on non-customers.

Media can be selective in two ways: geographic and demographic/psychographic selectivity. Advertisers undoubtedly want to use the media that will deliver the desired demographic group with a particular lifestyle. Direct mail, in spite of its notoriety, is a pretty selective medium in this regard in theory. While magazines are generally selective, the newspaper medium is less so.

Geographic selectivity is no less important. Based on the geographic coverage, media may be local, national, and international. This issue is important to international advertisers for two reasons. On the one hand, a marketer wants to minimize media costs which are based on the size of audience. With a particular market in mind, the marketer would be foolish to use an international medium that blankets a continent and then to have to pay for all those unwanted people who see the advertisement. On the other hand, multinational marketers often want to adjust or tailor their advertising messages for a particular country, and the availability of that country's national media will be critical for this purpose.

One teaching problem has to do with the advertising media as found in the United States. Virtually all marketing and advertising texts state that newspaper and radio are local in nature. But in many parts of the world, the major newspapers are predominant and can be found nationwide. Likewise, all citizens may hear the same program and hear the same radio commercials regardless of where they live. As in the case of TV being both local and national in the United States, most parts of the world again do not have the luxury of having a TV station being a local medium to cater to a particular city or region.


The geographic scope of advertising media has always been poorly represented by marketing and advertising textbooks. The discussion invariably focuses on the characteristics of U.S. media and presents them as being universal. Such claims require closer scrutiny (see Fig. 2).

Radio

The radio medium has been presented as a local one. Kotler and Armstrong (1999, p. 458) mention that radio has "high geographic and demographic selectivity" and that it has "good local acceptance." Capon and Hulbert (2001, p. 384), likewise, believe that radio provides local coverage, while Dickson (1997, p. 590) states that it is "difficult to buy national coverage." According to The Media Book (1978, pp. 433, 436), radio is "poor" in terms of national availability and uniform coverage, but it is "good" with regard to "local market selectivity."

Radio is primarily a national medium in a large number of countries (e.g. Thailand). France has national, regional, and local radio stations and networks. Such radio networks as BBC and Voice of America are even international in scope even though they do not have much commercial implications.

Television

U.S. television is a combination of both national and local media. On the one hand, the national networks of CBS, ABC, NBC, and FOX have local affiliates in big cities to carry their programs and national advertisements. On the other hand, these affiliates also have their own news programs and are responsible for their own programming outside of the prime time period. Naturally, they are very interested in accepting local advertisements that will allow them to

radio: high geographic selectivity, good local coverage

TV: local market selectivity

newspaper: local market selectivity one- or two-newspaper cities low pass-along rate

magazine: high geographic selectivity

Fig. 2. Questionable Assumptions.


keep all the advertising revenues. For advertisers, they can buy air time from either the networks for the national market or the local stations for the local audience.

According to The Media Book (1978, pp. 433, 436), television is "good" in terms of local market selectivity. But the truth of the matter is that TV stations in many or most countries are national. In Turkey, television is truly a nationally- based medium. Likewise, France's TV stations are national.

Cable and satellite TV operators in particular even have their network programs broadcast internationally. India has some 50 satellite channels. Citizens of Syria once had to endure seeing the world according to the Syrian authorities who control all stations. Now thanks to satellite dishes, there are choices and different perspectives. Demographically, cable TV is more of a narrowcast medium than a broadcast one because cable TV channels tend to cater to a particular group of audience.

Star TV, Channel 5, MTV, CNN and BBC are prime examples of international television. China has CCTV, and France has Channel 5 for their out-of-the- country citizens. When such channels are imported by local cable operators, both the content and advertisements (called pass-through advertising) are usually imported at the same time. In that regard, these channels could be regarded as international media.

As international media, MTV, CNN, and CNBC still allow for some degree of geographic selectivity. CNBC, in addition to its original U.S. version, has the Asian and European versions for those parts of the world. According to its advertisement, CNBC Asia, headquartered in Singapore, provides "an Asian perspective on live global and headline news and financial market action." While CNBC heavily emphasizes the Asian financial markets, it has certain hours that it will broadcast the U.S. and European versions live.

MTV is now seen in 256 million homes in 64 countries. MTV Latino offers programming for American Hispanics and those in Latin and South America. MTV Brazil is broadcast in Portuguese. On the other hand, MTV Asia covers 30 countries, and it owns and operates three services (MTV Southeast Asia, MTV Mandarin, and MTV India) that reach more than 100 million homes. The Mandarin-language version is for Taiwan, China, and Singapore. In contrast, MTV Japan uses both the English and Japanese languages. In the case of MTV Europe, it broadcasts in English and once used a single feed, allowing advertisers to reach the entire market of Europe. The approach reflects MTV' s slogan "One World, One Music." This also makes MTV vulnerable as local music channels tailor their programming and language to suit the individual markets. To fight back, MTV is now using digital compression technology to split its signal and transmit different channel feeds to different key countries. This decision has


made it possible for MTV to do some limited customization and local advertising while maintaining most of the pan-European programming.

It is important to note the countries' programming habits and the accompanying clutter. In Vietnam and Indonesia, there are 20-minute blocks of commercial time (Webb, 2001). As a result, there can be as many as 30 TV commercials between one TV program and another. So the frequency and length of advertising slots is going to be a hurdle. In South Korea, big companies have locked up the air time for TV commercials, and they have the fight to renew it indefinitely. That makes it difficult for foreign marketers to use television to penetrate the market.

Newspaper

According to Dickson (1997, p. 590), newspapers are "excellent for local retail sales." Kotler and Armstrong (1999, p. 458) similarly state that newspapers have "good local market acceptance." Until USA Today came along, the United States did not have a national newspaper. After all, American newspapers are very local, and all big cities have their own newspapers carrying local news and advertisements. Due to their interests in local politics and business activities, residents of one city (e.g. San Jose) are not so interested in reading newspapers from a nearby city (e.g. San Francisco). It should be noted also that most cities have only one or two newspapers.

As a national newspaper, USA Today is an exception to the norm. By trying to be national, it has to have a little bit of news from each of the 50 states. As such, it cannot devote much to any particular state or city. Consequently, it has to tell local residents that USA Today should be their second rather than primary or first newspapers.

While any countries may be liable to have some local newspapers, they are more likely to be dominated by national newspapers. Canada's leading national daily is Globe and Mail. In the case of Singapore, the city-state island nation of 3.2 million population, it is abundantly clear that all major newspapers must be national in scope. While Lianhe Zaobao is the main Chinese-language newspaper, the English-lanugage Straits Times, with a circulation of nearly 400,000 copies, is the largest newspaper. In Turkey, the national newspapers include Hurriyet, Sabah, Milliyet, Cumhuriyet, among others. France's major newspapers are also national. In any case, for national newspapers to be viable, citizens must exhibit a relatively high degree of national cohesion.

The market for a world or international newspaper is likely to be a limited one. For a newspaper to be international, it cannot be designed for the mass public because the tastes, preferences, and cultures vary widely, making it


impossible to have everything for everyone at the same time. It is impossible to be all things to all people. It is exceedingly difficult for a newspaper to carry enough of local news to simultaneously appeal to people all over the world.

An international newspaper is possible only when customers across countries have something in common. Its readers across countries must have a common language (basically English) as well as some common and specific interests. The common characteristics or interests that may be somewhat global in nature are business and financial transactions and international politics. Such newspapers include International Herald Tribune which calls itself "the global newspaper." Still The Wall Street Journal has to adapt its The Asian Wall Street Journal by heavily carrying financial news of interest to Asian businesspeople.

Another global newspaper is Financial Times which attracts international executives." Its advertisement states: "Because the entire world is its beat, the Financial Times is refreshingly free of narrow national interests." In addition, being both "local and global," the Financial Times that rolls off local presses centers around the world "is the daily result of FT reporters in more than 50 countries reporting to a senior team of editors skilled in making connections, spotting trends, drawing conclusions, and bringing them home to you in a timely fashion." It is supposed to be far ahead of The Wall Street Journal in "global coverage and global perspective."

Magazines

Kotler and Armstrong (1999, p. 458) state that magazines have "high geographic and demographic selectivity." It is true that U.S. magazines are generally very selective from the demographic and geographic standpoints. While the content of a national magazine may remain unchanged from one region to another, it usually offers a great deal of local editions for advertising purposes. But other nations' magazines do not have that kind of luxury. As such, both their content and advertising are national in scope.

The Economist claims that it is "the weekly international news and business publication of choice worldwide." As such, "we also choose not to write to a broad, lowest-common-denominator readership. Those that benefit from reading The Economist are those who are in the enviable position to make decisions, call for action, and elicit change." Being read by both heads of corporations and heads of state, the magazine provides readers with a broad international perspective.

Such magazines as Time, Newsweek, and Business Week can be considered to be international magazines. They offer regional editions for the various parts of the world. Other magazines have gone another step farther by creating


local-language editions. Reader's Digest and Penthouse are examples of these international vehicles turning national. Some of the trade publications catering to certain professions are also international in geographic coverage.

Internet

The Internet is the most recent of the major advertising media. This medium is unique in the sense that, from the outset, it is an international medium. This unique attribute also enhances its influence on a worldwide basis. It has also got to the point that there are now more people using the Internet outside the United States than inside.

Just a few years ago, English was the native language of 80% of Internet users. The percentage has dropped to less than half and is projected to decline to one-third by 2004 (Crockett, 2000). Naturally, it is a mistake for 55% of U.S.-based Internet companies to offer sites only in English.

Even when a Web site can use a common language, the language issues may not be completely solved. A common language does not mean homogeneity. Latin America is both big and fragmented at the same time. The many Spanish- language countries have different dialects, phrases, or words.

More recently, the Internet has taken a first step to become less international and more national. As a leader in this direction, Yahoo has the various versions of its site operating in more than two dozen countries. It has local portals in Denmark, France, Germany, Italy, Norway, Spain, Sweden, the United Kingdom and Ireland, Australia and New Zealand, China, Hong Kong, Taiwan, Japan, Korea, Singapore, Argentina, Brazil, Canada, and Mexico. Yahoo India is a recent addition (Heim, 2000).

Another significant development is that new software has allowed a multinational marketer to make users' locations to dictate a particular Web site that users will be exposed to. For example, those in Western Europe trying to access the Web site of Coca-Cola may end up with a European site rather than the one seen by their American counterparts. Coke used to block local divisions from setting up their own Web sites and require them to use only the corporate Internet home page. Now the operation in Belgium and Luxembourg has a Belgian Web site that is trilingual in Dutch, French, and English. The site attracts more than 3 million hits each month (Echikson, 2000).

While shopping and Internet use are global behavior, shopping manner and the determinants of the Internet sites' attractiveness may be culture-bound. A study of 299 respondents from 12 countries found that site quality, trust, and positive affect toward it were critical in explaining purchase intentions and visitors' loyalty to the site (Lynch et al., 2001). At the same time, "the impact


of these factors varies across different regions of the world and across different product categories. Results of this research highlight the need to tailor websites according to each world region and product being offered for sale."

It is not a simple task to build a multilingual e-commerce site (Crockett, 2000). Other than the language that must be overhauled, a site must be able to handle different currencies, characters, and measurements. Some languages have words that must be read from right to left. Certain U.S. Net icons such as shopping carts are alien in some countries. Therefore, a global Web site has to be culturally sensitive.

International media, while offering opportunities, may also create problems for some advertisers. A country may not allow certain products to be advertised on the air. So a prohibited product, using international TV, may end up being broadcast into a certain country. A similar problem occurs when a particular advertising technique is deemed illegal or offensive in a certain country. The legality of comparative advertising is still an issue in Germany, while showing female models wearing sleeveless shirts is going to cause an outcry in Malaysia. Yahoo was forced to go to French courts because Nazi memorabilia were sold on a Yahoo auction site. Sales of such memorabilia are illegal in France. Likewise, German authorities charged Compuserve for its failure to block access to Internet sites offering child pornography.

It is unclear at this point whether the law governing an Internet advertisement should be the law of the upload site or that of the download site. It is thus easy to violate many domestic laws (Cohen, 1996). Within the near future, conflicting court rulings across countries are going to have to be anticipated.

G L O B A L ( G L O C A L ) A D V E R T I S I N G

Whenever possible, it is desirable for a multinational marketer to avoid both standardization and localization (Onkvisit & Shaw, 1994). When feasible, a global advertisement should be utilized (see Fig. 3). A universal advertisement is one that is both global and local at the same time. This kind of "glocal" advertising tries to achieve the best of both worlds by combining the efficiency of standardization with the effectiveness of localization. The efficiency is derived from the identification of the common theme and elements whose appeals are universal enough to serve as the advertisement's main theme that can be used everywhere.

The effectiveness is accomplished by planning in advance for necessary modifications that will make the advertisement more meaningful to each country's customers. As such, a global advertisement recognizes both market homogeneity and heterogeneity (Onkvisit & Shaw, 1999). The results of one


A global ad should be visual. A global ad must have some universal appeal. A global ad must be adaptation-ready. A global ad combines both standardization and localization. A global ad assumes both homogeneity and heterogeneity.

A global ad combines efficiency with effectiveness.

A global ad is simultaneously global and local.

Fig. 3. What Is a Global Advertisement?

study "confirm and amplify the need to seek a balance between global efficiency and responsiveness to local conditions" (Gould et al., 1999).

A global advertisement should be visual. Based on one recent study, "in a standardized campaign, the most important factor is that visual aspects be identical. With respect to other elements of an ad, country-specific modifications can be made without destroying the standardized character of a campaign" (Backhaus et al., 2001).

It is important to recognize that, toward both efficiency and effectiveness, a global advertisement must be "adaptation-ready." Being adaptation-ready differs from an attempt to modify a standardized advertisement. Once a standard advertisement has been completed with a particular country in mind, an attempt to modify it involves unforeseen problems. Adaptation readiness means that, while designing an advertisement for the world, market differences are being considered at the same time. During the original planning stage, allowances are made for those differences and subsequent adjustments. As such, when an adjustment has to be made later for a particular country, the adjustment becomes a simple process.

In preparing an adaptation-ready advertisement, one should pay attention to a number of "world-ready" design principles that will make any subsequent translation simpler, quicker, and less costly (Bohan, 1994). A U.S. advertiser is wise to consider localization during the design phase of its English version rather than to wait until after the completion of the English version. When doing a script, it is practical to seek "generalized ways of saying things." It is thus better to use "a popular ride" in place of "a hip ride." Because words in other languages may require more space, it is necessary to have enough room for the extra text and voice track length. In addition, a knowledgeable person from the target country should be involved in art direction by viewing the appro- priateness of signage, faces, body language, clothing, offices, and other symbols or graphic images. Finally, while rushing to finish the English version, it may

Marketing~Advertising Concepts and Principles in the International Context 97

be tempting to ignore logging graphics, scripts, audio elements, edit decision lists, and programming lists only to needlessly increase costs when having to retrace each step all over again.

Gillette Co. adhered to the principles mentioned above when it launched Venus razors for women in 2001 (Spethmann, 2001). This global launch hit 29 countries simultaneously. Point-of-purchase displays, to be used globally, required the lowest common denominator of specifications so as to suit all retailers in all countries. Details like peg holes got scrutinized since pegs in Europe differed from those in the United States. A single design greatly reduced costs. The GiUeteVenus.com served as a global template for 15 regional sites. The company's translation war room in London was filled with designers, translators, and lawyers. The package (which may have as many as three languages) and display language must fit the layout and pass the legal requirements. Each package took about a day to be completed. Because the ideas of "soft, protective cushions" and "reveal the goddess in you" carried significant nuances, the process began with the English language, and a person then expressed the core idea in his/her native language. To alleviate any cultural or religious problems, Gillette chose not to capitalize "goddess" and use the lower-case.

Coca-Cola Co.'s "I 'd Like to Teach the World to Sing," and "General Assembly" campaigns are global. The General Assembly commercials showed a thousand children singing the praises of Coke and world peace. Naturally, children and peace have universal appeals. It is also only natural for consumers in a particular market to want to see a youngster from their own country. A local advertising agency in each country was thus permitted to edit the film to include close-ups of a particular kid. Therefore, at least 21 different versions of the spot existed (Advertising Age, 1987).

A recent global commercial was shown on November 1st, 1999 by Ford Motor Company (Simison, 1999). The company bought two minutes of the 9 p.m. air time on every major commercial TV network around the world to showcase its global image campaign tied to the end of the millennium. The commercial shows nearly 60 emotional scenes, filmed in 9 countries, along with Ford's brands and logos of Ford, Lincoln, Mercury, Volvo, Jaguar, Mazda, and Aston Martin. The message has to do with how Ford's various brands relate to people of different countries and cultures while welcoming the new millennium.

C O N C L U S I O N

In spite of the universality of marketing as a discipline of study, it is presump- tuous to believe that there is only one form of marketing and that marketing is practiced in the same way all over the world. Certainly, American scholars


have made a great deal of contribution to the marketing discipline, and it is not easy to write a textbook that assures currency, accuracy, and international applicability. But it is long overdue for scholars and practitioners to go way beyond merely questioning the validity of the standardization of the 4 Ps. Instead, we need to question the more general and abstract levels of marketing by critically examining the concepts and theories rather than a company's marketing mix.

It is scientifically sound for marketing instructors and marketers to critically examine whether the marketing concepts and theories (e.g. market segmentation, test marketing, advertising media, advertising approaches, etc.) as taught in the United States are indeed universal as often claimed. The validity of these concepts in an international context undoubtedly affects how multinational firms conduct (i.e. standardize, localize, or globalize) their international advertising campaigns.

It is highly questionable to state that U.S. marketing is marketing and to also hold as true the opposite. In actual truth and practice, they are not one and the same. As explained by Porter and McKibbin (1988, p. 320), "America's future managers need to understand the degree to which U.S. methods are unique rather than universal and the related ethnocentric character of their own attitudes. . . . The question, then, is whether American business school graduates can afford to continue to be as parochial - as culturally and internationally naive - as they have been in the past. We doubt it."

U.S. marketing is a subset of marketing (or international marketing) - not the other way around. Marketing instructors need to be culturally sensitive. Teaching and practising marketing in multiple countries should force practitioners and academicians alike to question the statements contained in U.S. textbooks. U.S. courses are probably more ethnocentric than geocentric. Just because most non-U.S, business schools have been using U.S. textbooks by default, it does not mean that these textbooks are geocentric. While it is inadequate to continue to teach U.S. marketing, it is also unsatisfactory to teach the international dimension of marketing. It is about time that we begin to study and teach marketing as what the discipline should be or is supposed to be in the first place.

REFERENCES

Advertising Age (1987). Goodbye Global (November, 22), 36. Backhaus, K., Muhlfeld, K., & Van Doom, J. (2001). Consumer Perspectives on Standardization

in International Advertising: A Student Sample. Journal of Advertising Research, 41(September-October), 53--61.


Baumgartner, H., & Steenkamp, J. (2001). Response Styles in Marketing Research: A Cross- National Investigation. Journal of Marketing Research, 38(May), 143-156.

Berman, B., & Evans, J. R. (1998). Retail Management: A Strategic Approach (7th ed.). Upper Saddle River, NJ: Prentice Hall, p. 313.

Bohan, S. (1994). Multimedia Notes. Copy Magazine. Capon, N., & Hulbert, J. M. (2001). Marketing Management in the 21st Century. Upper Saddle

River, NJ: Prentice Hall. Cohen, M. J. (1996). New Media, New Laws. PROMO, March, 37. Crockett, R. O. (2000). Surfing in Tongues. Business Week E.Biz, 11 December, EB 18. Dalrymple, D. J., & Cron, W. L. (1998). Sales Management: Concepts and Cases (6th ed.). New

York: John Wiley & Sons. Dickson, P. R. (1997). Marketing Management (2nd ed.). Fort Worth, TX: Dryden. Echikson, W. (2000). For Coke, Local Is It. Business Week, 3 July, 122. Gould, S. J., Lerman, D. B., & Grein, A. F. (1999). Agency Perceptions and Practices on Global

IMC. Journal of Advertising Research, 39(January-February), 7-20. Heim, K. (2000). Yahoo Plans India Portal. San Jose Mercury News, 27 May. Kotler, P. (2000). Marketing Management (10th ed.). Upper Saddle River, NJ: Prentice Hall. Kotler, P. et al. (1999). Marketing Management: An Asian Perspective (2nd ed.). Singapore: Prentice

Hall. Kotler, P., & Armstrong, G. (1999). Principles of Marketing (8th ed.). Upper Saddle River, NJ:

Prentice Hall. Lynch, P. D., Kent, R. J., & Srinivasan, S. S. (2001). The Global Internet Shopper: Evidence from

Shopping Tasks in Twelve Countries. Journal of Advertising Research, 41(May-June), 15-23.

Onkvisit, S., & Shaw, J. J. (2000). How Universal Are Marketing Concepts and Principles? Proceedings. Association of Marketing Theory and Practice Conference. Hilton Head, S.C.

Onkvisit, S., & Shaw, J. J. (1999). Standardized International Advertising: Some Research Issues and Implications. Journal of Advertising Research, 39(November/December), 19-24.

Onkvisit, S., & Shaw, J. J. (1994). Standardization vs. Localization: The Need for the Compromising Perspective. In: S. S. Hassan & R. D. Blackwell (Eds), Global Marketing: Perspectives and Cases (pp. 30-50). Fort Worth, TX: Dryden.

Porter, L. W., & McKibbin, L. E. (1988). Management Education and Development: Drift or Thrust into the 21st Century? New York: McGraw-Hill.

Sharma, S., Shimp, T. A., & Shin, J. (1995). A Test of Antecedents and Moderators. Journal of the Academy of Marketing Science, 23(1), 26-37.

Simison, R. L. (1999). Ford to Debut Ad at Same Time Globally. The Wall Street Journal, 27 October.

Spethmann, B. (2001). Rising. PROMO. April, 53ff. The Media Book (1978). New York: Min-Mid Publishing, pp. 433, 436. Thorelli, H. B. (1983). Internationalizing the Marketing Curriculum Calls for an Entirely New

Philosophy of Teaching Marketing. Marketing Educator, 2(Fall, 1983), 1-5.

CREATING A POSITIVE BRAND

IMAGE WITH A LOCAL

ADAPTATION ADVERTISING

STRATEGY: THE HYUNDAI

SANTA FE

Mary Anne Raymond and Jong Won Lim

ABSTRACT

This paper provides a case study comparing the international advertising strategy that Hyundai Motor Company, Korea, utilized when they introduced the Hyundai Santa Fe in Korea and in the United States. Based on Hyundai's understanding of factors affecting standardization and adaptation decisions and possible negative country-of-origin effects, the case illustrates how Hyundai created a positive brand image with a local adaptation advertising strategy. A framework illustrating factors affecting the local adaptation decision, the advertising decisions that Hyundai made, and the effectiveness of those decisions is presented. Given the success of Hyundai' s local adaptation advertising strategy and the Santa Fe, Hyundai announced plans to build a production facility in the United States.


101

102 MARY ANNE RAYMOND AND JONG WON LIM


As opportunities for trade in international markets increase, decisions regarding the standardization or adaptation of international marketing strategies are critical. Managers faced with decisions regarding international advertising strategies must determine what degree of standardization or adaptation is necessary to ensure that the messages are conveyed accurately and that their objectives are accomplished. While standardized messages help portray a global image and have cost savings due to economies of scale, the environmental conditions and stage of economic development may be different in foreign markets and necessitate a local adaptation strategy. Compounding the difficulty of standardization vs. adaptation decisions for many multinational corporations (MNCs) based in rapidly developing markets are possible country-of-origin effects. Products that have not developed a strong reputation or that may be perceived as being of poor quality because of the country-of-origin provide special challenges and implications for international advertising strategy. Various strategies may be used to overcome country-of-origin effects. Specifically, the local adaptation of advertising may provide an effective means for a multinational manufacturer to create a positive brand image and overcome perceived quality differences resulting from the effects of country-of-origin.

The purpose of this case study is to compare the international advertising strategies for the Hyundai Santa Fe, a Sport Utility Vehicle (SUV) being marketed in the United States and South Korea (Korea). Hyundai Motor Company, an automobile manufacturer headquartered in Korea, a rapidly developing market, faces special challenges given image problems of its automobiles in the United States market. By examining the standardization-adaptation debate and factors, including country-of-origin, that influence the decision of what degree of standardization or adaptation to use, the Santa Fe international advertising strategy in the U.S. and Korea provides an example of how a firm uses a local adaptation strategy to improve its brand image.

In order to better understand Hyundai's adaptation strategy, a review of the standardization-adaptation literature is presented first, followed by a discussion of research regarding country-of-origin effects, which is a significant consideration for Hyundai Motor Company, Korea. An overview of Hyundai Motor Company and Korea as an international market are then examined. Utilizing the factors affecting standardization and adaptation decisions, a framework is presented for examining the Hyundai Santa Fe case and the international advertising strategies pursued by Hyundai. Specifically, the framework illustrates factors affecting the adaptation decisions, identifies specific adaptation decisions regarding advertising strategy, and summarizes indicators of effectiveness regarding the local

Creating a Positive Brand Image with a Local Adaptation Advertising Strategy 103

adaptation of advertising strategy. Next, using a case study approach and the components identified in the framework, Hyundai's international advertising strategy for introducing the Santa Fe in Korea and in the United States is discussed. The study concludes with indicators of effectiveness of the international advertising campaign and Hyundai's plans to build a production facility in the United States.

R E V I E W O F L I T E R A T U R E

Standardization-Adaptation Debate

International advertising strategies are typically one of the key variables discussed in the standardization-adaptation debate. Specific questions regarding what constitutes standardization in advertising are often included in the discussion (Backhaus et al., 2001). The longstanding debate has been discussed extensively in the literature, with both standardization and adaptation strategies having advantages and disadvantages. Managers responsible for global marketing decisions must determine whether standardization or adaptation of marketing strategies should be utilized in foreign markets. There has also been considerable discussion focusing on the degree of standardization or customization that should be used rather than using complete standardization or complete adaptation of international marketing strategies.

Levitt (1983) believed that standardization was legitimate due to the globalization of markets or specifically to the increasing similarity of needs across borders. A standardization strategy has the advantage of using economies of scale to obtain cost advantages and efficiency improvements in promotion, production, distribution, and research and development (Backhaus et al., 2001; Jain, 1989). Further, a global image can be enhanced through consistent messages in a standardized advertised strategy. Similarities and differences in markets should be considered from the outset in developing global advertisements. While global integration is necessary for both standardization and adaptation, coordination is more difficult for situations requiring adaptation (Onkvisit & Shaw, 1999). Different competitive and cultural environments, different perceptions, and different levels of product acceptance may cause problems in standardized strategies. A localized strategy that adjusts for differences in the market and possible country-of-origin effects may improve a product's likelihood for success.

Many finns use a combination strategy, which is partially localized and partially standardized. Yin (1999) found that the decision to use a combination advertising strategy depends upon the importance of cultural values and local


language, product attributes, and the number of subsidiaries. Laroche et al. (2001) note that the primary force behind developing a standardized advertising strategy is the degree of control of MNCs. Their findings suggest that MNCs need to learn and understand foreign markets, foreign contexts, similarities in position, and then develop shared beliefs and values for standardization to be successful. Samiee and Roth (1992) also found the degree of control to be very important in advertising decisions.

Many researchers have examined the various factors that influence the standardization-adaptation decision (Baalbaki & Malhotra, 1995; Jain, 1989; Samiee & Roth, 1992; Szymanski et al., 1993). Different factors influence the degree of standardization or adaptation that a company pursues. Jain (1989) developed a framework for determining the degree of marketing program standardization. The five factors in the framework that affect standardization are: (1) target market, which includes the geographic area and economic factors; (2) market position, which includes market development (stage of development or the product life cycle), market conditions (cultural differences, economic differences, and differences in customer perceptions); (3) nature of the product, which includes product type - industrial product or consumer product (Jain notes that standardization is more feasible for industrial products than for consumer products and more feasible for durable consumer goods rather than non-durable goods) and product positioning; (4) environmental factors, which include physical environment, legal environment, political environment, and marketing infrastructure; and (5) organization factors, which include corporate orientation, headquarters-subsidiary relationship, and delegation of authority.

Baalbaki and Malhotra (1995) state that in addition to environmental factors such as the economic, political, cultural, and competitive conditions, which have been frequently discussed, marketing management factors also influence the formulation and implementation of international marketing strategic decisions. Marketing management factors include factors related to the product, such as the stage of the product life cycle, the necessity of the product, support requirements, and laws related to product features; factors related to promotion, such as importance of various media channels, different interpretations of messages, differences in availability and coverage of promotional infrastructure, and similarity of laws; factors related to distribution, including infrastructure, government regulations, geographic structure, and variance in norms and preferences; and factors related to price, including elasticity, perceptions, exchange rates, and government regulations. They also felt that attitudes towards foreign products and country-of-origin and the intensity and level of competition affected standardization decisions. In their study, Baalbaki and Malhotra (1995) found that the most important factor affecting the degree of standardization is


the competitive environment. Of the marketing management factors, the product- related factors had the greatest influence on standardization-adaptation decisions.

Recent studies have also discussed ethnocentrism and country-of-origin as factors that may affect the standardization-adaptation decision. Moon and Jain (2001) stated that while foreign (standardized) advertising is not common in the U.S. due to its size, foreign advertising promoting American brands in other countries is more common. In fact, although major cultural differences exist between the U.S. and both Korea and Japan, advertisements promoting foreign brands have done extremely well in both countries. Moon and Jain (2001) found that the degree of standardization or adaptation varies depending on how a country scores on ethnocentrism and country-of-origin perceptions. Their study is particularly important in developing the Hyundai case since they examined various product classes, including automobiles, and various countries, including the United States and Korea. For example, Moon and Jain (2001) stated that if consumers' ethnocentrism in the target market is relatively low but their country-of-origin perception is poor, then firms may benefit from a partial localization strategy. Specifically, when asked about a Korean automobile company entering the U.S., they found that if consumers' ethnocentrism in the U.S. is low, but the consumers perceive Korean automobiles as being of poor quality, the firm may want to use a partial localization strategy to overcome the negative country-of-origin effects. Further, a complete adaptation strategy may be recommended if consumers' ethnocentrism in a country such as China is high and the perceptions of country-of-origin are bad as in the case of the Korean automobile manufacturer. Although complete standardization is unlikely (Jain, 1989), a situation justifying a complete standardization may occur when consumers in the target market have a low degree of ethnocentrism and high country-of-origin perceptions. For example, in the case of a Japanese automobile manufacturer entering the U.S., where consumers have a low degree of ethnocentrism, and also perceive that Japanese cars are of good quality, Moon and Jain (2001) suggest that a fully standardized strategy may be used. These factors along with the proposed target market are all considered critical in developing international advertising strategies.

Country-of-Origin

Many researchers have noted that country-of-origin has a significant influence on the quality perceptions of products, the brand image, and purchase decisions, which affect the success of entry into new markets and positioning of new products in existing markets (Bergiel & Bergiel, 1999; Clarke et al., 2000;


Johansson et al., 1985; Knight & Calentone 2000). Klein et al. (1998) note that one frequently used surrogate indicator of quality is country-of-origin. However, they suggest that factors other than product quality may influence attitudes and the amount of influence that country-of-origin has on product evaluations may be due to culture-specific factors. Further, Pecotich and Rosenthal (2001) found that when factors such as brand and quality are present, the country-of-origin effect may either be enhanced or reduced.

On one hand, positive perceptions of country-of-origin can be advantageous for MNCs entering new markets or introducing and positioning products in existing markets. On the other hand, negative perceptions of country-of-origin may create major barriers for firms trying to enter new markets (Knight & Calentone, 2000). The success of international products may be affected by appropriate country-of-origin markings (the "made in" statement). However, with increased globalization of markets and competition for low cost, high quality products, identifying specific country-of-origin markings may be difficult when components and parts come from multiple countries (Clarke et al., 2000). Manufacturers must also be careful as to the perceptions of country-of-origin for parts, assembly, and design. Depending on the country-of-origin, attitudes and purchase intentions may be affected even if assembly and parts represent different countries (Chao, 2001).

Knight and Calentone (2000) define country-of-origin image (CO1) as the perceptions that consumers have about the quality of products made in a specific country and the people from that country. Therefore, the cognitive processing that takes place during COI product evaluations is important (Knight & Calentone, 2000). In their study Knight and Calentone (2000) found that both beliefs and COl simultaneously influence attitudes and purchase intentions regardless of whether a consumer has product knowledge. Previously, Han (1989) found that beliefs and CO1 worked independently on attitudes, depending on a consumer's product knowledge. Consumers with high product knowledge may use CO1 to summarize beliefs about the product features, which affects the attitude. The halo model developed by Han (1989) suggests that when consumers are unfamiliar with brands, they use COI to infer quality. Knight and Calantone (2000) suggest several strategic alternatives. First, when consumers have a negative COI, firms should not bring attention to the country- of-origin and additional promotions may be necessary to overcome a negative image. Second, a positive CO1 may allow finns to set prices higher, but higher prices may also be perceived as negative. Third, good quality and attractive prices may help consumers overcome negative COL

To further explore COI, Shimp et al. (1993) examined consumers' cognitive structures and categorization of various products from different countries, both


developing countries and highly industrialized countries. Their results showed that low price and low quality were the perceptions that consumers had of less developed countries such as Korea whereas Japan, a highly industrialized country, was favorably perceived with regard to prices and quality. Shimp et al. (1993) introduce the concept of country equity as a way of thinking of country image and global brands.

Gtirhan-Canli and Maheswaran (2000) found that a country's cultural differences (collectivism vs. individualism) may cause country-of-origin effects to vary. For example, in collectivist cultures, the product from the home country was evaluated higher regardless of superiority. However, in individualistic cultures, the product from the home country was only evaluated higher when it was better than the competition. As such, the purchase of foreign products is influenced by cultural orientation. Therefore, whether a strategy emphasizes country-of-origin may vary across countries.

Bergiel and Bergiel (1999) suggest that the perceptions of country-of-origin effects are not only dependent upon the country, but also upon the image of the company and its brands and the type of product. For example, they noted that Korean electronic firms often have trouble persuading consumers that their products are as good as Japanese products. In their study, they found that products from Korea rated high on value, but that the products did not rate highly on quality. However, respondents did not feel that the quality of Japanese brands justified the higher price. They further noted that many people feel that information on country-of-origin is very important when buying a car and that promotion can be used as an effective strategy to overcome country-of-origin effects (Bergiel & Bergiel, 1999).

THE HYUNDAI SANTA FE

Korea and Hyundai Motor Company

As MNCs based in previously protected and rapidly developing markets, such as South Korea (Korea) make their products available in markets worldwide, the development and implementation of international advertising strategies are critical for acceptance and success. Korea, the eighth largest trading partner for the U.S. and the eleventh largest economy in the world (U.S. Department of Commerce, 2001), has many large chaebols (conglomerates) that compete in world markets. Korean exporters also trade in markets worldwide (Raymond et al., 2001).

Although Korean exporters feel that the quality of their products is comparable to that of products in developed countries, their promotion abilities,


marketing research, and brand equity are often quite inferior based on a study conducted by the Korean Chamber of Commerce. Pricing strategies often serve as a cue in the poor brand image of some Korean products. Further, consumers in foreign markets have poor images about major export items from Korea and foreign marketing activities cause serious problems for exporters. For example, problems dealing with inactive new product development, weak marketing research skills, ineffective advertising, passive distribution channel management, and poor after sales-service have affected Korean exporters' internal marketing activities and pricing decisions (Korea Economic Daily, 1995a; Korea Economic Daily, 1995b; Maeil Business Newspaper, 1995). Developing a positive reputation has also been found to be the most problematic strategic marketing decision for exporters (Raymond et al., 2001). Equally problematic is the concern that Korean exporters do not factor in additional cost components when determining their strategies in international markets (Raymond et al., 2001).

Hyundai, perhaps the largest chaebol in Korea, has also experienced a problem with their brand image in foreign markets. While Hyundai focuses on five core businesses: automobiles, construction, electronics, heavy industry, and finance; internationally, cars are the best-known Hyundai product (Adbrands, 2002). However, Hyundai's image in the automobile industry is one of a cheap car company that has encountered many quality problems (Freeman, 2002). While Hyundai wants to maintain its value focus, it wants to be known as a company that has cheap prices and great cars. After experiencing serious quality problems, Hyundai has made major quality improvements and has begun the process of selecting the advertising agency that will continue to improve their image. Hyundai Motor has over $160 million in annual billings (Freeman, 2002). Worldwide, the Hyundai chaebol, with global media expenditures of $370 million, is the forty-fifth largest advertiser in the world (Adbrands, 2002).

Hyundai Motor Company is a relatively new competitor in the global marketplace. Hyundai Motor Company, Korea, (HMK) entered the United States market in 1986 with the Hyundai Excel. HMK capitalized on their strategy of going after an entry-level market that other carmakers abandoned. Hyundai wanted to attract first time car buyers, including young families and college students. Initially, HMK focused their distribution on the East and West Coasts and Southern states before expanding into the central portion of the United States in 1987. HMK established a subsidiary, Hyundai Motor America, in California and continued to introduce innovative, high-quality automobiles, including the Sonata in 1989, the Scoupe in 1990, and the Elantra in 1991 at very affordable prices (Hyundai, 1999). While Hyundai set sales records in the U.S., it appeared that they might have a problem with their brand image due to major quality problems. Hyundai replaced the Excel with the Accent in 1995


and replaced the Scoupe with the Tiburan in 1997. Hyundai also began promoting extensive warranty coverage as they improved the quality of their vehicles in hopes of changing their image and becoming part of consumers' evoked set when considering buying a new vehicle (Freeman, 2002).

Introducing the Hyundai Santa Fe

The Hyundai Santa Fe is truly the result of international cooperation. The Santa Fe was designed in the United States at Hyundai California Design, a subsidiary of HMK, in a cooperative venture with design studios in Korea and input from design centers in Japan and Germany. The vehicle was the first Hyundai designed in the United States. The Santa Fe was designed in the United States because the U.S. is considered the home of the sport utility vehicle (SUV). Hyundai Motor America (HMA) has unique advantages over HMK with regard to location variables for adaptive research. First, HMA has more resources in design and product evaluation. Second, the market size of HMA is much larger than that of HMK, and finally the SUV culture in the U.S. is far ahead of the culture in Korea. The needs and wants of the North American market were a primary consideration in the development and design of the Santa Fe although the needs and wants of global consumers were also considered (Hyundai, 1999). After being designed in the U.S., the Santa Fe was manufactured in Korea where Hyundai has its production facilities. The Santa Fe was to be introduced in both the U.S. and Korea. The cross-over concept of sports, utility, and passenger cars was quite new in Korea while the market in the U.S. had many competitors. Since consumers in Korea were not as familiar with the cross-over concept, the Santa Fe was to have the same level of driving comfort as an inter- mediate size passenger car and be in an automobile category where a passenger car looks like a SUV. Hyundai wanted to convince owners of mid-size passenger cars in Korea to switch over to the Santa Fe.

Given the international cooperation in the Santa Fe project and the unique challenges facing Hyundai, the international advertising strategy became the critical strategic decision as Hyundai wanted to make a successful entry in the SUV market in both the U.S. and Korea. After successfully introducing the Santa Fe, a Cross-Over Vehicle (CUV) in Korea, HMK launched the product as a Sport Utility Vehicle (SUV) in the United States. However, it is important to note that Hyundai delayed the launching of the Santa Fe in the U.S. market until they completed two years of market testing in Korea. Further, 100 vehicles were tested around the U.S. in all types of climates after a few glitches were found in assembly lines (Kiley, 2001). Given previous quality control problems and a suffering brand image in the U.S., Hyundai faced many decisions


regarding the degree of standardization or adaptation of its advertising strategy across the two markets. In the U.S., possible negative country-of-origin effects were a concern for Hyundai given the quality problems and image of being a cheap Korean automobile manufacturer.

Using many of the factors, including country-of-origin perceptions, that affect the degree of standardization or adaptation a MNC pursues in international markets, this case study examines and compares the international advertising strategy for the Hyundai Santa Fe in the Korean and the U.S. markets. Specifically, information regarding the competitive situation and positioning, marketing-related factors, country-of-origin effects, environmental factors and the target market are discussed followed by a discussion of specific decisions regarding the launching period and media schedules, the adaptation of advertising strategies and messages, and special promotions and events. This is followed by a discussion of indicators of the effectiveness (or the performance) of the local adaptation strategy used across markets. A framework illustrating factors, adaptation decisions regarding advertising, and effectiveness indicators utilized in presenting the case study is shown in Fig. 1. The case study concludes with questions that Hyundai must consider after the successful launch of the Santa Fe.

Factors Influencing Degree of Adaptation

Competitive Situation, Product Positioning, Marketing-Related Factors, and Country-of-Origin Effects Hyundai believes that the U.S. owns the SUV market with many competitors and a large market share in the automobile industry. However, Hyundai feels that the compact SUV market in the U.S. is the fastest growing segment and that major automobile manufacturers have neglected the compact SUV market. Only a few competitors, the Toyota Rav-4, the Honda CR-V, and the Subaru Forester compete in the compact SUV market (Wechter, 2000). Since the SUV market is much larger in the U.S. than in Korea, the researchers and designers in the U.S. have more knowledge of the SUV and its competitors than researchers and designers in Korea. Also, since HMA has more resources in design and product evaluation than HMK, the Santa Fe SUV was designed in the U.S. in order to best meet the needs of the target customer and to add the image of USA origin for Korean customers. Competition in the SUV market in Korea was not as intense as it was in the U.S. and Koreans were not familiar with the SUV or the CUV concept. The Koreans did not understand how to enjoy leisure life using the SUV. Therefore, in Korea the Santa Fe was positioned as a vehicle that looked like an SUV passenger car. The Santa Fe was a new concept in the Korean market.


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Marketing-related factors affected the international advertising strategy for the Hyundai Santa Fe. First, Hyundai has a dominant market share and intensive distribution networks in Korea. The Hyundai brand is well-known and the Santa Fe is positioned as an SUV passenger car with a value positioning relative to the other SUVs in the market. All consumers in the target market are exposed to mass media. In the U.S. the residual value of Hyundai was low due to the high perceptual risks on the part of consumers. In order to reduce the perceptual risks and improve their brand image in the U.S., Hyundai offered the best warranty in the business on its vehicles. Hyundai offered a five-year or 60,000 mile bumper-to-bumper warranty and a 10 year or 100,000 mile warranty on the power train. The warranty program shows a long time commitment of the company to enhance quality standards for customer satisfaction. The warranty program combined with the delayed launch of the Santa Fe helped Hyundai overcome country-of-origin effects and provided another platform for the advertising messages in the U.S.

Environmental Factors and Target Market

Consumers in Korea wanted an SUV that rides like a mid-size passenger car. They were not satisfied with existing options due to the noise and rough ride. Hyundai saw the Santa Fe as a Cross-Over Vehicle (CUV) from the passenger car to the sports utility. They viewed their competition as passenger cars and wanted to entice consumers away from the mid-size passenger car. While the Korean market is homogeneous in terms of culture, the market for SUVs is very heterogeneous and relatively new.

The Santa Fe primarily targets males in their mid-20s to mid-30s that are office/professional workers who plan to use the vehicle primarily for commuting. The workers are future-oriented. Bachelors and males with school-aged children make up the majority of the market. The targeted males view vehicles as important to their personality, so the attractiveness of the vehicle is more important than the practical aspect. However, riding comfort is important. The targeted market for the Santa Fe spends less than the self-employed people who are older (mid-30s to mid-40s), uses the SUV for several purposes rather than just commuting, and wants both practicality and styling.

In the United States, Hyundai wants to capture consumers in the compact SUV market, believing that this is the fastest growing segment of automobiles (Kiley, 2001). The Santa Fe was designed to provide consumers features, quality, strength, and power at an affordable price (Wechter, 2000). From the commercials, it appears that young people wanting excitement are in the target market. The vehicle is targeted to consumers who enjoy going for rides on the


open road. The Santa Fe also attracts families by providing enough room for families and cargo, without using too much fuel or being too large (Hyundai, 1999). The Santa Fe is positioned as a quality vehicle with a reasonable price, apparently going after the first-time buyers and young families as Hyundai did with their other vehicles.

Advertising Adaptation Decisions

Advertising and Promotion Decisions in Korea The intensive advertising launching period for the Santa Fe took only three months in Korea. After the launch, maintenance advertising was used with minimal advertising expense. HMK wanted to maximize the advertising impact while carefully considering cost. A pre-marketing event was held prior to any advertising. Press announcements were made about the new model exhibition. Members of the press were invited to test drive the vehicle. In addition, it is very important to note the number of news stories about the Santa Fe that appeared in the media since the CUV/SUV is a relatively new concept in Korea. The news stories increased the awareness level of consumers and shortened the duration of the intensive advertising launch necessary to reach planned sales levels.

The fact that the Korean population is relatively homogeneous, sharing the same cultural heritage, and marketing management factors (Jain, 1989) apparently played a role in the need for only a short duration for the launch period, The media schedule was very intense during the launch and the media mix was very efficient. Television, newspaper, magazines, and radio were used to release information about the Santa Fe. However, newspaper and magazine advertisements were used initially to provide a lot of information. The newspaper and magazine ads were related and the television and radio commercials were related.

The communication in Korea was intended to entice potential consumers, especially those who drove mid-size passenger cars and remove entry barriers. Hyundai wanted to establish a new upscale, brand image while maintaining a value position in the SUV market. Differentiation from other SUVs was achieved by utilizing an expression strategy, again trying to reach the target market that views the vehicle as important to his personality. The expression strategy differentiated the Santa Fe by combining riding comfort and safety in its message. The word "fusion" was used in the expression strategy to differentiate the Santa Fe from competition. As Taylor et al. (1994) point out, using brand differentiating messages are likely to make the commercial much more effective, enhance attitudes toward the ad, improve brand image, and improve the likelihood of


purchase intention. The advertising concept was to show an urban SUV with a high-class style. The creative strategy showed driving in the city and also emphasized romance and fantasy and helped create an envious position for the owners of the Santa Fe. The "fusion" strategy changed to "attraction in the city" in 2002. The driving image projected was different from the existing SUVs to maximize its high-class image. The outstanding running capacity was also highlighted in the advertisements. It is important to note that other than vehicle type, English expressions were not used in the Korean promotions in 2001.

Special promotions, such as the exhibition were beneficial to the successful launching of the Santa Fe. Also, HMK used its support and sponsorship of sports to generate awareness of the Santa Fe. HMK's support and sponsorship of sports include being the official sponsor of World Cup 2002, the operation of a famous golf course at a Korean resort, a baseball team, and advertisements at many sports arenas.

Advertising and Promotion Decisions in United States On the other hand, the U.S. market is larger and more heterogeneous than the Korean market. Target customers are more difficult to reach given the number of different media vehicles available. Hyundai is not a major player in the U.S. and it did not have an intensive distribution network. The Santa Fe concept car was unveiled at the North American International Auto Show in Detroit in early 1999 with the vehicles to be available at dealers in the U.S. in spring 2000 (Hyundai Unveils, 1999). The launch in the U.S. was delayed for two years while market testing in Korea was conducted. Testing of 100 vehicles in all types of climates also took place in the U.S. before the launch. Perhaps even more significant was the extensive warranty that Hyundai offered on all of its vehicles to show a longtime commitment to its customers.

The delayed launch and the warranty as well as the design and brand became key components of the launching strategy and the message platform. The Santa Fe was named after a capital city in the Southwestern U.S. with the intent of showing a rugged Western character with style and sophistication. The desert in the Southwest provided many ideas for the Hyundai (Hyundai, 1999).

For Hyundai Motor America, the advertising strategy was developed to increase consumer sales of the Santa Fe. Hyundai did not want to rely on fleet sales or rebates. Instead, their incentive strategy was to reduce the customer rebate through a price corresponding to value (value positioning) and to offer the dealers incentives based on volume. The marketing message in the U.S. was that of a high value product that was very competitive and that had the best warranty in the industry (five years or 60,000 miles bumper-to-bumper and 10 years or 100,000 miles on the power train).


To improve their corporate and brand image and to increase brand recognition, HMA also sponsors and participates in many sports and promotion events. They have a four-year contract to sponsor the Women's United Soccer Association (WUSA). At the sporting events, they exhibit their vehicles on the grounds and they are the only automobile company that has advertising at the events. They are also the sponsor for team golf matches for three years. Through their sponsorship of golf matches, they receive the benefit of much television exposure and additional public relations through the famous golfers. Hyundai also participates in the Mongoose bicycle competition where they display the Santa Fe and receive the benefit of television broadcasts. Through exhibits and special promotions at large malls, HMA also gets much exposure from people visiting the mall, looking at vehicles, and registering for gifts.

Indicators of Effectiveness of Advertising Strategy

While it is difficult to evaluate the effectiveness of an advertising campaign based on sales since many other factors may influence a purchase, it is important to note that the Santa Fe exceeded all sales expectations. Dealers throughout the United States stated that they could sell as many Santa Fe vehicles as they could import. All Santa Fe vehicles are produced in Korea. Hyundai had the best first quarter profit performance ever after the introduction of the Santa Fe. Consumers' awareness levels were up and after the launch, many consumers said that, yes, they would consider looking at a Hyundai. Perhaps, another important indicator of advertising effectiveness and performance success was the fact that for the first time ever, a Korean vehicle (the Santa Fe) topped the vehicle segment in satisfaction. The Santa Fe beat both Honda and Toyota (Kiley, 2001). In fact, the 2001 APEAL (Automotive Performance, Execution, and Layout) study conducted by J. D. Power gave the Hyundai Santa Fe the score of 856, which is 17 points higher than the Toyota Rav 4. Finally, the consumer response and consumer comments have been very positive. The positive awareness and sales results of the Santa Fe, which only has worldwide capacity for 120,000 units encouraged Hyundai to build a production site in the United States. Recently, Hyundai announced that it had selected Alabama for its first U.S. assembly plant with production beginning in 2005 (Brooks, 2002).


As illustrated by the Hyundai Santa Fe, a local adaptation advertising strategy combined with a quality product, is an effective means for creating a positive brand image and for overcoming negative country-of-origin effects. Although


Korean vehicles were viewed as cheap, low quality cars, the Hyundai Santa Fe has gotten great reviews. The delayed launch of the Santa Fe, which helped insure that high quality standards were met, and the best warranty program in the automobile business provided platforms for advertising messages that got consumers' attention and reduced their perceptual risk. As a result, the sales results and satisfaction ratings exceeded expectations.

As globalization continues and MNCs expand their production facilities around the world, the effect of country-of-origin effects should change. As the knowledge and skills to produce quality products spread to other countries, a re-evaluation of products and country-of-origin should take place. This raises interesting questions for companies such as Hyundai Motor Company, Korea, who is building a production plant in Alabama. Hyundai successfully integrated design teams and production teams from around the world creating a very successful marketing strategy. The efficient coordination of marketing efforts between HMA and HMK was critical to the market success in the U.S. Interestingly, it appears that other automobile manufacturers may have taken note of Hyundai's success and their quality initiatives, with another major automobile manufacturer now offering an extended warranty.

A C K N O W L E D G M E N T S

The authors gratefully acknowledge the assistance of Dr. S. W. Chung and Mr. H. K. Lee at Hyundai Motor Company, Korea. Their input and feedback on a previous version of the manuscript is greatly appreciated.

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EMOTIONAL AND RATIONAL

ADVERTISING MESSAGES IN

POSITIVE AND NEGATIVE

POLISH MEDIA CONTEXTS

Patrick De Pelsmacker, Dominika Maison and

Maggie Geuens

ABSTRACT

An emotional and a rational advertising message for a new brand o f juice are tested in a positive and negative newspaper context in a sample o f 100 young Polish consumers. The positive context leads to more positive attitudes and to better ad content recall. The rational advertising message results in significantly more positive attitudes, in a higher purchase intention, and in better ad content recall. The attitude towards an emotional ad and ad content recall are significantly more positive in a positive context. Purchase intention and content recall as a result o f rational ads are higher in a negative context.

INTRODUCTION

The attention to, and elaboration of, advertising stimuli by individuals are influenced by three categories of factors. First of all, the characteristics of the


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122 PATRICK DE PELSMACKER ET AL.

individual may enhance or hamper the elaboration of the message (e.g. Geuens & De Pelsmacker, 1999, 2001; Moore et al., 1994; Vakratsas & Ambler, 1996). Secondly, situational factors may influence ad elaboration. One example is the environment of the subject at the time of the exposure. Another type of situational influence is the (perceived) characteristics of a newspaper, magazine or television program in which the ad is embedded. These characteristics of the source of the message (the medium) may be carried over to the advertising message itself (Schumann & Thorson, 1990). One of these situational factors that have been frequently studied is media context, i.e. the characteristics of the content of the medium in which an ad is inserted (articles in a newspaper, spots in a television program), as the individuals who are exposed to it perceive it (e.g. Perry et al., 1997). Finally, certain characteristics of the stimulus itself, such as format and content, may affect its processing (e.g. De Pelsmacker & Van den Bergh, 1998; Leather et al., 1994; Stewart & Koslow, 1989).

The purpose of this study is to investigate the impact of a situational and a stimulus factor, more specifically negative and positive media context and emotional and rational advertising stimuli on ad and brand responses in a Polish context. Three research questions will be explored:

(1) Does a positive media context lead to more positive or more negative attitudes towards ads and brands than a negative context?

(2) Does an emotional advertising message lead to more positive or more negative attitudes towards ads and brands than a rational one?

(3) What is the interaction effect between context type and message type on attitudes towards ads and brands?

Media context factors are highly relevant, both from a theoretical and a managerial point of view. As Lynch and Stipp (1999, p. 15) indicate:

The available research evidence [on qualitative viewing factors that influence ad effectiveness] is far from satisfactory and more research in this field should be strongly encouraged.

Aylesworth and MacKenzie (1998) make a similar remark. From a theoretical point of view, the issues raised are important to our understanding of moderating effects in advertising. This is even more relevant since previous empirical evidence regarding these media context effects is often contradictory. From a managerial point of view, media context effects are central to, amongst others, media planning and ad pre-testing. As to the former, the effectiveness of advertising may be greatly improved by embedding it in the appropriate context. As to the latter, if media context proves to be relevant, ad pretests that do not take this factor into account may become less useful or even totally irrelevant.

Emotional and Rational Advertising Messages 123

RESEARCH HYPOTHESES

Positive and Negative Contexts and Advertising Effectiveness

There is a body of research that suggests that a positive or positively evaluated context, or a context that evokes a positive mood, leads to less ad processing. This phenomenon is explained by the fact that a positive mood reduces the processing of stimulus information. Mackie and Worth (1989) and Lee and Sternthal (1999) explain this phenomenon by means of the cognitive capacity theory: a positive mood activates an array of information in memory that limits the recipient's processing of incoming information. According to the feelings° as-information theory, people who are in a good mood will avoid all stimuli (such as ads) that could alter this situation. The opposite takes place when they are in a neutral or a bad mood (Kuykendall & Keating, 1990; Worth & Mackie, 1987). According to these hypotheses, it may be expected that people who are in a good mood as a result of seeing a media context that they like, may avoid paying attention to ads embedded in this context, and may process them less intensively.

However, there is even more evidence that people who are in a good mood (as a result of being exposed to a positively evaluated context) like ads more and are more capable and willing to process message information. The excitation or affect transfer hypothesis (Cantor et al., 1975; Tavassoli et al., 1995) states that the positive evaluation of the context is transferred (or misattributed) to the ad, as a result of which the ad is also positively evaluated. The hedonic contingency theory (Lee & Sternthal, 1999) explains this phenomenon by arguing that people in a positive mood process a stimulus more intensively because they believe that the consequences are going to be favorable. Isen (1984) argues that knowledge structures (associative networks) associated with good moods are generally more extensive than structures that are associated with bad moods (affective priming). Aylesworth and Mackenzie (1998) offer another explanation. According to them, people who are in a good mood after seeing a program are less inclined to analyze it further, and therefore are more capable of processing the ad centrally. As a result, a media context that is well appreciated may lead to a more positive appreciation of the ad shown in that context and to more elaborate ad processing.

The excitation transfer hypothesis and related theories have been confirmed in several other studies (Goldberg & Gorn, 1987, Murry et al., 1992, Lynch & Stipp, 1999, De Pelsmacker & Geuens, 2002). All in all, there is more support for it than for alternative theories. Therefore, we expect the excitation transfer theory in general to also hold in the Polish context. This leads to the following hypothesis:


HI: The attitude towards ads and brands, the purchase intention of brands, ad content and brand recall, and the perceived profile of users of the advertised brands are more positive in a positive media context than in a negative media context.

Emotional and Rational Advertising

Emotional appeals can be defined as stimuli that are aimed at evoking affective reactions and feelings. Rational appeals induce a process of cognitive elaboration. Emotional messages try to convince the consumer by using nostalgic, humorous or warm cues. Often reference is made to 'feel good' and/or 'family life' arguments and pictures. Since the early eighties more and more empirical research has been focused upon the effectiveness of emotional advertising. Stewart and Furse (1986) found that brand differentiating messages are the single factor most closely associated with recall and other measures of advertising effectiveness. These messages can be used as a part of emotional and rational appeals. Most previous studies come to the conclusion that emotional stimuli lead to more positive reactions than rational or purely informative ones, especially in low involvement situations (Hitchon & Thorson, 1995; Ray & Batra, 1983). For instance, Aaker and Bruzzone (1981), Aaker et al. (1986), De Pelsmacker et al. (1998) and Geuens and De Pelsmacker (1998) conclude that warm 'feel good' advertising reduces irritation and leads to a more positive attitude towards the ad and the brand, and a higher purchase intention. The effect of emotional ads on ad and brand recall is less clear. De Pelsmacker and Geuens (1996) and Goldberg and Gorn (1987) found that rational stimuli result in better ad and brand recall. On the other hand, De Pelsmacker et al. (1998) and Aaker et al. (1986) find higher levels of recall for emotional ads.

The vast majority of these results suggest that emotional advertising leads to more positive ad responses. The explanation for this may again be found in the affective priming theory (Isen, 1984): positive feelings or good moods as a result of seeing the ads lead to more extensive associative networks than the neutral moods or feelings that are evoked by rational stimuli. We expect this to be true also in the Polish situation. The following hypothesis can be advanced:

H2: The attitude towards ads and brands, the purchase intention of brands, ad content and brand recall, and the perceived profile of users of the advertised brands are more positive as a result of the exposure to emotional ads than to rational ads.


Interaction Between Context Style and Message Style

Some types of context may be more supportive for certain types of advertising than others. More specifically the role of ad-context congruency has been studied. Although some results point in the direction of a negative effect of ad- style congruency (Derks & Arora, 1993; Meyers-Levy & Tybout, 1997), most studies find a positive effect of congruency on ad and brand attitudes and recall. For instance, Aaker and Brown (1972) found a significantly positive effect of congruency on print advertising effectiveness. Although Perry et al. (1997) concluded that advertising was less effective in a humorous context, this was far less the case if the ads themselves were humorous. The explanation for this effect can be found in the priming principle (Yi, 1990, 1993). A certain context style may activate knowledge structures that make the processing of messages similar to this particular context easier. For instance, a rational context can serve as a primer to make the consumer more susceptible to a congruent ad style (in which rational arguments are used), as a result of which the ad is processed more intensively. Also, the congruency between the type of mood evoked by the context and the ad may serve as a primer for ad processing. Ads that show elements that are relevant to or congruent with the mood of a subject at that particular moment may be accessed and processed more easily. This effect is called the mood congruency-accessibility hypothesis (Goldberg & Gom, 1987; Perry et al., 1997).

On the basis of these theories and results, it can be expected that ads showing positive emotions lead to more positive results in a positive than in a negative context. Emotional ads in positive contexts are expected to lead to more positive results than emotional ads in negative contexts, since there is less congruency between the ad type and the context type. For rational ads, no difference between an emotional and a rational context is expected. For the same reason it may also be expected that emotional ads in negative contexts lead to more negative results than rational ads in negative contexts. There is a body of research that suggests that a negative context, or a context that evokes a negative mood, leads to better information processing. Furthermore, the feelings as information theory suggests that, when people are in a negative mood, they will look for stimuli that could alter this situation (Worth & Mackie, 1987; Kuykendall & Keating, 1990). As a result, when people are in a negative mood, information processing takes place more carefully. Therefore, it can be expected that rational and informative ads are better processed and, as a result are more convincing and better recalled in a negative than in a positive context. This leads to the following hypothesis with respect to the interaction effect between context and ad style:


H3: Emotional ads in positive context lead to a more positive attitude towards the ad and the brand, and a more positive purchase intention, and better ad content and brand recall than emotional ads in a negative context. This is not the case for rational ads. Emotional ads in a negative context lead to more negative effects than rational ads in a negative context. Consequently, rational ads lead to more positive effects in a negative context than emotional ads.

RESEARCH DESIGN

Independent Variables

The study was conducted early 1999 in Warsaw (Poland). The research questions are investigated on the basis of a between subjects (2 x 2) experimental design in which two types of contexts and two types of advertising stimuli are manipulated as independent variables. As media contexts, two fictitious newspaper pages were created. The first page only contains positive news and pictures with positive headlines, e.g. 'Warsaw in flowers,' 'Smiling children.' This will hereafter be referred to as the 'positive context.' The second page contains only bad news, negative pictures and negative headlines about accidents and crime. This newspaper page is further referred to as the 'negative context.' The contexts were tested in a jury of 20. All of them categorized the positive page as significantly more positive than the negative one. Two different advertising messages for a non-existing brand of peach juice Natura were created, i.e. an emotional and a rational one (see the previous section for a definition). Both ads showed the product. In the first stimulus, mainly emotional arguments are used: 'Peach juice Natura is fruity, natural, tasty and fresh. It is exactly what your family needs. You have to try it. I t ' s the best. Feel the taste of Natura.' This ad will hereafter be referred to as the 'emotional message.' In the second stimulus only rational arguments are used: 'Peach juice Natura contains many vitamins and ingredients needed by your body. Two glasses of juice are sufficient to fulfill the daily needs of your body for vitamins B and C. Moreover it contains many other healthy ingredients. Natura means health.' This ad will be referred to as the 'rational message. ' Again, a jury of 20 judged the nature of the stimuli, and all agreed that the emotional message was indeed more emotional and less rational than the rational one, and that the rational message was less emotional and more rational than the emotional one.


Participants

The (2 x 2) design implies that each type of ad was inserted in each type of context. The ads were embedded in the newspaper page. A sample of 100 Polish students, aged between 16 and 19 was selected and randomly divided into four groups of 25. Each group was assigned to one of the four experimental conditions. The participants were told that this was a test of a new newspaper. Nothing was said about the ad inserted in the newspaper page. Each separate group received their version of the page. They were asked to look at it and read it for five minutes. After that, the pages were collected and questionnaires were distributed for the participants to fill in.

Dependent Variables

Advertising effectiveness was measured by means of the following variables: attitude towards the ad, attitude towards the brand, purchase intention, user image, brand recall and ad content recall.

The attitude towards the ad (Aad) was measured on the basis of seven items: I like the ad, the ad attracts the attention, the ad is reliable, understandable, I like the picture, I like the text, the ad is convincing. Principal components analysis reveals that only five of these items load on the first factor extracted, and two on the second factor. However, correlation and Cronbach alpha analysis shows that this second factor was not a reliable construct. The correlations between the five items of the first factor are all above 0.40, and the Cronbach alpha of this reduced scale is 0.8254. It was therefore decided to define Aad as the average score on the following five items: I like the ad, the ad is reliable, I like the picture, I like the text, the ad is convincing. The attitude towards the brand (Ab) was measured by means of three items: this juice looks tasty, this juice looks healthy, and this juice seems to be of high quality. Principal components analysis shows that all three items load on one component. Again, the correlation coefficients are all above 0.40, and the Cronbach alpha is 0.7160. Ab was defined as the average score on the three items. Purchase intention (PI) was measured by means of two items: I would like to try the juice; I would like to buy the juice. The Cronbach alpha of the scale is 0.8426. PI was defined as the average score on the two items. All items were scored using six categories (1 = definitely not - 6 = yes, definitely).

The user image was measured by means of the following procedure. Participants were asked to associate the person who would drink the juice with each of thirteen descriptions. They were asked to answer 'yes ' or 'no ' to the


question whether the person was: merry, aggressive, sad, unattractive, quiet, enticing, surprising, inventive, ordinary, exciting, boring, repulsive and gentle. Finally, participants had to indicate for which brand they had seen an ad (brand recall), and to describe as many advertising arguments they recalled. On the basis of the answers to the latter open question, a five-category variable was constructed (ad content recall), in which 0 means no single element was recalled, and 1-4 means the number of arguments that were correctly remembered.

R E S U L T S

The ANOVA results on the main effects of context type and ad type are shown in Tables 1-4. On the basis of these results, hypothesis 1 can be largely accepted. The type of context has a significant effect on the attitude towards the ad and ad content recall (Tables 1-2). A positive context leads to a more positive attitude towards the ad than a negative context (3.676 vs. 3.252). The difference between the scores is small, but statistically significant. A positive context also results in better ad content recall than a negative one (1.320 vs. 0.780). The type of context does not influence brand recall, the attitude towards the brand and purchase intention. Apparently, the type of context only impacts ad-related responses. Brand-related effects are unaffected. A large number of the perceived user profiles are not influenced by context type. However, participants regard the potential user of the product as having more positive characteristics (merry, attractive, gentle, not ordinary) when the ad is shown in a positive context (Table 3).

The type of message has an even more significant impact on most ad responses (Tables 1-2). Rational as opposed to emotional ads lead to a significantly more positive attitude towards the ad (3.620 vs. 3.308), a more positive attitude towards the brand (4.013 vs. 3.572), a higher purchase intention (3.940 vs. 3.470), and better ad content recall (1.280 vs. 0.820). Again, brand recall is not significantly affected. Furthermore, rational ads result in a clearly significantly more positive perception of the user image of the product. Seven of the thirteen user profiles are more frequently and positively associated with the rational message type: merry, enticing, surprising, inventive, attractive, exciting, and not ordinary (Table 4). On the basis of these results, hypothesis 2 has to be rejected. Contrary to the expected superiority of the emotional ad, the rational ad seems to be more effective.

ANOVA-results of the interaction effects between the type of context and the type of message on ad responses are shown in Table 1 and Fig. 1. The attitude towards the ad, ad content recall and purchase intention are significantly affected by this interaction effect. The attitude towards an emotional ad is

Emotional and Rational Advertising Messages

Table 1. Analysis of Variance Results. Context and Message Type and Ad Responses.

129

Dependent variables Source of variation df F-value p-value

Attitude towards the ad

Attitude towards the brand

Purchase intention

Ad content recall

Type of context (A) 1 7.228 0.008 Type of message (B) 1 3.914 0.051

A x B 1 5.928 0.017 Type of context (A) 1 2.674 0.105 Type of message (B) 1 11.376 0.001



A x B 1 7.844 0.006

Table 2. Main Effects of Context Type and Message Type on Ad Responses: Cell Means and Standard Deviations.

Context Type Message Type

Negative Positive Emotional Rational

Attitude towards the ad 3.252 3.676 3.308 3.620 (0.959) (0.651) (0.8696) (0.7931)

Attitude towards the brand 3.687 3.900 3.572 4.013 (0.675) (0.691) (0.660) (0.649)

Purchase intention 3.590 3.820 3.470 3.940 (1.039) (1.077) (1.081) (0.993)

Ad content recall 0.780 1.320 0.820 1.280 (1.093) (1.491) (1.305) (1.325)

Cells are scores on 6-point scales (Aad, Ab and PI) and 5-point scale (Ad content recall)

Table 3. Context Type and User Image.

Context Significance

Characteristic Negative Positive Chi 2 value p-value

Merry 14 38 7.484 0.006 Ordinary 74 58 2.852 0.091 Not attractive 18 6 3.409 0.065 Gentle 26 42 2.852 0.091

Cells are percentages. Only the user image results are shown that are significant at the 10% level.


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Emotional and Rational Advertising Messages

Table 4. Message Type and User Image.

131

Message Significance

Characteristic Emotional Rational Chi 2 value p-value

Merry 6 46 20.790 <0.001 Enticing 6 22 5.316 0.021 Surprising 10 24 3.473 0.062 Inventive 4 26 9.490 0.002 Ordinary 78 54 6.417 0.011 Not attractive 22 8 3.843 0.050 Exciting 0 16 8.696 0.003

Cells are percentages. Only the user image results are shown that are significant at the 10% level.

significantly more positive in a positive context than in a negative one (3.712 vs. 2.904). In a negative context, the attitude towards emotional ads is significantly more negative than the attitude towards rational ads (2.904 vs. 3.600). Similarly, emotional ad content recall is more positive in a positive context than in a negative one (1.440 vs. 0.200). In case of a negative context, emotional ads are less well remembered than rational ads (0.200 vs. 1.360). Purchase intention as a result of emotional ads is significantly more positive in a positive context than in a negative one (3.880 vs. 3.060). Hypothesis 3 can be largely accepted.

DISCUSSION, MANAGERIAL IMPLICATIONS AND SUGGESTIONS FOR FURTHER RESEARCH

Ads embedded in positive advertising contexts lead to a more positive attitude towards the brand, a more positive perception of brand users, and to better ad content recall. This is consistent with the affective priming principle (Isen, 1984) and with the excitation transfer hypothesis (Tavassoli et al., 1995). Brand attitudes, purchase intention and brand recall are not positively affected. Again, this is in line with previous results (De Pelsmacker & Geuens, 2002). Apparently, positive contexts lead to better elaboration and a more positive impression of the message without any carry-over effect to the brand. However, for instance De Pelsmacker et al. (1998) have shown that brand attitudes are positively correlated with the attitude towards the ad. Maybe the effect measured here is only the first stage in the elaboration process, and multiple exposures to ads embedded in a positive context may eventually also lead to positive brand attitudes and purchase intentions. More research is needed to explore this possibility.


Rational ads lead to more positive ad and brand responses and to a significantly more positive perception of the users of the product. This is contrary to expectations based on previous research (e.g. Geuens & De Pelsmacker, 1998; Hitchon & Thorson, 1995). This result is even more unexpected because peach juice can clearly be regarded as a low involvement product. Most empirical results support the superiority of emotional advertising especially in the case of low involvement situations (e.g. Ray & Batra, 1983). Several explanations for this result can be advanced. First of all, the experiment was only based on two types of messages for one product. It may simply be the case that for this particular product the 'healthy ingredient' claim is more appealing than the 'feel good' argument, and that this result says more about the expectations of Polish youngsters towards peach juice than about the effectiveness of emotional or rational claims in general. More research with other types of products and other emotional and rational claims is therefore needed. Secondly, Poland is a country with a relatively young tradition in advertising, at least when compared to the environments in which most of the previous studies were conducted. Earlier research (De Pelsmacker & Geuens, 1998; Geuens & De Pelsmacker, 1997) suggests that the attitudes of Polish consumers towards ads and brands are more positive when the ads contain more rational claims. Maybe Polish consumers expect from advertising to learn from the brand rather than to be entertained by it. Again, this result requires further confirmation.

Emotional messages lead to more positive ad and brand responses in positive than in negative contexts, and in negative contexts emotional messages lead to more negative responses than rational ads. This is in line with the mood congruency accessibility hypothesis (Perry et al., 1997) and the priming principle (Yi, 1990, 1993). Congruency between the style of the context and the nature of the message leads to more elaborate processing and to more positive attitudes. Furthermore, the feelings-as-information theory (Kuykendall & Keating 1990) is also supported. Rational ads, as opposed to emotional ads, result in higher ad content recall and purchase intention when embedded in a negative context. Apparently, rational-analytical ads are more carefully processed as a result of the fact that people react upon the negative mood generated by a negative context. Again, as could be expected, the attitude towards the ad itself is not affected: although the ad in itself is not considered to be more likeable, it is better processed.

Some managerial implications of our findings can be stated. First of all, although in general positive context lead to better advertising results, this is not at all the case for rational messages. They seem to be better processed in a negative context. Media planners should take this phenomenon into account by considering more carefully the qualitative aspects of their insertion strategy. A


positive media context is called for in case of emotional advertising, while a negative context may be instrumental for the elaboration of more rational ads. There are also implications for ad pre-testing. Testing an ad in a particular context or without any context is potentially biasing. It may lead to misleading results, depending upon the style of the ad and the nature of the context. Therefore, ads should be tested with a specific insertion strategy in mind.

The experiment was conducted in a specific cultural environment, in a fairly limited group of youngsters, for one specific product, and only in a newspaper context. Needless to say the results need confirmation. Suggestions for further research include the effect of positive and negative contexts on ads for other types of products, and the study of context effects in other media. Different types of consumers may also react differently to different ad-context type combinations. Given the unexpected results on the responses to rational and emotional ads in this Polish context, more cross-cultural corroboration of the findings is needed.

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ADVERTISING IN THE CZECH

REPUBLIC: CZECH PERCEPTIONS

OF EFFECTIVE ADVERTISING

AND ADVERTISING CLUTTER

Charles R. Taylor, P. Greg Bonner

and Michael Dolezal

ABSTRACT

This paper examines Czech expectations of their advertising, the perceived intensity level of that advertising, and how various cultural factors affect the efficacy of that advertising. Findings suggest that the hypothesis that transitioning economies may be free of advertising clutter to no longer be true in the Czech Republic. Information gleaned from in-depth interviews and a survey suggests that effective Czech advertising reflects the collectivistic nature of the culture as well as the contextual level of communication. Simple, direct approaches that inform, along with the use of clever, humorous creative and group depictions, are often effective.

INTRODUCTION

The interest in transitional economies continues to be fueled by both external and internal pressures for growth. Mult inational corporations view evolving


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138 CHARLES R. TAYLOR, P. GREG BONNER AND MICHAEL DOLEZAL

transitional economies as fertile ground to expand brand dominance. Years of pent up demand promise sales growth rates far exceeding those available in mature economies once the necessary economic infrastructure, wealth accumulation and domestic investment are in place. Similarly, local businesses are pushing to take advantage of rapidly expanding domestic opportunities and will not cede market dominance to multinationals without a fight. One of the marketing necessities to gain consumer acceptance in these evolving environments is to communicate product or service solutions effectively with potential consumers.

The transitional economies of Eastern and Central Europe have emerged from years of centrally planned rather than market-driven allocations of both resources and goods. Advertising had a minimal role in these planned economies and now, with the transition to a re-emergence of the market, advertising is again being utilized to communicate, persuade and build brand identity in the region. Numerous cultural, institutional and societal factors are posited to mediate the effectiveness of advertising. The purpose of this article is to examine perceptions of the intensity of advertising, to understand what is valued in advertising and to suggest what the cultural expectations are for advertising in the Czech Republic.

The study's specific goals are to provide a better understanding of the current advertising environment in the Czech Republic and to provide a preliminary analysis of the nature of effective advertising in the country. On the latter point, a multi-method approach using the results of both an exploratory survey and depth interviews is used in order to outline key characteristics of effective advertising in the Czech Republic. As there has been very little research reported on Czech advertising, it is hoped that these findings will serve as a basis for hypotheses for future researchers.

LITERATURE REVIEW

Advertising in Transitional Economies

An investigation into the role of advertising in transitional economies like the Czech Republic seems warranted given the importance of the communication process to the market development. Advertising can be conceptualized (Cheng & Schweitzer, 1996) as an evolutionary process based on its stage of development, and the efficacy of the advertising may vary across these four stages, production information, product image, personalization, and lifestyle (Leiss, Kline & Jhally, 1990), based on content and design features of the advertisement.

Advertising in the Czech Republic 139

Understanding where a transitional economy lies on this evolutionary continuum has implications for those involved in the design of advertising programs in such economies. Batra (1997) suggests consumers in transitional economies may be more responsive to facts and information than image-related communications. Van Herpen et al. (2000) found that advertisements in transitional economies do, in fact, contain more product-related information. Further, the authors suggest that the exposure to increasing amounts of advertising may be at least partly responsible for advancing an economy along the sequence of stages. Research is required to understand where an economy currently lies because placement on the continuum should not be merely a function of time lapse since the initialization of widespread advertising. Consumers in those countries where advertising growth first occurred were not exposed to potential influences on attitude-toward-advertising-in-general from more communication-experienced external economies. The United States, for example, took seven decades to evolve through the four stages of advertising development suggested by Leiss et al. (1990). However, due to advertising spillover, exposure during travel, and the input of multinationals into domestic advertising practices, one may expect the evolution of the sequence of advertising stages to be more time-compressed in economies transitioning to a market economy at this time.

Attitude Toward Advertising in General

The attitude-toward-the-ad construct is viewed as mediating both brand attitudes and purchase intentions (Andrews, 1989; Lutz, 1985; Mitchell & Olson, 1981; Shimp, 1981). Further, attitude-toward-advertising-in-general is considered a key antecedent of attitude-toward-the-ad. If Aad_g does in fact mediate Aad, which, in turn, affects advertising effectiveness, and, if Aad_g truly varies across cultures (economies), then it is important for communication practitioners to understand the magnitude of these differences. Andrews et al. (1994) found support for their hypothesis that Russian respondents will have a more favorable attitude- toward-advertising-in-general than respondents from the United States. Mehta (2000) found support for his hypotheses that individual attitudinal factors related to advertising in general do affect respondent recall and persuasion. These findings lend support to the importance of research in transitional markets that attempts to measure Aad_g.

In addition to Aad_g , we are interested in Czech perceptions of clutter. Batra (1997) states:

The low level of advertising clutter in most of these TEs (transitional economies) presents an opportunity to MNCs (multinational corporations) to build long-lasting reputational effects.


From an operational standpoint, potential advertisers need to understand if a low level of advertising clutter exists. Part of this research is designed to assess the level of clutter perceived by the Czech consumer based upon respondents' perception of advertising intensity.

Cultural Factors and Their Influence on Advertising

Several authors have posited that specific cultural dimensions have an impact on the effectiveness of advertising (DeMooij, 1998). Among the key dimensions that have been posited to play a role in advertising effectiveness are Hall 's (1976) dimensions of time and level of context, as well as Hofstede's (1980) five dimensions of culture: power distance, individualism/collectivism, masculinity/ femininity, uncertainty avoidance, and long-term orientation. Prior research has clearly established that at least some of the dimensions play a role in what advertising approaches can be effective within specific countries.

While an exhaustive review of all cultural dimensions that have been examined is beyond the scope of this paper, two dimensions for which there have been convincing findings are reviewed below to illustrate the impact such factors can have.

Additionally, how these differences affect advertising practices in Japan and the U.S. will be discussed in order to show a specific case where such factors have been demonstrated to matter and to provide a baseline for comparison to the Czech Republic.

Context Language is a central component of culture. As cultures and languages differ from each other, so do their communication practices. Hall (1976, 1987) developed the notion of cultures differing from each other in their contextual level, that is, the degree to which communication is direct and vested in the explicit code of the language. He describes the difference between high context and low context languages as follows:

A high context (HC) communication or message is one in which most of the information is already in the person, while very little is in the coded, explicit, transmitted part of the message. A low context (LC) communication is just the opposite; i.e. the mass of the information is vested in the explicit code (Hall, 1976, p. 79).

Thus, high context cultures require focus on the situation in which the communication is taking place and they tend to use indirect and ambiguous messages, whereas low-context cultures tend to use explicit, clearly articulated messages.


Contextual differences in cultures have been used to help explain differences in marketing and advertising practices. For example, contextual differences have been hypothesized to lead to differences in new product diffusion patterns (Takada & Jain, 1991), strategies for brand image creation (Roth, 1992), and advertising message strategies (Miracle, Chang & Taylor, 1992; Mueller, 1987; Taylor, Wilson & Miracle, 1994).

With respect to advertising, it has been found that Japanese consumers prefer ads that are less confrontational and take more of a "soft sell" approach (Mueller, 1987; Johanson, 1994). Moreover, Miracle, Taylor and Chang found that Japanese ads are less prone than U.S. ads to mention the brand name often or to show the brand name on screen for long periods of time. Instead, a higher proportion of the ad is typically devoted to building positive feelings toward the advertiser. Thus, in comparison to the U.S., consistent with a high context culture's communication patterns, Japanese ads have been found to be less direct in their approach.

Individualism~Collectivism Hofstede (1980, p. 87), defines individualism as "a preference for a loosely knit social structure in which individuals take care of themselves and their immediate families only," and collectivism as "a tightly knit social organization in which individuals can expect other in-group persons to look after them." Of the 53 countries he analyzed, the United States was the most individualistic. In contrast, Japan was found to be more collectivistic. Subsequently, researchers have also noted that the Czech Republic is also more collectivistic than the U.S. (Earley et al., 1999).

In relation to the information content of advertising, a high value on collectivistic behaviors may lead to a need for companies to develop some type of personal relationship with the audience. Miracle (1987) reports that the goal of advertising in Japan, which places a relatively higher value on collectivism than does the United States, is often to make friends with the consumers and to encourage them to depend on the seller. Japanese advertisements often begin by telling a story or entertaining the audience. The sequence is described as follows:

(1) Make friends with the audience. (2) Prove that you understand their feelings. (3) Show that you are nice (4) Consumers will then want to buy from you because they feel familiar with

you and trust you.

Miracle (1987) proposed that Japanese consumers follow a "Feel-Do-Learn" (i.e. affect-conation, cognition) sequence in processing persuasive messages in


contrast to the traditional "learn-feel-do" proposed in U.S. advertising models. The logic behind Western advertising does appear to be essentially the opposite. The audience is often told how the product is different and why it is preferable to other brands to establish a clear justification for purchase. Then, if consumers are satisfied with the purchase, they will begin to develop trust in the company and prefer its products. Hence, approaches in which higher information content and more focus on showing the product and brand have been demonstrated to be correlated with effectiveness in U.S. advertising (Stewart & Furse, 1986; Miracle, Taylor & Chang, 1992; Taylor, Miracle & Wilson, 1997).

In terms of Czech advertising, one would expect the Czech approach to be somewhere in between the U.S. and Japanese styles, as the Czech Republic is more collectivistic than the U.S. but slightly less collectivistic than Japan. In terms of contextual level of the culture, prior studies show that Czech culture is toward the low context end of the scale, but not as low context as is the case in the U.S.

METHOD

In order to assess the impact of cultural influences on Czech advertising, a total of fifteen in-depth interviews were conducted. All fifteen of the individuals interviewed had business experience, eight were currently MBA students in the Czech Republic. The remaining seven consisted of four advertising agency personnel and three individuals working in marketing departments of manufactured good companies. In addition to the in-depth interviews, 52 students were asked to respond to the following written question: "What is your opinion of how Czech culture influences what advertising approaches are effective in the Czech Republic." The students had been exposed to material on cultural influences on international advertising.

The second objective of this research was to attempt to identify how Czech consumers felt about their exposure to advertising in the media and what expectations they have for advertising. Marktest, a Prague-based agency, conducted a public opinion poll on a representative sample of 935 respondents in mid- 2001. Respondents rated their exposure to advertisements in various media on a three-point scale anchored with "too many," "adequate" and "may be more." There was also a "don't know" response category. Data are taken from this poll to address this objective.

RESULTS

In general, the Czech informants reported that while they believed the Czech approach to advertising is somewhere between that used in the U.S. and Japan,


they bel ieved it was closer to U.S. advertising. Three major recurring themes were evident both in the personal interviews and in responses to the specific written question about the nature of Czech advertising. These were: (1) Direct, simple messages are desirable in Czech advertising; (2) In comparison to the U.S., collectivistic themes are common and desirable in Czech advertising; and (3) Humor and clever creative approaches are a very important aspect of advertising in the Czech Republic. Each of these themes as well as some other observations are discussed below.

Collectivism The informants consistently mentioned that appeals to family happiness, togetherness, and friendship are common and often desirable in Czech advertising. One student respondent noted that popular beer commercials in the Czech Republic often show men drinking in groups at the pub and having a good time. Another observed that appeals such as "you are not alone," and "you and your friends can have a good time" are common in beer advertising.

In terms of the influence of individualism/collectivism on Czech advertising, one student wrote:

In my opinion, Czech advertising is something between U.S. and Japanese advertising. Czech people are not as individualistic as Americans because they help each other in study-groups and when a Czech student gets information about an exam he would let the other students know and not gain the advantage by himself. On the other hand, Czechs are not as collectivistic as Japanese. Czechs would not care about smoking when sitting together with friends, however, some of them would ask: 'Do you mind if I smoke here.' In seeing ads, Czechs will like to see some group settings, yet to trust the company before they buy a product is mostly not necessary.

This thinking is consistent with the notion that, to some extent, Czech advertising can successfully make appeals to a sense of belonging to groups.

Direct, Simple Message Consistent with the Czech Republ ic ' s being a relatively low context culture, the informants expressed a bel ief that simple, direct messages can be effective in the Czech Republic. Messages that simply describe how the consumer will benefit from using the product were commonly cited. For example, a very popular campaign by the mobile phone company Oskar was widely cited for its effectiveness as it made it clear that this was a service that everyone could afford. In the campaign, ordinary Czechs were seen using Oskar ' s services in cleverly developed situations.

Notably, while the respondents agreed that direct messages are helpful, there was also consensus that overly aggressive approaches can be a turn-off. For example, one professional informant who had spent time in the U.S. indicated that he was taken aback by how spokespeople in car ads could so confidently


and boldly recommend that others purchase the product. Another observed that "aggressive and rude" approaches may conflict with the cultural sensibilities of the Czech people. Hence, respondents consistently agreed that Czech adverts are more direct than Japanese adverts, but not as direct as U.S. adverts.

It was also mentioned frequently that focusing on the needs of the common person may be effective. Advertisements that Czechs can relate to as reflecting their everyday environment and how products can serve their needs were cited as good ones. Informative ads were cited as being effective, especially if the appeal was simple and to the point. Some respondents also indicated that emotional ads that show people in different types of real life situations are also positively received.

One student cited a Coca-Cola ad transferred from the U.S. as being a mistake in that it did not reflect Czech reality. The ad depicted a family consuming the soft drink during lunch. The problem was that Czech cuisine is traditionally very heavy and Coca-Cola is not viewed as helpful in digesting food while eating a large meal. Hence, it was felt that the ad was ineffective as it did not reflect an everyday type of situation.

Another issue that has sparked controversy is the use of Santa Claus in adverts that run in the Czech Republic. Unlike in the U.S. and some other places, Baby Jesus, and not Santa Claus, is the primary symbol of Christmas. Many Czechs remain sensitive to having been forced to use "Grandpa Frost," a traditional Russian symbol, prior to 1989. Some informants did indicate that while some Czechs are bothered by the use of Santa Claus, others are not, and one even mentioned he believed the advertising would eventually lead to Santa becoming a fixture in Czech holiday culture.

Humor One of the most striking aspects of the in-depth interviews was the unanimity of agreement that humor is a central feature of Czech advertisements. The informants consistently mentioned that the use of irony or clever/witty situations was an aspect of a high proportion of effective Czech adverts. One female ad agency employee suggested that, "you have to give the people clever, witty approaches." Funny stories were frequently mentioned as a way to increase the memorability of an ad. However, it was stressed that intelligent, as opposed to silly, humorous approaches tended to work the best.

One explanation that some informants gave for the importance of humor is that there is skepticism about specific claims such as "our product is of the highest quality," or "our prices are the lowest." On one hand, the informants cited the pessimism of the Czechs as a factor in this skepticism, while on the other, they noted that the Czech culture is a fun-loving one - another factor that may contribute to the success of clever, humorous approaches.


Other Issues Several respondents, especially students, were quick to point out the U.S. culture developed under heavy European influence and, hence it makes sense that Czech advertising would have more in common with the U.S. than with Japan. Others mentioned that because of heavy exposure to U.S. films and television media, young Czechs aspire to be like Americans and that future advertising may reflect this. For example, one student wrote:

• .. I want to say that if we are not now similar to Americans in advertising behavior, we will be in the future. It is because what we think about America and its people comes mainly from American films and soap operas. In these films, America seems to be the land everyone wants to live in, the people there are so nice and beautiful, everyone can sing very well, has a lot of money.., so everyone wants to be like them, like the great Americans and everybody also likes what comes from America.

When asked, the informants consistently indicated that Czech advertising is closer to U.S advertising in nature than Japanese advertising. However, the specific responses suggest it is somewhere in between the two, albeit a bit closer to the U.S. side. Quite a few respondents also mentioned music as a prominent feature in Czech adverts, indicating that if used properly it could greatly enhance

an ad ' s appeal.

Advertising Intensity Czech consumers increasingly feel they are exposed to too many television advertisements. The Czech Republic has four national channels broadcasting in the Czech language (two public and two private) and more than twenty-five local channels available through cable networks. Since NOVA, the first privately owned/broadcast television channel, came on-line in 1994 (Secunda, 1994), the number of respondents reporting "too many" in response to number of exposures to television commercials has grown steadily. In 1994, 60% responded "too many," 64% by 1996, 70.8% by 1998 and 78.7% in our current database, 2001.

Similarly, mass print mailing advertisements and direct market mailings are seen, at 73.1% responding "too many" exposures, to be far too voluminous in number. Church (1992) suggests television as the mass media with the greatest potential, and it appears that marketers have rushed like air into a vacuum to fill the Czech television airtime with advertisements. However, Church (1992) does cite direct mail as being practically non-existent. In ten years this medium has grown in intensity to the point where about 3 out of 4 Czech respondents view themselves as receiving "too many" advertisements in the mailbox.

Other media receive responses of "too many" at much lower rates. Radio came in at 30.1% and one may hypothesize at least three reasons for the much lower perceived intensity level relative to television. First, there may be significantly less advertising time utilized on radio, although this needs to


be measured in actual minutes since expenditure levels are misleading due to different rate structures. Second, with 86 different radio stations in the Czech Republic and audience demographics that indicate stations target to different audiences, respondents may be more willing accept/process advertisements targeting their demographic profile and, consequently, view them as less intrusive or intense. Third, similar to American FM radio (Church, 1992), Czech radio stations cluster their commercials resulting in less total interruptions of programming.

Magazines (35.0% "too many") and newspapers (36.1%) are viewed as having intensity levels more in line with expectations. Magazine and newspaper advertising are much less intrusive than broadcast advertising in that the reader can exercise direct control over exposure and processing time. Given this control, for many respondents the "too many" threshold for the print ads may not exist in a practical range. In fact, print media are often selected for ad content and, at least some of the time, the ad content is the driving force in the selection of the medium. Broadcast media, on the other hand, is almost totally education or entertainment driven, with few people "tuning-in" to get informational content from the advertisements. Therefore, these differences in reported intensity levels are not outside the realm of expectation.

Czech expectations of advertising are consistent with earlier suggestions of effective content for transitional economies. Czech advertising in the early nineties brought highly exaggerated promises and respondents now expect advertising to be true (57.7%). Informative (39.9%), credible (39.4) and humorous (37.6) form the next cluster of expectations. Creative, original (25.6) and expressive (20.4) are much lower among items that Czech respondents expect of their advertising. These findings are consistent with suggestions (see Heyder et al., 1992; Batra, 1997) that factual information content is more effective than image-intensive advertising content in transitional economies.

I M P L I C A T I O N S

Advertisers attempting to reach the Czech market would appear to be well advised to use approaches that are simple and direct in terms of the selling proposition. However, it is clear that relative to most countries, clever approaches that incorporate humor are especially appreciated. Approaches that consider the collectivistic nature of Czech culture should also be considered as appropriate. Especially for products that are consumed in group settings, persuasive communications that show groups having fun times are valued by the Czech public.


Advertisers must also be aware that there is some level of skepticism about advertising in the Czech Republic. Consistent with our finding that many Czechs believe that there are too many television ads and direct mailings, Czech consumers do not unquestioningly believe that everything about advertising is positive. For example, exaggerated approaches incorporating puffery are not likely to be successful. Additionally, consistent with Czech culture, aggressive "hard-sell" approaches are not likely to be effective. While many Czechs admire U.S. popular culture and see their advertising as being relatively similar to American advertising, advertisers must be cautious to use approaches that are consistent with Czech culture. Certainly, some standardized approaches can be effective in the Czech Republic, and it is likely that the general theme of most global campaigns can be communicated to Czech audiences effectively. However, the decision as to whether a specific execution needs to be modified for the Czech market should be made on a case-by-case basis.

Finally, advertisers must recognize that clutter now exists in both the television and direct mail media. While creative techniques used to break through clutter may not transport effectively from other cultures to the Czech Republic, advertisers must now be aware that this need now exists. The challenge now is to provide information effectively while also using execution approaches that gain attention.

LIMITATIONS AND FUTURE RESEARCH NEEDS

One obvious limitation is the use of a secondary data source, the public opinion poll. While these data are current and the sample representative, the breadth and specificity of the information does not allow a number of issues to be addressed. While some insight has been provided on what the Czech public expects and desires from its advertising, few content studies exist which describe what the Czech advertising content actually is (see van Herpen et al. (2000) for a content analysis of magazine advertising in the Czech Republic). Similarly the in-depth interviews tended to focus responses relative to the United States and Japan advertising environments and to "place" the Czech advertising somewhere on a hypothesized continuum between the two. Since the United States is the largest advertising market in the world, most comparative advertising studies use the United States market as one of the data points. Further, multinationals tend to look at the transitioning economies of Eastem and Central Europe as "a" potential market.

In spite of it being not much more than a decade since the Revolution of 1989 in the Czech Republic, the relatively fast development of the advertising industry has led to most Czech's actually believing that there are too many


television advertisements and pieces of direct mail. While this is not yet characteristic of other media, it does suggest that advertisers trying to reach the Czech Republic need to be aware of perceptions of clutter. Addit ional research on how the perception of clutter is affecting Czechs ' Aad_g would be useful not only for understanding Czech advertising, but also for better understanding the stages of advertising development in a transitional economy.

In terms of research on advertising executions, it is hoped that this research provides the basis for hypotheses for further research. However, in order to provide definitive evidence on which executional techniques tend to be effective in the Czech Republic, experimental research is needed. Through experimental research, we can gain empirical evidence that provides insight on what makes advertising effective by isolating the effect of very specific aspects of the ad. At the present time, a large scale survey of Czech advertising practit ioners for their perceptions of what makes advertising effective would also be worthwhile. Of course, similar research in other transitional economies would be worthwhile.

REFERENCES

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Hall, E. T. (1976). Beyond Culture. Garden City, NY: Anchor Press/Doubleday. Hall, E. T. (1987). Hidden Differences. New York: Doubleday. Hofstede, G. (1980). Culture's Consequences: International Differences in Work-Related Values.

Beverly Hills, CA: Sage Publications. Heyder, H., Musiol, K. G., & Peters, K. (1992). Advertising in Europe - attitudes towards advertising

in certain key East and West European countries. Marketing and Research Today, 20(1), 58~8.

Johansson, J. K. (1994). The sense of 'nonsense': Japanese TV advertising. Journal of Advertising, 23(1), 1%26.

Leiss, W., Kline, S., & Jhally, S. (1990). Social Communication in Advertising: Persons, Products & Images of Well-being. Ontario: Nelson Canada.


Lutz, R. J. (1985). Affective and cognitive antecedents of attitude toward the ad: a conceptual framework. In: L. Alwitt & A. Mitchell (F_As), Psychological Processes and Advertising Effects (pp. 45-63). Hillsdale, NJ: Lawrence Erlbaum.

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Miracle, G. E. (1987). Feel-do-learn: An alternative sequence underlying Japanese consumer response to television commercials. In F. Feasley (Ed.), The Proceedings of the 1987 Conference of the American Academy of Advertising (R73-R78). Columbia: University of South Carolina.

Miracle, G. E., Chang, K. Y., & Taylor, C. R. (1992). Culture and Advertising Executions: A Comparison of Selected Characteristics of Korean and U.S. Television Commercials. International Marketing Review, 9(4), 5-17.

Mitchell, A. A., & Olson, J. C. (1981 ). Are product attribute beliefs the only mediator of advertising effects on brand attitude? Journal of Marketing Research, 18, 318-332.

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Secunda, E. (1994). Commentary: brand marketing the first private national commercial TV station in central Europe. Journal of Product and Brand Management, 3(2), 37-41.

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Stewart, D. W., & Furse, D. H. (1986). Effective Television Advertising: A Study of 1000 Commercials. Lexington, MA: Lexington Books.

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Taylor, C. R., Wilson, D., & Miracle, G. E. (1997). Culture's consequences in advertising: The impact of information level strategies on the effectiveness of Korean vs. U.S. television commercials. Journal of Advertising, 26(Spring), 1-18.

van Herpen, E., Pieters, R., Fidrmucova, J., & Roosenboom, P. (2000). The information content of magazine advertising in market and transition economies. Journal of Consumer Policy, 23, 257-283.

A CROSS-CULTURAL EXAMINATION

OF THE ENVIRONMENTAL

INFORMATION ON PACKAGING:

IMPLICATIONS FOR ADVERTISERS

Michael Jay Polonsky, Les Carlson, Andrea Prothero

and Dimitri Kapelianis

ABSTRACT

This study presents a cross-cultural analysis of environmental information on packaging. We used judges and packages from four countries (Australia, South Africa, the United Kingdom, and the United States) and we asked judges to determine their own environmental information. Results suggest that whilst there is some consistency in judges' views, there are also important information differences across countries. Judges were found to infer environmental information from material that has not been considered to be environmental in nature. Our results may have important connotations for advertising, where environmental information might be offered as part of the array of product benefits being presented to consumers.

INTRODUCTION

Many consumers believe that environmental issues are amongst the most pressing problems facing society today and attempt to modify their consumption patterns in order to reduce environmental harm (Rhodes & Brown, 1998).


153

154 MICHAEL JAY POLONSKY ET AL.

For example, findings from the U.S. indicate that 54% of consumers check labels for environmental information prior to purchase (Ottman, 1993). Further, surveys have shown that approximately three-quarters of consumers in developed countries choose products that make environmental claims (Rhodes & Brown, 1998). In addition, research on OECD (Organization for Economic Cooperation and Development) countries has indicated that many consumers are willing to pay a premium for goods that are environmentally more benign (Salzman, 1991).

The importance of environmental attributes to consumers is not restricted to developed nations. For example, South African consumers are willing to pay an average premium of between 6 and 10% for environmentally friendly products (Kapelianis & Strachan, 1996). Internationally, some consumer groups have gone so far as to place pressure on firms to deliver green products (Wong et al., 1996). Globally, firms have responded by making greater use of environmental claims, both in advertising and on packaging.

The use of environmental claims has not always resulted in consumer acceptance and approval. For example, Davis (1993) reports that many consumers believe that environmental information found in advertising is misleading. This belief is evidently well-founded: a series of systematic evaluations of advertisements, using content analysis, has found support for consumers' views on the inaccuracy of environmental advertising (Banerjee et al., 1995; Carlson et al., 1993; Carlson et al., 1996; Eastefling et al., 1996, Kangun et al., 1991; Mohr et al., 1998; Polonsky et al., 1997, 1998). Thus, it may be necessary to question the effectiveness of using environmental claims since the issues involved are much more complex than many advertisers realize (Kilbourne, 1995).

Consumer views that much of the environmental information provided by marketers is insufficient and/or misleading is not restricted just to advertising but extend to packaging as well. Examinations of this information using a variety of methodologies have all arrived at the same conclusion, i.e. marketers do not provide complete information to consumers (Holloway & Wallich, 1994; Polonsky et al., 1997, 1998; Prothero et al., 1997). Even worse, not only is the information incomplete, much of it has been found to be inaccurate (Polonsky et al., 1998). Perhaps it is little wonder then that in a study of the consumer- package relationship (Underwood & Ozanne, 1998), it was found that many consumers do not generally trust the information on packaging.

Motivation for the Study

All of the previous packaging-related studies cited thus far have shortcomings, including restricted internal validity (see Polonsky et al., 1998) as well as limited

A Cross-Cultural Examination of the Environmental Information on Packaging 155

global generalizability since the occurrence of environmental information on packaging has not been examined across countries. This study will attend to these shortcomings. In addition, the present research is motivated by an assumption that seems to characterize at least some of the earlier literature and which relates to the theoretical and methodological underpinnings of certain environmental information work. Specifically, an examination of the environmental literature suggests that a number of investigators have assumed that they understand what consumers believe is the scope and nature of environmental marketing.

This assumption by some researchers may be incorrect because it is founded on their own a priori definition of the nature of environmental information, rather than relying on a discovery-based approach that uses consumers as the source of knowledge regarding what constitutes environmental information. Such an approach would allow for more grounded theory which could be empirically examined later (Wells, 1993). Furthermore, it has been suggested that such a method is the only way that marketers can truly understand the complex meaning of advertising or other multifaceted information-laden stimuli (Phillips, 1997). This becomes even more difficult once marketers attempt to examine perceived advertising meanings across countries (Lerman & Callow, 1999), especially when interpretation of advertising and the symbols used within advertising are laden with culturally specific interpretations or meaning (Leach & Liu, 1998; Lerman & Callow, 1999). We believe our results will have implications for a variety of promotional formats, including packaging, labels, as well as ads and commercials. Specifically, our findings should enable advertisers to take advantage of a broader array of environmental appeals than have been traditionally thought to exist. The remainder of this section is devoted to developing the case that at least some of the previous literature on evaluating environmental information in advertising is incomplete in terms of conceptual- ising what constitutes an environmental claim and as such reinforces the need for the research undertaken here.

Research on environmental marketing has occurred during two distinct histor- ical periods (Kilbourne & Beckman, 1998). Initially, interest in the environment seemed to peak during the 1970s, perhaps in coincidence with and spurred on by such initiatives as Earth Day. During the 1990s, environmental investigative endeavour in marketing generally centered on two focal points: consumers and firms. In the former instance (which we do not explore further in this paper), researchers examined the characteristics and incidence of consumers who engage in activities that are environmentally related (see, for example, Granzin & Olsen, 1991; Kapelianis & Strachan, 1996; Pickett et a1.,1993; Schwepker & Cornwell, 1991; Shrum et al., 1995).


In the latter instance, and of particular relevance for the present study, are investigations by another group of researchers who focused on organizational attempts to exploit consumer concern about the environment. Specifically, their studies have considered how environmental marketing by firms is being manifested (Polonsky & Rosenberger, 2001). For example, a number of researchers - including Banerjee et al. (1995); Carlson et al. (1993); Carlson et al. (1996); Davis (1993); Kangun et al. (1991); Maronick and Andrews (1999); Mohr et al. (1998); Polonsky et al. (1998); Prothero et al. (1997); and Schuhwerk and Lefkoff-Hagius (1995) - have examined environmental marketing claims as they occur in advertising or on packaging. These authors have investigated what constitutes an environmental claim and in so doing, have contributed to our understanding of how marketers capitalize on consumer concern for the environment. Some researchers (cf. Banerjee et al., 1995) have focused on the content of green claims by examining the underlying structure of environmental commercials. Similarly, Carlson et al. (1993); Carlson et al. (1996); Kangun et al. (1991); and Polonsky et al. (1997) have shown that environmental claims can be classified according to specific types.

The classification systems used for sorting environmental claims vary. For example, Polonsky et al. (1997) suggested that environmental claims can be substantive where claims relate to corporate/product environmental changes or they can be posturing where claims promote a broader philosophical stance, unrelated to any corporate action. Others have categorised environmental claims as general or specific (Maronick & Andrews, 1999); truthful or deceptive (Davis, 1993); and/or qualified or unqualified (Maronick & Andrews, 1999). In addition, some of this research has indicated that claims may vary in terms of consumer interpretation, which includes the extent to which claims are perceived to be insufficient or misleading (see, in particular, Carlson et al., 1993).

A review of these studies uncovers a phenomenon that acts as the impetus for the present research. In all of these studies, there has been a tendency to rely upon the investigator's own interpretation of what constitutes environmental information. For example, Carlson et al. (1993) utilized third-party assistants to obtain a sample of advertisements. These authors then reviewed and filtered the sample themselves to determine those advertisements that were believed to be environmental in nature. Similarly, Banerjee et al. (1995) first defined green advertising and then used this definition to screen a series of print and television advertisements that served as the ad stimuli in their research. In both of these studies (as well as others, see, for example, Carlson et al., 1996; Polonsky et al., 1997), the advertisements used in the research were deemed to be environmental because of their green content as judged by the researchers themselves thereby bypassing what consumers may have considered to be environmental information.


What appears to be missing in this research is the consumer's voice, specifically, in determining what constitutes environmental information from the point of view of consumers. As was mentioned earlier, consumer interpretation of environmental information is a core issue of concern, rather than solely considering a researcher's perceptions of how consumers identify environmental information (Phillips, 1997). Having investigators rely on their own interpretations, rather than the consumer's perceptions, may not in fact cover the true domain of interest, i.e. stimuli that consumers believe communicate environmental information. This is an important demarcation because consumers make choice decisions based on environmental information that is relevant, significant, and specific to them, which may or may not encompass what has been defined as environmental by researchers. We base this study on the argument that the degree of symmetry has yet to be determined between what consumers and researchers believe is the scope of environmental stimuli. And, as Phillips (1997) has suggested, consumers may in fact identify different information or meaning from complex stimuli, i.e. advertising, which is different from what is envisioned or planned.

Consumer interpretations of what constitutes environmental information is made even more complex by the fact that there may be geographical differences in terms of what is assumed to be environmental. As such, researchers who study green claims on a global basis would be assisted by integrating an understanding of cultural context to identify the generalisability of perceived meanings associated with words and images (Leach & Lui, 1998; Lerman & Callow, 1999) which are acknowledged by consumers to be environmental in nature. Global consistency with respect to what constitutes environmental information across locales would lend additional legitimacy to prior findings and would have substantial implications for organisations, as well as public policy makers, interested in communicating such information to consumers. In summary, little is known about what attributes consumers (as opposed to the researchers conducting the studies) consider to be environmental in nature or if there are global differences in these consumer views. Our study is aimed at partially closing these gaps in our understanding.

M E T H O D O L O G Y

Within the green marketing literature, content analysis has frequently been used to evaluate environmental information within advertisements (Carlson et al., 1996; Carlson et al., 1993) and on packaging (Polonsky et al., 1998). Some of these studies have undertaken comparisons of information in advertisements across countries (see, for example, Carlson et al., 1996). However, most comparative studies have relied on judges in one country to evaluate the environmental


information contained in advertisements from all countries examined. While the process of using judges from one country to evaluate multi-country stimuli is extensive in the wider content analysis literature, some research has indicated that it is more appropriate to compare results using different sets of judges, i.e. content analysis results from judges in Country Z for materials from Country Z are compared to content analysis results from judges in Country V for materials from Country V (e.g. A1-Olayan & Karande, 2000; Alden et al., 1999; Leach & Liu, 1998). The latter approach allows individuals to use culturally relevant criteria to interpret information (Lerman & Callow, 1999) and thus allows for differences in the operationalization of environmental information across countries (Polonsky et al., 1997), though, doing so hampers cross-country comparisons because of the dissimilarity of the stimuli that are used.

Judges' self-reference criteria or cultural bias may influence results (Alden et al., 1999; Mathews & Bradley, 1983; Leach & Lui, 1998), as the judges' country of origin may influence how they interpret environmental information within the advertisements. It is unclear how such inconsistencies would be identified in a content analysis and any global evaluation of information needs to have judges from the home country as well as judges from countries where the stimuli are not utilised. This design controls for any country-specific effects regarding either judge or package idiosyncrasies and permits two important cross-cultural comparisons. First, it is possible to determine differences in environmental claims on packages across countries (keeping judges constant). Second, the design enables comparison of judges' perceptions of the environmental information cross-culturally (keeping packages constant). In this way a true global evaluation of information can occur. This approach does raise a methodological question relating to the global reliability of evaluations. Lerman and Callow (1999) identified the complexity associated with this issue, although there have not been attempts to test empirically various approaches to measure global reliability (using judges from both the home and foreign countries) in the literature. This issue is not addressed in this paper, although it is one that is important and warrants substantial inquiry.

For this study, judges were recruited a n d content analysis stimuli obtained from four countries, i.e. Australia (AUS), South Africa (SA), the United Kingdom (U.K.) and the United States (U.S.). These countries were selected because they vary along three key dimensions, i.e. economic development, environmental awareness, and the nature of the regulatory framework governing packaging. In addition, all countries were Anglophone. This is obviously a s ine

qua non for conducting a cross-cultural content analysis of commercial communication because using countries where different languages are spoken (i.e. across or even within countries) would have required all judges to be familiar


with all the various languages used within the stimuli. This would have been difficult with a diverse range of countries, especially when the judges used are intended to represent the "average consumer."

We restricted the packaging for the study to one particular product category, i.e. dishwashing liquid detergent. Dishwashing liquids were selected for two reasons. First and foremost, these products frequently make environmental claims and can also have a substantial impact on the natural environment (Choice, 1990). Second, a preliminary examination of product categories identified numerous variations amongst most other "environmentally related" products (e.g. in the detergent market there are liquids, powders, granules, concentrated formulas, etc.) that would complicate the environmental information identification process. At the time the research stimuli were collected (1998) there were in fact limited variations within the dishwashing liquid sector. This allowed us to provide judges with a population of all readily available products, without the threat of cognitive overload or boredom jeopardizing the findings. We believe that this approach may compensate for the potential disadvantage of limited generalizability.

One researcher in each of the four countries purchased bottles of all major dishwashing liquid brands (original formulation) sold within that country. Where appropriate, brand extensions were also included - for example, anti-bacterial and sensitive formulations. However, in order to keep the size of the stimuli set manageable, scent variations, such as lemon or potpourri, were not included. Finally, in order to standardize the stimuli set, researchers bought the dominant package size in that country - for example, 28 fluid ounces in the U.S. and 750 mililiters in SA. Four sets of 64 detergent bottles were purchased: 23 in AUS, eight in SA, 13 in the U.K., and 20 in the U.S. (a complete list of brands is available in Table 1). Each researcher then posted a set to each of the other researchers. This process resulted in each individual researcher having a complete set of all dishwashing liquid bottles within each of the four countries examined.

A panel of three judges in each country (i.e. a total of 12 judges) evaluated all stimulus materials. Judges were recruited in a convenience manner but also on the basis of each researcher's evaluation of the judges' ability to undertake the task in a diligent manner. In addition, all judges had to shop regularly for products such as detergents and household cleaners which ensured that judges were familiar with the product category. Finally, none of the judges could have any specific environmental expertise in terms of environmental education or environmental orientation. Judges were compensated for their participation ($50 U.S.) in the research because of the complex nature of the task we asked them to perform.

Each judge examined each of the 64 packages and identified and described any environmental information on each container. To ensure consistency, all


Table 1.

No. Brand Name COO* No. Brand Name COO*

1 ADVANCE AUS 33 MORNING FRESH AUS 2 AJAX (ANTI) U.S. 34 NADCOR AUS 3 AJAX U.S. 35 NATURE'S ORGANICS (ANTI) AUS 4 AJAX SA 36 NATURE'S ORGANICS AUS 5 AUSTRALIAN EARTH AUS 37 NEW DAY U.S. 6 BIOCLASSIC SA 38 PALMOLIVE (ANTI) AUS 7 COUNTRY LIFE AUS 39 PALMOLIVE (ORIGINAL) U.S. 8 CYCLONE U.K. 40 PALMOLIVE (ORIGINAL) AUS 9 DART (ANTI) U.S. 41 PALMOLIVE (SENSITIVE) AUS

10 DART U.S. 42 PALMOLIVE (POT & PAN) U.S. 11 DAWN U.S. 43 PERSIL (ANTI) U.K. 12 DAWN (ANTI) U.S. 44 PERSIL U.K. 13 DAWN (SPECIAL CARE) U.S. 45 PLAINWRAP SA 14 DEMASSAGE U.S. 46 POLAGRIC SA 15 DOWN TO EARTH AUS 47 PUBLIX U.S. 16 DOWN TO EARTH U.K. 48 PURE POWER (ANTI) U.S. 17 EARTH CHOICE AUS 49 QUIX SA 18 ECOVER U.K. 50 SAUBERMAN SA 19 FAIRY (ANTI) U.K. 51 SAFEWAY U.K. 20 FAIRY U.K. 52 SO GENTLE AUS 21 FARMLAND AUS 53 SPREE AUS 22 FIESTA U.S. 54 SPRING FRESH AUS 23 GREEN CHOICE AUS 55 SQEZY U.K. 24 HOME BRAND AUS 56 SUNLIGHT AUS 25 IVORY U.S. 57 SUNLIGHT (ANTI) U.S. 26 JADE AUS 58 SUNLIGHT U.S. 27 JOY U.S. 59 SUNLIGHT SA 28 JOY (ANTI) U.S. 60 TEEPOL SA 29 KWIT AUS 61 TESCO U.K. 30 LAURA LYNN U.S. 62 TESCO (ANTI) U.K. 31 MAAA'S AUS 63 TESCO U.K. 32 MORNING FRESH U.K. 64 TRIX AUS

* COO - Country of Origin AUS - Australia SA - South Africa

(ANTI) - Antibacterial U.K. - United Kingdom U.S. - United States

j u d g e s w e r e g iven c o m m o n s t ructured ins t ruc t ions and cod ing sheets . The

d i scovery -o r i en ta t ion approach p rov ided b road o p e n - e n d e d ques t ions re la ted

to c o n s u m e r s ' pe rcep t ions and an oppor tun i ty to jus t i fy these pe rcep t ions

(Phil l ips, 1997) ra ther than p r e d e t e r m i n e d cod ing ca tegor ies of ten used in the

con ten t analys is cod ing process . As such, r e sponden t s were no t cons t ra ined by


researchers' perceptions of environmental information. On the coding sheet, judges from each country first identified any information that they perceived to be environmental on each dishwashing liquid bottle. Next, they were asked to explain why they considered this information to be environmental in nature. Third, judges stated if they considered the environmental information provided was, in their opinion, accurate or complete enough to be understood. Finally, they were asked to explain why the information was (in)accurate or (in)complete. Thus, three judges were recruited in each of four countries (12 judges in all) to evaluate sixty-four dishwashing liquid packages from each of the four countries for environmental information. This resulted in 768 observations being available for analysis. The issue of concern was whether global or macro-type consistency of views existed. The question of whether environmental information from a diverse set of English speaking countries was defined in the same way across a range of countries meant that the study focused on evaluating whether the patterns of information identified were similar across the countries.

Within this study, the information on bottles was determined to be reliable if it was recognized by at least one judge in each country. This is the same as assuming that some consumers in each country would have interpreted information in this way. No detailed empirical test of reliability was performed and more work needs to be undertaken to examine alternative approaches to evaluating cross-cultural reliability when all judges evaluate a common set of information (e.g. Lerman & Callow, 1999).

Assessment of inter-judge reliability will become an important issue in future research as more definitive categories are developed that encompass the entire range and scope of what consumers consider to be environmental information. For the present paper, it was difficult if not impossible to assess inter-judge reliability via traditional means because our judges were providing their interpretations of what they thought might comprise environmental information as opposed to determining whether a pre-identified stimulus mirrored the characteristics of predetermined categories (e.g. see Carlson et al., 1993), a process which could result in a measure of inter-judge reliability. In other words, our judges were involved in creating potential categories of environmental information rather than classifying stimuli according to a set of pre-existing environmental information categories. Our use of the Nud*ist software (see below) enabled the formation of potential categories that could be used to assess the frequency of specific environmental information forms in future content analysis research. In sum, it is hoped that the preliminary interpretations of what constitutes environmental information obtained here will eventually serve as the bases for forming exhaustive as well as unique categories of environmental information in future research.


Resul~

The data were analysed using the qualitative software package Nud*ist, (Non- numerical Unstructured Data: Indexing Searching and Theorizing) which permitted the identification of common themes and allowed for the comparison of bottles across countries as well as across judges within and between countries. The within-country analysis addresses the consistency of the judges' responses, whereas the cross-country comparison allows for an analysis of the generalizability of the results across the four countries of interest.

The amount of information considered to be environmental was considerable and is broken down into four main categories: environmental product information; ingredient related information; general product information; and informational points of differentiation. The different categories identified are illustrated in Table 2. It should be noted that Table 2 indicates where information was provided by at least one judge from any country for at least one bottle from that country. Table 2 does not indicate whether judges from only one particular country provided this information. This issue is examined separately below.

The main environmental related information which appeared consistently across packages for all four countries was in the areas of biodegradability of the product's ingredients; the phosphate-free nature of the product; the existence of a bottle which could be recycled; the inclusion of a recycling symbol; and the provision of an environmental slogan such as "Respects the Environment." Other information tended to vary between countries with the most information being provided on bottles from the AUS and the U.K. samples. In the AUS sample, six bottles had a product name perceived by respondents to be environmental, two such brands existed in the U.K., one in SA, and none in the U.S.. Many of the environmental terms described for bottles from AUS and the U.K. were found only on these particular bottles and were not located on the other bottles in each country's samples.

Listings of product ingredient information and statements about the product not being harsh on one's hands were cited across all countries. Another important category was the use of natural ingredients in products and a general portrayal of a natural image for the products, for instance via the use of pictures of fruit such as oranges, lemons, and limes.

The most frequently specified product information across countries was detail on how to use the product, whether the product had a concentrated formula, and whether the product lasted longer than its competitors. An anti-bacterial formula was also mentioned for each country except SA. Other product information tended to be noted in one or two countries only.


Table 2. A t t r i b u t e s t ha t C o n s u m e r s C o n s i d e r to b e E n v i r o n m e n t a l .

Attribute AUS SA U.K. U.S.

Environmental Product Information

Biodegradable ¢ ' Recycle bottle/symbol ¢ ' Phosphate free V' Product name V' Recycled packaging v' Reduces pollution ¢ ' Reduces waste ¢ ' Uses less packaging Reduced use of resources ¢ ' Reduces energy use v ' Environmental slogan ¢' Environmental sponsorships ¢ ' Helps conservation ¢ ' Third party endorsements V' Environmental picture Environmental award Ecological factory Please recycle bottle Synergistic formula ¢ '

Informational Points of Differentiation

v' v ' v ' v ' ¢ ' v '

v" v ' v ' V' v '

v '

v '

i /

v ' v ' ¢ '

¢, v ' v ' v '

Keep out of children's reach Don't use with bleach Eye irritant Not tested on animals Vegan approved

v ' v ' v '

¢' ¢'

v"

Ingredient Related Information

Ingredients listing Soft on hands Contains lanolin Eliminated contaminants Non-toxic ingredients Natm-al fragrance Natural ingredients Ph balanced Mild and gentle Fights germs on hands Picture of natural image

i / v ' ¢, v '

I,,' v" I,,' v ' v '

v '

¢, v '

v' v'

I,' v '

¢, ¢, ¢,

¢,

¢, v '

v '

¢,


Table 2. Continued.

Attribute Aus SA U.K. U.S.

General Product Information

How to use t/ Concentrated formula t/ Anti-bacterial t/ Careline telephone number t/ Dermatologically tested Multi-purpose use (e.g. soap) Please dispose of carefully t,,' Money back guarantee New bigger size Safe for fine washables Safe for septic tanks Use in hard or soft water

t/ t/ v' t/ v' t/

t/ t / t/

t/ t,t

t / ii

The table also shows informational points of differentiation across countries. There were three caution statements and these appeared only on U.S. bottles. There was also some limited information on whether the product was tested on animals on AUS and U.K. bottles and there was a Vegan approved logo on one bottle in the U.K. sample.

As noted, while it was not possible to determine interjudge reliability via traditional methods, there were some consistencies across judges in what they reported as being environmental. For example, the most important common finding across all judges is that environmental information is considered to be adequate only if it is explained sufficiently and in a manner that is understandable to the consumer. Judges were generally dissatisfied with descriptions that they considered to be vague and/or meaningless. The main issue here is more the adequacy of information provided, rather than its veracity. This is somewhat inconsistent with the findings of earlier studies reported in the literature (see Carlson et al., 1993).

Generally, judges were not cynical about the information provided, although there were a small number of exceptions. Rather, judges felt that much of the product information was not adequate unless it was accompanied by a detailed explanation. For example, the term "biodegradable" is not enough on its own; respondents wanted further explanation as to what this means and why it is important from an environmental perspective. For instance, one judge was uncertain whether the term referred to the product 's ingredients or to its packaging. AUS bottles tended to indicate that products were biodegradable in accordance


with a specific standard. However, our judges felt there was no discussion as to what this meant and were dissatisfied by this lack of explanation. Comments from judges reflect this dissatisfaction,

Label on the front is confusing [biodegradable label] - is the bottle biodegradable or its contents? Judge 1, U.S.

Benefits of biodegradable substances not described. Judge 3, SA.

What is anionic and non-ionic surfactants? [Reference to bottle which states 'Contains biodegradable anionic and non-ionic surfactants'] Judge 2, U.S.

Doesn't explain what biodegradable is, only that product conforms to certain mysterious standards. Judge 2, U.K.

No, although a somewhat vague explanation of biodegradable is given on the back of the container - biodegradable to Australian Standard AS4351.2/1986. This is not understandable in any meaningful way. Judge 2, AUS [A reference to information that the package conformed to biodegradable Australian Standard AS 4351].

The information is clear, but the meaning of biodegradable is not explained. Judge 3, AUS.

Not clear whether product or bottle is biodegradable. Judge 3, U.K.

Judges were more satisfied when the term "biodegradable" was explained. For instance,

Explains how the agents are used in the product and how they are biodegradable to be broken down into harmless substances by natural processes. Judge 1, U.S.

Explains that some of the ingredients are biodegradable and explains what this means. Judge 1, U.K.

Breaks down into harmless substances by sewerage treatment and natural processes - although this is the definition of biodegradable that I had always assumed, this is the first product to explain it this way. Judge 2, AUS.

166 M I C H A E L J A Y P O L O N S K Y ET AL.

In addition the use of the three-arrow recycling symbol was heavily criticized for its location on the bottom of bottles (a number of judges missed this), being meaningless to consumers, and not providing information as to where the bottles could be recycled. This is of some concern as countries around the world require the three-arrow recycling symbol whose purpose is to identify the type of plastic used and to facilitate recycling. Judges commented,

I presume the recycle symbol 1 inside is a code. Is it for me or recycling companies? Judge 2, U.S.

Ambiguous symbol, also should be clear and on front [was on bottom of bottle]. No symbol explanation for uninformed customer. Judge 2, U.K.

If I had not accidentally turned the bottle upside down I wouldn't have seen the emblem - needs to be more clearly stated. Judge 1, U.S.

The use of environmental slogans such as "caring for the environment", "respects the environment", "environmentally approved" were criticized as being emotional statements which were meaningless to consumers. Judges deemed these statements acceptable only if they were backed by other information that explained why the product was in fact "environmental." Judges even criticized one product that had won an environmental award from an outside body for not explaining why the award had been won. The following comments reflect these assessments:

Lots of other info like respects the environment - uses plant based ingredients - which I don't believe mean anything. Judge 1, AUS.

It 's the use of jargony words and phrases like this that give green products a bad name. It 's not clear or complete. It doesn't explain anything. It 's a slogan. Judge 1, U.K.

Nice, but marketing blurb, and little else. Judge 2, U.K.

No explanation, much mumbo jumbo about being synergistically empowered. Judge 2, AUS.

Listing the specific ingredients was viewed by at least one judge in each country, other than SA, as being environmental in nature. Judges felt that this


information was usually not adequately provided because it was either too technical (and thus meaningless) or because the percentage of ingredients used was not provided.

A number of judges linked the use of natural ingredients to the environment because they believed that such ingredients were self-generating. However, judges felt that not enough information was provided in relation to this link. Interestingly, the judges inferred this link as no such claim was explicitly made on any package. Remarks from the judges on this aspect include:

Suggests product has a NATURAL quality, which might imply environmental benefits also. Judge 2, U.K.

Friendly to environment as gives details of natural ingredients. Judge 3, U.K.

Natural things must be good for the environment? Judge 2, AUS.

Water is a natural element and so this product is perceived as being environmentally friendly. Judge 3, AUS.

It is also interesting that some judges identified information that one might not necessarily immediately associate with environmental issues. Common perceptions related to information about the product being soft on hands, mild and gentle, or that it fought germs. At least one judge across all countries suggested that information relating to the fact that the product was concentrated or included an antibacterial formula also inferred some environmental characteristic. Comments specific to this inference were:

Antibacterial implies that the detergent will kill off harmful substances. Judge 3, AUS.

The implication is that it is mild - no nasty chemicals. Judge 1, U.K.

This suggests that the product is very mild and not harmful to people. Judge 3, AUS.

Dirty hands spread disease into the environment in which our children must live. All germs are bad. Judge 2, AUS.

Shows the desired finish and the desire to have a clean environment free from kitchen germs. Judge 3, AUS.


It might be suggested that these general claims are designed to have this impact, i.e. infer environmental information without explicitly stating this fact. In the case of concentrated products, judges felt that less of the product would be used per wash, therefore the product would be replaced less frequently, thus resulting in less waste. However, judges recognized that this was an inference that they were making and that no actual information was related to this issue on the packaging itself. A mild and gentle formula, a product that is gentle on one's hands, or one that has been dermatologically tested, implied a formula with no harsh chemicals. Respondents again indicated that such information was not provided on the packaging itself and that this was an inference on their part. As such, judges appear to be extrapolating environmental characteristics about products based on the information they are being given.

Generally, judges were not cynical about the claims made by manufacturers with the notable exception of one Australian judge who was particularly disparaging about the information provided. Overall, although they tended to be sceptical about the use of environmental slogans, they accepted them and even praised them if further environmental information supporting the claims was also provided. Examples of praise for information provided includes,

Yes - explanatory detail on back label, attempts made to explain all terminology. Judge 2, SA.

Excellent!! Thank you for detailing this information! [Reference to list of points explaining various pieces of environmental information at the back of product]. Judge 1, U.S.

Yes - guides consumer to where product's environmental attributes are comprehensively and concisely explained. Judge 2, U.K.

Bold and highlighted - separated from other info. Explains the manufacturers' efforts, and commitment to further environmentally improved production. Judge 2, U.K.

Clearly stated and makes you think about the product. Judge 1, U.S.

Every judge identified more than one product that they considered to contain no environmental information, even though other judges in the sample identified environmental information on the bottle. In the SA sample, three of the eight bottles were identified as having no environmental information. However, two of these had a recycling symbol located on the bottom of the bottle and one indicated how much of the product should be used. One U.K. judge considered


this latter "fact" to be environmental information. Six of the 13 U.K. bottles were identified as having no environmental information. Again, a recycling symbol was found on four of these, ingredients listing on five, statements related to "natural ingredients", "concentrated", and "a new bigger size" each appeared on one bottle, which at least one judge identified as environmental in nature. For the U.S. sample, three of the 20 bottles were identified as not containing any environmental information, although the recycling logo and statements about "concentrated" and "Phosphate Free" appear on all three, ingredients listing on two, antibacterial on one. Finally, of the 23 AUS bottles, not one was cited as exhibiting no environmental information.

DISCUSSION

The purpose of this study was to investigate perceptions of what might constitute environmental information across four countries. To this end, we asked three judges in each of four countries to examine bottles of dishwashing liquid that had been purchased in the four countries used in the study, i.e. Australia, South Africa, the United Kingdom and the United State. Judges were to determine what information (if any) appearing on the bottles might qualify as being environmental and to explain why they believed the information was environmental in nature.

We found notable consistency in the judges' responses, i.e. information that was judged to be environmental across all four countries included general categories such as the biodegradability of the product's ingredients; whether the product was phosphate-free; the recyclable nature of the container; inclusion of a recycling symbol; and providing an environmental slogan such as "Respects the Environment." In addition, judges from all countries also cited product ingredient information (e.g. use of natural ingredients), statements about the product not being harsh on one's hands, and portrayal of a natural product image. Product use information, whether the product had a concentrated formula, and if the product lasted longer than its competitors were the most frequently cited features across the bottles irrespective of country of origin.

When judges were asked to explain whether a piece of environmental information was presented adequately, the most important common finding across all judges was that the environmental information needed further explanation. Judges were dissatisfied with environmental information that they interpreted as being vague and/or meaningless. From a practical standpoint, it appears that the choice to use environmental information on the bottles in this study also required accompanying detailed explanation, which was not too technical, to satisfy our judges.


From the analysis of the information collected it also appears that there ate some inconsistencies in what is believed to be environmental information across countries. For example, this study suggested that some, but not all, judges cited certain informational elements as being environmental in nature that may not be necessarily perceived within the environmental realm. These included perceptions about the product being tested on animals, concentrated, soft on hands, mild, and/or antibacterial.

While certain types of environmental information are widely used across countries further work needs to examine the occurrence of this information. That is, are the given types of environmental information equally prevalent on products across countries? There is some suggestion that this is not the case, as the proportion of bottles containing no environmental information appears to be substantially different across the sample. This finding supports the work of Carlson et al. (1996), who suggest that there may be differing levels of national environmental involvement across countries. The diversity of the information may partly relate to this. For example, it is unclear why information on animal testing appears on AUS and U.K. bottles only. Could this reflect differing stages of a greening philosophy? Alternatively, it might reflect differing interests of consumers within these countries or differing regulations. For example, many countries require firms producing plastic bottles to include the "recycling triangle" with a number indicating the type of plastic used.

Such public policy requirements may make it more difficult for marketers to standardize products and product information globally. However, the results of this study seem to suggest that it may also result in unintentionally increasing consumer confusion. That is, consumers may sense that certain product information may be environmentally oriented without fully understanding what it means. As such, public policy designed to give consumers environmental information needs to ensure that it is complete enough to be evaluated (Kangun & Polonsky, 1995). Our study appears to agree with earlier work: incomplete information causes some level of confusion, scepticism and/or concern (Davis, 1993).

Implications for Advertisers

As noted, environmental information identified by our judges varied considerably in terms of whether they considered it to be vague and incomplete or as providing sufficient and adequate detail to be understandable and appreciated. Advertisers might take note of these discrepancies because these inconsistencies offer clues as to potential differential advantages that might be exploited when green products are promoted and advertised. For example, advertisers might capitalize on the fact


that our judges appreciated attempts to clarify and substantiate the use of certain "green" terminology. Specifically, advertisers might explain how and where a product can be recycled if it is claimed to be recyclable or what aspect of the product is expected to decay and into what final form (and when) if the product is claimed to be biodegradable. In addition, simply avoiding the use of terms such as "caring for the environment", "respects the environment", and "environmentally approved" might also be of benefit to an advertiser if such claims cannot be adequately explained and substantiated. This would also prove more satisfactory to environmental groups who are quick to criticise perceived inadequate environmental actions by organizations.

One of the more interesting findings of this study is that our judges seem to infer environmental product characteristics from information that has not been considered to be explicitly environmental in nature. This result might suggest that advertisers could consider utilizing as a differentiating characteristic information that may not have been thought to be "environmental" in a traditional sense, e.g. whether the product has been tested on animals.

Yet, taking advantage of this broadened view of what constitutes environmental information could have both positive and negative consequences for firms. On the negative side, it is possible that firms may unintentionally mislead consumers, though, conversely, it may mean that firms can portray their products in ads and/or product packages and labels as having environmental characteristics without explicitly saying so. For example, concentrated products use less water, packaging and fuel in transportation, aspects which imply explicit environmental benefits. Thus, questions may arise like, what are the real environmental benefits and will consumers be able to compare unstated benefits with those explicitly made by other firms?

It may be that inferred claims are in fact more misleading than those that are explicitly stated because they do not explain the actual benefits of these products, making it even more difficult for consumers to modify behaviour to minimize the environmental harm from consumption. Thus, while inferred claims may be useful for firms they may not be beneficial for consumers or the environment.

The fact that there is inferred environmental information also has important implications for research whose focus is on green advertising and/or product labels and packaging. That is, a researcher who undertakes a content analysis on the environmental information in such sources may overlook critical types of information if the criteria are too rigidly specified. Future research needs to examine whether the explicit and inferred claims are equivalent across countries, both in terms of usage and perceptions. Much interesting work remains to be done in this field.


CONCLUSION

We attempted in this study to reveal how at least some previous research has failed to incorporate what we now consider to be a critical parameter, i.e. what consumers consider to be environmental information. Based on our judges' responses, we surmised that the range of what has been typically cited as constituting environmental information may be somewhat narrow in scope. The possibility that the array of what consumers believe to be "green" product aspects and features may be broader than previously thought, opens the possibility of new environmental themes and differentiating characteristics that advertisers may not have considered before as being viable, especially from a consumer point of view. We recognize that generalizing to consumers at large from our somewhat restricted range of judges (albeit typical consumers from four different countries) is a limitation of our research.

Yet, we also believe that our research has raised at least the potential for a broader array of new issues and intriguing questions with respect to what really constitutes environmental information. Thus, we think that this study may serve as a useful basis for future research on what may be, in actuality, a wider scope of environmental ad, label, and/or packaging claims than what has been considered previously.

ACKNOWLEDGMENTS

The authors gratefully acknowledge financial support from the American Academy of Advertising and the University of Newcastle in Australia, with whom the first author was employed throughout this project. The fourth author thanks also the Department of Business Economics, University of the Witwatersrand where he collected the South African data for this study. An earlier version of this paper was presented at the 7th Cross-Cultural Research Conference.

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ADVERTISING, TECHNOLOGY, AND THE DIGITAL DIVIDE:

A GLOBAL PERSPECTIVE

Ronald Paul Hill and Kanwalroop Kathy Dhanda

ABSTRACT

The primary purpose of this paper is to examine the digital divide so advertisers recognize opportunities, threats, and responsibilities in their use of the lnternet to promote goods and services worldwide. Through data collected by a variety of international organizations and in cooperation with the United Nations, this research explores the diffusion of information and communications technology within the context of vast socioeconomic inequalities across and inside nations. The paper opens with a brief discussion of the impact of the technological revolution on advertising, followed by a look at the digital divide. Data descriptions are presented in the next section, along with findings that provide regional comparisons. The paper closes with implications for advertising practice as well as global policy.

ADVERTISING AND THE TECHNOLOGICAL REVOLUTION

People lack many things: jobs, shelter, food, health care and drinkable water. Today, being cut off from basic telecommunications services is a hardship almost as acute as these other deprivations, and may indeed reduce the chances of finding remedies to them. United Nations Secretary-General Kofi Anan (in Norris, 2000, p. 5).


175

176 RONALD PAUL HILL AND KANWALROOP KATHY DHANDA

There is little doubt that the field of advertising is changing as a result of technology innovations introduced towards the end of the 20th century. For example, the introduction of high-resolution/high-definition television, fiber optic transmission of sound and video, and computer integration of entertainment systems have transformed dramatically the quality of TV programming (Morgan & Cameron, 1990). According to Rust and Oliver (1994), the convergence of the computer, consumer electronics, cable, telecommunications, and information and entertainment services industries is causing the demise of advertising as historically practised, spawning a whole new way of communicating with potential consumers.

One outcome of the technological revolution is a significant increase in consumers' ability to access information, leading to a fragmentation of media and markets (Rust & Oliver, 1994). The new multimedia will become increasingly interactive, empowering consumers through greater viewing options (Berthon & Pitt, 1996). Consumers will no longer be constrained by place and time - sources of information will be available on demand, transforming advertisements from involuntary and intrusive to voluntary and sought out (Rust & Oliver, 1994).

Taken together, these new media have formed what Rust and Oliver (1994) refer to as the "network of networks" or the information superhighway. Other common designations include the World Wide Web, cyberspace, and the Internet (or Net). Without a doubt, this phenomenon represents the greatest challenge and opportunity for advertisers in the new millennium.

Nonetheless, there is growing uncertainty whether the Internet will become the global electronic supermarket envisioned by some scholars (e.g. Rust & Oliver, 1994). While Bogart (1990) believes that advertisers' use of the Net will continue to grow in the U.S. as the penetration of home computers approaches one-hundred percent, others suggest that the initial cost of hardware and software will preclude many consumers from becoming connected (Fox & Geissler, 1994). Even Rust and Oliver (1994) concede that the new media will be user-supported and at rates beyond the ability or willingness of lower socioeconomic groups to afford.

The Digital Divide

Recent research conducted by the United Nations reveals that Internet usage has grown exponentially during the previous decade (UNDP, 2001). From a mere 16 million users in 1995 to over 400 million users by the close of the decade, it is now predicted that one billion consumers worldwide will be online by 2005. Global spending by public and private sources on information and

Advertising, Technology, and the Digital Divide 177

communications technology will also advance from $2.2 trillion in 1999 to $3 trillion by 2003. Access through wireless devices, including mobile/cellular phones, will continue to grow rapidly and will surpass personal computers as the primary connection mechanism within a few years.

This explosive growth notwithstanding, the Internet has yet to reach a non-elite mass audience (Bucy, 2000). In a global community where less than half of all citizens have ever made a phone call, Internet access is a distant dream (Hammond, 2001). Norris (2000) reports that only four percent of the world's population is currently online. These users are concentrated within postindustrial Western democracies, which contain ninety-seven percent of Internet hosts, ninety-two percent of computer hardware and software consumers, and 86% of all online connections (see also Godlee, Horton & Smith, 2000).

While these numbers suggest disparities between developed and developing nations, other findings demonstrate that differences also exist within countries. For example, a variety of investigations found that access to the Internet in a sovereign state depends upon race/ethnicity, education, age, income, location, and head of household (Abbott, 2001; Feldman, 2000/2001; Phillips, 2000). For example, Bucy (2000) notes that Internet usage is lower for female-headed households as well as older consumers. Crandall and Cunningham (2001), using recent U.S. Census data, reveal that white households are almost twice as likely to contain a personal computer and nearly three times as likely to be connected to the Net than black or Hispanic households. Finally, Norris (2000) shows American households with incomes above $75,000 are twenty times more likely to have Internet access than households at the lowest income levels.

These disparities are captured by the term "digital divide," which recognizes the yawning gap in accessibility to the Internet among and within countries. Implicit in this definition is two distinct sets of issues (Harrington, 2001). The first set reveals differences in the diffusion of technology innovations within a population as well as the level of development of the necessary infrastructure. For instance, while the high-income Organization for Economic Cooperation and Development (OECD) countries make up only 14% of the world's population, they constitute approximately 80% of all Internet users (UNDP, 2001). The second set is made up of socioeconomic gaps that must be bridged before a society can take advantage of the information technology revolution. For example, within the developing world alone, nearly nine hundred million citizens are illiterate and close to three billion people live on less than $2 a day. Unfortunately, the digital divide that separates rich from poor continues to grow, condemning consumers and entire countries to even greater poverty (Hanshaw, 2000; Persaud, 2001).


Research Objective

This research examines the digital divide so advertisers may recognize opportunities, threats, and responsibilities in their use of the Internet to promote goods and services worldwide. Utilizing data collected through a variety of international organizations and standardized by the United Nations, this paper explores the diffusion of information and communications technology in the midst of socioeconomic inequalities across and within nations. Descriptions of these data are presented in the next section, followed by a presentation of the findings. The paper closes with ramifications for advertising practice and global policy implications.

T E C H N O L O G I C A L D I F F U S I O N , H U M A N D E V E L O P M E N T , A N D I N E Q U A L I T Y

Data Description

The UN assesses the state of human development worldwide through the activities of the United Nations Development Programme (UNDP). Founded in 1965, this organization has an annual budget that exceeds $1.5 billion to support field offices around the globe in their conduct and assimilation of hundreds of individual data-collection projects (Hill & Adrangi, 1999). Major sources of standardized data include the International Monetary Fund, World Bank, World Health Organization, and a wide variety of UN supported agencies such as the United Nations Educational, Scientific and Cultural Organization. These efforts culminate in its annual publication of the Human Development Report, which has updated the status of the international community of nations for the last eleven years. The focal topic of the most recent volume is "Making Technologies Work for Human Development" (UNDP, 2001), and it is the source of all data in this research.

For the first time, the UNDP presents human advancement from technology worldwide through its technological achievement index (TAI). This index is a composite of several indicators involving the creation of technology, diffusion of recent innovations, and diffusion of older innovations. Additionally, the UNDP provides data that are specific to investment in technology creation, diffusion of agricultural and manufacturing technology, and diffusion of information and communications technology. It is the latter that is most relevant to this project.

The diffusion of information and communications technology is captured by two distinct factors. The first represents the diffusion of the Interact within


a country and is measured by the number of Internet hosts per one thousand citizens. The second reveals the necessary infrastructure to utilize the Internet by a nation through the number of mainline and cellular telephones per one thousand citizens. These data sets were collected by the International Telecommunication Union in 2000 and 1999, respectively (ITU, 2001a, b).

Socioeconomic differences among nations are operationalized by the UNDP through the human development index (HDI). This composite contains three individual indices that measure longevity (life expectance), knowledge (adult literacy and combined primary, secondary, and tertiary school enrollments), and standard of living (real gross domestic product per capita). The resulting index is reduced to a scale between 0 and 1, with larger fractions representing higher levels of human development. The UN (2001), a supporting agency (UNESCO, 2000, 2001), and the World Bank (2001) assembled the input data for these indices, and the values represent the year 1999.

Socioeconomic inequalities within countries are determined by the UNDP based on share of income or consumption of the richest ten and twenty percent of the population as well as the poorest ten and twenty percent. In order to create inequality measures that allow for cross-country comparisons, the ratios of the richest to the poorest ten and twenty percent of the people within nations were calculated. Additionally, the Gini index is presented and measures inequality over the entire distribution of income or consumption, with values closer to zero representing greater equality and statistics closer to 100 reflecting greater inequality. This index was selected for the purposes of this research, and the original source of the data is the World Bank (2001).

Findings

A review of the data on the diffusion of information and communications technology shows great disparities in Internet hosts and infrastructure support through telephony (the ability to connect with others using telecommunications equipment) around the world. On a global basis, there are 243 telephone mainlines and cellular mobile subscribers and 15.1 Internet hosts per one thousand people. However, among the relatively wealthy OECD countries, the number of telephone lines jumps to 831 and Internet hosts to 75 per thousand. In contrast, the developing countries of the world have 103 main and cellular phone lines and only one Internet host per thousand. Within the least developed countries among this group, these numbers drop to 6 lines and less than 0.1 Intemet hosts. (Table 1 provides a complete listing of countries and the development and geographic categories to which they belong.)


Table 1.* Listing of Countries by Development and Geographic

Categories.**

HDI Development Gini Geographic Category Category Category Category

Norway High OECD Less Scandinavia Australia High OECD Moderate Australia Canada High OECD Less North America Sweden High OECD Less Scandinavia Belgium High OECD Less Western Europe United States High OECD Moderate North America Iceland High OECD NA Scandinavia Netherlands High OECD Moderate Western Europe Japan High OECD Less Asia Finland High OECD Less Scandinavia Switzerland High OECD Less Western Europe Luxembourg High OECD Less Western Europe France High OECD Less Western Europe United Kingdom High OECD Moderate Western Europe Denmark High OECD Less Scandinavia Austria High OECD Less Western Europe Germany High OECD Less Western Europe Ireland High OECD Moderate Western Europe New Zealand High OECD NA Australia Italy High OECD Less Western Europe Spain High OECD Less Western Europe Israel High NA Moderate Middle East Greece High OECD Less Southern Europe Hong Kong, China High Developing NA Asia (SAR) Cyprus High Developing NA Southern Europe Singapore High Developing NA East Asia/Pacific Korea, Republic of High OECD Less Asia Portugal High OECD Moderate Western Europe Slovenia High NA Less Eastern Europe Malta High NA NA Western Europe Barbados High Developing NA Latin

America/Caribbean Brunei Darussalam High Developing NA Middle East Czech Republic High OECD Less Eastern Europe Argentina High Developing NA Latin

America/Caribbean Slovakia High OECD Less Eastern Europe Hungary High OECD Less Eastern Europe Uruguay High Developing Moderate Latin

America/Caribbean


Table 1. Continued.


Poland High Chile High

Bahrain High Costa Rica High

Bahamas High

Kuwait High Estonia High United Arab Emirates High Croatia High Lithuania High Qatar High Trinidad and Tobago Medium

Latvia Medium Mexico Medium

Panama Medium

Belarus Medium Belize Medium

Russian Federation Medium Malaysia Medium Bulgaria Medium Romania Medium Libyan Arab Medium Jamahiriya Macedonia, TFYR Medium Venezuela Medium

Colombia Medium

Mauritius Medium Suriname Medium

Lebanon Medium Thailand Medium Fiji Medium Saudi Arabia Medium

OECD Less Eastern Europe Developing Greater Latin

America/Caribbean Developing NA Arab States Developing Greater Latin

America/Caribbean Developing NA Latin

America/Caribbean Developing NA Arab States

NA Moderate Eastern Europe Developing NA Arab States

NA Less Eastern Europe NA Less Eastern Europe

Developing NA Arab States Developing Moderate Latin

America/Caribbean NA Less Eastern Europe

OECD Greater Latin America/Caribbean

Developing Greater Latin America/Caribbean

NA Less Eastern Europe Developing NA Latin

America/Caribbean NA Greater Eastern Europe

Developing Greater East Asia/Pacific NA Less Eastern Europe NA Less Eastern Europe

Developing NA Arab States

NA NA Eastern Europe Developing Greater Latin

America/Caribbean Latin

America/Caribbean Sub-Saharan Africa

Latin America/Caribbean

Arab States East Asia/Pacific East Asia/Pacific

Arab States

Developing Greater

Developing NA Developing NA

Developing NA Developing Moderate Developing NA Developing NA


Table 1. Continued.


Brazil Medium Developing Greater Latin America/Caribbean

Philippines Medium Developing Greater East Asia/Pacific Oman Medium Developing NA Arab States Armenia Medium NA Moderate Eastern Europe Peru Medium Developing Greater Latin

America/Caribbean Ukraine Medium NA Less Eastern Europe Kazakhstan Medium NA Moderate Eastern Europe Georgia Medium NA Moderate Eastern Europe Maldives Medium Developing/Least NA South Asia

Jamaica Medium

Azerbaijan Medium Paraguay Medium

Sri Lanka Medium Turkey Medium Turkmenistan Medium Ecuador Medium

Albania Medium Dominican Republic Medium

China Medium Jordan Medium Tunisia Medium Iran, Medium Islamic Republic of Cape Verde Medium

Developed Developing Moderate Latin

America/Caribbean NA Moderate Eastern Europe


Developing Less South Asia OECD Moderate Southern Europe

NA Moderate Eastern Europe Developing Moderate Latin

America/Caribbean NA NA Eastern Europe


Developing Moderate East Asia/Pacific Developing Moderate Arab States Developing Moderate Arab States Developing NA South Asia

Kyrgyzstan Medium Guyana Medium

South Africa Medium E1 Salvador Medium

Samoa (Western) Medium

Syrian Arab Republic Medium Moldova, Republic of Medium

Developing/Least NA Developed

NA Moderate Developing Moderate

Developing Greater Developing Greater

Developing/Least NA Developed Developing NA

NA Moderate

Sub-Saharan Africa

Eastern Europe Latin

America/Caribbean Sub-Saharan Africa

Latin America/Caribbean East Asia/Pacific

Arab States Eastern Europe


Table 1. Continued.


Uzbekistan Algeria Vietnam Indonesia Tajikistan Bolivia

Egypt Nicaragua

Honduras

Guatemala

Gabon Equatorial Guinea

Namibia Medium Morocco Medium Swaziland Medium Botswana Medium India Medium Mongolia Medium Zimbabwe Medium Myanmar Medium

Ghana Medium Lesotho Medium

Cambodia Medium

Papua New Guinea Medium Kenya Medium Comoros Medium

Cameroon Medium Congo Medium Pakistan Low Togo Low

Nepal Low

Medium NA Less Eastern Europe Medium Developing Moderate Arab States Medium Developing Moderate East Asia/Pacific Medium Developing Less East Asia/Pacific Medium NA NA Eastern Europe Medium Developing Greater Latin

America/Caribbean Medium Developing Less Arab States Medium Developing Greater Latin

America/Caribbean Medium Developing Greater Latin

America/Caribbean Medium Developing Greater Latin

America/Caribbean Medium Developing NA Sub-Saharan Africa Medium Developing/Least NA Sub-Saharan Africa

Developed Developing NA Sub-Saharan Africa Developing Moderate Arab States Developing Greater Sub-Saharan Africa Developing NA Sub-Saharan Africa Developing Moderate South Asia Developing Less East Asia/Pacific Developing Greater Sub-Saharan Africa

Developing/Least NA East Asia/Pacific Developed Developing Moderate Sub-Saharan Africa

Developing/Least Greater Sub-Saharan Africa Developed

Developing/Least Moderate East Asia/Pacific Developed Developing Greater East Asia/Pacific Developing Moderate Sub-Saharan Africa

Developing/Least NA Sub-Saharan Africa Developed Developing NA Sub-Saharan Africa Developing NA Sub-Saharan Africa Developing Less South Asia

Developing/Least NA Sub-Saharan Africa Developed

Developing/Least Moderate South Asia Developed


Table 1. C o n t i n u e d .


Bhutan Low

Lao People's Low Dem. Rep. Bangladesh Low

Yemen Low

Haiti Low

Madagascar Low

Nigeria Low Djibouti Low

Sudan Low

Mauritania Low

Tanzania, U. Rep. Of Low

Uganda Low

Congo, Dem. Rep. Of theLow

Zambia Low

Cote d'Ivoire Low Senegal Low Angola Low

Benin Low

Eritrea Low

Gambia Low

Guinea Low

Malawi Low

Rwanda Low

Developing/Least NA South Asia Developed

Developing/Least Moderate East Asia/Pacific Developed

Developing/Least Less South Asia Developed

Developing/Least Less Arab States Developed

Developing/Least NA Latin Developed America/Caribbean

Developing/Least Greater Sub-Saharan Africa Developed Developing Greater Sub-Saharan Africa

Developing/Least NA Arab States Developed


Developing/Least Moderate Sub-Saharan Africa Developed




Developing/Least Greater Sub-Saharan Africa Developed Developing Moderate Sub-Saharan Africa Developing Moderate Sub-Saharan Africa




Developing/Least Greater Sub-Saharan Africa Developed



Developing/Least Less Sub-Saharan Africa Developed

Advertising, Technology, and the Digital Divide

Table 1. Continued.

185


Mali Low Developing/Least Greater Sub-Saharan Africa Developed

Central African Low Developing/Least NA Sub-Saharan Africa Republic Developed Chad Low Developing/Least NA Sub-Saharan Africa

Developed Guinea-Bissau Low Developing/Least Greater Sub-Saharan Africa

Developed Mozambique Low Developing/Least Modera te Sub-Saharan Africa

Developed Ethiopia Low Developing/Least Modera te Sub-Saharan Africa

Developed Burkina Faso Low Developing/Least Greater Sub-Saharan Africa

Developed Burundi Low Developing/Least L e s s Sub-Saharan Africa

Developed Niger Low Developing/Least Greater Sub-Saharan Africa

Developed Sierra Leone Low Developing/Least NA Sub-Saharan Africa

Developed

* Abstracted from Human Development Report, 2001 ** Category descriptions include HDI - classification of countries by the Human Development Index; Development - separation of countries based on UN analysis of membership in OECD or level of economic development; GINI - Grouping according to the distribution of income or consumption; and Geographic - categorization according to region of the world.

Further examination of the developing world reveals differences across geographic boundaries. For example, Latin America and the Caribbean have the greatest diffusion of technology, with 213 telephone mainlines and cellular mobile subscribers and 5.6 Internet hosts per thousand. East Asia and the Pacific are next and currently have 130 telephone lines and 0.6 Internet hosts for each one thousand citizens. Arab states follow and the number of telephone main and cellular lines drops to 86 and Internet hosts to South Asia, one of the least developed regions of the globe, contains only 31 lines and 0.1 hosts per thousand. (Data reports from Sub-Saharan Africa include too many missing responses to estimate telephony, but this region contains 0.6 Internet hosts per thousand.)


For the purpose of comparison across socioeconomic differences among nations, countries of the world are divided into three development categories: high human development (HDI values of 0.800 and above), medium human development (HDI values of 0.500 to 0.799), and low human development (HDI values below 0.500). Forty-eight countries are categorized as high human development with an average HDI of 0.914, and they are located primarily in North America, Western Europe, Scandinavia, and Australia. Seventy-eight countries are in the medium human development category with a mean HDI of 0.684, and they are found principally in Latin America and the Caribbean, Eastern Europe, East Asia and the Pacific, and the Arab States. Thirty-six countries are considered low human development with an average HDI of 0.442, and this category is dominated by nations in Sub-Saharan Africa and South Asia. Analysis of variance (ANOVA) shows that statistically significant differences exist among the three development categories (F = 462.91, p < 0.01).

A review of the amount of telephony and number of Internet hosts suggests critical differences across development categories. For example, high human development nations boast 889 telephone mainlines and cellular mobile subscribers along with 80.5 Internet hosts per thousand. In contrast, medium human development countries have only 107 phone lines and 1 Internet host for every one thousand citizens. Low human development nations report a paltry 11 connected telephones and less than.1 Internet hosts per thousand. ANOVA results confirm these differences as statistically significant (phone lines: F = 276.45, p < 0.01; Internet hosts: F = 43.62, p < 0.01).

In order to examine socioeconomic inequalities within nations, countries across the globe once again are split into three groups: less income or consumption inequality (Gini index values below 35), moderate income or consumption inequality (values between 35 and 45), and greater income or consumption inequality (values above 45). Thirty-eight nations are categorized as less inequality with an average Gini value of 29.1, and they are situated primarily in Scandinavia, Western Europe, Eastern Europe, and wealthier Asian nations. Forty-two countries are of moderate inequality with a mean Gini of 37.0, and they are located mostly in North America, Australia, East Asia and the Pacific, South Asia, and the Arab states. Thirty-one nations are deemed of greater inequality with an average Gini of 52.8, and their predominate locations are Latin America and the Caribbean and Sub-Saharan Africa. Once again, ANOVA demonstrates that statistically significant differences exist among the three Gini categories (F= 18.70, p < 0.01).

An examination of the telephone infrastructure and Internet hosts suggests real differences across Gini categories. For instance, less income or consumption inequality nations have 568 telephone mainlines and cellular mobile subscribers


as well as 35.3 Internet hosts per thousand. However, moderate inequality countries have just 246 combined phone lines and 16.4 Internet hosts for every thousand citizens. Finally, greater inequality nations report having only 118 connected telephones, with 1.7 Internet hosts per thousand. ANOVA verifies these differences as statistically significant (phone lines: F = 22.73, p<0 .01 ; Internet hosts: F = 8.21, p < 0.01).

D I S C U S S I O N A N D I M P L I C A T I O N S

Summary of Findings

Using data collected by the United Nations, its affiliates, and other international organizations, this research investigates the digital divide through an examination of information and communications technology diffusion among the nations of the world. Results demonstrate significant disparities in telephony and Intemet hosts, with more developed countries boasting greater diffusion than less developed countries. Additionally, nations that maintain less inequity in income or consumption experience greater diffusion of telephony and Internet technology than those nations that tolerate greater inequity.

Across all data points, findings suggest more diffusion of information and communications technology within northern countries than in southern nations. Regions of the world that stand out with regard to telephony and Internet hosts include Scandinavia, Western Europe, North America, and Australia. Eastern Europe, East Asia and the Pacific, and Latin America and the Caribbean dominate the next level of diffusion, representing some possibility of greater penetration for the future. Sub-Saharan Africa, South Asia, and the Arab States occupy the lowest rung, with little or none of the necessary infrastructure or advanced communications technology to partake in this global revolution.

Implications for Advertisers

The rapid diffusion of the Intemet among the most developed nations represents an expanding opportunity for advertisers who are eager to reach and persuade consumers worldwide. These countries possess the necessary telephony infrastructure to allow for the widespread dissemination of increasingly affordable computers that will create a nearly universal connection to the Intemet throughout Western society. Additionally, most citizens from these nations are schooled in and comfortable with written language and the technological devices required for most Intemet access, and they typically are


savvy consumers who seek a connection to and a sophisticated relationship with the global marketplace.

On the other hand, the developing and least developed countries worldwide possess none of these characteristics. Their telephony infrastructure is poor by Western standards, and the cost of service, as well as associated hardware, is beyond the reach of average consumers (UNDP, 2001). Universal access at a reasonable cost, a concept that propelled the distribution of telephone service throughout much of the developed world, is not part of their political landscape. Thus, connection to the Internet is a rare commodity and available only to the most wealthy citizens. However, even if access was more widespread, the income, education, and lifestyle of typical consumers in these regions of the globe make use of the Intemet for need satisfaction almost superfluous.

These problems notwithstanding, a recent push for improved and cheaper telephony has increased the possibility of connection to the Internet throughout the less developed world. High capacity and fiber optic linkages now span most continents, broadening the potential for access within China, Latin America, and many African countries (Hammond, 2001). Additionally, technological advances, especially with spectrum radio, low-orbiting satellites, microwave, and laser connections, increasingly will bring wireless telephone service to remote locations, rendering traditional infrastructure problems irrelevant (Godlee, Horton & Smith, 2000). The famous Grameen network of organizations has begun to exploit these opportunities by pioneering a new model for telephony (Yunus, 1998). Based on shared usage of one wireless connection within a rural community, Grameen Telecom provides a profitable entrepreneurial venture for the "wireless women" and more affordable access to low-income consumers.

Of course, infrastructure problems are only part of the dilemma. Internet usage in developing countries also is stalled by the cost of personal computers. To resolve this issue, several academic institutions have worked to develop low- price Internet accessible technology designed for mass distribution. For example, scientists at the Federal University of Minas Gerais in Brazil recently produced a basic computer at a cost to consumers of approximately $300 (Rich, 2001; SiliconValley.com, 2001). A prototype was quickly developed that includes a modem, color monitor, speakers, mouse, and Intemet software. The Brazilian government hopes eventually to install this device in public schools, providing improved access to seven million students throughout the country. Additionally, the Indian Institute of Technology developed a low-price Internet access device that requires no modem and eliminates cosily copper wiring (Anand, 2000). At its center is a wireless local system that is uniquely designed for Internet usage within low-income communities that lack the necessary telephony infrastructure.


This technology has been licensed to manufacturers in India and China, and it is already in use in Yemen, Nigeria, and Tunisia.

Even with these dramatically reduced costs, individual ownership of the necessary hardware is impossible for most consumers within the least developed nations and many consumers within the most inequitable countries. One alternative that is spreading rapidly in poor regions is the use of cyber cafes and kiosks for connectivity to the Internet (Hammond, 2001; Yunus, 1998). Consistent with the village wireless phones, these connections provide income- generating opportunities for local entrepreneurs while simultaneously meeting the educational and informational needs of the community. Cyber cafes/kiosks allow for low-cost access to the Net through mobile connectivity, and they may include low literacy touch screens and prepaid chip-card software for e-business that overcome socioeconomic hurdles. The use of solar power to operate this technology makes Internet access a possibility even in the most isolated areas (see Attali, 2000; Swaminathan, 2000).

If these advances are to help society reduce the digital divide, they must be coordinated to ensure that multiple constituencies are operating jointly to accomplish overarching information and communications technology goals. The United Nations notes that success requires national governments "to establish broad technological strategies in partnership with other key stakeholders" (UNDP, 2001, p. 5). Such coordination demands the pooling of public and private resources from all levels of government, nongovernmental organizations (NGOs) such as the World Bank, philanthropic institutes like the Bill and Melissa Gates Foundation, and a variety of private concerns (i.e. the Grameen conglomerate) (Godlee, Horton & Smith, 2000; Norris, 2000).

One example involves the Ministry of Education in Argentina and "venture philanthropist" Martin Varsavsky, who donated $11.2 million to develop an Internet portal that will give ten million grammar, high school, and university students Net access (Hanshaw, 2001). The company Educar was established to operate the portal and sell on-line advertising and e-business opportunities. While the use of advertising to sponsor this endeavor remains controversial, advertisers will continue to play a critical role in making such undertakings financially successful at low consumer costs.

Global Policy Implications

Regional and global cooperation that spans national and cultural boundaries also can improve the availability of the Internet (UNDP, 2001). To this end, leaders of the Group of Eight (G-8) countries established the Digital Opportunities Task Force to coordinate their efforts to bridge the digital divide


worldwide. Task force members are diverse in their associations and nations of origin, representing public, private, and nonprofit organizations within G-8 as well as developing countries such as China, Brazil, and India. This collaboration is devoted to creating the necessary information and communications technology infrastructure within developing countries by improving coherence across conflicting policy initiatives, proactively seeking multinational public-private alliances, and increasing the level of official development assistance.

An essential ingredient for the success of this collaboration is the break up of state-run monopolies that control telephony infrastructure within developing countries (Persuad, 2001). One viable policy option is the eventual implementation of key aspects of the United States Telecommunications Act of 1996 on a global basis. This bill represents the first significant change to U.S. information and communications law since the Communications Act of 1934, which reflected a period of time before television, personal computers, and the Internet were available (Andolfo, 2001; Aufderheide, 1999). Signed into law by President Clinton, this act resulted in dramatic expansion of financial investment industry wide, increased inter-type competition across traditional market boundaries, and improved access to and reduced consumer cost of the information superhighway. While some policy analysts fear a nationalist backlash to the influx of global communications firms (Comor, 1997), a more likely scenario is the rapid expansion of private investment in technology that will advance citizens' quality of life through greater consumption opportunities (Whitman, 1997).

Another important issue involves the implementation of the Trade Related Aspects of Intellectual Property Rights or TRIPS agreement. Hailed as the most important global initiative in intellectual property rights since the Paris Convention of 1883, it was designed to give computer software the same protec- tion as copyrighted works of literature (Blakeney, 1996). Developed countries like the United States advanced this agreement in an attempt to stem the tide of pirated intellectual property by standardizing Western legal protections around the globe. Developing countries' acceptance into the World Trade Organization (WTO) is dependent upon successful implementation of these rules, and failure to enforce these standards may result in trade sanctions from member states whose property rights are violated (Correa, 1996; Smith, 1999).

This agreement was the result of tense negotiations between developed and developing countries, with the least developed nations fearing high socioeconomic costs due to greater dependency on and financial obligation to the West (Smith, 1999). As an incentive for their eventual acquiescence, the final document contains provisions that allow for the delay of implementation for a period of five years for developing countries and economies in transition, and for eleven years for the least developed nations in the world (Correa, 1996).


While this concession may support the dissemination of Internet software in the short term, developing open-source programs that provide the same level of accessibility at little or no cost is a preferred long-term solution for poor nations and regions (UNDP, 2001).

Concluding Comments

The opening remarks of this paper by the Secretary-General of the United Nations eloquently state the importance of information and communications technology to the human condition worldwide. Intricately connected to inequalities across and within nations, the spread of the Internet and supporting telephony infrastructure must be a priority among nations that work in partnership to achieve greater levels of technological diffusion. For many developing countries, success will require the small elite class of citizens, who already have access to the necessary technology and education, to look beyond their own needs and support the greater good of the larger society.Advertisers may not be the primary catalysts for such vital change, but they can play a meaningful supporting role. One of the greatest hurdles to the dissemination of the Internet is a lack of funding, especially within the least developed nations. The continued commercialization of the lnternet may remain controversial, but the increasing financial investment by the advertising industry will be of strategic importance to how, when, and where the Internet is available in the 21 st century.

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DIRECT AND INDIRECT USE

OF COUNTRY OF ORIGIN

CUES FOR HYBRID AND

NON-HYBRID PRODUCTS

TaiWoong Yun, Wei-Na Lee and Trina Sego

ABSTRACT

This study explores country of origin phenomena by assessing the impact of hybrid vs. non-hybrid products on target consumers'product evaluation. In addition, since advertising is a major form of marketing communication that is used to present consumers with information and image of products and build preferences, the impact of indirect country of origin cues through foreign language slogan is also investigated.

Results from the study indicate a significant difference between French hybrid and non-hybrid products. This distinction between hybrid and non- hybrid products may be relevant only when the relative roles of design and manufacture are considered simultaneously. The impact of foreign words in ads on product evaluation is observed to be similar to that of the direct country of origin cues.

New Directions in International Advertising Research, Volume 12, pages 195--214. Copyright © 2002 by Elsevier Science Ltd. All rights of reproduction in any form reserved. ISBN: 0-7623-0950-4

195

196 TAIWOONG YUN, WEI-NA LEE AND TRINA SEGO

INTRODUCTION

Consumers encounter countless situations everyday that require them to process information and/or make decisions either consciously or subconsciously. These situations range from trivial decision-making tasks such as what to eat or wear on a particular day, to processing information presented in the media, to buying products or using services of all kinds. While the sheer number of information- processing tasks consumers go through daily has increased, less differentiation among products today has made evaluating product quality objectively more difficult. Kotler (1998, p. ix) once noted that "consumers buy a Sony if they think it is better than a Panasonic. They don't really know. They don't take apart the Sony and Panasonic TV sets and examine them from an engineering point of view."

Given the challenging task of product evaluation, extrinsic cues such as a product's country of origin (COO) may be considered along with intrinsic properties of a product. That is, consumers who are familiar with the product category will use COO as a heuristic or summary index that they already have in their memory to reduce the amount of information processing (summary construct). Whereas, consumers with little knowledge of the product category will infer the quality of products based on their impression of the source country (halo effect; Han, 1989).

Since Schooler's (1965) seminal work, COO phenomena have received a great deal of attention from consumer behavior researchers (for reviews, see Bilkey & Nes, 1982; Ozsomer & Cavusgil, 1991; for meta-analyses (see Liefeld, 1993; Peterson & Jolibert, 1995; Verlegh & Steenkamp, 1999). Most previous COO research focused on the use of "made-in" labels (e.g. Made in USA) and their impact on perceived quality and purchase intention. The construct of COO therefore has been operationalized largely as "made-in xxx" (Peterson & Jolibert, 1995).

As noted by Peterson and Jolibert (1995), previous research regarding the COO phenomena were mainly descriptive in terms of finding cases where a "made-in" label had an impact on the dependent variables (perceived quality and purchase intention). As a result, despite the large number of studies, the understanding of the COO is still somewhat limited in scope (Maheswaran, 1994; Parameswaran & Pisharodi, 1994; Peterson & Jolibert, 1995; Verlegh & Steenkamp, 1999).

During the 1960s and 1970s, most COO research relied solely on a single cue (i.e. a "made-in" label) and a verbal product description as a stimulus, thus lacking the external validity of consumer interaction with a realistic presentation of product or service information. Later in the 1980s and 1990s, the scope of

Direct and Indirect Use of Country of Origin Cues 197

COO research was expanded and became more comprehensive via carefully designed studies that increased internal and external validity. Studies in the 1980s included additional information cues as well as tangible products as stimuli (Liefeld, 1993).

Despite these limitations, previous findings have supported a strong direct relationship between "made-in" labels and the perceived quality of, attitude towards and purchase intentions for products (Verlegh & Steenkamp, 1999). In today's global business environment, the increasing presence of hybrid products (e.g. a Sony product made in Malaysia) demands careful understanding of COO effects. However, not a great deal is known about these complex CO0 make- ups and their impact. Furthermore, how marketing communication approaches situations that involve hybrid products has not been fully explored.

Therefore, this study seeks to answer the following questions: (1) How do "made-in" labels affect product evaluation of hybrid vs. non-hybrid products? (2) Does the indirect route of CO0 communication through foreign language in advertisements affect product evaluation? If so, is it similar to the direct way of communication through "made-in" labels?

L I T E R A T U R E R E V I E W

Starting with formative years and throughout their lives, consumers form images of countries around the world through education, personal contacts, media, consumer products, and various other avenues. These country images may influence the way consumers evaluate products (Papadopoulos, 1993). Past research has provided a wealth of knowledge on the effect of direct COO cues, or the so-called "made-in" label. Many researchers have provided both qualitative and quantitative analyses of CO0 phenomena (e.g. Peterson & Jolibert, 1995; Verlegh & Steenkamp, 1999).

Existing research documents that the impact of CO0 involves "product in general," "classes of products," "specific types of products," "specific brands," without regard to whether the countries studied were among developed, between developed and less developed, or among less developed countries (Bilkey & Nes, 1982). In their summary of COO studies, Bilkey and Nes (1982) identified a positive relationship between economic development and COO effects with consumers' tendency to favor their home country's products over foreign ones. Further, factors such as culture, political climate, perceived similarity with the source country, perceived risk, gender, age, income, education and personality variables may also impact or moderate CO0 effects. However, these reviews also revealed inconsistent results as to the magnitude and direction of COO effects on outcome measures.


Meta-analytical techniques have also been used to summarize previous COO research. Liefeld (1993) found that study design (within vs. between subjects) moderated the strength of COO effects on perceived product quality. In contrast, Peterson and Jolibert (1995), after comparing 200 studies, concluded that not only study design but also study cues (single vs. multiple cues), sample size (less than 260 vs. 260 and more), and stimulus context (actual product shown vs. verbal description) moderated COO effects. Recently, Verlegh and Steenkamp (1999) examined the effect of hybrid vs. non-hybrid products and concluded that there was no statistically significant difference between the two in terms of product evaluation; factors outside of researchers' interests may have acted as moderating factors that confounded the strength of COO effects.

During this period, other researchers shifted their attention from descriptive studies on COO (i.e. occurrences of country-of-origin effect) to understanding the theoretical nature of the phenomena. They studied COO in the context of image, facets of COO image, the process underlying evaluation and decision making, and the development of measurement scales. Practical aspects of COO image such as managers' views of the phenomena and comparisons between industrial buyers and general consumers were also examined (see Papadopoulos & Heslop, 1993, for a review).

Defining Country of Origin Image

Although there is an agreement in the literature that CO0 affects consumers' evaluation of and purchase intentions for products, it is not clear exactly what country image means. Nagashima (1970, p. 68) conceptualized country image in his study as:

idea, emotional background, and connotation associated with a concept. Thus, the made-in image is the picture, the reputation, the stereotype that businessmen and consumer attach to products of a specific country.., created by such variables as representative products, national characteristics, economic background, history, and tradition.

Several other researchers in subsequent years also worked on conceptualizing CO0 image. Bilkey (1993, p. xix) defined country of origin image as "buyers' opinions regarding the relative qualities of goods and services produced in various countries." Roth and Romeo (1992, p. 479) also proposed a definition of country image, with a marketing emphasis: "Country image is the overall perception consumers form of products from a particular country, based on their prior perceptions of country's production and marketing strengths and weaknesses."


Martin and Eroglu (1993, p. 193), on the other hand, defined country image as "the total of all descriptive, inferential and informational beliefs one has about a particular country." They further criticized other researchers for confusing country image with the image of products from the country, while simultaneously developing a country image scale (Papadopoulos, Heslop & Bamossy, 1990; Roth & Romeo, 1992; Parameswaren & Pisharodi, 1994; Yaparak & Parameswaran, 1986). Martin and Eroglu (1993) argued that other COO measurement scales were not valid in that country image measurements were confounded by product attitudes.

The construct of country (of origin) image has been treated as either unidimensional (Roth & Romeo, 1992) or multidimensional (Martin & Eroglu, 1993; Papadopoulos et al., 1990; Parameswaren & Pisharodi, 1994; Yaparak & Parameswaran, 1986). Studies involving combinations of the dimensions (i.e. political, economical, technological, social, cultural, general product attributes and/or specific product attributes) assumed that CO0 cues trigger the image of the country that has those dimensions. Better understanding of CO0 effects may be obtained by examining which dimensions are more or less influential in product evaluation.

Hybrid vs. Non-hybrid Products

In the current global market environment, hybrid products (products sourced from two or more countries) that emerged as a mechanism to achieve competitive advantages have also challenged the traditional and rather simplistic treatment of COO in research contexts. This calls for a different set of considerations and theoretical developments in future studies.

Given that consumers today encounter products designed in one country and manufactured in another country, their evaluation of such hybrid products may have important consequences for marketers and advertisers (Chao, 1993). Few researchers (e.g. Chao, 1998; Johansson & Nebenzahl, 1986) have examined the impact of production location change on consumers' product evaluations and the price they are willing to pay. Nebenzahl and Jaffe (1993, p. 160) noted that "traditional analysis does not provide clues as to what would be the image of a brand associated with a certain country when products marketed under a certain brand name is produced in another country."

Papadopoulos (1993, p. 3) argued that "sellers and buyers use advertising, packaging, branding, product design, and many other means, in addition to 'labels,' to provide and obtain information about product origins." Consequently, marketers and advertisers are facing the daunting task of communicating to consumers aspects and variations of the "made-in" image.


Communicating Country-of-Origin linage

Since advertising is a major form of marketing communication used to present consumers with functional and image information and to build product preferences, an examination of the COO concept is worthwhile from an advertising perspective. In advertising, country image may be communicated through the use of foreign languages in ads (Head, 1988). From their analysis of magazine ads from four East Asian countries, Neelankavil, Mummalaneni and Sessions (1994) concluded that foreign language copy (usually English) is common in Asian advertising. Advertisers in the U.S. have been using European languages in more and more advertising campaigns (Ray, Ryder & Scott, 1991).

One reason for using foreign language in ads is to generate attention. For example, Domzal, Hunt and Kernan (1995, p. 99) claimed that foreign language is an "unusual" element in the ad. Consequently, it catches the attention of consumers and leads them to more elaborate processing of the ad, which results in better retrieval and memory of the message.

Until recently, however, most research concerning the use of foreign language focused on sociocultural or information processing perspectives (e.g. Luna & Peracchio, 2001). This focus is based largely on the premise that the foreign language portion of the ad is understood and processed by consumers (e.g. Domzal et al., 1995). However, it is not clear that advertisers are concerned whether foreign words in their ads are completely understood by their prospec- tive consumers.

Foreign language words may be intentionally included even though consumers may not understand the meaning of the words in the ad. The rationale behind this approach is that the image of the language is separate from the individual foreign words (Ray et al., 1991). Thus, it implies that through the use of foreign language, advertisers try to convey a certain meaning associated with the country that the language is from, rather than the meaning of the foreign word itself. In this context, it is not a matter of whether consumers understand the meaning or not. Rather, the goal is that consumers associate the ad with the country origin of the language.

This notion can be understood through the linguistic explanation of borrowing that is done for the purpose of necessity or prestige (Ray et al., 1991). Linguistic borrowing out of necessity takes place, for example, when no term for a new concept exists in a certain language; a term for the concept is borrowed from the originating culture or country. The rationale behind the prestige of foreign language is that people associate a foreign language with the national characteristic and traditional products of the country it represents (Domzal et al., 1995). Ray et ai. (1991) speculated that foreign languages can be used


much the same way as "made-in" labels to affect product evaluations. Thus, foreign language copy is used in advertising not just as an attention-getting device but also as an indirect and implicit way of communicating the "made- in" concept. Consequently, the foreign language may be used as a proxy that triggers the image of its originating country.

From the above literature review, several specific issues emerge that require further investigation. For CO0 research to have realistic marketing implications, it must deal with the issue of hybrid products in today's global marketplace. Furthermore, it is likely that not all consumers have access to or receive explicit CO0 information about products. Therefore, the use of indirect CO0 cues, transmitted via advertising, and their effects should be addressed.

RESEARCH QUESTIONS AND HYPOTHESES

An experiment was designed to assess the impact of both direct (disclosure of COO for hybrid and non-hybrid products) and indirect (foreign words in ads) CO0 cues on product quality perceptions and purchase intentions.

Specifically, this study attempts to answer the following research questions:

• Does the impact of direct COO cues on product quality perceptions and purchase intentions differ between hybrid (manufactured and designed in two different countries) and non-hybrid products (manufactured and designed in only one country)?

• Does the impact of indirect CO0 cues (foreign words in ads) on product quality perceptions and purchase intentions differ from that of "manufactured- in" and "designed-in" labels?

Most previous studies have focused on COO effects where products are manufactured and designed in a single country. Thus, there has not been much consideration regarding hybrid products. However, the global competitive environment has brought significant changes to production locations, often resulting in products manufactured in one country and designed or branded in another country. Chao (1993) differentiated products that are solely manufactured and branded in one country from products that are designed in country "A" and manufactured in country "B."

Verlegh and Steenkamp (1999) speculated that hybrid products might provide more information regarding product country of origin. As a result, the magnitude of CO0 information cues may have greater impact on product quality perceptions and subsequent purchase intentions. Alternatively, COO effects may not be as strong for hybrid products compared to non-hybrid products since


image information associated with origin countries is diffused between the two or more countries specified. Based on this notion, the following hypothesis is proposed:

HI: Consumers will report different levels of perceived product quality and purchase intentions when asked to evaluate hybrid vs. non-hybrid products.

Since advertising often informs consumers of a product's COO through foreign words in ads, it is important to consider whether such an indirect COO cue affects quality perceptions of and purchase intentions for products. Thus, the following hypothesis is proposed:

H2: Consumers will report different levels of perceived product quality and purchase intentions following exposure to an ad with a foreign-language slogan vs. an ad with a native-language slogan.

METHOD

Although the value of a brand is closely associated with the country where the brand is from (i.e. consumers may associate Sony with Japan even if a Sony product is made in Malaysia), COO studies on hybrid products have not produced consistent outcomes. One major problem is the complexity of stimuli with multiple COO cues. Ideally, the "made-in" concept should be expanded to include such terms as "manufactured-in," "designed-in," "assembled-in," etc. in order to have realistic marketing and managerial implications (Chao, 1993).

This study sought to remedy this problem by including "manufactured-in" and "designed-in" as two separate conditions in an experiment. In addition, the use of foreign words in ads was also examined. Specifically, this study employed 2 (manufactured in the U.S. or France) x 2 (designed in the U.S. or France) x 3 (English, French or no slogan) factorial design. Table 1 provides a list containing all 12 conditions for the experiment.

Subjects

Subjects consisted of 587 undergraduate students enrolled in an introductory marketing class at a southwestern state university. Students were offered extra credit points as incentives for their participation in the study.

Subjects' ages ranged from 18 to 44; both the mean and median age is 21 years-old. The pool was approximately evenly split among male (282) and

Direct and Indirect Use of Country of Origin Cues

Table 1. Manipulation for the Study.

203

Condition Design Manufacture Language

1 France France French 2 France France English 3 France France N/A 4 USA France French 5 USA France English 6 USA France N/A 7 France USA French 8 France USA English 9 France USA N/A

10 USA USA French 11 USA USA English 12 USA USA N/A

female (305) subjects. Students participating as subjects came from majors ranging from liberal arts to natural science.

Among 587 subjects, over 90% were reportedly U.S. citizens. Ethnic backgrounds were reported to be Caucasian (61.5%), Asian/Pacific Islander (18.9%), Hispanic (11.6%), African American (1.5%), Native American (0.2%) and Others (6.3%).

Stimulus Development

Since the objective of this study was to examine the impact of direct and indirect CO0 cues, three different manipulations were required; these were country of manufacture, country of design (see Appendix A) and foreign words in the ad.

Jeans were chosen for the study because the product category is highly relevant to the subject population. The advertising stimulus contained a dominant visual picturing eight young Caucasian adults and teens of both genders wearing jeans. The brand name used ("Cavalier") is fictional. Previous research suggests that foreign brands can affect product evaluations (Leclerc, Schmitt & Dube, 1994; Thakor & Pacheco, 1997). "Cavalier" was chosen for this study following a pretest suggesting members of the subject population regard it as a word of ambiguous linguistic origin. In front of the models, below the mid-point, was the rectangular space where the slogan was inserted (English "Team Spirit," French "Esprit de Corps" or no slogan).


Data Collection Procedure

The research instrument was created online using Cold Fusion technology, where responses to each item were automatically transmitted to a Microsoft Access database file located on a Windows NT server. The questionnaire required that subjects complete all questions in each section before proceeding to the next section. As a result, there were no missing values for the study.

An electronic message containing a link to the experimental site was sent to potential subjects. After subjects arrived at the Web site for the experiment, they were instructed that "this is a study to examine your opinions regarding several advertising executions." Instruction for participation in the experiment was then provided. During this process, subjects were randomly assigned to one of the 12 treatment conditions via random generation, programmed specifically for the study. Each subject then received information regarding the country of design and country of manufacture (see Table 1).

Within each treatment condition subjects were shown a stimulus ad. Each ad was followed by an assessment of subjects' quality perceptions of the products and purchase intentions. The procedure ended with a section soliciting subjects' demographic information.

Treatment Variables

Two independent variables were used in the study. Direct COO cues were operationalized as "manufactured-in" and "designed-in" labels (Bilkey & Nes, 1982; Peterson & Jolibert, 1995). An indirect CO0 cue was operationalized through the presence of foreign words in ads. Specifically "Esprit de Corps" for the jeans ad was used. In the English-language condition, the equivalent slogan was 'Team Spirit."

Dependent Variables

Two dependent variables, perceived product quality and purchase intention, were used in this study. A multi-item measure of product quality perception was adapted from past literature. Each item was measured on a five-point Likert- type scale (1 = strongly disagree; 5 = strongly agree).

A principal component analysis revealed four dimensions of perceived quality for jeans. This purification process resulted in 16 items (Cronbach's alpha = 0.83) out of the 20 Likert-type items initially measured. Table 2 presents items averaged in each index of product quality perception with corresponding Cronbach's alphas in parentheses.

Direct and Indirect Use of Country of Origin Cues

Table 2. Items Used in Each Dimensions for the Jeans.

205

Stylishness (0.87) Durability (0.83) Prestige (0.82) Quality construction (0.78)

is stylish is durable is prestigious is cheaply put together is fashionable is long lasting is luxurious is poor quality is atttractive is reliable is sophisticated is tasteful is well made is innovative

is good value is different

Purchase intention was measured through one 5-point Likert-type item: "If this product were available at a reasonable price, I would probably buy it."

R E S U L T S

The goal of this study is to investigate the impact of direct CO0 cues (e.g. "manufactured in" and "designed in" labels) and indirect COO cues (e.g. foreign words in ads) on consumers' product quality perceptions and purchase intentions. Analyses were carded out in two phases by first examining direct COO effects for hybrid vs. non-hybrid products. Subsequently, the impact of indirect COO cues was evaluated.

Hybrid vs. Non-Hybrid Products

Table 3 indicates the groups that were compared to test Hypothesis 1. The first comparison involved non-hybrid French jeans (group 3) vs. hybrid

France + U.S. jeans (groups 6 and 9). The second comparison involved non- hybrid U.S. jeans (group 12) vs. hybrid France + U.S. jeans (groups 6 and 9). These comparisons allowed for examination of the hybrid product phenomenon from both French and U.S. perspectives.

Table 3. Groups Compared in Hypothesis 1.

Comparison Group Design Manufacture

3 France France 1 6 USA France

9 France USA

12 USA USA 2 6 USA France

9 France USA

206 TA1WOONG YUN, WEI-NA LEE AND TRINA SEGO

Table 4. Results of M A N O V A for Hypothesis 1 for Jeans.

Comparison Effect Value F Hypothesis Error Sig. df df

1 Intercept Wilks' Lambda 0 . 0 2 0 1554.837 5 162 0.000 Group (3, 6 and 9) Wilks' Lambda 0.891 1.929 10 324 0.041

2 Intercept Wilks' Lambda 0 . 0 2 2 1364.504 5 155 0.000 Group (15, 6 and 9) Wilks' Lambda 0.865 2.333 10 310 0.012

Because this study employed multiple dependent variables, M A N O V A was used as an initial test o f differences. Table 4 shows the result of the M A N O V A test for Hypothesis 1.

The M A N O V A results reveal that a product 's status as either hybrid or non- hybrid has statistically significant effects on outcome measure(s) in both sets of comparisons.

To determine which dependent variable(s) are responsible for the statistically significant M A N O V A result, post hoc analysis using Tukey 's HSD was performed for each of the dependent variables: four dimensions of perceived quality and purchase intention. Results of these comparisons are presented in Table 5.

As seen in Table 5, purchase intentions reported by subjects in group 3 (French non-hybrid jeans, mean = 3.47) differed significantly from those of group 6 (designed in the U.S. and manufactured in France, mean = 2.92). This indicates that subjects from group 3, who were exposed to "manufactured and designed in France," reported a higher likelihood to purchase jeans than those exposed to "designed in the U.S. and manufactured in France." However, purchase intentions reported by subjects in group 12 (U.S. non-hybrid jeans) did not differ statistically from those of group 6. Thus, Hypothesis 1 was partially supported. The impact of direct C O 0 cues differs depending on whether the product is hybrid or non-hybrid.

Table 5. Tukey 's HSD Post Hoc Test For Hypothesis 1.

Dependent Group Group Mean Std. Comparison Variable (I) Mean (J) Mean Difference Error Sig.

(l-J)

1 Purchase Intent 3 3.473 6 2.922 0.551" 0.201 0.017 for Jeans 9 3.524 6 2.922 0.602* 0.195 0.006

2 Purchase Intent 12 3.354 6 2.922 0.433 0.211 0.099 for Jeans 9 3.524 6 2.922 0.602* 0.197 0.006

* p<O.05


An additional interesting result involves the comparison of two hybrid jean products. Significant differences were found in the comparison between group 9 (designed in France and manufactured in the U.S., mean = 3.52) and group 6 (designed in the U.S. and manufactured in France, mean = 2.92). This suggests that consumers differentiate not only between French hybrid and non-hybrid products but also between different combinations of hybrid products.

However, no statistically significant differences were found between hybrid and non-hybrid products with regard to perceived product quality.

Foreign Words in Ads

To assess the impact of language on quality perceptions of and purchase intentions for jeans, a MANOVA analysis was conducted. Among the groups manipulated, only those who were shown either French or English ads were chosen for testing Hypothesis 2. This process resulted in combining groups 1, 4, 7 and 10 into a French-language group and 2, 5, 8 and 11 into a English- language group (see Table 6).

MANOVA results in Table 7 reveal that language has a statistically significant impact on outcome variable(s).

Table 6. French and English Groups.

Design Manufacture Language

France France French USA France French

French Group France USA French USA USA French

France France English USA France English

English Group France USA English USA USA English

Table 7. Result of MANOVA for Hypothesis 2 for Jeans.

Effect Value F Hypothesis Error Sig. df df

Intercept Wilks' Lambda 0.020 3492.958 5 364 0.000 LANGUAGE Wilks' Lambda 0.967 2.516 5 364 0.030


Table 8. ANOVA Result for Hypothesis 2.

Language in Mean SS df MS F Sig. the ad

Purchase intent French 3.448 Between Groups 13.863 1 13.863 10.969 0.001 for jeans English 3.059 Within Groups 465.110 368 1.264

Total 478.973 369

To determine which dependent variable(s) was responsible for the significant MANOVA results, ANOVA was performed for each of the dependent variables: four dimensions of perceived quality and purchase intention.

Table 8 shows that the language effect is statistically significant for purchase intention, F(1,368) -- 10.97, p < 0.05. Specifically, those who viewed the French ad (mean = 3.45) reported higher purchase intentions than those who viewed the English ad (mean = 3.06).

However, no statistically significant differences were found for perceived product quality dimensions. Thus, Hypothesis 2 is partially supported. A similar pattern of results was found for both direct CO0 cues and indirect COO cues in that the manipulations affected purchase intentions but not perceived product quality.

D I S C U S S I O N

Contrary to Verlegh and Steenkamp's (1999) conclusion regarding hybrid vs. non-hybrid products, this study found that purchase intention for jeans differed depending on whether the product is French non-hybrid (designed and manufactured in France) or hybrid product (designed in the U.S. and manufactured in France). However, no statistically significant difference was observed for U.S. hybrid vs. non-hybrid product with regard to purchase intention. The distinction between hybrid and non-hybrid products in product evaluation may not be a universal phenomenon. Rather, consideration of both design and manufacture locations plays a role in determining the purchase intentions. This suggests a rather dynamic nature of consumer product evaluation process. The distinction between hybrid vs. non-hybrid products may be relevant only when the relative roles of design and manufacture are considered simultaneously.

In addition, Hypothesis 1 results suggest that groups exposed to a French design cue had higher purchase intentions than groups exposed otherwise. This outcome provides an important managerial implication in that the origin of design may be an effective promotional tool to elicit favorable purchase intentions. Thus, marketers and advertisers could use design location to differentiate products


manufactured in the same country. A caveat here is that this may apply mainly to "image" products such as jeans or other fashion apparel. To date, most COO research has examined effects on evaluations products such as automobiles, electronics and appliances (e.g. Chao, 1998; Parameswaran & Pisharodi, 1994).

Further, Hypothesis 1 results indicate that hybrid and non-hybrid products were not seen differently in terms of perceived product quality. This lack of differentiation might be due to the fact that the countries employed in this study are both highly developed countries with a good reputation for quality production in clothing. According to the meta-analysis conducted by Verlegh and Steenkamp (1999), the impact of COO cues was greater when countries compared differed significantly in their economic status. Thus, the COO effects might have been attenuated in this study due to comparing two highly developed countries. In addition, several previous studies pointed out that consumers tend to evaluate their home country's products more favorably than those from other countries. Since this study was conducted in the U.S., the quality perceptions of jeans of U.S. origin may have been exaggerated.

In Hypothesis 2, the impact of indirect COO cues was assessed by comparing the difference in quality perceptions and purchase intentions following exposure to an ad containing a French slogan vs. to one containing an English slogan. Clearly, the results show that language used in the ads impacted subjects' likelihood to buy jeans. Specifically, those who viewed the French slogan reported a higher propensity to buy jeans than those who viewed the English slogan. This supports the notion that foreign words are used not only to attract attention but also to imply the origin of products.

L I M I T A T I O N S A N D S U G G E S T I O N S F O R F U T U R E R E S E A R C H

This study builds on extensive past research in COO while simultaneously broadening the scope of investigation through examining CO0 effects in hybrid products and indirect means of CO0 communication via foreign language. By doing so, this study sheds light on understanding not only on how direct COO cues affect perceived quality of and purchase intentions for hybrid and non- hybrid products, but also on how foreign language slogans, as indirect CO0 cues, might affect consumers' product evaluations.

To interpret the findings from this study in a meaningful way, several limitations need to be addressed. This study manipulated treatment conditions and randomly assigned subjects to one of 12 conditions online. Although the online technology helped in the execution of the experiment, it also introduced uncontrolled experimental "noise." The Internet as an experimental setting might


have exposed subjects to unequal environments. Specifically, factors such as time of the day, speed of the Internet connection and place of accessing the Internet (e.g. home or work) may have confounded or diluted the results. Hence, similar studies in more controlled settings are needed.

The study design was incomplete in that subjects were made aware of where the product was manufactured and designed before viewing the ad containing the foreign slogan. Thus, a pure and independent test of the impact of language as an indirect COO cue was not conducted. Future researchers should take this into consideration when developing an experiment dealing with foreign language treatments.

Purchase intention in this study was measured through a single item, which may be subject to criticism. For example, a subject might have liked the product shown, but he/she may have already bought several similar items in the past, resulting in low purchase intention. Thus, future research should employ more inclusive purchase intention measures.

Given that no statistically significant differences were found for perceived product quality dimensions, moderating factors may have played a role with regard to the strength or direction of the relationships between COO cues and product evaluation. According to Baron and Kenny (1986, p. 1174), "moderator variables are typically introduced when there is an unexpectedly weak or inconsistent relation between a predictor and a criterion variable (e.g. a relation holds in one setting but not in another, or for one subpopulation but not for another)."

Several researchers (Liefeld, 1993; Peterson & Jolibert, 1995; Verlegh & Steenkamp, 1999) have identified methodological factors that may moderate relationships between COO cues and product evaluations. However, relatively little is known about what psychological factors moderate the relationships. Only a few researchers examined psychological factors such as situational involvement, consumer knowledge (Maheswaran, 1994), perceived value and monetary sacrifice (Teas & Agarwal, 2000).

Further, based on the premise that COO cues trigger the image of the country, future studies could further examine the role of country image in the relationship between COO cues (both "made-in" label and foreign language) and outcome measures. In addition to the country image, consumers exposed to COO cues may trigger general product attitudes from that country to evaluate a specific product (Parameswaran & Pisharodi, 1994). Thus, dimensions used to measure the perceived product quality of a certain country in general could be used to assess quality perception of a specific product from that country (see Nagashima, 1970, 1977; H a n & Terpstra, 1988; Roth & Romeo, 1992; Papadopoulos et al., 1990; Parameswaran & Pisharodi, 1994). Such an attempt would provide insights into what really affects consumers' evaluation of


products in terms of COO: the image of the country (i.e. political, technological, economical dimensions), overall product image of certain country, or the function of country image and product image (overall and specific category).

Although direct and indirect COO cues may have similar effects on product evaluation, it is not known how direct and indirect COO cues are similar or different with regard to eliciting cognitive responses during product evaluation. Thus, it would be interesting to see what kind of cognitive processes are utilized under direct COO cues and indirect COO cues.

In addition, unlike direct COO cues, a foreign slogan in the ad might require that consumers recognize the origin of the language and associate it with a country. Languages such as English, Spanish and Mandarin are spoken in multiple countries in different regions of the world. Thus, future research might examine which country is associated with a foreign language in different regions of the world to have better insights into the effects of foreign slogans. This will help advertisers and marketers ascertain if the intended consumers identify with the country of language origin and if so, which country was associated with the language.

As in the study of other consumer behavior phenomena, finding a clear conceptual and operational definition of key concepts, such as country image, is a paramount task to which COO researchers must devote a good deal of attention. Parameswaran and Pisharodi (1994) addressed several important questions regarding country of origin and specifically about country image scale development. They noted that the importance of precisely defining and examining the dimensionality of the country (of origin) image construct. Without clearly identifying the construct of country image, researchers can only be satisfied with the finding that COO cues are effective in certain situations.

Finally, as noted by Ray et al. (1994), speculation is not enough to address the questions generated here. Additional empirical research is needed to build on the present investigation and comprehensively address both the antecedents and consequences of the relationships between COO cues and product evaluations. Answers to concerns raised here will provide a better understanding of country image phenomena.

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Verlegh, P. W. J., & Steenkamp, J. E. M. (1999). A review and meta-analysis of country-of-origin research. Journal of Economic Psychology, 20, 521-546.

Yaprak, A., & Parameswaren, R. (1986). Strategy Formulation in Multinational Marketing: A Deductive, Paradigm-Integrating Approach. Advances in International Marketing, 1, 21-45.


APPENDIX: MANUFACTURED-IN AND DESIGNED-IN STIMULI

U.S. Non-hybrid

Online Survey Please read the description below carefully before you proceed with each section of b~le survey.

French Non-hybrid

Online Survey Plea , reed the description below cartfuily before you proceed with each section of the aurvey.

Description Description

For this study, you are asked to evaluate two products, Jeans and sunglasses. Both products are designed and manufac"uJred in USA. Since people typically have Impressions when they flrot lee I product, in ell product surveys that we conduct we usueJly begin by gettin9 these initial Improlalonl.

IMPORTANT: YOU MUST ANSWER ALL THE QUESTIONS to proceed to the next page.

To begin, click on the button below.

For thli I'0Jdy, you art l i ked to evaluate two products, June end sunglasses. Both products ere designed and manufactured In France. Since people typically have impressions when they llrst lee a product, in all product surveys that we conduct we usuldly begin by get6ng these Initial Impressions.

IMPORTANT: YOU MUST ANSWER ALL THE QUESTIONS to proceed to the next page.

To begin, click on the button below.

POSSESSION AND EFFECTS OF

POWER IN ADVERTISING

AGENCY-CLIENT RELATIONSHIPS

IN SOUTH KOREA: A MULTI-LEVEL

ANALYSIS

Changho Oh and Stephen Keysuk Kim

ABSTRACT

The study reported here examines the effects of power on two major outcome variables - commitment and communication - at three different levels of analysis: the individual firm, a cross level, and a dyad level. The hypotheses were tested through dyadic data on advertising agencies and their client firms in South Korea. Results highlight the constructive nature of power in agency-client relationships. The authors also found that: (a) the power of a client firm has a significant effect on commitment and communication; (b) client firms expect a high level of communication with agencies regardless of level of power; and (c) total commitment and total communication at the dyad level do not change much as relative power of a firm increases.

New Directions in International Advertising Research, Volume 12, pages 217-241. Copyright © 2002 by Elsevier Science Ltd. All fights of reproduction in any form reserved. ISBN: 0-7623-0950-4

217

218 CHANGHO OH AND STEPHEN KEYSUK KIM

INTRODUCTION

What are the implications of having more power in interfirm relationships? How does possession of less power affect attitude and behavior of exchange parties in a dyad? These questions have attracted substantial research attention in business- to-business contexts including marketing channel relationships (Frazier, 1999), OEM-supplier relationships (Heide & John, 1988), and advertising agency-client relationships (Prendergast, Shi & West, 2001). Although substantial progress has been made on the study of power (i.e. potential for influence on the exchange partner's beliefs, attitudes, and behaviors) and its effects, a review of extant literature suggests that two gaps remain unfilled. First, despite the recognition that interfirm power is inherently a dyadic issue, a majority of previous studies have examined only one side of the interfirm dyad. Even when power was conceptualized at the dyad level, empirical studies were limited to only one side of the dyad (e.g. asking a client firm about its own power and advertising agency's power). We are unlikely to gain a complete and balanced perspective on interfirm relationships until power and its effects are examined for both members of a dyad. Second, despite the sheer number of previous studies on power and its effects, the bulk of them focused on marketing channel relationships in the United States. Few studies examined power and its effects in non-marketing channel relationships in foreign markets (cf. Jancic & Zabkar, 1998). Accordingly, the external validity of the extant study findings remains to be tested.

The study reported here addresses the above issues in two related ways. First, we conceptualize and hypothesize on the effect of power on advertising agency-client relationships in a truly dyadic sense. For this purpose, we theorize on the effect of power at three levels: an individual firm level, a cross level, and a dyad level. We examine both attitudinal and behavioral effects of power in this study. Second, we chose a unique study setting: advertising agency-client relationships in South Korea that is seventh largest in the world and second largest in Asia in terms of total advertising expenditures (Oh, 1998). The study of power and its effects in a non-marketing channels setting will provide a stronger test on the external validity of the previous study findings from the United States, thereby helping firms manage agency relationships across different countries.

The intended contribution of the study is twofold. First, the study should help market researchers interested in interfirm relationships by clarifying the relationships between power and its effects at three different levels. Second, the study should enhance our understanding of the role of power in advertising agency-client relationships in general and it provides a rare opportunity to gain insights on the advertising industry in South Korea. The study begins with

Possession and Effects of Power in Advertising Agency-Client Relationships 219

a brief description of theoretical background, followed by hypotheses on the effects of power on commitment and communication at the individual firm, cross, and dyad levels. The method section follows and in the discussion section, unexpected results are discussed, major findings are reviewed from theoretical and managerial standpoints. The limitations of the study are acknowledged, and further research directions are suggested.

THEORETICAL BACKGROUND AND RESEARCH HYPOTHESES

Theoretical Background

Dependent variables. We examine two dependent variables as major consequences of the possession of power: (a) commitment, the extent to which a firm desires to maintain the relationship with its exchange partner firm, as a representative construct of attitudinal dimension of interfirm relationships; and (b) communication, the extent to which a firm engages in information exchange with its partner firm through various channels, as a representative construct of behavioral dimension of interfirm relationships. The importance of commitment as a key "attitudinal" element of relationship marketing (Anderson & Weitz, 1992; Michell & Sanders, 1995) or as the ultimate exchange outcome (Geyskens, Steenkamp & Kumar, 1999) has been emphasized lately as the mode of interfirm exchange has shifted from discrete transactions to close, long-term relationships. From a managerial standpoint, the need and importance of developing and nurturing commitment of a select group of customers or suppliers are vindicated by surging interest in business practices including customer relationship management (Rust, Lemon & Zeithaml, 2001), just-in-time exchange (Frazier, Spekman & O'Neil, 1988), and single sourcing (Segal, 1989).

Communication has been characterized as the "glue that holds together a channel of distribution" (Mohr & Nevin, 1990). The importance of communication as a key "behavioral" element of relationship marketing has been emphasized (Anderson & Narus, 1990; Mohr, Fisher & Nevin, 1996). From a managerial standpoint, the focus of communication has shifted from the use of influence strategies to persuade an exchange partner firm (Boyle et al., 1992) to collaborative communication strategies including bilateral communication (Kim & Frazier, 1997).

Independent variable. Power is arguably one of the most-studied, yet controversial, constructs for interfirm relationships. Despite the recognition that power is an ability to influence an exchange partner, which is separate from the use of power (i.e. influence strategies) or achieved influence (i.e. control), the term


power still carries negative connotations and some researchers considered power as a symptom of "sick and dysfunctional relationships" (Morgan & Hunt, 1994). In this study, we conceptualize power as "potential for influence" in accordance with the dominant research tradition in marketing (Frazier, 1999).

Levels of analysis. We will discuss the relationship between power and its effects in an agency-client dyad at three levels. First, we discuss both independent and dependent variables at the individual firm level. That is, we examine the effect of each dyad member 's possession of power on its partner finn's commitment and communication. Second, at the cross level, we discuss the independent variables at the dyad level and the dependent variables at the individual firm level. That is, we examine the effects of power at the dyad level on each dyad member 's commitment and communication. Note that the opposite case (i.e. independent variables at the individual firm level and dependent variables at the dyad level) is not considered in the study because we do not see any logical link between power at the individual firm level and commitment and communication at the dyad level. Third, we discuss both independent and dependent variables at the dyad level, which has not been done in prior studies. Examining the impact of power at three levels is important for theoretical and managerial reasons. From a theoretical standpoint, a multi-level analysis provides an opportunity to test whether theoretical links that have been discussed at the individual firm level are applicable at the dyad level of analysis. From a managerial standpoint, a multi-level analysis provides a better understanding on how power should be managed to nurture commitment and communication at both individual and dyad levels.

Possession of Power and Commitment in an Agency-Client Dyad

Power and commitment at an individual firm level. As the power of a firm, say an advertising agency, over its exchange partner firm, say a client firm, increases, the client firm's commitment to the relationship with its agency will increase. Following Emerson (1962) and Frazier (1983), we suggest that an agency's possession of power over its client finn means the client is dependent on the agency to achieve its desired goals. There are two major reasons for a client's dependence on its advertising agency: the client firm's motivational investment in goals mediated by the agency and the lack of alternatives other than the incumbent agency. As the client's dependence on the agency increases because of either the superior role performance of the agency or the relative importance of the advertising functions for the client firm, its desire to develop and strengthen the relationship with the agency will increase. Similarly, a client


finn's commitment will also increase when the client firm has few alternative agencies. Exactly the same logic applies to the relationship between a client firm's power over an advertising agency and the agency's commitment to the relationship with that client firm.

Hla: As the power of a client firm increases, its advertising agency's commitment to the relationship with the client firm increases.

Hlb: As the power of an advertising agency increases, its client firm's commitment to the relationship with the agency increases.

Power and commitment at a cross level. With the recognition that interfirm power is a dyadic issue, the examination of power has recently been elevated to the dyad level and two dimension of power at the dyad level are identified: total power and asymmetry of power. Total power refers to overall amount of power existing in a dyad. Total power is an important dimension of power because it reflects the overall amount of resources exchanged between the parties in a dyad. High total power means that an agency and its client firm share common goals and that business interests between them are aligned closely. As the perception of common goals and interests increases, both the agency and its client firm are likely to have higher motivation to continue and further strengthen the relationship (Gundlach & Cadotte, 1994; Kumar, Scheer & Steenkamp, 1995; Lusch & Brown, 1996). Similarly, previous studies found that total interdependence is related positively to distributor commitment (Kumar, Scheer & Steenkamp, 1995). Therefore, we hypothesize that:

H2a: As total power increases, an advertising agency's commitment to the relationship with the client finn increases.

H2b: As total power increases, a client finn's commitment to the relationship with its advertising agency increases.

Asymmetry of power refers to the comparative level of power between the two parties in a dyad (Gundlach & Cadotte, 1994). The extent of power asymmetry indicates how much gap in power exists between dyad members. Unlike the effect of total power, asymmetry of power is likely to divide the commonality of goals and interests between the exchange parties. As the gap in power increases (e.g. the client possesses significantly more power than the agency does), the two firms' desire to maintain the relationship will move to opposite directions. That is, the less powerful (i.e. more dependent) firm will have a


stronger desire to further strengthen and continue the relationship, whereas the more powerful (i.e. less dependent) firm is likely to have less desire to further develop and continue the relationship.

H2c: As relative power of a client firm increases, its advertising agency's commitment to the relationship with the client firm increases.

H2d: As relative power of an advertising agency increases, its client firm's commitment to the relationship with the agency increases.

Power and commitment at a dyadic level. Despite the recognition that interfirm power is a dyadic issue, the bulk of previous research stopped at the cross- level analysis, leaving the question of the relationships between power and its effects at the dyad level unanswered. We examine the dyad-level links through the following hypotheses. High total power is likely to have two major effects on an interfirm relationship. First, a stronger interfirm relationship, as is manifested by higher commitment by both a client firm and its advertising agency, is likely to be forged through higher total power. That is, an agency- client dyad with higher total power is likely to elicit higher total commitment from exchange parties. Second, the asymmetry of commitment, the gap between client commitment and agency commitment, is likely to decrease as the total power increases because higher total power means both firms need each other and that the goals and interests of the two firms converge.

H3a: As total power increases, the total commitment between an agency and its client increases.

H3b: As total power increases, the asymmetry of commitment between an agency and its client decreases.

Unlike the effect of total power, we propose that commitment at the dyad level does not change significantly as the asymmetry of power between a client firm and its agency increases. Specifically, the magnitude of total commitment by two firms should remain stable because the more powerful (less dependent) firm is likely to lower its commitment to the relationship, while at the same time the less powerful (more dependent) firm is likely to increase its commitment to the relationship. Therefore, one firm's decrease in commitment is offset by the other firm's increase in commitment.

H3c: As relative power of a client firm increases, the total commitment between the client firm and its advertising agency does not change.


H3d: A relative power of an advertising agency increases, the total commitment between the agency and its client firm does not change.

As for the effect of asymmetry of power in a dyad on asymmetry of commitment, the level of gap in commitment at the dyad level should remain stable as power gap increases because the more powerful finn's commitment will go down, while the less powerful firm's commitment will go up. In effect, the net effect of the power gap should be close to zero and the commitment gap at the dyad level should remain stable. Therefore, we hypothesize that:

H3e: As relative power of a client firm increases, the asymmetry of commitment between the client firm and its advertising agency does not change.

H3f: As relative power of an advertising agency increases, the asymmetry of commitment between that agency and its client firm does not change.

Possession of Power and Communication in an Agency-Client Dyad

Power and communication at an individual firm level. Communication is the vehicle for all interactions through which information is sent and received between an agency and its client firm. Like other types of relationships, it is hard to envision a good agency-client relationship without an effective information flow (Rosenbloom, 1999) and communication difficulties are a prime cause of problems in interfirm relationships (Mohr & Nevin, 1990).

An agency is likely to engage in more communication with its client firm as power of that client firm increases for the following reasons. First, under a low client power condition, the agency has low dependence on that client and consequently little desire and motivation to engage in communication with the client. In contrast, higher power of a client firm means that the agency depends heavily on the client firm for its goal attainment. Under this condition, the agency will increase its interaction and information exchange with the client firm. Second, sharing information with the client and keeping the client informed become critical for relationship management as the power of the client firm increases because active communication is shown to nurture a stronger bond between firms (Wilson & Mummalaneni, 1988). Exactly the same logic applies to the relationship between an agency's possession of power and its client's communication activities.

H4a: As power of a client firm increases, its agency's communication with the client increases.


H4b: As power of an advertising agency increases, its client firm's communication with the agency increases.

Power and communication at the cross level. An agency is likely to increase its communication with the client firm as total power increases for the following reasons. First, under a low total power condition, neither party is interested in engaging in communication with its exchange partner actively because neither of them is dependent highly on the other finn for its goal attainment. There is simply little need for intensive information exchange that costs time and money to firms. In contrast, an agency is likely to engage in more intensive communication with the client firm under a high total interdependence condition because the agency's goal attainment is highly dependent on the client. In other words, the goals and interests of the two firms are aligned closely and sharing information and keeping each other informed make a lot more sense under a high total power condition. The same logic applies to the relationship between total power and a client firm's communication activities.

H5a: As total power increases, an advertising agency's communication with the client firm increases.

H5b: As total power increases, a client firm's communication with its advertising agency increases.

What will happen to an individual firm's communication when there is a power gap between agency and client? We think a firm with less power will engage in more communication for the following reasons. First, under the condition in which the power gap is low, both firms are likely to have similar needs for communication (i.e. little communication under low, symmetric power condition and intensive communication under high, symmetric power condition). This parity in communication is likely to change as the power gap increases. As relative power of a client firm increases, the agency will engage in communication more than the client firm does because it is really the agency that needs the client more for its goal attainment. Conversely, the client firm in this condition does not see an urgent need to initiate and engage in communication because its dependence on the agency is not as high as that of the agency. We can expect the same logic for the effect of relative power of an agency on its client firm's communication.

H5c: As relative power of a client firm increases, the advertising agency's communication with the client firm increases.


H5d: As relative power of an advertising agency increases, its communication with the client firm increases.

Power and communication at a dyadic level. Extending our discussion on the effect of total power on an individual firm's communication, we believe that the level of total communication between an agency and its client will increase as total power increases. We propose this positive link because both an agency and its client will engage in active communication, thereby increasing the level of total communication. Similarly, the gap in the level of communication will also decrease as total power increases because high total power means that the goals and interests of the two parties are now aligned closely and both parties see a stronger need to exchange and share information.

H6a: As total power increases, the total communication between an agency and its client increases.

H6b: As total power increases, the asymmetry of communication between an agency and its client decreases.

As for the effect of power asymmetry, we propose that the level of total communication should not change significantly as the power gap increases. As relative power of a client firm increases, the client firm may decrease communication, but at the same time the agency that is highly dependent on the client finn will engage in more active communication with the client. Therefore, the client firm's less communication is offset by the agency's more intensive communication. Therefore, at the dyad level, the total level of communication is likely to remain stable.

H6c: As relative power of a client firm increases, the total communication between the client and its advertising agency does not change.

H6d: As relative power of an advertising agency increases, the total communication between the agency and its client firm does not change.

Similarly, the level of communication gap should not change much as the power gap increases. As relative power of an agency increases, the agency may decrease communication, but at the same time the client firm will certainly increase its communication. Loss in an agency's communication is offset by the gain in the client's communication activities. Thus, when communication asymmetry is measured at the dyad level, the level of asymmetry in


communication will stay stable, although it is quite feasible that the level of communication at the individual finn level may change.

H6e: As relative power of a client finn increases, the asymmetry of communication between the client finn and its agency does not change.

H6fi As relative power of an advertising agency increases, the asymmetry of communication between the agency and its client finn does not change.

METHOD

Empirical Study Context

Interfirm relationships between advertising agencies and their client finns in South Korea were chosen as the empirical study setting. The size of the advertising industry in South Korea was $4.5 billion in year 2000, which soared up 26.7% from $3.6 billion in 1999. But a worldwide recession has been hitting the advertising industry lately, resulting in a decline of about 20% drop in expenditures to $ 4.1 billion. As for advertising media, newspapers (36% of total expenditure) and TV (35% of the total expenditure) lead, and spending on Cable TV and Internet/Online media is rising sharply. Major advertising client finns in South Korea are computer and telecommunication companies, services finns, and food and beverage companies. Those three sectors account for more than 50% of nationwide advertising expenditure, while the proportion of traditional major advertising clients in the pharmaceutical industry and the apparel industry has been shrinking lately. According to the latest data (Korea Association of Advertising Agencies, 2000), around 200 advertising agencies are in business and the top ten agencies account for over 70% of total market.

Since the Asian financial crisis, multinational advertising agencies have launched major services in South Korea through various modes of entry including strategic alliance, direct investment, joint venture, or acquisition of South Korean agencies. As of 2000, there are sixteen subsidiaries or joint- ventures of multinational agencies in South Korea. Their business performance has been impressive and accounts for 37.5% of total agency billing, which represents remarkable progress. Because of the aftermath of the Asian financial crisis as well as the recent growth of multinational agencies, the climate of advertising industry in South Korea has been changing rapidly. Profit-focused management, specialization of functional areas such as separate media agencies, and providing education for skilled experts are among the new approaches being


used by South Korean agencies. Accordingly, agency---client relationships are moving toward a more long-term perspective and the compensation system for agencies is becoming more diverse. In-house advertising agencies for major business groups, once typical in South Korea, are now diminishing in their roles and market power, which makes the management of independent agency-client relationships critical.

Measure Development

Multi-item measures were developed for each construct through the following process: First, we reviewed prior academic studies and trade journals on power and its consequences in interfirm relationships. Second, we conducted personal interviews with people in advertising agencies, client firms, and advertising industry associations. Third, we used the results of the personal interviews and a review of prior academic empirical studies and trade publications to develop the measurement items (see Appendix for description of measurement items). Finally, a back-translation process was used to ensure the equivalence between original English measurement items and Korean versions.

Commitment and communication. Agency commitment was measured using four items from Anderson and Weitz's (1992) study, including a strong sense of loyalty, willingness to invest in the relationship, and treating the relationship as a long-term alliance. Wording of the items was changed for client-agency relationships. Client commitment was measured by the same items after going through minor wording changes. For the measurement of communication, we focus on two aspects: frequency and modality. That is, the frequency of interaction between agency and client firms through formal and informal communication channels was measured. In addition, recognizing the reality that communication occurs at different levels of interfirm relationships, we also asked respondents about communication at three levels: between top management of the two companies, between middle-level managers in charge of advertising operations of the two companies, and between the lower-level workers of the two companies. Since, frequency, modality, level of communication tap different aspects of communication, the measure of communication is operationalized as a formative scale.

Total commitment and total communication were constructed by summing: (a) the agency commitment score, and the client commitment score; and (b) the agency communication score and the client communication score, respectively.


Asymmetry of commitment and communication were defined as the comparative levels of commitment and communication in an exchange and the measures were constructed by calculating the absolute difference score between (a) the agency commitment score and the client commitment score, and (b) the agency communication score and the client communication score, respectively (Kumar, Scheer & Steenkamp, 1995).

Power. Power of an agency is defined as the extent to which the focal client is dependent on the agency (Emerson, 1962). Specifically, dependence is operationalized as role performance of the agency, the extent to which an agency fulfills its tasks to client firm's satisfaction. Through personal interviews, three major elements of role performance were identified: role content, role process, and relationship between boundary role personnel. Role content refers to the set of tasks that need to be performed by an advertising agency to achieve the advertising goals of its client firm. We identified eight different tasks for an advertising agency and four different roles for a client firm. Role process is concerned with the extent to which those tasks are fulfilled effectively. We identified four different role process items for an advertising agency and six different role process items for a client firm. Although relationship between an account executive of an agency and advertising staff of a client firm has not been considered as part of role performance in previous studies, we found, through personal interviews with agencies and client firms, that it is an essential element of role performance for advertising agency-client relationships in South Korea. Therefore, we operationalized relationship between boundary role personnel as the extent to which personal ties between account executive and advertising staff are close and stable. We found three relationship items for both an agency and its client firm. Since each task is concerned with a different role of an agency and a client firm, the measure of power is operationalized as a formative scale.

Total power is defined as the sum of the power in an exchange, and its scale was constructed by summing the agency power score and the client power score. Asymmetry of power is defined as the comparative level of power in an exchange and is divided into a client firm's relative power advantage and an agency's relative power advantage conditions. The computation of relative power advantage of a client firm (ADVcli, hereafter) and relative power advantage of an agency (ADVage, hereafter) followed the method used by Kumar, Scheer and Steenkamp (1998). Briefly, ADVdi is equal to client power (P~li) minus agency power (Page) when Pcli > Page and zero when Page -> Peli" Similarly, ADVg e is equal to Page minus Pc~i when Page > Peli and zero when Pdi > Page'


Sampling and Data Collection

The sampling frame was the Korea Advertising Data Directory (1998). We first identified top 300 client firms in terms of their annual advertising expenditure. After deleting those client firms that are either non-for-profit organizations or refused to participate in the study, 100 client firms were selected through systematic random sampling. Through telephone calls to selected client firms, a key informant who is most knowledgeable about the advertising of the client firm's main product line was identified and contacted. The title of those key informants includes senior marketing director and senior marketing (or advertising) manager. Data collection began with a letter to the chosen key informants that introduced the research project. The letter contained a recommendation from Korea Broadcasting and Advertising Corporation (KOBACO). A few days later, we called the key informants and gained permission to deliver the questionnaire to the key informant's office in person. A follow-up call and another questionnaire was sent two weeks later to those that had not responded to the original questionnaire. For the purpose of delivering and collecting questionnaires from key informants, a group of college students were used. The final response rate after two mailings and multiple phone calls was 100% (100 out of 100 delivered).

The questionnaire for client firms contained questions asking for the name of the advertising agency and major contact person in that agency. Those who were identified as the key contact persons by the client firms' key informants were asked to participate in the survey with the explanation on the purpose of the survey and recommendation by KOBACO. All advertising agencies agreed to participate in the survey. We went through the same process for data collection for advertising agencies except that the key informants in advertising agencies were asked to talk about the focal client firm throughout the questionnaire. In effect, we collected data from both sides of agency--client dyads: 100 client firms and corresponding 100 advertising agencies.

Measure Validation

The measurement items first were examined in terms of their item-to-total correlations. Since power and commitment are operationalized as formative scales, coefficient alpha and exploratory factor analysis were conducted only for the commitment scales. Coefficient alphas were 0.80 for agency commitment and 0.82 for client commitment. Exploratory factor analysis result also shows that agency commitment and client commitment are internally consistent, yet different from each other. Therefore, convergent and discriminant validities of


the commitment scales are established. Pearson correlation and exploratory factor analysis results are reported on Table 1

Since we could not conduct factor analysis for formative scales of power and commitment for measure validation purposes, the convergent validity of the power and communication scales was tested by calculating correlation between each scale and a convergence item. For the agency power scale, its correlation

with a convergent item (i.e. the extent to which the agency contributed to marketing and advertising goal attainment of the client firm) was calculated. Correlation between agency power and this item was 0.79 ( p < 0.001). For the agency communication scale, its correlation with a convergent item (i.e. the agency's responsiveness to client requests) was calculated. The correlation was 0.39 (p < 0.001). These results support the convergent validity of the power and communication scales. The discriminant validity of the power and communication scales was checked by correlation matrix on Table 1. Correlations between power

Table 1. Pearson Correlation and Exploratory Factor Analysis Results.

A. Descriptive Statistics and Pearson Correlation

1 2 3 4 5 6

1. Client power 1.00 2. Agency's commitment 0.56 1.00 3. Agency's communication 0.51 0.43 1.00 4. Agency power 0.12 0.11 -0.04 1.00 5. Client's commitment 0.12 0.17 0.00 0.67 1.00 6. Client's communication 0.18" 0.11 0.15 0.54 0.52

Mean 4.51 5.16 25.52 4.98 5.02 Standard deviation 1.13 1.00 4.71 0.89 0.95

1.00

25.86 5.41

* Coefficients larger than 0.18 are significant at the 0.05 level.

B. Exploratory Factor Analysis of Agency Commitment and Client Commitment

Items Factor 1 Factor 2

Client commitment 1 0.83 0.15 Client commitment 2 0.77 0.12 Client commitment 3 0.87 0.08 Client commitment 4 0.74 0.04 Agency commitment I 0.06 0.83 Agency commitment 2 0.08 0.84 Agency commitment 3 -0.01 Agency commitment 4 0.13 0.78


and communication are 0.56 for agency data and 0.54 for client data, which are significantly different from unity. These results provide an evidence of discriminant validity. The results of key informant bias check are available upon request.

A N A L Y S I S A N D R E S U L T S

A series of regressions was conducted with power as the independent variables and commitment and communication as dependent variables. We used the Generalized Least Square option of SPSS to take the correlation between commitment and communication into account in model estimation. The regression results are reported on Table 2.

Possession of Power and Commitment

Analysis results in Table 2.A indicate that an agency's commitment to the relationship increases as power of that client firm increases (b = 0.50, p < 0.001) and a client firm's commitment to the relationship increases as power of that agency increases (b = 0.72, p < 0.001), in full support of Hla and Hlb. Analysis results on Table 2.B indicate that an advertising agency's commitment to the relationship increases as total power increases (b = 0.27, p < 0.001). Similarly, a client firm's commitment to the relationship increases as total power increases (b = 0.37, p < 0.001). Thus, H2a and H2b are fully supported. As was hypothesized, we found that an agency's commitment to the relationship increases as relative power of that client firm increases (b = 0.29, p < 0.05). Similarly, a client firm's commitment to the relationship increases as relative power of that agency increases (b = 0.31, p < 0.001). Therefore, H2c and H2d are fully supported.

Analysis results on Table 2.C indicate that total commitment between agency and client increases as total power increases (b = 0.64, p < 0.001). Conversely, the asymmetry of commitment between agency and client decreased as total power increased (b = -0.04, n.s.), but it was not statistically significant. Therefore, H3a is supported and H3b is not supported by data. As for the effect of relative power of a firm on commitment, we found that total commitment does not change significantly as relative power of either client firm (b = -0.12, n.s.) or agency firm (b = 0.11, n.s.) increases, in full support of H3c and H3d. Although we hypothesized that the asymmetry of commitment between agency and client does not change as relative power of client (or agency) increases (H3e and H3f), the analysis results indicate that asymmetry of commitment increases as relative power of a client firm increases (b = 0.62, p < 0.001). Relative power of an agency also has a similar, albeit weaker, effect on

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asymmetry of commitment (b = 0.17, p < 0.10). Therefore, H3e and H3f are not supported by data.

Possession of Power and Communication

The analysis results on Table 2.A indicate that an advertising agency's communication increases as power of that client firm increases (b = 2.12, p < 0.001) and a client finn's communication increases as power of that agency increases (b = 3.20, p < 0.001). Therefore, H4a and H4b are fully supported. We found that both an agency's communication (b = 0.83, p < 0.01) and a client firm's communication (b= 1.71, p<0 .001 ) increase as total power in the dyad increases. Therefore, H5a and H5b are fully supported. We also found that an advertising agency's communication increases as relative power of its client firm increases (b = 1.99, p < 0.01), in support of H5c. However, a client firm's communication with its advertising agency does not change significantly as relative power of its agency increases (b = -0.07, n.s.). Therefore, H5d is not supported.

As hypothesized, the total communication increases as total power increases (b = 2.54, p < 0.001). However, the asymmetry of communication does not decrease as total power increases (b = 0.16, n.s.). Therefore, H6a is supported and H6b is not supported by data. In support of H6c and H6d, the total communication does not change significantly as relative power of the client finn (b =-1.84, n.s) or the advertising agency (b =-1.03, n.s.) increases. Although we hypothesized an insignificant change, the analysis results suggest that the asymmetry of communication increases significantly (b = 2.45, p < 0.001) as relative power of a client finn increases. In contrast, the asymmetry of communication does not change significantly (b = -0.15, n.s.) as relative power of the agency firm increases. Therefore, H6e is not supported and H6f is supported by data.

DISCUSSION

Speculation on Unexpected Results

The effect of asymmetry of power on asymmetry of commitment. Although we hypothesized that asymmetry of commitment does not change as relative power of either an advertising agency or a client firm increases (H3e and H3f), the analysis results indicate that the gap in the commitment increases as relative power of the client firm (b = 0.62, p < 0.001) or the agency (b = 0.17, p < 0.10)


increases. These results suggest that one firm's change in commitment due to power asymmetry is not fully offset by the other firm's change in commitment to the opposite direction. Specifically, a comparison of two regression coefficients indicates that the relative power of a client firm has stronger effect on the asymmetry of commitment than relative power of an agency firm does (t = 2.78, p < 0.01). Thus, it is the advertising agencies that need to be more attentive to the power gap issue.

The effect of asymmetry of power on asymmetry of communication. As hypothesized, we found that the asymmetry of communication does not change as relative power of the agency increases (b =-0.15, n.s.). Yet, the asymmetry of communication increased significantly as relative power of a client finn increases (b = 2.45, p < 0.001). It is quite clear that relative power of a client firm has a stronger effect on the asymmetry of communication than relative power of agency does (t = 3.08, p < 0.01). The analysis results on Table 2.B indicate that the major cause of this difference is a client finn's steep decrease in communication. That is, a client finn lowers communication with its agency significantly as its relative power increases (b =-3.83, p < 0.001), whereas a client finn's communication does not change much when relative power of its agency firm increases (b = -0.07, n.s.). These different responses to power gap suggest that agencies should pay more attention to the power asymmetry and also highlight the need to study both sides of a dyad.

Implications of the Study Results

Effects of power on commitment and communication at the individual firm level. The analysis results on Table 2.A clarify two major issues in research on power: theoretical and methodological. From a theoretical standpoint, the results suggest clearly that power of a finn is conducive to positive attitude (i.e. commitment) and behavior (i.e. communication) of both advertising agencies and client firms. Therefore, the allegation that power is a symptom of dysfunctional relationships (Young & Wilkinson, 1989) needs to be dropped. Instead, the construct of power should be treated as a strategic variable that drives long-term, close ties between firms.

From a methodological standpoint, the results suggest that operationalizing and measuring power with a "role performance" approach (Frazier, 1983) explains a significant amount of variation in commitment and communication. Note that we did not include any covariate in the regression models, yet R-squares on Table 2.A ranges from 0.26 (agency total communication) to 0.46 (client commitment). These results contrast with the prior analysis results based


on "replaceability" measure of power that had R-squares ranging from 0.04 (conflict) to 0.08 (distributor commitment) (Kumar, Scheer & Steenkamp, 1995). These differences in explanatory power suggest strongly that the "role performance" approach of power does a better job and should be used.

From a managerial standpoint, the results on Table 2.A suggest a clear divergence on the effect of one's own power and exchange partner finn's power on commitment and communication. For example, it is really the power of the client finn that motivates an agency to commit more to the relationship and engage in more communication with the client finn. In contrast, the power of an agency as is perceived by the client firm does not have any significant effect on either the agency's commitment (b = 0.04, n.s.) or communication (b = -0.54, n.s.). This divergence suggests the possibility of a perceptual gap between a client finn and the agency itself on the power of that agency, thereby highlighting the need to know perceptions and opinions of both parties.

Effects o f power on commitment and communication at the cross level The results in Table 2.B show a very consistent pattern of the differential effects of relative power on an individual firm's commitment and communication. That is, a finn's own relative power advantage lowers its commitment to the relationship and communication with the exchange partner finn, whereas a finn increases commitment and communication as the relative power of the partner firm increases. To the best of our knowledge, this is the first clear empirical evidence that firms adjust their commitment and communication in a discrim- inating fashion as the power condition in a dyad changes, although this effect has been alluded to in the literature (Kumar, Scheer & Steenkamp, 1998).

From a managerial standpoint, we observe slightly different effects of the power gap on commitment and communication on Table 2.B. That is, one finn's commitment to the relationship is clearly driven by the direction of power advantage within a dyad. Thus, a more powerful film decreases its commitment, whereas a less powerful finn increases its commitment, to the relationship. In contrast, power gaps appear to have divergent effects on communication. That is, an agency increases communication with its client firm significantly (b = 1.99, p < 0.01), but a client finn decreases communication with its agency significantly (b=-3 .83 , p<0 .001) , as relative power of that client firm increases. In contrast, neither an agency (b=--0.96, p < 0 . 1 0 ) nor a client finn (b =--0.07, n.s.) changes communication level significantly as relative power of an agency increases. This asymmetry between a client and an agency suggests that, at least in the context of South Korean advertising industry, advertising agencies are expected to initiate and maintain a certain level of communication regardless of its power advantage over its client finn.


Interestingly, both agencies and clients appear to be aware of this "unwritten rule" of the advertising industry.

Effects of power on commitment and communication at the dyad level The results on Table 2.C indicate that our hypotheses on the effects of total power on total commitment and total communication are fully supported. That is, total commitment and total communication increase as total power increases, while asymmetry of commitment and communication do not change much as total power increases. Thus, the constructive nature of power for exchange parties' attitude and behavior is supported at the dyad level as well. We also found that total commitment and total communication do not change much as either relative power of a client firm or an advertising agency increases. This result clearly shows the "compensatory" nature of power advantages for commitment and communication at the dyad level. That is, the effect of a firm's power advantage is offset by the effect of the other firm's power disadvantage, thereby leaving the net effect of power gap at the dyad level stable. Relatedly, this result also corroborates a dyadic nature of interfirm relationships, reminding us the danger of examining only one side of a dyad in the study of interfirm relationships.

From a managerial standpoint, the above results indicate that what matters more for commitment and communication at the dyad level is the magnitude of total power rather than the extent of power gap between an agency and its client firm. Therefore, "expanding the size of the pie" through collaboration (Jap, 1999) should be the focus of the client-agency relationship instead of worrying about the imbalance of power between the two firms (cf. Heide & John, 1988). Thus, from an agency's perspective, the best strategy is to reduce the power gap and to expand the total power at the same time. Another insight from Table 2.C is the divergent effects of power advantages on asymmetry of commitment and communication at the dyad level. That is, asymmetry in commitment and communication does not change much as relative power of agency increases (b=0.17, p < 0 . 1 0 and b= -0 .1 5 , n.s. for commitment and communication, respectively). In contrast, asymmetry in commitment and communication increase significantly (b = 0.62, p < 0.001 for commitment b = 2.45 p < 0.001 for communications) as relative power of a client firm increases. Therefore, it is the condition in which a client firm has more power that changes dyad members' attitude and behavior.

This result suggests two implications. First, as a seller of advertising service, an agency may be expected to remain committed to the relationship and maintain communication with its client firm even if its power over a client firm increases. On the other hand, as a buyer of advertising service, a client firm has more leeway in adjusting commitment to its agency and communication with that


agency as power condition changes. Second, this divergence also suggests that it is the advertising agencies that should be more vigilant about imbalance in power conditions and make efforts to expand the magnitude of total power through client support programs and superior role performance.

Limitations of the Study and Further Research Directions

The paper has two potential limitations. From a conceptual standpoint, our measurement of power did not consider the "replaceability" dimension of dependence (Emerson, 1962). Although the analysis results indicate that "role performance" measure of power does an excellent job of explaining the variations in commitment and communication, the study is still vulnerable to a criticism that a full domain of power has not been tapped and measured. From a methodological standpoint, using an absolute difference scores of asymmetry in commitment and communication and spline measure of power asymmetry as was suggested by Kumar, Scheer and Steenkamp (1995, 1998) carries the potential problem of missing the feasible nonlinear functional relationships between power and outcome variables (Edwards, 1994).

Further research on client-agency relationships can be expanded in two ways. First, the link between power and other outcome variables such as control and economic performance should be examined. The relationship between power and control in a dyad remains elusive despite its importance for managerial purposes. Similarly, the link between power and economic outcome variables should be clarified (Buchanan, 1992). If indeed total power is conducive to positive attitude and behavior of dyad members and the gap in power does not change asymmetry of attitude and behavior of dyad members, total power should also lead to a better economic performance of a dyad. Yet, this speculation has not been tested empirically. Second, the relationship between power at the interpersonal level and power at the interfirm level deserves more research attention. The importance of interpersonal issues appears quite high in advertising agency-client firm relationships in which power of an account executive can make a significant difference. Power at the interpersonal level should be examined further and related to commitment and communication at the interpersonal level.

A C K N O W L E D G M E N T S

The authors thank anonymous reviewers for their helpful comments and C. Ray Taylor for his encouragement and support. Financial support by Korea Broad- casting and Advertising Corporation for this study is gratefully acknowledged.


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A P P E N D I X

(Questionnaire for Client Firms)

I. Power

How well does your advertising agency perform on the following tasks? (1: very dissatisfied - 7: very satisfied)

1. Role content (a) understanding on market and consumers (c) suggestion of advertising concept (e) media planning (g) event and special promotion

2. Role process (a) understanding for our decision-making

process (c) easy coordination in execution

3. Relationship (a) competence of the agency staff

(c) stability of the agency personnel

(b) suggestion of good marketing ideas or tactics (d) creativity (f) media management and execution (h) market research and ad effectiveness research

(b) easiness to reach agreement in decision making

(d) responsiveness to client requests

(b) personal relationship between AE and client advertising staff

II. Client Commitment

How much do you agree with the following statements (1: Strongly disagree - 7: Strongly agree)

1. We treat the relationship with this agency as a long-term, cooperative relationship. 2. We have been investing much time and effort to the relationship with this agency. 3. This agency and our firm have strong business ties. 4. We are willing to switch to a new agency if that agency offers better terms ®.

III. Communication

How often does your staff meet with the people from the advertising agency to discuss advertising issues? (1: no interaction at all - 7: very frequent interaction)

1. Between top management (a) office meetings and visits (c) exchange of documents

2. Between senior managers (a) office meetings and visits (c) exchange of documents

3. Between advertising staff (a) office meetings and visits (c) exchange of documents

(b) telephone calls (d) informal meetings (dinner, sports, etc.)



SELF-ESTEEM, LIFE-SATISFACTION

AND MATERIALISM: EFFECTS OF

ADVERTISING IMAGES ON CHINESE

COLLEGE STUDENTS

Shuhua Zhou, Fei Xue and Peiqin Zhou

ABSTRACT

This paper investigated the effects of exposure to advertising images on quality of life issues. Affordable products and unaffordable products, as well as control images, were presented to participants of the experiment. Subjects' self-esteem, life-satisfaction and materialism were measured using a battery of scales. Results indicated affordable product images did not affect any dependent variables. However, exposure to unaffordable products enhanced, rather than decreased, Chinese students' self-esteem and life-satisfaction, contrary to results found in previous social comparison research. This suggested that Chinese students were rather optimistic about their future and they used future orientation in their prediction of success. Implications of the study were discussed.


243

244 SHUHUA ZHOU, FEI XUE AND PEIQIN ZHOU

INTRODUCTION

Advertising conveys cultural symbols by means of well-crafted images with inherent values. People are exposed to countless advertising images every day in the form of billboards, magazine images, and television commercials. Critics are concerned that advertising is directed towards those with money, margin- alizing those who are poor and low in social and economic status (Englis, 1992). Because the purpose of an advertisement is to arouse interest and motivate desire, many wonder about the effects of advertising on viewers' perception of the self and life in general.

As advertising is often about the glamorous, the better and the more, the images often present an idealized version of life. These idealized images work through one's psyche in two mechanisms. First, it leads to self-comparison with those images, in which the consumer may feel less satisfied with his or her current circumstance and strive to achieve the idealized state. Second, the self-comparison can result in an upward shift of consumers' expectations for the standard of living that they believe they should achieve (Richins, 1995). As a consequence of such a comparison, people may feel frustrated if they do not obtain the "better life" presented in advertising.

Almost without exception, the idealized images presented in advertising focus on the material aspect of life. Many researchers argue that, because the emphasis on material possessions has both a functional value and a symbolic one, long- term exposure to such images will lead to higher materialism. Ultimately, this will drive people to evaluate the quality of general life by the quality of material life, which typically results in a negative evaluation of life satisfaction (e.g. Sirgy et al., 1998; Zinkhan, 1994; Sirgy, 1998).

However, most research on quality of life issues treats exposure to advertisement as a global construct. Little empirical research has been done focusing on the nature of advertised products on viewers' perception of their self worth. It is important to understand what enhances and what interferes with a person's evaluation of the self and his or her life in relation to the features and characteristics of the advertised products.

This study used social comparison theory to test the effects of exposure to two types of advertised products, either affordable or unaffordable for the participants at the time of the study. Three dependent variables were examined regarding exposure to such images: perception of life satisfaction, self-esteem and sense of materialism. This study therefore addressed an important area that needed more investigation: the impact of advertising on issues dear to the evaluation of a happy life in a society saturated with media images. By examining the effects of different images, this study further explored how

Self-Esteem, Life-Satisfaction and Materialism 245

advertising provided or activated constructs in viewers' minds and how people used these as criteria reference in their subsequent judgment and interpretation of concerns about quality of life.

T H E C A S E C O U N T R Y

We chose a fast developing country, the People's Republic of China, as our target of investigation. The variables involved in this study, self-esteem, life satisfaction and sense of materialism, are particularly important in the case of an evolving society where materialistic consumption is an emerging concept. Arguably, effects of advertising images would manifest themselves more readily with the benefit of a sharp contrast between traditional Confucian values and the newly found consumer freedom.

Thanks to the policy of openness and reform enacted in 1978, China has become one of the epitomes of economic success. In 1992, the country furthered a vigorous market-oriented reform, which became a major impetus responsible for the emergence of a consumer market and consumer culture. The mass media, especially advertising, reinforced this process (Wei & Pan, 1999).

Under these circumstances, materialistic possession began to gain momentum. Most families in China now have electronics, such as television sets, washing machines and refrigerators. These items were considered unaffordable luxuries twenty years ago. A survey conducted in Shanghai indicated that in 2000 there were 147 television sets, 102 refrigerators, and ninety-three washing machines per hundred families. The counterpart numbers in 1985 were twenty-two, twenty, and twenty-six. 1

On the other hand, advertising, which was accused of reinforcing capitalism and hedonism and was absent from the communist media landscape since the Cultural Revolution in the 1960s, came back to China in 1978 and helped spur the growth of a market-oriented economy. Tremendous strides have been made since then. It was reported that from 1987 to 1996 advertising expenditures in China increased by almost 900%. 2 Wang (2000) surveyed the advertising environment in Beijing on a day in 1996 and reported a total of 386 ads encountered. Understandably, most of these commercials emphasized materialistic consumption, which was incompatible with traditional Confucian and Communist values. While life satisfaction used to depend on how favorable one was viewed by the Party and little on material possession, it would be interesting to see the impact of these newly gleaned concepts on viewers' sense of materialism, self-esteem and ultimately, life satisfaction.


is a function of the social environment (Mruk, 1999). Self-esteem is the result of comparison between the ideal self and the current, actual, or "real" self. The smaller the gap is between the ideal and the actual, the higher the self-esteem. Conversely, the greater the gap, the lower the self-esteem. Advertisements can very well serve as the stimuli that remind and highlight the gap between the ideal and the reality. The study of Gulas and McKeage (2000) has testified that advertisements can change viewers' self-esteem. Generally speaking, after comparison with the idealized model in advertisements, viewers have lower scores on self-esteem. It is reasonable to predict that lacking the financial ability to buy the advertised products will make people feel worse about themselves. This discussion suggests the following hypotheses:

H2a: Exposure to ads of currently affordable products and services will not influence viewers' self-esteem.

H2b: Exposure to ads of currently unaffordable products and services will lower viewers' self-esteem.

It has been consistently reported that self-esteem is positively related to life satisfaction. Lewinsolm et al. (1991) stressed that self-esteem is one of the determinants of life satisfaction in their conceptual model of life-job satisfaction. Sekaran (1986) suggested self-esteem is the best predictor of life satisfaction because self-esteem helps surmount negative experiences, which in turn helps the individual to experience the good things in life. Moreover, those who view themselves in a positive way tend to observe life events more positively and may therefore show higher life satisfaction. Thus we expected a positive relationship between self-esteem and life satisfaction to emerge in the present study.

H3: Self-esteem is positively related to life satisfaction.

Materialism

Materialism denotes the importance one attaches to their worldly possessions (Belk, 1985). According to Belk (1984), the highest levels of materialism are assumed when such possessions take up a central place in one's life and become the greatest source of satisfaction and dissatisfaction in life. For a materialist, possessions are central to his or her life in that he or she feels that increased consumption increases his or her satisfaction with life. Materialism may become a problem in situations where the physical goal of consumption overshadows all other goals of self and interactive development (Belk, 1985; Richins & Dawson, 1992).


Materialism encourages customers to buy and consume. It leads to the idea that more is better. A desire for more means increased sales, so advertisers often incorporate materialistic appeals in their messages. Such appeals facilitate the attainment of corporate objectives (in terms of market share or profitability) because if consumers lose focus on material acquisitions and place an emphasis on non-material concerns, then they will consume less from the economic system, leaving marketers with fewer consumers and less demand for their goods (Zinkhan, 1994).

Materialism is observed to influence people's perception of life satisfaction. Richins and Dawson (1992) conceptualized materialism as a consumer value with three components: success (possession-defined success), centrality (acquisition centrality), and happiness (acquisition as the pursuit of happiness). Possession-defined success suggests that materialists tend to judge their own and others' success by the number and quality of possessions accumulated; acquisition centrality suggests that materialists make possessions the focus of their lives; acquisition as the pursuit of happiness factor suggests that materialists regard possessions as essential to their satisfaction and well-being in life. Thus the value of possessions for materialists lies in their ability to both confer status and to project a desired self image.

Materialism is thus a dispositional trait or personality that negatively influences life satisfaction. The reason is that materialism involves a tendency to experience negative emotions. Belk (1985) suggested that materialistic people are usually possessive, nongenerous, and envious. Several studies have examined the relationship between materialism and happiness or life satisfaction (e.g. Belk, 1984; Richins & Dawson, 1992). This literature review leads to the following hypothesis:

H4: Materialism is negatively related to life satisfaction.

EXPERIMENTAL STIMULI

We selected twenty-four print advertisements from mainstream Chinese magazines and divided them into three groups. Eight of them were used for the control group, with the ads featuring PSA and health issues. Eight of them featured affordable products such as orange juice and shampoo. Another eight were ads of products and services incompatible with subjects' current financial status, such as automobiles and overseas trips. Experimenters selected the ads if they were of a full page and the product was the central visual element. Manipulation checks indicated that categorization were adequate, as data


indicated that the majority (90.6%) of students' monthly allowance fell below 1000 yuan (approximately $125) and 97.3% of their annual family income was lower than 100, 000 yuan (approximately $12,500). An import family sedan, such as the Honda Accord, sold for more than 300,000 yuan (approximately $37,500) in the Chinese market, hardly within reach for most families.

P A R T I C I P A N T S A N D P R O C E D U R E

The participants, seventy-five junior college students at a large Southeastern Chinese university, were randomly divided into three groups and exposed to different print advertisements we selected: advertisements for public good, advertisements for currently affordable products (such as shampoo, orange juice, etc.), and advertisements for currently unaffordable products and services (automobiles and overseas trips). There were thirty-five males and forty females. Each group contained relatively equal numbers of male students and female students to minimize the impact of gender differences. Participants were asked to view eight advertisements in each group and answer two questions unrelated to our experiment to make sure they paid attention to the advertisements.

College students were chosen for this experiment for several considerations. In one of the manipulated conditions, subjects were exposed to luxury product images. If anyone would be able to afford them in China, college students would be the most likely consumers of luxury products in the future. In an effort to sustain its economic boom, the Chinese government has been putting technology initiatives among their highest priorities, and they have rewarded thousands of scientists with generous compensation for their innovations. The intention is to instill the idea that knowledge equates to power and money. Therefore, if advertisers of luxury products want to secure the Chinese market in the long run, college students should reasonably be the target audience.

On the other hand, one could reasonably argue that if effects on quality of life issues were detected in college students after exposure to unaffordable products, there would be good reason to suspect that a more dramatic effect existed for the general population. College students were assumingly more rational human beings with promises of future affordability. With dimmer indications in either affordability or rationality, the adverse effect of exposure to luxury items presumably would be greater for the general public as viewers might have difficulty discerning advertised reality and the real world.

However, student participants also limited our generalization scope. College students, after all, were special in many ways, especially in the Chinese context. Therefore, any findings should be interpreted with caution.


MEASURES

After viewing the advertisements in the given condition, participants were required to answer fifty questions including the test scales and several filter questions.

A combination of measures was adopted in this study. The three-item life satisfaction measurement scale was developed from the congruity life- satisfaction scales by Sirgy et al. (1998), asking how satisfied participants were compared to either what they had ideally hoped to become, or to what their parents wanted them to be, or to the accomplishments of their friends. The reported alpha for these measures ranged from 0.744 to 0.934, depending on the country in which they were used. China registered the lowest coefficient alpha, a fact substantiated again in this study as we recorded a coefficient alpha of 0.73. This might have to do with the adoptability of the scales in China. These scales all seemed to measure individual achievements as an indicator of life-satisfaction. Individual achievements were downplayed by the communist regime which advocated collective achievements for decades. It could also be that some nuances were lost when the original scales were rendered into the Chinese language.

Richins and Dawson's (1992) eighteen-item scale was used to measure materialism (see Appendix 1), with a coefficient alpha of 0.68, while the statistics reported in the original article stood at 0.80. Again, this was likely caused both by a longtime sneering campaign by communist ideologists and translation problems. On the other hand, Rosenberg's (1965) ten-item scale was used to measure self-esteem (see Appendix 2), with the coefficient alpha tested to be 0.74, compared to the original statistics reporting at 0.72.

All responses were recorded on five-point Likert scales ranging from "strongly disagree" (1) to "strongly agree" (5). The reversed scales were recoded after data were collected.

R E S U L T S

Life satisfaction

The first hypothesis stated that exposure to ads of currently affordable product would not influence viewers' life-satisfaction. Results supported this hypothesis. There was no significant difference between the life satisfaction of the control group (M = 2.56, SD = 0.70) and that of the affordable group (M = 2.72, SD = 0.53), t (48 )=-0 .91 , p>0 .10 . However, the hypothesis that exposure to currently unaffordable product would lower viewers' life-satisfaction was not


supported. On the contrary, the mean satisfaction index (M = 2.93, SD = 0.70) was significantly higher than that of the control group (M = 2.56, SD = 0.70), t (48) = - 1.89, p < 0.05 (one-tailed test). This result represented a stark contrast to our hypothesis. That is, exposure to currently unaffordable product advertisements significantly improved Chinese college students' life-satisfaction.

Self-Esteem

The hypothesis that exposure to currently affordable product would not influence viewers' self-esteem was supported. There is no significant difference between the self-esteem of the control group (M = 3.20, SD = 0.45) and that of the affordable group (M = 3.10, SD = 0.39), t (48) = 0.91, p > 0.10 (two-tailed test). However, results did not support the hypothesis that exposure to ads of currently unaffordable products would lower viewers' self-esteem. On the contrary, and similar to our findings on life-satisfaction, exposure to ads of currently unaffordable product significantly improved Chinese college students' self-esteem (M = 3.52, SD = 0.48), t (48) = -2.39, p < 0.05 (one-tailed test).

Self-Esteem and Life-Satisfaction

In conformity with results of previous research, a positive correlation between self-esteem and life-satisfaction was observed (r = 0.57, p < 0.00), supporting Hypothesis 3 which stated that higher self-esteem corresponded to higher life- satisfaction and vice versa.

Materialism and Life-Satisfaction

Results indicated that there was no correlation between materialism and life- satisfaction (r = 0.02, p > 0.10) in the case of Chinese students, failing to support Hypothesis 4 which predicted that materialism had a negative correlation with life satisfaction.

D I S C U S S I O N

Research in social comparison suggests that media viewers are prone to use images in advertisements to make upward comparisons, resulting in inferior evaluation of their self worth and the social environment because the images in advertising are often superior to those in real life (e.g. Richins, 1991; Gulas & McKeage, 2000). In this study, advertising images were not treated as a global construct. Rather, we manipulated them into two disparate categories:


affordable and unaffordable items. It was expected that affordable products, such as shampoo, orange juice and candy, were too trivial to have an impact on people's life-satisfaction, self-esteem and sense of materialism. However, viewing unaffordable products, or automobiles and pleasure trips overseas, was expected to activate upward comparison in Chinese college students. Consequentially, participants' evaluation of their current situation would be lowered.

As predicted, exposure to affordable products did not have any significant impact on either life-satisfaction or self-esteem, supporting Hypotheses la and 2a. These lent credence to our contention that treating all images in advertisements as a global construct might not be a precise representation and that careful categorization might offer us more insight into how different images might bear different impact. On the other hand, self-esteem and life satisfaction were found to be positively correlated, supporting Hypothesis 3 and confirming previous findings in the literature.

However, statistical tests failed to support Hypothesis 4, which stated that materialism was negatively correlated with life-satisfaction. Results indicated that neither affordable products nor unaffordable products had any effect on viewers' sense of materialism. Several reasons could be responsible for this. It could be that after years of communist indoctrination for the lofty goals of utopian equality, worldly possession was still shunned if not despised. On the other hand, non-material quality of life concerns have been a central part of Confucian teaching over the years, in that happiness was defined more in terms of one's knowledge acquisition than materialistic consumption. Of course, the possibility also existed that our participants were not representative of the general population. Barring such a scenario, the fact that there were no effects on Chinese students' desire to buy and consume after exposure to either affordable or luxury items does not bode well particularly for a developing market economy in China. As Wei and Pan (1999) argued, Chinese are adopting an official discourse on establishing a market economy to legitimize their fever for consumption. Results of this study were not especially encouraging in this regard.

The more interesting findings, however, came from exposure to unaffordable products, in which results ran opposite to the predicted direction. Exposure to ads of currently unaffordable products enhanced Chinese college students' perception of self-esteem and life-satisfaction.

Most studies on social effects of advertisement focus on populations in developed countries, especially in the U.S. where the general population tends to pessimistically consider their failure of having the good life presented in ads instead of being skeptical at the believability of the life presented in advertising images (Williams, 1981). In this study, we might be dealing with a student


population who is very confident and optimistic about their future. The evidence of which came from a question in which we asked participants to predict when they would be able to afford a car and a pleasure trip overseas. Table 1 revealed that they were hopeful of their financial future.

To these students, although the advertised luxury items were temporarily beyond their reach, their predicted affordability was not far from the horizon. 82.7% students agreed that they would be able to afford an overseas trip in ten years, while 54.7% predicted car ownership within 10 years. It is possible that these luxury items were viewed as potentially affordable to them, and they represented a higher quality of life in the future, thus enhancing participants' evaluations.

There was also a negative relationship between predicted affordability of an automobile and self-esteem (r = -0.37, p < 0.001), indicating that the sooner the students predicted they would be able to afford a car, the higher self-esteem they had. The negative relationship also existed between the predicted time to afford an overseas trip and self-esteem (r = -0.27, p < 0.05).

Several factors are accountable for this optimism in Chinese college students. First, China's continuous economic development over the last two decades has caused dramatic improvement in life quality. From 1978 to 1997, China's Gross Domestic Product (GDP) growth rate surpassed 10% every year, higher than any other country's for the same period. The poor population declined from 33% in 1978 to 4% in 1997 (Li, 1998). A survey done in twenty-two major cities in China in 2000 revealed that 41.6% of subjects agreed that their quality of life had been improved in 2000, and 40.4% predicted that the quality of life would be further improved in 2001. In other words, optimism continues to run high in regards to life improvement.

It is also no secret that Chinese college students can reasonably dream of a promising future. In 1997, only four out of every one hundred college-age youths were able to enroll in either a college or a university (Cai & Tian, 2000).

Table 1. Prediction of Affordability of Overseas Trip and Car.

Overseas trip Buying a car Prediction of affordability Number Percentage Number Percentage

Within this year 3 4.0 0 0 Within 1-2 years 8 10.7 0 0 Within 3-5 years 22 29.3 6 8.0 Within 5-10 years 29 38.7 35 46.7 After 10 years 12 16.0 33 44.0 Never have the chance 1 1.3 1 1.3


Completion of a higher education inevitably improves the graduates' chances of becoming China's elites in the social and economic hierarchy. From this perspective, they have every reason to be buoyant about higher self-esteem and life satisfaction.

If we were to understand self-esteem from a formula proposed by James (1983) more than a century ago, we would understand how optimism in Chinese students would readily translate into self-esteem.

The formula states:

Self-Esteem - Su ccess

Pretent ions

In this experiment, the denominator, or pretensions, was equally distributed in the control group and in the experimental groups. Therefore, the only variable that could account for an increase in self-esteem would be an increase of the numerator of "success." Chinese student participants might be experiencing "future orientation" (Cameron, 1977), which stated that if one's best life accomplishments seemed to lay ahead, attention would be future directed. Gulas and McKeage (2000) argued that college students were more likely to do social comparison because they had not been fully developed and their futures bore far more potential than most others in the population.

To understand Chinese college students' processing of advertising, it seems that James' formula can be modified as follows:

Self-Esteem = Future Success

Pretent ions

Keeping the pretensions constant, an increase of future success will account for an increase in self-esteem. The result is consistent with Shobe et al.'s (2001) hypothesis that an enhanced orientation toward the future may increase an individual's social and economic well being.

It would be interesting to see whether the enhancing effects of unaffordable ads will remain over time in Chinese college students. As pointed out earlier, Chinese college students use future success to evaluate their self-esteem and life satisfaction. If their expectations about the future are met, we may predict that they will maintain high self-esteem and life-satisfaction. If their expectations exceed the reality and they do not realize the successes they anticipate, it is reasonable to predict that would have a negative effect. To date, most Chinese cannot afford to have an overseas trip or a car. It is reported that in 1999, only 4.26 million Chinese traveled outside Mainland China for private activities) and this represented less than 0.04% of the overall population in China. Statistics


reported that automobile ownership was 1.14 for every one hundred people in China 4. Compared with the current living standard in China, Chinese college students' expectation about the future is high. Whether these expectations will be met in the future is a key to understand whether "future success" can be used as a constant evaluator for an optimistic audience.

LIMITATIONS

Care should be taken in generalizing these results to college students and the general population due to the following reasons.

First, the exposure to advertisements in the experiment was different to how people view advertisements in real life. In this experiment, the participants viewed eight print advertisements and answered two questions about each ad. To answer the questions in the experiment, the participants had to pay more attention to advertisements that they may skip in real-life viewing.

Second, Chinese college students have their own characteristics that make them different from college students in other countries. They are also different from other segments of the Chinese population.

Third, the implications of these results are open to debate. Although in this study, Chinese college students are influenced by luxury advertisements positively, it is hard to argue that over time this effect may sustain. As discussed above, Chinese college students take these luxury products for granted as part of their future, and it is uncertain whether this is a realistic projection. Thus, the currently "positive" effects may be the cause of detrimental long-term effects of luxury ads.

IMPLICATIONS AND DIRECTIONS FOR FUTURE RESEARCH

Results in this study showed that ads of unaffordable products and services exerted different influence on Chinese college students' self-esteem, as compared to previous researched populations.

Future research should examine whether these findings are applicable to other comparable populations, such as college students in western countries, to see if different cultures cultivate a different mindset toward advertised products. It would also be interesting to utilize students from developed Asian countries such as Singapore, South Korea and Japan to see if similar cultures nurture a similar mentality in interpreting advertising images. However, it would be advisable to insert a couple of control variables in the measurement instrument to further tease out the effects of exposure on different segments of a student


population. One of those should be the inclination to social comparison - or how likely a person is to comparing status with others. Another potential control is to use sense of material ism as a possible confound rather than a dependent variable. Effects of exposure to luxury items may be more fine-tuned if personality and material ism are controlled as covariates. From another perspective, future studies may also pursue other segments of the Chinese population to see if these ads have the same impact. It is reasonable to assume that there are some other segments that are not as optimistic as these college students and may be more vulnerable to some unintended effects of luxury advertisements.

This experiment can serve as a starting point in understanding the effects of advertisements in an emerging, non-negligible market such as China. The results indicate that China 's population has its own characteristics and should be taken into consideration in future research. These unique characteristics may call for alternative approaches to understand social comparison and the mechanisms involved regarding different populations.

NOTES

1. Statistics reported by the Shanghai Statistics Bureau, see: http://www.stats- sh.gov.cn/shtj/tjnj/2OO l/tables/3_13.htm

2. Figure reported in Asian Adspend: A Review of its Development and Future Prospects. International Journal of Advertising, •7(2), 255-262.

3. Statistics reported by the Chinese Statistics Bureau, see: http://www.stats. g o v. c n/sjjw /nd sj/z g nj/2 OOO /R O1 c. h tm

4. See Xinhua News Agency (September 27, 2001), www.xinhua.gov.cn

ACKNOWLEDGMENTS

The authors would like to thank Dr. Joseph E. Phelps and Dr. David Roskos- Ewoldsen at the Universi ty of Alabama, as well as our editor Dr. Charles R. Taylor and other anonymous reviewers for their invaluable input in this project.

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(June), 1-4.


APPENDIX 1: M A T E R I A L I S M S C A L E

Success

(1) I admire people who own expensive homes, cars, and clothes. (2) Some of the most important achievements in life include acquiring mate-

rial possessions. (3) I don't place much emphasis on the amount of material objects people own

as a sign of success. (4) The things I own say a lot about how well I 'm doing in life. (5) I like to own things that impress people. (6) I don't pay much attention to the material objects other people own.

Centrality

(1) I usually buy only the things I need. (2) I try to keep my life simple, as far as possessions are concerned. (3) The things I own aren't all that important to me. (4) I enjoy spending money on things that aren't practical. (5) Buying things gives me a lot of pleasure. (6) I like a lot of luxury in my life. (7) I put less emphasis on material things than most people I know.

Happiness

(1) I have all the things I really need to enjoy life. (2) My life would be better if I owned certain things I don't have. (3) I wouldn't be any happier if I owned nicer things. (4) I 'd be happier if I could afford to buy more things. (5) It sometimes bothers me quite a bit that I can't afford to buy all the things

I like.

Self-Esteem, Life-Satisfaction and Materialism

APPENDIX 2: SELF-ESTEEM SCALE

261

Self-esteem

(1) On the whole, I am satisfied with myself. (2) At times, I think I am no good at all. (3) I feel that I have a number of good qualities. (4) I am able to do things as well as most other people. (5) I feel I don ' t have much to be proud of. (6) I certainly feel useless at times. (7) I feel that I am a person of worth, at least on an equal plane with others. (8) I wish I could have more respect for myself. (9) All in all, I am inclined to feel that I am a failure.

(10) I take a positive attitude toward myself.

ADVERTISING COMMUNICATION

IN AUSTRALIA: A COMPARISON

OF INFORMATION USED BY

AUSTRALIAN, JAPANESE AND

U.S. FIRMS

Cameron James Hughes and Michael Jay Polonsky

ABSTRACT

This paper examines the information content of print advertisements for high involvement products in Australia, by Australian, Japanese and U.S. firms. Paired comparisons between firms found that the information in Japanese firms, Australian advertising is relatively more similar to information in Australian firms' advertising than is the information in U.S. firms'Australian advertising. Comparisons between the results of this study and previous works found that the information used in Australian advertising by both Japanese and U.S. firms differed from advertising within the two respective home markets. This may support the view that there is some localization of information taking place.

New Directions in International Advertising Research, Volume 12, pages 263-280. Copyright © 2002 by Elsevier Science Ltd. All rights of reproduction in any form reserved. ISBN: 0-7623-0950.4

263

264 CAMERON JAMES HUGHES AND MICHAEL JAY POLONSKY


The debate as to whether finns should standardize or localize their advertising in formation has existed for well over 30 years, with various authors arguing both cases (Onkvist & Shaw, 1999; Ramarapu et al., 1999). For example Elinder (1961), Kreutzer (1988), Levitt (1983) and Schnaar (1991) are just a few who have argued that advertising should be standardized globally to achieve economies of scale, whereas authors such as Kotler (1986), Mueller (1992) and Wind (1986) are only a few of those who have suggested that advertising should be customized to accommodate the cultural idiosyncrasies of consumers in foreign markets.

The proponents of standardisation contend that consumers are converging on a global scale due to the forces of technology, the accessibility of information, migration, tourism and modern transport (Elinder, 1961; Dichter, 1962; Levitt, 1983). Essentially, if consumers are converging toward a homogenous unit, who respond with equal enthusiasm to the same marketing stimuli, then standardised advertising campaigns will be the most effective means of competing on world markets. Alternatively, if national tastes and cultural idiosyncrasies are unyielding, or if people in different countries simply interpret information differently (Phillips, 1997), then competitive advantages will only be obtained through the conceptualization and implementation of advertising strategies that are reflective of the cultural empathy of the marketer (Leach & Liu, 1998). Unfortunately there have been few attempts to model the factors that influence whether standardization is indeed an appropriate approach (Laroche et al., 2001).

According to the proponents of customization, convergence is a case of 'marketing myopia' (Hill & Still, 1986; Kacker, 1972; Kotler, 1986, Toyne & Waiters, 1989; Whitelock, 1987; Wind et al., 1973). Cultures may appear to be converging, however, this is only occurring on a cosmetic level. Hofstede (1991) argues that, although national cultures in the contemporary world give the appearance of having converged, in reality this has occurred only in superficial manifestations, such as similarities in dress, consumer products, television, movies, and sport. According to Hofstede, the deep underlying values, which determine the meaning people give to these activities and practises, have not changed, thus highlighting the need to use culturally relevant stimuli within host markets (Leach & Liu, 1998; Phillips, 1997).

Essentially, the ability to appeal to the motivational pattern of consumers across international markets with a standardised advertising approach depends upon the relative influence and rigidity of certain environmental contingencies, one of the most significant of which is the cultural environment. For example, in communications theory, it is well established that individuals' cultural

Advertising Communication in Australia 265

environment significantly affects the way in which they perceive information (Phillips, 1997). Accordingly, if senders (i.e. marketers) of a message live in a cultural environment that is different from their intended audience, they will need to understand the cultural background of the receiver (Kanso, 1992; Mueller, 1987; Phillips, 1997; Roth, 1995). Kanso (1992) posits that international advertisers should employ frames of reference that are equally understood by their target audience. The intemational advertiser must also match the appeal used with the cultural characteristics of the target market (Caillat & Mueller, 1987; Hong, et al., 1987; Mueller, 1992; Rice & Lu, 1988). If an appeal is inconsistent with the local culture's motivational pattem then the advertisement will fail to achieve its objectives (Leach & Liu, 1998). For example, Ricks et al. (1974) attributed most international advertising blunders to a lack of cultural awareness. Consequently, advertising strategies must be conceived with an element of cultural sensitivity and recognition of consumer and market heterogeneity.

While advertising strategies within foreign markets will depend upon a range of environmental factors, the effects of home country-culture on the advertising strategies within foreign markets is often overlooked. Most of the literature examining intemational advertising, attempts to compare advertising activities in two different home countries and suggest that differences are explained by underlying differences in national culture. An exception is the research conducted by Graham et al. (1993), who examined variations in advertising strategies. By examining foreign firms' behaviour in host countries, however, they fail to compare these overseas strategies with advertising inside the companies home country.

This paper attempts to partially fill this gap by examining the information content of Australian, Japanese and U.S. firms' print advertising for high involvement products within Australia. Comparisons of information are made between host and foreign firms' advertising to identify whether there are differences in the information used. Previous research has suggested that U.S. and Japanese advertising styles, with respect to information content and other factors, are very different and thus if home culture were to have an effect it would be expected that there should also be differences in the information content within Australia. Japanese culture displays "more" differences to the Australian culture than occur between the U.S. and Australian culture. However, it could be suggested that the advertisements of Japanese firms will in fact be more similar to Australian firms as Japanese firms are often considered to be polycentric (i.e. adaptive) in their approach to marketing than other countries (Schneider, 1989). Although others have recently found that Japanese automobile firms are choosing to standardize activities in all international markets rather


than adapt to each specific market (Grein et al., 2001), it is thus unclear if they are polycentric in relation to each market.

This study attempts to examine the degree of polycentric behavior of U.S. and Japanese firms by comparing the information usage of these firms in a host market (Australia) to the information usage in advertising within Japan and the U.S., and by comparing the results of this study to those previously reported in the literature. If Japanese firms are indeed polycentric, it would be expected that greater differences in information usage would occur between Japanese firms' Australian advertising and advertising in Japan, than U.S. firms' Australian advertising and advertising in the U.S.

C R O S S - N A T I O N A L I N F O R M A T I O N C O N T E N T RESEARCH

Extensive research has been conducted over the past twenty years into the cultural determinants of various types of information types and levels of information within advertising (A1-Olayan & Karande, 2000; Biswas et al., 1992; Dowling, 1980; Hong et al., 1987; Madden et al., 1986; Maynard & Taylor, 1999; Norton & Norton, 1988; Onksist & Shaw, 1999; Resnik & Stem, 1977; Taylor et al., 1997; Weinberger & Spotts, 1989). The majority of these studies have examined communication strategies in one home country and/or compared multiple home country communication strategies. Other than Graham et al. (1993), few studies have examined the effects of home country-culture on companies' advertising strategies/tactics within foreign markets.

Existing research efforts have validated the proposition that different cultural groups have distinct means of communicating information through advertising (A1-Olayan & Karande, 2000; Biswas et al., 1992; Dowling, 1980; Di Benedetto et al., 1992; Graham et al., 1993; Hong et al., 1987; Lin, 1993; Madden et al., 1986, 1989; Maynard & Taylor, 1999; Taylor et al., 1997; Weinberger & Spotts, 1989). Both the level of information contained in advertisements, and the types of informational cues, vary according to the cultural context of advertising. As a result of these research efforts, there has been an accumulation of empirical data helping to establish where certain national cultures are positioned with respect to the information content of their advertising. For example, it has been demonstrated that Japanese print advertisements are generally more informative than U.S. print advertisements (Hong et al., 1987; Madden et al., 1986), Chinese print advertisements are more informative than those in the U.S. (Rice & Lu, 1988), that U.S. print advertisements are generally more informative than French print advertisements (Biswas et al., 1992), as well as more informative than British television advertisements (Weinberger & Spotts, 1989).


IMPORTANCE OF HOME COUNTRY-CULTURE

Theoretical and empirical evidence suggests that cultural values have profound impacts upon consumer and corporate behavior (Daft & Weick, 1984; Dutton & Duncan, 1987; Erickson et al., 1984; Littrel & Miller, 2001; Mueller, 1986 1987; Schneider, 1989), including a firm's ability to coordinate activities internationally (Hewett & Bearden, 2001). Empirical evidence has indicated that cultural values may even determine behavior as complex as the selection of a particular brand within a product class category (Pitts & Woodside, 1983). Schneider's (1989) research, into the effects of national culture upon the organizational strategy formulation process, has illustrated that cultural values permeate the operational and strategic decision-making functions of firms. Schneider (1989) contends that assessments of the environment and of the company are not objective but are a function of subjective perceptions and interpretations. National culture has profound effects upon the strategy formulation process as it derives from assumptions regarding relationships with the environment as well as relationships among people (Frederickson, 1984; Lyles & Mitroff, 1985; Schneider, 1989).

In the area of home country-culture, some theoretical and empirical evidence suggests that home country-culture may have a significant impact upon the strategy formulation process of companies operating in foreign markets. For example, Tse et al. (1988) investigated the impact of home country-culture on the international marketing decisions of managers from China, Canada and Hong Kong, and found that home country-culture had a significant effect on decisions. Meissner (1986) also found that home country-culture affected marketing strategies in foreign markets. He found that the German approach was product- focused, concentrated on niche markets and personal selling, whereas the Japanese approach emphasised mass marketing, advertising and special attention to customers and their needs.

Graham et al. (1993), attempted to empirically validate Meissner's work by examining the intemational advertising practices of Japanese and German MNEs operating in Spanish, Indonesian and U.S. markets. The results were not totally consistent with Meissner (1986), as Graham et al. (1993) found that within foreign markets both German and Japanese companies modified the levels of information content as well as the facial expressions of models in advertisements and the number of metaphors contained in the advertisements. This suggests companies in both countries were polycentric, i.e. they varied their advertisements in the host market. Graham et al. (1993) found that Japanese companies were more proficient in their adaptive behaviours, thus supporting the view that home country-culture has varying effects upon the strategic decision-making


process of firms. Thus, strategic decision making, such as the decision whether to use an advertising agency based in the overseas market, home market or a global agency, may in fact be effected by the firms national culture (Lafayette, 1992; Marshall & Na, 1994; Rosen et al., 1988), although this issue has not been explicitly examined in the literature.

C U L T U R E D I F F E R E N C E S B E T W E E N T H E J A P A N E S E A N D U S A

There are a number of reasons for comparing the advertising behaviour of U.S. and Japanese firms in a third country. Firstly, there has been extensive literature discussing the advertising activities within these two home markets (Belk et al., 1985; Belk & Pollay, 1985; Maynard & Taylor, 1999; Mueller, 1987; Ramaprasad & Kazumi, 1992), especially information content (Hong et al., 1987; Lin, 1993; Madden et al., 1986). In relation to information content, most of this literature suggests that Japanese print advertisements are more informative, and that the advertisements contain different types of informational cues. For example, print advertisements in Japan tend to have more price cues than print advertisements in the U.S. (Hong et al., 1987; Madden et al., 1986).

Secondly, these countries are very different culturally. For example, extensive differences may be illustrated using Hofstede's (1980) cultural dimension scores for individualism (U.S.-50, Japan-29); power distance (U.S.-16, Japan-21); uncertainty avoidance (U.S.- l l , Japan--44) and; masculinity (U.S.-36, Japan-50). In general, the Japanese culture is said to have developed "an attitude of receptivity and high adaptability to changing conditions" (Maruyama, 1984, p. 106). In Japanese firms, uncertainty and ambiguity is actively managed by engaging in information-generating activities. Reflecting these cultural idiosyncrasies, Japanese marketing is predominantly described as polycentric (Kagono et al., 1985; Keegan, 1983; Koichi, 1983; Lazer et al., 1985; Maruyama, 1984; Nagata, 1981; Schneider, 1989). This entails an extensive examination into the peculiarities of markets and an attempt to understand the nature of consumers in international markets (Graham et al., 1993; Koichi, 1983; Lazer et al., 1985; Meissner, 1986; Nakaishi, 1981; Yokota, 1980).

Conversely, U.S. marketing practices are often stereotyped as being ethnocentrically oriented. The main criticism of U.S. marketing practices is that of an oversimplification of reality and an "over-reliance on cognitively linear explanation of events" (Pascale, 1984, p. 57). Firms in the U.S. generally set out to exert control over the external environment (Draft & Weick, 1984; Schneider, 1989; Trompenaars, 1993), and to explain marketing phenomena through statistical modeling and the development of 'lawlike generalizations.'


These generalizations or 'universal business principles' are then applied to all situations regardless of the cultural context.

Finally, while there are cultural differences between the U.S. and Japan, there are also extensive similarities between the two countries. That is, both countries have similar levels of economic and socio-economic development, which may influence advertising strategies (Renforth & Raveed, 1983). For example, per capita income in the two countries is somewhat similar (U.S. $31,500; Japan $24,500), literacy rates in both countries are high (U.S. 97%; Japan 99%), as is the years of schooling required (U.S. 12 years; Japan 14 years). In addition the general media penetration in both countries is also similar for TV (U.S. 89%; Japan 79%) and radio (U.S. 83%; Japan 86%).

All of these factors, plus the fact that U.S. and Japanese firms compete across a range of high involvement products globally, including within Australia, make them ideal for examination. Given the general environmental similarities, any differences in information content contained within advertising of foreign firms in Australia should, therefore, be explained by cultural differences between the two countries home culture.

Three hypotheses will be examined in this paper. The first examines whether the levels and types of information used by Australian, U.S. and Japanese firms are the same and is included for methodological completeness. The second relates to the fact that Japanese firms should, according to the literature, most likely be more polycentric and U.S. firms more ethnocentric. Thus, the advertising of Japanese firms should be more similar to the host country firms' advertisements. The last hypothesis further considers this issue, by examining whether firms from Japan or the U.S. adapt their information content more in relation to advertising within their home country. The three null hypotheses are as follows:

HI: Firms from Japan, the U.S., and Australia will use similar levels and similar types of information within advertisements.

H2: Advertisements from Japanese firms will be more similar to advertisements from Australian firms than will be U.S. firms' advertisements.

H3: Advertisements in Japan and U.S. will use the same types and levels of information content as appears in Japanese and the U.S. firms' Australian advertising.

M E T H O D O L O G Y

This study utilised a multi-stage methodology. The first set of activities is related to the content analysis process and includes identifying, collecting the stimuli


(i.e. advertisement) and coding the data. The second phase involved the analysis of the data (i.e. information content) in advertisements used by Australian, Japanese and U.S. firms within Australia using ANOVA's and paired t-tests. The third phase used paired t-tests and ANOVA's to compare the results in phase two with those of Maden et al. (1986) to identify whether the information content of advertising by Japanese and U.S. firms in Australia, differed from the information content of general advertising within these firms' home country (i.e. Japan and the U.S.).

Madden et al.'s (1986) work was chosen for comparison because it examined 1440 Japanese and U.S. print advertisements, contained high involvement product types and listed individual cue results. It also used three judges to code the information content, who were trained prior to conducting coding procedures, and resulted in 97.6% reliability. It is assumed there is no time bias, as Abernethy and Franke's (1996) meta-analysis into information content found there was no time effect on information levels. Although the fact that the information content is collected across samples collected 10 years apart may be one limitation of this study.

Previous literature has identified that information content in advertising varies according to the product type being advertised (Dowling, 1980; Resnik & Stern, 1977). In addition some researchers have suggested that high involvement purchasing decisions are more complex (Johar, 1995; Stayman & Batra, 1991), which would infer that consumers require more information in evaluating high involvement products (Bolting, 1988; Holmes et al., 1987; von Keitz, 1990; Mazursky & Schul, 1992; O'Cass, 2000). To address this fact, the advertisements selected for examination within the study discussed in this paper were further restricted to high involvement products. High involvement products were defined as those that are purchased infrequently, relatively highly priced and require extensive information search prior to purchase (Mueller, 1987). There are of course many products that fit this definition and for the study reported in this paper three sub-groupings of high-involvement products were examined - cars; computers, electronics, and telecommunications (CET); and airlines. This refinement was undertaken to ensure there were a sufficient number of advertisements in each category for firms from the three countries, Australia Japan, U.S. This resulted in 424 different advertisements being included in the analysis. See Table 1 for a breakdown of advertisements by country and product category.

In terms of the stimuli this research used all half page or larger advertisements (color or black and white) from 1996 and 1997 of a weekly popular general interest magazine and a weekly business type magazine. Both of these magazines were compatible in terms of circulation and target audiences and as

Advertising Communication in Australia

Table 1. Advertisements by Product and Country.

271

Japan Australia U.S. Number (%) Number (%) Number (%)

Computers, electronics, 82 (56.9%) 63 (58.9%) 120 (69.4%) telecommunications (CET) Airlines 51 (35.4%) 19 (17.8%) 19 (11.0%) Cars 11 (7.6%) 24 (22.4%) 34 (19.7%)

Total 144 (100%) 107 (100%) 173 (100%)

such should have similar types of advertisements, thus minimising variation across finns (i.e. Australian, U.S., Japanese). Much of the previous cross-cultural content analysis literature has included advertisements from a wide cross section of product categories (i.e. high and low involvement). To achieve broad-based coverage of advertisements, researchers have collected materials from a cross- section of publications to ensure that no types of advertisements were over represented (for example see A1-Olayan & Karande, 2000). However, some of the cross-cultural content analysis work has been more focused in terms of its objectives and as such has examined a smaller sample of publications. For example, Maynard and Taylor (1999) used advertisements appearing in one magazine targeting young females in the U.S. and Japan to evaluate girlish images in these two countries. The study reported within this paper is concerned only with advertisements for high involvement products. As such it was deemed appropriate to examine two weekly business focused publications (i.e. 104 issues in total). It is assumed that these would include a representative sample of similar high involvement products marketed by Australian, Japanese and U.S. firms within Australia.

A content analysis process, using Resnik and Stem's (1977) 14 informational cues, was used to evaluate the information content within the 424 print advertisements identified, although the taste and nutrition cues were not used, as they were not relevant to the high involvement categories being examined. This typology was employed because it is an objective, systematic and quantitative description of the qualitative communications content of advertising material. It has also been suggested that Resnik and Stem's (1977) typology has been extensively used within the literature (Abemethy & Franke, 1996) and thus, it allows this study to make comparisons to earlier works examining information content of advertising within Japan and the U.S.. However it should also be noted that some researchers such as Taylor et al. (1997, p. 7) suggest that the Resnik and Stem's (1997) criteria "omits several important types of information seen


fairly commonly in advertising" and that some of these other types of information are frequently used in other countries, i.e. non-U.S, advertisements (Taylor et al., 1997). The Resin and Stern (1997) criteria are still used in this paper because in addition to being extensively used in the literature (Abemethy & Franke, 1996), their use also allows for a direct comparison to the previous results of other researchers to be made.

The content analysis coding in both the pre-test and final examination of the data involved three independent judges to evaluate the advertisements (Kassarjan, 1977), and inter-judge reliability was evaluated using Rust and Cooil's (1994) Proportional Reduction of Loss method (PRL). A pre-test of the criteria was undertaken on a sample of advertisehaents from a previous year to evaluate the inter-judge reliability, with a 0.91 level of agreement, which is greater than the 0.85 suggested by Kassarjian 1977.

The substantive analysis of the data involved a combination of parametric and non-parametric statistical techniques. These tests included, multivariate analyses of variance, T-tests, Z-tests of proportions, and signed rank tests.

A N A L Y S I S

An analysis of the inter-judge reliability using PRL yielded a 0.94 level of agreement, which exceeds the 0.85 recommended by Kassarjian (1977) and thus allowed the substantive analysis to be undertaken. The first step involved an examination of whether there were differences in the overall informational levels and types of information within advertisements from Australian, Japanese and U.S. firms (see Table 2 for summary of results).

The mean number of cues per country was Australia-l.73, Japan-2.43 and the U.S.-1.91, which are statistically different across samples (F= 2.065, p = 0.0029). Paired comparisons between countries also identified that there were differences in mean cue usage, Aus-Japan = 2.49 (p = 0.03); Aus-U.S. = 2.85 (p = 0.02); U.S.-Japan = 3.89 (p = 0.00). A MANOVA was undertaken for the set of cues across the countries, which was significantly different (F = 2.25, p < 0.001).

A non-parametric signed rank test was also undertaken on ordering of cues between the pairs of countries and identified that the types of cues used varied across countries as well, Australia-Japan = 27.5 (p = 0.02); Australia-U.S. = 27.5 (p = 0.02); U.S.-Japan = 22.5 (p = 0.04). This suggests that the usage of types of information varied across the three companies, which supports the previous research identifying that advertising in different cultures relays different types of information (Di Benedetto et al., 1992). As such, looking at aggregate levels of information is insufficient to understand all components of cultural differences.


These results suggest that there are differences in the levels, as well as the types of information cues used across the three countries. That is Japanese firms' advertising in Australia use more cues than U.S. firms and also use more cues than Australian firms. In addition the paired t-tests reported in Table 2 indicate that there are differences at the individual cue level as well, both across countries and between pairs of countries. Between Japanese and the U.S. firms, there are differences for Quality and Special Offers. However, Japanese firms only use more Components cues than their Australian Counterparts, whereas U.S. firms differ in their usage of Components, Special Offers, Guarantees and Independent Research from their Australian counterparts.

These results provide support for rejecting HI. That is, not only are the aggregate levels of information cues different across the three countries, but that there are also differences across countries in terms of information usage for four of the twelve cues. The results suggest that H2 cannot be rejected, as there are, in fact, more differences in information cue usage between Australia- U.S. (4 out of 12, 33%) than between Australia-Japan (1 out of 12, 8%). It, therefore, appears that Japanese firms might in fact adapt their advertising to be culturally congruent, assuming that Australian firms are indeed in tune with Australian consumers.

The next stage involved comparing Japanese and U.S. firms' use of informational cues in Australia to the usage of informational cues contained within advertising in their home countries. This examination was undertaken by comparing the results of this study with the results of Madden et al. (1986). The justification for this comparison was made earlier and will not be repeated here. At the macro level the overall usage of informative advertisements were compared based on the proportion of informative advertisements within each of the two samples. As can be seen in Table 3, there are statistically significant differences in the information used in advertisements and in both cases Japanese and U.S. firms used more informational cues in Australia, on average, than were used in advertisements within their home countries. This suggested that both Japanese and U.S. firms adapt their behaviour within Australia.

Using z-tests the proportion of Japanese and U.S. advertisements in Australia containing each of the various 12 cues were compared to the proportion of advertisements in Japan and the U.S., respectively, for each of the 12 information cues. If the proportions are the same then foreign companies have not adapted information content within the host market as compared to information content used in home country advertising. The results in Table 4 suggest that from both Japanese and the U.S. firms extensively modify the information contained within their advertisements in Australia, as compared with the information used within their home market. As such, H3 can be rejected

Advertising Communication in Australia

Table 3. A g g r e g a t e C o m p a r i s o n s w i th M a d d e n et al. (1986) .

275

COUNTRY Madden et al., 1986 Within Australia Z-Scores (P)

JAPAN N (% informative) 608 (85%) 144 (93%) -2.51 (p < 0.05) U.S. N (% informative) 832 (75%) 173 (88%) 3.71 (p < 0.05)

Table 4, C o m p a r i s o n o f C ue Types B e t w e e n Aus t r a l i a ( th is s tudy) and

H o m e C o u n t r y M a d d e n et al. (1986) .

% of u.s. Firms in _ using this cue % Japanese Firms in __ using this cue

Cue The U.S. Australia z-scores Japan (%) Australia z-score

Price 13 10 0.77 59 14 10.18"* Quality 2.5 10 -5.71"* 0.09 21 4.51"* Performance 28 9 -15.12"* 15 8 2.55* Components 32 44 3.03** 54 50 0.91 Availability 29 83 -13.17"* 37 78 4.63** Special offers 16 5 3.79** 6 0 4.11"* Packaging 2 4 -0.06 1 1 0.01 Guarantees 5 9 2.11 * 2 5 -2.45* Safety 0.09 0 1.30 0 1 0.27 Ind. Research 2 5 2.31" 0.09 7 0.24 Comp. Research 2.5 0 0.03 0.09 0.09 0.03 New ideas 0.09 12 -2.52* 0.09 13 -1.58 Overall 8 6 Differences

Significance * = P < 0.05, ** = P < 0.01.

for there are subs tan t i a l d i f f e rences in the p ropor t i on o f a d v e r t i s e m e n t s

c o n t a i n i n g at leas t h a l f o f the cues in b o t h coun t r i e s (8 for U.S. f i rms and 6

for J a p a n e s e f irms). Th i s appea r s to s o m e w h a t coun t e r the f ind ings in H2, as

f i n n s f rom b o t h cu l tu res s e e m to b e e thnocen t r i ca l ly o r i en t ed and in fact the

U.S. f i nns s e e m to b e e n m o r e adap t ive to the Aus t r a l i an cu l ture t han the i r

J a p a n e s e counte rpar t s .

IMPLICATIONS AND CONCLUSIONS

T h e r e do appea r to be some na t iona l ly b a s e d d i f f e rences in the l eve l o f

i n f o r m a t i o n wi th in a d v e r t i s e m e n t s in Aust ra l ia . As sugges t ed b y the l i te ra ture

the i n f o r m a t i o n con t en t w i th in J a p a n e s e f i rms ' adve r t i s emen t s con ta ins the m o s t


information (i.e. 2.43 information cues per advertisement). It also seems to be conveying similar types of information to that conveyed by Australian firms in their advertising (i.e. 1 difference in cue usage, see Table 2). The relatively low number of differences in the types of information used by Japanese and Australian firms in Australia might suggest that Japanese firms are polycentric, i.e. firms adapt their information to be consistent with local "standards."

While on average U.S. firms use less information than Japanese firms in Australia (1.91 information cues), they appear to use more information than Australian firms. In addition they also use a greater variety of informational cues more frequently (i.e. they are different on four informational categories, see Table 2). Given the close cultural similarity between Australia and the U.S., it might have been expected that the information content of U.S. firms' advertising would in fact be more similar. This result might seem to support a view that U.S. firms are ethnocentric in their behavior and do not modify their activities to be consistent with host cultures, at least in terms of information content.

These results become less conclusive when an examination of the similarity between information content used by Japanese and U.S. firms advertising in Australia and the information content in advertising within their respective home countries. There are substantial statistical differences in the proportions of advertisements using the various information cues, six cues for Japanese firms in Australia - Japan home country advertisements and eight cues for U.S. firms in Australia - U.S. home country advertisements.

One interpretation might be that U.S. firms are in fact more flexible and adaptive (i.e. polycentric) than Japanese firms. This is inconsistent with the literature and to some extent also contradicts the findings related to the comparisons of differences in information content of Australian-U.S. and Australian-Japanese firms. Although, it must be remembered that information content within U.S. firms' advertisements started off less similar to the host Australian firms' advertisements and they would have to undertake more changes in information content simply to match Japanese firm behavior.

Overall it appears that firms from both Japan and the U.S. are trying to "adjust" information content to be more similar with what is being practiced by host country firms. In fact, foreign firms changed behaviour in all areas where informational cue usage differed from host country firms (see Table 2). Once again this reinforces the fact that U.S. firms would need to change informational processes more to "match" their Japanese counterparts and be consistent with Australian firm behaviour.

While there are differences in Japanese and U.S. cultures, firms from both countries seem to be adapting information content to be more consistent with


the host market and in fact it seems that they are explici t ly trying to min imise

any differences in informat ion content. The results would also appear to suggest that firms from these two foreign markets are not taking a complete ly local or global approach, bu t rather are taking a customized approach, at least in terms of informat ional cues.

Of course this study focused only on Resnik and S t e m ' s informat ion cues and not on the other aspects of advert isements or market ing strategy. There could be a range of other informat ion conta ined within advert ising (Taylor

et al., 1997) or implementa t ion factors that could be modified, such as the adver- t ising appeal. It is possible that marketers of high invo lvement products might be expected to adopt more global advert isements in regards to informat ion and thus future research would need to examine other types of product categories. One final considerat ion is that even though previous authors have "compared" their results with other earlier works, it might be more appropriate to collect data on the same product categories in the two home markets to al low a more matched comparison.

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