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Standardization and Adaptation in International Advertising of Consumer Goods a Case Study of Libresse

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Standardization and Adaptation in International Advertising of Consumer Goods a Case Study of Libresse 2003:140 SHU BACHELOR’S THESIS Standardization and Adaptation in International Advertising of Consumer Goods A Case Study of Libresse ELINA DAHLBERG LENA LINDGREN ANNA ROSENDAHL Social Science and Business Administration Programmes INTERNATIONAL BUSINESS AND ECONOMICS PROGRAMME Department of Business Administration and Social Sciences Division of Industrial Marketing Supervisor: Manucher Farhang 2003:140 SHU • ISSN: 1404 – 5508 • ISRN: LTU - SHU - EX - - 03/140 - - SE ACKNOWLEDGEMENTS Writing this thesis has been a process of learning and hard work during ten weeks of the spring of 2003. The thesis has been made possible with the help of Nicola Jones, Communications Project Assistant at Libresse, who has provided us with excellent information about the advertising of Libresse. We would also like to give a special thank you to our supervisor Manucher Farhang, Associate Professor at the Division of Industrial Marketing, for his ideas, help and guidance throughout the writing of this thesis. Finally, we would like to thank the people living with us for patience and support. Luleå University of Technology, May 28, 2003 ………………….. ………………….. ………………….. Elina Dahlberg Lena Lindgren Anna Rosendahl ABSTRACT Much has been written on the subject standardization and adaptation in international advertising, however, there have been few general conclusions and agreements. The purpose of this thesis is to gain a better understanding of standardization and adaptation in international advertising of consumer goods. The research investigates what motivates companies to standardize or adapt their international advertising, which factors that decide to what degree the international advertising is standardized or adapted, and finally how companies are standardizing or adapting the elements of their international advertisements. A case study on Libresse and how the company deals with standardization and adaptation of international advertising has been conducted. The conclusions that can be drawn from the findings of our research are that the main motive for Libresse to standardize the international advertising is to gain economies of scale, and that the company generally adapts the international advertising in order for consumers to be able to relate to the advertisement. Furthermore, the company’s economic situation and the consumer profile are important factors to consider when choosing the extent of standardization and adaptation in international advertising. When investigating how the advertisements are standardized and adapted, our research shows that text and voice- overs are frequently adapted, while visual elements, appeals and buying proposals are standardized. SAMMANFATTNING Det har skrivits mycket om ämnet standardisering och adaptering av internationell reklam, även om få slutsatser och överenskommelser har resulterat från studierna. Syftet med denna uppsats är att öka förståelsen för standardisering och adaptering av internationell reklam för konsument varor. Studien undersöker vad som motiverar företag att standardisera eller adaptera internationell reklam, vilka faktorer som bestämmer till vilken grad internationell reklam är standardiserad eller adapterad, och till sist hur företag standardiserar eller adapterar element i den internationella reklamen. En fallstudie av Libresse och hur de hanterar standardisering och adaptering av internationell reklam har utförts. Resultaten från studien visar att Libresse främst standardiserar internationell reklam av ekonomiska skäl, och adapterar internationell reklam för att kunden ska kunna relatera till reklamen. Faktorer som påverkar i vilken utsträckning företag ska standardisera och adaptera internationell reklam är främst företagets ekonomiska situation, och kund profilen. Angående undersökningen om hur reklamen är standardiserad och adapterad, så visar vår forskning att text och bakgrunds röst ofta är adapterade, medan visuella element, appell, och köp förslag är standardiserade. TABLE OF CONTENTS 1 INTRODUCTION 1 1.1 BACKGROUND 1 1.2 PROBLEM DISCUSSION 3 1.3 PURPOSE AND RESEARCH QUESTIONS 4 1.4 DEMARCATIONS 5 1.5 DISPOSITION 5 LITERATURE REVIEW 6 2.1 COMPANIES’ MOTIVES FOR STANDARDIZATION AND ADAPTATION 6 2.1.1 MOTIVES FOR STANDARDIZATION 6 2.1.2 MOTIVES FOR ADAPTATION 8 2.2 FACTORS INFLUENCING THE DEGREE OF STANDARDIZATION AND ADAPTATION 9 2.3 COMPANIES STANDARDIZATION AND ADAPTATION OF ADVERTISEMENT ELEMENTS 14 2.4 CONCEPTUAL FRAMEWORK 16 2.4.1 PRESENTATION OF A CONCEPTUAL FRAMEWORK 16 2.4.2 CONCEPTUALIZATION OF THEORIES 16 2.4.3 EMERGED CONCEPTUAL FRAMEWORK 17 3 METHODOLOGY 19 3.1 RESEARCH PURPOSE 19 3.2 RESEARCH APPROACH 20 3.3 RESEARCH STRATEGY 20 3.4 DATA COLLECTION 21 3.5 SAMPLE SELECTION 23 3.6 DATA ANALYSIS 23 3.7 QUALITY STANDARDS 24 4 EMPIRICAL DATA 25 4.1 CASE STUDY: SCA AND LIBRESSE 25 4.1.1 LIBRESSE’S MOTIVES FOR STANDARDIZATION AND ADAPTATION 26 4.1.2 FACTORS INFLUENCING LIBRESSE’S DEGREE OF STANDARDIZATION AND ADAPTATION 27 4.1.3 LIBRESSE’S STANDARDIZATION AND ADAPTATION OF ADVERTISEMENT ELEMENTS 30 5 ANALYSIS 32 5.1 MOTIVES FOR STANDARDIZATION AND ADAPTATION: LIBRESSE COMPARED TO THEORY 32 5.1.1 MOTIVES FOR STANDARDIZATION 32 5.1.2 MOTIVES FOR ADAPTATION 33 5.2 FACTORS INFLUENCING THE DEGREE OF STANDARDIZATION AND ADAPTATION: LIBRESSE COMPARED TO THEORY 34 5.2.1 PRODUCT FACTORS 34 5.2.2 ORGANIZATIONAL FACTORS 35 5.2.3 ENVIRONMENTAL FACTORS 35 5.3 STANDARDIZATION AND ADAPTATION OF ADVERTISEMENT ELEMENTS: LIBRESSE COMPARED TO THEORY 36 5.3.1 STANDARDIZATION OF ADVERTISEMENT ELEMENTS 36 5.3.2 ADAPTATION OF ADVERTISEMENT ELEMENTS 37 6. CONCLUSIONS AND IMPLICATIONS 38 6.1 WHY ARE COMPANIES MOTIVATED TO STANDARDIZE AND ADAPT THEIR INTERNATIONAL ADVERTISING? 38 6.2 HOW CAN THE FACTORS INFLUENCING THE DEGREE OF STANDARDIZATION AND ADAPTATION IN INTERNATIONAL ADVERTISING BE DESCRIBED? 39 6.3 HOW DO COMPANIES STANDARDIZE AND ADAPT THE ELEMENTS OF THEIR INTERNATIONAL ADVERTISEMENTS? 40 6.4 IMPLICATIONS 41 6.4.1 IMPLICATION FOR MANAGEMENT 41 6.4.2 IMPLICATIONS FOR THEORY 41 6.4.3 IMPLICATIONS FOR FURTHER RESEARCH 42 LIST OF REFERENCES 43 APPENDICES APPENDIX A: INTERVIEW GUIDE APPENDIX B: ENGLISH ADVERTISEMENT APPENDIX C: SWEDISH ADVERTISEMENT APPENDIX D: DETAILED REFERENCES FOR CONCEPTUAL FRAMEWORK LIST OF FIGURES FIGURE 1.1: DISPOSITION OF THE THESIS 5 FIGURE 2.1: STANDARDIZATION VERSUS ADAPTATION OF INTERNATIONAL ADVERTISING STRATEGIES: TOWARDS A FRAMEWORK 13 FIGURE 2.2: EMERGED FRAME OF REFERENCE 18 FIGURE 3.1: FORMS OF QUALITATIVE RESEARCH 22 FIGURE 4.1: SCA’S BUSINESS AREAS 25 LIST OF TABLES TABLE 3.1: RELEVANT SITUATIONS FOR DIFFERENT RESEARCH STRATEGIES 20 TABLE 3.2: SOURCES OF EVIDENCE 21 TABLE 4.1: INFLUENCING FACTORS 28 1 INTRODUCTION In this chapter we will present our problem area with an introduction to globalization of business and international advertising, followed by a discussion of adaptation and standardization. This will then lead to the purpose of our research and our research questions. Finally, we present the demarcations and the outline of the study. 1.1 Background During the last decades, business in general has become increasingly internationalized. This rapid growth is a result of technological expansion, liberalization of trade policies and intensified global competition. (Daniels & Radebaugh, 2001) Companies expand into international markets driven by possibilities to grow and expand, but also by the need to survive. Many companies are forced to market their products globally since they are facing global competition, and since there is a global demand for their products. The increasing level of world trade has led to an environment where basically all countries are economically interdependent. (Mülbacher, Dahringer & Leihs, 1999) As the globalization of trade continues to escalate, companies need to view marketing from an international perspective (Mülbacher et al, 1999; Czinkota & Ronkainen, 2001). As further argued by Terpstra and Sarathy (2000), the importance of international marketing has increased due to three basic reasons: foreign markets comprise an increasing portion of the total world market, foreign competitors are increasing their market share in one another’s markets, and foreign markets can represent great sources of low-cost products, technology and capital. International marketing principally deals with the same activities and tools as local marketing1, however, international marketing needs to coordinate the marketing activities over several markets (Mülbacher et al, 1999). Since international marketing occurs across boarders, the international marketer needs to deal with new environments and barriers resulting from legal, cultural, and societal differences in the different markets (Czinkota & Ronkainen, 2001). International marketing can be divided into two fundamental approaches: the multinational approach and the global approach. The multinational marketing approach principally focuses on country-markets and a special marketing strategy is developed for each market, where efforts are adjusted to the differences in the marketing environment. The global approach focuses on product-markets rather than distinguishing the markets 1The American Marketing Association defines marketing as “the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives” (www.ama.org). 1 into geographical areas. Also, the global approach emphasizes the similarities between markets, trying to take advantage of similar consumer
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