European Perspectives in Marketing

Erdener Kaynak

• Publisher: Routledge
• Year: 2012
• eBook ISBN: 9781136427510
• Topic: Business
• Subtopic: Business General
• Index: Business

Improve your grasp of contemporary European marketing issues with these fascinating case studies and analyses!

From the editor:
Europe is not a homogenous mass market. It is rather a heterogeneous market with substantial regional, country, and individual market differences. There are three major sub-markets: European Union (EU) countries, European Free Trade Area (EFTA) countries, and Eastern/Central European (ECE) countries (accession countries). Ten of these countries joined the EU on May 1st, 2004. These countries offer tremendous market opportunities for other European countries, as there is a strong demand in these ten countries for various products and services. Very soon, we will be witnessing the emergence of an enlarged Europe with high market and investment potential.

This resource examines marketing practices and consumer behavior in several EU countries, plus one EFTA country and one Associate EU member country. With conceptual frameworks, case studies, analytical insights into European marketing issues, empirical data, and propositions for future testing, European Perspectives in Marketing presents clear, understandable writing on:

• outsourcing industrial products from Eastern and Central European suppliers
  
• cross-cultural differences in the effect of advertising repetition and sizewith a case study from Germany
  
• the internationalization of small high-tech firmswith case examples from Norway
  
• the impact of the euro on Italian consumers' currency adjustment strategieshave they successfully adapted to the new currency by substituting their old internal price references (based on the high-denomination lira) with a new set of references that reflects the low-denomination currency of the euro?
  
• international antitrust strategies and the policies of Pepsi and Coke in Europe as compared to in the United Statesand a look at the managerial and public policy implications of US and EU antitrust regulations
  
• recent advances in Information & Communication Technology (ICT) and how they can reduce the communication barriers between and within geographically dispersed organizations
  
• why young Turkish adults (high school and university students, and young people in the workforce) purchase and use mobile telephones for symbolic rather than practical reasons

Cross-Cultural Differences in the Effect of Ad Repetition and Ad Size: Experiments with Americans, Germans, and Singaporeans

Chanthika Pornpitakpan

Chanthika Pornpitakpan is Associate Professor, Universitas 21 Global, Singapore.

Address correspondence to: Dr. Chanthika Pornpitakpan, School of Business, Universitas 21 Global, 5 Shenton Way, #01-01 UIC Building, Singapore 068808 (E-mail: [email protected] and [email protected]).

The author would like to thank Sharon Li Hoon Khoo, Jennifer Ai Peng Lee, Regina Hwee Huang Low, Vassana Maprasert, Natcha Petchdakul, Wang Hua Tay, Evonne Li Fern Teow, and Charatphan Viravan for their assistance.

This research received financial support from National University of Singapore.

SUMMARY. This study examines the effect of ad repetition and size, using a 3 (cultures: American, German, and Singaporean) × 2 (ad sizes: small, large) × 3 (ad repetition levels: low, moderate, high) between-subjects factorial design with 180 German, 180 American, and 180 Singaporean adults. The results show cultural differences in consumers’ responses. For Americans, for the large ad, the higher is the repetition, the less favorable are attitudes toward the ad and the brand and purchase intention. For the small ad, moderate repetition results in less favorable attitudes toward the ad and the brand and purchase intention than does low repetition. The German results show that for the large ad, moderate repetition results in more favorable attitudes toward the ad and the brand and purchase intention than does low repetition. High repetition induces less favorable attitudes toward the ad and the brand but not purchase intention. For the small ad, low and moderate repetition are equally effective on all responses. Finally, the Singaporean results show that for the large ad, high repetition is more effective than low and moderate repetition levels in terms of attitudes toward the brand and is more effective than is low repetition in terms of purchase intention. For the small ad, moderate repetition is more effective than are low and high repetition levels in terms of attitudes toward the ad and purchase intention. The results do not support signaling theory. Theoretical and managerial implications are discussed. [Article copies available for a fee from The Haworth Document Delivery Service: 1-800-HAWORTH. E-mail address: <[email protected]> Website: <http://www.HaworthPress.com> © 2004 by The Haworth Press, Inc. All rights reserved.]

KEYWORDS. Ad repetition, ad size, persuasion, cross-cultural differences, United States of America, Germany, Singapore

Many marketers like to repeat ads of their products based on the belief that high levels of repetition increases brand recall. In addition, repetition may be beneficial in terms of attitude accessibility and confidence (Berger and Mitchell 1989), as well as believability of ad claims (Hawkins and Hoch 1992). Research on ad repetition (Cacioppo and Petty 1979; Calder and Sternthal 1980; Pechmann and Stewart 1989; Ray 1977; Sawyer 1974) suggests that audience’s favorable responses to ads first increase with repetition and then decrease or wear out, partly due to boredom and irritation. These responses include recall of the message, learning, purchase intention, attitudes toward the ad and the brand, agreement with the advocated arguments, and production of counter arguments. In addition, economic signaling theory suggests that consumers may view ad repetition as insinuating the quality of an unfamiliar manufacturer (Kirmani 1997). In support of this theory, heavily advertised brands were found to be more correlated with ratings of brand quality than were less advertised brands (Marquardt and McGann 1975) and represent good buys (Archibald, Haulman, and Moody 1983).

Past studies (Kirmani 1990, 1997; Kirmani and Wright 1989) have demonstrated that expensive advertising implies high brand quality through the mediation of perceived manufacturer’s effort. Deviating from signaling theory, however, these studies indicated that passing a certain level of advertising spending, effort may be perceived as too high and suggests the manufacturer’s low confidence in the product, thus resulting in an inverted-U relationship between perceived advertising costs and perceived brand quality. In particular, Kirmani (1997) found that for a color ad, the perceived brand quality increased then decreased with ad repetition, whereas for a black and white ad, it continued to increase.

Advertising is becoming a significant part of marketing programs. Two major cost-related factors of ads, namely size and repetition, are focused on in this study. Very few studies have been conducted to examine the joint effect of these two important factors on advertising effectiveness. With respect to size, Hanssens and Weitz (1980) examined the relationships between 24 print ad characteristics and several measures of effectiveness for 1,160 industrial ads. It was found that ad size and position in the magazine were related to effectiveness measures across product categories. Furthermore, Rouse (1991) found that smaller ads negatively influenced the audience’s preference, whereas larger ones greatly influenced preference.

OBJECTIVES OF THE STUDY

This study addresses three important questions. First, are larger ads and more repetitions always more effective than are smaller ads and fewer repetitions? If not, opportunities exist for advertisers to save cost by using smaller ads and reducing repetitions. Second, are the effects of ad size and repetition consistent across cultures? If not, advertisers have to be careful in following advice typically based on American respondents. Third, what are the determinants of attitudes toward the brand and perceived manufacturer’s credibility?

This study investigates the effects of ad repetition and ad size on attitudes toward the ad and the brand, perceived manufacturer’s effort and credibility, and purchase intention across three cultures. It extends the research of Kirmani (1997) by taking into account the influence of cultural differences in terms of individualism and power distance. In this study, the target ads were color and appeared as either small or large size (i.e., this study manipulated ad size). In contrast, the target ads in Kirmani’s study were the same size but appeared as either color or black and white (i.e., Kirmani’s study manipulated ad color). Participants in this study were American, German, and Singaporean adults, whereas those in Kirmani’s study were American undergraduates. Finally, the product used in this study was a car advertised in Spanish in a Spanish magazine, whereas the one used in Kirmani’s study was sparkling mineral water advertised in German in a German magazine.

American, German, and Singaporean cultures were chosen because they are different in several dimensions. Based on Hofstede (1980), Americans and Germans are individualist (individualism indices = 91 and 67, respectively) and low in power distance (power distance indices = 40 and 35, respectively), whereas Singaporeans are collectivist (individualism index = 20) and high in power distance (power distance index = 74). These dimensions, coupled with other market situations in each country, were predicted to moderate the effects of ad size and repetition on the above dependent variables.

The following presents the literature review on ad repetition, ad size, and cultural differences and proposes hypotheses with the focus on attitudes toward the brand. Attitudes toward the brand is focused on because the most direct effects from ads are attitudes toward the ad and the brand, but attitudes toward the brand are usually more important to marketers than are attitudes toward the ad. Purchase intention is also important, but it is not as direct an effect from ads as are attitudes toward the brand. After the literature review, the paper elaborates on the research methods and results and discusses the implications of the study.

EFFECTS OF AD REPETITION

Research on the effect of ad repetition has generally shown that increased exposure to an ad can initially lead to more favorable attitudes toward the product (Haugtvedt et al. 1994) even in mature product categories (Souza, Rao, and Ram 1995). Hawkins and Hoch (1992) found that consumers’ beliefs could be influenced by repetition. In a study of four famous brands, Lane (2000) found that compared to participants who saw brand extension ads once, those seeing the ads five times evaluated incongruent extensions more favorably and showed higher usage intentions, more favorable consistency judgments, higher elaboration, and more positive elaboration. Taken together, these studies suggest that under particular conditions, ad repetition can influence product preference. The classical conditioning literature believes that in certain circumstances, repeated exposures to a positive stimulus should increase the chance of a conditioning effect (Stuart, Shimp, and Eagle 1987). Thus, while brand attitude may be influenced by one exposure to an ad, the influence may be stronger after multiple exposures to the same ad.

Burke and Edell (1986) found that attitudes toward ads deteriorated with repeated exposure but returned to the original level after a period of no exposure, suggesting that wearout was related to audience’s long-term memory. Kirmani and Wright (1989) found that when told that an ad for a fictitious brand of athletic shoes would run 10 to 15 times in a three-month period, participants inferred lower brand quality than they did when told it would run only once.

These studies suggest that in general, moderate levels of message exposure (two or three) should render higher effects than either very low or very high levels. This notion of diminishing returns on advertising or a concave response curve has received support in studies of ad repetition on eye movement responses (Krugman 1968), attention (Grass and Wallace 1969), and brand attitudes (Gorn and Goldberg 1980; Kirmani 1997 for color ads but not for black and white; Naples 1979; Ray, Sawyer, and Strong 1971; Winter 1973).

Several theoretical explanations have been proposed for repetition effects. Both the wearout and mere exposure literature view that while increasing exposure initially builds up learning and favorable affect, subsequent exposures past a certain point result in tedium and negative affect (Berlyne 1970; Calder and Sternthal 1980; Stang 1975). Berlyne’s (1970) two-factor theory proposed an inverted-U relationship between familiarity and liking. Two separate and opposing psychological processes operate simultaneously: positive habituation and tedium. Positive habituation refers to the situation when exposure reduces arousal due to uncertainty and conflict, and thus increases liking. At the same time, tedium increases with exposure and leads to less favorable feeling toward the stimulus. The relative strength of each factor varies, with the habituation process being more influential on affect initially, whereas tedium and disliking occur with greater exposure. Tedium occurs more slowly for complex, varied stimuli than for simple, non-varied stimuli. Stang (1973, 1975) extended Berlyne’s two-factor theory by arguing that repeated exposure allows more opportunity to learn about the stimulus. Because this learning is rewarding, it induces positive affect. Continued repetition beyond that necessary for learning, nevertheless, leads to boredom or satiation and eventually creates negative affect toward the stimulus.

Cacioppo and Petty’s (1979) two-stage attitude modification model offered a similar explanation. Repetition of the message gives the audience more opportunity to elaborate upon message content and to see its favorable implications. However, in the high exposure, tedium and/or reactance may develop, decreasing the affect. They found that generation of support arguments increases and then decreases with exposure, whereas generation of counter arguments decreases and then increases with exposure. Consequently, agreement with the message increases and then decreases with higher exposure.

Another account of the effect of ad repetition is economic signaling theory, which suggests that consumers may view repetition as indicating the quality of an unfamiliar brand (Nelson 1974). Ad repetition is costly. Because it may convince consumers that the manufacturer is ready to stand by the product and plans to stay in the market to recoup the advertising expenditure through consumers’ repeat purchase, it may reflect the perceived credibility of an unfamiliar manufacturer (Kirmani 1997). In support of this theory, heavily advertised brands were found to be more correlated with ratings of brand quality than were less advertised brands (Marquardt and McGann 1975) and represent good buys (Archibald, Haulman, and Moody 1983).

Some studies did not support the above tenets. Belch’s (1982) results did not support Berlyne’s (1970) two-factor theory, Cacioppo and Petty’s (1979) two-stage attitude modification process model, or Nelson’s (1974) economic signaling theory–the level of exposure influenced neither attitudes nor purchase intentions. Ginter (1974) found that the number of message exposures did not affect overall attitude change or brand choice. Similarly, Mitchell and Olson (1977) found that repetition of two types of print ads had no influence on belief strength, attitudes, or purchase intention.

EFFECTS OF PERCEIVED ADVERTISING COSTS

Consumers can infer advertising costs from ad elements. For example, in Kirmani and Wright’s (1989) study, participants perceived exotic locales, celeb...

Table of contents

• Cover
• Halftitle
• Title
• Copyright
• Contents
• About the Editor
• Euromarketing: An Introduction
• Outsourcing by Finnish Organizational Buyers from Eastern and Central European Suppliers: Country-of-Origin Impact
• Determinants of the Consumption of Cultural Events
• Cross-Cultural Differences in the Effect of Ad Repetition and Ad Size: Experiments with Americans, Germans, and Singaporeans
• Internationalization of Small High-Tech Firms: The Role of Information Technology
• Italians and the Euro: The Impact of Time on Consumer Adjustment Strategies
• A Case Study for International Antitrust: Pepsi versus Coke
• The Symbolic Use of Mobile Telephone Among Turkish Consumers
• Index