´´Advertising of brand X
in Russia and Croatia´´
Author: Jasper Folmer 0997331
Supervisors University of Groningen Drs.H.C.Stek & Drs.T.L.J.Broekhuizen
Groningen, The Netherlands Augustus 2004
Commissioned by Interbrew
Remarks concerning this public version
• In this public version, only the second chapter of the original thesis is included. In this chapter, among other things, the research approach and background of the research, the problem statement and the research methodology (including the theoretical frameworks) are discussed.
• Due to the confidentially of the information in this thesis, a fictitious brand name is used in this public version.
Index
Chapter 2 Research design ... 4
2.1 Introduction... 4
2.2 Research approach ... 4
2.3 Problem statement and theoretical framework ... 5
2.3.1 Background of the research ... 6
2.3.2 Research objective and Question... 8
2.3.3 Concept defining of the research objective and question ... 8
2.3.4 Theoretical framework ... 9
2.3.5 Research model... 13
2.3.6 Sub-questions... 14
2.3.7 Research boundaries ... 14
2.4 Research Methods ... 15
Chapter 2 Research design
2.1 Introduction
In order to obtain relevant and reliable results it is important to perform the research by a systematic methodology. The purpose of this chapter is therefore to explain the approach of the research according to a systematic methodology. Methodology monitors critically all the processes of knowledge production and knowledge use as well the quality of the knowledge1.
In order to ensure the efficiency and reliability of the research process in this research the approach of de Leeuw2 will be used in which the problem statement, concepts and research methods are
considered.
In paragraph 2.2 the mentioned research approach is described. Further the problem statement,
theoretical framework and model of this research is formulated in paragraph 2.3. Finally in this chapter the research methods are explained.
2.2 Research approach
In order to perform the research process in a systematic methodology a model of de Leeuw3 is used.
This model is named ‘’de ballentent’’ of research. This model (see figure 2.1) is a useful help
concerning the choices which the outlines in the research approach settle. The five different aspects of the model are interrelated and the decisions concerning these aspects should be made in cohesion.
The design of the approach for a research can be described according to de Leeuw like a set of connected decisions about:
1. Problem statement: What do you want to know and Why?
2. Use of concepts: In which theoretical framework do you want to catch the symptoms? Which model is used?
3. Data sources: What is the source of the data?
4. Measuring methods: How do you get this data?
5. Analyse methods: How will the acquired data been analyzed and how are the results made free to the customer of the research?
1 de Leeuw, 2001
2 de Leeuw, 2001
3 de Leeuw, 2001
The problem statement and theoretical concepts form together the core of the model. All other decisions should be made with respect to that perspective. It is the steering centre of the research approach.4
2.3 Problem statement and theoretical framework
In order to get usable and qualitative results it is necessary that the research process is organized in an adequate way and that the research starts with a good problem statement. First the background of this research will be described in this paragraph. On the basis of this the objective and research question are defined. Next, in order to get a clear understanding of the issue, theoretical concepts are
formulated. Finally the research model and sub questions, which arise from the theoretical framework, are set up in this paragraph.
4 de Leeuw, 2001
Problem statement
Analyse methods
Use of concepts
Measuring methods Data sources
Figure 2.1 Research approach of de Leeuw
2.3.1 Background of the research
Until 1997, Interbrew´s brand development strategy for international markets was largely laissez faire.
Brands were introduced to new markets through licensing, export and local production when
opportunities were uncovered. By 1998, however, the executive management committee perceived the need to identify a brand from its wide portfolio to systematically develop into the company’s global brand. Although the market for global beer brands was still small, there were some growing successes and Interbrew believed that there were several basic global trends that would improve the viability of this class of product over the next couple of decades. First while many consumers were seeking more variety, others were seeking lower prices. It appeared that the number of affluent and poor consumers segments would increase at the expense of the middle income segments. The upshot of this
socioeconomic trend was that eventually all markets would likely evolve in such a way that demand for both premium and economy-priced beers would increase. A second trend was the
internationalization of the beer business. As consumers traveled around the world, consuming global media, global media were expected to become more effective for building brands. According to Interbrew a global strategy could therefore lead to synergies in advertising.
As a result of these various factors, Interbrew believed that there would be an increasing interest in authentic, international brand in a growing number of countries and therefore Interbrew made the decision to launch the brand X as a global brand.
In 1998, Interbrew´s executive management committee settled on brand X, positioned as the premium European lager, as the company’s global flagship brand.
In the development of brand X into a global brand, there were obviously some difficulties.
As the global campaign got under way, it became clear that the organization needed time to adapt to centralized co-ordination and control of brand X brand marketing. This was, perhaps, not unexpected given that Interbrew had until recently operated on a regional basis; the new centralized brand X management organization approach had been in place only since September 1998.
In addition, there were often difficulties in convincing all parties to become part of a new global approach, particularly the international advertising campaign that was the backbone of the global plan for brand X. In the United Kingdom, Interbrew maintained its TV advertising campaign that already proved to be so successful the last years. On the other hand for other less-established markets, a different TV advertising campaign was created. This TV advertising campaign was rolled out in 1999 in 15 markets.
After using a different TV advertising campaign for three years in 15 countries, in 2002 the executive management decided to standardize the advertising as much as possible in order to aim at the same global premium position and to obtain cost reduces.
For these reasons the management team decided to stop working with this different TV advertising campaign. Because the UK market is the main (foreign) market for brand X and the TV advertising campaign used in the UK for the last years proved to be very successful, the management team
decided to use the UK advertising campaign globally. Since 2003 some international markets are using the TV advertising campaign of the UK in which brand X is positioned as premium beer.
In a meeting with the global brand director of brand X turn out to be that the arguments of that time concerning the specific decision for the UK advertising campaign were based on common sense and feeling. The main argument was that because the campaign had been a great success the last years in the UK, it will also be working in other countries. In order to know if this specific decision of the management team is really suitable for the brand X in all the countries, where the UK advertising campaign has been used since 2003, the global brand director analyzed this in different markets, except the Russian and Croatian markets.
Therefore, there is still a lack of information at the corporate marketing department concerning the actual suitability of the UK (TV) advertising campaign in the important markets Russia and Croatia and there exist doubts in the corporate marketing team of brand X concerning these specific markets.
For this reason the global brand director would also like to know if the TV advertising campaign of the UK is suitable for the Russian and Croatian markets in order to aim at a premium position.
With this information the global brand director is able to understand if it was the right decision to standardize completely and use the TV advertising campaign of the UK or that is preferable to use a different TV advertising campaign concerning the Russian and Croatian markets.
2.3.2 Research objective and Question
A problem statement consists of an objective and question which makes clear for who the research will be done, what kind of knowledge appears and why this is important for them5.
The objective of this research is:
‘’To formulate recommendations for the global brand director of brand X concerning the suitability of the TV advertising campaign of the UK in the Russian and Croatian markets in order to aim a
premium position´´
The main research question is:
‘’To which degree is the TV advertising campaign of the UK suitable for a premium position concerning the Russian and Croatian markets?’’
2.3.3 Concept defining of the research objective and question
Global brand director: The person of Interbrew, who is responsible for the brand X globally.
Advertising: Advertising is information paid by an advertiser about brands, organizations or ideas in order to influence the knowledge, attitude and/or behavior of the target group in the suitable direction for the advertiser6.
Premium position: A place of a product characterized by high quality image relative to other products in the market.
5 de Leeuw, 2001
6 Floor and van Raaij, 2002
2.3.4 Theoretical framework
It can be said that the central theme of this research is (TV) advertising of a brand concerning some countries. In order to understand where the instrument advertising can be placed with regard to all marketing literature first an explanation of the subject marketing-activities in general will be given.
´´Marketing-activities are those activities in an organization which are focused to the exchange of values (brands) between an organization and some stakeholders in the environment. These activities are taking place in such way that they can contribute to the realization of the objectives of the organization´´7.
One of the activities is the managing of the market instruments. Examples of market instruments are the specification of product, the price of the product, the way of communicating to the customers, distribution channel etc. The market instruments are managed in a particular combination to realize objectives. This combination is known as the marketing mix. In there, the cohesion between these marketing-instruments is central. In fact it is better to speak about a combination of fields of instruments than just about a combination of instruments. This because for instance instrument like sales promotion is itself a collection of instruments, like advertising, sponsoring and specific product actions. A well known grouping of fields of marketing-instruments is product, distribution, sales promotion and price.8
Because this research is focused at one of the instruments of the field sales promotion this topic will only be discussed in more detail now. In general the different instruments of the sales promotion are used to inform the target customer, to convince and to remember about the organization and the marketing mix of the products/services of the organization9. It is possible to distinguish the sales promotion in two parts, including communication and actions. Advertising is an instrument of the part communication (see figure 2.2).
Figure 2.2 Sales promotion elements
7 Leeflang, 1993
8 Leeflang, 1993
9 Mc. Carthy, 1984 Sales promotion
Communication
• Marketing: Advertising, merchandising, personal sales
• Corporate: Public relations, sponsoring,
Actions
• Discount actions, save actions, sampling, premiums
A company communicates with several target audiences. Consumers are just a few of these groups.
Other target groups in the communication of the company are: suppliers, shareholders, universities, government and own staff. The communication is always focused to influence the knowledge, the attitude and behavior of the persons in the target groups. Dependent of the subject of the
communication it is possible to make a distinction between corporate and marketing communication.
Corporate communication is dealing with the organization as a whole and marketing communication is dealing with the brands, products and services of the company.10 Because this research is dealing with the advertising of a brand the marketing communication will be considered, in here advertising is an instrument. According to Floor and van Raaij marketing communication has to do with the contact concerning trade and/or consumers in order to influence their knowledge, attitude and behavior for the marketing policy in the suitable direction11.
An important factor in the marketing communication is an understanding of the communication and persuasion process12. In figure 2.3 the communication process is presented. This model points out the key factors in good communication.
The sender needs to know what audiences they want to reach and what response they want. They must be good at encoding messages that contains the process of putting the intended message or thought into the symbolic form. Besides this, important is how the receivers decode the message that contains the process by which the receivers assign meaning to the symbols. Finally, they must send messages through media that reach target audiences and they must develop feedback channels so that they can assess the audience’s response to the message.13
Figure 2.3 Model of the communication process and different advertising elements14
10 Floor and van Raaij, 2002
11 Floor and van Raaij, 2002
12 Batra, 1996
13 Kotler, 2001
14 Belch, 2001 Sender Position Objectives
Encoding
Decoding
Receivers Country I
(Values) Channel
Message Execution
Receivers Country II (Values)
Decoding
Response Response
In order to communicate this message to the target audience advertising is one of the options and usually the central element in the marketing communication of a company15. According to Keller, advertising can be defined as any paid form of nonpersonal presentation and promotion of ideas, goods or services by an identified sponsor. On the other hand, according to Floor and van Raaij advertising is information paid by an advertiser about brands, organizations or ideas in order to influence the
knowledge, attitude and/or the behavior of the target group in the suitable direction for the advertiser16. In this research the definition of Floor and van Raaij will be complied with, because this definition gives a clearer understanding about the purpose of advertising concerning a brand, which is absolutely necessary in the communication process.
As mentioned by the italicized elements in the model of the communication process (see figure 2.3), different aspects are important with regard to advertising. Before explaining the implications of advertising in more countries first the different important aspects of advertising in general will be discussed now.
Within a product category products are positioned of each other. In this position the product benefits for the consumer are central. These are the perceived positive consequences for the consumer with the using of the product. In the message of an advertising campaign these positive consequences are presented as the promise (proposition) of the brand to the consumers. In the advertising campaign the promise will need support to achieve the position. In order to support the promise in the central message it is necessary to select values, which are related to the product and which are important for the target audience. 17 According to Floor and van Raaij there are different possibilities to support the proposition with values in the message of the advertising campaign. It is possible to support the proposition with functional benefits of the product but it is also possible to relate the product with values and associations that are important for the consumer.18 After all, regarding of what will be communicated in the message of the advertising it is needed that the consumers attaches great
´´value´´ to the relating values of the product or brand19.
On the basis of the proposition and the relating values of the product a creative concept will be developed. This contains the way of how the proposition to the target group is translated in the
message and the theme and style of the communication.20 Usually the creative concept is developed by using advertising appeals in order to attract the attention of consumers and/or to influence their
15 Keller, 2003
16 Floor en an Raaij, 2002
17 Floor and van Raaij, 2002
18 Floor and van Raaij, 2002
19 Leeflang, 1998
20 Floor and van Raaij, 2002
feelings toward the product. Hundreds of different appeals can be used as the basis of the proposition translation for advertising messages. At the broadest level, these appeals are generally broken into two categories: informational/rational appeals and emotional appeals.21
Besides on what is said in the message it is also important how it is said in the campaign, which finds expression in the execution of the advertising. If the advertiser is satisfied with the proposition and creative concept, it is possible to start with the real execution of the advertising. Basis execution styles represent contexts for the advertising message conveyed by a commercial22. A number of different execution styles can be distinguished23. In this execution different communication-expressions are used for example the language, music, pictures and humor24.
At this point the development of the advertising campaign content has been finished and will be communicated to receivers in different countries in the case of an international advertising campaign.
In the model of the communication this is presented by the separation to country I and country II, after the development of the message and execution.
The combination of the message and execution will reflect cultural elements. Wit regard to advertising in different countries it is important to take account of the culture of each country in relation to the different receivers (see figure 2.3).
The elements selected to differentiate the brand relate to the cultural mindset of the advertiser but should also relate to the cultural mind-sets of the receivers. What makes international advertising effective is the match between the values in the advertising message and the values of the receivers in the different countries with regard to the product. The core problem of in advertising in more countries is the cultural math between the advertisement and the different receivers.25
Finally it is important to consider, after using the advertising campaign in the different countries to consider the actual responses/effects in order to know if the different receivers decode the encoded
message in the right way and if the objective has been achieved. According to Franzen26 in the
evaluation of the advertising campaign it is possible to measure the effects of the advertising campaign by analyzing the output at individual level including the responses/ effects of the campaign at
individuals of the receivers (see figure 2.3).
21 Belch, 2001
22 Laskey et al, 1994
23 de Mooij, 1998
24 Floor and van Raaij, 2002
25 Franzen, 1998
26 Franzen, 1998
2.3.5 Research model
Taking into account the theoretical study a research model (see figure 2.5) can be created. The
research model shows which aspects are important during the study and are necessary to get answer to the central question of this research.
In order to know about what the content of the UK advertising campaign is, that has been used in the Russian and Croatian markets, the first step in this research is to give a clear understanding of the UK advertising campaign. Important for effective standardized advertising in different countries is the match between the reflected values in the advertising and the values of the receiver in the different countries. Therefore, in step 2 the important values of consumers in relation to premium beer in the Russian and Croatian markets are explained and compared with the reflected values of the advertising campaign of brand X. Next, because this campaign has been used in the specific countries, it is useful to consider in step 3 the actual responses/effects in order to know if the message is translated well to the consumers. Finally, on the basis of the results of the previous three steps and with own knowledge and analytical capacity recommendations concerning the suitability of this advertising campaign for the Russian and Croatian markets will be formulated.
Figure 2.5 Research model
TV advertising campaign UK
Meaning of premium beer in countries
vs Values advertising
Evaluation campaign in countries
Recommendations of suitability UK campaign in
countries for global brand director Step 1
Step 2
Step 3
Step 4
2.3.6 Sub-questions
In order to give an answer to the central research question the following sub-questions, which arise from the theoretical framework and research model, are set up and discussed in the different chapters of this research.
1. What is the content of the (TV) UK advertising campaign of brand X?
2. What is the relation between the reflected values in the advertising and the values of the consumers with regard to premium beer in the Russian and Croatian markets?
3. What are the responses of consumers with regard to the advertising campaign in the Russian and Croatian markets?
2.3.7 Research boundaries
The research boundaries reflect the constraints of the research. According to de Leeuw27 there are two kinds of research boundaries: boundaries with respect to the product (result) and boundaries with respect to the process. In order to define the boundaries clearly, this distinction is used.
Boundaries with respect to the product:
- Interbrew would like to use the results as input for possible adaptations in their advertising campaign.
- Because only the TV advertising is used of the UK other advertisement will not be considered.
- The interest of Interbrew should not be harmed; therefore it is not allowed to publish the whole assignment.
Boundaries with respect to the research process:
- The research should be done in six months at the corporate marketing department in Leuven and the final report should be made as soon as possible.
- The research should take into account the formulated restrictions of the faculty Organizations University of Groningen.
27 de Leeuw, 2001
2.4 Research Methods
To get an answer to the main question different kind of research methods can be used. In general this research project uses one kind of research method, including desk research.
Desk research
According to de Leeuw28 three kinds of sources for desk research can be distinguished: research after scientific literature and research after internal documents and external documents. The following internal documents have been used during this research:
• Internal documents about the Interbrew company
• Internal corporate documents about the brand X
• Internal documents (researches) about the Russian and Croatian beer markets
• Internal market documents of the brand X
• Internet pages of the Interbrew company
The following external document has been used during this research:
• Documents about the beer industry in general
Literature about advertising was the most important literature used during this assignment. Different authors wrote about this specific part of marketing and have been used in this research, including Floor and van Raaij on ``Marketingcommunicatie strategie´´, de Mooij on ´´Global marketing and advertising´´, Franzen on ´´Merken en Reclame`` and Belch et al on ´´Advertising and Promotion´´.
28 de Leeuw, 2001
