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LIST OF CONTRIBUTORS
Hae-Kyong Bang Villanova University, USA
P. Greg Bonner Villanova University, USA
Les Carlson Clemson University, USA
Albert Caruana University of Malta, Msida, Malta
Aruna Chandra Indiana State University, USA
Patrick De Pelsmacker Universiteit Antwerpen Management School

and Ghent University, Belgium
Kanwalrooop Kathy Dhanda University of Portland, USA
Michael Dolezal Masaryk University, Czech Republic
Michael T. Ewing Monash University, Australia
Maggie Geuens Vlerick Leuven Gent Management School

and Ghent University, Belgium
David A. Griffith University of Hawaii, USA
Ronald Paul Hill University of Portland, USA
Cameron James Hughes Millward Brown International,

United Kingdom
Chad M. Johnson Villanova University, USA
Dimitri Kapelianis Arizona State University, USA

ix
X LIST OF CONTRIBUTORS
Stephen Keysuk Kim Oregon State University, Corvallis, OR, USA
Wei-Na Lee The University of Texas at Austin, USA
Jong Won Lim Seoul National University, South Korea
Dominika Maison University of Warsaw, Poland
Gordon E. Miracle Michigan State University, USA
Changho Oh Hanshin University, Osan, South Korea
Sak Onkvisit San Jose University, USA
Michael Jay Polonsky Victoria University, Australia
Andrea Prothero University College Dublin, Ireland
Mary Anne Raymond Clemson University, USA
John K. Ryans, Jr. Kent State University, USA
Trina Sego Bosie State University, USA
John J. Shaw Providence College, USA
Charles R. Taylor Villanova University, USA
Andy Teo PSB Corporation, Singapore
Fei Xue University of Alabama, USA
TaiWoong Yun The University of Texas at Austin, USA
Shuhua Zhou University of Alabama, USA
Peiqin Zhou University of Alabama, 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
I N T R O D U C T I O N - 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. special-
ization. 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 diffi-
culty 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 interna-
tional 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 adver-
tising 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 execu-
tions 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 recom-
mended 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
ABSTRACT
Cross-cultural research presents unique challenges due to language and

cultural differences. Based on a large-scale research project involving tele-
vision 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 instru-
ments are provided.
INTRODUCTION
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

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 equiv-
alence 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 defin-
itions 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
a n o t h e r . . , 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 gener-
alizations. 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 simi-
larities 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, especially to discover if they are an artifact o f 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 if 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 o n e ' 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 o f translators are also
important regarding their perspectives on functions, concepts and language.
Additionally it was important for this particular project that the translators
should know the technical language o f advertising. Miracle (1988) reported
more fully on the requirements for effective translations o f advertising and
related material.
W h e n 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 charac-

ters 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 compre-
hensive 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 addi-

tional 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 uncontami-
nated 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.
EVALUATION OF RELIABILITY RESULTS
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.
CONCLUSIONS
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 neces-

sary 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 equiv-
alent in two or more languages. Any cross-cultural or cross-national study
that does not employ the back-translation technique should be an imme-
diate 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 experi-
ence, 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 mate-
rial 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 instru-
ments. 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 pos-
sible to the coders in the other countries. When research instruments are
designed that are appropriate for coders with certain characteristics, prob-
lems 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 sub-
stantially 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 especially acute for analysis of televi-
sion commercials, it probably is necessary also for the differences in the
verbal and visual content and executions in other advertising media, espe-
cially magazines. Do not make the assumption that most or all o f the
information in the advertising is in the verbal part o f 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 following organizations: the Michigan State University Development Fund,
the Hoso Bunka Foundation (Japan), the Korea Broadcast Advertising Corp.,
A S I Market Research (Japan), the Yoshida Hideo Memorial Foundation (Japan),
and the Youngshin A c a d e m y (Korea).
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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 demon-
strate 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.

© 2002 Published by Elsevier Science Ltd.
ISBN: 0-7623-0950-4
25
26 MICHAEL T. EWING, ALBERT CARUANA AND ANDY TEO
INTRODUCTION
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 transfor-
mational 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.
EQUIVALENCE IN CROSS-CULTURAL RESEARCH
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 frame-
works 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 instru-
ments 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).
STAGES IN DEVELOPMENT OF MARS
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 adminis-
tered 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.
RESULTS
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 unidimension-
ality. 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 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
Table 1. Results of CEA for Five Ads Shown to T w o P o p u l a t i o n s Using a

One-Factor and Two-Factor Model.
Population 1 Ad 1 Ad 2 Ad 3 Ad 4 Ad 5
O n e 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
Table 1. Continued.
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 Ad 1 Ad2 Ad3 Ad4 Ad5

(factor 1 with 2)
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 Ad 1 Ad2 Ad3 Ad4 Ad5

(factor 1 with 2)
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 adver-
tising 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 tele-
vision 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 compar-
isons. 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 exhaus-
tive, 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 M A R S ' 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
T h e issue of whether advertising should be standardized vs. adapted to local
cultures has been a major focus in the advertising literature. While the debate

ISBN: 0-7623-0950-4
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 condi-
tions 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 adver-
tisers 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.
REVIEW OF LITERATURE
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 data-
bases, 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 mar-
keting 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 diffi-

cult 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 adver-
tisements (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 maga-
zine 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 communica-
tions 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 communi-
cation 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 inter-
national 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 opportu-
nities 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 inter-
national 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 signifi-
cance 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 advertis-
ing. 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 consump-
tion 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 advertise-
ments (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 dif-
ferences 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 interna-
tional advertising managers are more likely to utilize the specialization strategy
(Kanso, 1992). In fact, one study estimated that two out of every three inter-
national 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 inter-
national 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 adver-
tising 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 standard-
ization 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 interna-
tional 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 differ-
ences 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 seg-
mentation. 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 stan-
dardized. 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).
CONCLUSIONS
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 impor-
tance 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 asso-
ciation 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.

ISBN: 0-7623-0950-4
67
68 ARUNA CHANDRA, DAVID A. GRIFFITH AND JOHN K. RYANS, JR.
INTRODUCTION
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.
STANDARDIZATION
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,
70 ARUNA CHANDRA, DAVID A. GRIFFITHAND JOHN K. RYANS, JR.
1974; Theophilopoulos, 1979; Vladimir, 1950), while others viewed standard-

ization 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 standard-
ization 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 stan-
dardized 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 stan-
dardization 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 adver-
tising 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.
ANALYSIS
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" -0.123
Similarity
Consumer 3.36 0.61 0.493* 0.391" 0.173
Market
Similarity
Note: *p<0.05, **p<0.01

Table 2. Multiple Regression Results.

(Dependent Variable: Program Standardization.)
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

Consumer Market Similarity 0.304 2.18 0.018
F(2,40) = 10.39, p < 0.000, R2= 0.342.
Equation 3
Maximum
Likelihood

Consumer Market Similarity 0.304 3.10 0.002
EnvironmentalSimilarity -0.353 -2.83 0.004
F(3,39) = 10.803, p < 0.000, R2= 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 stan-
dardization. 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 segmenta-
tion. 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 stan-
dardization 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 find-
ings 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 agen-
cies 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 standard-
ization. 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.
RESEARCH DIRECTIONS
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 contri-

bution 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 adver-
tising 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 standard-
ization 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. multi-
nationals exclusively in the study. For example, would one question whether
alternative variables would be associated with advertising program standard-
ization 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

ISBN: 0-7623-0950-4
85
86 SAK ONKVISIT AND JOHN J. SHAW
everywhere. To put it the other way, the basic disciplines and principles of mar-
keting, 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. U N I V E R S A L 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 maga-
zines have "high geographic and demographic selectvitiy."
M A R K E T I N G ASSUMPTIONS: F O R A M E R I C A N S O N L Y
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 , PRINCIPLES,
AND STRATEGIES
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 undoubt-
edly 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 recog-
nize 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.
ADVERTISING MEDIA IN THE INTERNATIONAL

CONTEXT: ARE ADVERTISING MEDIA UNIVERSAL?
Advertising media can be broadly classified in terms of their degree of selec-

tivity. 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 cover-
age, 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 accompany-
ing 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 adver-
tising 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 multi-
national 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.
GLOBAL (GLOCAL) ADVERTISING
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 efficiencywith effectiveness.
A global ad is simultaneouslyglobal 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 adver-
tisement 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 consid-
ered 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, trans-
lators, 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.
CONCLUSION
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 practi-
tioners 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.
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CREATING A POSITIVE B R A N D
IMAGE WITH A LOCAL
ADAPTATION ADVERTISING
STRATEGY: THE H Y U N D A I
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.

ISBN: 0-7623-0950-4
101
102 MARY ANNE RAYMOND AND JONG WON LIM
INTRODUCTION
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 devel-
oping 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 adver-
tising 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 interna-
tional advertising campaign and Hyundai's plans to build a production facility in
the United States.
REVIEW OF LITERATURE
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 market-
ing 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 global-
ization 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 advertise-
ments. 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 local-
ization 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 nega-
tive 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 differ-
ences (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 H Y U N D A I 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 reputa-
tion 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 adver-
tising 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 news-
paper 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 differ-
entiated 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. H M K ' 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 recogni-
tion, 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' aware-
ness 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 satisfac-
tion. 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).
CONCLUSIONS
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
116 M A R Y ANNE R A Y M O N D A N D JONG W O N LIM
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 auto-
mobile manufacturer now offering an extended warranty.
ACKNOWLEDGMENTS
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 f o r 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

ISBN: 0-7623-0950-4
121
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 manage-
rial point of view. As Lynch and Stipp (1999, p. 15) indicate:
The available research evidence [on qualitative viewing factors that influence ad effective-
ness] is far from satisfactoryand more research in this field should be stronglyencouraged.
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 elabora-
tion. 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 infor-
mative 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 adver-
tising 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 head-
lines 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. It'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 compo-
nents 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 con-
structed (ad content recall), in which 0 means no single element was recalled,
and 1-4 means the number of arguments that were correctly remembered.
RESULTS
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 signif-
icantly 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
Table 1. Analysis of Variance Results.

Context and Message Type and Ad Responses.
Dependent variables Source of variation df F-value p-value
Attitude towards the ad Type of context (A) 1 7.228 0.008

Type of message (B) 1 3.914 0.051
AxB 1 5.928 0.017
Attitude towards the brand Type of context (A) 1 2.674 0.105
AxB 1 0.042 0.838
Purchase intention Type of context (A) 1 1.329 0.252
AxB 1 8.748 0.004
Ad content recall Type of context (A) 1 4.668 0.033
AxB 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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Table 4. Message Type and User Image.
Message Significance
Characteristic Emotional Rational Chi2 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 pos-
itive 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 signifi-
cantly 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 posi-
tive 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 posi-
tive 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 inter-
views and a survey suggests that effective Czech advertising reflects the
collectivistic nature of the culture as well as the contextual level of commu-
nication. 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. Multinational corporations view evolving

ISBN: 0-7623-0950-4
137
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 accumu-
lation 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 environ-
ments 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 adver-
tising 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 devel-
opment, 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_gdoes in fact mediate Aad, which,
in turn, affects advertising effectiveness, and, if Aad_gtruly 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 (transitionaleconomies)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 exam-
ined 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) devel-
oped 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 communi-
cation 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 collec-
tivistic 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 manu-
factured 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 expec-
tations 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 believed 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 c o m m o n in beer advertising.
In terms o f 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 collec-
tivistic 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 adver-
tising can successfully make appeals to a sense of belonging to groups.
Direct, Simple Message Consistent with the Czech Republic's being a rela-
tively low context culture, the informants expressed a belief 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
O s k a r ' 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 c o m m o n 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 m a y 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.
W h e n 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 a d ' 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
N O V A , 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 o f "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.
IMPLICATIONS
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, adver-
tisers 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 adver-
tising 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 o f direct mail. While this is not yet char-
acteristic of other media, it does suggest that advertisers trying to reach the
Czech Republic need to be aware of perceptions o f clutter. Additional research
on how the perception o f clutter is affecting Czechs' Aad_gwould be useful not
only for understanding Czech advertising, but also for better understanding the
stages o f advertising development in a transitional economy.
In terms o f 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 o f the ad.
At the present time, a large scale survey of Czech advertising practitioners for
their perceptions of what makes advertising effective would also be worthwhile.
O f course, similar research in other transitional economies would be worthwhile.
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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 impor-
tant 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).

ISBN: 0-7623-0950-4
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 devel-
oped 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 envi-
ronmental claims, both in advertising and on packaging.
The use of environmental claims has not always resulted in consumer accep-
tance 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 assump-
tion 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 environ-
mental 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 adver-
tisers 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 mani-
fested (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 environ-
mental 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 under-
standing 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.
METHODOLOGY
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 compar-
ative 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 environ-
mental 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 sine
q u a n o n for conducting a cross-cultural content analysis of commercial commu-
nication 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 cogni-
tive 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 (ANTI) - Antibacterial

AUS Australia
- U.K. - United Kingdom
SA - South Africa U.S. - United States
j u d g e s w e r e g i v e n c o m m o n s t r u c t u r e d i n s t r u c t i o n s a n d c o d i n g sheets. T h e
discovery-orientation approach provided broad open-ended questions related
to c o n s u m e r s ' p e r c e p t i o n s a n d an o p p o r t u n i t y to j u s t i f y t h e s e p e r c e p t i o n s
(Phillips, 1997) r a t h e r t h a n p r e d e t e r m i n e d c o d i n g c a t e g o r i e s o f t e n u s e d in the
c o n t e n t a n a l y s i s c o d i n g p r o c e s s . A s such, r e s p o n d e n t s w e r e n o t c o n s t r a i n e d b y
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 informa-
tion 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 generaliz-
ability 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 envi-
ronmental, 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 impor-
tant 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 h a 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 ¢' v' v' v'

Recycle bottle/symbol ¢' v' ¢' v'
Phosphate free V' v" v' v'
Product name V' V' v'
Recycled packaging v' v'
Reduces pollution ¢'
Reduces waste ¢' v'
Uses less packaging i/
Reduced use of resources ¢'
Reduces energy use v'
Environmental slogan ¢' v' v' ¢'
Environmental sponsorships ¢'
Helps conservation ¢'
Third party endorsements V'
Environmental picture ¢,
Environmental award v'
Ecological factory v'
Please recycle bottle v'
Synergistic formula ¢'
Informational Points of Differentiation
Keep out of children's reach ¢'

Don't use with bleach ¢'
Eye irritant v"
Not tested on animals v' v'
Vegan approved v'
Ingredient Related Information
Ingredients listing i/ ¢, I,' ¢,

Soft on hands v' v' v' v'
Contains lanolin ¢,
Eliminated contaminants v'
Non-toxic ingredients I,,' v'
Natm-al fragrance v" v' ¢,
Natural ingredients I,,' ¢, v'
Ph balanced v' ¢,
Mild and gentle v'
Fights germs on hands ¢,
Picture of natural image v' ¢,
Table 2. Continued.
Attribute Aus SA U.K. U.S.
General Product Information
How to use t/ t/ t/ v'

Concentrated formula t/ t/ v' t/
Anti-bacterial t/
Careline telephone number t/ t/
Dermatologically tested t/ t/
Multi-purpose use (e.g. soap)
Please dispose of carefully t,,'
Money back guarantee t/
New bigger size t,t
Safe for fine washables t/
Safe for septic tanks ii
Use in hard or soft water
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 c o m m o n
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 under-
standable 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 uncer-
tain 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.
In addition the use of the three-arrow recycling symbol was heavily criti-
cized 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 infor-
mation 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 coun-
try, other than SA, as being environmental in nature. Judges felt that this
information was usually not adequately provided because it was either too techni-
cal (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 charac-
teristic. 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 envi-
ronmental 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 infor-
mation 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 percep-
tions 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 informa-
tion 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 environ-
mental 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 infor-
mation 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 adver-
tisers 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 discus-
sion 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. UnitedNations
Secretary-General Kofi Anan (in Norris, 2000, p. 5).

ISBN: 0-7623-0950-4
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 con-
sumers' 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 popu-
lation, 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.
TECHNOLOGICAL DIFFUSION, HUMAN

DEVELOPMENT, AND INEQUALITY
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 devel-
oped 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 o f Countries by D e v e l o p m e n t 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 OECD Less Eastern Europe

Chile High Developing Greater Latin
America/Caribbean
Bahrain High Developing NA Arab States
Costa Rica High Developing Greater Latin
America/Caribbean
Bahamas High Developing NA Latin
America/Caribbean
Kuwait High Developing NA Arab States
Estonia High NA Moderate Eastern Europe
United Arab Emirates High Developing NA Arab States
Croatia High NA Less Eastern Europe
Lithuania High NA Less Eastern Europe
Qatar High Developing NA Arab States
Trinidad and Tobago Medium Developing Moderate Latin
America/Caribbean
Latvia Medium NA Less Eastern Europe
Mexico Medium OECD Greater Latin
America/Caribbean
Panama Medium Developing Greater Latin
America/Caribbean
Belarus Medium NA Less Eastern Europe
Belize Medium Developing NA Latin
America/Caribbean
Russian Federation Medium NA Greater Eastern Europe
Malaysia Medium Developing Greater East Asia/Pacific
Bulgaria Medium NA Less Eastern Europe
Romania Medium NA Less Eastern Europe
Libyan Arab Medium Developing NA Arab States
Jamahiriya
Macedonia, TFYR Medium NA NA Eastern Europe
Venezuela Medium Developing Greater Latin
America/Caribbean
Colombia Medium Developing Greater Latin
America/Caribbean
Mauritius Medium Developing NA Sub-Saharan Africa
Suriname Medium Developing NA Latin
America/Caribbean
Lebanon Medium Developing NA Arab States
Thailand Medium Developing Moderate East Asia/Pacific
Fiji Medium Developing NA East Asia/Pacific
Saudi Arabia Medium Developing NA Arab States
182 RONALD PAUL HILL AND K A N W A L R O O P KATHY DHANDA
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
Developed
Jamaica Medium Developing Moderate Latin
America/Caribbean
Azerbaijan Medium NA Moderate Eastern Europe
Paraguay Medium Developing Greater Latin
America/Caribbean
Sri Lanka Medium Developing Less South Asia
Turkey Medium OECD Moderate Southern Europe
Turkmenistan Medium NA Moderate Eastern Europe
Ecuador Medium Developing Moderate Latin
America/Caribbean
Albania Medium NA NA Eastern Europe
Dominican Republic Medium Developing Greater Latin
America/Caribbean
China Medium Developing Moderate East Asia/Pacific
Jordan Medium Developing Moderate Arab States
Tunisia Medium Developing Moderate Arab States
Iran, Medium Developing NA South Asia
Islamic Republic of
Cape Verde Medium Developing/Least NA Sub-Saharan Africa
Developed
Kyrgyzstan Medium NA Moderate Eastern Europe
Guyana Medium Developing Moderate Latin
America/Caribbean
South Africa Medium Developing Greater Sub-Saharan Africa
E1 Salvador Medium Developing Greater Latin
America/Caribbean
Samoa (Western) Medium Developing/Least NA East Asia/Pacific
Developed
Syrian Arab Republic Medium Developing NA Arab States
Moldova, Republic of Medium NA Moderate Eastern Europe
Table 1. Continued.

Uzbekistan Medium NA Less Eastern Europe

Algeria Medium Developing Moderate Arab States
Vietnam Medium Developing Moderate East Asia/Pacific
Indonesia Medium Developing Less East Asia/Pacific
Tajikistan Medium NA NA Eastern Europe
Bolivia Medium Developing Greater Latin
America/Caribbean
Egypt Medium Developing Less Arab States
Nicaragua Medium Developing Greater Latin
America/Caribbean
Honduras Medium Developing Greater Latin
America/Caribbean
Guatemala Medium Developing Greater Latin
America/Caribbean
Gabon Medium Developing NA Sub-Saharan Africa
Equatorial Guinea Medium Developing/Least NA Sub-Saharan Africa
Developed
Namibia Medium Developing NA Sub-Saharan Africa
Morocco Medium Developing Moderate Arab States
Swaziland Medium Developing Greater Sub-Saharan Africa
Botswana Medium Developing NA Sub-Saharan Africa
India Medium Developing Moderate South Asia
Mongolia Medium Developing Less East Asia/Pacific
Zimbabwe Medium Developing Greater Sub-Saharan Africa
Myanmar Medium Developing/Least NA East Asia/Pacific
Developed
Ghana Medium Developing Moderate Sub-Saharan Africa
Lesotho Medium Developing/Least Greater Sub-Saharan Africa
Developed
Cambodia Medium Developing/Least Moderate East Asia/Pacific
Developed
Papua New Guinea Medium Developing Greater East Asia/Pacific
Kenya Medium Developing Moderate Sub-Saharan Africa
Comoros Medium Developing/Least NA Sub-Saharan Africa
Developed
Cameroon Medium Developing NA Sub-Saharan Africa
Congo Medium Developing NA Sub-Saharan Africa
Pakistan Low Developing Less South Asia
Togo Low Developing/Least NA Sub-Saharan Africa
Developed
Nepal Low Developing/Least Moderate South Asia
Developed
184 R O N A L D P A U L HILL AND K A N W A L R O O P K A T H Y D H A N D A
Table 1. Continued.

Bhutan Low Developing/Least NA South Asia

Developed
Lao People's Low Developing/Least Moderate East Asia/Pacific
Dem. Rep. Developed
Bangladesh Low Developing/Least Less South Asia
Developed
Yemen Low Developing/Least Less Arab States
Developed
Haiti Low Developing/Least NA Latin
Developed America/Caribbean
Madagascar Low Developing/Least Greater Sub-Saharan Africa
Developed
Nigeria Low Developing Greater Sub-Saharan Africa
Djibouti Low Developing/Least NA Arab States
Developed
Sudan Low Developing/Least NA Sub-Saharan Africa
Developed
Mauritania Low Developing/Least Moderate Sub-Saharan Africa
Developed
Tanzania, U. Rep. Of Low Developing/Least Moderate Sub-Saharan Africa
Developed
Uganda Low Developing/Least Moderate Sub-Saharan Africa
Developed
Congo, Dem. Rep. Of theLow Developing/Least NA Sub-Saharan Africa
Developed
Zambia Low Developing/Least Greater Sub-Saharan Africa
Developed
Cote d'Ivoire Low Developing Moderate Sub-Saharan Africa
Senegal Low Developing Moderate Sub-Saharan Africa
Angola Low Developing/Least NA Sub-Saharan Africa
Developed
Benin Low Developing/Least NA Sub-Saharan Africa
Developed
Eritrea Low Developing/Least NA Sub-Saharan Africa
Developed
Gambia Low Developing/Least Greater Sub-Saharan Africa
Developed
Guinea Low Developing/Least Moderate Sub-Saharan Africa
Developed
Malawi Low Developing/Least NA Sub-Saharan Africa
Developed
Rwanda Low Developing/Least Less Sub-Saharan Africa
Developed
Table 1. Continued.

Mali Low Developing/Least Greater Sub-SaharanAfrica

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-SaharanAfrica
Developed
Mozambique Low Developing/Least Moderate Sub-SaharanAfrica
Developed
Ethiopia Low Developing/Least Moderate Sub-SaharanAfrica
Developed
Burkina Faso Low Developing/Least Greater Sub-SaharanAfrica
Developed
Burundi Low Developing/Least Less Sub-Saharan
Africa
Developed
Niger Low Developing/Least Greater Sub-SaharanAfrica
Developed
Sierra Leone Low Developing/Least NA Sub-Saharan
Africa
Developed
* Abstracted from Human Development Report, 2001

** Category descriptions include HDI - classificationof 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 con-
sumption 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 . 0 1 ;
Internet hosts: F = 8.21, p < 0.01).
DISCUSSION AND IMPLICATIONS
Summary of Findings
Using data collected by the United Nations, its affiliates, and other international
organizations, this research investigates the digital divide through an examina-
tion 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 devel-
oped 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 tele-
phony (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 implemen-
tation 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 expan-
sion 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 socio-
economic 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 C o m m e n t s
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.

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?
LITERATURE REVIEW
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 quali-
tative 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 C O 0 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, emotionalbackground, and connotationassociated with a concept. Thus, the made-in

image is the picture, the reputation, the stereotypethat businessmen and consumer attach
to products of a specific country.., created by such variables as representativeproducts,
national characteristics,economicbackground,history, and tradition.
Several other researchers in subsequent years also worked on conceptualizing

C O 0 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 C O 0 cues trigger the image of
the country that has those dimensions. Better understanding of C O 0 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 prefer-
ences, 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 C O 0 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 C O 0 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 manufac-
tured 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 C O 0 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
Table 1. Manipulation for the Study.
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 specif-
ically 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 C O 0 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.
Table 2. Items Used in Each Dimensions for the Jeans.
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."
RESULTS
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 0.020 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 0.022 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 per-
formed 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.
DISCUSSION
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 manu-
factured 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 devel-
oped 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 percep-
tions 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.
LIMITATIONS AND SUGGESTIONS FOR FUTURE

RESEARCH
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 relation-
ship 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 evalua-
tions. Answers to concerns raised here will provide a better understanding of
country image phenomena.
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APPENDIX: MANUFACTURED-IN AND

DESIGNED-IN STIMULI
U.S. Non-hybrid French Non-hybrid

Online Survey Online Survey
Please read the description below carefully P l e a , reed the description below cartfuily
before you proceed with each section of b~le before you proceed with each section of the
survey. aurvey.
Description Description
For this study, you are asked to evaluate two For thli I'0Jdy, you art l i k e d to evaluate two
products, Jeans and sunglasses. Both products, June end sunglasses. Both
products are d e s i g n e d and manufac"uJred products ere designed and manufactured
in USA. In France.
Since people typically have Impressions when Since people typically have impressions when
they flrot lee I product, in ell product surveys they llrst lee a product, in all product surveys
that we conduct we usueJly begin by gettin9 that we conduct we usuldly begin by get6ng
these initial Improlalonl. these Initial Impressions.
IMPORTANT: YOU MUST ANSWER ALL IMPORTANT: YOU MUST ANSWER ALL
THE QUESTIONS to proceed to the next THE QUESTIONS to proceed to the next
page. page.
To begin, click on the button below. 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.

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 conse-

quences 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 contro-

versial, 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.
H l b : As the power of an advertising agency increases, its client firm's

commitment to the relationship with the agency increases.
P o w e r 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 commit-

ment between the agency and its client firm does not change.
As for the effect of asymmetry of power in a dyad on asymmetry of commit-

ment, 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 commit-

ment 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 commu-

nication with the agency increases.
P o w e r 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 commu-
nication 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 adver-
tising 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 commu-
nication 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 communi-

cation 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 commu-
nication 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 commu-

nication 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 communi-
cation 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 commu-

nication 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 adver-
tising 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 communi-
cation 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 com-
munication 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, A D V g 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 adver-
tising) 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. Clientpower 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 1.00
Mean 4.51 5.16 25.52 4.98 5.02 25.86
Standard deviation 1.13 1.00 4.71 0.89 0.95 5.41
* Coefficients larger than 0.18 are significantat 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 commitment2 0.77 0.12
Client commitment 3 0.87 0.08
Client commitment4 0.74 0.04
Agency commitment I 0.06 0.83
Agency commitment2 0.08 0.84
Agency commitment 3 -0.01
Agency commitment4 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 discrimi-
nant validity. The results of key informant bias check are available upon request.
ANALYSIS AND RESULTS
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 com-
mitment 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 rela-
tionship 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 H l a 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 hypoth-
esized, 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 commu-
nication 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 . 0 0 1 ) 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 commu-
nication 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 coeffi-
cients 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 hypothe-

sized, 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 perfor-
mance" 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 high-
lighting the need to know perceptions and opinions of both parties.
Effects o f p o w e r 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 . 8 3 , p < 0 . 0 0 1 ) , 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 mea-
surement 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 commit-
ment 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 inter-
personal level should be examined further and related to commitment and
communication at the interpersonal level.
ACKNOWLEDGMENTS
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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APPENDIX
(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 (b) suggestion of good marketing ideas or tactics
(c) suggestion of advertising concept (d) creativity
(e) media planning (f) media management and execution
(g) event and special promotion (h) market research and ad effectiveness research
2. Role process
(a) understanding for our decision-making (b) easiness to reach agreement in decision
process making
(c) easy coordination in execution (d) responsiveness to client requests
3. Relationship
(a) competence of the agency staff (b) personal relationship between AE and client
advertising staff
(c) stability of the agency personnel
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 (b) telephone calls
(c) exchange of documents (d) informal meetings (dinner, sports, etc.)
2. Between senior managers
3. Between advertising staff
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 prod-
ucts 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.

ISBN: 0-7623-0950-4
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.
THE CASE COUNTRY
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 sat-
isfaction 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 relation-
ship 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 (acqui-
sition 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 materi-
alists 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 exam-
ined 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.
PARTICIPANTS AND PROCEDURE
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 mate-
rialism (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.
RESULTS
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 ( 4 8 ) = - 0 . 9 1 , p > 0 . 1 0 . 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 adver-
tisements significantly improved Chinese college students' life-satisfaction.
Self-Esteem
The hypothesis that exposure to currently affordable product would not influ-
ence 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.
DISCUSSION
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 advertise-
ments 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:
Su ccess
Self-Esteem -
Pretentions
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 accom-
plishments 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:
Future Success
Self-Esteem =
Pretentions
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 advis-
able 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 materialism as a possible confound rather than a dependent
variable. Effects of exposure to luxury items may be more fine-tuned if person-
ality and materialism are controlled as covariates. F r o m 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 O1c. 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. D a v i d Roskos-
Ewoldsen at the University o f Alabama, as well as our editor Dr. Charles R.
T a y l o r and other anonymous reviewers for their invaluable input in this
project.
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APPENDIX 1: M A T E R I A L I S M SCALE
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.
APPENDIX 2: SELF-ESTEEM SCALE
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 adver-
tising 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.

ISBN: 0-7623-0950.4
263
264 CAMERON JAMES HUGHES AND MICHAEL JAY POLONSKY
INTRODUCTION
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 interna-
tional 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 compa-
nies 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 automo-
bile 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.
CROSS-NATIONAL INFORMATION CONTENT

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 advertise-
ments 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.
CULTURE DIFFERENCES BETWEEN THE JAPANESE

AND USA
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 infor-
mative, 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, exten-
sive 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.-ll, 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 exten-
sive 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 coun-
tries 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 advertise-
ments 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.
METHODOLOGY
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 proce-
dures, 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 advertise-
ments 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
Table 1. Advertisements by Product and Country.
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.
ANALYSIS
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.
"0
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0 <
0
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I
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.~.~ ~ ~ .~
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
Table 3. A g g r e g a t e C o m p a r i s o n s w i t h M a d d e n et al. (1986).
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 u e T y p e s B e t w e e n A u s t r a l i a (this study) a n d

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.
f o r t h e r e are s u b s t a n t i a l d i f f e r e n c e s in the p r o p o r t i o n 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 l e a s t h a l f o f t h e c u e s in b o t h c o u n t r i e s (8 f o r U.S. firms a n d 6
for J a p a n e s e firms). T h i s a p p e a r s to s o m e w h a t c o u n t e r t h e f i n d i n g s in H2, as
f i n n s f r o m b o t h c u l t u r e s s e e m to b e e t h n o c e n t r i c a l l y o r i e n t e d a n d in fact the
U.S. f i n n s s e e m to b e e n m o r e a d a p t i v e to t h e A u s t r a l i a n c u l t u r e t h a n t h e i r
Japanese counterparts.
IMPLICATIONS AND CONCLUSIONS
T h e r e d o a p p e a r to b e s o m e n a t i o n a l l y b a s e d d i f f e r e n c e s in t h e l e v e l o f
i n f o r m a t i o n w i t h i n a d v e r t i s e m e n t s in Australia. A s s u g g e s t e d b y the literature
the i n f o r m a t i o n c o n t e n t w i t h i n J a p a n e s e f i r m s ' a d v e r t i s e m e n t s c o n t a i n s t h e 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 lit-
erature 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 explicitly trying to m i n i m i s e
any differences in information content. The results w o u l d also appear to suggest
that firms from these two foreign markets are not taking a completely local or
global approach, b u t rather are taking a customized approach, at least in terms
of informational cues.
O f course this study focused only on R e s n i k and S t e m ' s information cues
and not on the other aspects of advertisements or marketing strategy. There
could be a range of other information contained within advertising (Taylor
et al., 1997) or i m p l e m e n t a t i o n factors that could be modified, such as the adver-
tising appeal. It is possible that marketers of high i n v o l v e m e n t products might
be expected to adopt more global advertisements in regards to information and
thus future research w o u l d need to e x a m i n e other types of product categories.
O n e final consideration 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 allow a more
matched comparison.
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LIST OF CONTRIBUTORS

Hae-Kyong Bang Villanova University, USA

P. Greg Bonner Villanova University, USA

Les Carlson Clemson University, USA

Albert Caruana University of Malta, Msida, Malta

Aruna Chandra Indiana State University, USA

Patrick De Pelsmacker Universiteit Antwerpen Management School

Kanwalrooop Kathy Dhanda University of Portland, USA

Michael Dolezal Masaryk University, Czech Republic

Michael T. Ewing Monash University, Australia

Maggie Geuens Vlerick Leuven Gent Management School

David A. Griffith University of Hawaii, USA

Ronald Paul Hill University of Portland, USA

Cameron James Hughes Millward Brown International,

Chad M. Johnson Villanova University, USA

Dimitri Kapelianis Arizona State University, USA

Stephen Keysuk Kim Oregon State University, Corvallis, OR, USA

Wei-Na Lee The University of Texas at Austin, USA

Jong Won Lim Seoul National University, South Korea

Dominika Maison University of Warsaw, Poland

Gordon E. Miracle Michigan State University, USA

Changho Oh Hanshin University, Osan, South Korea

Sak Onkvisit San Jose University, USA

Michael Jay Polonsky Victoria University, Australia

Andrea Prothero University College Dublin, Ireland

Mary Anne Raymond Clemson University, USA

John K. Ryans, Jr. Kent State University, USA

Trina Sego Bosie State University, USA

John J. Shaw Providence College, USA

Charles R. Taylor Villanova University, USA

Andy Teo PSB Corporation, Singapore

Fei Xue University of Alabama, USA

TaiWoong Yun The University of Texas at Austin, USA

Shuhua Zhou University of Alabama, USA

Peiqin Zhou University of Alabama, USA

This special volume of Advances in International Marketing is devoted to

International advertising is an area in need of more quality research. While this

New Directions in International Advertising Research, Volume 12, pages 1-5.

assessing whether data are equivalent by developing the eric Multicultural

in advertising research in general, but especially in transitional economies. The

Gordon E. Miracle and Hae-Kyong Bang

Cross-cultural research presents unique challenges due to language and

New Directions in International Advertising Research, Volume 12, pages 9-23.

The Concept of Culture

The Emic-Etic Distinction

Functional differences and similarities of cultures relate to behavioral phenomena.

Conceptual differences and similarities of culture relate to the existence or

Linguistic differences and similarities relate to the translatability of function

The Translation~Back-Translation Process

them when possible, especially to discover if they are an artifact o f a particular

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=

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

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

Special Problems of Translations Between Japanese and English

Written Japanese is a combination of three symbol systems: (1) Chinese charac-

Special Problems of Translations Between Korean and English

An example of a problem with the translation of "English to Korean and back

Training and Using Translators

versions by members of the research team. These comparisons provided addi-