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Advertising in Poland and Germany - A Comparison

Research Paper (undergraduate) 2005 38 Pages

Business economics - Offline Marketing and Online Marketing

Excerpt

Table of Contents

A. Table of Contents

B. Table of Figures

C. Table of Tables

D. Table of Abbreviations

1 Poland’s Economic Transformation and the Rise of the Polish Advertising Industry

2 Advertising Theory
2.1 Marketing Communication
2.2 Definitions and Objectives of Advertising
2.3 Major Elements of Advertising
2.4 Advertising and Culture

3 Advertising in Poland and Germany – Results of a Secondary-Statistical Analysis
3.1 Poland’s and Germany’s Advertising Market
3.2 Legal Conditions and Consequences for Advertising
3.3 Advertising Infrastructure
3.4 Reputation of Advertising in Poland and Germany
3.5 Cultural Attributes of Poles and Germans and their Impacts on Advertising

4 Possible Developments in the Advertising Markets of Poland and Germany

E. Table of Sources

F. Statement of Academic Honesty

B. Table of Figures

1. Figure: Perception Styles in Europe and Arabia

2. Figure: German Advertising Market Segmentation: %Share, by Value, 2004

C. Table of Tables

1. Table: Main Actors on Advertising Market in Poland8

2. Table: Estimations and Prognoses on Internet Advertising Expenditures in Poland

3. Table: Media Share Germany 2003

4. Table: Reputation of Advertising in Germany

5. Table: Scores on Hofstede’s Dimensions for Poland

6. Table: Comparison of the Cultural Dimensions of Poland and Germany

7. Table: Relationship of Appeals to Hofstede’s Dimensions

D. Table of Abbreviations

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1 Poland’s Economic Transformation and the Rise of the Polish Advertising Industry

In 1989 Poland entered the free-market economy. Radical and consequently-executed reforms transformed the country’s economy from central planning to a free-market system. Accompanied by many international companies investing in Poland and the rise of numerous enterprises in the small- and medium-sized business sector Poland’s GDP increased by 30% in 2002 as compared to 1989’s level. Modern Poland has achieved a fully functioning market economy which has recently been acknowledged by its inclusion into the European Union. According to government prognoses Poland will have a growth rate of 5-6% in 2005. This prediction is confirmed by the European Commission and the OECD (Instytut Koniunktur i Cen Handlu Zagranicznego 2002, p. 32).

Poland is also one of the most attractive countries of the former Soviet block for foreign investment (Piekarski 2005). It offers a large market with about 40 million potential consumers, its political system proved to be stable and the early economic reforms provide the country with numerous benefits in the present. Poles are very keen towards the free-market economy. After being restricted for many years in the communism era, they are now ready to spend beyond their means to get branded goods which are new on their market. Therefore, contrary to many Western consumers, they pay much attention to advertising offers (Moczarski 2005). Furthermore, Poland is the ideal location to start entering further Eastern European countries and many international companies chose Poland to manage their Eastern European advertising activities from there (Wollschläger 1999, p. 162).

Both number of advertisers and expenses for advertising have rapidly increased in Poland in the last years. From 1993 to 1994 advertising expenses grew from 299 to 469 million dollars. Continuous economical reforms and expenditure further contributed to this growth. Consequently, the case of Poland provides an ideal opportunity to study the impact an economy’s stage of development has on advertising management (West / Paliwoda 1996, p. 82).

Poland also offers huge potentials for its neighbouring countries which is especially true for Germany. From a German perspective it is eminently important to understand the differences between the German and the Polish culture as culture has a major impact on advertising and communication.

The above justifies and is reason enough to have a deeper look at the Polish advertising market with reference to Germany. Therefore these issues will be dealt within the following study paper. It starts with theoretical background information on advertising and then continues with a secondary-statistical analysis of major advertisement conditions in the Polish and German markets. This involves comparing the legal framework and general infrastructure (advertising agencies, media) for advertising in the two countries. Furthermore, the attitudes of Poles and Germans towards advertisement will be explained as well as the influence the Polish and German cultures have on advertising appeals. The comparison concludes with an outlook on the further development of the advertising markets in Germany and Poland by stating potential similarities and differences.

2 Advertising Theory

2.1 Marketing Communication

Advertising is a part of the promotion or communication mix within operative marketing. Marketing communication includes other fields, such as personal selling, online marketing, public relations, event marketing, sales promotion, direct marketing and sponsoring which all need to follow a consistent messaging (Rogge 1988, pp.18-21). Many companies are nowadays adopting the concept of integrated marketing communications. In this approach companies integrate and coordinate all their communication efforts (including advertising) centrally from one department to reach a clear and consistent product image in the marketplace. An improved communication consistency has positive impacts on a company’s sales performance, too (Kotler et al. 1996, pp. 631-632).

2.2 Definitions and Objectives of Advertising

Several business scientists have tried to define advertising. One of the most popular definitions is the one by Kotler who views advertising as any paid form of non-personal presentation and promotion of ideas, goods or services by an identified sponsor (Kotler et al. 1996, p. 626). Another definition is offered by Rogge for whom advertising is an instrument within the marketing mix to reach the marketing objectives of a company by providing information about goods and services to the users and buyers of a product in a given market (Rogge 1988, p. 29). An additional perspective is provided by Pepels who defines advertising as a conscious influence of market relevant opinions of targeted individuals by using instruments which intend to adapt the opinion of reality to the own objectives and expectations (Pepels 2004, p. 9).

Although these definitions seem not to be exactly the same, they have in common that they centre communication as a major component of advertising. In fact the communication process can be said to be the central issue in advertising. Who (sender, communicator) says what (message) to whom (recipient) via which channel (media) with which effect (efficiency, affectivity)? The message idea is the initial point of each communication process and is created by a sender. In a marketing context the sender is personified by the advertising company which wants to convey a certain message to its target group. The message needs to be encoded by using words (texts), pictures (graphics), colours and music. The advertising instruments serve as messengers. They take the messages to the target groups in form of print ads, TV spots or billboards, for example. The advertising instruments are carried by the advertising channels which contain magazines, newspapers, radio and TV stations. The message is received by the targeted individual by using its senses (hearing, seeing, smelling, feeling and tasting). Perception refers to the decoding of the message in order to understand it (interpretation). At this point the cultural background can have a certain influence (see 2.3. for detailed information). The recipient is the targeted person who is to be contacted by the communication. This can be a final consumer or an intermediate buyer, for instance. Each successful communication ends with the saving of the message which represents the effective transformation of the message. However, the success of communication is limited by disturbing factors which can appear at each stage and stop the process (Pepels 2004, pp. 6-7).

To put communication in the centre of advertising does not implicitly mean that communication is the only aim pursued by advertising. According to Pepels one can distinguish between emotional (qualitative) and rational (quantitative) advertising objectives.

On the one hand, emotional objectives contain awareness, image and intention to buy. It is important to make the target group aware of offerings in new markets or to keep / increase awareness in existent markets because awareness is the basis of sales. Only known products are present in the minds of potential buyers when deciding upon a purchase and therefore consciously selectable. Image relates to the attitudes towards a product. A good image positively influences the interests in and opinions about a product. With increasingly identical and complex products, the image of a product has a major impact on purchase decisions. The intention to buy is another emotional advertising target. It includes the information research during the purchase process by using brochures and other information sources.

On the other hand, rational advertising goals can be measured directly in numbers and figures. They involve sales volume, sales compensation and cost reduction. To expand the sales volume one uses introductive and extensive advertisement. Introductive advertising creates need and demand for a new product, whereas extensive advertising is applied to enlarge the usage of a product or to direct consumers away from competing goods or services. Sales compensation intends to balances losses in one segment by increased sales in other segments. Cost reduction is another sub-goal. It is supposed to direct demand in accordance with the company’s own sales targets. This can involve increasing and reducing demand to meet the production and distribution requirements of a company (Pepels 2004, pp. 10-11).

2.3 Major Elements of Advertising

The advertising function requires media to carry the advertising messages portrayed in advertising instruments to the target group. Media is divided into classical media (newspapers, magazines, TV, radio, cinema, billboards) and non-classical media (e.g. the internet).

Newspapers are characterised by their distribution areas (e.g. regional, national), their time sequences (e.g. weekly, daily) and procurement patterns (e.g. subscription, separate purchase). Additionally, they can differ in their contents which might focus on political, cultural or economic information. Advertising in newspapers mostly takes the form of a print ad (Pepels 2004, p.30).

Magazines are usually of better quality than newspapers (e.g. mostly full-colour, high-quality paper), have a higher amount of pages, tend to be smaller (e.g. A4), have a cover page and most often a higher price. Most magazines appear at least once a week or once a month. There are various types of magazines available which meet the needs of specific market segments, such as children, mothers, men, women or business people (special segment titles). As in newspapers, magazines mostly contain print advertisement (Pepels 2004, p. 31).

Contrary to print media, television offers additional ways to attract the senses of targeted individuals by combining visual with acoustic effects. Furthermore, it offers the opportunity to display mobile pictures. However, the number of TV stations is limited as compared to magazines and newspapers which exist to a much larger extend and there are many legal restrictions on TV advertising. The most common way of TV advertisement is the TV spot, but there also new forms which have emerged during the last years including advertising banners and permanent advertising shows (Rogge 1988, pp. 201-209).

Advertising in radio programs is another possibility marketers may consider. Radio spots are often much cheaper than TV spots and due to the fact that there are plenty of regional and local radio stations in most countries geographically-determined segments can be reached more efficiently. Limitations of radio advertising are that it only attracts acoustics and it is very often just used as a form of background entertainment (Pepels 2004, p. 36).

Another form of media are billboards. Main traits of billboards are their sizes and locations (public vs. private places). Additionally, the location of a billboard can be static or mobile. Usually mobile billboards can be found on means of public transport. Since those are in constant movement, they offer a better contact frequency and can be seen in various places at various times (Pepels 2004, p. 40).

The internet represents undoubtedly the most interesting non-classical form of media. The most common advertising instrument practiced in the internet is the banner. This is an electronic ad which can consist of static or mobile elements. They can be integrated into homepages and offer various forms of interaction. Banners are able to direct interested people to the homepage of the advertiser where usually a wealth of information can be found. Nevertheless, there are also some drawbacks to banners since special programs can extract them so that they do not appear on the browser (Pepels 2004, p. 90).

Most marketing departments work closely together with advertising agencies to carry out their advertising campaigns. Advertising agencies usually look after planning, execution, design and production of advertising materials and support companies regarding media selection and media buying. Since they most often have several clients, their procurement power within the media sector offers them larger discounts and they can profit from specialization by employing experts to take care of their customers’ arrangements (Rogge 2004, pp. 83-87).

2.4 Advertising and Culture

Many companies have tried to standardize their worldwide advertising campaigns, but in the past many failed because they did not take into account the different influences of culture-based habits, tastes and forms of perception. Such differences exist since all cultures have developed various worlds of experiences and perceptions during their evolutions. Therefore things which are normal to one culture can be totally unacceptable to another. The reasons for this are to be found in specific climatic conditions, technologies or conceptive particularities of linguistic systems.

In European cultures it is for example common to read letters and signs from the left to the right, whereas Arabic communities tend to interpret them from the right to the left. If one is unaware of such a cultural particularity, this might result in disastrous effects on advertising. Imagine the following signs to be part of an advertising campaign using three pictures to illustrate the way from having a headache to salvation by taking a pill against headache. It is more than obvious that it is essential to read the signs from the left to the right to decode the message that is tried to be conveyed by this order of signs. As standardized advertising is cheap but of limited success, local or at least regional advertising campaigns are increasing which fit the specific perceptive and communicative needs of the respective cultures (Bolten 2001, pp. 25-42).

1. Figure: Perception Styles in Europe and Arabia

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Source: Bolten 2001, pp. 25-42

Even between culturally and geographically closer nations such as Poland and Germany there are still cultural differences which have a strong impact on advertising and communication. However, these are often not that visible at a first glance and due to this often neglected. This results in less effective or even refused advertising efforts. Other important factors which influence advertising in a country are legal norms, the available human and capital resources of a nation and the variety of media.

3 Advertising in Poland and Germany – Results of a Secondary-Statistical Analysis

3.1 Poland’s and Germany’s Advertising Market

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Germany is ranked the fourth largest advertising market of the world (Aitken 2004, p. 30). The German advertising marked reached a value of 3 billion dollars in 2004 equating to a growth of 1.2%. In contrast to Poland, Germany has a mature economy which designates advertising to stimulate demand which otherwise would only be low. As in many mature economies the importance of services is increasing which also affects the advertising industry. The service segment was actually the most lucrative one in 2004 with a revenue volume of 901 million dollars which equals 29.8% of the overall market value. The retail industry also contributes to the major revenues of the German advertising industry. In 2004 German retailers spent 515.5 million dollars on advertising, equivalent to 17% of the total advertising revenues (Datamonitor 2005, p. 8).

2. Figure: German Advertising Market Segmentation: %Share, by Value, 2004

Source: Datamonitor 2005, p. 10

Poland, contrary to Germany, is for many companies a new or emerging market. Therefore also the advertising industry has profited from the investments which have recently been made in Poland. The 1990s represented a period of dynamic growth for the Polish advertising sector. In 1993 for example the growth rate was 230% in relation to 1992. Although this growth decreased in the later decade (60% in 1996 and 26% in 1999), it was still above European average. However, this tendency also shows that the Polish advertising market is approaching its saturation point becoming similar to the developed markets in Western Europe. This assumption is supported by the fact that Polish advertising is reaching European standards regarding growing professionalism, commitment of global advertising agencies and expectations of the main customers (OBP 2001). In 2001 especially the dotcoms (34%) and telecommunications industries (26%) contributed largely to the Polish advertising revenues as per the following table.

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Details

Pages
38
Year
2005
ISBN (eBook)
9783638521536
ISBN (Book)
9783638684880
File size
551 KB
Language
English
Catalog Number
v57825
Institution / College
University of Cooperative Education Mannheim – Berufsakademie Mannheim - Staatliche Studienakademie
Grade
1,8
Tags
Advertising Poland Germany Comparison International Marketing

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Title: Advertising in Poland and Germany - A Comparison