Perception of product placement usage by Slovak consumers

Perception of product placement usage by Slovak consumers

In recent years, increasing number of companies have used a product placement as a specific form of advertisement for promotion of their products. Many of them very quickly experienced different positive effects accompanied with this specific tool. One of these effects is reflected by brand image improvement of promoted products. The main aim of this paper is to identify changes in consumer brand image perception in case of product placement usage. In order to reach this aim, we have examined product placement knowledge and likeness of its usage among consumers or differences between classical advertisement and product placement. As well as main focus of this paper was to investigate opinions of consumers if the product placement usage influence their perception of brand image, we realized a primary research. In this research was applied binomial test and proved that more than 50% of Slovak consumers prevail positive brand image perception connected to product placement usage. Our research results proved correlations between brand image perception and purchase intention. This paper presents the part of results of complex research focused on investigating the effect of product placement on consumer behaviour.

1 Introduction

As the preferences of customers are changing, also the way of advertising has modified, because it was and will be still more and more difficult for marketers to reach and attract consumers via the traditional ways of advertising. This is why the attention of marketing specialists increasingly aims to the new and modern marketing tools, notably to the product placement and its usage. This specific element of marketing communication mix helps them to catch viewers in unexpected situation, by placement of brands or products into movies, TV shows, video games or any other entertainment content, but in unobtrusive way. It is very important, because watchers are not prepared for it and do not have any chance to avoid it, if they want to watch that program. In many cases, they do not even uncover placed brands at all, but the influential effect is there, especially on brand awareness and brand attitude. Therefore, we consider as very interesting to examine influence of product placement on brand image, not only for previous mentioned reasons, but also due to the enormous spread of product placement into various media during last years. At the beginning of the article, we introduce theoretical background of product placement and then we present the outcomes of primary research conducted on research sample of Slovak consumers.

1.1 Theoretical background of product placement

Evolution of product placement perception during decades was differentiating from year to year or from author to author. In a following text we would like to describe development of different concepts about product placement as a time passed and also to provide actual or complex definition of product placement from our point of view. One of the first description of product placement is dated to the year 1987, when Mr. Steortz (p. 22) defined it as „the inclusion of a brand name, product package, signage, or other trademark merchandise within a motion picture, television show, or music video” (Chen and Deterding 2013, p. 42). After few years, very famous definition of product placement from Balasubramanian (1994, In: Balasubramanian et al. 2006) took place, where he characterized it as a paid product message, which aim is to affect and influence the audience of movies or television, by unobtrusive and planned inclusion of branded product into a television program or a movie. Moreover, he understood it as a „hybrid” message that intention is to influence audience without identification of a sponsor. Another, quite instructive approach of Gupta and Gould (1997) tells that it is important to realize that product placement is not always paid in real dollars, therefore can include different forms of refund such as mutually beneficial marketing campaigns, cross-promotion or other (Guennemann and Cho 2014). Second of the two most cited characteristics was provided by Karrh (1998 p. 33) where he perceives product placement as „the paid inclusion of brand products or brand identifiers, through audio and/or visual means, within mass media programming” (Liu, Chou and Liao 2015, p. 300). As we can see, each of these definitions describes slightly different, but important dimension of product placement, while all of them are connecting product placement only to the traditional mass media content. As we mentioned, customers´ preferences and behaviour have changed significantly in last years, what lead to shift of practices and usage of product placement towards a new media. Therefore, marketers and researchers revised and provided new distinctive characteristics of product placement that better fits to changing media context. For example Russell and Belch (2005 p. 74) characterized product placement as „purposeful incorporation of a brand into an entertainment vehicle” or on the other hand authors Edwards and La Ferle (2006 p. 66) revised original definition of Karrh from 1998 and determined product placement as „the intentional inclusion of brands through audio and/or visual means, within entertainment, educational, or informational content” (Chen and Deterding 2013).

1.2 Usage of product placement in world movies

When we would like to briefly summarize the usage of product placement during a history, it is necessary to take a look much more to the past, as we could probably expect. Belovski and Caslavova (2016) conclude that already in 1994 several authors were predicting the death of traditional advertising by the year 2010. Especially, Richards and Curran (2002) indicated the word of mouth and product placement as challenging for marketers (Belovski and Caslavova 2016). Štrach (2014) concludes that product placement and clearly targeted sponsorship may offer opportunities, which have not yet been fully utilized. We cannot say that product placement is something newly formed. It is known that product placement is present here for many decades. One of the most famous example of product placement history is from Steven Spielberg movie – „E.T. – The Extra-terrestrial” (1982), where the young boy used the candies of „Reese´s Pieces” to make friendship with the alien. Interesting is that Steven Spielberg originally wanted to have M&M´s in the movie, but they reputedly turned him down. Probably they still regret their decision, because due to this placement, sales of Reese´s Pieces increased by 65% (Balasubramanian et al. 2006, p. 116; New York Film Academy 2015).
If we go deeper into the history we can find there a lot of examples too. One of the first documented instance of product placement appeared in Girel´s film from year 1896 – „Défilé du 8e Battalion”, where the wheelbarrow significantly displays the brand „Sunlight Soap” on it. In addition, Thomas Edison used more evident placement of products in his films, such as one 50 second scene where the men are smoking in front of the billboard of „Admiral Cigarettes” company. It is also known that Edison early travelling films were perfect models for product placement deals, because some part of production costs of these movies were covered by transportation companies. In exchange for filming they incorporated the trains of companies „Lehigh Valley Railroad” or „The Black Diamond Express” into film and Edison´s crew was travelling for free. Some authors, such as Wasko (1994) even considers origin of product placement usage to 1940´s or Eckert into 1930´s, but majority of them perceive these activities such as some unstructured process until the movie E.T was released (Nunlee, Smith and Katz 2012, p. 12).
After introduction of movie E.T., appearance of product placement in different movies dramatically increased, especially due to its huge impact on sales growth. Because of great success, companies from different industries started to use this phenomenon, such as car industry, beverages, fashion industry, electronic industry etc. For example, producers of beverages such as Pepsi, Coke or Dr. Pepper use to place their brands into movies very often. Very famous is placement of brands Reebok, Pepsi, Pizza Hut and Doritos in a movie „Wayne´s World” from 1992. It was and still is very popular to place branded cars into movies. For example BMW concern placed their Mini Coopers into the movie Italian Job from 2003. In that very same year company Cadillac experienced very busy year, because their car appeared in 11 movies, such as „2 Fast 2 Furious”, „Bad Boys 2”, „Kangaroo Jack”, „Scary Movie 3”, „Terminator 3: Rise of the Machines”, „Matrix Reloaded”. Also, it is worth to mention very famous and blatant placement of future car Audi, used in a movie iRobot from 2004 (Guennemann and Cho 2014, p. 30).
We cannot forget on series of movies „Fast and Furious”, where many brands are used too. The most famous is beer Corona, sport brand Under Armor, Apple, Panasonic and many branded cars. Brands Lacoste, Nokia, Nike and Apple were used in many episodes of movie „Transformers” in previous decade. Some specific examples of product placement have occurred during history too. For example, title of the movie „The Devil Wears Prada” directly promote and highlight fashion brand that is also used and shown in a movie. Moreover, quite long and important part of movie „I am Sam” was based on and took place in Starbucks coffee shops. Another very interesting example is from movie „Thank You For Smoking”, where the cigarette company provided $40 million to producer, if main character smokes their cigarettes after a love scene.
When we will take a look at the latest movies from previous year 2016, we will find even more products and brands used. Let´s take a movie „The Intern” where were placed many different products of brand Apple, Audi, application Uber, electronics devices such as Dell and Sony. Moreover they placed there Facebook, Skype, Starbucks and Stella Artois. Some of these brands have been used there really nicely, but for example so big focus on car Audi was blatant (brandsandfilms.com 2016).
Probably there is no doubt that everyone has ever heard about films of famous British special agent James Bond. Due to these movies became quickly extremely popular around the world, they came to the attention of the biggest companies worldwide. Agent 007, as main character, always represents pure manhood, is strong, clever, handsome and of course has the most-picky style. This simply caused that main character was always surrounded by top brands. It is known that product placement in Bond´s movies is very successful and therefore it deserves a closer and deeper attention from our side.
In addition, number of brands placed in latest Bond´s movies significantly increased, what could be explained very easily. Brands are outrunning to get a few seconds and to be connected to this perfect and premium movie, to improve their awareness and perception among millions of viewers. On the other hand, money provided from these brands represent very important part of budget of whole movie. For instance, latest blockbuster´s „James Bond Spectre” budget was reported to around $300 million, what placed it on second place of the most expensive movie ever made (right behind „Pirates of Caribbean: At World´s End”). During the history of these movies, main character many times switched brands, what even more confirm the rivalry and emulation between top brands (Cassidy 2015).
Probably many people cannot image James Bond without Martini drink, but this was not always the case. He was also connected to beer Heineken, different sodas and vodkas like Belvedere in latest one. It is also similar with special car that he always receives. At beginning he was using BMW, later he switched to Aston Martin, moreover recently appears also Jaguar & Land Rover and Fiat 500 in „Spectre”. In addition, what is one of the most important thing that special agent must have? Of course, perfect tuxedo or suit and here was change too, from previous Brioni to actual Tom Ford. We can clearly see huge pressure and aim of brands to influence watchers through these movies, by placement of their products into the plot of film. There are also many more brands used in James Bond movies, such as: Sony as smartphone or notebook, Omega as special watches, Avon, Coke, Walther as a pistol he uses, Vuarnet sunglasses or N. Peal´s cashmere turtleneck and many more.
Interesting is a fact that budget of $100 million of movie „Tomorrow Never Dies” from 1997, was whole covered from contracts with brands of 8 major partners. Another quite peculiar thing is a contract with Heineken that ties James Bond to drink their beer at least in one scene during a movie. Except this, Heineken is a very strong and important partner of these movies for example due to $45 million payment for placing their beer into movie „Skyfall” and also because of cross-promotional activities (Sauer 2015).
From all above mention, is obvious that trend of placing brands and products into movies, especially Bond´s movies, will increase and cover still higher and higher proportion of production costs. This is „win-win” situation for both sides, because movie producers will not be able to make such expensive blockbusters with all those special effect and top actors without any financial contribution of these brands. On the other hand, brands placed in these movies increase on their popularity and awareness and are connected to premium and extremely popular content. Some authors also stress „win-win-win” character of product placement. In this case production companies win because they get products for free or significantly cover their production costs. Company (client) wins because of promotion of their products to very huge audience and of coursed increased brand awareness. Moreover, specialized product placement agencies win, because they get paid for their professional advices and service (Product placement a cost-effective marketing 2001; La Ferle and Edwards 2006).
To sum it up, we have to say that product placement in movie industry has a very rich history with many different examples while for our purpose we mention only a few of them. Of course, that some of them were more and some less successful, but one thing is clear, that product placement is still increasing on its popularity and usage.

2 Aims, materials and methodology

The main aim of this article is to identify changes in consumer brand image perception in case of product placement usage. In order to be able to fulfil this aim, it was necessary to investigate several partial aims such as (1) to explore awareness about product placement among Slovak consumers, (2) to examine consumer likeness of product placement usage in TV shows, (3) to investigate differences between product placement and classical advertisement and (4) to study opinions about ethical and regulative aspects of product placement usage.
As well as main focus of this paper was to investigate opinions of consumers if the product placement usage influence their perception of brand image, we have realized a primary research. In order to accomplish the aim of this article we set main hypothesis H0:
H0: We assume that product placement usage influence consumer perception of brand image among more than 50% of Slovak consumers.
For online questionnaire survey, we decided to use questioning as a method for primary data collection. As a tool for collecting this data was used structural questionnaire. For a contacting method, we chose electronic way, especially via e-mail and social network, mainly due to its low organizational difficulty and low costs character. Our questionnaire contains one open question and few closed questions, while from the formulation point of view we used level of agreement statements, semantic differential statements and basic optional questions. In order to ensure suitable scale, we decided to use 7-point Likert scale, because it is soft enough to express opinion of respondent.
When characterizing structure of our sample, first of all we would like to state, that together we were able to collect 173 complete answers. This amount of respondents could be divided into several groups according different identification criteria. We decided to distribute them based on following ones: gender, age, education level, current level of economic activity and level of monthly net personal income. Within very first criterion, gender, our sample consists of 51,4% (i.e. 89) of female and 48,6% (i.e. 84) of male. In order to verify representativeness of this sample, we decided to use Chi-quadrat statistical test, were the results shown us that our sample is representative according gender, because p-value=0,659 is higher than level of significance α=0,05.
Criterion of actual age of our respondents, structured them into many different categories. To make it more transparent, we grouped them into following ones. Youngest respondents, under 18 years old represent 5,8% (i.e. 10), while the biggest group 48,6% (i.e. 84) consist of respondents aged between 18-25 years. Third age category, 26-35 years old, makes 31,2% (i.e. 54) from total amount. Equally were represented groups 36-45 and 46-55 with 6,4% (i.e. 11) and lastly, oldest respondents with more than 56 years stand for 1,7% (i.e. 3).
By the criterion of educational level of respondents, we identified 62,4% (i.e. 108) of them with university degree, 28,9% (i.e. 50) of respondents with high school education finished with state exam. Moreover, 5,2% (i.e. 9) of our respondents have high school education and 3,5% (i.e. 6) of them have primary school education level. Another criterion in identification part was actual economic activity of particular respondent. Based on this criterion, we can divide our sample into following groups. Students represent 32,9% (i.e. 57) from total amount, employed respondents are represented by 47,4% (i.e. 82), while group of entrepreneurs (self-employed included) form 13,3% (i.e. 23) from overall amount. Unemployed persons took part of 2,9% (i.e. 5) and 3,5% (i.e. 6) of them were on maternity leave. There was no representative of the retirement group.
In case of monthly net personal income, there were 28,3% of respondents (i.e. 49) with the net income less than 400 euros per month, 17,3% of respondents (i.e. 30) with the net income from 401 to 600 euros per month, 14,5% of respondents (i.e. 25) with the net income from 601 to 800 euros, 16,8% of respondents (i.e. 29) with the net income from 801 to 1000 euros per month, 6,4% of respondents (i.e. 11) with the net income from 1001 to 1300 euros and lastly 16,8% (i.e. 29) with the net income more than 1301 euros per month.
For verification of hypothesis H0 we used binomial test. In order to examine some relationships we realized correlation analysis, especially Spearman correlation coefficient.

3 Results

Firstly, we examined the respondent´s awareness about product placement. If they have ever heard anything about product placement, their task was to write down what do they know about it. Results shown that 51,4% (i.e. 89) of respondents marked that they are familiar with product placement, while 48,6% (i.e. 84) of them have never heard about it before. From those 89 respondents, 66,3% (i.e. 59) answers of respondents were correct. Interesting was fact, that many respondents used to mistakenly explain it as „merchandising of products into shelves (eye-zone of shelf, rotation of products) with regard to consumers preferences, but to reach highest sales.” Secondly, we examined the consumer likeness of product placement usage in TV programs. Answers of our respondents are very balanced for both sides, because 35% (i.e. 61) of respondents assigned that they do not like that products and brands are placed into TV programs (option 1, 2 and 3). On the other hand, 39% (i.e. 67) of them stated that they do not mind, that product placement is used (option 5, 6 and 7). Moreover, 26% (i.e. 45) of respondents were not sure about they answer and marked middle value (option 4). From these results, we can hardly conclude if respondents like or dislike usage of product placement, due to their split answers.
Answers provided for second statements were more straightforward than in previous question. Majority of respondents 65,9% (i.e. 114) stated that they would watch TV programs even though they would know in advance that product placement is used. On contrary, only 17,3% (i.e. 30) of them would not watch TV programs under this condition and 16,8% (i.e. 29) of respondents were not sure about their answers. Based on these results, we can say that consumers do not really mind inclusion of brands and products and do not perceive product placement as some kind of distraction.
Our statement from previous paragraph is even more confirmed by answers of respondents on next question. When expressing their opinion, if they perceive product placement as less disruptive than classical commercial advertisement they answered as following. Majority of them 74% (i.e. 128) agreed that product placement is less disruptive, while up to 30,6% (i.e. 53) of them expressed strong agreement with this statement. On the other hand, only 12,1% (i.e. 21) of respondents did not agree with this statement, therefore they perceive product placement as more disruptive than classical commercial advertisement.
Another question also proved our assumption, because 53,8% (i.e. 93) of all respondents answered that they would prefer product placement before classical advertisement. Only small amount of our respondents, 22% (i.e. 38) would rather prefer classical commercial advertisement.
To sum it up, we can say that among majority of respondents prevailed positive attitude toward product placement and its usage. This finding is quite interesting, because some authors (Nunlee, Smith and Katz 2012), as we mentioned before, believe that product placement is something „bad” and assume that consumer´s opinion is the same. However, as we can see results of our research are showing the very opposite.
Taking look at the ethical side, respondents were expressing their opinion if they think that product placement is unethical or not. Surprisingly, in spite of some authors (Nebenzahl and Jaffe 1998; Hudson, Hudson and Peloza 2007), called product placement as „subliminal advertisement” or „dark art” answers of our respondents were more positive than negative. From total amount, nearly half – 49,7% (i.e. 86) did not agree that product placement is unethical. Unethical perception of product placement dominated among 27,2% (i.e. 47) of respondents. Rest of them 23,1% (i.e. 40) was not sure and chose middle value.
Aim of last statement, from this section was to reveal consumer´s opinion on product placement regulation. From the results, we can say that two thirds – 67,1% (i.e. 116) of them agreed that product placement should be regulated. On contrary, only 16,8% (i.e. 29) did not agree with this statement.
When summarizing results, we can see that answers of respondents brought us interesting findings about product placement perception. We can say that majority of consumers do not perceive it negatively, even they would prefer it before classical ads. Of course, as with everything, consumers believe that usage of product placement should be regulated, because majority of them 79,8% (i.e. 138) assume that product placement subconsciously influence consumer behavior.
Very last part of our online questionnaire survey was devoted to consumer brand image perception of products and brands included in TV programs. They had to express their opinion through simple semantic differential statement „I think that inclusion of products into TV programs influence their image”. Their answers disclosed that more than half – 60,1% (i.e. 104) of them think that inclusion of brands into TV programs improve their image. In other words, they expressed that brand inclusion in form of product placement has a positive impact on brand image. Opposite opinion about effect of product placement on brand image prevailed among 15,6% (i.e. 27) of respondents. In this case relatively low amount of them 24,3% (i.e. 40) was not sure. In addition, we decided to use these answers to made statistical tests, in order to reveal potential relationships between brand image perception and other factors.
One of our tasks was also to verify our research hypothesis H0, where we assumed that product placement usage influence consumer perception of brand image among more than 50% of Slovak consumers. In order to verify this hypothesis, we used binomial test. Through this test, we found that in our sample, among 60,1% of respondents prevailed positive brand image, therefore we accept this hypothesis H0, because p-value=0. To sum it up, we can say that among more than 60% of Slovak consumers prevail positive brand image perception connected to product placement usage. Output is shown in table 1.

a. Based on Z Approximation.
Table 1: Hypothesis H0 verification
Source: authors by SPSS output

We found interesting to take a look on relationship between brand image and purchase intention. As previously, using Spearman correlation coefficient we tested these relationships with significance level α=0,05. In first case (brand image and purchase intention) statistically significance dependence between those two variables was proven, because p-value=0,003, what is lower than significance level. According to the value of Spearman correlation coefficient 0,222 there is direct low dependence between them. It means that among consumers with more positive brand image tend to be higher purchase intention.

4 Discussion

In this paper we examined the influence of product placement on brand image perceived by consumers. We recommend companies to use product placement as brand improver, because our research showed that more than 60% of consumers feel more positive attitude towards brands and products included in TV shows. Results of our study, prove ideas of different authors, such as (Yang et al. 2004; Dudovskiy 2012) which claim positive perception of product placement among consumers. As we can see, product placement does not influence only brands awareness, but also improve brand image. It is obvious that it is not enough to just put brands into the TV shows and everything is done. Building a brand image is a long-term process which consists of many activities and could be influenced by many factors. Presence of brands through product placement in TV shows is one of them and has positive impact on brand perception. We recommend companies to very thoroughly revise their placements, to not harm their reputation and image by connection with some negative scenes or characters.
As we know, positive attitude toward things, especially products and brands use to end with their purchase, because we like or love them. After testing this relationship in our thesis, we proved that there is positive middle strong dependency between brand image perception and purchase intention. Therefore, if consumers perceive brand more positively, they have higher tendency to purchase them. This is important to realize, because as we mentioned before, usage of product placement is in a majority of consumers perceived positively. Thus, if it is implemented properly, companies can achieve not only better brand image, but also higher purchase intention as it goes hand in hand. In general, we know that purchase decision process consists from few steps, therefore there might be different variables that could influence and change it at all.
From this reason, companies should properly chose products and TV programs in which they place their products, because it takes important role. All this decisions influence perception of brand image by final consumer, which is interconnected to their purchase intention too. Thus, we suggest companies to strongly focus their attention on building positive and good image of their brands and products among customers, using all available activities, as well as by product placement. We know that there are many other ways within marketing, such as PR communication, usage of social media, sponsorship of different activities and so on. Complex usage of all possible elements should lead to improved brand image, what is solely important for companies, but even more connected with product placement effects.

5 Conclusion

In this paper we examined consumer perception of brand image in case of product placement usage. Research results should help businesses to find out if the product placement usage in films or TV shows has the effect on improving their brand image. We realized quantitative research on the sample of Slovak consumers and also examined the awareness about product placement among consumers, consumer likeness of product placement, differences between product placement and classical advertisement and opinions about ethical and regulative aspects of product placement usage. Moreover, through qualitative research have been revealed and proved relationships between brand image and purchase intention.
We would like to summarize also our research limitations. We have to mention, that answers of respondents were collected conveniently and therefore we were able to fulfil only gender condition of representativeness of our sample. For future research, it would be appropriate, to make deeper analysis of product placement, but on perfectly representative sample, in order to be able to generalize results for whole country. It might be interesting to take closer look on problematic of multitasking and duality within product placement examination. Moreover, it would be also interesting to broaden the scope of examination and include also other media in order to compare them. Due to topic of product placement is very wide, we can see that there are many possibilities of further study.

Literatúra/List of References

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Kľúčové slová/Key Words

product placement, brand image, customer perception, the use of product placement
umiestňovanie produktov, imidž značky, spotrebiteľské vnímanie, využívanie umiestňovania produktov

JEL klasifikácia/JEL classification

M37

Résumé

Vnímanie umiestňovania produktov slovenskými spotrebiteľmi

V posledných rokoch narastá počet podnikov, ktoré využívajú umiestňovanie produktov, známe aj pod pojmom product placement, ako špecifickú formu reklamy na propagáciu svojich produktov. Mnohé z nich v krátkom čase zaznamenali rôzne pozitívne účinky spojené s využitím tohto špecifického nástroja. Jeden z týchto efektov sa prejavuje v zlepšení imidžu značky propagovaných produktov. Hlavným cieľom tohto článku je identifikovať zmeny vo vnímaní značiek spotrebiteľmi v súvislosti s ich umiestnením. Na dosiahnutie tohto cieľa sme skúmali poznatky o umiestňovaní produktov a rozdiely vo využívaní klasickej reklamy a umiestnenia produktov. Rovnako sme chceli prostredníctvom primárneho výskumu preskúmať názory spotrebiteľov na to, ako umiestňovanie produktu ovplyvňuje ich vnímanie imidžu značky. V tomto výskume bol použitý binomický test, prostredníctvom ktorého sme dokázali, že u viac ako 50% slovenských spotrebiteľov prevažuje pozitívne vnímanie imidžu značky v súvislosti s umiestňovaním produktu. V rámci nášho výskumu sme identifikovali koreláciu medzi vnímaním imidžu značky a nákupným zámerom. Tento článok prezentuje časť výsledkov komplexného výskumu zameraného na skúmanie vplyvu umiestňovania produktov na správanie spotrebiteľov.

Kontakt na autorov/Address

Ing. Michal Budinský, Matej Bel University in Banská Bystrica, Faculty of Economics, Tajovského 10, 974 01 Banská Bystrica, Slovakia, e-mail: [email protected]

doc. Ing. Janka Táborecká-Petrovičová, PhD., Matej Bel University in Banská Bystrica, Faculty of Economics, Tajovského 10, 974 01 Banská Bystrica, Slovakia, e-mail: [email protected]

Recenzované/Reviewed

21. februára 2019 / 26. februára 2019