Evaluation of Eastern-Central European citizen’s decision-making style – a comparative study. Part II.

Evaluation of Eastern-Central European citizen’s decision-making style – a comparative study. Part II.

Having looked at western and Eastern-Central European adverts, the prominence of fact-based commercials was identified in ECE countries, whereas most of the western advertisements creatively take the audience to a journey, while showing limited information. This comparative study evaluates the reasons for this phenomenon, while answers the following questions: What kind of identity emerges as a consequence of the turbulent political and economic changes, as consumers’ transition from a communist to a democratic country? What kind of adverts do ECE consumers prefer? What influences their decision-making? The first part of the publication looks at identity formation from an academic point of view, with its main focus on Slovak consumers.
The second part of the contribution analyses the research findings. The research contributes to the understanding of the potential for travel to change the way that adverts are understood among ECE consumers. Travelling and exposure to different cultures earlier in life altered ECE consumers’ tendency to deconstruct transformational adverts. Based on the research findings, a marketing strategy for foreign brands wanting to penetrate the ECE market was devised.

1.4 Issues of institutional trust and its effects on ECE consumers risk aversion

A further reason behind ECE consumer’s need for detailed information in adverisement may arise from their lacking social trust (Boda and Medve-Bálint 2014). Social trust is “generalised reciprocity and trust, learned from participation in networks of civic engagement” (Letki and Evans 2002, p. 5). Putnam (2000) and Inglehart (1990, 1999) claimed that social trust benefits individuals, by influencing trust in institutions, and impacts individuals’ need for product related information. Letki and Evans (2002) conducted a survey-based analysis to observe how social trust and the economic and political development of ECE countries is interrelated, and concluded that Slovakia, Czech Republic and Hungary have the lowest social trust, political and economic satisfaction out of the other ECE countries; they believe to have no power to influence governmental actions and found the economic situation dissatisfactory. Kong (2013, p. 849) argued that countries where individuals experience low social trust, “utilise intercultural experience as a way of gathering information”, and blame the government for their problems.
Boda and Medve-Balint (2014) compared Western European and ECE countries’ trust levels, concluding that ECE inhabitants have lower institutional trust, due to the transitional process and disapproval towards the “legitimacy of ECE political systems and institutions” (Boda and Medve-Balint 2014, p. 1). UK citizens trust the local institutions and the government, but not EU institutions, whereas ECE countries lay more trust into international institutions (Sapir et al. 2012). Consequently, UK consumers do not require much organisation-related information in adverts, whereas the opposite is true for ECE citizens.
Institutional trust also depends on individuals’ success, economic safety and prosperity in social lives (Boda and Medve-Balint 2014). According to Brouthers et al. (1998), power distance also influences institutional trust. Hofstede (1980) characterized power distance as a: “measure of trust inherent in a culture…level of trust in a society and the need for formal control” (Brouthers et al. 1988, p. 488). Citizens from high power distance cultures display lower levels of trust than people from low power distance countries (Shane 1994). Since Slovak citizens have higher power distance, they should display lower trust levels towards authority and formal control, which may in turn explain why they require more informaiton in adverts to make decisions.
Even though trust may depend on institutions’ performance, and individuals’ social and economic well-being, the transition process from a soviet to a democratic country and the devastating outcomes of the financial crisis also have an impact. Lack of trust in the government and institutions may influence ECE’s need for more information in adverts, enabling the citizens to overcome their mistrust. In summary, it is proposed:
Proposition 1: That western experience- and transformation-based advertisement does not convince the ECE customer base, but confuses them, due to their lacking institutional trust levels, higher risk aversion and uncertainty avoidance.

2 The new consumer

Customers in developed markets gain product-relevant knowledge through several sources: from advertisements (Coulter et al. 2001), influence from others (Feick and Price 1987), personal product experience (Kempf and Smith 1998), personal information search (Srinivasan and Ratchford, 1991), social media and the internet (Tuten and Solomon 2017).
Feick et al. (1995) contrasted US and Hungarian customer’s information search habits a few years after the dissolution of the Soviet Union. Feick et al. (1995) concluded that Hungarian consumers extensively search for product related information, and do not trust personal information sources, friends and family, because of their ‘unreliability’. Hungarian women do not use cues that indicate quality, are sceptical about marketing, and do not trust advertisements. Some Hungarians identified packaging and price as signals of quality, yet some customers still believe that western products lack quality ingredients.
According to the research, 45% of Hungarian customers fall into the cluster of Self-Reliant: they research the product on their own, but do not ask experts for help. 15% of the people are risk averse and not interested in the new market information, and 18% claimed that they favor Western brands.
The research concluded that Hungarians search for extensive information when purchasing, because of their limited prior experience and knowledge about the brand. However, the research was conducted in 1992, when customers identity started to develop, hence their findings may not be adequate today. Consequently, the impact of risk aversion on advert preference needs to be observed. It is assumed:
Proposition 2: That increased amount of information in the adverts signal increased quality and lowers perceived risk for ECE citizens.
Advertising became the main source of product knowledge in the 1990s, and citizens spent more time researching information about new products (Coulter et al. 2005). The researchers identified a positive relationship between knowledge and brand experience, and concluded that “knowledge did not mediate the effects of either brand experience or media use on confidence in choice” (Coulter et al. 2005, p. 613). Even though more adverts are broadcasted, Hungarian customers’ search for information did not decrease; it was still a significant source of product knowledge, due to increased product choice and decreased amount of other “favoured choice heuristics”, such as “country-of-origin” (Coulter et al. 2005, p. 614). Furthermore, a research by Nagyová et al. (2014) confirmed that Slovak consumers are still influenced by the price, location and product quality when making decisions.
The literature review highlighted that ECE consumers began their transition to a western consumer, yet search for informational individually, rather than relying on adverts; demonstrate low trust towards brands, impacting their decision-making styles. Thus, it is expected:
Proposition 3: That ECE citizens take into account price, personal experience, brand awareness and factual information when making decisions, thus informative adverts are more appealing.

2.1 Differences between the ECE countries leads to different Euro- Consumer clusters with differing advertising needs and identities

Differences between post-socialist countries and their citizens can be observed (Manrai et al. 2001). Heterogeneity, namely “culture, history, language, and the duration and intensity of Communism and its economic doctrine… industrial development… approach towards the transition to a market economy” (Skinner et al. 2008, p. 195) contributed to these differences. Consequently, Euro-Consumer clusters were established, and marketing strategies adjusted to these homogenous markets (Van der Merwe and L’Huillier 1989). According to Skinner et al. (2008), differences can be explored between the Central (Slovakia, Hungary) and the Eastern European (Ukraine, Russia) countries, arising from heterogeneity factors. These individuals have different identities, attitudes towards advertising practice and decision-making styles. As generalisation on identity formation and decision-making among these different clusters would be problematic, the researcher chose to lay more emphasis on Central European countries for this research scope.
In summary, ECE countries have different needs, identities and decision-making styles, affecting their responses towards advertising practice. According to the literature, Slovakia and Hungary are more westernized ECE countries, yet are very different from Western European nations. Consequently, it is expected:
Proposition 4: That age, gender, and the country of origin have an impact on individuals responses towards informational and transformational adverts.

3 Informational and transformational adverts, and their deconstruction

Puto and Wells (1984) differentiated between informational (highly cognitive) and transformational (highly experiential) adverts. Puto and Wells (1984, p. 638) characterized information adverts as containing “factual (i.e., presumably verifiable), relevant brand data in a clear and logical manner; [they enable the assessment of] the merits of buying the brand after having seen the advertisement”. An advert only becomes informational, if the consumer believes and claims its’ factual value.
Puto and Wells (1984, p. 638) characterized transformational adverts as ones that associate “the experience of using (consuming) the advertised brand with a unique set of psychological characteristics which would not typically be associated with the brand experience to the same degree without exposure to the advertisement”. Transformational adverts describe the brands’ consumption experience by associating emotions awakened by the advert with the experience of using the product.

3.1 ECE adverts are more informational, as a result of higher risk aversion and market age

Bao et al. (2003, p. 750) argued that high-risk aversion has a negative aftermath on “recreational and hedonistic” orientation: the emotional response towards adverts (Holbrook 1983). Consequently, if ECE countries have higher risk-aversion, they should prefer utilitarian, informational adverts to transformational, hedonistic ones.
ECE consumers could also prefer informational adverts their identity was developed in a new market. Chandy et al. (2001, p. 400) claimed that argument-based appeal (informational adverts) is broadcasted in new markets, whereas emotion-based, transformational adverts are popular in older markets, because of the “intrinsic differences in consumers’ motivation and ability to process information”. Customers from developing markets have no product-related information and knowledge, limited feedback through word-of-mouth, and possess definite amount of product-related experience. Consequently, they require advertisements to decrease the perceived risk associated with decision-making, whereas customers who have experience with products, pay less attention to advertising practice, since they need less information to make purchase related decisions.
Consequently, western countries should have more transformational adverts, due to their vast experience with products. Nevertheless, ECE countries should have more informational adverts, as a consequence of younger market age and higher risk aversion (Schumann et al. 1990).

3.2 The process of advert deconstruction depends on the socio-cultural background of the individual

Extent literature presented above shows why ECE adverts tend to be more informational. First, citizens are more risk averse, thus need the brands reassurance about quality and value for money. Second, the essence of a „new market“ increases need for information about unknown brands. A further reason may stem from the disability to deconstruct transformational adverts. According to O’Donohue (1994), who draw on the users and gratifications theory, marketing does not serve people, but people do something with advertisements: the “ads only value is that which the consumer gives it” (O’Donohue 1994, p. 56). The ability to deconstruct adverts depends on the cultural, historical and social background of individuals.
Consumers interpret advertising messages in light of their cultural knowledge of texts and visual signs; consequently, individuals interpret adverts differently within various cross-cultural markets. Personal experience also influences deconstruction of adverts. Thus, not only the culturally embedded conventional meanings, symbolic and arbitrary relationships, but individual’s life project and themes, experiences and perceptions have an influence on advert deconstruction, and the ability to understand transformational adverts (Mick and Buhl 1992).

4 Goal and methodology

The literature review identified four propositions with regards to ECE consumer’s decision-making styles and their attitude towards adverts. The aim of the research is to establish how ECE consumers make decisions, how did the turbulent economic and historical background impact their consumer identity and whether they prefer informational adverts over transformational ones.
To address the above outlined goal, a mixed method approach was chosen: quantitative self-completion survey and qualitative semi-structured interviews. The mixed-method approach enabled the researcher to overcome the drawbacks of quantitative and qualitative research methods. A mixed-method approach bridges the gap between the low validity and reliability of qualitative interviewing practice and the risk of losing valuable information through solely focusing on quantitative survey findings. Qualitative research enables generalization and certainty about differences in responses towards adverts, and semi-structured interviews provide an in-depth understanding of the reasons for advert preference. Phenomenological interviewing, along with the life history approach were used to give the in-depth answers a context, and to better understand individuals’ opinions.
To be certain about whether ECE consumers react and interpret informational and transformational adverts differently, self-completion questionnaires were used. Self-completion questionnaires are sources of quantitative information; display closed questions and are shorter and easy-to-follow, to overcome the risk of ‘respondent fatigue’ (Bryman and Bell 2013, p. 232).
Semi-structured interview uses some pre-set questions as “interview guides” (Bryman and Bell 2013, p. 467). According to Leidner (1993), such interviewing practice allows a certain degree of structure, yet is flexible enough to “pursue topics of particular interest” (Leidner 1993, p. 238).
To evaluate the interview answers, understanding of answer context is necessary: phenomenological interviewing practice focuses on “direct description of a particular situation or event as it is lived through without offering causal explanations or interpretive generalizations” (Given 2008, p. 618). The interview enables exploration and gathering of “experiential narrative material, stories or anecdotes” (Van Manen 2011). Individuals’ life history is also pivotal in gaining deeper insight into interviewees’ reaction to adverts. The life history method is defined as documenting “the inner experience of individuals, how they interpret, understand and define the world around them” (Faraday and Plummer 1979, p. 776). The method incorporates the evaluation of important life themes (“text meanings of and about the reader”) and projects (fluctuates “in accordance with changes in circumstances and life cycle”) (Mick and Buhl 1992, p. 318).
According to Mick and Buhl (1992, p. 319), the customer is embedded in the social an cultural context inherited at birth; yet traverses through a “life history and resides in a current life-world that includes personal life themes and life projects”.

Figure 2: Sociocultural context
Source: Mick and Buhl (1992, p. 320)

4.1 Research limitation

The research is limited in its scope: due to the limited nature of the project, not every ECE country was observed. The author laid emphasis on Slovak consumer’s decision-making style, rather than focusing on every ECE country and its’ consumers. ECE countries and consumers are not homogenous, and hence generalization cannot be drawn. The research was conducted and presented in the form of a comparative study, with its main aim of focusing on the differences in identity formulation of post-communist and western consumers. Moreover, the scope of the project is limited in terms of the number of participants. However, the researcher was trying to overcome the above limitations through a more comprehensive and focused interviewing practice.

Furthermore, the scope of the research lacks in-depth analysis on how social media and the rise of marketing technology influences consumer’s decision-making (Jayaram et al. 2015). This is because the researcher wanted to focus on how decision-making and consumer identity formation was influenced by the historical and cultural factors.

4.2 Data sources

Firstly, eighty participants were required to fill out a survey on their reaction to two adverts: one transformational and one informational. Sixty Slovak consumers and twenty UK consumers contributed to the survey. Fifty-eight questions, on empathetic tendencies towards adverts were asked. Responses were given through a five-point Likert scale, that ranged from strongly disagree to strongly agree. The method and the questions were adapted from Puto and Wells’s research (1984).
Nine individuals born and raised in Slovakia were interviewed; their responses, along with the survey results that measured deconstructive ability and understanding of different adverts, were merged and further evaluated. Limitation arising from translation from Slovak to English was partially reduced by “using fluid descriptions of meanings” during interviewing (van Nes et al. 2010).

4.3 Data analysis

Quantitative data was analysed with SPSS techniques in three steps. First, a factor analysis was conducted, that identified the same two factors, informational and transformational, as Puto and Wells (1984). Second, Cronbach’s coefficient alpha measurements were conducted, and the both informational and transformational levels were found to be borderline acceptable (Nunnally 1978). Third, regression analysis was performed (Bryman and Bell 2011).
Qualitative data was analysed in two steps. First, participants opinions were translated to English, and coded based on seven codes identified that fall into four broad categories: difference between UK and ECE adverts, ECE adverts during the communism, efficiency of advertising strategies and decision-making styles. Second, life history method (Mick and Buhl 1992) and phenomenological approach (Given 2008) were used to analyse the context of responses, and provide deeper understanding.

5 Findings

The findings section is divided into two parts: first, the quantitative research summaries are presented, followed by the qualitative interview findings.

5.1 Quantitative research findings

Table 1: Regression coefficients for transformational factor
Source: Author

The standardized coefficient shows that individuals’ country of origin (0.055) has a bigger effect on their response to informational adverts, than age (-0.04) or gender (-0.136).

Table 2: Regression coefficients for informational factor
Source: Author

The standardized coefficient shows that individuals’ country of origin (0.238) has a bigger effect on their response to informational adverts, than age (0.218) or gender (-0.123). If borderline levels of significance are accepted (*p<0.1), individuals’ origin (“where are you from”) is significant (0.086), although it has a weak effect. However, the composition of the sample (20 respondents from the United Kingdom, and 60 from Slovakia) does not allow the effects’ identification with more confidence. A group of 20 people for a binary variable in a regression model does allow the variable to be included, but this is a threshold to acceptance. If the research were conducted with a larger sample size, the degrees of freedom would have increased, boosting confidence levels. The following two tables outline the differences between the level of persuasion by the informational and transformational advert among ECE and UK consumers.

Table 3: Informational adverts
Source: Author

Table 4: Transformational adverts
Source: Author

The survey used an instrument developed by Puto and Wells (1984) to categorize individuals based on responses towards informational and transformational adverts. The same two factors that the researchers identified were established: informational and transformational. This signals that consumers were able to respond to the adverts based on their empathetic tendencies. As found by Puto and Wells (1984), both factors were considered reliable, since the value of Cronbach’s alpha was borderline acceptable for explanatory research.
The regression model for transformational factor indicated no significant correlation between the dependent and independent variables, thus none of the independent variables (age, gender, country of origin) were associated with respondents’ survey answers.
However, the regression model for the informational factor showed that country of origin contributes statistically significantly to the model, if borderline level of significance is accepted, meaning that country of origin is associated with individuals’ responses to the advert. Based on the qualitative findings, the fourth proposition is partially rejected:

Proposition 4: That age, gender and the country of origin have an impact on individuals’ responses towards informational and transformational adverts.

Reasons for the decision are examined in the discussion, and the possibility of a methodological error is outlined.

5.2 Qualitative research findings

The interviews revealed that preference towards informational adverts stems from the historical and economic background of ECE countries, while highlighting that value for money and brand loyalty are the most important factors in the decision-making process. The interview findings are presented based on these two topics identified.

5.2.1 First topic: the preference towards informational adverts arose from the lack of facts during communism

Informants who had more chance to travel in their childhood claimed that the transformational advert made them curious and was convincing enough to try the product out. According to an Informant, “the [informational advert for chocolate] was boring…there are better ways to advertise the chocolate… [in the transformational advert], the kids are funny and I would not switch to another TV channel while watching it”.
On the other hand, those who did not travel claimed that they either did not understand the transformational advert, or the advert did not evoke an interest and thus did not convince them to buy the product; the transformational advert, as for an Informant, presented “another culture and values, and these do not fit the values and beliefs of our culture… we are old-fashioned”.
As a consequence, the first proposition is partially rejected, since the transformational advert only confused those consumers who did not travel:

Proposition 1: That western transformational advertisement does not convince the ECE customer base, but confuse them.

However, the interviewees claimed that the informational advert is more convincing for the ECE consumer base, since it contains more information about the product: according to another Informant, consumers need more facts arising from the lack of information during communism: “we are curious about how the product is made, about the ingredients… western people are used to adverts, they do not care about the ingredients, they want the advert to grab their attention immediately”. This may be because “people in the past [during communism], had to think ahead, had to plan rationally”, consequently, they need an advert to tell them “what we should do, what we should buy”.
Furthermore, an informant claimed that western markets are generally more competitive, thus brands want to distinguish themselves by creating a brand personality through transformational, creative adverts that consumers can buy into. The interviewee argued that this is not the case in a post-socialist country, such as Slovakia: individuals either require adverts to provide them with more information, alternatively they search for information on their own, or they trust the brand they have been using for a long time. Consequently, the second proposition is accepted:

Proposition 2: That increased amount of information in the advert signals increased quality and lowers perceived risk for ECE citizens.

5.2.2 Second topic: Value for money and brand experience are the two most important factors when making decisions

One informant believes that the most successful companies in Slovakia do not have to advertise themselves, since the single “most important thing, that is good value for money, does not need advertisement”. He also believes that only those advertise (banks, broadband and phone providers, pharmaceuticals) who constantly innovate their products, and have entered Slovakia after the fall of communism. Respondents agreed that products introduced during the communism that are still present on the shelves do not need to advertise: “people remember the good quality of those products, and even though they may try to experiment, would probably go back to the brand they know”.
Respondents highlighted that price and quality are more important than advertisements: an informant claimed that “only those brands advertise that do not have good quality products”. People rely on their brand experience and word-of-mouth, yet most of the time, do not trust the advertisements, rather are loyal to brands that have been present for longer: “I would always buy the product I trust and have experience with over a product that has an amazing advertisement” claimed another informant. Consequently, the third proposition is accepted, and further investigated in the discussion:

Proposition 3: That ECE citizens take into account price, personal experience, brand awareness and factual information when making decisions, thus informative adverts are more appealing.

In sum, the findings enabled the researcher to devise two themes influencing ECE consumers’ ability to deconstruct an advert: tendency to read-in and travelling. These are evaluated in the following section.

6 Discussion

The empirical work enabled acceptance or rejection of the four propositions identified in the literature review. Additional insight emerged in relation to the propositions, evaluated in the following section. The quantitative and qualitative research found:

1.That western transformational advertisement confuses ECE consumers who have not travelled, yet does not confuse ECE consumers who have travelled.

2.That increased amount of information in the adverts signals increased quality and lowers perceived risk for ECE citizens.

3.That ECE citizens take into account price, personal experience, brand awareness and factual information when making decisions, thus informative adverts are more appealing.

4.That country of origin has a weak effect on individuals’ responses towards informational adverts.

Based on the empirical findings, two themes have emerged: first, the experience of international travel; second, the ability and willingness to deconstruct texts. These affect ECE consumers’ deconstructive ability, and decision-making styles.

6.1 First theme: the amount of travelling in childhood

Based on the quantitative research findings, country of origin has a weak impact on individuals’ responses to informational adverts; none of the other demographic variables clarified responses to transformational adverts. The qualitative research suggests that the amount one travelled as a child explains attitudes towards adverts: individuals who travelled more were persuaded by the transformational advert and were able to read-in and relate it to their life themes and projects (Mick and Buhl 1992; Shankar, 1999). Individuals who did not travel did not understand the transformational advert and were not able to deconstruct it, since these adverts, as per an informant, represent “another culture and values”.
Travelling in early childhood leads to increased competency, skepticism towards advertisements, the understanding of its aims and exposure to different views. According to Wright (1986, p.1), individuals who were exposed to advertising practice earlier in life, develop a “schemer schema”, an “intuitive theory about marketers influence tactics” through a basic understanding of consumers and their role. It leads to understanding of advertising practice and results in skepticism towards marketing (Moschis and Moore, 1979, Moschis and Churchill 1979).
Arguably, individuals who did not travel did not develop the schemer schema: the competency to deconstruct an advert in the early stages of their life (Wright 1986). Individuals, who have indicated that travelling forms part of their life projects, were convinced by the transformational advert, found it “funny, interesting, persuasive and personally appealing”; were not distracted from “critical product content”, because they are socially and culturally competent to process these complicated visual messages (Chandy et al. 2001, p. 402). These findings support Ang’s (1990) argument: advert deconstruction depends on culture, social and historical background of individuals, their life project and themes (Mick and Buhl 1992). Deconstruction also builds on individual competency: the more competent consumers are, the more complicated visual structures they can cope with. Therefore, travelling may have increased competency in earlier life, leading to easier advert deconstruction.
In sum, ECE consumers who have travelled in their childhood and been exposed to advertising practice and different cultures earlier are more open-minded, yet skeptical towards adverts: they can understand transformational adverts, can easily deconstruct informational advert, and do not attempt to extract the information on its own, rather try to find ‘themselves’ in the advert. Individuals who have not travelled and not been exposed to adverts, have not learned the fundamentals of advertising practice early in life, believe that only informational adverts are part of the natural environment, thus do not question their meaning. They prefer adverts that are similar to the socialist persuasion style: they have always been told what to do, thus they want brands and adverts to guide them, rather than transform them.
This explains why the empirical findings differed from the fourth proposition devised from extent literature (That age, gender and the country of origin have an impact on individuals’ responses towards informational and transformational advert); the quantitative research only indicated county of origin to have a weak effect on individuals’ responses towards informational advert. A factor not considered in the quantitative research emerged through observations during qualitative interviewing: travelling deviates responses towards transformational adverts among ECE consumers.
The first proposition was partially rejected, (That western transformational advertisement does not convince the ECE customer base, but confuse them), since transformational adverts only confused the consumers who have not travelled, did not develop a schemer schema and learn advert deconstruction in their early life. Open-minded individuals were not confused by adverts: they successfully deconstructed transformational adverts in relation to their life themes and projects.
The small sample size of the quantitative research may deviate these findings. A group of 20 UK consumers for a binary variable in a regression model does allow the variable to be included, however, is a threshold level acceptance (Bryman and Bell 2011). Further research should consult a larger sample size to increase confidence levels. Research should also focus on travelling as an independent variable in quantitative research that deviates responses towards informational and transformational adverts.

6.2 Second theme: the tendency to read-in

The extent literature highlighted that need for decision-making guidance in adverts arose from the lack of institutional trust (Letki and Evans 2002, Boda and Medve-Balint 2014, Brouthers et al. 1998), higher risk aversion and uncertainty avoidance (Hofstede 1980, Matzler et al. 2008), stemming from the turbulent historical and cultural changes (Bakacsi et al. 2002, Szabo 2006).
The research findings indicate that ECE consumers need more information when making decisions yet do not search for additional information on their own; therefore, adverts should contain sufficient amount of facts. The advert should not be about the individual, its’ life themes and projects (Mick and Buhl 1992), but about the product: if an advert is transformational, it is confusing, because ECE consumers are not able or willing to read-in (depending on the amount of childhood travel). ECE consumers perceive the advert to be part of the traditional (classical) approach to communication: the marketer constructs the message, and the reader deconstructs the same message, without the prominence of noise factor (Gronhaug et al. 1991). The advert does not have degrees of freedom, since it is perceived to be the representation of the product only, rather than the reflection of the self. Contrarily, the findings indicate that non-ECE consumers tend to be more likely to ‘read-in’, to relate to their life themes and projects while watching the commercial, and deconstruct it in light of their own life (Mick and Buhl 1992).
Even though ECE consumers do not demonstrate a tendency of reading-in, the interviewees indicated that advertisements are a sufficient source of information and are pivotal for brands to sell: adverts persuade them to buy a low involvement product (confectionary or health-care related goods). Adverts need to contain some degree of information to be convincing: informants claimed that “if a product is not advertised with a lot of information, it does not make sense to advertise it at all… that product is not worth our attention, because it is not a good product”; if a “brand is advertised with less information, the company does not have to say anything about that brand”.
This finding reinforces Coulter et al.’s argument (2005) who claimed that the importance of advertisement in product information search increased during the 1990s, and as this research found, has been increasing for low involvement products ever since. The reason for this phenomena is the lack of institutional trust: ECE consumers require information from companies to lower their perceived risk, as a consequence of lacking trust (Boda and Medve-Balint 2014). Correspondingly, if the company does not give out information during its advert, their product is assumed to have low quality and the risk of buying increases.
Interestingly, past research on information search habits indicated that ECE consumers did not obtain information from peers, salespeople and acquaintances, rather relied on personal information search (Feick et al. 1995, Coulter et al. 2005). However, both the interview and survey results indicate that individuals do not search for information personally; they either rely on personal product experience, word-of-mouth, or adverts. Survey results indicate that 68% of the ECE consumers found sufficient amount of information within the informational advert, however, only 6% claimed that they would search for more information on their own (Table 3 and 4).

A further factor influencing ECE consumers’ tendency to read-in is brand loyalty. Based on the interview findings, two categories of consumer brand loyalty are identified: ECE citizens who have not travelled in early childhood stay brand loyal due to their risk aversion. The second category consist of ECE citizens who have experienced travelling in their childhood, thus developed the ability to relate to brands on a transformational level, hence perceive brands as part of their identity.
Consumers who have not travelled stay brand loyal towards the brands they first tried in the 1990s, because “people prefer brands they are familiar with, since they do not have money to experiment, or have experimented before and did not like the product”. These findings confirm Feick et al’s (1995) research that ECE consumers in the 1990s would be reluctant to stick to the brand they have used, as a result of negative past experience. Furthermore, the fact that ECE consumers are brand loyal because of their higher risk aversion confirms Vilcekova’s (2014) argument: Slovak consumers stay brand loyal due to their positive experience.
The second category of brand loyal individuals, mainly those who have travelled in their childhood, perceive the brand as part of their life theme, evoking positive life experiences and transformation. Fournier and Yao (1997) observed individual life themes and projects as having an effect on brand loyalty and identified different categories of loyalty: first, where the brand has a unique connection to individuals life themes, upbringing and self-expression; second, where one is loyal to multiple brands adopted for different usage purposes; third, where one expressed loyalty to product type, process and form (Gordon 1994). Most of the ‘travelled’ ECE interviewees belong to the second category; they are loyal to multi-brands used for different occasions. For instance, one informant highlighted that she regularly purchases technological products branded “Orava” because she is satisfied with the quality and associates good memories of family gatherings to these products, resulting in brand loyalty.
In summary, the research findings highlight a paradox of trust; ECE consumers do not trust institutions and brands, however, they trust the information presented by brands in advertisements, due to lacking deconstructive ability. More deconstructive-minded individuals, the ones who travelled, eliminate the paradox of trust, and have the tendency/ability to deconstruct transformational adverts. This may be due to differences in variety seeking behaviour: the respondents who travelled and been introduced to innovative products, may have more trust in institutions than ECE consumers who have not travelled.
Interviewees are not inclined to search for information extensively on their own, thus contradicting Coulter et al. (2005) and Feick et al’s (1995) argument in many cases: they rather rely on the help of salespeople, adverts, word-of-mouth and personal experience, and take into account price, brand awareness and facts when making decision; informational adverts are more convincing, since they provide the sufficient decision-making guidance. This explains why the third proposition suggested by the literature was accepted: That ECE citizens take into account price, personal experience, brand awareness, and factual information when making decisions, thus informative adverts are more appealing. Brand loyalty has a strong impact on ECE consumers’ decision-making process: even if an advert is informative, they stick to brands they have encountered and limit variety-seeking behaviour, due to negative past experience with experimentation, or the presence of positive life themes.
In light of the empirical work, the second proposition was accepted (That increased amount of information in the adverts signal increased quality and lowers perceived risk for ECE citizens). ECE citizens who have not travelled require an advert to be informational: if a “brand is advertised with less information, the company does not have to say anything about that brand”. The reason lays in the paradox of trust: ECE consumers lack institutional trust, yet trust the information portrayed by brands in informational adverts, due to the lacking ability of deconstruction. Contrarily, ECE citizens who have travelled in childhood show a tendency to read-in to adverts; they prefer informational commercials, yet have the ability/willingness to deconstruct and be convinced by transformational adverts.
A possible methodological error of badly chosen stimuli may have been present that could deviate the responses towards the adverts: the ad regarded as informational/ transformational may not have been informational/transformational enough; further research shall overcome this possible fault. Research should also investigate brand loyalty among the generation born in the 21th century (raised when western brands were established in ECE), to observe whether their family’s loyalty to ‘old brands’ (socialist; early 1990s) impacts the new generations’ decision-making style.

6.3 Implications for advertisers who want to penetrate the ECE market

Based on the survey and interview results, ECE consumers prefer informational adverts due to their technocratic, materialist identity. ECE individuals do not trust the institutions and are highly risk-averse. Paradox of trust was identified: despite the lack of institutional trust, they require the adverts to represent the factual benefits of using a product. However, their technocratic identity may be mediated by the extent of travelling in early childhood: these individuals demonstrate variety seeking behaviour, openness towards transformational adverts, and the ability to read-in to commercials.

Table 5: Differences between ECE consumers
Source: Author

If foreign brands want to successfully advertise to ECE consumers, their market research should investigate their audiences’ past travelling habits that deviates their ability/willingness to interpret adverts.

7 Conclusion

The research paper contributes to the formation of an understanding of ECE consumers’ decision-making style in three ways. First, the quantitative empirical work indicates that country of origin does only moderate individuals’ empathetic tendencies towards informational adverts. Second, in contrast to findings in the extent literature, ECE consumers do not search for information extensively; rather rely on the information presented by brands in adverts, despite not trusting the institutions (Boda and Medve-Balint 2014).
Third, the qualitative research contributes to the formation of an understanding of the potential for travel to change the way that adverts are understood. ECE consumers have a preference towards informational adverts, probably stemming from their technocratic identity; however, this identity is moderated by the amount of travelling in early childhood. ECE consumers who have travelled developed schemer schema earlier in life: an ability to understand the purpose of advertisements, be open about transformational adverts and deconstruct adverts through reading-in to their life themes and projects. These individuals develop brand loyalty as a consequence of their positive experience with the brand. On the other hand, ECE consumers whose materialistic identity was not moderated by travel did not understand and deconstruct transformational adverts, demonstrating limited variety seeking behaviour and preferring informational adverts that lower the perceived risk of purchase. These individuals developed brand loyalty as a consequence of risk minimization; they do not trust newer brands but prefer brands available since the 1990s.

End of Part II.

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Kľúčové slová/Key Words

decision-making, cultural differences, consumer identity, Eastern-Central Europe
rozhodovanie, kultúrne rozdiely, spotrebiteľská identita, východná a stredná Európa

JEL klasifikácia/JEL classification

M31

Résumé

Hodnotenie štýlu rozhodovania občanov východnej a strednej Európy – porovnávacia štúdia. Časť II.

Po preskúmaní reklám v západnej, východnej a centrálnej Európe je možné zhrnúť nasledovné fakty: reklamy orientované na fakty boli identifikované v ECE krajinách, kým reklamy na západe boli kreatívnejšie, avšak obsahovali limitované informácie. Tento článok hodnotí dôvody tohto javu a odpovedá na tieto otázky: Aký druh identity vzniká v dôsledku turbulentných politických a ekonomických zmien ako prechod spotrebiteľov z komunistickej do demokratickej krajiny? Aké typy reklám preferujú spotrebitelia ECE? Aké faktory ovplyvňujú ich rozhodovanie? Prvá časť publikácie sa zaoberá formovaním identity z akademického hľadiska.
Druhá časť príspevku analyzuje výsledky výskumu. Výskum prispieva k pochopeniu potenciálu samotného cestovania, na to, aby sa zmenil spôsob, akým sú reklamy vnímané medzi spotrebiteľmi ECE. Cestovanie a expozícia rôznym kultúram skôr v živote zmenili tendenciu spotrebiteľov ECE rozkladať transformačné reklamy. Na základe výsledkov výskumu bola navrhnutá marketingová stratégia pre zahraničné značky, ktoré chcú preniknúť na ECE trh.

Kontakt na autorov/Address

MSc Barbara Némethová DIC, MSc Strategic Marketing, Imperial College Business School, South Kensington campus, London SW7 2AZ, United Kingdom, e-mail: [email protected]

Recenzované/Reviewed

5. september 2018 / 11. október 2018




Evaluation of Eastern-Central European citizen’s decision-making style – a comparative study. Part I.

Evaluation of Eastern-Central European citizen’s decision-making style – a comparative study. Part I.

Having looked at western and Eastern-Central European adverts, the prominence of fact-based commercials was identified in ECE countries, whereas most of the western advertisements creatively take the audience to a journey, while showing limited information. This comparative study evaluates the reasons for this phenomenon, while answers the following questions: What kind of identity emerges as a consequence of the turbulent political and economic changes, as consumers’ transition from a communist to a democratic country? What kind of adverts do ECE consumers prefer? What influences their decision-making? The first part of the publication looks at identity formation from an academic point of view, with its main focus on Slovak consumers. It identifies possible reasons behind differences in decision-making styles, arising from the turbulent political and economic changes. These factors resulted in ECE consumers having higher risk aversion, uncertainty avoidance and lower institutional trust, having an impact on their information-searching behavior while creating a new consumer base with developing identity. The second part of the contribution will analyze findings and present recommendations.

1 The historical and economic changes influence the decision-making style and identity of ECE consumers, arising from higher risk aversion and uncertainty avoidance

ECE countries faced turbulent changes thorough history. The collapse of the Soviet Union resulted in social and political revival, but brought about decline in economic growth, inflation and unemployment (Bakacsi et al. 2002, p. 78). It resulted in lower social safety, new regulations, institutions and political systems; problems when entering new markets leading to limitations in expansion; downfall of Soviet markets, purchasing power, and fiscal redistribution, consequently lower GDP and privatization (Bakacsi 1994). This created fear, uncertainty, and a “tangible gap between people’s wish of stability and the surrounding environment” (Bakacsi et al. 2002, p. 79).
After the dissolution of the Soviet Union, ECE countries went through liberalization of foreign trade, privatization, restructuring, tax and social insurance reforms, to reestablish their macroeconomic stability. Slovakia entered the European Union on 1 May 2004 and experienced growing GDP until 2008-2009 (European Commission 2015). The financial crisis resulted in growth slowdown and turbulent economic changes.
Arising from the historical and economic changes, a new customer base emerged; ECE individuals’ identity shifted from being citizens to consumers. In the past, ECE was part of the COMECON, the ‘Council for Mutual Economic Assistance’ (CMEA), facilitating economic development and flow of goods between Soviet countries (Balassa 1992). The Soviet Union did not enable the flow of foreign goods, leading to limited advertising; the ad itself was “the product to be consumed” (Egipt 2014). Customers could not consume the advertised product, since it disappeared from the shelves immediately; sometimes the advert was produced so that “at the time of airing, a product would be available for sale”; soviet ads did not aim to sell to a target audience, but to provide an entertainment for their citizens, apart from the few TV programs available (Egipt 2015). The Soviet, entertaining advert with no sales goal, differs from today’s marketing, that serves the purpose of gaining consumers attention to inform, convince and remind them of a product (Wood 1958).
Historical changes in post-soviet countries created a new, learning customer, who is constantly transitioning from a citizen with no need for advertising, to a western consumer, with different attitudes towards marketing. The upcoming sections observe the notion of changing identity in more depth: Sections 1.1 and 1.2 highlight why Slovak consumers are more risk averse and have higher uncertainty avoidance. Section 1.3. draws together these two notions to present how they contribute to advertising decision-making.

1.1 Turbulent historical and ongoing changes lead to higher risk aversion

Hofstede and Bond (1984, p. 419) defined risk aversion as “the extent to which people feel threatened by ambiguous situations, and have created beliefs and institutions that try to avoid these”. Risk aversion can have an effect on consumers’ decision-making style: it increases need for information and brand loyalty (Matzler et al. 2008).
To observe risk aversion, The Hofstede Centre’s research on cultural differences is examined. Although Hofstede’s cultural research has been widely criticised for its‘ over-realiance on differences being drawn from one’s natural culture, while neglecting individuality (Ali et al., 2008), it can be argued that Hofstede’s doctrine is still a prevalent source for cultural difference mapping (Minkov and Hofstede 2011; Mooij and Hofstede 2015). Slovakia’s score of 51 demonstrates higher need to avoid future uncertainty than UK and US (The Hofstede Centre 2015).

Figure 1: Hofstede’s country specific cultural dimensions
Source: The Hofstede Centre (2015)

Perlaki (1994) argued that the ECE culture could be best described as “highly centralized, strictly hierarchical culture, a dislike for uncertainty, …and strong collectivist attitude” (Brouthers et al. 1998, p. 488). These cultural factors result in lower marketing orientation (Ennew et al. 1993), different ethical standards (Puffer and McCarthy 1995) and lower trust towards authority (Casson 1994), as compared to western countries.
LeFebvre and Franke (2013) claimed that collectivist cultures consider group interest hence discourage risk-taking. Consequently, an individualistic culture, such as the US and the UK, encourages higher risk-taking behaviour, than the collectivist Slovakia (Hofstede 2015). Eramilli (1996) supports this argument: uncertainty avoidance outlines a society’s risk aversion: high uncertainty avoidance relates to higher risk aversion and increased need for control over foreign operations. Thus, ECE countries should be more risk averse, since are uncertainty avoiders.

1.2 Higher uncertainty avoidance and risk aversion, a consequence of the Soviet Union and the communist economy

Before the collapse of USSR, ECE citizens were “information underload” (Susjan 1999, cited in Money and Colton 2000, p. 193); after the dissolution, markets opened up; demand for product-related information grew. Customers could only personally evaluate the product, since other’s opinions were not available (Money and Colton 2000). Consequently, customers tried to overcome the novel risk by buying more expensive products, since these signalled higher quality (Shama 1992).
Similarly to the above findings, the extent literature has shown that Slovakia has higher uncertainty avoidance, and citizens are more risk averse than in western countries, due to the change from a Soviet country to democracy. Soviet citizen could not choose between products, and advertisements had no selling objective; the role of marketing in the Soviet Union was utilitarian; consumers only received information about the product’s function (Fazekas 1978; Naor 1986).
The shift from a communist economic actor to a western consumer has resulted in shifting identity of ECE citizens: western brands presented thousands of information and new products to customers not used to choice. ECE consumers, who were uncertain about new products, had to learn how to be a consumer, and make purchase decisions.

1.3 Impact of higher risk aversion and uncertainty avoidance on ECE consumers’ decision-making style

According to Shimp and Bearden (1982), consumers with high-risk aversion seek for more information about the product when making a purchase-related decision. Matzler et al. (2008) observed risk aversion and its’ effects on brand loyalty through an empirical research on mobile phone users, and concluded that high-risk averse individuals are more brand loyal than low-risk averse consumers. According to Matzler et al. (2008, p. 155), “risk-averse consumers feel threatened by ambiguous and novel situations and are reluctant to try new products” because they believe the financial, social and performance risks are higher than the benefits; they either search for more information before buying, or become brand loyal (Kapferer and Laurent 1985).
Vilčeková‘s (2014) research supports this argument: she compared the differences in Slovak consumers buying behaviour after the financial crisis. Slovak customers paid more attention to price and quality than advertising. Consumers are brand loyal to established brands, since are more price sensitive and “when they give away their money they expect to get the desired performance” (Vilčeková 2014, p. 308). According to Vilčeková (2014), this is because brands act as shortcuts that ease decision-making, signal quality and value.
Vilčeková’s (2014) research indicated that Slovak consumers are either brand loyal or engage in personal information search. This argument supports Kapferer and Laurent’s (1985) research: high-risk averse consumers either become loyal to their favorite brands, or search for extra information, since they want to avoid neglecting details, thus are inclined to obtain more facts to avoid uncertain outcomes. To summarise, ECE consumers are highly risk averse and either seek for more information regarding a brand or remain brand loyal to avoid uncertain outcomes.

End of Part I.

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Kľúčové slová/Key Words

decision-making, cultural differences, consumer identity, Eastern-Central Europe
rozhodovanie, kultúrne rozdiely, spotrebiteľská identita, východná a stredná Európa

JEL klasifikácia/JEL classification

M31

Résumé

Hodnotenie štýlu rozhodovania občanov východnej a strednej Európy – porovnávacia štúdia. Časť I.

Po preskúmaní reklám v západnej, východnej a centrálnej Európe je možné zhrnúť nasledovné fakty: reklamy orientované na fakty boli identifikované v ECE krajinách, kým reklamy na západe boli kreatívnejšie, avšak obsahovali limitované informácie. Tento článok hodnotí dôvody tohto javu a odpovedá na tieto otázky: Aký druh identity vzniká v dôsledku turbulentných politických a ekonomických zmien ako prechod spotrebiteľov z komunistickej do demokratickej krajiny? Aké typy reklám preferujú spotrebitelia ECE? Aké faktory ovplyvňujú ich rozhodovanie? Prvá časť publikácie sa zaoberá formovaním identity z akademického hľadiska. Identifikuje možné dôvody rozdielov v štýloch rozhodovania, ktoré vyplývajú z turbulentných politických a ekonomických zmien. Tieto faktory viedli k tomu, že spotrebitelia ECE majú vyššiu averziu voči riziku, vyhýbanie sa neistote a nižšiu inštitucionálnu dôveru, čo má vplyv na ich správanie pri vyhľadávaní informácií, pri vytváraní novej spotrebiteľskej základne s rozvíjajúcou sa identitou. Druhá časť publikácie analyzuje zistenia a uvádza odporúčania.

Kontakt na autorov/Address

MSc Barbara Némethová DIC, MSc Strategic Marketing, Imperial College Business School, South Kensington campus, London SW7 2AZ, United Kingdom, e-mail: [email protected]

Recenzované/Reviewed

5. september 2018 / 11. október 2018