As Democracy Spreads in Eastern Europe, so Do Hordes of Advertisers : * Marketing: Cities are being bombarded with brand-name awareness campaigns. Many residents find the corporate invasion opportunistic.
Burger King showed what fast food is all about when it raced into this former East German city ahead of reunification--and ahead of archrival McDonald’s--to begin selling Whoppers from a truck.
Not far from Burger King’s parking spot, around the corner from the Ho Chi Minhstrasse, a shiny new Volkswagen sits with an alluring placard in the windshield. “Soon,” it says, “I’ll own a Volkswagen.”
The signs of a Western corporate invasion are everywhere in this mostly dreary city, a one-time European showpiece until it was flattened by the Allies near the end of World War II and rebuilt to Stalinist specifications.
Logos and brand names are plastered across garbage cans, cafe umbrellas, shop windows, billboards and countless other nooks and crannies of city space.
For Western and Japanese companies anxious to expand into Eastern Germany and the fledgling democracies of Eastern Europe, initial marketing and advertising strategies have focused largely on bombarding these important new sales territories with brand-name awareness campaigns.
In Prague, the entire side of a multistoried building on Wenceslas Square--the public forum where Czechoslovakia’s Velvet Revolution took hold--is covered with an advertisement for the German washing detergent Persil. On the streets below, 70 of the city’s street cars--fully 20% of all the trams in Prague--have been painted end-to-end to look like packs of Marlboro or Camel cigarettes.
There is even advertising to promote advertising. Train travelers entering Budapest recently were greeted by a billboard stating, “I am a billboard. I sell your products.”
No one knows how much money is being spent on advertising in Eastern Europe. In a May report, London-based media-buying specialists Carat International estimated total 1990 advertising expenditures for the region at $100 million.
But the firm is predicting rapid increases and believes ad spending will rise “much faster than the econom(ies) as a whole.”
Compounding the marketing frenzy--which is rapidly transforming the look of Eastern Europe’s cities--is the hazy nature of government controls. Laws regulating advertising in these countries are often unclear and sometimes nonexistent.
“All the old laws were thrown out, and no new ones were made to replace them,” says Michael Prokop, whose Prokop International Ltd. specializes in marketing Western products in Czechoslovakia. “It’s like a free-for-all at the moment.”
Attempting to reach tens of millions of consumers who have virtually no experience in choosing competing brands, Western companies have been scrambling to focus attention on themselves. But how best to do it?
While advertisers have collected staggering amounts of research on what makes people buy goods in the established free-market societies, little is known about consumer behavior in propaganda-battered Eastern Europe.
The question, says Dresden-based advertising executive Sebastian Turner, is “how can you communicate to 17 million people (in Eastern Germany) who have had little exposure to your brand? The first step is to get your name known.”
But today, two years after the democratic revolutions that swept the region, there are signs that the barrage of advertising is starting to create a backlash of resentment and resistance from consumers.
At the same time, advertisers, through groundbreaking research and experimentation, are starting to use more sophisticated and tailor-made techniques in these new markets.
In a survey of Eastern German consumers published in October, Backer Spielvogel Bates Worldwide found that many of the assumptions held by Western advertisers are false or already outdated.
“Many marketers looking eastward may be forgiven for imagining markets filled with naive, trusting consumers thirsty for Western goods,” says the BSB report. “The study . . . suggests that these marketers revise their thinking. Consumers in eastern Germany are at best leery, and often downright skeptical of a Western-style marketing pitch. More than three out of four already think they receive too many product offers.”
Far from finding that Eastern German consumers are easy prey for Western selling techniques, the BSB survey found that a greater percentage of Eastern Germans than Western ones believes that advertising takes advantage of them--59% in the East versus 52% in the West.
The survey also found that 87% of Eastern German consumers believe advertising makes them buy things they don’t need; 64% believe that advertising gives people the wrong impression of a product.
Although the study is limited to Eastern Germany, which is undergoing a vastly different economic transition than its neighbors because of reunification, Marylin Silverman, the BSB executive who headed the survey, believes the consumer attitudes found here could be a bellwether for the entire region.
Ad executive Turner, whose agency Scholz & Friends, is affiliated with BSB, says Eastern Europeans are accustomed to products with generic names, and now have to learn a new method of shopping. While a can of soup would have once said simply “Tomato Soup,” shoppers now find cans that say “Campbell’s” and have to search further to discover what’s inside.
Advertisers also have learned that Eastern Europeans must be taught how to pronounce, as well as recognize, Western brand names. Consumers are unlikely to ask for a product if they are worried about being embarrassed over their pronunciation, says Turner.
As a result, cigarette makers--who are barred from broadcast advertising in Germany and therefore cannot use ads to train consumers in pronunciation--have taken to sponsoring events where their cigarette brand will be mentioned repeatedly by announcers who have been carefully trained to get it right.
Turner says he is appalled at much of the saturation advertising in Eastern Europe. He calls the monolithic Persil ad in Wenceslas Square “the most ugly example you can think of. It’s disgusting. There’s no excuse for it.”
His firm has begun designing marketing campaigns based on social conditions specific to Eastern Germany.
For BMW, Turner’s firm has been organizing seminars on subjects designed to interest business people, managers and entrepreneurs. The BMW-sponsored seminars will give the novice free marketeers badly needed practical advice while enabling BMW to “get in touch with the people they want to reach,” Turner says. “And it’s very cheap of course.”
Elsewhere throughout the former Communist Bloc, advertising and marketing executives are turning to more sophisticated strategies as well.
“You have to be able to adapt very quickly to the rapid changes in these societies,” says Wolfgang P. Wiedermayer, director of business development in Eastern Europe for Young & Rubicam. “You can’t compare research data now with what you had a year ago.”
Eastern Europeans still have an inherent belief in the quality of Western goods, he says, but “they are becoming more critical.” His research shows, for example, that they are more likely than Westerners to go beyond the headline and graphics in print advertisements and read all the copy.
“There was an initial euphoria” of buying after the collapse of Communism, says Hajo Valk, advertising giant Saatchi & Saatchi’s regional director for Central and Eastern Europe. Products sold simply because they were available.
But he, like other executives, says consumer choices are becoming increasingly price-related. And stressing a product’s reliability is now an important advertising strategy for the region.
On the other hand, an enticing contest doesn’t seem to hurt, either.
The French makers of Tchibo coffee ran a coupon sweepstakes in Czechoslovakia that grabbed the attention of other advertisers because of its wild success. Anyone mailing in a proof-of-purchase seal from a package of Tchibo was eligible to win a weekend in Paris.
“Half the country sent coupons in,” recalls Valk, noting that a 5% return would be considered very good in the West.
“People were buying the coffee just to enter the competition,” says Prokop, of Prokop International.
Some companies have been learning what works here the hard way.
To introduce its shampoo to Poland, Procter & Gamble unit Vidal Sassoon relied on the time-honored Western tradition of mailing out free sample packets.
But the day the samples arrived in Warsaw, one ad executive recalls, the city was hit by an epidemic of mailbox break-ins. Soon, the little shampoo packets were being hawked by sidewalk vendors.
Even Burger King, which continues to do brisk business from its “Burger King Express” truck parked outside Dresden’s main railway station, may have taken a misstep.
Circumventing the property ownership quagmire in Eastern Germany that has hindered some companies trying to establish retail outlets, the Miami-based company literally rolled into Dresden and began selling Whoppers on July 4, 1990.
But while the firm appears to have scored a marketing coup--Burger King is now well-entrenched while McDonald’s is only now poised to open a Dresden outlet--the plan still could backfire.
“McDonald’s will be the serious player,” predicts ad executive Turner. Dresden’s novice fast-food consumers will view Big Macs as the burger that comes from a restaurant, he explains, while Burger King’s Whoppers will be stuck with the less prestigious image of “the burger from a truck.”