Understanding Brand Website Positioning in the New EU Member States: The Case of the Czech Republic

Introduction

Both academics and practitioners have long debated whether advertising messages should be standardized. The proponents of standardization argue that the use of uniform advertising would provide significant cost benefits, thus improving company performance in the short run, while creating a consistent brand image in multiple markets. In contrast, the proponents of localization contend that ignoring the cultural, social, and economic characteristics of particular markets would cause psychological rejection by local consumers, thus decreasing profits in the long run. The debate has also produced a compromised or hybrid approach, which suggests that whether to standardize or localize advertising in a given market is a question of degree, and it is necessary to analyze many factors on a case-by-case basis (Mueller, 1991).

This debate is not limited to traditional media. As multinational corporations (MNCs) integrate their marketing communication with an emergent interactive medium, websites are becoming increasingly important for brand marketing and customer relationship management in multiple markets. This is because the Internet is, by definition, a glocal medium, which allows companies to create localized content with global access. In fact, many MNCs have established so-called “global gateway” sites with several language options. Consumers can first choose the language, then seek the information they desire. In this regard, the content of the local sites may need to be adapted to local consumers’ tastes and preferences, in terms of design, layout, copy, message, and so forth. (Okazaki and Alonso, 2002).

Okazaki (2005) examined websites created by American MNCs’ in four EU member states (i.e., the UK, France, Germany, and Spain), and found a high level of localization in website communication strategy. This research extends Okazaki’s exploration into the new EU member states, by conducting a content analysis of the MNCs’ websites created in the Czech Republic. Specifically, we address the following questions: (1) What types of brand website functions are used? (2) To what extent are the Czech sites standardized?

Enlargement Of The European Union

In 2004, the enlargement of the European Union increased its member states from 15 to 25, by adding 10 countries: Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia. In 2007, two more countries, Romania and Bulgaria became the member states, making the Union of 27 countries. This drastic expansion changed the way multinational corporations (MNCs) operate their businesses in Europe. Because of these countries’ low labour costs and investment incentives (e.g., tax reduction, construction aid, etc.), many firms moved their production facilities from other regions to these new member states. For example, Sheram and Soubbotina (2000) report that “Countries seen as more advanced in market reforms—the Czech and Slovak Republics, Hungary, and Poland—attracted almost three-quarters of foreign investment” in transition economies. In fact, Poland received approximately $6.4 billion in foreign direct investment in 2003, an increase of $360 million over the previous year (MacKay 2004).