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Global brands, local ads

European consumers welcome brands from across the globe, but when it comes to advertising, they seem to prefer brands from their own country. A survey conducted by Yankelovich and Partners and its affiliates found that most European consumers’ favourite advertisements were for local brands, even though they were more than likely to buy brands from other countries. Participants in the UK, France and Germany named Coca-Cola as the most-often purchased soft drink. The French, however, selected the famous award-winning spot for France’s Perrier bottled water as their favourite advertisement. Similarly, in Germany, the favourite advertising was for a German brand of non-alcoholic beer, Clausthaler. In the UK, though, Coca-Cola was the favourite soft drink and also the favourite advertising. In the light of such findings, the important question was: does advertising help? Does it help increase the purchase probability of the brand or does it merely maintain a high brand recognition rate? One way of finding out was by running a regression where the dependent variable was the likelihood of brand purchase and the independent variables were brand attribute evaluations and advertising evaluations. Separate models with and without advertising could be run to assess any significant difference in the contribution. Individual t tests could also be examined to find out the significant contribution of both the brand attributes and advertising. The results could indicate the degree to which advertising plays an important part in brand purchase decisions.
In conjunction with these results, a study revealed that attempting to build brand loyalty purchases by means of a sales promotion is not a desirable way to achieve such an objective. According to the study, sales promotions only encourage momentary brand switching and merely enhance short-term performance for companies. Furthermore, over the long run a sales promotion may imply a low-quality or unstable brand image to consumers or it may confuse them, which could also lead to a decline in brand loyalty. The results of this study show that sacrificing advertising and relying on sales promotions reduces brand associations, which ultimately leads to a decrease in brand loyalty purchases.