THE MEDIA BUSINESS; Cautiously, Advertisers Rush to Eastern Europe
With little fanfare, Hungarians have been eating Herz Salami for decades. Soon, they are going to learn why they should eat competing salamis, one ad at a time.
With the opening of the Eastern European economies over the last two years, Western advertising agencies have been rushing to set up shop in the region. Their biggest challenge is to develop strategies for marketing to people who have never seen an American-style ad campaign.
In the last year, 16 large agencies have opened 31 offices in Eastern Europe and the Soviet Union. Last week, the Leo Burnett Company announced that it would open agencies in Warsaw, Budapest and Prague. Wary of Advertising
Both Eastern European advertisers and their Western counterparts are expected to face difficulties in countries where most people are wary of advertising.
"It's important for global consumer products to plant their flags in these countries," said Carl Spielvogel, chairman and chief executive of Backer Spielvogel Bates Worldwide. "But the potential for short-term profit isn't there because there isn't a capitalist free-market structure on which to hang their efforts."
For some Eastern European companies, advertising and marketing are new concepts. In Hungary, for example, Herz Salami was state-owned and never had any competition, so it never had to advertise, said Gerhard Puttner, the president of Dr. Puttner & BSB, the Vienna unit of Backer Spielvogel Bates. But with Western meat companies expected to enter the Hungarian market soon, Herz is going to have to use turn to jingles and 30-second spots, he said.
The salami maker has a lot of catching up to do. "Companies in the East want to develop Western marketing habits, but when they go to do it, they realize that they are 20 to 30 years behind," Mr. Puttner said. Serious Image Problems
Eastern European companies also face a serious image problems. Most Eastern Europeans perceive local goods as being of low quality. "It's impossible to overcome perception unless products already have a great reputation, like a cavier or vodka," Mr. Puttner said.
To help change things, Dr. Puttner & BSB plans to teach marketing and advertising techniques at the University of Vienna to more than 200 Eastern Europeans and Russians.
Western companies are faced with a different problem: consumers wearied by years of propaganda, who are likely to find advertising repugnant.
"Advertising is the last thing these people need right now," said Michael Conrad, the president and director of creative services at Leo Burnett International.
Several agencies, including D'Arcy Masius Benton & Bowles and McCann-Erickson, have already done extensive market research on Eastern Europe to find what consumer there do want.
"At the moment, what our Western clients are looking for is not advertising; it's understanding of their markets," said Simon Goode, the corporate director at Saatchi & Saatchi Advertising in London.
Until recently, marketing in Eastern Europe has been somewhat unsophisticated. "There is really more of a pull strategy used," said Bernd M. Michael, chief executive and managing partner of the Grey Group Germany in Dusseldorf. "Pull means you tell the consumer what you have and he will ask you for it. Push means you distribute widely and people discover you. With the pull apprach, you need innovative ways to distribute. Most Western companies are driving into these little towns and selling mainly low-priced goods out of trucks."
For Eastern European and Western advertisers alike, the experts have the same creative advice: keep it simple.
"The ads will have to be basic print, and the most rudimentary, fundamental ads around," Mr. Spielvogel said. "Eye it, try it and buy it may be the watch words."
For example, the B.S.B. company in Budapest, Europrisma & BSB, is concentrating on print advertisements for such Western clients as Minolta cameras, Mercedes-Benz automobiles and Ikea furniture.
And Mr. Puttner recommends that advertisers not depend on imitating Western advertising in Eastern Europe. "It would be a major mistake to try life-style advertising, because their life styles are just beginning," he said. "They must develop their own style by drawing from their own heritage."
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