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Branding is a new phenomenon to people in Central and Eastern Europe.
Their Communist past did not address concerns such as branding. Western
companies doing business in those countries have to have a thorough
understanding of the cultural dissimilarities to be able to understand the
problem area. Volvo Truck Corporation was selected to serve as case
company for the study. Central and Eastern Europe were represented by
Hungary and the Czech Republic. The purpose of the study was to examine
how the Volvo Truck brand can be strengthened in Hungary and the Czech
Republic.
By conducting interviews on the two markets and applying culture and
branding theory, conclusions were drawn regarding how Volvo Truck
should manage their brand in Central and Eastern Europe. The assets that
increase brand equity can be divided into given and variable assets, with
the given assets being the most important and necessary to stay in business.
However, to differentiate themselves from the competitors, Volvo needs to
employ the variable assets and adjust them to the country culture. Four
adaptable brand areas have been found, i.e. brand loyalty, brand
association, product attributes and marketing communication. By
effectively managing these tools Volvo Truck increases their brand equity
and also the brand loyalty. Not only does this generate increased brand
loyalty, but also new customers, and it thereby provides value to the Volvo
Truck Corporation.
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Brand management, Culture, Brand equity, Relationships, Central and
Eastern Europe, Industrial brands, Volvo Truck Corporation.
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Writing this thesis gave us an excellent opportunity to investigate an
interesting research problem and also to experience the Hungarian and
Czech cultures.
With this we would like to express our gratitude to everyone that has been
involved and supported us in our thesis work. First of all we would like to
thank our tutor, Professor Hans-Fredrik Samuelsson and Mr. Greg
Geiselhart for introducing us to the topic and assisting us in our study.
Your help has been invaluable – thank you!
Furthermore, we would like to thank Mr. Mats Karlsson, Mr. Ulf
Magnusson, Mr. Are Knopf and employees at the Volvo Truck Corporation
in Sweden, Hungary and the Czech Republic, for helping us realise our
goals and supporting the research work. Finally, we would like to
acknowledge all our interviewees who have provided us with the
information necessary for this thesis.
Gothenburg 2000-01-17
Helena Larsson Anna Wallström
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1 INTRODUCTION .................................................................................................... 1
1.1 Background....................................................................................................... 1
1.2 Purpose.............................................................................................................. 3
1.3 Problem formulation ......................................................................................... 3
1.3.1 Research problems .................................................................................... 4
1.4 Delimitations..................................................................................................... 5
1.5 Outline of the thesis .......................................................................................... 7
2 CULTURE AND ATTITUDE THEORIES ............................................................. 8
2.1 The Institutional Network Model...................................................................... 8
2.2 Culture ............................................................................................................ 10
2.2.1 What is culture? ...................................................................................... 10
2.2.2 Cultural dimensions ................................................................................ 11
2.2.2.1 Hofstede .............................................................................................. 12
2.2.2.2 Trompenaars ....................................................................................... 16
2.3 Attitudes.......................................................................................................... 22
2.3.1 Critical reflections of cultural and attitudinal theories ........................... 25
3 BRANDING THEORY .......................................................................................... 27
3.1 What is a brand? ............................................................................................. 27
3.1.1 Brand name awareness............................................................................ 28
3.1.2 Perceived quality..................................................................................... 29
3.1.3 Brand loyalty........................................................................................... 30
3.1.4 Brand associations .................................................................................. 31
3.1.5 Other proprietary brand assets ................................................................ 31
3.2 The different functions of the brand ............................................................... 32
3.2.1 The brand owner ..................................................................................... 33
3.2.2 The Consumer......................................................................................... 33
3.3 Building strong brands.................................................................................... 35
3.3.1 Product attributes .................................................................................... 36
3.3.2 Brand identity.......................................................................................... 36
3.3.3 Core value ............................................................................................... 36
3.3.4 Positioning .............................................................................................. 36
3.3.5 Marketing communication...................................................................... 37
3.3.6 Internal Brand loyalty ............................................................................. 37
3.4 How to create and achieve brand loyalty........................................................ 37
3.5 Industrial brands.............................................................................................. 39
3.6 Global brands.................................................................................................. 41
3.7 Critical reflections on branding theory ........................................................... 43
3.8 Choice of theories ........................................................................................... 45
3.9 Linkages between culture and branding ......................................................... 46
4 METHODOLOGY ................................................................................................. 48
4.1 Research Strategy............................................................................................ 48
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4.2 Case study research design ............................................................................. 49
4.2.1 Case Company ........................................................................................ 49
4.2.2 Type of research...................................................................................... 50
4.2.3 Qualitative versus quantitative data ........................................................ 50
4.3 Data collection ................................................................................................ 51
4.3.1 Primary data ............................................................................................ 52
4.3.2 Secondary data ........................................................................................ 53
4.3.3 Sampling ................................................................................................. 54
4.4 Validity and reliability .................................................................................... 56
4.4.1 Construct/Internal validity ...................................................................... 57
4.4.2 Reliability................................................................................................ 59
4.4.3 External validity...................................................................................... 59
5 CULTURAL ANALYSIS ...................................................................................... 61
5.1 Historical background of Hungary and the Czech Republic .......................... 61
5.1.1 History of Hungary ................................................................................. 62
5.1.2 History of the Czech Republic................................................................ 65
5.1.3 Historical comparison ............................................................................. 67
5.2 The Communist period in Hungary and the Czech Republic ......................... 68
5.2.1 The first decade of communism – the Stalin era..................................... 68
5.2.2 The decades of the revolutions and bloody defeats ................................ 70
5.2.3 The last decades of communism – movements towards liberation......... 71
5.2.4 Coping with freedom .............................................................................. 73
5.3 Conclusion of Hungary’s and the Czech Republic’s cultural    development 75
5.4 Cultural analysis.............................................................................................. 76
5.4.1 Uncertainty avoidance ............................................................................ 77
5.4.2 Power distance ........................................................................................ 79
5.4.3 Individualism versus collectivism .......................................................... 82
5.4.4 Universalism versus particularism.......................................................... 84
5.4.5 Specific versus diffuse relationships....................................................... 85
5.5 Conclusions of the cultural analysis ............................................................... 86
5.5.1 Key words for the cultural parameters.................................................... 87
6 VOLVO TRUCK CORPORATION....................................................................... 90
6.1 Volvo Truck Corporation in Hungary and the Czech Republic ..................... 90
6.1.1 Volvo Truck Corporation in Hungary..................................................... 90
6.1.2 Volvo Truck Corporation in the Czech Republic ................................... 92
6.1.3 Competitive situation.............................................................................. 94
6.1.4 Market development ............................................................................... 96
6.1.4.1 Differences in customer structure ....................................................... 97
6.2 The Volvo brand ............................................................................................. 98
7 ANALYSIS OF THE CULTURAL INFLUENCES ON THE VOLVO BRAND. 99
7.1 Standardisation versus adaptation................................................................... 99
7.2 Given brand assets ........................................................................................ 101
7.3 Brand Loyalty ............................................................................................... 103
7.3.1 Customer segments ............................................................................... 103
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7.3.1.1 Brand loyal companies...................................................................... 104
7.3.1.2 Fence-sitters ...................................................................................... 106
7.3.1.3 Switchers........................................................................................... 107
7.3.2 How to create brand loyalty.................................................................. 108
7.4 Variable brand assets .................................................................................... 108
7.4.1 Brand association.................................................................................. 108
7.4.1.1 Standardised associations of the Volvo brand .................................. 109
7.4.1.2 Brand associations as a value to the customer’s customer ............... 110
7.4.1.3 Association with country of origin ................................................... 111
7.4.1.4 Association with the sales person ..................................................... 113
7.4.2 Product attributes .................................................................................. 115
7.4.2.1 Service and support........................................................................... 115
7.4.2.2 Financing........................................................................................... 118
7.4.3 Marketing Communication ................................................................... 119
7.4.3.1 The importance of personal relationships ......................................... 119
7.4.3.2 The character of the personal relationships ...................................... 120
7.4.3.3 Differences in the characteristics of personal relationships.............. 122
7.4.3.4 Power distance in personal relationships .......................................... 124
7.4.3.5 Brand loyalty through personal relationships ................................... 125
7.4.4 Reflections ............................................................................................ 127
8 CONCLUSIONS .................................................................................................. 129
8.1 Future research areas..................................................................................... 134
BIBLIOGRAPHY......................................................................................................... 136
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Figure 1.1: Outline of the thesis........................................................................................ 7
Figure 2.1: Basic Institutions Model................................................................................. 9
Figure 2.2: Three components of attitudes ..................................................................... 23
Figure 3.1: Brand Equity................................................................................................. 32
Figure 3.2: The branding mix ......................................................................................... 35
Figure 3.3: Creating and Maintaining Brand Loyalty..................................................... 39
Figure 3.4: Illustration of the development of the theoretical framework. ..................... 45
Figure 3.5: The country culture’s influence on branding. .............................................. 46
Figure 4.1: Relevant situations for different research strategies..................................... 48
Figure 5.1: Map over Hungary........................................................................................ 62
Figure 5.2: Map over the Czech Republic ...................................................................... 65
Figure 5.3: Cultural evolution......................................................................................... 76
Figure 6.1: Market shares at the Hungarian market for trucks over 16 tons. ................. 91
Figure 6.2: Volvo Truck’s presence in Hungary ............................................................ 92
Figure 6.3: Market shares at the Czech market for trucks over 18 tons. ........................ 93
Figure 6.4: Volvo Truck’s presence in the Czech Republic ........................................... 94
Figure 6.5: Positioning of truck brands in Hungary and the Czech Republic ................ 94
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Figure 6.6: Market segmentation .................................................................................... 97
Figure 7.1: Classification of Brand Assets ................................................................... 101
Figure 8.1: Conclusion model....................................................................................... 133
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Appendix IA Interview Guide - Customers
Appendix IB Interview Guide - Volvo
Appendix IC Interview Guide - Cultural Instances
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The official fall of Communism came with the opening of the Berlin wall
on the 9th of November 1989, even though the movement towards a free
Europe had started much earlier. Decades before this historic event people
in several nations within the Warsaw Pact had openly shown their
dissatisfaction with the Communist system and its leaders. Two countries
where there was a smouldering discontent were Hungary and the former
Czechoslovakia; discontents which eventually resulted in revolts. As early
as 1956, the Hungarian people revolted against the oppression by
Communist leaders in Budapest. During the days between October 23 and
November 4, people were marching in the streets of Budapest showing
their resentment for a system that had robbed them of their freedom. A
little over a decade later, in 1968, it was the people of Czechoslovakia’s
turn to show their discontent. People expressed their anger by
spontaneously gathering together in demonstrations and distributing
leaflets. Although both of the revolutions were brutally and bloodily
knocked down by the countries’ regimes, with the assistance of their
comrades in the Soviet Union, it had at least led to a shake up within the
Communist system (www.hungary.com, 991112 and Library of Nations,
1986).
Today, the transition countries in Central and Eastern Europe are
increasingly market economy oriented countries aspiring for a closer
integration on all levels with Western Europe. One main step towards this
integration is the countries’ applications for membership of the European
Union. (www.riksdagen.se, 991112).
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However, although the transition countries are opening up to the rest of the
world, there are still major differences between eastern and Western
Europe. Forty years of Communist thinking has left a significant mark in
people’s mentality and many Hungarians and Czechs are still left in the
planned economy philosophy. One effect of the planned economy is that
many people in Central and Eastern European companies do not have the
same profit orientation and long term thinking that most companies in the
western world have.
Also, people in transition countries are not used to such western
phenomenons as branding, since brands did not exist in the planned
economy during the Communist era. Purchasing within the Eastern Bloc
meant queuing for the few products offered in often empty stores. This
implies that great challenges lie ahead for enterprises when it comes to
introducing the people in Central and Eastern Europe to how brands should
be handled. At the same time, brand management used in the western world
cannot be directly transferred to the East. In order to achieve a satisfactory
response from customers in this part of the world, the companies
sometimes have to communicate their brand through other channels than
they do in Western Europe. This is especially true for industrial brands,
since industrial purchasing involves greater risks than the purchasing of
most consumer products.
The emergence of brands, especially western brands, is an increasing
phenomenon within the transporting business in Central and Eastern
Europe. Before the revolution, the transport companies in these countries
had only a few low quality domestic brands to choose between. However,
with the opening of markets in Central and Eastern Europe and the fact that
these countries’ long haulage business with international transports all over
Europe is growing, the transport companies in Central and Eastern Europe
are becoming more familiar with global truck brands. In general, brand
management within the truck business is already a complex task in the
West, implying that brand management on these new markets is even more
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complicated. This is due to the fact that the cultural setting is very different
and the relative importance of the tools used in brand management is
therefore not the same in Central and Eastern Europe as compared to the
Western world.
The truck industry, world-wide as well as on Central and Eastern European
markets, is characterised by the fact that the products are becoming more
and more similar. To be able to gain a competitive advantage, a truck
company must consider the possibility of employing assets that can
distinguish their brand from others. This also requires an understanding for
various country cultures and the attitudes on the market.  By adapting to the
country culture the company can build a brand with a competitive
advantage.
 3XUSRVH
Theories suggest that there are differences between consumer and industrial
brands, implying that brands should be managed according to their specific
characteristics. Furthermore, industrial brand management on emerging
markets is even more demanding than brand management on mature
markets. This is due to the fact that there are other prerequisites on
emerging markets than those of mature markets, and also that current
knowledge regarding brand management on emerging markets is
inadequate. Volvo Truck is a company that manages an industrial brand on
Central and Eastern European markets, and is used as a case study in this
thesis.  With regards to this background, a further examination of the
subject is required and therefore the following purpose is formulated.
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In order to fulfil our above stated purpose, we have chosen to formulate
one main problem and divide it into three subproblems. The rather wide
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problem thereby becomes easier to handle and investigate, and the work
obtains a manageable structure. The main problem for this thesis is:
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To thoroughly be able to fulfil the purpose and solve the main problem,
three problem areas need to be examined. The first concentrates on the
country culture and the second on how attitudes are formed by the country
culture. The third problem area deals with the customers’ perceptions of
trucks in general and the Volvo brand in particular.
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There are different prerequisites for managing a brand, depending on the
market where the company operates. The first research problem concerns
the cultural aspects of Central and Eastern European markets. It is
necessary to understand the culture in a society, since it influences the
customer’s attitudes.  Knowledge about their attitudes and background
them provides the company with a competitive advantage because it makes
it possible to operate according to this knowledge.
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It is not only necessary to be aware of the background of the customers’
attitudes, but also to determine the nature of these attitudes. An
understanding of the attitudes supplies the company with a platform that
facilitates brand management.
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To be able to manage a particular brand, knowledge about how that brand
is perceived is necessary. The perceptions need to be relevant to how the
competitors’ brands are regarded in order to identify strengths and
weaknesses of the Volvo brand.
Starting to describe the institutional setting enables an understanding of the
attitudes in a society. The knowledge of customer attitudes gives a
background to the prerequisites for brand management on particular
markets, and facilitates the work with the strengthening of the brand. The
three research problems thereby contribute to solve the main problem.
 ’HOLPLWDWLRQV
The thesis will focus on brand management in Hungary and the Czech
Republic. A limitation to the number of countries had to be made due to
time and other resource restrictions. To be able to keep the content
manageable, a limitation to only one product category was made, i.e.
trucks. It is important to note that the Volvo brand covers a wider product
range, and also the products that fall out of this investigation, affect the
perception of the Volvo brand.
Even though the attitude also includes the purchasing behaviour, the
intention is not to explain how the beliefs and feelings towards trucks result
in an actual purchase, i.e. what the connection is between the affective and
the conative component in the attitude.
Another delimitation concerns the technical aspects of the truck. The focus
will be on the customers’ perceptions regarding the technical standard of
the truck and the spare parts, and there will be no evaluation of whether
those opinions are in accordance with actual quality or not.
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The legal aspects will only be touched upon, and no thorough examination
of the legal system for trademarks, copyrights and patents will be explored
in this thesis.
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Figure 1.1: Outline of the thesis
Introduction
Culture and Attitude Theories
Branding Theory
Industrial Brand
Management on
Central and Eastern
European Markets
Methodology
Volvo Truck Corporation
Cultural Analysis
Analysis of the
Cultural Influences on
the Volvo Brand
Conclusions
Further Research
• The introduction section serves
as a background and also
presents the problem.
• The theoretical section creates a
tool to be used in for the
empirical study and for the
analysis. The last part explains
how the theories are linked
together to create a framework.
• The methodology explains
methodological choices and
describes how the study was
carried out.
• In the Cultural Analysis it is
explained how historical events
and episodes have created the
current attitudes in Hungary and
the Czech Republic.
• The VTC chapter describes
VTC’s operations and
prerequisites on the topical
markets.
• The last analysis part discusses
how the Volvo brand can be
strengthened by adapting to the
cultures.
• The conclusions summarise the
analysis and give a
recommendation of how VTC
could strengthen their brand on
Central and Eastern European
markets.
• Last, a suggestion of further
research is given.
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Each society is built on a number of institutions that form a certain context
within which all activities in a society take place. In this context,
companies make strategical and operational decisions that are more or less
exclusively influenced by the institutional setting in which they are active.
To be able to understand how companies act on a certain market, a
thorough analysis of the institutional framework on that particular market
needs to be conducted.
A tool that can be used in this context is Jansson’s Basic Institutions
Model. The model explains how the different institutions influence each
other and the company, and suggests that the institutions affect the
company either directly or indirectly. Looking at the three different
rectangles of the Basic Institutions Model, the outer rectangle, containing
the societal sector, can be viewed as a base which influences the
institutions in the organisational sectors, that in turn is affecting the
multinational company (MNC) in the centre of the model. The Basic
Institutions Model is presented in Figure 2.1.
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Figure 2.1: Basic Institutions Model
Source: Jansson, H, 1999
The institutions in the societal sector are on a country level, and by being
linked to each other, form a specific cultural environment in the country.
When the institutions in the outer rectangle develop and change, they also
influence other things such as the organisational fields. That, in turn,
affects the companies in the country. In other words, the institutions are
interlinked with each other and together they have an impact on how the
company acts on the market.
The institutional frameworks are different between countries, particularly
between developed market and emerging market economies. So, if a
company that originates from a certain instutional setting expands into
another country with a different institutional setting, the company should,
in order to be successful, adjust itself to match the institutions it represents
with those of the domestic institutions of the host country (Jansson, H,
1999).
In the explanation of why people act the way they do, the first thing to
acknowledge is the fact that behaviour seems to follow a certain pattern.
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This pattern makes people act in a certain way in their everyday life, i.e.
they are mentally programmed. The mental programming of individuals,
which affects their general behaviour, is influenced by society, social
groups and above all, the culture to which the individuals belong. Within
these social groupings, people affect each other and a common social
behaviour is developed. The behaviour that is formed and sustained during
a certain period of time is then gradually transformed into collective
behaviours. The organisation of this collective behaviour of the social
groupings can be defined as an institution. These institutions prescribe
specific rules, conventions and procedures that organise the people within it
and their behaviour. These rule systems reduce people’s perceived degree
of uncertainty, since by following this repeated and determined behaviour
of the institutions, it is more likely that the members will be accepted in
that society.
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In the Basic Institutions Model, culture is presented as a specific institution.
The cultural institution could, however, be viewed as the most fundamental
institution, because not only is it a result of the other institutions, but it also
continuously affects all the other institutions. Even though institutions all
influence each other, culture is probably the institution that has the most
drastic effect on all the other institutions. Culture also, depending on the
definition used, is a rather wide concept that might explain the behaviour of
individuals in a society.
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The concept of culture is used in a number of different disciplines and
many different definitions have been formulated. Most authors, however,
agree that culture is a learned phenomenon. A definition formulated by
Goodenough states (Usunier, J.C, 1996:5):
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This definition reaches beyond national borders and implies that an
individual can be part of any culture, and also belong to several different
cultures. To put a national delimitation to culture can sometimes be
misguiding, since a country culture can only be defined in reference to
other countries. Many countries are extremely diverse and sometimes the
national borders are a result of political decisions where the decision
makers did not take cultural aspects into consideration (Usunier, J.C.,
1996).
Within relatively small countries like Hungary and the Czech Republic, one
could expect that it is possible to find a certain amount of cultural
homogeneity and this is mostly due to their communist background. Also
the fact that the countries have a geographical closeness could be linked to
cultural similarities.  Hofstede suggests that nations that have existed for
some time strive towards further integration through education and political
systems, language etc. This does not mean however, that there are no
ethnic, linguistic or religious groups that fight for their own identity. He
states that the national level is one layer of culture and that it corresponds
to certain of the different levels of depth carried out by different cultural
manifestations. Hofstede claims that cultural differences manifest
themselves at four levels, i.e. as symbols, heroes, rituals and values, where
symbols represent the most superficial level and values the deepest
(Hofstede, G, 1997).
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The two researchers, Gert Hofstede and Fons Trompenaars, suggest that
there is a limited number of universally shared problems that need to be
solved no matter where people live. What distinguishes one culture from
another is the way people solve those problems. To describe a culture, the
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12
parameters that explain the universal problems could be used. In order to
gain an understanding that is as adequate as possible, both of the authors’
views will be presented.
+RIVWHGH
Among the many different definitions, Hofstede has chosen to focus on the
concept of culture as “the collective programming of the mind which
distinguishes the members of one human group from another”.  He
suggests that culture is to humans collectively what personality is to an
individual, and also that it is a set of common characteristics that influence
a human group’s response to its environment. There are four main
dimensions that are considered to distinguish the differences between
cultures (Hofstede, G, 1982) and this part is based on how Hofstede views
cultural parameters;
1. Power distance
2. Uncertainty avoidance
3. Individualism/Collectivism
4. Masculinity/Femininity
3RZHUGLVWDQFH
Power distance is concerned with the inequality of power that more or less
exists in various institutions in a society, such as families, schools and
particularly at work. Uneven allocation of power is one of the oldest
concerns of human thinking, and humans share this dominant behaviour
with many other species. According to Hofstede, inequality has three
predicators: prestige, wealth and power, and in order to deal with this
uneven distribution, societies have found different solutions to the matter
by putting different weights on these three status variables. Some societies
have sophisticated formal systems of dominance while others go to great
lengths to de-emphasise dominance. Also, political systems, religious life
and philosophical and ideological thinking in a country can be seen both as
a background and an amplifier for power distance. Inequality can occur in
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
13
areas like physical and mental characteristics, social status and prestige,
wealth, power and laws, rights and rules. Since it is obvious that inequality
and power distance are very culturally dependent there should be a great
caution in projecting experience from one culture or subculture to another.
In an organisation, inequality and the perception of the manager differ
substantially depending on the culture of the society. The power distance
has an important effect on the organisational structure, since it affects the
degree of centralisation and the number of hierarchical levels in the
organisation. It is apparent that an organisation in a country with high
power distance has a tendency to prefer a greater centralised structure than
organisations in low power distance countries. Other differences between
high and low power distance cultures are, among others, that in a country
with high power distance there is a tendency for a higher proportion of
supervisors in the workforce and an autocratic style of management than in
countries with low power distance. In the latter case, the management style
is distinguished by a smaller proportion of supervisors in the workforce and
a consultative relationship between superior and subordinate.
8QFHUWDLQW\DYRLGDQFH
This dimension involves measuring the extent to which people in a society
tend to feel threatened by uncertain, risky or undefined situations. Humans
try to cope with the uncertainty for the future through factors such as
technology, law and religion. Technology is concerned with all human
artefacts, law involves all formal and informal rules that guide the social
behaviour, and religion copes with the unknown. Uncertainty avoidance is
transferred and reinforced through, among other things, the family, the
school and the state. Due to the fact that freedom involves uncertainty in
the behaviour of humans, totalitarian political ruling systems like
communism can partly be explained as an “escape from freedom”. These
autocratic systems can be seen as a response to the anxiety that freedom
creates in societies with low tolerance for these concerns. It is obvious that
the rate of uncertainty avoidance in a society depends strongly on the
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
14
country’s history as well as its political system, the population’s education
level and the legislation. However, uncertainty avoidance does differ not
only between traditional and modern societies, but also among modern
societies.
In studying organisations from this perspective, it is evident that
organisations have different ways to manage uncertainty avoidance
depending on what society they belong to. This management is done
through technology, rules and rituals, and is influenced by the society’s
cultural characteristics. In other words, dealing with uncertainty means
dealing with the issue differently in different cultures. For example,
organisations will acquire and use technology differently and for different
reasons.
In organisations where uncertainty avoidance is high, organisations often
promote stable careers. This can be explained by the fact that employees in
high uncertainty avoidance societies often have a greater willingness to
stay in the company, since they are more anxious about the uncertainties in
the future. For example there are also differences in the resistance to
change, where high uncertainty avoidance organisations tend to have more
emotional resistance to change than in organisations with low uncertainty
avoidance. There is a fear of failure in the cultures with high uncertainty
avoidance, and motivations and achievements are determined in terms of
security.
,QGLYLGXDOLVP&ROOHFWLYLVP
Individualism versus collectivism reflects the relationship between the
individual and the collective group in society. Hofstede’s definition states:
“Individualism pertains to societies in which the ties between individuals
are loose: everyone is expected to look after him or herself and his or her
immediate family. Collectivism, on the other hand, pertains to societies in
which people, from birth onwards, are integrated into strong, cohesive in-
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15
groups which, throughout people’s lifetime, continue to protect them in
exchange for unquestioning loyalty.”
In other words, the dimension is concerned with how people live together,
and where individuality is seen as superior and a source of well being in an
individualistic society. It is interpreted in the opposite way in a
collectivistic society, where it can be seen as a selfish and immoral
behaviour. The society and its culture are very much affected by this
element, since it has a great impact on such things as people’s decisions
and how they value relationships with other people and groups.
Whether the society, and thereby the organisation, is distinguished by
individualism or collectivism, this dimension chiefly affects the
relationship between the employee and the organisation. Companies with a
collectivism culture are often characterised by particularistic relationships
that are based on personal trust as a basis for the moral nature of work and
business life rather than contractual transactions, which is common and
promoted in individualistic societies. Also, it is more common that
promotions and other rewards are often given to the whole team in
collectivistic societies than in individualistic societies.
0DVFXOLQLW\)HPLQLQLW\
A society characterised by masculinity is a culture that is different in many
ways than that of a society that is characterised by femininity. Masculinity
represents features like hostility, competition, toughness and orientation
towards results and strong achievement motivations, while femininity
represents modesty, cooperativeness, nurturing, tenderness and equality
orientation.
This dimension affects an organisation in the respect that, for instance,
masculine cultures “live in order to work” whereas the feminine cultures
“work in order to live”. The differences between cultures distinguished by
masculinity versus femininity are important to the companies, since this
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
16
affects things such as how conflicts in the organisation are resolved, that is,
whether they should be solved by trough combat or compromise. Also, it
has an effect on how various types of motivation can be used, i.e. should
the organisation use an achievement/goal approach which is more
masculine, or a welfare/socially oriented one that is more feminine.
7URPSHQDDUV
Trompenaars has identified seven dimensions of culture, where the first
five involve relationships with people and the other two relationships with
time and nature. This section is, when nothing else is stated, based on
research presented by Trompenaars in “Riding the waves of culture”
(Trompenaars, F, 1996).
7KHXQLYHUVDOYHUVXVWKHSDUWLFXODU
In a strongly universalist culture, personal relationships should not interfere
with business decisions and rational, analytical thinking as well as impartial
professionalism are regarded as being the ideal standards. The culture is
based on rules and implies equality in the sense that all persons falling
under the same rule should be treated the same. People living in such a
culture are unwilling to make exceptions to the rule system, as they are
afraid that the system might collapse if they do. In the particularist culture,
on the other hand, people that one has a personal relationship with, one
must sustain, protect or discount, regardless of what the rules say. The
different views of the two orientations could sometimes result in a lack of
understanding between people from different cultures. A universalist will
not trust a particularist since he thinks that a particularist will only help his
friends, whereas a particularist would not trust a universalist as he would
never help a friend.
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17
8QLYHUVDOLVW 3DUWLFXODULVW
Focus is more on rules than on
relationships.
Focus is more on relationships than on
rules.
Legal contracts are readily drawn up. Legal contracts are readily modified.
A trustworthy person is the one who
honours their word or contract.
A trustworthy person is the one who
honours changing mortalities.
There is only one truth or reality,
which has been agreed to.
There are several perspectives on
reality relative to each participant.
A deal is a deal. Relationships evolve.
,QGLYLGXDOLVPDQG&ROOHFWLYLVP
This dimension is almost identical to the one with same name used by
Hofstede, and so a further explanation is not required. Trompenaars does
however warn about oversimplification of collectivity and individualism
since they are heterogeneous concepts.
,QGLYLGXDOLVP &ROOHFWLYLVP
More frequent use of “I” form. More frequent use of “We” form.
Decisions made on the spot by
representatives.
Decisions referred back by delegate
to organisations
People ideally achieve alone and
assume personal responsibility.
People ideally achieve in groups
which assume joint responsibility.
Vacations taken in pairs, even alone. Vacations in organised groups or
with extended family.
$IIHFWLYHYHUVXVQHXWUDOFXOWXUHV
In neutral cultures, people do not show their feelings as obviously as people
in affective cultures. This does not necessarily mean that members of a
neutral culture have fewer feelings than members of an affective culture,
but they do keep their feelings under control. Cultures that are more
affective, require that feelings be signalled more loudly to be registered at
all. When there is a highly emotional approach, the individuals are seeking
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18
approval through a direct emotional response, aiming for emotional
consensus. In neutral cultures on the other hand, the parties would like to
come to agreements by agreeing on each other’s reasoning.
1HXWUDO $IIHFWLYH
Do not reveal what they are thinking
or feeling.
Reveal thoughts and feelings
verbally and non-verbally.
May (accidentally) reveal tension in
face posture.
Transparency and expressiveness
release tensions.
Emotions often dammed up will
occasionally explode.
Emotions flow easily, effusively,
vehemently and without inhibition.
Cool and self-possessed conduct is
admired.
Heated, vital, animated expressions
admired.
Physical contact, gesturing, or
strong facial expressions often
taboo.
Touching, gesturing and strong
facial expressions common.
Statements often read out in
monotone.
Statements declaimed fluently or
dramatically.
6SHFLILFYHUVXVGLIIXVHUHODWLRQVKLSV
Some cultures are specific, meaning that the relationships are one-
dimensional. Claims can only be put to the other party within the area
where the relationship is concerned, i.e. a specific relationship concerns
only business. The opposite of specific is diffuse, and a within a diffuse
relationship, claims and expectations regard areas that do not fall into the
original strings of the relationship, i.e. people are both friends and business
partners.
In specific cultures, people use a very direct way of speaking, while a direct
approach in a diffuse culture can be an insult. The reason for this is that
people in diffuse countries are concerned about not losing face, which
happens when something that is considered to be private is made public. In
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19
diffuse cultures it is necessary to avoid private confrontation since it is
impossible to not take things personally there.
Another outcome of the two different ends of this cultural parameter is that
for people living in diffuse countries, work life and private life are not
separated to the same extent as in a specific society. This is because in
diffuse countries everything is connected and building relationships is very
important.
6SHFILFLW\ ’LIIXVHQHVV
Direct, to the point, purposeful in
relating.
Indirect, circuitous, seemingly, aimless
forms of relating.
Precise, blunt, definitive and
transparent.
Evasive, tactful, ambiguous, even
opaque.
Principles and consistent moral stands
independent of the person being
addressed.
Highly situational morality depending
upon the person and context
encountered.
$FKLHYLQJRUDVFULELQJVWDWXV
Some societies accord status to people as a result of their achievements,
while other societies use other factors, such as age, gender, etc. for
ascribing people status. The former is called achieved status and the latter
ascribed status. Most literature states that a society where status is ascribed
is a sign that that country is only recently developed, or even
underdeveloped and that ascribing status is not stimulating the economy.
The problems that can arise from cultural differences in the respect of how
status is gained appear mostly in negotiation situations. If the negotiating
parties view status differently, the party from the achieving culture often
becomes impatient since the ascribing party needs to ask someone at the
mother company for approval before closing a deal. This causes the
ascribing party to become offended because he has problems accepting the
fact that the counter party might be younger than he is, since in his
perception, a younger person is unlikely to be as competent as an older one
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20
(Trompenaars, F, 1996). In ascriptive cultures, achievements are less an
individual than a collective matter. The organisations in these societies
justify high power distance and resulting hierarchy as a way to get things
done (Gatley, Lessem and Altman, 1996). Worth mentioning, however, is
the fact that Trompenaars states that it does not matter whether someone is
of ascribed status as a consequence of achievements or other factors, since
if you have a certain status you will automatically bring about success.
$FKLHYHPHQWRULHQWHG $VFULSWLRQRULHQWHG
Use of titles only when relevant to
the competence you bring to the
task.
Extensive use of titles, especially
when these clarify your status in the
organisation.
Respect for superior in hierarchy is
based on how effectively his or her
job is performed and how adequate
their knowledge.
Respect for superior in hierarchy is
seen as a measure of your
commitment to the organisation and
its mission.
Most senior managers are of varying
age and gender and have shown
proficiency in specific jobs.
Most senior managers are male,
middle-aged and qualified by their
background.
3HUFHSWLRQVRIWLPH
When discussing the perception of time, there are two issues that are of
particular significance, i.e. what relative importance cultures give to the
past, present and future, and also whether the view of time is sequential or
synchronic. In sequential cultures time is viewed as a line and it is
important that everything is done in the right order, and as a result the
queue-system and sticking to the agenda is of utmost importance. For
someone from a synchronic culture it is much more natural to do a lot of
things in parallel and punctuality is not crucial.
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
21
6HTXHQWLDO 6\QFKURQLF
Only do one activity at a time. Do more than one activity at a time.
Time is seizeable and measurable. Appointments are approximate and
subject to “giving time” to
significant others.
Keep appointments strictly;
schedule in advance and do not run
late.
Schedules are generally subordinate
to relationships.
Relationships are generally
subordinate to schedules.
Strong preference for following
where relationships lead.
Strong preference for following
initial plans.
+RZZHUHODWHWRQDWXUH
There are two basic relations to nature, i.e. the inner-directed orientation,
meaning that nature is and should be controlled by humans contra the
outer-directed orientation that suggests that man is a part of nature and
should go along with it. The outer-directed societies see an organisation as
a product of nature that owes it development to the environment and to a
favourable ecological balance.
,QWHUQDOFRQWURO ([WHUQDOFRQWURO
Often dominating attitude bordering on
aggressiveness towards environment.
Often flexible attitude, willing to
compromise and keep the peace.
Conflict and resistance means that you
have convictions.
Harmony and responsiveness, that is
sensibility.
Focus is on self, function, own group
and own organisation.
Focus is on “other”, that is customer,
partner, and colleague.
Discomfort when environment seems
out of control or changeable.
Comfort with waves, shifts and cycles
if these are natural.
How we are mentally programmed to deal with the different cultural
parameters is what distinguishes one culture from another. The mental
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22
programming that decides how the population in a society generally acts in
certain situations is also the foundation for how the attitudes of each
individual are formed. Knowledge about a certain culture facilitates the
understanding for attitudes in that particular culture.
 $WWLWXGHV
Both attitudes and culture are learned phenomena and since culture is the
set of beliefs that determines how people think and act, it is closely related
to attitude. The main difference between the concepts of attitude and
culture is that attitude describes mental programming on an individual
basis, whereas the culture describes the collective behaviour. The most
frequently used definition of attitudes was formulated over 50 years ago by
Gordon Allport, who wrote (Assael, H, 1995:266):
‡$WWLWXGHVDUHOHDUQHGSUHGLVSRVLWLRQVWRUHVSRQGWRDQREMHFWRU
FODVV RI REMHFWV LQ D FRQVLVWHQWO\ IDYRXUDEOH RU XQIDYRXUDEOH
ZD\·
To understand attitudes is especially important when dealing with products
that have a high involvement in the purchasing decision. Products with a
high involvement are, among other things, products where there is a high
financial risk involved. According to Assael, attitude consists of three
components. These three components affect each other so that the
consumer first becomes aware of the product in order to be able to form an
opinion regarding it. Then, this opinion optimally leads to a purchasing
decision. Assael presents a model that describes how the three components
of an attitude influence the consumer’s behaviour (Assael, H, 1995).
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
23
Figure 2.2: Three components of attitudes
Source: (Assael, H, 1995)
7KH FRJQLWLYH FRPSRQHQW: This component includes the consumer’s
awareness and knowledge about the product and is also referred to as the
thinking component. The component is important since it influences how
the consumer evaluates the product. In marketing research, the cognitive
component is usually studied by letting the consumer rank brands
according to different product attributes. The consumer’s beliefs are
thereby discovered, and it is possible to detect strengths and weaknesses of
the brand in relation to competing brands. It is important to understand
what value the consumer puts on different product attributes, since one
person could place a high value on a certain attribute, whereas another
places a much lower value on the same attribute. When the consumers
place different values on certain product attributes, they will have different
attitudes towards the brand even though they share similar beliefs regarding
it. How the consumers place a value on a product attribute could be
dependant on a number of different circumstances, such as cultural
background.
COGNITIVE
COMPONENT
Brand beliefs
AFFECTIVE
COMPONENT
Brand
CONATIVE
COMPONENT
Intention to buy
BEHAVIOUR
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24
7KHDIIHFWLYHFRPSRQHQW: This part of the attitude represents the consumer’s
overall evaluation of a product, and is the primary determinant for intended
behaviour. According to Assael, this is what is commonly called an
attitude, and it is measured by letting the consumer rate the product from
“poor” to “excellent” or from “prefer most” to “prefer least”.
7KHFRQDWLYHFRPSRQHQW: This component refers to the consumer’s intent to
buy and also to the actual purchasing behaviour. Assael states that the
difference between intent to buy and actual purchase is smaller than one
might think.
When marketing a product, it is possible to either focus on the cognitive
component, trying to influence the consumer’s beliefs, or to concentrate
directly on the affective part of the attitude. The former strategy needs to be
more informative, whereas the latter is relying on the possibility of evoking
positive feelings by using such things as symbols and imagery. The feeling
oriented approach has been used frequently during the last two decades,
since products often have such similar and standardised attributes, and the
only way for the marketers to persuade the consumer is therefore to rely on
the affective part of the consumer’s mind. A third way of influencing the
consumer’s behaviour is to appeal directly to the third attitudinal
component, by elaborating with the price.
According to Engel et.al, the attitude is formed by stored information,
experience and evaluation of different alternatives, and as some feelings,
opinions and reactions are repeated, the attitude is stored in the mind of the
individual. This means that the individual becomes programmed to act in a
certain way, and therefore attitude has two functions (Engel, J, Wales, G,
Warshaw, M, 1975):
1. To provide the individual with a base for his or her decision-making.
2. To contribute to stability and productiveness for the individual.
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25
A clear understanding of the customer’s attitude provides the marketer with
an advantage, since makes it possible to affect the attitude. For products
that entail a high involvement in the purchase, attitude is of especially high
importance for the purchasing decision. There are three main determinants
of degree of involvement connected to the purchase of a certain product,
i.e. personal, product and situational factors. A high involvement occurs
when the product is perceived as enhancing self-image, when the purchase
and use of the product means some kind of risk, and/or the situation
changes, if, for example, the product is no longer in fashion (Engel,
Blackwell and Miniard, 1995).
 &ULWLFDOUHIOHFWLRQVRIFXOWXUDODQGDWWLWXGLQDOWKHRULHV
To facilitate the construction of a tool for cultural studies and analysis,
theories of both Hofstede and Trompenaars have been used. Even though
the parameters sometimes overlap, an understanding of both theories
supplies the researcher with better prerequisites for making a complete
cultural study. Hofstede brings up the crucial parameter of uncertainty
avoidance that, to our previous knowledge, is significant in Central and
Eastern European countries. However, he has not conducted research on
the markets in question, and if only his theory is used, there is the chance
that important matters will be overlooked. Furthermore, Trompenaars’
theory equips the researcher with tools for discussing personal relationships
that are important in Central and Eastern Europe. In order to avoid
repetitiveness, the parts of the two respective theories that appear to best
apply to the problem will be chosen so as to formulate questions, and
analyse thereafter. There will be a further discussion regarding what
parameters that will be given special attention in the Cultural analysis part.
The study requires a tool to investigate culture. Trompenaars and Hofstede
supply the researcher with a theoretical tool that can be used to describe
culture according to different cultural parameters. However, the parameters
cannot be used to explain how cultures evolve. The purpose of Jansson’s
theory consequently is to gain an understanding of how institutions
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26
influence culture, which in turn affects particular product markets. The
basic institutions model will serve as a background in the analysis.
The literature regarding attitudes is focused on consumer goods, and it is
important to keep in mind that the purchasing behaviour for consumer
goods and industrial products is not identical. When purchasing industrial
products, it is not only the personal attitudes of the purchaser that is of
importance, but also factors that are out of the purchaser’s control, such as
company policy. Another factor that separates industrial purchasing
behaviour from consumer behaviour is that for industrial goods, the
personal relationships between the buyer and the seller are much more
important, and the product attributes are not necessarily the most crucial
aspect. The differences between consumer and industrial brands will be
further discussed in part 3.5 Industrial brands. It is, however, important to
understand the feeling that the customer has towards a company and its
products, and this is captured in the attitude towards the brand.
%5$1’,1*7+(25<
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27
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 :KDWLVDEUDQG"
According to Aaker, “a brand is a distinguishing name and/or symbol (such
as logo, trademark, or package design) intended to identify, the goods
services or either one seller or group of sellers, and to differentiate those
goods or services from those of competitors. A brand thus signals to the
customer the source of the product, and protects both the customer and the
producer from competitors who would attempt to provide products that
appear to be identical (Aaker, D, 1991:7).”
To strengthen the brand and improve the positioning of the brand in the
mind of each existing or potential customer and also by the general public
in the society, the brand equity needs to be increased. Aaker uses the
following definition of brand equity (Aaker, D, 1996:7):
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28
“%UDQG HTXLW\ LV D VHW RI DVVHWV DQG OLDELOLWLHV OLQNHG WR D
EUDQG¶V QDPH DQG V\PERO WKDW DGGV WR RU VXEWUDFWV IURP WKH
YDOXH SURYLGHG E\ D SURGXFW RU VHUYLFH WR D ILUP DQGRU WKDW
ILUP¶VFXVWRPHUV·
According to Aaker, brand equity can be divided into five major asset
categories that together create brand equity.
1. Brand name awareness
2. Perceived quality
3. Brand loyalty
4. Brand associations
5. Other proprietary brand assets (patents, trademarks, channel
relationships etc)
In order to understand the background of brand management, all the
important categories of brand equity will be explained below. By
improving and working with each of the assets that create brand equity, the
brand will be strengthened and an understanding of each of the categories
therefore facilitates the use of the theoretical framework as a tool in the
analysis. The following section is based on theories explained by Aaker in
Building Strong Brands (Aaker, D, 1996).
 %UDQGQDPHDZDUHQHVV
Brand awareness is concerned with the strength of a brand’s presence in the
consumer’s mind. One part of this awareness is about brand recognition,
and it reflects the consumer’s familiarity with a brand obtained from past
exposure. Much research done within this area shows that even though the
consumer does not know when or where the brand was seen or heard, he
still has more positive feelings towards a brand that is familiar and prefers
it over a brand that is completely unknown. This indicates the significant
power brand recognition has. The consumer interprets brand exposure as a
signal that the company is concerned with its products, since he believes
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29
that companies would not spend promotion money on “bad products”, i.e.
brands that are often exposed are considered to be “good products”.
Brand recollection is another important aspect of brand awareness, and a
brand is said to have “recall” if it springs to the consumer’s mind when its
product class is mentioned. The recall of a brand can be the decisive factor
for the product to be put on the shopping list or a chance to bid on a
contract. Finally, the brand name dominance, which is the ultimate goal for
a brand, is when the consumers can only recognise a single brand. Here, it
is especially crucial for the company to have their brand legally protected,
because this ultimate success can be tragically lost if the brand name
becomes such a common label for the product and is not protected.
Today, when the marketing activities from the companies are becoming
more and more intense, it is very difficult and costly to build superior brand
awareness. However, this fact makes it even more crucial for the
companies to take brand awareness seriously, since brand recognition and
recollection can substantially enhance the company’s brand equity.
 3HUFHLYHGTXDOLW\
Due to the fact that many companies consider quality to be one of their
chief values and frequently include it in their mission statement, it is
obvious that perceived quality is a key strategic variable today. Perceived
quality is also important from the aspect that, among all brand associations,
only perceived quality has been shown to drive financial performance. In
fact, perceived quality is generally the heart of what the consumers actually
are buying and in that sense, it is the fundamental measure of the impact of
brand identity. It can be defined as a measure of “goodness” that affects all
the elements of a brand. In general, if the perceived quality improves, so do
the other elements of the consumer’s interpretation of the brand.
In order to reach perceptions of quality, the quality claim has to have
substance. It is crucial for the company to understand which factors of
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30
quality are important for the target customers, so as to be able to create the
quality required. However, producing a quality product or service is not the
only part of the matter, perceptions must be created as well. This can be
explained by the fact that perceived quality does not always equal actual
quality.
 %UDQGOR\DOW\
Brand loyalty is a very important asset, since, in general, the more brand
loyal customers a company has the higher the company’s expected sales
and profits. A company with few brand loyal customers is more vulnerable
and has more difficulties in predicting its sales and profits. Also, it is
commonly known in business life that it costs less to keep an existing
customer than to try to attract new ones, which explains why brand loyalty
is so crucial. Customers with high brand loyalty also function as an entry
barrier towards competitors because these customers are very reluctant to
change brands, so if the competitors wants to acquire them, they have to
spend a lot of money and effort in order to succeed.
In order to have better control over the customers and to receive tactical
and strategical insights when building a strong brand, the customers’ brand
loyalty can be divided into five different segments:
1. The non-customers - those who buy competitor brands or are not
product class users.
2. Price switchers - those who are price-sensitive
3. The passively loyal – those who buy out of habit rather than
reason.
4. Fence sitters – those who are indifferent between two or more
brands.
5. The committed
When the different segments are identified, the company can improve their
brand loyalty by attracting the customers that are not price switchers and
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
31
try to tie the fence sitters and the committed more to the brand. Also, the
company has to keep in mind that more effort and activities have to be
invested in the passive loyal and the committed customers, since these
important segments are often a bit neglected and taken for granted. The
brand loyalty can be supported by activities like, for example, customer
clubs and frequent buyer programs, enabling the company to tie the
customer closer to the brand and also to show the customers that the
company cares about them.
 %UDQGDVVRFLDWLRQV
Brand associations are concerned with how the customers associate with a
brand, i.e. what product attributes or product symbols that the brand stands
for in the customer’s mind. It is important for the company to know how
they want their customers to perceive their brand, and most essentially, that
the customers association with the brand and what they believe that it
stands for, is positive. Brand associations are often effected by the brand
identity and the company has to develop and build on its brand identity in
order to create a strong brand. We also believe that country of origin is a
factor within this context that is of utmost importance. This will be further
discussed under 3.6. Global brands.
 2WKHUSURSULHWDU\EUDQGDVVHWV
The last asset of brand equity concerns proprietary brand assets, and it
involves protecting the brand from competitors’ attempts to undermine and
destroy the company’s customer base and brand loyalty. These proprietary
brand assets include patents, trademarks and channel relationships. The
protection of a brand can involve such things as trademarks that protect the
brand equity from competitors who might want to confuse customers by
using a similar name or package. It can also be a distribution channel that is
controlled by a brand due to its past of brand performance (Aaker, D, 1991,
Aaker, D, 1996).
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32
Aaker has developed a model that describes the components that build
brand equity and how this factor affects the value provided to the customer
and the firm (Aaker, D, 1991).
Figure 3.1: Brand Equity
Source: Aaker, D, 1991:17
The model implies that the brand provides value to both the customer and
the firm, but it does not explain the difference in the perceived value. The
theory is therefore complemented with what role the brand is playing to the
customer and to the firm.
 7KHGLIIHUHQWIXQFWLRQVRIWKHEUDQG
 A brand has different meaning and provides different value to the actor,
depending on which actor’s perspective it is seen from. Here, the focus is
placed on the brand owner’s and the consumer’s perspective of the brand,
since these are the actors that are of interest for this thesis. Other actors on
the market that the brand has important functions for are the legislator and
the competitor. This section is based upon the view presented by Melin
(Melin, F, 1997).
%5$1’
(48,7<
Name
Symbol
Brand
Loyalty
Name
Awareness
Perceived
Quality
Brand
Associations
Other Proprietary
Brand Assets
Provides Value
to Customer
Provides Value
to Firm
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33
 7KHEUDQGRZQHU
From the brand owner’s perspective, the brand has several important
functions:
- Firstly, the brand has role as a carrier of information, i.e. a carrier
of rational data concerning the product’s functional
characteristics such as the product’s contents, price, quality etc.
- Secondly, having the exclusive rights to a brand gives the brand
owner the possibility to build up a unique brand identity. The
creation of a brand identity can be considered a sophisticated
form of marketing and this identity is communicated through
investments in brand creation promotion that are based on
emotional arguments.
- Thirdly, the brand functions as a positioning tool in order to
distinguish the product from others on the market.
- Fourth, the brand functions as a competitive tool. A strong brand
is a powerful tool against competitors, and it also allows the
brand owner to communicate directly to the consumer without
going through an intermediate, i.e. a strong brand means a strong
negotiating position towards actors in the distribution chain. This
is one of the most important functions of a brand.
- Fifth, a well-known brand can be employed as a base for
introducing new products; here the brand owner can exploit the
brand name by using either “brand expansion” or licensing.
 7KH&RQVXPHU
Also from the consumer’s perspective, the brand has several important
functions:
- Firstly, the brand has the role of being a source of information.
The consumer can, by using the brand as a reference source,
compare the different branded products’ prices, quality and
function with each other in a clear and simple way.
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
34
- Secondly, the brand gives the consumer the possibility to
familiarise himself on the market. When the consumer has finally
decided upon which brand he prefers and makes repeated
purchases of the product, the transaction costs are reduced. In
other words, the brand is both a time and cost saver for the
consumer.
- Thirdly, the brand can be seen as a guarantor. Even though a
brand is not necessarily equal to products of high superior
standard, it does guarantee products with an even and consistent
quality.
- Fourth, besides the fact that a brand guarantees an even and
consistent quality, it functions as a risk reducer in a wider
perspective. The purchasing of products like clothes, cars and
drugs often involves a high amount of risk, such as social risk,
financial risk and/or physical risk. By choosing a well-established
and well-known brand, the consumer can reduce this perceived
risk factor substantially.
- Fifth, the fact that the consumer perceives the brand from both a
rational and emotional view, means that the brand can be said to
have a symbolic meaning, a fact that is of high importance for the
brand’s image. The importance of an image is particularly crucial
in connection with the purchase of exclusive branded products,
where the product’s brand is extremely important. It is important
both for the product’s image, but also for the buying consumer’s
image in the way the consumer wants to be perceived of others,
i.e. the consumer’s image towards its surrounding. In other
words, a brand can be a mean of self-fulfilment and a way to be
socially accepted.
It has now been discussed how brand equity, according to Aaker, is created
and how it provides value to the two crucial actors in a business
relationship. Aaker’s theory is limited compared to the theory developed by
Melin. To increase the comprehensiveness of the research and analysis
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
35
tool, Aaker’s view is therefore complemented with theory developed by
Melin.
 %XLOGLQJVWURQJEUDQGV
Melin has a slightly different view than Aaker on how brand equity is
created. One of the main differences between Aaker and Melin is that
Melin makes the concept wider and also includes the product and the
competitive situation. The branding mix that is developed by Melin and
presented in figure 3.2 is a complement to Aaker’s brand equity model that
was discussed earlier. Melin has, by using concepts from the branding
literature created a model that describe how to build and sustain a brand
successfully. Those concepts represent activities that are part of the
integrated development of a brand. Unless otherwise stated, the following
discussion is built upon the theories of Melin (Melin, F., 1997).
Figure 3.2: The branding mix
Source: Melin, F, 1997
Product
attributes
Brand identity
Core values
Positioning
Marketing
Communication
Internal
Brand loyalty
Brand
building in
the company
Brand Equity
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36
 3URGXFWDWWULEXWHV
Product attributes are concrete signs of a product that provides the
customer with a functional value. One of the most important product
attributes when building a brand is consistent product quality, but also the
packaging, colour and logo are considered to be of great importance. The
role of the product attributes is to individualise and visualise the product.
One of the main problems with the product attributes is that they are easy
to copy.
 %UDQGLGHQWLW\
The concept of brand identity includes what the brand stands for, what
provides it with meaning and makes it unique, i.e. it gives the product
added value. A brand includes product characteristics and a set of other
factors that give the brand an identity. This is a relatively new concept, but
since the differences between products in a certain category tend to
decrease, brand identity has become a central issue (Melin, F, 1997). The
strongest brand identities often include emotional benefits and this adds
richness and depth to the experience of owning and using the brand, which
in turn makes the brand stronger. To provide the customer with value
though, the product also needs to have a functional benefit. Another extra
value is added if the product also provides a self-expressive benefit that
communicates the self-image of the user (Aaker, D, 1996).
 &RUHYDOXH
The core value is the link between the competitive advantage, consisting of
the product’s attributes and the brand image, of the product and its
positioning.
 3RVLWLRQLQJ
Positioning is the process where the company tries to get a specific position
in the consumer’s mind, which leads to brand awareness and that in turn,
creates brand loyalty (Melin, F, 1997). When positioning the product, the
company must build the position on a competitive advantage, which is
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37
achieved either by offering lower prices than the competitors or by offering
more benefits to justify the higher prices (Kotler, P, Armstrong, G, 1994).
 0DUNHWLQJFRPPXQLFDWLRQ
According to Kotler, the marketing communication is traditionally said to
consist of advertising, promotion, PR and personal selling. The four tools
that together create the promotion mix are differing in efficiency depending
on the product type. For industrial goods, personal selling and sales
promotion are the most important tools.
 ,QWHUQDO%UDQGOR\DOW\
To make the customers remain loyal to a brand, the company also needs to
be loyal. This means that the company has to be consistent in everything
that the brand represents, i.e. the product attributes, brand identity, core
values and positioning. The advantage of internal brand loyalty over time is
that it results in an ownership of a position in the minds of the customers,
which makes it almost impossible for competitors to attach themselves to
the same position. The consistency also enhances the power of the position
by owning an identity symbol that makes the brand identity easier to
understand. The strong well-known identity symbol leads to cost
advantages since it is less expensive to communicate than a new identity.
 +RZWRFUHDWHDQGDFKLHYHEUDQGOR\DOW\
In Aaker’s model, which describes how brand equity is created, brand
loyalty is presented only as a mean. This way of looking at brand loyalty is
not quite sufficient, especially in an industry that is characterised by that
information and opinions most probably partly are spread through word of
mouth. A loyal customer logically has a positive perception of the brand
and therefore shares this judgement with other actors in the business. Loyal
customers can consequently be seen as a mean to increase brand equity, as
well as a goal that each company should strive to accomplish.
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
38
According to Aaker, due to the fact that changing brands requires effort,
especially when the decision involves a high risk, and customers do not like
to admit that their prior decision was wrong, one more or less has to
actually do something wrong to make the customer change brands. In fact
customers rationalise to justify prior decisions. Furthermore, the author
means that if you follow five basic rules, it should be fairly easy to keep
customers. The customer needs to be WUHDWHGULJKW, which basically means
treated with respect and avoiding rude, uncaring and unresponsive
behaviour. Furthermore all employees at a company need to VWD\FORVH WR
WKHFXVWRPHUV, which can be done by letting all employees work with direct
customer contact for a couple of days per year, for example. Thereby the
customers’ voices are more easily heard and it is communicated to both the
organisation and the customer that the latter is highly valued. The customer
satisfaction can also be actively PHDVXUHGPDQDJHG, so that the company
learns how and why the customers’ attitudes are changing. Brand loyalty is
also partly secured by VZLWFKLQJ FRVWV. Those can be enforced by a
company by helping the customer adjust their processes or work to the
product supplied, so that a product of another brand would not be suitable
without a change in the work process. Another way of creating switching
costs is to introduce a reward system, like the ones that for example is used
by many airlines, rewarding the customers that utilize your products
frequently. ([WUD VHUYLFHV, that could be an explanation of a procedure
something as simple as an apology, also serve to increase brand loyalty. A
model that clarifies how brand loyalty is achieved is presented in Figure
3.3.
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39
Figure 3.3: Creating and Maintaining Brand Loyalty
Source: Aaker, D, 1991
Brand loyalty is important in all industries, since marketing theories have
always implied that it is easier to keep a customer than to attract a new one.
In certain industries that are also characterised by the fact that the
relationship between the company and the customer is especially long
lasting, brand loyalty becomes even more central. The relationship between
a customer and the selling company is usually quite long lasting since the
product, when all dimensions are included, also contains service and after
sales. A loyal customer can therefore contribute with revenues not only as a
result of the actual purchase, but also as a result of the use of the product
(Aaker, D, 1991).
Throughout the theory chapter it has been indicated that there is a
difference between brand management for consumer goods, compared to
industrial goods. To highlight the differences, an examination of industrial
brands is required.
 ,QGXVWULDOEUDQGV
This chapter is written, not only to acknowledge, but also to understand the
differences between consumer branding and industrial branding. It must be
Treat the Customer Right
Stay Close to the Customer
Measure/Manage
Customer Satisfaction
Create Switching Costs
Provide Extras
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/2<$/7<
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40
clear that all consumer branding strategies are not directly transferable to
industrial markets.
To be able to define the differences first of all, a distinction between
consumer products and industrial products has to be made. McDowell,
Doyle and Wong define industrial products, as “products used in
manufacturing that are not marketed to the general consuming public”.
Both goods and services are included here, as are capital goods and
consumable items (McDowell, Doyle and Wong, 1997:26). So, in other
words, industrial products are bought by other companies to produce their
own output. Also, the buying decision process is often much more complex
on industrial markets, since it usually often involves more actors than on
consumer markets. The purchasing of industrial products means meeting
largely functional needs and thereby the decisions are very likely to be
more rational within this field. However, there are similarities, for instance,
emotional influences do play an important role on both industrial markets
and on consumer markets (Hague, P, Jackson, P, 1994). Industrial
purchasing often involves more risks and therefore, factors like image,
branding and good reputation have probably an even higher importance on
industrial markets than on consumer markets. Most consumer purchases
involve less risk and effects fewer people and factors than a purchase for a
company.
According to Hague & Jackson there are three different factors that
particularly influence most industrial buying decisions, i.e. quality, price
and delivery. It is important to understand how the buyers value these three
factors. There has to be a thorough knowledge about the customers’
requirements regarding the quality, price and delivery in order to know
which of the factors to that should be emphasised.
The reason for the importance of creating successful brands on industrial
markets is that a well-reputed industrial brand creates trust and confidence,
factors that are often crucial in this environment. Due to the fact that
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
41
industrial branding is often concerned with close linkages between two
organisations, the industrial brand should function as a symbol for a strong
and ongoing relationship between customers and suppliers. For the
customer on the industrial market, the feeling of comfort with the brand
together with a trustful friendship with the supplier’s personnel is highly
valued. However, deep-rooted trust often takes a long time to build, since
confidence and trust for a supplier is based on repeated use and honest
behaviour.
Hague & Jackson are weighting in the importance of brands versus
personalised business, giving an example where a manager that was
operating a fleet of Volvo trucks was asked why he had chosen this
particular make. His reply was “I do not buy Volvo, I buy the dealer”. His
answer highlights the importance of personal relationships in this context,
since even though Volvo is considered to be a superior truck, the dealer had
done a better job selling himself.  This example also stresses the less
beneficial fact that a brand can be overshadowed by the friendship between
a buyer and a salesman, leaving the supplier’s business vulnerable to any
change in the dealership. In other words, a too close connection between
the sales representative and the buyer could be more restraining than
favourable. In the long run, there needs to be a balanced mix in the usage of
personal relationship and the rest of the branding mix, to create brand
equity (Hague, P, Jackson, P, 1994).
Also, the use of other high valued brands in a company’s operations can
have great importance for the company’s reputation. In other words, if the
company uses premium brands, it is very likely that the company’s own
status increases and thereby they can attract more customers.
 *OREDOEUDQGV
There are also differences in how a brand should be managed globally,
compared to a particular market. Global branding implies that there is a
difference not only between brand management concerning consumer and
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
42
industrial goods, but there is also a difference between how a brand should
be managed on different markets.
Managing brand images globally is often a complex task, since buyers are
not global themselves. Also, the buyers do not generally buy a product for
the sake of it being global. Most of the time the global availability of a
brand is not the determining factor for the buyers’ purchasing decision, i.e.
they do not care if the brand is available in the rest of the world or not. The
problem of adaptation versus standardisation of a globally sold brand arises
and the question is how should these two factors be weighted in order to
create a successful branding mix?
According to Usunier, the globalisation process has more or less been
forced on buyers and that the crucial factor of cultural differences is often
ignored. In the global branding process it is important to acknowledge
cultural differences that function as natural barriers and influence both the
consumer behaviour and its environment. The ignorance of the cultural
aspects can explain many failures of globalisation strategies of brands
(Usunier, J.C, 1996).
On the other hand, the development of the world’s needs and desires are
becoming more and more homogenised and along with that, arguments for
a more standardised brand. It seems like ancient differences in national
tastes and modes of doing business are becoming less important than before
(Levitt, T, 1983). Another fact promoting standardisation is that the
company can benefit from economies of scale, since extensive brand image
adaptation to every new market is very costly and time consuming.
However, probably the most important aspect in this area is that the
standardisation of the brand world-wide is capturing the core value and the
brand identity. Too extensive brand adaptation can lead to the product
being interpreted as less reliable and trustworthy. Also, the positioning of
the brand is a critical factor in the global branding context. As stated by
Kapferer, a brand cannot be an expensive premium product in one market
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
43
and a mainstream product in another, since this can also reduce the
credibility of the brand. The price level positions the brand in terms of
perceived quality, performance and prestige (Kapferer, J-P, 1996).
Globalisation of a brand can become less problematic if the brand is totally
built into a cultural stereotype. In other words, if the brand is associated
with the collective image that reflects the traditional view of a nation, an
image that is positively interpreted by the rest of the world, it is easier to
standardise the brand identity in a more trustworthy way globally. An
example of this is that German brands such as Bosch, Siemens, Mercedes
and BMW are often associated with robust performance and quality, while
the Italian food brand Barilla is benefiting from the traditional Italian image
of tasty cookery (Kapferer, J-P, 1996). In Sweden brands like Ericsson,
Volvo and Saab embody the Swedish image of good technical quality and
punctual delivery worldwide. Factors like political freedom, the degree of
economical and industrial development, and the quality of technology and
design, are substantially influencing the purchasing of foreign products.
This is particularly true within the industrial segment, where the buyers
consider products from nations with a positive political and economical
image, more desirable than from countries with a poorer image of these
factors (Usunier, J.C, 1996). It is obvious that a brand should try to exploit
the unique edge and positive image that it’s nationality may bring about,
since this can certainly simply the global branding process (Kapferer, J-P,
1996).
 &ULWLFDOUHIOHFWLRQVRQEUDQGLQJWKHRU\
Most branding theories concentrate on consumer branding, and to build a
tool to research and analyse industrial brand management, the consumer
theories required a complement of limited available theories about
industrial branding. Furthermore it was necessary to point out the particular
issues in global branding, since that relates to the problems branding faces
in different cultures.
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
44
The reason for employing two different theories regarding how brand
equity is created, is that neither Aaker’s, nor Melin’s way of viewing brand
equity is sufficient as a tool for analysing industrial branding in transition
economies when presented separately. The reason is that Aaker excludes
the substantial and concrete parts regarding how to strengthen a brand, i.e.
the product and the competition. Melin on the other hand is treating the
abstract part of brand equity rather ignorantly. The two models, therefore,
serve as complements to each other. However, the theories sometimes
overlap. This is most obvious when discussing the concept brand
association used by Aaker and brand identity used by Melin. The two
concepts are not identical but to avoid being repetitive, and to make a
distinct analysis only brand association will be discussed.
It is obvious that global branding is a delicate task, particularly in the field
of standardisation versus adaptation of the brand. Furthermore, the
understanding of global branding is particularly important when managing
a brand on Central and Eastern European markets, as this task requires a
particular understanding of how to balance standardisation versus
adaptation in conjunction with the specific cultural setting. The ideal
situation would be a consolidation of these two variables. Even though
standardisation brings about many advantages and it is important to have a
consistent brand image worldwide, the cultural difference’s impact on
consumers’ beliefs and attitudes toward a brand cannot be ignored.
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
45
 &KRLFHRIWKHRULHV
7RIDFLOLWDWHWKHXQGHUVWDQGLQJIRUWKHWKHRUHWLFDOIUDPHZRUNWKDWVHUYHVDV
DWRROLQWKHHPSLULFDOVHFWLRQDQH[SODQDWLRQRIWKHFKRLFHRIWKHRULHVDQG
KRZWKRVHWKHRULHVDUHOLQNHGWRJHWKHUZLOOEHSUHVHQWHGEHORZ
Figure 3.4: Illustration of the development of the theoretical framework.
Source: Own elaboration.
To be able to make some conclusions regarding how a brand of an
industrial product could be managed at a specific market, it is necessary to
create a theoretical framework that combines cultural and branding
theories. The purpose is not to come to conclusions regarding branding in
general, but to discuss industrial branding in particular. To cover all areas
that this thesis includes, it was necessary to build certain theories on each
other in order to create a focus that is at industrial brand management at
Central and Eastern European Markets.
It was natural to start with a cultural focus, since culture is a societal
parameter that influences all other factors in a society. The aim was to form
an understanding of how the attitudes towards a brand have developed and
Culture
Attitudes
Consumer Branding
Industrial Branding
Industrial Brand
Management on Central and
Eastern European Markets
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46
attitudes derived from the country culture serve as a natural link between
the culture and the perception of a brand. The second layer of theory
therefore consists of theories about attitudes. It was also necessary to use a
layer approach to branding theories, as theories about consumer branding
only partly describe industrial branding. Consumer branding does not point
out that there should usually be differences in how different markets should
be approached, so to emphasise this fact, theories about global branding are
included.
 /LQNDJHVEHWZHHQFXOWXUHDQGEUDQGLQJ
To simplify, it could be argued that the theoretical framework consists of
two main parts, culture and branding. Even though those parts are
presented separately, they are dependant on one another when discussing
how a brand should be managed at a particular market. A separate section
will be devoted to highlight the connection between the two theoretical
parts.
Figure 3.5: The country culture’s influence on branding.
Source: Jansson, H, 1999 (modified)
The MNC and how
 it’s brand is
perceived
Labour
Markets
Government Financial Markets
Product/
Service
Markets
Country
Culture
Legal system, Political System, Professional
and Interest Associations
Family
Religion
Business
Mores
Educa-
tion
    

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47
The country culture and the other institutions in a society are constantly
affecting each other and together they form a collective mind that could be
captured in and explained by the country culture. The arrow marked as
number one above emphasises the influence that culture has on a particular
market and the actors in this market. The general set of beliefs that is
specific for each country, is naturally also the base for the particular
attitudes at a certain product or service market. Some of the general
attitudes in a society are especially important to a specific product market
and those attitudes can be explained with regards to some cultural
parameters. All general attitudes are not of equal interest to a particular
product market though, and consequently not all cultural parameters are as
important to explain the attitudes at this market.
The attitudes among the actors in a certain business area are the foundation
for how an attitude towards, and the perception of, a certain brand are
formed. The actors in a particular market form a sub-culture that affects the
individual or corporate attitudes in the same way as the country culture
influences the sub-culture. Attitudes on the market where a company acts
have severe effects on how a company should and could act. This is due to
the fact that the company has to adjust their behaviour to the customers’
attitudes. The connection between the product market and a particular
company and the perception of this company’s brand, is marked out with
the second arrow in the figure above. The reason the arrow is pointing in
two directions is that it is not only the present attitudes on the truck market
that is the base for how a brand is perceived. The company also constantly
influences the attitudes on the market by communicating the brand in
different ways.
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48
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DQHYDOXDWLRQRIWKHYDOLGLW\DQGUHOLDELOLW\RIWKHVWXG\
 5HVHDUFK6WUDWHJ\
When choosing research strategy, several things should be considered.
These include what kinds of questions need to be answered, what degree of
control the investigator has over the behavioural events and whether the
study focus on contemporary or historical events. Yin discusses five
different research strategies and suggests which strategy should be used
depending on the characteristics of the study (Yin, R, 1994).
Figure 4.1: Relevant situations for different research strategies.
6WUDWHJ\ )RUPRIUHVHDUFK
TXHVWLRQ
5HTXLUHVFRQWURO
RYHUEHKDYLRXUDO
HYHQWV
)RFXVHVRQ
FRQWHPSRUDU\
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Experiment How, why Yes Yes
Survey Who, what, where,
how many, how
much
No Yes
Archival
analysis
Who, what, where,
how many, how
much
No Yes/no
History How, why No No
Case study How, why No Yes
Source: Yin, R, 1994
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49
Since we need answers on questions regarding issues that are not directly
observable, but are a part of people’s minds and thoughts, we need to ask
“how” and “why”. We will have no control over behavioural events and
furthermore we will study a current problem where the events take pace
now. With regards to those conditions we have chosen to conduct a case
study.
 &DVHVWXG\UHVHDUFKGHVLJQ
The research design is the fundamental framework of the research that
explains how the data that can answer the research problems will be
collected. A well-designed study ensures that the collected data is
complying with the objectives of the study (Kinnear, T, Taylor, J, 1996).
To fulfil the purpose of our thesis, we find it necessary to first select a
suitable case company. We also need to identify what type of research we
will conduct, to be able to set the goals for the study in order to understand
the characteristics of the data required. After identifying what kind of data
is necessary, we need to decide upon whether it is most suitable to collect a
quantitative or a qualitative material and how this material will be
collected. Thereafter suitable samples need to be selected in order to obtain
the information required.
 &DVH&RPSDQ\
A pilot case for a study can be chosen for various reasons. It could be that
the site could be geographically convenient, or it provides a vast amount of
documentation and data, or that it represents the most complicated of all
related cases, etc. (Yin R., 1994)
When we first decided to investigate the subject, industrial branding on
emerging markets, we had to start looking for a suitable industry and
company within this context. The company should preferably be a
company based in Sweden with operations on an emerging market and a
company that needed assistance in form of an investigation on how they
could strengthen their brand. The selection of Volvo Truck Corporation
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
50
gave our study the interesting approach we had been looking for, i.e. a
Swedish company with a globally well-known brand, but that needs to be
strengthened on Central and Eastern European market. Volvo Truck
represented a company that could supply us with material that covered our
problem and therefore serves as an adequate case company.
 7\SHRIUHVHDUFK
Marketing research can be classified into three different types, i.e.
exploratory, conclusive and performance-monitoring research. The type of
research that is most suitable for the situation is decided by where in the
decision-making process the company is. This also decides the objectives
of the research. The exploratory approach is used when the previous
knowledge of the subject is very limited and the research is characterised
by flexibility, to be able to capture also unexpected findings. It helps the
researcher to identify alternative courses of action and encourages
innovativeness. A conclusive research on the other hand, supplies the
company with information that can serve as a base for evaluation of already
set courses of action. Performance-monitoring research is used to explain
the outcome of a certain marketing programme (Kinnear, T, Taylor, J,
1996). The case study can be used to conduct all types of researches (Yin,
R, 1994).
The aim of our thesis is to come up with innovative ideas regarding how to
strengthen an industrial brand on Central and Eastern European Markets.
The information regarding how this could be done is limited, and there are
no obvious courses of action to evaluate, nor any previous action to
measure. Therefore, we have decided to use an exploratory type of research
in our thesis.
 4XDOLWDWLYHYHUVXVTXDQWLWDWLYHGDWD
The fact that there is a lack of theories explaining how an industrial brand
should be managed in Eastern Europe leads to a strategy that must employ
an inductive research strategy. An inductive research creates new
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
51
hypotheses instead of testing already existing ones. For this type of
research a qualitative approach is needed. A qualitative research usually
involves a study in the setting where the phenomenon is carried out, and is
commonly used when the researchers aim to find out about other cultures
and when they want to understand the people in that culture (Meriam, S,
1998).
The alternative to a qualitative research is quantitative research, which
intends to measure different parameters of a phenomenon and explain them
numerically. A qualitative method, on the other hand, explains the reality
with words and aims to explain how different parameters in a phenomenon
are interconnected (Meriam, S, 1998). We consider the attitudinal
perception of a brand to be influenced by the culture, where the customer
acts, and therefore find it logical to choose an approach that can describe
how the different parameters relate to each other. With this background, we
decided to use a qualitative research strategy and this will be explained
below.
 ’DWDFROOHFWLRQ
What sort of data and also how it is collected depends on what type of
study being conducted. Data collection can be divided into two major areas,
primary data and secondary data. Within this context, Merriam is
discussing three different data collection techniques for a case study
research. These techniques include conducting interviews, observing and
analysing documents. The author is implying that it is common for this type
of study to use one and preferably two, of these methods. The first two
forms of data collection gather first-hand information, while the third is
concerned with data that has been produced for other reasons than for the
specific study, i.e. secondary data. (Merriam S., 1998)
In our study, we have mainly conducted interviews and analysed
documents in order to find the relevant information. However, the third
method, observation is also used, especially in the investigation of the
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
52
cultural aspects, where it has been used as a kind of confirmation for the
information we received from our interviews.
 3ULPDU\GDWD
Primary data is defined as new data that is gathered to help solve the
problem at hand. (McDaniel, C, Gates, R., 1996)
Regarding interviews, the most frequently used technique is a person-to-
person interview. However, other forms like group interviews can also be
made. An observation takes place in an informal situation and also implies
a firsthand encounter with the factors studied rather than a second hand
opinion. (Merriam, S, 1998)
To be able to collect necessary information, it was important for us to
conduct interviews with customers, Volvo employees and other persons of
interest in Hungary and the Czech Republic. This enabled us to receive
firsthand information, which was particularly important concerning the
customer’s opinion.
In an interview, the interviewer can choose to use open-ended questions,
where the respondent can reply in her own words, or close-ended questions
where the respondent is asked to choose from a list of answers (McDaniel,
C, Gates, R., 1996). In our interviews we used open-ended questions, since
we believed that the nature of the subject called for the interviewees to be
able to express their perceptions and opinions freely, rather than choosing
answers from a list. The idea with the exploratory research approach is to
find new information and the questions should therefore not be restrictive.
One of the problems, however, with open-ended questions is that the
answers can be rather extensive and thereby it can be difficult to write
everything down. In order to solve this problem we made notes and
recorded all the interviews. This prevented us from missing important
comments and misinterpreting our notes.
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53
In order to obtain as accurate answers for the study, we had prepared three
different interview guides, all with questions that were directly derived
from the theoretical framework. We believed that it was important to have
one specific interview guide for the customers, one for the Volvo
employees and one for the people in the different cultural institutions, since
we wanted to gain somewhat different information from each of these
groups. The interview guides are presented in Appendix I.
In Hungary we conducted eight customer interviews, and in the Czech
Republic six customer interviews. The customers we interviewed
represented different customer segments in order to collect as
comprehensive material as possible. The customer interviews in the Czech
Republic were complemented with two interviews with drivers, as previous
interviews had led us to the conclusion that their point of view might also
be of interest. We interviewed the Managing Directors of Volvo Truck in
both Hungary and the Czech Republic and complemented their views with
interviews with sales staff in the respective countries. Furthermore, we
interviewed two employees at the Swedish Trade Council in Budapest, the
second secretary at the Swedish Embassy in Prague and a journalist,
stationed in Prague, at the Norwegian newspaper “Dagens Näringsliv”. The
Swedish Trade Council in Prague recommended the Norwegian journalist
to us, since he is knowledgeable within the area of Central and Eastern
European culture and economy.
 6HFRQGDU\GDWD
Secondary data are pieces of information that already have been collected
previously and only might be relevant to the study. The fact that the
secondary material is not always exactly suitable and applicable to the
specific study conducted can be a problem, and sometimes it can also be
difficult to value the reliability of a secondary source (Lekvall, P, Wahlbin
C, 1993).
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
54
According to Merriam, the analysis of documents includes the mining of
data from public records, personal documents, physical material, on-line
data sources etc. The author also states that even though these data sources
sometimes may be fragmented or do not perfectly fit into the conceptual
framework of the research, they can still be very useful for the study
(Merriam, S, 1998).
The secondary sources we have used in this thesis contain books, articles,
dissertations and the Internet. We have also obtained figures and other kind
of company information, in forms of copied slides, newsletters and other
written material, from Volvo Truck Corporation in Sweden, Hungary and
the Czech Republic.
In the Theory chapter, we used an early publication of Hofstede’s
“Culture’s consequences – International differences in work-related
values”. In this publication, the cultural parameter of time was not
discussed. However, by also using the theories of Trompenaars, this area
has still been covered.
The data that have been used in the cultural analysis chapter has both the
character of secondary and primary data, since we believe this approach
has enabled us to obtain the most valid information. We first used
secondary data, in the form of books, articles and Internet sites, in order to
acquire the necessary background for both our main thesis work and our
interviews. After the completion of the interviews we have also used the
firsthand data that we gained, which has both confirmed our existing
information and filled the gaps.
 6DPSOLQJ
It is important that the samples selected for examination in a research are
representative of the topic studied, otherwise there is a significant risk for
biases in the final result. It is not only the quantity of the samples that is
important for a valid study, but also on what grounds the samples have
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
55
been selected (Lekvall, P, Wahlbin, C, 1993). Samples can be either
randomly drawn or conducted in a non-random way. According to
Dahmström, the random samples are superior when there is a high demand
for precision. Occasionally, time and matters of convenience do not
motivate a random sampling (Dahmström, K, 1991). According to Lekvall
and Wahlbin, sometimes selecting samples on a convenient basis is done
instead of using a random approach. However, this does not mean that this
kind of approach is used out of laziness, instead it is often done due to the
cost and time restrictions of a study (Lekvall, P, Wahlbin, C, 1993).
Regarding selection of countries, we choose a non-random sampling since
we needed a limited number of countries that were representative for
Central and Eastern Europe. The selection of Hungary and the Czech
Republic was also done on the basis of time limits, the extensiveness of the
thesis and on requests from Volvo Truck. Although these two countries’
societal and economical conditions are ahead of other countries’ in the
region, we still believe that they can function as illustrative samples in the
context of this study. This is mainly due to the fact that the countries that
are defined as Central and Eastern European have a commonality in that
they are former communist countries. They all obeyed Moscow, and it is
very likely that these countries will eventually undergo the same kind of
development as Hungary and the Czech Republic, but at a different pace.
Regarding the geographical sampling within these countries, we selected
the countries’ capitals in this sampling basis due to our time and costs
limits. Even though it is likely that there could be differences between the
urban and rural areas in these countries concerning the truck business, we
still believe that our study in Prague and Budapest is sufficient in order to
come to a satisfactory result.
The respondents were selected to create a representative and
comprehensive picture and the method used was non-random. The careful
selection was done on the basis of having the whole spectrum of opinions
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
56
from all the customer groups. In order to get a broader opinion within this
subject, we also evaluated the importance of interviewing employees at
Volvo and persons at cultural institutions in Hungary and the Czech
Republic. Within these groups, however, we had to use a convenient
approach, since we could not freely choose who to interview and when, due
to the time limits and the availability of interviewees.
 9DOLGLW\DQGUHOLDELOLW\
To evaluate a research it is common to use the concepts validity and
reliability. According to Yin, three different measures are used to evaluate
a case study, i.e. construct validity, external validity and reliability (Yin, R,
1994). Merriam, on the other hand discusses the three concepts internal
validity, reliability and external validity (Merriam, S, 1998). Also Yin uses
the concept internal validity, but in a different context. Internal validity to
him is if a causal relationship can be detected. This type of validity will not
be evaluated here since it is only relevant for explanatory or causal studies.
Otherwise, the two sets of concepts are very similar since both authors
argue that reliability considers if the same result would be the outcome of a
repeated study and external validity regards whether or not the result could
be generalised.
The concept of internal validity used by Merriam, and the concept of
construct validity applied by Yin, also have similarities. Construct validity
focuses on the construction of the research, such as the instrument for the
investigation, whereas internal validity aims more generally at measuring if
the researcher is capturing what is really exposed to him or her. No matter
if the focus is on the actual construction of the investigation or of a more
general character, the same issues will be evaluated, i.e. if the researcher is
measuring what he or she intends to measure. Below, we will discuss each
of the concepts in relation to our study.
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57
 &RQVWUXFW,QWHUQDOYDOLGLW\
There are a number of strategies a researcher can use to improve the
construct and internal validity (Merriam, S, 1998, Yin, R, 1994). We have
used four of them.
1. Other people should be consulted regarding the construction of
questions, definition of concepts, etc.
2. The researchers and investigators can use many sources or methods
to collect the information required. This is called triangulating
methods, and if successful the findings support each other.
3. The researchers can ask for other colleagues to comment on the
findings throughout the work.
4. The researchers should thoroughly describe how they came to their
conclusions to facilitate easier understanding.
To improve the construct validity, we developed our interview guide
directly from our theoretical framework. This was to ensure that we would
ask questions that really were relevant to our problem. The interview guide
was discussed with our supervisor in order to avoid asking irrelevant
questions and so that relevant questions were not forgotten. We also
discussed what was meant by the questions in order to minimise the risk of
asking leading questions or questions that could be interpreted in more than
one way. We also consulted an employee at Volvo Truck who is working
professionally with market investigations. We had discussions regarding
the same issues that we had with our supervisor. The origin and the
development of the interview guide, points at construct validity in our
results.
To collect our material, both about cultural aspects and industry specifics,
we have triangulated methods. Information about the country cultures has
been confirmed by secondary material, as well as interviews and
observations. Furthermore, we have been two people to discuss the findings
in cases of obscurity.
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58
Regarding the material concerning the attitudes towards truck brands in
Hungary and the Czech Republic, we have also used triangulation in the
sense that we have not only interviewed the customers directly, but also
confirmed the findings with people at Volvo that are constantly in contact
with the customers and therefore have a certain understanding for their
opinions. As mentioned before, to minimize the risk for misinterpretations
we both taped the interviews and took notes during them. This ensured that
we could later discuss what the respondents had said, and also that we did
not miss any important information and thereby interpreted the findings
falsely. Something that could have influenced the internal validity
negatively is that, in some cases, an interpreter was used. The interpreters
were not professional, but employees at Volvo Truck. It is possible that the
interpreters put some of their own evaluations into the questions and
answers. Some of the respondents might not have been completely honest,
for fear that their honest answers might influence their relationship with
Volvo Truck. We did however inform the respondents that their answers
would be treated confidentially and we paid attention to any sign of the
respondents being dishonest.
Throughout our stay in Hungary and the Czech Republic, we discussed our
findings with experienced staff at Volvo Truck in the respective countries.
The general character of our results equalised with their experiences even
though they were not aware of all the details.
Our methodology chapter and the presentation of the results and the
analysis facilitates the readers’ understanding of how we came to our
conclusion.
The methods we have used to improve the internal validity should have
enhanced the fact that we do measure what we think that we measure, and
want to measure. The main problem regarding the internal validity is that in
some cases we used an interpreter. How that affected the internal validity is
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59
out of our control, but we hope that the instructions we gave influenced the
matter in a positive way.
 5HOLDELOLW\
It is difficult to discuss reliability in case studies, since the world is not
static. Whether you reach the same result on another occasion or not is
therefore not relevant. Furthermore it is impossible to isolate parameters in
a case study, to be able to measure a phenomenon independently of the
context. On the other hand it is not necessarily the uncovered truth that is
most interesting, but rather an understanding of how people experience
their reality (Merriam, S, 1998). Our aim was to study the attitudes towards
truck brands of the customers in this particular industry and to put this in
the context of the country culture. As we were interested in a societal
phenomenon, the results we got cannot be replicated.
This does not mean, however, that the reliability is low. Some of the
measures to achieve internal validity are also relevant for the reliability.
Factors that, according to Merriam, point at reliability and we have used
are that we have explained the theory behind our study and used method
triangulation. According to Meriam, it could also be argued that there is
reliability if there is a consistency in the findings from different
respondents (Merriam, S, 1998) and this is something that we have detected
in our findings.
 ([WHUQDOYDOLGLW\
To be able to generalise the findings, there needs to be an equivalence
between the sample and the population and there also needs to be an
internal validity (Merriam, S, 1998). We believe that our study fulfil these
requirements. There are, however, according to Merriam, different opinions
regarding whether it is possible to generalise from a case study or not. This
is because the aim is to understand specifics and not general opinions
shared by a wider public. However, the deep knowledge offers possibilities
to explain also other occasions, even though the findings should be
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60
regarded as guidelines and work for context bound extrapolation, instead of
generalisation. It is up to the reader to judge which results can be used in
another setting.
There are, however, some measures that a researcher can take to increase
the possibilities to generalise. There should be a thorough description of the
situation, so that that the reader will be able to compare the situation of the
study with that situation to which the findings should be applied. The
description should also include an explanation of how representative the
case is. Furthermore, the use of more than one case increases the
generalisation possibility (Merriam, S, 1998). We have made a rather
extensive explanation of the context in the country cases and therefore
believe that it should be achievable for the reader to judge if the situation
could be extrapolated to anther setting.  We have made the case study in
both Hungary and the Czech Republic and believe that the findings that are
valid for both countries are better objects for generalisation than those that
are country specific.
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The chapter has been divided into three main parts where the first part
describes main important events in Hungary’s and the Czech Republic’s
history. To highlight the impact the communist system had and still has on
societies, the second part has been entirely devoted to describing the
communist period. The evolvement of Hungary and the Czech Republic’s
national cultures is then concluded in the last part of this section. Due to the
fact that all interviews are confidential, no specific references are given.
With the assistance of the theories of Hofstede and Trompenaars, the last
part aims at scrutinising the different cultural parameters that are most
likely to be important to recognise in order to employ successful brand
management within these countries. The third part ends with a conclusion
that identifies what key words that are especially central in the next
chapter, the analysis of the cultural influences on the Volvo brand.
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Figure 5.1: Map over Hungary
Source: www.odci.gov, 991016
Hungary, as a country, has gone through many transformations during the
centuries; it has experienced eras of greatness and times of great defeat,
where each epoch’s influence has affected the country’s boarders and its
inhabitants. Even though the Hungarians have experienced times of
greatness, the countries’ history during the last four hundred years has
mostly been characterised by invasions and oppression, a fact that can
explain the collective minds of the people today. Taking this into
consideration, it is no wonder that the national anthem describes the
Hungarians as “people torn by fate” (Library of Nations, 1986 and
www.fsz.bme.hu, 991016).
Despite the fact that the Hungarians are a mixture of various ethnic groups
originating from, among others, the Huns and Avars, Magyars, Slavs,
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63
Tatars, Turks, Romanians, Germans, Jews, Gypsies, they do not have an
identity crisis. They know how they are and they are proud of their long,
but dramatic history (Richmond, Y, 1995).
Between 1000 and 1526 Hungary was an independent kingdom, although
the period was characterised by both internal and external turbulence.
Under the reign of Matthias I, in the 15th century, Hungary became a great
power, ruling territories like Bohemia and Schlesien with Vienna as
residential city. During this era, Hungary was not only ruling a large part of
Europe, but also had a prosperous political, cultural and economical life.
The Hungarians, as the proud and nationalistic people they are, remember
this period of greatness and independence quite well. The fact that the
Hungarians have actually been a great power once, ruling others instead of
being ruled, seems to be an important factor for them (Sugar, P, Hanák, P,
Frank, T, 1990 and Interviews).
However, in the 16th century, the invasions of the country started. First it
was the Turks that attacked Hungary in 1526, and in 1699 Hungary came
into the hands of the Habsburgs. Between 1699-1867 Hungary was ruled
from Vienna as a kind of colony, which severely hampered Hungary’s
economical recovery. However, in 1848 the Hungarian revolution and the
war of independence towards the Austrian monarchy began. The revolution
led to the Compromise Agreement in 1867 with Emperor Francis Joseph,
making Hungary and Austria a double monarchy (Sugar, P, Hanák, P,
Frank, T, 1990). This revolution is another event in the Hungarians history
that is, to a large extent, remembered and acknowledged by the people,
which highlights the Hungarians’ yearning for freedom.
In 1918, the Hungarians once again faced defeat and misery, when Austria-
Hungary found themselves on the loosing side in the end of the First World
War. Due to this event, the double monarchy was dissolved. The peace
time after the war was very hard for the Hungarians, and in 1920 the
country was forced to give up more than two-thirds of their territory and
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
64
three fifths of the population. Due to the so-called ”red” and then the
”white” terror during the post war period many Hungarians, particularly
Jews, flew from the country (Sugar, P, Hanák, P, Frank, T, 1990 and
Interviews).
During the 1930s, Hungary was approaching Germany, both politically and
economically. With German support, Hungary was able to take back lost
territories like Slovakia, Transylvania and Vojvodina. This close
connection between the countries also led to the fact that Hungary joined
the German side in the Second World War, and thereby were defeated once
again. In the peace negotiations, Hungary belonged to the Soviet sphere of
interest, and in 1949 the country became a “people’s republic”. Once again
the Hungarians found themselves in the hands of hard and uncompromising
oppressors, and pretty soon it became obvious that Russians’ methods were
also going to change the already worn out Hungarian society. Due to the
fact that the Soviet influenced period has affected the country and the
people in such a devastating way, permeating the whole society, the
communist period of the Hungarian history will have a part of its own
(Library of Nations, 1986 and Sugar, P, Hanák, P, Frank, T, 1990).
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
65
 +LVWRU\RIWKH&]HFK5HSXEOLF
Figure 5.2: Map over the Czech Republic
Source: www.odci.gov, 991016
The Czech Republic is another country within the former Eastern Bloc that
has undergone many transformations during the centuries. The Czechs have
also experienced oppression from different rulers, and there are a number
of historical events in the Czech history that have influenced the society
and the collective mind of the people today.
The ancestors of the Czechs were the tribes that settled in Bohemia and
Moravia in the fifth century. Although the Czechs have mainly been
influenced by the Austrian and the Germans, they do belong to the Slavic
people. Also, when discussing the history of the Czech Republic, it is
important to recognise that even though the Czechs and the Slovaks are
many ways similar, and have a related history, they are two different
people, and this chapter will focus on the Czechs and their past (Richmond,
Y, 1995).
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
66
From the 16th century to 1989, the Czech lands were almost exclusively
controlled by some other state and this has led to the fact that the Czechs
today put great pride in their freedom. One of the most important eras in
the Czech history began in 1526 and went on for more than 300 years. This
was when the Habsburgs controlled the land. During those years
Catholicism was firmly reinstated, German became the official language in
most business endeavours, and politics were controlled from Vienna. In the
middle of the 18th century, nationalism was reborn in Czech and a
movement towards independence developed with Tomás Masaryk by the
turn of the century (Nollen, T, 1997).
In October 1918, Masaryk founded Czechoslovakia, and he has become
something of a national hero, since he represents freedom for the first time
for a long period of time. The time between the two World Wars was a
very prosperous time for Czechoslovakia and the country ranked among the
most industrialised, economically advanced, and with the one of the most
advanced parliamentary democracies in the whole of Europe
(PriceWaterhouseCoopers, 1999).
However, in the Munich agreement in 1938, Czechoslovakia was broken
up and German, Polish and Hungarian claims on parts of the country were
acknowledged. In March 1939, a separate Slovak state was established,
controlled by Nazis and this was followed by an immediate invasion of the
Czech lands by Germany. After the Second World War, however, most of
former Czechoslovakia was restored as a democratic state. The Second
World War was followed by a period when the Communist Party came to
grow very strong, and in 1948 the non-communist parties resigned from the
coalition after unsuccessful attempts to force the Communists from power.
This was a beginning of a forty years period that led to a significant
rearranging of the society and the mentality of the people, a period that will
be especially described and explained in the communist part of this chapter
(Nollen, T, 1997 and PriceWaterhouseCoopers, 1999).
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67
 +LVWRULFDOFRPSDULVRQ
As already mentioned, both Hungary and the Czech Republic have a long
history of being puppet states in one way or another to various different
rulers. In hindsight of their history, it is easy to understand the Hungarians’
and the Czechs’ nationalism and the feeling of pride they have today for
their newly liberated nations. During the centuries, these people have been
forced to constantly adapt to the various artifices and regulations that the
present ruler has come up with.
Before the Communists came into power, there have been two main nations
that have affected the Hungarian and the Czech society substantially;
namely the Austrians and the Germans. Both Hungary and the Czech
Republic became, by force, incorporated into the Habsburg Empire and
thereby had to adapt to the Austrian culture. After the liberation from the
Austrians, a short period of freedom was experienced before the countries
once again became invaded, this time by the Germans and the Nazis.
The Germans have also had an impact on the Hungarian and the Czech
culture, and still have, to a larger extent than the Austrians. It seems as if,
even though both the Hungarians and the Czechs have a sort of love-hate
relationship with their big and powerful neighbour in the West, they prefer
the Germans to the Austrians. One factor that could explain this is the fact
that Germany is both Hungary’s and the Czech Republic’s largest trading
partner, making them quite dependent on the Germans, whether they like it
or not. Here, it seems like it is the Czechs that dislike the Germans and
what they stand for the most, and implying that the Czechs are German
oriented makes them quite offended (Nollen, T, 1997 and Interviews).
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68
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After the incorporation into the Soviet communist sphere, both Hungary
and Czechoslovakia underwent a complete transformation into Soviet
puppet states. Here, the Soviet Union had a harder time to bring
Czechoslovakia under their absolute control, than they had with Hungary.
This can be explained by the fact that the Czechs had experienced a period
of democracy before the Second World War when the country was
prospering, and therefore the leaders of Czechoslovakia made serious
attempts to keep the country within the Western sphere. These attempts
were, however, abruptly and violently ended. In order to make an example,
several party officials were executed after a show trial in 1952, a
demonstration of power that became common in the post-war Soviet bloc.
The fact that the Soviet Union had more difficulties incorporating the
Czechs into a new political system, compared to Hungary, highlights the
Czechs’ relatively high resistance towards changes. Today, this high
resistance to change has become an obstacle for the communist
deprogramming in the Czech Republic, which could be one main
explanation for the fact that they are lagging behind the Hungarians in the
western integration (Library of nations, 1986).
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69
During almost a decade, Hungary and Czechoslovakia underwent Stalin’s
terror and the local communist machinery experienced his agents’ brutal
methods in their struggle to tighten Soviet’s control over its satellite
countries. The agriculture was ruthlessly collectivised, all industries came
under state control and the Soviet Five Year Plan with all its implications
was implemented. Within a few years, both Hungary and Czechoslovakia
had a planned economy designed and imposed by Moscow (Library of
Nations 1986).
These Five Year Plans meant a central planning system that was
characterised by an unwieldy bureaucratic and autocratic system. The state
enterprises, and thereby its directors, were responsible for delivering a
certain quantity of outputs to the appropriate ministry according to the
Plan, nothing more and nothing less. These Five Year Plans were founded
on communist political priorities, and they thereby did not promote
profitable or effective thinking. The laws of supply and demand, in the
western definition, did not apply at all in the Eastern Bloc.
As a consequence, the Communist countries suffered a constant shortage in
supply of products, and empty store shelves were a rule rather than an
exception. Many times people had to queue up for hours in front of the
stores in order to buy a piece of bread, and often they still came home
empty handed. In other words, people were happy with what they could
get, i.e. choosing among different brands was unthinkable and the western
phenomenon of branding did not even exist. An obvious effect derived
from the planning system is the fear of being short of something, a fear that
still is present in the Hungarians’ and the Czechs’ minds today. The people
are still trying to avoid this uncertainty of not having all that they need
(Holden, N, Cooper, C, Carr, J, 1998 and Interviews).
One positive thing with this system, though, was the fact that the prices for
the products that did exist were low. All people in the communist countries
were forced to have a job, the health care was free and people could afford
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
70
to buy the communist produced products. Today, however, the market
economy has led to substantially increased prices and therefore the people
with low salaries or no income at all have difficulties buying these
products.
As mentioned before, during the first decade of communism, Hungary and
the Czech Republic experienced Stalin’s terror. Stalin has been known as
“the man of steel” and his cruel and vicious ruling methods were feared
throughout the Eastern Bloc. These methods’ intentions were to break
down the trust between the people, which eventually made them modest
and dependent on the Communist authorities’ arbitrariness. In Hungary, for
example, opposition was dealt with in the best Stalin methods by the
notorious state security police force, ÁVO, who conducted midnight
arrests, brutal questionings and cellar executions as specialities (Holden, N,
Cooper C, Carr J, 1998, Library of Nations, 1986 and Interviews).
 7KHGHFDGHVRIWKHUHYROXWLRQVDQGEORRG\GHIHDWV
When Stalin died in March 1953 the conditions in both the Soviet Union
and the puppet states improved substantially. However, it would soon
become quite clear that the satellite countries still had to stay in Moscow’s
leash and were not permitted to leave the Warsaw pact, established in 1955.
Nevertheless, the discontent with the harsh communist system led to revolts
in both Hungary and the Czech Republic.
In Hungary the old conservative communist leader, Mr. Mátyás Rákosi,
was replaced by a more liberate leader, Mr Imre Nagy. However, due to his
reform friendly leadership Mr Nagy became dismissed in 1955 and
Hungary was under the threat of attaining Stalinists ruling again. The
discontent with the Communist leaders that followed, together with
revolutionary movements in the Eastern Bloc, led to the Revolution in
Hungary in 1956, an important event in the Hungarian history. By that
time, Mr Nagy had retained his position and argued for a withdrawal from
the Warsaw pact. This was too much liberation for the rulers in Moscow,
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
71
and military troops were sent to Budapest. Both the Hungarian revolution
and Mr Nagy received a bloody end and more than 200,000 Hungarians
fled to the West before the boarders were closed. (Sugar, P, Hanák, P,
Frank, T, 1990, Library of Nations, 1986 and Interviews).
Twelve years later, in March of 1968, it was Czechoslovakia’s people’s
turn to express their discontent with the communist system. The reformer
Alexander Dubcek became the President and he tried to combine socialist
economic principles with democracy using the slogan “Socialism with a
human face”. The actions were not looked upon with blessings by the
authorities in Moscow, since they feared that the reforms would spread
eastwards. When they did not manage to convince Prague to stop the
reforms, the Warsaw Pact tanks invaded Czechoslovakia. This period is
called the Prague Spring and the outcome was that Czechoslovakia had no
alternative but to conform to Soviet standards. In the aftermath of
revolution, the Prague Spring participants received reprisals in forms of job
losses, exclusion from the Communist party and placements under
surveillance. Suddenly half a million Czechs became “non-persons” and
secret policemen and government censors were back in business. The trust
for the authorities continued to be undermined and people were afraid to
officially resist or to criticise the system, since they knew they could expect
serious reprisals from the secret police, which had a register of dissidents
and informers in the society as a help (Library of Nations, 1986).
 7KHODVWGHFDGHVRIFRPPXQLVP–PRYHPHQWVWRZDUGVOLEHUDWLRQ
Even though the revolts ended in bitter defeat, the Hungarians and the
Czechs still continued to search for the means to obtain more breathing
space from the Soviet Union. In this sense, it is obvious that the
Hungarians’ and the Czechs’ pride and struggle for freedom was so strong
that they just tried another path to gain freedom, a more peaceful and
cautious path than the revolutions had been (Library of Nations, 1986).
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
72
During these decades, it was Hungary that managed to gain the best
political and economical achievements, being the success story in the
Eastern Bloc. Even though Hungary’s new leader, Mr Kádar, had been
supporting the invasion of Soviet troops during the revolution, he adopted a
more liberal approach when his power had been consolidated. In 1968, “the
New Economic Mechanism” decentralised the Hungarian production. This
led to that the Hungarian industry acquiring features of free determination
of prices and market economy. Hungary was characterised by the so-called
“goulash communism” and was called “the happy barrack in the camp”
(Library of Nations, 1986 and Interviews).
In accordance with the liberation tendencies in the Soviet Union in 1985,
Hungary obtained more space for reforms and in 1989, the Hungarian
Communist Party abolished itself. The new funeral of the hero from the
Revolution in 1956, Mr. Nagy, was another reason for the communist’s
resignations. The communists were afraid that a new revolution in
connection with the funeral and in order to save themselves they started to
negotiate with the opposition. Hungary was declared republic on the 23rd of
October in 1989 and the spring after Hungary had its first free elections
(Library of Nations, 1986 and Hansson, W, 991108).
In Czechoslovakia, there was still a small dissident reform group remaining
from the Prague Spring period, and in 1977 their statement of democratic
principles and human rights known as Charter 77 appeared in West German
newspapers.  The original manifest was signed by 243 persons like artists
and other prominent persons, and by 1985 nearly 1200 Czechoslovakians
had signed the charter. However, the dissident in opposition to the
government and the independent activities were fairly limited to a small
segment of the population. In other words, the Communist party in Prague
was more successful in preserving the system after the revolution and made
more attempts to keep it than the Hungarian communists did (Library of
Nations, 1986, Nollen, T, 1997 and www.lcweb2.loc.gov, 991119).
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
73
However, with the fall the fall of the Berlin Wall and Gorbachev’s open
distance taking from the invasion of the Warsaw Pact in 1968, the
Czechoslovaks gained more legitimacy in their struggle for freedom, and
among other things, the Velvet Revolution emerged. The revolution was
led by Václaw Havel, who was also elected president in the first free
elections in 44 years, i.e. July 1990. His thoughts were at that time nothing
but appreciated by the people and he was considered to be somewhat a
national hero (Nollen, T, 1997).
 &RSLQJZLWKIUHHGRP
Even though Stalin died almost fifty years ago, he and his followers’
wicked deeds still make themselves remembered in the former communist
societies and the collective minds of the people within it. During the
nineties both Hungary and the Czech Republic have been struggling with
the different consequences of events that occur in the transformation from a
planned economy ruled by fear, to a market economy with a democratic
government. In this respect, Hungary has come further then the Czech
Republic, although the Czechs are also coping quite well with their
relatively newly won freedom (Holden, N., Cooper C. and Carr J., 1998,
and Interviews).
Hungary formally changed its political system on the 23rd of October 1989,
when the country went from being a socialistic “people’s republic” to
becoming a parliamentary democracy.   There are two main reasons that the
transformation of Hungary, from a communist country to democracy, went
so well and peacefully. Firstly, the Hungarian people had a quite long time
to adapt themselves to a new political and economical system compare to
other countries in the Eastern Bloc, i.e. they were relatively prepared when
the Berlin wall fell. Secondly, there has been an extensive privatisation of
the Hungarian state owned companies and banks, and the Hungarians that
had good business ideas were able to lend money. Since there were no
violent demonstrations for freedom in 1989 in Hungary (which was the
case in many other Eastern Bloc countries) no batons were used, nor were
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
74
shots fired during the last days of communism either. The Hungarians did
not see meaning in celebrating the fall of Communism, since Communism,
for them, had been dead for a long time.
Even though Hungary is one of the countries that has developed most
successfully after the communist fall, the transformation has not been
completely painless. For example, at least twenty per cent of the population
has experienced a decreased standard of living and the rift between the
classes in the country is growing (Hansson, W, 991108 and Interviews).
In Czechoslovakia the decade began with the fact that the Czech and the
Slovak parts of the country did not completely agree politically, and the
need for a split urged after the elections in 1992. The market oriented party
in coalition with the Christian Democratic Party gained the most votes in
the Czech lands, and the national party HZDS, arguing for a slower pace in
the economic reforms got a clear majority in the Slovak Republic. Long
negotiations therefore led to the formation of two independent states in
1993, and the Velvet Revolution went into the books as one of the most
peaceful revolutions in history (Nollen, T, 1997).
Due to the communist leaders’ eagerness to “preserve status quo” in
Czechoslovakia, the Czechs were not as well prepared for market economy
and all its consequences as the Hungarians were. One reason that the Czech
Republic is lagging behind Hungary in its economical development, is that
the privatisation of the state owned companies has not succeeded as well as
expected. The biggest mistake within this context is the fact that the Czech
banks, up until recently, have still been in the hands of the state. However,
one positive fact is that the Czech Republic has had significantly lower
unemployment than many other former communist countries, although this
has caused the Czech state to be short of funding. Due the fact that the
economical development has not been as successful as expected, the Czech
people still have shared opinions regarding what political string is
preferred. The positive feeling of freedom in 1989 is blurred by the fact
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75
that the social clashes are continuously increasing and that a large part of
the population has a much worse reality today, than during communism
(Hansson, W, 991106, www.lcweb2.loc.gov, 991119 and Interviews).
 &RQFOXVLRQ RI +XQJDU\¶V DQG WKH &]HFK 5HSXEOLF¶V
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A conclusion that can be drawn from the cultural analysis of Hungary and
the Czech Republic’s pasts is that the culture of a society evolves over
time. In this development some parts of the culture disappears naturally or
by force, while other parts accelerates and develop into other shapes. Both
Hungary and the Czech Republic have, due to their dramatic historical
background, national cultures that have been strongly influenced from
various cultures over the centuries. However, these outside influences
escalated when the Communists came into power, and with forty years of
communist ruling, the Hungarian’s and the Czech’s national cultures were
very much inhibited and destroyed. Due to the fact that the system’s
mission was to erase their satellite state’s own manners and customs in
order to turn all the people into “homo Sovieticus”, it is no wonder that an
extensive part of Hungary’s and the Czech Republic’s previous national
culture came to naught.
In the transition period that Hungary and the Czech Republic find
themselves today, efforts are made in order to cut loose from the ties that
their cultures have with the communist past. It is probably going to take a
long time to do this, although, these two countries have been lucky enough
to not become too damaged by the system, compared to other countries in
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
76
the former Eastern Bloc, leaving them not too tainted for a recovery within
the foreseeable future.
As Figure 5.3 illustrates, the transition period that Hungary and the Czech
Republic belongs to at present, is moving from a communist influenced
culture that, to a certain extent, still had elements of the previous national
culture, towards new national culture. Within this transition period, the
original national culture, together with a more western influenced culture,
are continuously pushing out the communist culture in order to evolve into
a new national culture. However, since the communist culture made great
efforts to push out the national culture, the affect on the societies was so
severe that there will continue to be influences from the communist culture
for a long period of time. However, the new national culture will eventually
shake of most of its communist past and turn into a modern, more
westernised culture that still has important elements from the countries’
previous national history.
Figure 5.3: Cultural evolution
3UH&RPPXQLVWSHULRG &RPPXQLVWSHULRG  7UDQVLWLRQ
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Source: Own elaboration
 &XOWXUDODQDO\VLV
Not all cultural aspects are of equal importance to how relevant attitudes
are formed at the truck market in Hungary and the Czech Republic. As
mentioned, the most severe impacts from the background of those countries
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77
derive from the fact that the two countries have been ruled by several
invaders, where Soviet, as the last invader, managed to change the society
from top to bottom in line with the communist system. What the Soviet
system meant concretely was described in the previous section, and this
part consequently aims at analysing cultural parameters with regards to the
communism and other historical events of particular importance. In this
part, the aim is to link together causes and consequences, in order to be
able to analyse how the causes of the history affects peoples’ attitudes
towards brands today.
Experiences in Hungary and the Czech Republic have shown that there are
five cultural parameters that explain attitudes and behaviours that are
relevant to this study. Also, other parameters could have been used as
analysis tools, but to maintain a certain focus, only the five most significant
cultural parameters will be analysed.  The parameters that are chosen as a
base for the analysis are Uncertainty avoidance, Power distance,
Individualism versus collectivism, Universalism versus particularism and
Specific versus diffuse relationships. It could be argued that also other
parameters are of importance, but to reach a deep, rather than wide
analysis, a limitation regarding the number of parameters was made. For
example, the parameter regarding time could have been included. However,
the most important aspects of the excluded parameters are brought up in the
context of the included parameters. Unless stated the following analysis is
based on interviews and conclusions drawn from the previous cultural
analysis part.
 8QFHUWDLQW\DYRLGDQFH
The Czech and Hungarian history is characterised by a lot of uncertainty,
not only in the past but also in recent history. The sources of uncertainty
that have influenced the people in those countries are though the
communist system and the rapid changes that have followed after the fall of
the communism. It should not be neglected though, that also the many
periods when those countries have been controlled by other states have also
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
78
contributed to the uncertainty in the countries. A consequence of the many
occupations is that the people have such a desire for freedom, a
circumstance that contributes to uncertainty avoidance as freedom offers
own control. However, the communist system taught people certain ways
to handle uncertainty and this is still deeply routed in the minds of people.
This means that the uncertainty that derives from the recent changes in the
society is handled in the same manner as during the communist era.
The rapid changes in the society since the fall of the communism have led
to people having problems with long-term planning. It is hard to foresee
what will happen next month or even tomorrow and most people therefore
use a short time perspective.
Another source of uncertainty regarding the near future situation was the
Five Year Plans. The system caused a shortage of food and goods, and
people bought what was in the stores even though it might not have
fulfilled their demands completely, for fear of not getting anything the next
day. People were more or less forced to act on a day-to-day basis and this
routed the short-sightedness even deeper. There was not only a lack of
supply in general, but also a lack of branded goods. This has led to people
in the former communist countries being unused to brands and having little
understanding for the fact that one of the functions of a brand is that it
represents and guarantees a certain standard.
The Five Year Plans also made the people forget about qualitative
approaches since the system advocated a certain amount of output, but did
not measure the quality. People in former communist countries are aware
that products produced during the communist era did not have as high
quality as products produced in the west. Most Czechs say that the
Communist way of doing business is only a memory, but the regime has
had a severe effect on the mentality of the Czech people and also on their
way of doing things. Quality, efficiency and customer service were
concepts that practically did not exist from 1948 to 1989, meaning that the
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79
Czechs are still relearning about those business techniques (Nollen, T,
1997). Products originating from western countries do, as a consequence,
represent high quality to people in Central and Eastern Europe.
The fact that Central and Eastern Europeans are not used to brands and at
the same time consider western made products to represent quality has led
to the fact that the country of origin is at least as important as the brand
itself to people in this area. To them, a western originating product offers a
guarantee that reduces the uncertainty.
Short-sightedness does, though, create uncertainty, as it leaves the future
that is beyond the planned period blank. The approach of being short-
sighted is therefore both a way of handling uncertainty and a source from
where it derives. The impossibility to plan and control what would happen
in the future, increased the importance of personal relationships. This was
due to the fact that trust in one and another reduced uncertainty and
increased the possibility of influence and thereby also control. Short-
sightedness was not the only reason for the increased importance of
personal relationships though, but this sprang from many sources. The
importance of personal relationships will therefore be particularly
examined when discussing universalism versus particularism.
 3RZHUGLVWDQFH
The fact that autocratic leaders from various cultures throughout the
centuries have ruled both the Hungarians and the Czechs indicates that the
power distance between people and leaders was already high when the
Soviet Union entered the scene after the Second World War. With the
central planning system and its entire means, Moscow managed to continue
to keep the power distance high between the rulers and the people. In the
state owned enterprises, the workers tasks were only to carry out the orders
they were given and were not supposed to think for themselves. This has
had a serious impact on the Hungarians’ and the Czechs’ working mentality
today.
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80
Many companies in Hungary and the Czech Republic still have a high
hierarchical structure with an autocratic style of management where the
manager’s orders are unquestionable. A consequence of these
unquestionable orders is that it is not uncommon that employees in these
countries agree on executing the manager’s order, but do something else
instead. Furthermore people partly lost their ability to think for themselves,
as they were only supposed to execute orders. The managers in the
communist system did not encourage their employees to take initiatives
above the completion of the production goal and many people in Hungary
and the Czech Republic therefore still do not see the meaning of taking
initiatives and doing anything above the concrete orders they receive.
In the Czech Republic the people have respect for authority, but that does
not stop some of them from talking behind their manger’s back and only
doing what they are supposed to in the presence of the authority. Also, the
power distance in the country can be said to be high, since some Czechs
believe that important business deals should only be a matter for the
highest managers in the company. Sometimes high managers refuses to
deal with representatives from another company that are lower ranked. This
highlights the importance of talking to the right person when conducting
business.
Another possible outcome of a high hierarchical management is that the
employees regard the superior as a controlling mechanism. Taking this into
consideration together with the fact that within the communist system there
was an extremely extensive and feared controlling organisation; it is no
wonder that the Hungarians and the Czechs today still, to some extent, fear
the control from superiors. As a consequence, it can be difficult for a
manager at a Hungarian or Czech company to have the employees to
confide in him or her. It is common that the people in these countries do
not always trust their manager, since they think that the manager only
wants to check upon them, and this only makes things worse. In other
words, to avoid eventual punishments from superiors, the eagerness to
share information is low.
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81
However, management systems influenced by Communism is changing,
and especially in Hungary, the more westernised companies have adapted a
westernised management style. The Czechs are lagging behind in this
respect, which could be explained by the fact that many companies have
been controlled by the government longer than in Hungary, where the
privatisation of the companies has come further.
Another development within the management context, which Hungary in
particular has experienced during the last decade, is that people in high
positions, both in the political and business life, are getting younger.
Hungary’s Prime Minister for example is only thirty-eight. This
transformation of power could be a consequence of Communist leaders and
managers in the former state-owned enterprises having had a harder time
adapting to the fast changes in the new market economy environment. A
new, younger generation of western oriented, well-educated yuppies
(which is a positive word in Hungary) with a university degree, language
skills, and a career has emerged. There is a big distance between the
yuppies and the more common Hungarians. The yuppies show their status
by buying expensive western premium brands, which makes the gap
between them and others even more obvious. These yuppies also have
better knowledge of brands and are trying to imitate the western way of life
by purchasing western premium brands (Library of Nations, 1986,
Hansson, 991108, and Interviews).
In this respect, the Czech Republic is quite different and people in high
positions are generally much older than in Hungary. There are also more
former communists in power in the Czech Republic than in Hungary. This
could be a result of the Czech Republic being under harder communist
ruling than Hungary, and therefore, together with the slow privatisation, the
younger generation has not had the same career possibilities. An important
outcome of this seems to be that, particularly within the larger companies,
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
82
the Hungarians and Czechs have different ways of looking at how to
conduct business.
Titles are another way to distinguish the distance in power between people.
In both Hungary and the Czech Republic titles are important and frequently
used, which highlights class differences and power distance between
people. However, regarding classes in the society, a difference can be
discerned between Hungary and the Czech Republic, where it seems like
the class differences are higher and more accepted in Hungary than in the
Czech Republic. This could be another result of different communist ruling
systems that affected the countries during the last decades before the fall of
the Berlin Wall.
Also, the Czechs have different mentality regarding showing success and
wealth than the Hungarians. In the Czech Republic it is not appreciated
when someone brags about his/her wealth and success, i.e. the mentality is
that one should not think or say that he or she is better than anyone else. In
Hungary, on the other hand, it is much more accepted. The wealthy and
powerful Hungarians show their status buy driving an expensive car. These
differences can also be a way to determine whether the society is of
collectivistic or individualistic art, which will be continuously discussed in
the following part.
 ,QGLYLGXDOLVPYHUVXVFROOHFWLYLVP
During this study, two kinds of collectivism have been discerned, i.e.
voluntary collectivism and forced collectivism. Due to the countries’
communist past both the Hungarians and the Czechs have experienced
forced on collectivism. Examples of this are the collectivisation of
agriculture, which forced people to cultivate the land as cooperatives, and
the need to join a Communist club in order get anywhere in the Communist
society.
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83
The voluntary collectivism has many times unified people out of free will
in the resistance towards different invaders’ oppression. As mentioned
before, it seems like both the Hungarians and the Czechs have had a strong
longing for freedom throughout the centuries, and a way to gain that has
been to group together in order to be stronger. As a consequence, there
have been several revolutions in both countries’ histories and the
nationalistic feeling runs deep in both the Hungarian and the Czech
collective minds. One example of this is that many Hungarians are
supporting the national campaign, buying domestic produced goods, by
wearing the Hungarian pin that symbolises this campaign. It seems that
foreign companies supporting the domestic production are appreciated.
However, both the Hungarians and the Czechs are still proud of their
countries and their societies. They do not have the same need to come
together in the present democracies as they had during dictatorships. The
values within a market economy are built upon an individualistic
philosophy, a contradiction to the Communist system, where everything
was supposed to be done in groups.
It seems like the real societal mentality that existed in Hungary and the
Czech Republic before the communists’ collectivist indoctrination is
becoming more and more visible today. The Hungarians are known for
being entrepreneurial by nature, and great accomplishments by individuals
within areas such as the academic field is strongly encouraged by the
society. As for the Czechs, they refer to their Bohemian inheritance,
meaning that they want to decide upon their way of living.
Nevertheless, the communist past in Hungary and the Czech Republic has
led to some people being left in the system, and they expect the state to
take care of them. These people have a hard time adapting to the new, more
market oriented system, where the people have to act on their own in order
to get anywhere, and many people that have not managed to cope with this
successfully are bitter and want the old system back. This development has
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
84
also, as mentioned above, led to increasing class differences in both
Hungary and the Czech Republic.
 8QLYHUVDOLVPYHUVXVSDUWLFXODULVP
There are many factors that have led to people relying on personal
relationships rather than rules and regulations. The corruption during the
communist regime has planted the idea into the minds of people that rules
and regulations could not be trusted. However, knowing the right people
and managing relations in an appropriate way will help to solve problems
and reach the results desired. For the relationships to serve their purposes,
people regard it as important that promises are kept and that there is trust
and honesty in the relationship.
As discussed previously, there was a shortage of supplies, due to the Five
Year Plans and one way of getting the goods anyhow, was to take
advantage of personal relations. People could, through the right
connections, get hold of goods through alternative sources. The system was
not transparent and bribing was a common way to facilitate transactions.
Bribing is still part of Central and Eastern European societies and is one of
the more tangible relics from the communist regime.
Also, repression, terror and fear have caused people to avoid uncertainty by
forming close personal relationships. The particularistic society meant that
people built a security network through personal relationships and guarding
friends and family applied more as rules than the legislated law system.
Nowadays, there has been a rapid change in the legal system in order adjust
it to the market economy, but the fast changes are not always aligned with
reality and the legal system is therefore still not completely transparent.
There are many customs left from the communist regime and this
strengthens the peoples’ beliefs that personal relationships are important.
The business mores in Hungary are not always compatible with Western
standards. However, the corruption in Hungary is relatively low compared
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
85
to other countries in the former Eastern Bloc (Hansson, W, 991108). The
grip of the communism was more powerful in the Czech Republic and as a
consequence the importance of personal relationships is higher there.
According to Trompenaars, research from America suggest that
“universalism is a feature of modernisation per se, of more complex and
developed societies” (Trompenaars, F, 1996). This could further explain
why Hungary appears, on a scale, to be further from particularism than the
Czech Republic is. This, however, does not imply that Hungary is a
universalist society, since the importance of personal relationships there is
also high. On the other hand it confirms that communism had a strong
impact on societies and that economic development does not automatically
erase the traces of the regime.
 6SHFLILFYHUVXVGLIIXVHUHODWLRQVKLSV
The fact that both Hungary and the Czech Republic are particularistic
societies underlines the importance of personal relationships. To be able to
understand, take advantage of, and manage personal relationships in those
countries it is necessary to understand the characteristics of the
relationships. The importance of personal relationships implies that the
characteristics of them also differ slightly from relationships in societies
where they do not have the same importance. Another factor that affects the
characteristics of the personal relationships is the fact that they serve as a
way to avoid uncertainty. The multi-dimensional socialising with another
person, results in a thorough knowledge of how that person acts and thinks
in different situation and this also reduces uncertainty. As both
relationships as such and diffuse relationships aim at reducing uncertainty
on Central and Eastern European markets, the parameters may sometimes
overlap.
Hungary and the Czech Republic are particularistic societies because they
are trying to reduce uncertainty by increasing the trust that derives from a
personal relationship. This is, as discussed before, to exchange the security
that a universalist society gains from rules and regulations with security as
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
86
a result of trust in a relationship. Particularists argue that getting to know
people at a private level, i.e. mixing business with pleasure, facilitates the
understanding and possibility to predict how the other party will act in
certain situations. To the people in Hungary and in the Czech Republic, it is
therefore important to get into the private sphere of the other party, to
convince themselves that the other person is not hiding anything. To be
able to trust persons in a business relationship, in all respects, is probably
the basic reason for why relationships have a diffuse character.
People do not only rely on rules and regulations, but expect their personal
relations to solve their problems. If there is a problem to be solved or if
something unexpected happens in a business relationship it is easier to
come to agreements if there is trust and a close personal relationship. To
develop trust requires not only getting to know people outside the business
buildings, but it also requires time. Once the trust is built, though, it
facilitates business and doing business in the way that is custom in Central
and Eastern European countries. An outcome of the emphasis on trust in
the business relationships is that many deals are made without written
contracts.
During the communist era, negotiations, or planning, were handled by the
state and people are therefore not used to negotiations. Furthermore, they
do not use the same methods as western companies when finding partners
to do business with. To the people in those countries, personal chemistry is
even more important than it is in the west and they like to consider their
business partners friends. This might also be caused by the fact that people,
in at least Hungary, are emotional and like to talk on all different occasions.
A personal relationship to the business partner means that it gives
opportunity to express oneself in that relationship.
 &RQFOXVLRQVRIWKHFXOWXUDODQDO\VLV
The cultural analysis presented above functions as a background and a tool
for the next chapter of the thesis, the analysis of cultural influences on the
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87
Volvo brand. In this conclusion there will be an identification of certain
keywords that are of special importance for successful industrial brand
management in Hungary and the Czech Republic, key words that will be
applied in the analysis in the next chapter.
 .H\ZRUGVIRUWKHFXOWXUDOSDUDPHWHUV
How people look upon risks and how they cope with these risks affects the
actions of a society. The means avoiding uncertainty is the most important
cultural parameter in this study, since it permeates the whole society in
Hungary and the Czech Republic. It has a severe affect on the collective
mind of the Hungarians and the Czechs and how they act on a daily basis.
The two main concerns regarding uncertainty avoidance in the analysis of
the truck markets in Hungary and the Czech Republic, are the customer’s
short-sightedness and their emphasis on personal relationships as a means
to avoid risks.
.H\ZRUGVIRU8QFHUWDLQW\DYRLGDQFH
How high the power distance is in a society has an effect on the
hierarchical structure in both the society and in the companies within it. In
both Hungary and the Czech Republic the power distance is rather high
compared to many Western European countries. However, there are main
differences in the power structure between Hungary and the Czech
Republic, where Hungary has a higher societal power distance than the
Czech Republic. Within the truck industry in Hungary and the Czech
Republic, it is important to know who to talk to in the organisation in order
to close a deal. Also, the awareness of how the truck buyers in theses
countries attract their customer by showing status is a valid fact to
understand within this context.
Short-sightedness and  Personal relationships
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88
.H\ZRUGVIRU3RZHUGLVWDQFH
Whether people act in groups or by themselves has a substantial impact on
a society. In Hungary and the Czech Republic three major forms of this
cultural parameter have been discerned, i.e. forced collectivism, voluntary
collectivism and individualism. Important knowledge for acting in the truck
industry in Hungary and the Czech Republic today is to understand that the
customers want to be treated more on an individualistic basis than they
were used to during Communism.
.H\SKUDVHIRU,QGLYLGXDOLVPYHUVXV&ROOHFWLYLVP
This cultural parameter determines whether the society focus more on rules
than on relationships or vice versa. Due to the Hungarians and the Czechs
historical background, their societies are now of a particular character,
where the people reduce their uncertainty by relying on relationships rather
than rules and regulations. This is another very important parameter for this
study, since it is a means to explain why personal relationships are so
important within the truck industry in Hungary and the Czech Republic.
Within this context it is also important to emphasise the fact that keeping
promises to the truck customers is a necessity if the truck supplier wants to
continue to operate on these markets.
.H\ZRUGVIRU8QLYHUVDOLVPYHUVXV3DUWLFXODULVP
Hierarchy and Status
Treat the customers on an individualistic basis.
Relationships and Keeping promises
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89
The character of people’s relationships in specific cultures clearly separates
their working life and private life, whereas the line between these two lives
are not as strict in the diffuse cultures. Both Hungary and the Czech
Republic belong to diffuse societies, where it is important to have a
thorough knowledge of the person in order to trust him or her. Regarding
the truck industry in Hungary and the Czech Republic, the relationships
with the truck customers have to be on a personal basis in order to create
the trust needed for conducting successful business. Here, the best way to
create this thorough knowledge of a person is by mixing business with after
work hour activities.
.H\ZRUGVIRU6SHFLILFYHUVXV’LIIXVHUHODWLRQVKLSV
Multidimensional Relationships and Mixing business with pleasure
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VLQFHWKHFRPSDQ\ZLOOVHUYHDVDQREMHFWRIWKHFDVHVWXG\
Volvo Truck is part of the Volvo group, which had sales in 1998 that
amounted to USD 14 billion and about 52 000 employees. This means that
Volvo Truck accounts for 55 per cent of the Group’s turnover. The
company started truck operations in 1928 and is one of the leading brands
on the truck market. The global operations are supported by ten production
facilities that serve more than 120 markets. Volvo’s main markets are
Europe, and North and South America, but to increase the global presence,
the company is now setting up operations on Emerging Markets like
Central and Eastern Europe, India and China (www.volvo.com, 991109).
 9ROYR7UXFN&RUSRUDWLRQLQ+XQJDU\DQGWKH&]HFK
5HSXEOLF
Volvo has not been well represented on the Hungarian and the Czech
markets until quite recently. The company opened a workshop in Hungary
in April 1999, and built facilities for internal marketing and sales
operations in the Czech Republic in 1997.
There are large external differences between the prerequisites for how the
operations in the two countries can and should be developed. To
understand the internal set-up in two countries that are rather representative
of Central and Eastern Europe, we hereby give a brief description of Volvo
Truck’s operations in Hungary and the Czech Republic.
 9ROYR7UXFN&RUSRUDWLRQLQ+XQJDU\
Volvo Truck started their contacts with the Hungarian market when they
received a deal from Pepsi-Cola five years ago. A prerequisite for the deal
was that Volvo establish a certain service network in the country and since
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
91
then, the presence of Volvo Truck in Hungary has increased continuously.
A major break-through on the Hungarian market came in 1998 when Volvo
Truck received a large order from the recently privatised transport
company Hungarocamion. This meant a step forward, not only at the
Hungarian market but also on other Central and Eastern European markets,
as Hungarocamion is one of the dominating transporting companies in
Europe.
Volvo Truck Hungary employs 55 people. There are around 2 500 Volvo
trucks in Hungary, spread over a couple of hundred customers with 650 of
the trucks located in Budapest. Between January and September 1999,
Volvo Truck Hungary sold 409 units, resulting in a market share of 44 per
cent (Magnusson, U, 1999). The market shares on the Hungarian truck
market are presented in Figure 6.1.
Figure 6.1: Market shares at the Hungarian market for trucks over 16 tons.
0DUNHWVKDUHV!WRQ+XQJDU\
DAF
6%
IVECO
7%
MAN
13%
MERCEDES
6%
RENAULT
11%
SCANIA
9%LIAZ
3%
TATRA
1%
VOLVO
44%
Source: Internal Volvo material
All salesmen are located in Budapest, but the service spots are spread
throughout the country. In the workshops they serve either local trucks or
trucks coming from other places. Volvo is looking for key positions for
their operations, meaning places where a lot of transports are passing
through.
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
92
Figure 6.2: Volvo Truck’s presence in Hungary
Source: www.volvo.com
 9ROYR7UXFN&RUSRUDWLRQLQWKH&]HFK5HSXEOLF
Volvo started to work on the Czech market in 1972, when there were
discussions regarding how Volvo could strengthen the Czech TIR fleet.
The negotiations were carried out between Volvo Truck and the Czech
government and the deal resulted in Volvo becoming the first international
truck manufacturer on the Czech market. Volvo became highly regarded on
the Czech Market since the cooperation between the Czech Ministry of
Foreign Affairs and Volvo Truck was very satisfactory. This good
reputation is also a result of Volvo selling personal cars in the country for
more than thirty years (Internal Volvo material).
In 1991, Volvo Truck formed their first agreement with a reseller in the
Czech Republic, i.e. they made the Czech company PEMA their authorised
representative in the country. Today, Volvo Truck has six partners in the
Czech Republic, but the relative importance of the partners is decreasing, in
terms of sales. Since 1997, Volvo Truck has established their own sales
organisation in the Czech Republic. The strategy since then has been that
people employed by Volvo Truck make all deals. They might not
physically sit in the office, but they are Volvo people, serving only Volvo
Truck, and they have no conflicting interests. This increases the possibility
of keeping control over price, distribution and knowledge level of the staff.
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
93
Volvo Truck in the Czech Republic presently has 42 employees and will
have over 50 after the year 2000. There are about 2 500 Volvo trucks
present on the market and they are owned by approximately 1 200
customers. This implies that most Volvo customers in the Czech republic
are rather small companies and there is no clear tendency showing that
companies have started to merge, at least not to any serious extent. There
has been a continuous increase in sales during the last years, and the
number of sold units between January and September 1999 were 219. This
has resulted in Volvo Truck having a market share of around 12 per cent in
the segment where the company is most competitive, i.e. trucks over 18
tons (Knoph, A, 1999). This is shown in Figure 6.3.
Figure 6.3: Market shares at the Czech market for trucks over 18 tons.
0DUNHWVKDUHV!WRQ&]HFK5HSXEOLF
MERCEDES
22%
VOLVO
12%
DAF
12%
IVECO
13%
MAN
11%
RENAULT
8%
SCANIA
11%
TATRA
6%
LIAZ
5%
Source: Internal Volvo material
One of the most critical criteria for evaluation by the customer is the
service net that the supplier can offer. The service net in the Czech
Republic is well developed and Volvo Truck is represented, as shown in
Figure 6.4, at eight locations in the country.
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94
Figure 6.4: Volvo Truck’s presence in the Czech Republic
Source: www.volvo.com
 &RPSHWLWLYHVLWXDWLRQ
To facilitate the understanding of how the brands are positioned at the
Hungarian and Czech markets, the positions are illustrated in Figure 6.5.
The positioning is evaluated according to perceived quality and the result is
based on findings from customer interviews.
Figure 6.5: Positioning of truck brands in Hungary and the Czech Republic
Source: Own elaboration
Mercedes, Volvo and Scania are positioned as premium brands in both
Hungary and the Czech Republic. Scania is not as well-known as the other
35(0,80%5$1’6
Volvo, Mercedes andScania
5(6(0%/,1*%5$1’6
DAF, Renault, MAN andIveco
’20(67,&%5$1’6
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95
two brands due to the fact that they are not associated with personal cars
and do not have the same presence. DAF, Renault, MAN and Iveco are
positioned in a group that is considered to be below the premium brands.
The third group of truck brands are the domestic brands that are far below
the others.
The distance between the premium brands and the brands in the second
group is considered, by the customers, to be shrinking continuously. The
quality of the brands in the second group is increasing and the prices of the
premium brands are decreasing. At the moment, at least the headquarters of
Volvo do not regard the brands in the second group to be direct
competitors. With the present trend in development, the brands in the
second group can become a threat to the premium brands in the future.
The customers regard the domestic brands to be far below the premium and
resembling brands.  As an increasing amount of transports becomes
international and the standard requirements are increasing, the domestic
brands are, with their current quality, no option for a transport company
that wants to drive internationally. When Hungary and the Czech Republic
are approaching the European Community, the domestic truck brands will
be forced to increase their standards if they do not want to lose their
position completely. The question is if they have the know-how and skills
to achieve this without input from any of the international truck
manufacturers. In the Czech Republic the domestic brands have a market
share of eleven per cent, whereas in Hungary they only have a market share
of four per cent. The Hungarian economic development and integration
with Western Europe has come much further than in the Czech Republic.
With this background, it could be argued that the domestic brands are likely
to lose their position and more or less vanish unless they find a way to
catch up, regarding technological and environmental standards.
The main difference regarding the competitive situation in Hungary and the
Czech Republic is that in Hungary it is Renault that seems to be the brand
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96
that has the shortest way to go before being accepted as a premium brand
and in the Czech Republic it is DAF. The latter has a large market share in
the Czech Republic and as a result of high volume can gain acceptance.
 0DUNHWGHYHORSPHQW
This section is based on interviews with Volvo customers and employees.
There has been a change regarding the direction of the transports of the
customers. During the past years the transporters that used to head for the
Russian market have turned their activities westwards and lately also
towards the Balkans since that area requires reconstruction after the war.
Most companies believe that the Russian market will be a subject for the
future. Many companies therefore keep a small share of their operations on
the Russian market since they feel that they need to keep it due to its size.
The new market focus means that the competition among the transport
companies at the Czech and Hungarian markets has increased. All
companies are competing for the same and decreased number of
assignments. Another reason for the increased competition is that many
MNC’s have entered the markets and one Hungarian customer described
the MNC’s as “very disturbing”. The competition not only derives from the
MNC’s in Hungary and the Czech Republic, but also from transporting
companies in other European countries. The reason is that most transporters
who use premium brands focus on cross-border transports and they
consequently compete for European customers that need transports across
borders. The domestic brands on the other hand are used for domestic
transports.
A trend that is to be noticed in both Hungary and the Czech Republic is that
the customers demand more logistical solutions, and the transporting
companies are therefore developing their operations so that they involve
more planning of the transports. The customers of the transporting
companies ask for complete solutions and compare prices. An outcome of
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97
the more logistical approach to business is that the transporting companies
need larger trucks.
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The customer structure in Hungary and the Czech Republic are differing.
The number of small companies appears to be higher in the Czech Republic
than in Hungary, and in the Czech Republic the customer structure is more
diverse than in Hungary. In the Czech Republic there are five main
customer segments, whereas the Hungarian customers can be divided into
three groups. The customer structure in Hungary and the Czech Republic is
presented in Figure 6.6.
Figure 6.6: Market segmentation
Source: Own elaboration
In Hungary, the big companies have started to acquire the middle-scaled
companies and the trend suggests that the middle-scaled companies will be
very few in the future, whereas the market will be dominated by big
transporting companies. The small companies that survive will probably be
used as subcontractors. In the Czech Republic, on the other hand, it is the
middle-scaled companies that are the most stable and they are growing
gradually.
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1. Small companies with
2-4 trucks
2. Middle-scaled
companies with 30-40
trucks.
3. Big companies with 80-
100 trucks.
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1. One-man companies
with only one truck.
2. Family companies
where the whole family
is involved in the
business.
3. Middle-scaled
companies  with 5-10
trucks.
4. Large companies with
30-35 trucks.
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The reason the customer structure is so dissimilar in the two countries most
likely originates from that the economic development has progressed with
different speed in Hungary and the Czech Republic. It is therefore not
unlikely that the Czech transporting companies will face a similar
development as the Hungarian companies. The transporting business is
cost-conscious, and to be able to offer the best technology to competitive
prices the transporting companies are dependent on a certain volume.
 7KH9ROYREUDQG
The three core values; quality, safety and environmental concern, are the
foundation for the global strategy, and they are communicated through the
Volvo brand world-wide. The Volvo strategy is standardised and the idea is
to basically use the same means and measures worldwide. An example of
the standardised strategy is that Volvo has a global sponsorship program
where they sponsor golf and sailing. One of the principal driving forces is
the volume-oriented approach, where achievements are measured as a
percentage of return on fixed assets. Another important issue that severely
influences the work on each market is the strategy to have as few units in
stock as possible (Magnusson, U, 1999).
Even though the brand should consistently represent the three core values,
it is important to keep in mind that concepts might have different meaning
to people from various societies. It is also likely that the core values do not
have the same relative importance to all customers.  Among Volvo’s three
core values it is especially quality that is a concept into which many values
could be put. The reason for this is that it is a concept that is hard to
measure and can be measured in many ways. This means that even though
the core value quality needs to be communicated to all customers, without
exceptions, there might be a difference regarding what is the most
appropriate way for it to be communicated, depending on target population.
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The first fact to acknowledge regarding the assets of a brand is that they are
all given assets in order to create a successful brand. In other words, the
assets are necessities and therefore cannot be left out. Secondly, after
recognising this crucial fact, the next step is to acknowledge which of these
necessary components of the brand needs to be globally standardised and
which need to be adapted to the local culture. Even though the standardised
global brands assets are, as implied, as important as the more variable
assets, the focus in this study is on the assets that are adaptable. By
recognising these adaptable variables and how they should be employed
successfully in conjunction with the country culture, Volvo can strengthen
its brand by differentiating itself on the truck market in Central and Eastern
Europe.
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100
The empirical study covered all assets that can create brand equity,
however, as mentioned, the focus in the analysis will be on the adaptable
assets. One main finding that supports the study’s focus on adaptable assets
rather than on standardised, is that the standard and technical features of the
premium brands are becoming more and more alike. The evaluation of the
tangible, technical product attributes based on interviews proved that
customers had problems separating Volvo, Mercedes and Scania from each
other in terms of these attributes. These functional assets are not only the
most important to customers, but also an important issue for the truck
suppliers. The reason why companies need to pay attention to these
functional values is that a communicated high image needs to be supported
by high quality in the tangible product attributes in order for the customers
to perceive the quality as high. However, even though the tangible product
attributes are the most important to truck customers, they are easy to copy
and nothing that a truck company can use to differentiate itself.
The section Given brand assets will have a brief discussion on the parts of
the brand that are fully standardised and why they cannot be used as a
differentiating tool. A separate section will then highlight the structure and
importance of brand loyalty on these markets. Finally, the rest of this
chapter will be dedicated to discussing the brand assets, brand association,
product attributes and marketing communication. Even though these assets
are partly given and partly variable, they will, due to the importance of
their variable parts, be discussed in the section variable brand assets. The
reason for this is that these variables are found to be the most appropriate
tools to solve the main problem. The focus will be on what parts of the
assets that could be adapted and how it should be done to strengthen the
Volvo brand in Central and Eastern Europe.
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101
Figure 7.1 illustrates the issues that this analysis is built upon and explains
the sequence in the presentation of the assets that create brand equity.
Figure 7.1: Classification of Brand Assets
Source: Own elaboration
 *LYHQEUDQGDVVHWV
The main reason that brand name awareness cannot be used as a foundation
for competitive advantage in comparison with other premium brands, is
that all customers are fully aware of the truck brands in the industry. What
could be used as a competitive advantage is brand name association, but
then not in the sense of association with given assets, but with variable
assets.
*LYHQ%UDQG$VVHWV
• Brand Name Awareness
• Perceived Quality
• Positioning
• Core Values
• Other Proprietary Brand Assets
• Brand associations
• Product Attributes
• Marketing Communications
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• Customer segments
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•  Brand Association
•  Product Attributes
•  Marketing Communication
Necessities
for a brand in
the Truck
Business
Assets that can
create a
Competitive
Advantage by
increasing the
Brand Equity
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102
Perceived quality is another asset that cannot be used as a differentiating
instrument towards Volvo’s main competitors, since all the premium
brands are perceived as high quality with little or no difference. Also,
perceived quality is one of the brand assets that is most important to have
standardised globally, since varying perceptions of a brand’s quality can
lead to a reduction in the credibility of the brand.
Standardised within the Volvo brand are also the core values that are
globally communicated through all channels. The core values themselves
are not objects of adaptation, but in how they are communicated.
Advertising is a tool that can also be copied and, as a marketing
communication form, should only have a supporting or informative
function. As mentioned before, brand name awareness is already almost
complete in the truck industry, and advertising does, as a consequence, lose
the function of increasing awareness. How to communicate the advantages
Volvo can offer in conjunction with the core values on Central and Eastern
European markets will be further described under marketing
communication.
Positioning is another brand asset that has to be standardised globally. The
background for this, as explained by Kapferer in the global brand chapter,
is that a brand must be positioned the same on all markets, otherwise the
brand’s credibility can be reduced. Volvo’s position among the top brands
negates the possibility of using this asset as a differentiating tool.
Regarding other proprietary brand assets, this study has discovered that
truck companies in Hungary and the Czech Republic have problems coping
with pirate spare parts that exist on these markets. Legislation is not
sufficient enough to protect the original spare parts, but most importantly,
the general praxis within these countries agree with pirate copies, making
the problem extremely difficult to solve.  Today, the pirate companies have
to be seen as competitors to the truck companies on a lower level.
Addressing this issue does not give Volvo a tool to differentiate its brand.
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103
As mentioned, brand association, product attributes and marketing
communication will be discussed in the section variable brand assets in
order to high-light their special role compared to the other brand assets.
 %UDQG/R\DOW\
Brand loyalty is crucial when managing an industrial brand on Central and
Eastern European markets because it could be considered as both a way to
create brand equity and as a company objective. First, the obvious reason
behind wanting brand loyal customers is they will always buy the brand of
a certain truck manufacturer, meaning that the company will have to put in
little effort to get the deals. It is also because brand loyalty and a unified
fleet create switching costs. Switching costs derive from gradual changes in
brands that lead to the customer no longer taking advantage of economies
of scale, since there would be a transition period when the fleet would be
diverse. The switching costs tie a loyal customer with only one brand in the
fleet to that particular truck manufacturer, meaning brand loyalty works
like a positive spring and increases the brand loyalty by itself. Brand
loyalty is therefore a win-win situation for the truck manufacturer and the
customer since the truck manufacturer becomes the primary supplier, and
the customer can take advantage of the positive outcomes of having only
one brand.
Second, brand loyalty can lead to a new generation of customers through
positive word of mouth association. The truck business in Hungary and the
Czech Republic is characterised by one’s reputation being spread through
word of mouth, and opinions about the different truck brands circulate
among purchasers and drivers. There are many examples of customers who
have been recommended to buy Volvo, or they themselves have
recommended Volvo.
 &XVWRPHUVHJPHQWV
To be able to reach the goal of increasing the share of brand loyal
customers, it is necessary to have an understanding of how different
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104
customers act. Consumer behaviour can be categorized as being non-
customers, passively loyal, brand loyal, fence-sitters or switchers. For this
study, the brand loyal customers, the fence-sitters and the switchers are of
interest, since it is, to some extent, possible to fit the customer segments of
the Czech and Hungarian truck industry into these three behaviours.
However, a complete generalisation of the customer segments cannot be
done. The description therefore will have the theoretical concepts as point
of departure. The reason for non-customers not being analysed is that the
focus was on already existing customers of Volvo. Due to the fact that tuck
purchases concern high involvement, passively loyal customers are rare
and therefore not of high interest for this study.
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The brand loyal customers are generally those who have a rather large
number of trucks in their fleet, i.e. the middle-sized and large companies in
Hungary, and the large and fleet companies in the Czech Republic. A large
fleet motivates having only one brand since the consistency offers
opportunities to take advantage of economies of scales. The customers in
this group have established businesses and can survive the ups and downs
in the business. They have the ability to view their operations in a longer
time perspective than that used by the smaller customers, and are detailed
in the planning of their operations.
There are two main reasons why the customers in this group are loyal.
First, they realise that they can take advantage of economies of scales
regarding spare-parts and after-market. Not only can purchasing larger
amounts of spare-parts result in lower price per unit, but also the mechanics
in their own work-shops can specialise on a certain type of truck and
thereby become more skilled in how to repair it in cases of break-downs.
Also when the customers are not repairing the broken-down trucks
themselves, this customer category means that having only one brand has
advantages. It means that they get “everything under one roof” and this is a
struggle that can be detected in many areas of the truck business.
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105
The second reason why they try to create a unified fleet is to communicate
a consistent image to their customers. This is main difference between
consumer and industrial brands is that selling an industrial brand often
means that the sale is not to the end-user. It is, according to many of the
respondents, important to have a certain image of the truck and apparently
not only to have high status brands, but also to have a consistent image that
is supported by a unified fleet. A mix of premium brands could support
high image, but consistency in the image could not.
Some large customers consider personal business relationships to be an
important outcome of, and reason for, brand loyalty. They regard
economies of scale and a unified image of the fleet to be important, but are
also strongly influenced by the particular society. Other large customers
regard personal relationships as obstacles for professional negotiations, and
are brand loyal because financial conditions imply that brand loyalty is
favourable. The financially driven customers are generally managed in a
westernised way or even controlled by western companies.
Small companies can also be brand loyal. Their loyalty, however, could be
said to derive from reasons other than reasons of large companies. Brand
loyalty among small customers is a consequence of the particularistic and
diffuse society, where the customers try to avoid uncertainty through
diffuse relationships. The small customers have not been as influenced by
western culture as bigger companies, and to the smaller companies
relationships are important. They reduce their uncertainty by getting
involved with the company at a personal level and they want to be able to
consider business partners as friends.
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106
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The second group of customers, when classified according to brand loyalty,
are the fence-sitters. Those customers are indifferent regarding the brands
they have in their fleet, or believe that they have advantages in different
areas. They have made the strategic decision to have two or three brands in
their fleets and are thereby able to play the truck manufacturers against
each other, i.e. bargaining power. This kind of negotiation style requires a
rather large fleet. A truck manufacturer would not consider lowering the
price for a small deal, but would for a big deal because of revenue that
could be generated in the after market.  It is common that customers use the
brands for different purposes, having one share of premium brands and one
of a brand that is considered to be of slightly lower quality but has better
purchasing price. Some customers then use the premium brand for
international transports and the other brands for domestic transports,
whereas other customers do not separate the brands in terms of use.
Domestic brands are not used to play the manufacturers against each other,
but are part of the fleet since they have not been replaced by a new truck
yet.
It is rather common that Volvo Truck customers, classified as fence-sitters,
have Volvos and Renault in Hungary and Volvo and DAF in the Czech
Republic.
The goal should be to convince the fence-sitters to commit themselves to
only one brand through the following argument. The costs, split on the
trucks entire lifetime becomes lower if the customers uses the effects of
economies of scales. The customers that have a long-term perspective on
their operations in Hungary and the Czech Republic are very concerned
about the costs and often measure them as for example cost per kilometre.
The customers with a more short-sighted perspective are more concerned
about immediate expenses like purchasing price.
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107
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The third category of customers are those that buy trucks offering the best
conditions when they are purchased. This purchasing behaviour is most
common among small, domestic customers. The two factors most
important to this group is that the purchasing price is favourable and maybe
even more important is that the truck can be delivered immediately. They
are buying the truck for a certain purpose and usually have a customer of
their own that is waiting to employ them as soon as the truck is delivered.
This group is further characterised by small customers that are operating on
a day-to-day basis. They are not able to foresee their situation in advance
and are dependant on fast delivery. These customers are more affected by
the booms and busts in the country economy. Since the Central and Eastern
European Markets are unstable, they are unable or scared to make
forecasts. The time perspective of switchers is shorter than brand loyal
customers or the fence-sitters. One way to make them change their
behaviour is to assure them that uncertainty could also be reduced, using a
long-term perspective. The future becomes more predictable when
employing personal relationships characterised by honesty and trust.
The fact that small customers generally switch between brands does not
mean that they consider relationships to be of little importance, but that
price is superior relationships.
Most theories argue that it is pointless to put any effort into customers that
switch between brands and look only for the best price. On those markets,
however, where structural changes among the customers are underway, it
could be worth it also to work on the switchers that are generally the
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108
smaller companies. The reason for this is that they are likely to be acquired
by other, presumably larger, transport companies in the future and will
contribute with a number of trucks to the acquiring company’s fleet. There
have been examples among the respondents in Hungary where the acquired
company has convinced the acquiring company to buy the brand they had
in their fleet. The ongoing structural change on the market might then lead
to a former switcher being acquired by another company and influencing
future decisions, turning them into fence-sitters.
 +RZWRFUHDWHEUDQGOR\DOW\
As discussed in the theory chapter, brand loyalty is, according to Aaker,
achieved through five measures. When trying to create brand loyalty, either
tangible or intangible assets can be employed. Previous discussions have
explained the importance of focusing on the intangible assets. Three assets
that focus on intangibles and at the same time increase brand equity are
brand association, intangible product attributes and marketing
communication. Part of marketing communication is personal selling and
through that tool, the means that create brand loyalty can be employed.
How to create brand loyalty with intangible assets will therefore be
discussed under marketing communication.
 9DULDEOHEUDQGDVVHWV
It has been possible to detect three brand assets that can partially be
adapted to the specific country culture. Within each of these assets, there
are also aspects that are standardised. Therefore, as mentioned above, the
focus of the analysis will be on what can be adapted.
 %UDQGDVVRFLDWLRQ
As stated by Aaker, brand association is concerned with what the brand
stands for in the customers’ mind and it is important that this association is
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109
positive. Due to the fact that the brand association affects the identity of a
brand, Volvo Truck has to manage and develop the associations of the
Volvo brand successfully in order to create a strong brand. Concerning
Volvo Truck’s customers in Hungary and the Czech Republic, they have, in
many ways, a standardised association of the Volvo brand, an association
that is more concerned with the given assets of a truck brand.
However, most customers do not associate the Volvo brand only with the
truck and its features, but also with a specific sales person. This has to do
with the importance of personal relationships in these countries. The Volvo
brand is also, to a certain extent, associated with its country of origin -
Sweden. Another issue within this context is that brand association on
industrial markets is not only a matter between the buyer and the seller, but
that the buyer has positive association with the brand. If this is not the case,
the truck buyer can have difficulties attracting customers. The association
with the country of origin and the sales person should be paid special
attention to, since they can be used as adaptive variables that the company
can employ in order to differentiate itself on the Central and Eastern
European market.
6WDQGDUGLVHGDVVRFLDWLRQVRIWKH9ROYREUDQG
The most common brand association of the Volvo brand within this is
context is reliability. Even though this is something that Volvo is
associated with world-wide, it is important to remember that the content of
the word reliability is cultural specific. In Hungary and the Czech Republic
reliability is equal to a truck not breaking down, which probably varies
from a West European’s understanding of reliability. The main difference
is that people in Central and Eastern Europe have fresh memories of the
communist period, where the low quality of the products was a rule rather
than an exception. Due to the planning system with goals based on quantity
instead of quality, the trucks produced in the Eastern Bloc often broke
down and were continuously being repaired. To customers in Western
Europe that have not experienced communist quality, these factors are
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110
taken for granted. This explains why reliability in Hungary and the Czech
Republic equals few break downs.
Despite this fact, reliability must be seen as a given brand association on
these markets and cannot be used as a superior instrument for strengthening
the Volvo brand. This is because Volvo’s main competitors, Scania and
Mercedes, are also associated with reliability. As discussed above, other
features associated with the Volvo brand cannot be ignored since they are
crucial for a successful truck brand. A truck brand on these markets has to
be associated with features like quality, design, low fuel consumption and
comfortable cabs in order to be considered premium brands. However,
since this study is focusing on how Volvo can use features that differentiate
the Volvo brand from others, these standardised associations will not be
discussed any further.
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One main difference between consumer brands and industrial brands is that
industrial products are bought mainly to be used in the buyer’s own
operation. As previously mentioned, this means that the associations with
the buyer’s brand also depend on the associations that the brands used in
the buyer’s operation. Even though this is a given fact within this context, it
is however, essential to recognise this due to its importance for the
association of a truck brand. It is also vital to distinguish the differences
between Western and Eastern Europe. This subject will be used as
background and not as a differentiating tool.
On the markets in Central and Eastern Europe, companies that have
western premium truck brands are associated with high status, which
distinguishes them from the companies that drive only domestic truck
brands. This fact highlights the differences between Western Europe and
Eastern Europe, since it is easier to achieve high status in Hungary and the
Czech Republic, due to the much wider range of truck brands of various
standard in Central and Eastern Europe.
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111
Owning premium brand trucks in Hungary and the Czech Republic
communicates that the company is solid, since they can afford an expensive
truck. As discussed in connection with power distance in the cultural
analysis, having a truck that is associated with high image is a means of
demonstrating to others in the society one’s success, which is a way to
attract customers. However, there is a main difference between Hungary
and the Czech Republic, because it is more acceptable to show off one’s
success in Hungary than it is in the Czech Republic. In Hungary the biggest
status symbol is a car, which is why this concept can be more extensively
exploited. In the Czech Republic, on the other hand, it appears that a
company should be more cautious being extravagant. One Czech truck
customer mentioned, that it could be a disadvantage for a company to come
with a new and shining truck to their customers. It could give the
impression that the company is making too high profits at the expense of
their customers. This attitude derives from the collectivism during the
communism, when everybody had the same standard. Due to the fact that
not all their customers saw the connection with reliable premium branded
trucks and deliveries on time, it had to be explained for them in order to
avoid this negative perception.  An issue that highlights the people’s short
sightedness and also their lack of understanding of the fact that one of the
functions of a brand is that it represents and guarantees a certain standard.
Buying from a company that uses premium brands in their fleet is also a
way to reduce uncertainty for the buyer’s customer. Doing business today
in Hungary and the Czech Republic is very much connected with risk
taking, which will be further discussed below, buying from a company that
has reliable trucks is a means for the end customer to reduce this
uncertainty.
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As discussed in the global brand chapter, if the brand is associated with the
positive image that its nationality may bring about, the brand can exploit
this association as a unique differentiating edge. Even though the
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112
association with country of origin is a feature that should be globally
standardised rather than locally adapted, it should still be used as a
differentiating tool, since it gives the brand a natural protection towards
copying. The motive for this is that it is only companies from that specific
country that can capture upon a country’s specific national image. Here, the
national image has to be interpreted as positive by the rest of the world in
order to increase the brand equity.
Customers in Central and Eastern Europe have experienced low quality that
products produced in the former Eastern Bloc, had and to a large extent still
have. The primary concern regarding the brand’s country of origin today is
if the brand is from the Western world or from Eastern Europe. Here, the
western brands have an advantage in comparison with the brands produced
in Central and Eastern Europe.
However, the people in Central and Eastern Europe also have an ability to
differentiate western European countries from each other, and can discern
differences in products produced in different Western European countries.
In Hungary and the Czech Republic, premium brands mainly originate
from Germany and Sweden. Both German and Swedish products have the
advantage of being positively associated with superior technical products
that have high quality and are reliable.
The Germans have a geographical advantage and is also the largest trading
partner for both Hungary and the Czech Republic, which makes the
German impact considerable. However, due to their less flattering,
historical past, they are not particularly appreciated by the Hungarians and
the Czechs. Many of the respondents described the Germans as arrogant
and strict.
Sweden has the disadvantage of being more distant geographically and
therefore lacks the natural closeness to Hungary and the Czech Republic.
Despite this fact the Hungarians and the Czechs have a high and positive
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opinion of Sweden in general. Swedes also have the reputation of being
calm, well mannered and good at keeping promises, characteristics that this
study has found to be important in a business relationship in Hungary and
the Czech Republic. Furthermore, many of the Czech respondents
mentioned that they can easily relate to the Swedish mentality. Even
though most employees at Volvo in Hungary and the Czech Republic are
natives, the top managers are from Sweden, highlighting the importance of
the character of Swedes. It could be argued that it is not only Volvo that
can use Sweden as an association, since Scania has the same advantage.
However, if Volvo is first to strongly emphasise its country of origin, a
first-mover advantage could be gained within this context.
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Industrial purchasing often involves more risks than purchasing consumer
products. The purchase of industrial products like trucks is a large
investment involving high risk, especially in unstable markets such as
Hungary and the Czech Republic. As mentioned in the cultural analysis
chapter, the uncertainty avoidance in Hungary and the Czech Republic is
generally much higher than in the west. This implies the importance that
Hungarian and Czech truck customers associate the truck they are
purchasing with security.
In order to deal with this high risk purchase, many truck customers in
Hungary and the Czech Republic have a close business relationship with
the sales person. This is a way of coping with uncertainty avoidance and
can be explained by the fact that Hungary and the Czech Republic belong
to particularistic societies, where people solve uncertainty by employing
relationships rather than rules and regulations. These relationships have
mostly a diffuse character, i.e. the uncertainty is further reduced through
the thorough knowledge of the person. Due to the importance of business
relationships in Hungary and the Czech Republic, the matter will be
thoroughly discussed in the section on marketing communication.
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In the industrial theory section, Hague & Jackson give an example of a
manager of a Volvo truck fleet who explains that he chose Volvo truck due
to the dealer and not just because it is a Volvo. This fact was confirmed by
the interviews in Hungary and the Czech Republic. In other words, the
truck customers do not only associate the Volvo brand with the features of
the truck, they also associates the Volvo brand with the sales person.
Another reason for strong brand association with the sales person rather
than with the product itself can be explained by the fact that the truck
customers have often had problems to see specific differences between the
premium branded trucks. Instead, the truck customer focuses on the truck
sales person and associates him with the brand.
The concentration on the sales person rather than the total image of the
brand has both positive and negative aspects. The positive aspect is that
even if a customer becomes dissatisfied with the truck, they are more likely
to stay with the brand if they associate the brand with the sales person
rather than the product. The association with a brand becomes more
personal and is therefore more difficult to let go. Some respondents have
verified this fact and mentioned when they were dissatisfied with a Volvo
truck, but due to the personal relationships they have stayed with the brand.
However, this close personal connection often leads to the customer
holding the sales person personal responsible for the truck, possibly being
negative.
Another negative aspect is if the association with the sales person is too
strong, the brand loyalty can shift from only concerning the association
with sales person and thereby no other brand assets. This is something
acknowledged in the industrial branding theory, where the recommendation
is that the brand should not be overshadowed by the friendship between the
customer and the salesman.  This kind of situation is not healthy for the
brand or the brand owner, since it makes the brand equity and the company
more vulnerable. Also, if the sales person decides to leave the company he
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might take some of his customers with him, since the brand for them is so
strongly associated with this sales person. This is a vulnerability that the
brand owning company should be aware of, and in order to shift the focus
from one salesman, the brand association focus should be on several people
in the sales force, i.e. multiple brand association. The customer could still
have one main contact person in the company and at the same time have
closer relations with other sales peoples. This could be done by introducing
the customer to employees that could serve as “stand-ins” for the main
contact person.
This combination would lead to a larger focus of the brand association on
the whole organisation and thereby the brand owning company would
become less vulnerable. It will be more difficult for the salesman to see the
truck customers as his own and the probability that he takes them with him
if he leaves becomes smaller. In order to extend this brand association on
the whole organisation, other parts of the company can be included. For
example, closer relationships between the truck customers and the
workshop staff could be developed, a suggestion that is further discussed in
section on service and support.
 3URGXFWDWWULEXWHV
The abstract variables that are unique and difficult to copy are often more
concerned with how it is offered than with what is offered. Due to the fact
that this study aims at giving the Volvo brand a competitive edge towards
its competitors, the focus of the discussion will be on how these variables
can be used to distinguish the Volvo brand from other brands. Even though
there are several important variables, the study has been limited to the most
important variables within this context.
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The purchase of a truck does not only involve the vehicle; the supplier also
has to be able to provide a satisfactory service with easy access to spare
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parts. The service function together with the after sales market is one of the
main areas where understanding what features should be offered is vital.
An effective service network is a compulsory part of the truck business to
customers world-wide, since breakdowns can cause severe losses of
income for companies. In other words, service has the purpose of reducing
uncertainties and risks. The reduction of uncertainty is, because one
striving for security, of special importance in Hungary and the Czech
Republic. Also, the poor road conditions in both Hungary and the Czech
Republic makes a sufficient service net essential.
In order to gain a competitive advantage concerning service, it is important
to understand what features, additional to those compulsory, are
particularly important for the truck customers in Hungary and the Czech
Republic. By recognising these culturally dependent features, a truck
supplier can create and offer a service that is adapted to the truck
customers’ special needs in Central and Eastern Europe. Another thing to
acknowledge by the truck supplier in order to address specific customer
needs, the service needs between the long haulage companies and the local
transport companies in Hungary and the Czech Republic may sometimes
differ. The basic differences between these two types of customers are the
usage of different kinds of vehicles and therefore the wear and tear is
different, which requires service to be adapted to the specific vehicle
involved.
The features customers often brought up regarding service were the
importance of flexibility, presences and short lead times. Flexibility
concerns the ability to adapt to the specific customers’ needs by finding the
particular service solution requested. However, flexibility is a compulsory
feature demanded by truck customer world-wide, the differentiation lies in
recognising what specific needs the customers have in Central and Eastern
Europe. A first step in this differentiation should be to acknowledge the
different service needs that long haulage and local transport companies
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have. Another flexibility is to understand that the smaller truck customers
in Hungary and the Czech Republic are very price sensitive and therefore
not as impatient in waiting for spare parts as the larger truck customers.
The larger customers are often prepared to pay a little extra for fast
delivery.
Regarding presence, a truck company should have an extensive service net
in the country where it operates. This would communicate its commitment
to their customer, which increases the brand reputation. This is also a given
fact, however, due to the fact that Hungary and the Czech Republic belongs
to particular societies, commitments and relationships in the business life
are looked upon with greater seriousness than in Western European
countries. It would be beneficial if the relationship between the staff in the
workshops and the truck customers could be on a personal level. The
customer could, for example, have one special person as a contact person in
the workshop. This would be appreciated by the Hungarian and the Czech
customers, due to their diffuse societal background, where people do not
only involve each other one-dimensionally. Also, as discussed above, it
could be a way to reduce the focus of the brand association concerning
several persons in the company staff instead of just one salesman.
The Hungarians and the Czechs requests for short lead times has, on the
one hand, to do with their short-sightedness, which is inherited from their
communist past, and on the other hand it is a consequence of the fierce
competition that exists both on the Hungarian and the Czech market. Here,
their short-sightedness and their incapability to plan ahead seems mainly to
concern the continuously maintenance of the trucks, since break downs are
difficult to calculate in advance.
Another important factor concerning service, that many customers also
mentioned was their dissatisfaction with new truck models. Many truck
customers are used to repair and maintain their trucks themselves and the
new trucks are so technically complicated that this is difficult. It used to be
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118
implied that a real truck owner could fix his truck by himself with the help
of a spanner, but this is not valid anymore. Several of the respondents had a
workshop of their own and criticised Volvo for not assisting them in the
service training of their staff regarding these new models. This is a
weakness for Volvo trucks concerning their service offer, since it is even
more crucial to have a supporting service network for truck models that are
technically complicated.
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Financial support is another important attribute that can be offered, giving
the truck supplier a competitive advantage. Due to the economical
conditions in Central and Eastern Europe, it is difficult to get credits,
especially in the Czech Republic and financial assistance from the truck
supplier is crucial. According to many respondents, truck companies with a
financing company of their own had a competitive advantage over the
companies that do not. Offering financial support does not, by itself, supply
the company with a competitive advantage. However, an advantage could
be achieved by communicating a special message through the financing
function.
The explanation of the importance of having a financing company of its
own is not only due to the fact that Hungary’s and the Czech Republic’s
economical level is lower than in the Western European countries. By
having their own financing company, the truck suppliers are able to offer a
complete solution. A complete financial solution is not just more
convenient and time saving for the customer, it also communicates
commitment, which is important in Central and Eastern Europe. An
interesting opinion that was expressed by a customer in Hungary was that
the financing function of a truck company would create brand loyalty, as it
generates trust between the parties. The customer referred to financing as
business support and meant, “if a company is ready to take part in the
business risk, then a real partnership is formed”.
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 0DUNHWLQJ&RPPXQLFDWLRQ
Marketing communication is traditionally regarded to include advertising,
sales promotion, public relations and personal selling. To be able to
differentiate a company in marketing communication it is important to also
use a marketing strategy that is not easy to copy. Advertising and sales
promotion are tangible tools that are exposed to the business environment
that make it possible to copy, therefore it is hard to offer something special
with these tools. Through personal selling, on the other hand, a personal
touch can be added that differentiates the company in the relation to its
customers. Since it is almost impossible to differentiate a truck company
according to the tangible product attributes a company should search for a
niche that concentrates on intangible assets. Those assets should relate to
what the company can offer apart from the product, but such soft aspects
could be hard to communicate through advertising.
Personal selling could be considered the direct interaction between the
salesman and the customer at the negotiation occasion, but in this context
personal selling is defined as the complete interaction between the two
parties, i.e. letting it involve the management of the complete business
relationship. The reason for this is the high power distance on Central and
Eastern European markets, where executives and employees in high
positions are many times involved in the business relationships.
Furthermore, the society is not inclined to divide relationships into specific
areas and a more overall approach must therefore be employed.
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The utilisation of personal relationships gives the company an opportunity
to differentiate themselves not only regarding marketing activities, but also
concerning the entire package offered by the firm. This is due to the fact
that it is not the necessities that are decisive, but how they are offered.
Personal relationships can be adjusted to the specific cultural characteristics
on particular markets, and by using the opportunity to do so, the company
achieves a competitive advantage.
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The customers in Hungary and the Czech Republic regard personal
relationships to be helpful when negotiating. The salesman through strong
bonds, most likely receives valuable information about the customers.
Close personal relationships in those countries are characterised by the
parties knowing each other on a personal level, and people have a higher
trust in each other if the relationship does not only involve business. When
the salesman knows the customer privately, he can gain information about
him that might be sensitive and would not be shared if there were no
personal bonds between the parties. By understanding the customer and his
behaviour in many different areas, the salesman has an advantage and can
likely make a better offer than if there were a weak bond. A customer in
Hungary stated, if there is only business between the two parties, one
cannot judge the other person. Furthermore, negotiations in those countries
do not end when the parties leave the negotiation table. A negotiator that
believes he can only have a business relationship with the Czech and
Hungarian customers, will not be trusted.  To have faith in personal
relationships is the Czechs’ and Hungarians’ way of avoiding uncertainty.
Not all customers argue that personal relationships are important though,
implying that personal relationships have no crucial impact on the
purchasing decision. In this context, one has to keep in mind that the
customers might want to appear professional in a way that they believe
western companies regard as professional. This could cause them to tone
down the importance of personal relations.
7KHFKDUDFWHURIWKHSHUVRQDOUHODWLRQVKLSV
The characteristics of a sales person, that the customers regard as
important, can be divided into issues that regard tangible assets, i.e.
knowledge about the product and intangible assets, i.e. trust and honesty.
Characteristics that refer to tangible assets are considered to be at least as
important as trust and honesty, but once again, the tangible is more of a
necessity that does not require further discussion.
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121
There were two basic aspects mentioned repeatedly by both Czech and
Hungarian customers as being important, correctness and honesty.
Correctness meant they demanded that the truck company keep their
promises. They believed that they should be able to trust the sales person in
a way that a verbal contract equalised a written contract. This particular
aspect is highly valued, especially when comparing the relationship they
have with Volvo to other truck manufacturers. Several examples were cited
when broken verbal contracts made them stop trusting the other truck
manufacturers. The example that at least two of the customers used was
Mercedes where they had had negative experiences in the relationship
regarding this aspect. By adapting to Central and Eastern Europe, Volvo
Truck has an advantage over their competitors. In particularistic countries
such as Hungary and the Czech Republic, penalty clauses are replaced by
trust in the personal relationship.
Honesty was also considered significant. Customers expected the selling
company to supply them with authentic and sufficient information. Also,
there should not be any negative surprises regarding the product after
delivery. One example when a customer was disappointed in Volvo Truck
was when there was a repeated production error on a delivery. The
information supplied by the selling party should contribute to the
purchasing party so that they can predict situations and aspects regarding
the use of the truck. The fact that predictability is considered to be
important could be linked to the customers trying to avoid uncertainty,
since they have negative experiences from the past. During communism
and the present transition it has been hard for customers to foresee
developments, and this has probably made them try to avoid uncertainty.
Another important aspect in the business relationship is that customers feel
humiliated and neglected if they feel they are being treated differently. Due
to customs in diffuse societies, people expect to be treated with respect and
honesty by friends and colleagues. Therefore, business partners should
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122
never find out if they have been treated differently, and the best way to
avoid uncomfortable surprises is to be honest.
Another reason for the Czechs and Hungarians to get upset because of
unequal treatment could be that they have little self-confidence when doing
business according to western manners. The feeling of being cheated is
therefore causing higher concern among them than among western
customers. The customers in these transition countries feel that it was their
mistake that they did not get the most favourable contract, which causes a
feeling of being insufficient as negotiators. It is especially important that
the small customers feel fairly treated, as they are more sensitive regarding
this issue. As previously discussed, personal relationships are more
important to the small customers than the big.
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When discussing universalism versus particularism, one can easily get the
impression that either rules and regulations apply, or relationships. The
same applies to diffuse versus specific, i.e. either people mix business with
pleasure, or they do not. It is, however, rare with such extremes and it has
been possible to trace differences according to those parameters within the
sampling. Differences can firstly be traced between Hungary and the Czech
Republic, and secondly among customer segments.
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In Hungary most socialising after business hours is linked to activities that
are arranged by the company and not by a single salesman. The salesmen in
the Czech Republic, on the other hand, carry out activities such as playing
tennis, with their customers. The latter could be considered to be at a more
personal level than the former and the parties do, to a higher extent, get
involved at various levels. The appearance of more personal relationships
in the Czech Republic than in Hungary can partly be explained by the
customer structure in the two countries. This is, however, a separate issue
and will be discussed after the country specific discussion. A more cultural
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123
and historical explanation is the fact that communism had a firmer grip of
the Czech Republic than of Hungary.  Many customers in the Czech
Republic use expressions like “that is the way do business in this country”,
referring to personal relationships and to socialise at a private level. The
reason why personal relationships are more important to the Czechs than to
the Hungarians, is that the Communist culture still plays a larger role in the
Czech Republic than in Hungary. The cultural development from the
communist period to the present transition, is lagging behind in the Czech
Republic and the ways to avoid uncertainty is therefore more influenced by
the Communist culture than in Hungary.
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Most customers socialise on a private level even though socialising seems
to be more important among the smaller and medium sized customers. This
issue has already been touched upon, in the context of brand loyalty, where
it was stated that price was the priority for smaller customers. This supports
that given product attributes are more important, and cannot be forgotten.
However, the interviews support that personal relationships are most
important to the small customers. They do, to a higher extent than larger
customers, put their faith into relationships and also have a desire to
socialise privately. This probably has two causes, i.e. that small companies
are not as influenced by western practices and they do not have as many
relationships to nourish. Not mixing privately is often because of practical
reasons, they do not have enough time. This could be interpreted to mean
that some customers do not value time spent on socialising, but the main
reason is probably that increased competition has led to strict business
matters taking priority. Here, the influences from western countries and
market economy can be traced and, as stated before, modern societies are
less inclined to depend on relationships than less developed countries.
Smaller companies generally do not have as much international influence
as bigger companies, and are therefore less affected by the westernisation
of the culture. Furthermore, small companies are more exposed to
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124
uncertainty in the respect of fluctuating demand in the business, and their
way of handling the uncertainty is to rely on personal relations.
Some larger customers even have a tendency to detect negative aspects of
personal relationships. They stress that if a business relationship is to close,
it can effect the professionalism negatively. The thought of being forced to
choose a less favourable alternative to avoid damaging a friendship or
personal relation as a consequence of emotional aspects, is regarded as
throwing a shadow on getting too involved in a business relationship. They
are more likely to employ the typically western rule of “never mixing
business with pleasure”, since emotional involvement can be an obstacle in
choosing the most cost effective alternative.
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Relationships between the selling and the purchasing company may not
only be limited to the purchaser and the salesman. Due to the high power
distance in Central and Eastern European countries, many managers only
finalise deals between top managers. Trucks are heavy investments, and the
managing director and/or the owner therefore take the purchasing decision.
Even though the power distance is high, truck drivers often have the
opportunity to express their opinion regarding what truck brand is
preferred. Many Volvo Truck customers feel that a comfortable cab is
important, especially in the eye of the driver. It implies that Volvo Truck
customers listen more to their drivers, more than when compared to
customers using other brands. In companies where power distance allows
for the purchasing decision maker to consult the driver, he becomes one of
the most important influencers. The companies that appear to be influenced
by the driver are the smaller companies. There are two reasons for this:
1. Small companies do not have as many employees and are not as
hierarchal. The power distance is not as high as in larger companies
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125
and the employees at the lowest level in the organisation have a
larger influence.
2.  Small companies experience difficulty in finding good drivers, since
they cannot offer the same conditions as big companies. This leads
them to try hard to keep good drivers and listen to their opinions.
It is important to consider that drivers have an influence on the purchasing
decision, since they frequently use word of mouth. They talk at borders and
when they stop for breaks, and one of the most commonly discussed
subjects is the truck they are driving. Since the skilled drivers are often a
scarce resource, their opinion is of great importance. With directing
marketing communication towards the drivers, a company can create a
demand for the particular brand, i.e. use a pull-strategy.
Word of mouth is not only employed by the drivers, but is a general
characteristic within the industry. Relationships in Hungary and the Czech
Republic are diffuse and people can put demands on each other even
outside the business relationship. With competitors often being friends it is
common that Volvo Truck customers recommend Volvo to colleagues in
the business. This is why brand loyal customers can also generate new
customers. It is important for Volvo Truck to work on brand loyalty by
applying personal relationships to activities that create and maintain brand
loyalty. Otherwise, customers may not communicate positive opinions and
experiences.
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Having previously discussed the importance of brand loyalty this section
will discuss how to create and maintain brand loyalty by focusing on the
variable brand assets of personal relationships.
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As discussed previously, being trustworthy, honest and avoiding making
the customer feel cheated, a company can take other measures to treat the
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126
customer right. During Communism, people were not used to being
separated from the group, i.e. feeling selected. With the increasing
individualism in the societies, people are looking to be treated special,
something in contrast to expectations under Communism. Furthermore,
people in Central and Eastern Europe are not used to advertisements and
especially not to advertisements that state that a person has been selected to
be member of a VIP club. VIP clubs make the customer feel privileged and
can have a better effect on a markets that have not been exposed to
sophisticated commercials as in mature markets. A VIP system could be
regarded as a way of treating the customers right. It is not only through VIP
clubs that customers should be treated specially. This needs to be
communicated with all customers all the time. A way to make the
customers feel special is through personal relationships. Most people feel
selected when the other party is interested in their personal lives. This is
not only important but more or less compulsory, since people are expected
to have an interest in the other party that is not related to business.
6WD\LQJFORVHWRWKHFXVWRPHU
The heavy investment and large financial risk the customer is taking means
the salesman’s role should be more of an advisor. The sales person needs to
be aware of the customer’s needs and listen to the customer’s requirements.
This is also a measure that increases brand loyalty and can be characterised
as “staying close to the customer”. It is not enough only to listen to the
customer when negotiating. The sales person needs to employ measures
that refer not only to specific business related issues, but also to other
spheres of the buyers life. This could be done through taking part of both
the customer’s business and private life. This would expand the
understanding of the customer’s needs. One example of how this was in the
Czech Republic where a salesman accompanied a customer on a business
trip to Spain. The customer went to Spain to purchase Volvo busses and
needed the Volvo Truck salesman as an advisor. This gives the company an
opportunity to widen the relationship while listening to the customers
needs. This increases trust by letting the relationship stretch past business.
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127
One of the most appreciated features of Volvo Truck is the company
having flexible approach to business. The customers feel that Volvo Truck
adapts to the customers’ needs, and this can only be done if the company
understands this.
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The importance of creating switching costs has already been discussed
previously. However, a pitfall to switching costs could be when a customer
feels trapped and has no choice when it comes to buying a new truck. It is
more likely that a customer feels trapped by switching costs related to
economic issues, than by personal relationships that the company offers. To
create positive attitudes that lead to brand loyalty the truck company must
provide measures that “treat the customer right”, “stay close to the
customer” and “provide extras”. All those measures are closely related to
what can be offered in personal relationships.
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In a society where relationships play such a significant role it becomes
more important to provide the customer with something extra. A company
can only supply customers with something extra if it has knowledge about
the customers’ preferences. Especially for smaller customers, the little extra
is often linked to personal relationships and to the customer feeling
selected. In Hungary, hospitality is important and the customers want to
feel welcomed. Something as simple as having coffee together influences
how a customer perceives the relationship.
 5HIOHFWLRQV
The analysis of the cultural influences on the perception of the Volvo
brand, repeatedly stresses the importance of personal relationships and that
the customers are treated in accordance with their preferences. To
effectively employ the advantages a company can gain by adapting to the
country culture, time-consuming investments in personal relationships are
required. This can cause clashes between Headquarters who have a
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128
different view of effective business than the local managers have. The
reward system and goals advocate a focus on immediate profit, and by
adapting this approach the importance of nourishing relationships is often
forgotten. It is important that Headquarters understand the need to adapt to
local customs and that they design the goals and reward system, so that
they stimulate activities in accordance with the specific country culture.
Investments in personal relationships must be viewed as cost efficient, and
not as if the local sales force has difficulties closing deals.
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Western culture has, to a varying degree, managed to neutralise Communist
culture of Central and Eastern European countries. The behaviour and
attitudes in Central and Eastern Europe depend on the relative influence of
Communist and Western cultures. Hungary and the Czech Republic can be
regarded as countries where the relative importance of these two cultural
extremes differ. Western influences are higher in Hungary than in the
Czech Republic, but the two countries still have their Communist past in
common. The country culture has an important impact on how truck
customers perceive the Volvo brand.
When managing its brand, Volvo should employ all assets that increase the
brand equity. The branding concept should be considered more than just
the image and the reputation, i.e. it is the sum of all assets that create brand
equity.
The largest share of assets that create brand equity are the standardised
assets necessary for being a premium truck brand world-wide. They are
standard requirements, which do not provide Volvo with a competitive
advantage. Those factors refer to the product and other assets that are easy
to copy. To be able to achieve a competitive advantage, Volvo needs to
employ brand assets that are hard to copy and can be adapted to the specific
culture in Central and Eastern Europe.
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130
Four main areas where Volvo can achieve a competitive advantage by
understanding and taking advantage of the cultural specificities are:
• Brand loyalty
• Brand association
• Product attributes
• Marketing communication
Regarding the brand loyalty, the customers can be divided into three
different groups, according to how loyal they are to the Volvo brand. They
could be classified as brand loyal, fence-sitters or switchers. These
customers have different approaches to business and the motives behind
their actions depend on their way to handle uncertainty. This in turn
depends on the size of the customer company and how influenced the
corporate culture is by Western standards. It is necessary for Volvo to adapt
to each of the customer’s specific characteristics. As brand loyalty is not a
concrete tool, it is somewhat different from the other three variable assets.
Still, it is important that brand loyalty is handled in conjunction with the
specific country culture. Further discussed is how Volvo can, in
combination with brand loyalty, use brand association, product attributes
and marketing communication, in order to increase brand equity.
To differentiate from the competitors it would be preferable if Volvo’s
customers could associate the brand with something other than the given
assets, i.e. the assets that are necessary to a premium brand. In societies
where personal relationships are significant, a personification of the brand
through associations to people would increase the commitment to the
Volvo brand. The personalised association should not be too specific, as
this could make the brand asset vulnerable. Volvo has to avoid the risk that
a customer leaves with the salesman, if the salesman resigns. A solution
could be to have the customers associate the Volvo brand with the whole
organisation rather than only one salesman. By increasing the interaction
between the truck customers and the Volvo employees at several levels in
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
131
the organisation there could be a shift in the personalised association of
Volvo.
Another brand association Volvo should employ is Sweden as a country of
origin, a country that is highly regarded in both Hungary and the Czech
Republic. The positive associations with the country of origin should be
used as a competitive tool.
The product attributes service, support and financing are assets necessary in
the truck industry on Central and Eastern European markets. By adding a
differentiating edge to these assets, they could be used to increase brand
equity in favour of the competitors. The differentiating edge could derive
from letting these three tools link the customer to Volvo, and if Volvo
communicates commitment to the customer through these assets, they will
be regarded as a partner. Relationships are important on these markets and
if Volvo expresses willingness to get further involved with their customers,
they will receive the customers’ trust.
Trust is important in many aspects of the relationship between Volvo and
the customers. The customers are commonly searching for overall solutions
to their relationships with truck companies and expect Volvo to help them
with solutions to the entire value chain. For the customer to accept the
complete package, trust in the relationship between Volvo and the customer
is required.
In the emerging individualistic societies where the people in Central and
Eastern Europe are looking for contrasts to the communist past, they
appreciate being made to feel selected and prioritised. This is something
that Volvo should consider throughout all their marketing communication,
particularly concerning personal relations.
The marketing communication could be designed so that it increases the
demand, as an effect of a pull strategy. The demand can derive from two
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
132
sources, i.e. the customers of the transporting companies and the drivers.
The customers’ customers can be convinced to demand Volvo and so can
the drivers. These two groups of actors have the primary influence on the
purchasing decision.
Successful management of a global brand needs adaptation to the different
markets that it operates on world-wide.  The recognition of what brand
assets that should be globally standardised and what brand assets that
should be locally adapted have been illustrated in figure 8.1. If these assets
are managed according to the findings of this study, Volvo can increase its
brand equity and thereby strengthen the Volvo brand in Central and Eastern
Europe. Increased brand equity will generate an enhanced brand loyalty
among Volvo’s existing truck customers. By word of mouth from these
brand loyal customers together with the increased equity of the Volvo
brand, new customers can also be gained. In other words, stronger loyalty
to the Volvo brand, in combination with the acquisition of new customers
will provide value to Volvo Truck.
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133
Figure 8.1: Conclusion model
Source: Own elaboration
*OREDOO\6WDQGDUGLVHG$VVHWV /RFDOO\$GDSWHG$VVHWV
Brand Name
Awareness Brand
Association
Perceived
Quality
Product
Attributes
Marketing
CommunicationOther Proprietary
Brand Assets
Positioning
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Brand Loyalty New Customers
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134
 )XWXUHUHVHDUFKDUHDV
The focus of this thesis has been on brand management and how this could
be effectively employed in Central and Eastern Europe. Even though brand
management is a wide concept, it does not cover all measures that could be
used to improve the operations on a specific market. Some crucial issues
fall under business strategies and even though brand management and
business strategies are closely related, it was not possible to look into areas
that are leaning more towards business strategy even though they would
have increased brand equity. This is also in alignment with our focus on
adaptable brand assets.
An area that would have been interesting is the business strategy for
implementing used trucks on the Central and Eastern European markets. A
focus on used trucks in Central and Eastern Europe could increase sales,
due to the fact that the purchasing price is lower. This would in turn
increase the brand equity since brand name awareness would be positively
affected by greater presence on the market. However, there might be risks
with this approach, since it could be perceived as the truck supplier is
treating Central and Eastern European customers as second class citizens
and this risk has to be evaluated. Furthermore, a study regarding the
demand for trucks that do not meet Euro 3 standards, i.e. cannot be used for
international transports in the long run, needs to be appraised.
The collected material that serves as a foundation for the analysis is partly
based on interviews with Volvo customers. A complementing angel could
be achieved by also interviewing non-customers. This would be an
interesting area for further research and information regarding this matter
could most likely fill a thesis of its own.
In addition to the after market for used trucks, research regarding how to
manage spare parts would be of interest. Spare parts, as well as used trucks,
are given brand assets and to avoid a too extensive analysis, the focus in
this thesis was on the adaptable assets. How to create brand loyalty to spare
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135
parts was, despite the revenues spare parts mean, not included. The
importance of spare parts does, however, motivate further research
regarding how to convince the customers to buy original parts instead of
pirate copies.
Another area is the negative preferences of the Czech and Hungarian
customers for trucks not manufactured in Western Europe. Strengthening
the image of Volvo trucks manufactured in Poland is a crucial issue and
this is an area that requires further research. An evaluation regarding how
country of origin could surpass country of manufacturing might lead to a
solution of the problem.
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136
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$DNHU’$., (1991) 0DQDJLQJ%UDQG(TXLW\FDSLWDOL]LQJRQWKHYDOXHRI
DEUDQGQDPH, The Free Press, N.Y.
$VVDHO+, (1995) &RQVXPHUEHKDYLRUDQGPDUNHWLQJDFWLRQ, 5th edition,
International Thomson Publising, Cincinnati, Ohio
’DKPVWU|P., (1991) )UnQGDWDLQVDPOLQJWLOOUDSSRUW, 5th edition,
Studentlitteratur, Lund
(QJHO-%ODFNZHOO5	0LQLDUG3 (1995) &RQVXPHUEHKDYLRXU, 8th
edition, The Dryden Press, USA
*DWOH\/HVVHPDQG$OWPDQ, (1996) &RPSDUDWLYH0DQDJHPHQW–$
WUDQVFXOWXUDO2G\VVH\McGraw-Hill Book Company
+DJXH3	-DFNVRQ3, (1994) 7KHSRZHURILQGXVWULDOEUDQGV–$Q
HIIHFWLYHURXWHWRFRPSHWLWLYHDGYDQWDJH, McGraw-Hill Book Company,
London
+RIVWHGH*, (1997) &XOWXUHVDQG2UJDQLVDWLRQV6RIWZDUHRIWKHPLQG
McGraw-Hill, N.Y.
+RIVWHGH*, (1982) &XOWXUH¶VFRQVHTXHQFHV–,QWHUQDWLRQDOGLIIHUHQFHVLQ
ZRUNUHODWHGYDOXHV, SAGE Publications, USA
+ROGHQ1&RRSHU&	&DUU-(1998) ’HDOLQJZLWKWKH1HZ5XVVLD
–0DQDJHPHQW&XOWXUHVLQ&ROOLVLRQ John Wiley & Sons, U.K.
-DQVVRQ+, (1999) ,QWHUQDWLRQDOVWUDWHJLFPDQDJHPHQWLQHPHUJLQJ
PDUNHWV–*OREDOLQVWLWXWLRQVDQGQHWZRUNV The School of Economics and
Commercial Law at Gothenburg University
.DSIHUHU-3, (1996) 6WUDWHJLF%UDQG0DQDJHPHQW Kogan Page, London
.LQQHDU7	7D\ORU-, (1996) 0DUNHWLQJ5HVHDUFK, 5th edition,
McGrawhill Inc., USA
.RWOHU3	$UPVWURQJ*(1994) 3ULQFLSOHVRIPDUNHWLQJ, Prentice Hall,
USA
/HNYDOO3	:DKOELQ&(1993) ,QIRUPDWLRQI|UPDUNQDGVI|ULQJVEHVOXW
IHM Förlag, Göteborg
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137
/LEUDU\RI1DWLRQV, (1986) (DVWHUQ(XURSH Time-Life Books,
Amsterdam, the Netherlands
0F’DQLHO&-U	*DWHV5(1996) &RQWHPSRUDU\0DUNHWLQJ
5HVHDUFK West Publishing Company, MN, USA
0F’RZHOO0XGDPEL6’R\OH3	:RQJ9, (1997) $QH[SORUDWLRQRI
EUDQGLQJLQLQGXVWULDOPDUNHWVIndustrial marketing management,
0HOLQ), (1997) 9DUXPlUNHWVRPVWUDWHJLVNWNRQNXUUHQVPHGHO Lund
University Press, Lund
0HUULDP6(1998) 4XDOLWDWLYHUHVHDUFKDQGFDVHVWXGLHV,
1ROOHQ7(1997) &XOWXUH6KRFN&]HFK5HSXEOLF, Times Editors Pte Ltd,
Singapore
3ULFH:DWHUKRXVH&RRSHUV, (1999) ’RLQJ%XVLQHVVDQG,QYHVWLQJLQWKH
&]HFK5HSXEOLF, PriceWaterhouseCoopers, USA
5LFKPRQG <, (1995) )URP ’D WR <HV – 8QGHUVWDQGLQJ WKH (DVW
(XURSHDQV Intercultural Press, USA
6XJDU3)+DQiN3	)UDQN7., (1990) $KLVWRU\RI+XQJDU\ Indiana
University Press, USA
7URPSHQDDUV) (1996) 5LGLQJWKHZDYHVRIFXOWXUH, Nicholas Brealey
Publishing, London
8VXQLHU-&, (1996) 0DUNHWLQJDFURVVFXOWXUHV Prentice Hall, Hemel
Hempstead
<LQ5. (1994) &DVHVWXG\UHVHDUFK–’HVLJQDQGPHWKRGV, CA Sage
cop., Thousand Oaks
$UWLFOHV
/HYLWW7, (May/June, 1983)7KH*OREDOL]DWLRQRI0DUNHWV Harvard
Business Review
+DQVVRQ: )UnQDUEHWDUHWLOOPnQJPLOMRQlUAftonbladet,  991108
+DQVVRQ:)RONKMlOWHQILFNJORULDQSnVQHG Aftonbladet, 991106
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138
,QWHUQHWVRXUFHV
www.odci.gov/cia/publications/factbook/hu.html, 991016
www.fsz.bme.hu/hungary/geo.html, 991016
www.riksdagen.se, 991112
www.hungary.com, 991112
www.volvo.com, 991109
http://lcweb2.loc.gov/frd/csquery.html, 991119
,QWHUYLHZV
+XQJDU\
&XVWRPHUV
Mr. Papp Gábor, Bátortransz Kft, 991025
Mr. Ferenc Pók, Flottrans Kft., 991026
Mr. Georgopoulos Theodoros, Auto Teo Kft, 991026
Mr. K Szabó István, Merci Trans Kft, 991026
Mr. Károly Csiszár, Volán Tefu AG,  991027
Mr. Kalman Szabo, Pepsi-Cola Hungary, 991027
Mr. Géza Vass, Hungariocamion, 991028
Mr. Gúthe Janos & Mr. Szabó Ferenc, Trans Babolna, 991029
9ROYR7UXFNHPSOR\HHV
Mr. Ulf Magnusson, Managing Director VTC Hungary, 991029
Mr István Nagy, Salesmanager VTC Hungary, 991026
Mr. Miklós Kovács, After Salesmanager VTC Hungary, 991027
Mr. Gyula Hartai, Sales representative VTC Hungary, 991027
Mr. David Illec, Controller VTC Hungary , 991029
&XOWXUDOLQVWDQFHV
Ms. Eva Szekely & Mr. Denes, the Swedish Trade Council Budapest,
991027
7KH&]HFK5HSXEOLF
&XVWRPHUV
Mr. Pavel Karas, PKC Praha spol. s r.o., 991102
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139
Mr. Viri Cedik, Car Transport, 991103
Mr. Hodr Tomás Kamionservis, 991103
Mr Milan Popilka, Popilka, 991103
Mr. Milan, Besico Trans, 991104
Mr. Zdenek Procházka, P.G. a.s. Probo Group, 991104
9ROYR7UXFNHPSOR\HHV
Mr. Are Knopf, Managing Director VTC the Czech Republic, 991101
Mr. Petr Kotrsál, Salesmanager VTC the Czech Republic, 991101
Mr. Jacub Cermák, After Salesmanager VTC the Czech Republic, 991101
Ms. Ivana Lysakova, Executive Secretary VTC the Czech Republic,
991101
Mr. Marián Cervoch, Sales Representative VTC the Czech Republic,
991103
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Driver 1, for a middle-sized company, 991103
Driver 2, for a middle-sized company, 991104
&XOWXUDOLQVWDQFHV
Mr. Jan Sadék, Second Secretary at the Swedish Embassy, Prague, 991104
Mr. Terje Englund, Journalist in Prague for Dagens Näringsliv, Norway,
991104
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Internal material from Volvo Truck Corporation
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140
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1. What does Volvo Truck stand for, according to your opinion?
2. What country do you associate Volvo Truck with?
a. What does that mean to you and why?
3. Could you please rank Volvo, Mercedes and Scania according to the
following features?
4. What is the competitive advantage of:
a. Mercedes?
b. Scania?
c. Volvo?
3URGXFWDWWULEXWHV
5. What product features do you consider as particularly important?
6. Is there anything else that you believe is crucial for a truck supplier
and that leads you to assign that particular one?
4XDOLW\YHUVXVSULFH
7. What do you expect from a good quality truck supplier?
8. What is it like to run a business like yours in Hungary/Czech
Republic?
a. What does it involve?
E 7U\WRILQGRXWVRPHWKLQJDERXWSODQQLQJDQGULVN
Appendix I A
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141
9. What is “value for money” for you concerning trucks?
a. Which truck supplier gives you “value for money”?
b. Does Volvo supply you with “value for money”?
’HOLYHU\
10. How do you experience the delivery from Volvo Truck?
a. Positive and negative aspects?
11. What do you consider to be a reasonable delivery time?
a. What delivery time did you get from Volvo Truck last time?
12. Have you experienced an even quality from Volvo Truck?
a. If not, how has it differed?
/R\DOW\
13. What truck brands do you have in your fleet?
14. Have you switched between brands?
a. (What made you switch?)
15. Do you think that you would buy a Volvo truck again?
16. Would you recommend Volvo Truck to your colleagues in the
business?
17. How do you experience your relationship with Volvo Truck?
a. Positive and negative aspects?
b. (Do you get anything “extra” by being a Volvo customer?)
3XUFKDVLQJGHFLVLRQ
Who takes the final purchasing decision regarding trucks, in your
organisation?
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142
19. Who influences the purchasing decision?
a.  Colleagues in the business
b. The truck drivers
c. The salesman
d. Advertising and promotional activities
e. Own suggestion of the respondent:
20. (What kind of purchasing instructions, if any, do you get from your
supervisor?)
%LJFXVWRPHUVRQO\
21. Why is the above factor important to the purchasing decision?
5HODWLRQVEHWZHHQWKHVHOOHUDQGWKHEX\HU
22. What is important to you in a business relationship?
23. What would make you switch truck supplier?
24. Do you mix with your business partners socially?
25. Could you compare your relationship with Volvo Truck to your other
relationships in the business? (Positive and negative aspects)
0DUNHWLQJ
26. What information have you received from Volvo Truck?
 Direct Mail
Exhibitions
Information from the dealer
Advertisements in magazines
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143
Customer meetings/representation
Other:
27. What did you think about this information?
&XVWRPHURUJDQLVDWLRQ
28. How many people does your company employ?
29. How do you work/are you organised, in you company?
30. What is your annual turnover?
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144
,QWHUYLHZ*XLGH
- 9ROYR
+RZGRHV9ROYRXVHEUDQGPDQDJHPHQW"
• What is branding to you?
• Why is branding important?
• How is the branding function organized in the Czech
Republic/Hungary and globally?
• To what extent do you use standardisation and adaptation
respectively, in the brand message?
- How adaptive to the specific country culture are Volvo today?
• How well known is Volvo by the general public in Czech Republic
and Hungary?
%UDQGOR\DOW\
• Are the customers loyal to the Volvo brand?
- How often do the customers switch brands?
- What do you believe increase brand loyalty?
- Between what brands do the customers switch?
• What has the response been from the customers regarding their
relationship with Volvo?
• Is Volvo carrying out any activities to listen to the customers’
opinions and needs?
• Is Volvo trying to enforce switching costs for their customers?
Appendix I B
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145
- Do you help the customers to adjust their working processes to
Volvo Truck’s products?
- Does it exist any kind of reward system for loyal customers?
1HJRWLDWLRQVDQGSHUVRQDOUHODWLRQVKLSV
• How important are relationships, both in the society and in business
life?
• How are you relationships formed?
• What is important to consider when you negotiate in the Czech
Republic/Hungary
- Is a negotiation characterised by arguments where you use
“hard” facts, or do you rely more on coming to an agreement
through the personal relationship?
- (Reasoning or emotional consensus in the decisions?)
• How do you socialise with your customers?
Only at negotiation occasions.
Dinners and other kinds of representation.
On a private level.
• What is important to nourish in a business relationship in the Czech
Republic/Hungary?
• How much time is needed for negotiations – are the customers
impatient or patient?
• Who takes the purchasing decisions – formally and informally?
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146
0DUNHWLQJFRPPXQLFDWLRQ
• What marketing communication tools has Volvo used in the Czech
Republic/Hungary?
• At what product attributes do you focus when promoting Volvo
Truck in the Czech Republic/Hungary?
9DULRXVTXHVWLRQV
• What is Volvo’s competitive advantage in the Czech
Republic/Hungary?
• How do you think Sweden is perceived in those countries?
• Are there any cultural similarities between the Czech Republic and
Hungary?
• How are the sales activities differing between the Czech
Republic/Hungary and Sweden?
• Discuss, in relation to each other, the importance of price, quality
and delivery in the Czech Republic/Hungary!
• How large part of the expenses for the different customers does a
truck involve in these countries?
• How is the price for a truck calculated (is durability taken into
account and what time
perspective is used)?
• Discuss, in relation to each other, prestige, wealth and power in the
Czech Republic/Hungary, specifically within the industry?
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147
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148
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&XOWXUDO,QVWDQFHV
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• How well known is Volvo by the general public in Czech Republic
and Hungary?
• How is Sweden perceived in these countries?
- Positive and negative aspects.
- Is Sweden associated with any particular features?
3XUFKDVLQJEHKDYLRXU
• What are the most significant differences regarding purchasing
behaviour between the Czech Republic/Hungary and Sweden?
• Could you describe the uncertainty avoidance in the Czech
Republic/Hungary?
- How does this influence the purchasing behaviour?
• How are quality, price and delivery valued in the Czech
Republic/Hungary?
,PSRUWDQFHRIWUXVWDQGUHODWLRQVKLSV
• Could you describe the role of trust and relationships in the Czech
Republic/Hungary?
 %RWKLQWKHVRFLHW\DQGLQEXVLQHVVOLIH
- Is there a difference in importance of these matters depending
on whether the relationship is with a fellow citizen or with a
foreigner?
- Are settlements more depending on persuasive arguments or
on the personal relationship?
Appendix I C
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149
• Do people mix business with pleasure?
- Do the relations with the business partner have to be nourished
also privately (wine and dine)?
• Could you compare the negotiation styles in the Czech
Republic/Hungary to the one used in Sweden?
7KHHIIHFWVRI&RPPXQLVP
• How are people coping with freedom today?
• How has the political power distribution developed after the fall of
the Communism?
– Are the communists still ruling, directly or in directly?
• Has there been any forced on collectivism during the Communist era
that is affecting the society today?
6\PEROVKHURHVDQGULWXDOV
• What symbols (gestures, words, dress, hairstyles etc.) particularly
reflect the Czech Republic/Hungarian culture?
• What heroes (persons - dead or alive, real or imaginary) exist and
serve as models for behaviour?
• What rituals (ways of greeting, paying respect to others, social and
religious ceremonies etc.) are typical for the Czech
Republic/Hungary?
• How are those factors influencing everyday-life?
&XOWXUDOGLPHQVLRQV
• Is the culture long- or short sighted compared to what it is like in
Sweden?
0DVWHU7KHVLVLQ,QWHUQDWLRQDO%XVLQHVV+HOHQD/DUVVRQ	$QQD:DOOVWU|P
150
• How are prestige, wealth and power looked upon in the Czech
Republic/Hungary?
• How affective are the people in these countries compared to Sweden
and other Northern European countries?
• Are people in these countries loyal to other people?
– How large is the difference regarding how people treat each
other depending on how close the relationship between the
two is?
• How great is the resistance to change in these countries and
particularly in the
organisations?
• How would you describe the environmental concern in the Czech
Republic/Hungary?
– Has it been affected by history?
– How has it changed as a result of the integration with the
European Union?
• What gives you status in the Czech Republic/Hungary?
• Do people get respected as a result of their achievements or because
of their age, sex, etc.?
• Is the culture and customers in these countries more oriented towards
hard values, for example, technology and results, or is it more soft
values, for example, safety and cooperativeness?
• Do we need to be “loud” (use extreme expressions, e.g. superlatives)
when communicating in the Czech Republic/Hungary?
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151
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• Are there any cultural similarities between the Czech Republic and
Hungary?