How Multinational Enterprises Develop their Advertising Strategy in New EU Member States: A Qualitative View

The European market is increasingly important in the world economy. The expansion of the European Union (EU) advanced further in 2004, by adding ten new member states, a total of 77 million people, and over 700,000 square kilometres of territory. The incorporation of eight central and eastern European countries (Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia, Hungary and Slovenia) and two Mediterranean islands (Cyprus and Malta) was one of the most ambitious initiatives in the five-plus-decade history of European integration. This drastic expansion has changed the way in which multinational enterprises (MNEs) operate their businesses in Europe. Because of these countries’ low labour costs and investment incentives (e.g., tax reduction, construction aid), many firms have moved their production facilities from other regions to these new Member States. In particular, the Czech and Slovak Republics, Hungary and Poland have attracted almost three-quarters of foreign investment (Sheram and Soubbotina 2000), while MNEs have rapidly become the largest advertisers in these countries. To date, however, little research has been available regarding advertising or marketing strategy in this region.