An International Comparison via the Advisor Model

This paper presents a cross-national study of industrial marketing communications spending. The study compares the results of data collected from 55 European companies on 80 products with a sample of 131 products from 29 companies representing the ADVISOR 2 study sample in the U.S. Several key questions are addressed. First, we consider if the original ADVISOR results are specific to U.S. companies. We also consider if budgeting norms are time dependent, i.e., whether the structure of the budgeting process has changed over time. The main results show that (a) the same strategic variables have about the same power in explaining variations in marketing spending patterns in the U.S. as in Europe, (b) the overall relationship between the strategic variables and advertising and marketing spending levels is not different between the U.S. and Europe, and (c) although some differences exist in the importance of individual strategic variables between the U.S. and Europe, those differences are generally small. Implications for marketing managers as well as directions for future research are discussed. One should expect the size and structure of industrial marketing budgets to vary between the U.S. and Europe. Marketing programs in Europe deal with smaller geographical areas and generally deal with different customer profiles. The actual differences in monetary level of spending are not as important, however, as is an understanding of whether budgeting behavior per se is different between the two continents. In other words, the interesting question is whether the paradigm with which the American manager works is different from that of his European counterpart. An ideal test of this hypothesis would be to transplant managers across the Atlantic and observe whether they spend differently in their new environment. Practically such a test is infeasible. As an alternative, the experience gained through the ADVISOR studies allows us to learn which considerations marketing managers use in formulating industrial marketing budgets and how those considerations are used. In this study we sought a collective European Industrial Marketing wisdom as was found in the U.S. After a brief description of the American experience, we describe the rationale behind our comparison, suggest research hypotheses and report the results. We then evaluate how this study has added to our knowledge of the cross-national generality of the process of setting marketing budgets for industrial products. 1. Background on the ADVISOR Studies As Webster (1978) has pointed out, industrial marketing, accounting for well over half of all economic activity, has not received nearly its proportional share of attention in the professional literature and in academic research. Much of the work in the area "... is trivially descriptive, ... based on small unrepresentative samples ... and naively unaware of real world complexity." (p. 21).