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2004:152 SHU
BACHELOR’S THESIS
Promotion Strategies
for Banking Services
Case Study of Nordea in Estonia
ANNA GRANKVIST
CAROLINA KOLLBERG
ANNA PERSSON
Social Science and Business Administration Programmes
INTERNATIONAL BUSINESS AND ECONOMICS PROGRAMME

Department of Business Administration and Social Sciences
Division of Industrial Marketing and e-Commerce
Supervisor: Manucher Farhang
2004:152 SHU • ISSN: 1404 – 5508 • ISRN: LTU - SHU - EX - - 04/152 - - SE

ACKNOWLEDGEMENTS
ACKNOWLEDGEMENTS
This Bachelor’s thesis was written as a part of the program for International Business and
Economics at Luleå University of Technology in the spring of 2004.
We would like to thank our supervisor Manucher Farhang at the division of Industrial
Marketing for his help and guidance during the process of writing this thesis. We would
also like to thank our respondent Mr. Christer Rosentröm, country manager of Nordea
Bank Finland plc Estonia branch, for taking time of to answer our questions. Without him
we would not have been able to complete this thesis.
Finally, we would like to express our gratitude to all the people that have supported us
during the process.
Luleå, May 2004
Anna Grankvist Carolina Kollberg Anna Persson

ABSTRACT
ABSTRACT
The issues of promotion are becoming more and more complicated as internationalization
of financial services continues to increase. In the latter years, the Baltic States have
emerged as attractive markets for many western countries, and several banks have
initiated operations there. The purpose of this thesis is to gain a better understanding of
international banks’ promotion strategies in the Baltic States. In order to reach our
purpose we have conducted a case study of a Nordic retail bank’s promotion strategy in
Estonia. For our data collection we have used interviews and documentations. Our study
shows that the most important promotion tools for financial services are personal selling
and advertising, in order to create awareness of the brand and establish personal
relationships. The external factors influencing the choice of promotion strategy are
technology orientation of the industry, cultural aspects, competitiveness of the market,
and economic factors. Adaptation of the promotion strategy is performed to a great
extent, due to customers’ different preferences and expectations, as well as local
conditions of the host country. However, banks attempt to standardize their promotion as
much as possible in order to reduce costs and reach economies of scale.
SAMMANFATTNING
SAMMANFATTNING
Frågor gällande marknadsföring blir alltmer komplicerade i takt med att
internationaliseringen av finansiella tjänster ökar. Under de senaste åren har de Baltiska
staterna utvecklats till attraktiva marknader för många länder i västvärlden, och ett flertal
banker har initierat verksamhet där. Syftet med denna uppsats är att öka förståelsen för
internationella bankers marknadsföringsstrategier i de Baltiska staterna. För att nå syftet
har en närmare studie av marknadsföringsstrategier hos en Nordisk bank, aktiv i Estland,
genomförts. För insamling av data har vi använt oss av intervjuer samt dokumentationer.
Vår studie visar att de viktigaste marknadsföringsverktygen för finansiella tjänster är
personlig försäljning samt reklam. Detta för att skapa medvetenhet om varumärket och
för att etablera personliga relationer. De viktigaste externa faktorerna som påverkar valet
av marknadsföringsstrategi är teknikintensitet inom industrin, kulturella aspekter,
konkurrens på marknaden samt ekonomiska faktorer. Adaptering av
marknadsföringsstrategin genomförs i mycket stor utsträckning, främst på grund av
kundernas varierande preferenser och förväntningar, men även på grund av lokala
betingelser. Emellertid försöker banker att standardisera sin marknadsföringsstrategi i så
stor utsträckning som möjligt, för att minska kostnaderna samt uppnå skalekonomi.
TABLE OF CONTENTS
TABLE OF CONTENTS
1 INTRODUCTION ......................................................................................................1
1.1 Background ...........................................................................................................1
1.1.1 Internationalization of the Banking Industry....................................................1
1.1.2 Promotion of Financial Services......................................................................2
1.1.3 Financial Services in the Baltic States .............................................................3
1.2 Problem Discussion ...............................................................................................3
1.3 Purpose & Research Questions ..............................................................................4
1.4 Demarcations.........................................................................................................5
2 THEORETICAL FRAMEWORK.............................................................................6
2.1 The Promotion Mix for Banking Services ..............................................................6
2.2 External Factors Influencing the Choice of Promotion Strategy .............................9
2.3 Adaptation and Standardization of the Promotion Strategy...................................15
3 FRAME OF REFERENCE......................................................................................18
3.1 The Promotion Mix for Banking Services ............................................................18
3.2 External Factors Influencing the Choice of Promotion Strategy ...........................19
3.4 A Conceptual Frame of Reference .......................................................................22
4 METHODOLOGY ...................................................................................................24
4.1 Research Purpose.................................................................................................24
4.2 Research Approach ..............................................................................................25
4.3 Research Strategy ................................................................................................25
4.4 Data Collection ....................................................................................................27
4.5 Sample Selection .................................................................................................29
4.6 Data Analysis ......................................................................................................30
4.7 Quality Standards ................................................................................................31
4.8 A Visual Design of Methodology.........................................................................32
5 EMPIRICAL DATA.................................................................................................33
5.1 The Nordea Group ...............................................................................................33
5.2 The Promotion Mix for Nordea’s Banking Services .............................................35
6 DATA ANALYSIS....................................................................................................42
6.1 The Promotion Mix for Banking Services ............................................................42
7 CONCLUSIONS.......................................................................................................52
7.1 How can the promotion mix for banking services in the Baltic States be described?
..................................................................................................................................52
TABLE OF CONTENTS
7.2 How can the external factors influencing the choice of promotion strategy for
banking services in the Baltic States be described? ....................................................53
7.3 How can the adaptation vs. standardization of the promotion strategy for banking
services in the Baltic States be described?..................................................................54
8 IMPLICATIONS ......................................................................................................56
8.1 Implications for Management ..............................................................................56
8.2 Implications for Theory .......................................................................................56
8.3 Implications for Further Research ........................................................................57
REFERENCE LIST ....................................................................................................58
APPENDIX 1 – Interview Guide: English Version

APPENDIX 2 – Interview Guide: Swedish Version
LIST OF FIGURES
LIST OF FIGURES
Figure 2.1 A Testable Framework of Product and Promotion Adaptation.......................10
Figure 3.1 External Factors Influencing the Choice of Promotion Strategy ....................21
Figure 3.2 A Conceptual Frame of Reference ................................................................23
Figure 4.1 A visual design of Methodology ...................................................................32
Figure 5.1 The Nordea Group........................................................................................33
LIST OF TABLES
LIST OF TABLES
Table 4.1 Relevant Situations for Different Research Strategies.....................................26
Table 4.2 Six Sources of Evidence: Strengths and Weaknesses......................................27
Table 6.1 Comparison between Theory and Empirical Data...........................................47
Table 6.2 Basic Conditions for Adaptation or Standardization .......................................49
Table 6.3 Arguments for Adaptation..............................................................................50
Table 6.4 Arguments for Standardization.......................................................................51
INTRODUCTION
1 INTRODUCTION
This introductory chapter is divided into four subsections. Firstly, a brief background
will be presented. Thereafter, the problem discussion will be provided, which in turn will
lead to the purpose and research questions. Finally, the demarcations will be set forth.
1.1 Background
Globalization is growing faster than ever. In order to keep up with the competition,
companies are forced to think globally and to expand their business across borders.
National boundaries are falling and multi-national companies are increasing in numbers.
The focus on internationalization efforts and development of global strategies has tended
to fall upon manufacturing companies. However, due to the growth of the service sector
and its important role for many countries in compensating trade deficits, as well as its
increasing internationalization, service companies have become more and more
important. (McLaughlin & Fitzsimmons, 1996)
Today, services are the fastest-growing part of world trade and account for the largest
share of gross domestic product in almost every country (Albers-Miller & Straughan,
2000). In an internationalization process, services are assumed to be encountering larger
risks than manufactured goods, since service providers often immediately have to
establish its operations abroad and cannot gradually export the goods (Välikangas &
Lehtinen, 1994). This is due to the fact that services generally cannot be separated from
the person performing or selling them (Nicolaud, 1989). One of the sectors within the
service industry that has been influenced the most by the changes in the globalization
process, and at the same time has been highly internationalized, is the banking sector.
(Sanchez-Peinado, 2003)
1.1.1 Internationalization of the Banking Industry

Financial activity across borders is a phenomenon as old as international trade
(Marquardt, 1994). Since the 1960s, the internationalization of banks has expanded at a
rapid pace, and banks from all over the world have established themselves abroad since
then (Lindström, 2003).
According to Albers-Miller & Straughan (2000) banks have been encountering numerous
challenges during the past two decades, including competition, recessions and image
problems. Additionally, many banks have been facing mature domestic markets with
limited future growth potential, which as a result, has led to expansion of their services
abroad (ibid). Until recently, banks were seen as highly bureaucratic organizations
operating solely in national markets. Today, they are more likely to be efficient and
modern institutions operating in a highly competitive environment, and often on
international markets. (Quintana, 2003) There are three primary driving forces behind
these transformations. The first force is the process of globalization (Daniels &
Radebaugh, 2001). Globalization has affected the banking sector both directly, through
1
INTRODUCTION
the increasing interdependence of national financial markets, and indirectly, through the
parallel internationalization of organizations. The second force is the reduction of
regulations concerning the banking industry in most countries, including the decreasing
interference of central banks. (Quintana, 2003) Finally, the technological expansion has
been an important factor behind the transformations (Daniels & Radebaugh, 2001).
For a long time retail banking1 operations have to a great extent been conducted
nationally. However, internationalization within this sector is now taking place, either
through cross-border mergers and acquisitions, or through the establishment of
subsidiaries in foreign countries. (Quintana, 2003)
Flohr-Nielsen et al., (2003) claim that the best place to study how companies meet
market and technology challenges is within the Nordic-banking sector. What makes this
banking sector particularly interesting are the ongoing changes reflected in mergers,
acquisitions and technological developments. (ibid) Apart from the Benelux countries,
the Nordic countries appear to be the only region within Western Europe where cross-
border bank mergers have achieved satisfactory results. The reason for this success is said
to be the resemblance in culture, language and history of the countries within those
regions. (Quintana, 2003)
1.1.2 Promotion of Financial Services

Promotion is the direct way an organization tries to reach its publics. This is performed
through the five elements of the promotion mix, i.e. advertising, sales promotion,
personal selling, public relations, and direct marketing (Czinkota & Ronkainen, 2004)
With the growing importance of the financial sector, pressures are escalating for more
effective marketing management of the financial services. Despite the recent recessions,
the financial services sector is continuing to grow in terms of turnover and profits and
thus, has a supreme impact on the other spheres of the economy. Consequently, there is
currently growing interest in applying marketing techniques and tools in financial
services. (Meidan, 1996)
In spite of major changes on the market of financial institutions, there are indications that
banks have not yet successfully embraced the marketing philosophy or achieved levels of
its implementation consistent with satisfied customers. Financial institutions are realizing
that their established promotion practices are inadequate for new market conditions as
levels of customer defection in the sector grow. Traditionally, banks have tried to reach
out to everyone in the community, but recent research proposes that banks should aim to
identify and serve micro-segments. (Dawes & Brown, 2000)
The role of promotion has been redefined into managing long-term relationships with
carefully selected customers, including construction of a learning relationship where the
marketer maintains a dialogue with an individual customer (Dawes & Brown, 2000). Due
to this fact, the personnel are one of the most important resources of a bank. Their
1
Banks that focus on private persons and smaller companies (Lindström, 2003)
2
INTRODUCTION
competence will determine the quality of the bank and how well it operates. (Marquardt,
1994)
The difficulties with understanding a foreign culture2 often leads to insecurity, which as a
result makes it harder to operate on a new market. This is a reason why many banks
choose to operate in markets that are similar to those of their home countries. (Marquardt,
1994)
1.1.3 Financial Services in the Baltic States

The transition economies in Central and Eastern Europe are emerging as attractive target
markets for companies in Western Europe. The notable economic growth that is taking
place in the former East block has triggered interaction, especially across the Baltic Sea.
The Nordic countries have demonstrated an increasing interest in trade relations and in
making direct investments in Estonia, Lithuania and Latvia. (Ghauri & Holstius, 1996)
The Baltic States are some of the most developed transition economies (Fleming et al.,
1997). Since the independence of the three countries in 1991, the development from
planned economy to a functioning market economy has been rapid. A great number of
new corporations have been established, and almost all economic activity is now operated
privately. (Exportrådet, 2003) Initially the three countries took different approaches
regarding their financial systems (Fleming et al., 1997). Today, however, the basic
structures of the financial system in the Baltic States are quite similar, in the sense that
they are strongly dominated by retail banks, which increasingly tend to be foreign owned
(Berglof & Bolton, 2002). For example, in Estonia the market share of foreign-owned
banks is more than 90 percent (Ghauri & Holstius, 1996).
1.2 Problem Discussion
Experience has shown that operating abroad involves many difficulties, such as cultural
differences, language, laws and regulations, lack of foreign contacts and business
connections. These factors are ever so difficult for banks, since their operations involve a
high degree of risk taking. The establishment of banks has generally taken a long time,
and very few have attained a strong position on foreign markets. (Marquardt, 1994)
Promotion of financial services is an understudied area. Much of the bank marketing

literature has concentrated on marketing theory more than promotion practice.
Unfortunately, the issues of marketing are becoming more complicated as
internationalization of financial services continues to increase. (Albers-Miller &
Straughan, 2000) Effective promotion of financial services is crucial since services are
intangible products, and it is hard to stand out, considering the fact that all banks offer
similar products (Meidan, 1996). A bank’s services are seldom unique and they are easy
2
Culture is the specific learned norms of a society, based on attitudes, values and beliefs (Daniels &
Radebaugh, 2001)
3
INTRODUCTION
for competitors to copy (Marquardt, 1994). Additionally, many people cannot make a
distinction between different banks’ services, and they are often not aware of the wide
range of different financial services available. (Meidan, 1996)
Since the independence from the Soviet Union, advertising in the Baltic States has been
reinforced. Advertising did exist prior to 1991, but mainly in the form of outdoor poster
sites and shop-window displays, promotional techniques far from those mostly familiar in
the west, i.e. television and press. Since the adoption of the free market, advertising has
become an inevitable feature of the Baltic economies, especially through the activities of
western companies. Although, in actual terms, advertising expenditure remains small, it is
continuously growing. In comparison to other central and eastern European countries,
there is evidence that advertising growth will continue. Perhaps most significant is the
contribution that advertising is already beginning to make to the GDP of these countries.
(Arnold et al., 2001)
According to Ghauri & Holstius (1996) transition economies are very different from
industrialized countries, and their banking and communication systems tend to be rather
underdeveloped. However, since the Baltic States are referred to as some of the most
developed transition economies by Fleming et al. (1997), it would be very interesting to
know to what extent their rapid development has affected the promotional activities of
Banks operating within this region. Berglof & Bolton (2002) state that the banks in the
Baltic States are to a great extent foreign owned, and yet there has not been enough
significant research concerning the challenges facing international banks’ when
promoting themselves in these countries. Our main motive for conducting this study is
due to the fact that limited research is available within this area. We think that this is ever
so interesting to study now, as the Baltic States are entering the European Union.
1.3 Purpose & Research Questions
Based on the problem discussion above, the purpose of this thesis is to gain a better
understanding of international banks’ promotion strategies in the Baltic States.
In order to fulfil this purpose three research questions have been constructed and will be
used as a foundation for the research:
RQ1: How can the promotion mix for banking services in the Baltic States be
described?
RQ2: How can the external factors influencing the choice of promotion strategy for
banking services in the Baltic States be described?
RQ3: How can the adaptation vs. standardization of the promotion strategy for banking
services in the Baltic States be described?
4
INTRODUCTION
1.4 Demarcations
Ghauri & Holstius (1996) state that the Baltic countries are three different areas with
different cultures and history. Yet they can be seen as one area as far as the establishment
of Nordic companies is concerned. Out of all the Baltic States, Estonia is the most
developed economically, especially in its banking system. (ibid) The system was
effectively reformed in the early 1990s, and today it is working satisfactorily
(Exportrådet, 2003). As far as technological advances are concerned, and the impact that
they have on the way business is done, Estonia is in the forefront in Europe (Bokros et
al., 2001).
Estonia is called a transition economy, but appears to be relatively comparable to the

industrialized countries of Western Europe. Since it is the Baltic country that is most
similar to the Nordic countries, we think that it will be interesting to see what possible
obstacles or differences in terms of promotion might be facing a Nordic bank operating
there. As a further demarcation we will solely focus on one form of banking activities,
namely retail banking.
Based on the facts stated above, this thesis will focus on promotion strategies pursued by
Nordic retail banks operating in Estonia.
5
THEORETICAL FRAMEWORK
2 THEORETICAL FRAMEWORK
In this chapter the theoretical framework relevant to our purpose and research questions
will be presented. The chapter begins with a presentation of the promotion mix for
banking services, followed by the external factors influencing the choice of promotion
strategy, and thereafter theories regarding adaptation and standardization of promotion
will be discussed.
2.1 The Promotion Mix for Banking Services
Promotion is according to Brassington & Pettitt (2000) the direct way in which an
organization communicates the product or service to its target audiences. Within the
financial services industry, promotion is used in many different ways (Meidan, 1996).
Brassington & Pettitt (2000) has categorized the promotional tools into five main
elements;
! Advertising,
! Sales Promotion,
! Public Relations,
! Personal Selling, and
! Direct Marketing
Advertising
Brassington & Pettitt (2000) define advertising as any paid form of non-personal
communication directed towards target audiences and transmitted through various mass
media in order to promote and present a product, service or idea. The key difference
between advertising and the other promotional tools is that it is impersonal and
communicates with large numbers of people through paid media channels. (ibid)
Meidan (1996) states, that a financial services organization can use its advertising for
either its short-term or its long-term objectives. A bank attempting to generate a long-
term build-up of its name would use institutional advertising, while a bank interested in
promoting its brand name and its different services would use a brand advertising policy.
(ibid)
Meidan (1996) further states that the institutional advertising consists of promotion of the
firm’s image as a whole, and promotion of the products offered, with extra emphasis on
the specific firm’s name organization. The organization seeks through its marketing
communications, to build awareness and to impress customers looking for the best range
of financial services. Due to the former impression of banks as impersonal institutions
with no interest in their customers as people, and of financial services as abstract and
quite similar, the institutional advertising has become more and more important. Brand
advertising follows closely in the footsteps of institutional advertising. Its purpose is to
create awareness of the bank’s name and to advertise the different services it is offering.
Since financial firms are serving a mass of people, the problems of brand advertising are
6
to know who to advertise to, and how to advertise. While institutional advertising is
directed towards the whole population, the brand advertising of particular products has to
be much more selective, since it has to show that the consumer will benefit from the
service. Furthermore, all the individual campaigns of brand advertising have to be
compatible in tone and presentation, and match the image the bank has created through its
institutional advertising. (ibid)
Mortimer (2001) states that an important part of advertising is to make the service
tangible in the mind of the consumer in order to reduce perceived risk and provide a clear
idea of what the service comprises. Furthermore she considers it important to advertise
consistently, with a clear brand image, in order to achieve differentiation and encourage
word-of-mouth communication (ibid).
According to Meidan (1996), there are two types of advertising channels appropriate for
financial advertising. That is “above-the-line” and “under-the-line” advertising. Above-
the-line advertising contains different channels of communication, such as television,
radio, posters, magazines and newspapers. Under-the-line advertising constitutes a huge
part of a financial organization’s advertising activities. It is the invisible advertising of
the bank’s services, including leaflets, pamphlets, explanatory guides and manuals that
can be used to support selling of a specific service. It is hard to draw a definite distinction
between under-the-line advertising and sales promotion. Under-the-line advertising is
very easy and cheap to produce, but it must be used discreetly. Furthermore, this kind of
advertising does not attract new customers, and it is depending on personal selling for its
effectiveness. (ibid)
Sales Promotion
According to Brassington & Pettitt (2000) sales promotion is different tactical marketing
techniques with mostly short-term incentives, which are designed to add value to the
product or service, in order to achieve specific sales or marketing objectives.
Furthermore, Meidan (1996) states that it has two distinctive qualities. Firstly, it provides
a “bargain chance”, since many sales promotion tools have an attention-gaining quality
that communicates an offer that will not be available again to purchase something special.
The disadvantage, however, is that although they appeal to a wide range of buyers, many
customers tend to be less brand loyal in the long run. Secondly, if sales promotions are
used too frequently and carelessly, it could lead to insecure customers, wondering
whether the service is reliable or reasonably priced. (ibid)
Meidan (1996) indicates that due to the conflicting ideas concerning the benefits of sales
promotions, a financial service organization must base its decisions upon relevance and
usefulness of sales promotion, as well as cost-effectiveness. Peatti & Peatti (1994) claim
that normally, coupons, special offers and other forms of price manipulation are the
dominant forms of sales promotion. However, price-based promotions are difficult and
probably dangerous to use for financial service markets. This due to the fact that the price
setting of a financial service is already a difficult process, and that consumers often see
lower prices as a result of lower quality. (ibid) However, Meidan (1996) states that sales
promotion within financial services appears to be most effectively used in combination
7
with advertising. The primary objectives with sales promotion within financial services
are to attract new customers; to increase the level of deposit accounts, thereby increasing
the banks share of savings; to increase market share in selected market segments; and to
lower the cost of acquiring new customers by seeking to avoid direct price competition
with other financial institutions. (ibid)
Public Relations
According to Brassington & Pettitt (2000) the essence of public relations (PR) is to look
after the nature and quality of the relationship between the organization and its different
publics, and to create a mutual understanding. PR covers a range of activities, for
example the creation and maintenance of corporate identity and image; charitable
involvement, such as sponsorship, and community initiatives; media relation for the
spreading of good news, as well as for crisis management, such as damage limitation.
Moreover, an organization can attend trade exhibitions to create stronger relationships
with key suppliers and customers as well as enhancing the organization’s presence and
reputation within the market. (ibid)
Meidan, (1996) states that another part of public relations is the publicity gained through
magazines. Financial services obtain considerable publicity in so called quality press,
such as different financial journals. In popular newspaper the publicity is, in contrary to
the quality press, often negative from the financial firm’s point of view. (ibid) Meidan
(1996) further claims that the importance of public relations is being increasingly
attended, and financial services often have public affairs officers, working actively to
generate publicity.
Personal Selling
Brassington & Pettitt (2000) define personal selling to be a two-way communication tool
between a representative of an organization and an individual or group, with the intention
to inform, persuade or remind them, or sometimes serve them to take appropriate actions.
Furthermore, personal selling is a crucial element in ensuring customers’ post-purchase
satisfaction, and in building profitable long-term buyer-seller relationships built on trust
and understanding (ibid).
Verhallen et al. (1997) state that the increased competition within the fast changing
environment of financial services has lead banks to develop and maintain comprehensive
relationships with their customers. Furthermore, Julian & Ramaseshan (1994) state that
the long-term person-to-person relationship is an important factor for a retail bank to
achieve a competitive advantage. Meidan (1996) points out that once a customer has
chosen its bank, he is unlikely to switch to another. Thus, personal selling is probably the
most important element in the communication process within the financial services
industry. (ibid) Lee (2002) state that personal selling can be performed either face-to-face
or through technological aids such as the Internet.
According to Julian & Ramaseshan (1994) the relationship between the salesperson and
the customer is perceived as being of great importance for the marketing of a bank.
Hence, the sales force within the financial services industry needs not only to be trained
8
in the art of selling, but also to be aware of all the services available and be able to clearly
explain what each service offers. Since customers’ needs and motivation are likely to be
complex, and their ability to assess alternative courses of action without professional
assistance is likely to be limited, it is of great significance for the sales force to know
their customers, as well as their products. (ibid) Verhallen et al. (1997) indicate that
banks should see the selling as a problem-solving process in which the sales force
engages and co-operates towards the customer, trying to find a solution to the customer’s
problem, rather than only persuading him to purchase the products or services. In
addition, Meidan (1996) claims that it is up to the sales force to enhance the bank’s
reputation by looking after its customers.
Direct Marketing
According to Brassington & Pettitt (2000), direct marketing is an interactive system of
marketing, using one or more advertising media to achieve measurable response
anywhere, forming a basis for creating and further developing an on-going direct
relationship between an organization and its customers. To be able to create and sustain
quality relationships with sometimes hundreds or even thousands of individual customers,
an organization needs to have as much information as possible about each one, and needs
to be able to access, manipulate and analyze that information. Thus, the database is
crucial to the process of building the relationship. (ibid)
Lee (2002) states that the fast advances in technology over the past 30 years have
reshaped how consumers today interact with their financial institutions. The financial
sector has extended its “face-to-face” selling towards direct marketing of products and
services in the form of phone, mail, or computer transactions. (ibid)
Mols (2000) claims that as computer literacy and the availability of computers increase
and the costs decrease, Internet banking consumers are increasing considerably. Through
the Internet banks, the customers can identify what interests them. Furthermore, the
Internet technology also makes it possible to follow individual customer usage. With the
information gathered in an integrated database it is possible to read the customers needs
and satisfy them. This knowledge can be used for different kinds of direct marketing.
(ibid)
2.2 External Factors Influencing the Choice of Promotion Strategy
According to Cavusgil et al. (1993) there are three categories of influences on the choice
of adaptation of the promotion strategy; the product and industry, the company and the
export market of choice.
9
PRODUCT & INDUSTRY
Technology Cultural
Product
Type of Product Orientation of Specificity of
Uniqueness
Industry Product
COMPANY EXPORT MARKET
Firm’s International Promotion Adaptation Similarity of Legal

Experience ! Positioning Regulations
! Packaging/Labeling
! Promotional
Approach
Export Sales Goals Competitiveness of
for the Venture Export Market
Product Familiarity of
Entry Scope
Export Customers
Figure 2.1 A Testable Framework of Product and Promotion Adaptation

Modified from Cavusgil, et al., 1993, p. 485
The Product and Industry

According to Cavusgil et al. (1993) the product and industry influences include four
factors; type of product, product uniqueness, technology orientation of the industry and
cultural specificity of the product.
Type of Product
Cavusgil et al. (1993) define the type of product as the product’s classification. Nicolaud
(1989) & Meidan (1996) state that services are intangible products which often cannot be
separated from the person performing or selling them. Czinkota & Ronkainen, (2004)
further state that the value of services is harder to measure, its performances are harder to
observe and to possess, compared to manufactured goods. According to Bossone (2000)
banks are intermediaries between savers and users of capital. They supply transaction
services and provide liquidity to both consumer and industrial markets (ibid). Meidan
(1996) states that banks need to offer a wide range of products and services to meet a
10
variety of financial and related needs from different customers in different areas. The
general types of products offered by a bank can be divided into five categories;
• Cash accessibility (for instance telephone banking)

• Asset security (for instance safety of money deposits)
• Money transfer (for instance payment service)
• Deferred payments (for instance loans)
• Financial advice (for instance advice on investments, taxation or wills)
Meidan (1996) further states that a service such as bank credit cannot appeal to a buyer’s
sense of touch, smell, taste, sight or hearing, which as a result makes it very important for
the marketer to explain what the service actually comprises. However, the general
promotion strategy tends to focus on the brand rather than the product (ibid).
Product Uniqueness
Cavusgil et al. (1993) define the product uniqueness as the degree to which the product is
made or designed to satisfy unique needs of the customers. According to Julian &
Ramaseshan (1994) there is constant pressure within the competitive environment of
banking to innovate and develop new ways to improve customer service. Long-term
person-to-person relationships between a financial institution, its distributors and its
customers, are seen as an important factor for a bank to achieve a competitive advantage
(ibid). However, Meidan (1996) claims that since banks offer similar products, it is very
hard to stand out. According to Marquardt (1994) a bank’s services are seldom unique
and they are easy for competitors to copy. Additionally, Meidan (1996) states that
banking services tend to meet general needs rather than specific, and since there are no
particular benefits distinguishing different banks from each other, promotion of financial
services is essential. A bank must strive to attain a good overall image and to attract
customers with the right message (ibid).
Technology Orientation of the Industry

According to Cavusgil et al. (1993) the technology orientation refers to the technology
intensity of the industry. Joseph et al. (1999) claim that technology has increasingly been
applied in the delivery of services since the mid-eighties. The adoption of technology into
service industries has become important, and service providers are being urged to invest
in technology as a way of securing their future in the electronic age (ibid). Meidan (1996)
states that new products, new payment systems, new forms of distribution and delivery
and improved management information systems are increasing the demand of technology
within the financial services sector. According to Flohr-Nielsen (2002) Internet banking
should be seen as part of general trend in which customer relationships as well as new
Web-technologies have become very important. The banking industry provides strong
incentives for banks and customers to use the Internet. Banks can reduce their costs
considerably, and at the same time meet potential demands of customers, such as
convenience and cheap transactions. (ibid)
11
Cultural Specificity of Product

According to Cavusgil et al. (1993) cultural specificity of a product concerns if the
product relates to the extent to which the product mediates the needs of a specific culture.
Albers-Miller et al. (2000), state that consumer expectations can differ tremendously and
the issues of culture should therefore be thoroughly examined by the bank in wish of
conducting international business. An understanding of the customers is essential in order
to create effective promotion (ibid). Root (1994) indicates that the greater the distance
between two cultures, the harder it is to communicate effectively. Culture can affect
many, if not all, of an organization’s strategic decisions (ibid). Meidan (1996) states that
banking services tend to meet general needs rather than specific. He claims that a bank
should analyze the wants and needs of different market segments and design its
marketing mix to fulfill them. Consequently, market segmentation is essential. Consumer
behavior towards financial services is very much a function of social class. (ibid)
Papavassiliou & Stathakopoulus (1997) claim that the development of a basic advertising
campaign with country-specific adaptations is very important, especially when there are
great linguistic differences across different host countries. The advertising messages must
correspond with the beliefs and traditions of the citizens in each country traditional, since
cultural values have an impact on advertising message appeal (ibid).
The Company
According to Cavusgil et al. (1993) the company influences include the firm’s
international experience, export sales goal for the venture and entry scope.
Firm’s International Experience

According to Cavusgil et al. (1993) a firm’s international experience refers to its previous
international practice and the amount of information management had gained about the
target country. A firm can gain international experience through involvement in
international transactions, operating in many foreign markets, and through interaction
with foreign suppliers or distributors. (ibid) Ghauri & Holstius (1996) mean that gaining
information about the target market can be very difficult in developing countries and in
the former socialist countries, because the infrastructure is often underdeveloped. Getting
information from local counterparts may also be difficult, and it necessitates the
development of relationships and mutual trust. However, research shows that this is less
of an issue in the Baltic countries. (ibid)
Export Sales Goal for the Venture

According to Cavusgil et al, (1993) the export sales goal for the venture refers to what the
penetration aim of the venture is in the target country. When a venture sets ambitious
goals for it self, it will require a deeper penetration and a better understanding of the
market of interest, in order to achieve success (ibid). Claessens & Jansen (2000) state that
in comparison with domestic banks, foreign banks tend to be larger and have better
quality loan portfolios, higher net worth and higher ratios of operating income to costs.
They specialize in different activities and have a slightly smaller share of income from
services than domestic banks. Foreign banks also tend to be less involved in consumer
12
lending, and focus their portfolios rather on the manufacturing sector. Foreign banks thus
differ in their operations from domestic banks. (ibid)
Entry Scope
According to Cavusgil et al. (1993) the entry scope refers to if the product is exported to
a single foreign market or multiple foreign markets. When a product enters multiple
markets at the same time, the cost of adapting the product and promotion to fit each
market is likely to be compounded with by substantial initial investment costs (ibid).
Ghuari & Holstius (1996) claim that the Baltic States differs to a great extent from entry
into traditional developing countries since these countries are more developed.
The Export Market

According to Cavusgil et al. (1993) the export market influences include three factors;
similarity of legal regulation, competitiveness of export market and product familiarity of
export consumers.
Similarity of Legal Regulation

According to Cavusgil et al. (1993) similarity of legal regulation is defined as the degree
of market similarity, and similarity of legal regulation between the host and home
country. Brassington & Pettit (2000) name political stability, ownership restrictions,
employment laws, safety regulations, financial laws, promotion constraints, price
regulations, and consumer protection legislation as some of the political and legal factors
affecting an international organization. Cavusgil et al. (1993) further state that in an
export market where the legal regulations are comparable with those in the home market,
firms have less pressure to modify their promotional program. However, when there are
great differences, modification promotion will be required (ibid).
Ghauri & Holstius (1996) claim that when international companies start operations in
East European transition economies, the environment is very different to their home
country. However, according to Fleming et al. (1997) the Baltic States are some of the
most developed transition economies. Exportrådet (2003) states that since the
independence of these countries, the development from planned economy to a
functioning market economy has been rapid. Ghauri & Holstius (1996) also claim that out
of the Baltic countries, Estonia has done the most to harmonize laws with Western ones,
but Lithuania is not far behind. Politically, all three countries are going through a
democratization process (ibid).
Competitiveness of Export Market

According to Cavusgil et al. (1993) competitiveness of export market refers to the
competitive intensity of the host country. Czinkota & Ronkainen (2004) mean that there
is a greater variance of competition in the international market than the domestic. To be
successful, an organization has to learn about the competitive activities and evaluate the
actual and potential impact it has on its own operations (ibid). Papavassiliou &
Stathakopoulus (1997) further state that by making a competitive analysis, multinational
corporations can gain a “competitive advantage” for the role of advertising in their
13
marketing strategies in foreign markets. When this is not fulfilled, competition may force
organizations to adapt promotion (ibid).
According to Quintana (2003) increased competition has strongly affected banking

organizations throughout the industrialized world, and there is now greater diversity than
ever before in the activities and markets in which banks decide to operate. Deregulation
and growing European integration have facilitated both domestic consolidation and
internationalization of banking firms (ibid). Arnold et al. (2001) claim that the banking
industry hardly existed in the Baltic States at the turn of the decade, but tens of
companies have been establishing after 1991, many without the reserves to maintain their
position.
Product Familiarity of Export Consumers

According to Cavusgil et al. (1993) product familiarity of the export consumers refers to
if the customers are familiar with the product or not. Lindström, (2003) state that banks
are generally important for the functioning of any country’s economy. However,
according to Watters (1995) the financial services sector has no worldwide brands and
has even lacked this extensive expansion across borders. This is because some of the
considerations, such as management control and language, are the same as other business
sectors, and others, such as legislation and regulation, are distinct to this sector (ibid).
Other External Factors Influencing the Choice of Promotion Strategy

Papavassiliou & Stathakopoulus (1997) state a few other factors that are influencing the
advertising adaptation. These factors are country of origin image, economic factors and
advertising infrastructure.
Country of Origin Image

Root (1994) implies that people in industrial countries tend to have a more favorable
image of their own country’s product than foreigners do. Knowledge of made-in images
can be of great help when operating abroad. Each image contains both positive and
negative attitudes towards the product identifiable with the country of origin. By being
aware of these attitudes and promoting on the positive ones, a company can increase the
chance of success. (ibid) Claessens & Jansen (2000) mean that the increasing
internationalization of financial services eliminates discrimination in treatment between
foreign and domestic financial services providers, and removes barriers to the cross
border provision of financial services.
Economic Factors
Papavassiliou & Stathakopoulus (1997) indicate that the economic conditions prevailing
in the host country are of major concern in influencing international strategy. Brassington
& Pettit (2000) mean that these economic factors can include inflation, exchange rates,
income, consumption potential, rate of unemployment and exchange control regulations.
Ghauri & Holstius (1996) state that the Baltic countries have made free trade agreements
with the Scandinavian countries and have started to redesign their legislation to follow
Western principles better. That is very important, since modern taxation laws are crucial
for foreign investors. There are also some investment incentives for foreign enterprises in
14
all the Baltic countries, such as tax relief and improved protection of foreign property
against nationalization. (ibid)
Advertising Infrastructure
Papavassiliou & Stathakopoulus (1997) further state that the availability, performance
and cost aspects of the advertising infrastructure can affect the promotion decisions. The
advertising infrastructure consists of the institutions and functions essential to the
advertising process, such as availability of media, the structure of media, availability of
technical equipment, local advertising experience and staff talent in the target country
(ibid). Arnold et al. (2001) claim that in the latter years, a great deal of money has been
invested in advertising in the Baltic States, and this in turn has increased availability of
media and development of the advertising structure.
2.3 Adaptation and Standardization of the Promotion Strategy
The decision whether to adapt or standardize the marketing mix is, according to
Brassington & Pettitt (2000), complicated for any organization operating in more than
one environment. Too much adaptation might lead to failure of the organization to exploit
the synergies that become possible when going international. (ibid) However, Van
Mesdag (2000) states that a pure, comprehensive standardization is not possible, since the
differences in for example language, retail structure, regulations and cultural features
between countries are too great.
Adaptation
Agrawal (1995) states that marketers in favor of the adaptation strategy tend to argue that
advertisers have to take differences including culture, stage of economic and industrial
development, stage of product life cycle, media availability and legal restrictions into
consideration. Brassington & Pettitt (2000) claim that when acting on an international
market, an organization always have to consider to which degree a customer’s needs and
wants are different from those on the domestic market, and if adaptation is necessary.
Brassington & Pettitt (2000) further state that promotional mixes often have to be
adjusted to suit the local environment and reflect the target markets preferences.
Promotion has to take language as well as local regulations, in terms of both media
choice and content, into account. Sales promotion is also affected by local regulations;
therefore the choice of activities must respect these regulations and consider the
preferences of the customers. (ibid)
Brassington & Pettitt (2000) also indicate that marketing communication might have to
be adapted, due to consumer readiness stage. A product that is mature in one market
might be totally unknown in another market, and therefore the promotional mix will have
to be adapted. Cavusgil et al. (1993) claim that adaptation of the promotion includes the
costs of using different promotional messages, appeals, packaging/labeling and media.
There are four variables that significantly and constantly impact the promotion
15
adaptation. These are the firm’s international experience, technology orientation of the
industry, product exclusivity and the competitive intensity of the market. (ibid)
Cavusgil et al. (1993) further state that both reactive and proactive approaches of
promotional adaptation exist. Proactive harmonizing with the characteristics of the
market includes modification of positioning, packaging/labeling, and promotional
approach. Firms may also choose to reactively adapt their products in order to improve
their competitive position, especially if competition in the market is intense, the industry
is technology intensive, or the product is unique. (ibid)
There are three basic conditions, stated by De Mooij (1994), that have to be fulfilled in
order to use a standardized approach, and if these are not realized adaptation should be
considered.
1. A brand’s advertising cannot be universal if different national markets are in

diverse stages of maturity.
2. A brand’s advertising cannot be universal if the idea depends on a large budget
which is unsupported in some markets
3. A brand’s advertising cannot be universal if it defies local customs and
regulations and ignores the efforts of the competition.
De Mooij (1994) presents eight arguments in favor for choosing an adaptive promotion
strategy:
1. The heterogeneity of the countries concerned.

2. The “not invented here” syndrome: the desire to create own campaigns.
3. Differences in the media scene.
4. Differing regulations regarding service or advertising.
5. The nature of the competition in different markets.
6. The service is at different stages of its life-cycle in different markets.
7. The danger of being seen as a foreign company.
8. Reduced economic advantage because of higher co-ordination costs.
According to Czinkota & Ronkainen (2004) adaptation also has to be carefully

investigated in emerging market economies, where the consumers are more likely to be
interested in rational advertising that has a clear message. They see advertising as
information, which they can use in order to sort out between the numerous and sometimes
confusing offers. This has led to the fact that many consumers tend to prefer
advertisements in newspapers to those on television, particularly if they are well
organized and informative. (ibid)
Standardization
Cavusgil et al. (1993) state that the development in communication and transportation
technologies, together with the increased travel contributes to the globalization of
markets, has resulted in emerging global customer groups. Therefore, in a market where
needs and preferences of the customers are largely universal, standardization might be
16
preferable. In order to succeed in the global market it is of importance for companies to

be able to deliver high-quality products at a competitive price. Standardization of
marketing programs might be crucial to achieve a low-cost competitive position. (ibid)
Agrawal (1995) explains that people favoring a standardization approach believe that
differences between countries are more a matter of degree than direction. That is why
advertisers should focus on the similarities of the consumers in the international
marketplace rather than the differences (ibid).
De Mooij (1994) claims that the following nine arguments are a reason for choosing a
standardized promotion strategy:
1. Cost reduction is the most important argument for standardization.

2. A uniform brand image and corporate image worldwide avoid confusion.
3. The globalization of media.
4. Simplified planning through uniform objectives.
5. Maximum use of good ideas and transmission of know-how.
6. Centrally managed international enterprises.
7. Better use of manage abilities and resources.
8. Universal guidelines and quality standards.
9. Better access to know-how and experience of other countries.
According to O’Donnell & Jeong (2000) the main characteristic of global marketing
tends to be to standardize the elements of the marketing mix as much as possible. The
advantages are economies of scale within the three elements product, place and
promotion, which are captured in the marketing mix (ibid).
O’Donnell & Jeong (2000) further claim that the amount of standardization needed
depends on the type of product. Industrial products are seen to be more suitable than
consumer products for standardization, since industrial buyers tend to be more rational in
their purchasing behavior and demand for industrial products is more homogenous across
markets. (ibid) Furthermore, Cavusgil et al. (1993) state that in a captive market, where
the product already has achieved a leader position, a higher degree of standardizations
may be advantageous.
The Contingency Theory

O’Donnell & Jeong (2000) indicate that it is not possible to use either total
standardization or complete adaptation. The degree to which these are used depends on a
number of internal factors, for example organizational structure and managerial
orientation, and external factors, such as target market and environment. (ibid) Cavusgil
et al. (1993) states that standardization and adaptation should be seen as two extremes,
and choosing one of these approaches without adjusting it will not be successful.
17
FRAME OF REFERENCE
3 FRAME OF REFERENCE
Based on the theoretical framework presented in the previous chapter, this chapter will
show the conceptualization of the theories and help to clarify how they will answer the
research questions.
Miles & Huberman (1994) state that the meaning of conceptualization is to explain, either
through graphics or text, the main things that will be studied. Because of the
extensiveness of the literature review, parts of each theory has been chosen and
conceptualized. Our conceptualization will be presented accordingly with the order and
content of our research questions stated below:
RQ1: How can the promotion mix for banking services in the Baltic States be
described?
RQ2: How can the external factors influencing the choice of promotion strategy for
banking services in the Baltic States be described?
RQ3: How can the adaptation vs. standardization of the promotion strategy for banking
services in the Baltic States be described?
In order to answer our first research question, we will apply theories regarding promotion
of financial services. We will use the five general promotional tools, which according to
Brassington & Pettit (2000) are advertising, sales promotion, public relations, personal
selling and direct marketing. For the characterization of each tool, we will use the
definitions provided by these authors. The theories we will rely on for describing the five
tools are theories concerning promotion of financial services, presented mainly by
Meidan (1996), but also by Julian & Ramaseshan (1994), Peatti & Peatti (1994),
Verhallen et al. (1997) and Lee (2002). We believe that with these theories as a
foundation, the comparison with our research findings will be facilitated and more
accurate, and that we will be able to describe the promotion mix of a bank’s services.
Concerning advertising, we will look at institutional and brand advertising, which

according to Meidan (1996) covers advertising of the company image as a whole versus
advertising the brand name and the different products. He also talks about above-the-line
advertising as channels of communication that can be applied, and under-the-line
advertising as a discreet but significant part of a financial services organization’s
promotion. These two communication approaches will also be considered.
Meidan (1996) also presents a number ways to use sales promotion, such as through
coupons, special offers and other forms of price manipulation. This will also be of
relevance for our research. Moreover, he describes to what extent sales promotion can be
used by financial institutions, which also will be of interest.
18
FRAME OF REFERENCE
With public relations, we will look at significant issues, which according to Brassington
& Pettit (2000) are relationships building, image maintenance, charitable involvement,
sponsorship, and community initiatives. We will also consider Meidan’s (1996) statement
regarding the importance for financial institutions to appear in financial magazines.
Concerning personal selling, we will look at the importance of interaction and

relationships with customers, which according to Verhallen et al. (1997) is increasingly
important for banks due to the competition intensity.
Lastly, within direct marketing our concerns will mainly include measurable response
achieved through different tools such as the Internet, which according to Lee (2000) and
Mools (2000) is to a large extent replacing face-to-face interaction.
Our second research question concerns external factors influencing the choice of
promotion strategy. In order to answer this question we will mainly use selected parts
from the theory of Cavusgil’s et al. (1993) and also some facts mentioned by
Papavassiliou & Stathakopoulus (1997), which we believe covers most of the issues that
are relevant to describe the external influences on the choice of promotion strategies.
There are no theories to be found that suit the exact approach of our research, but
although our chosen theories concern influences on promotional adaptation, we think that
the theories provide a suitable framework for defining of the external factors that can
influence the choice of promotion strategy.
We will focus on the factors that Cavusgil et al. (1993) state are the product and industry
and the export market. The product and industry influences include four factors; type of
product, product uniqueness, technology orientation of the industry and cultural
specificity of the product. The export market influence will include two factors; similarity
of legal regulation and competitiveness of export market. (ibid)
Most of the basic definitions of each subtitle have been applied, but the theory has been
adjusted with a number of authors’ statements regarding financial services and the
general conditions in the Baltic States. This has been done in order to make a relevant
comparison and to answer our research question more properly.
Although it provides a general framework for possible influences, the theory by Cavusgil
(1993) is in many ways inadequate. This is due to the fact that it only comprises factors
relevant for manufactured products and does not consider services. Furthermore, we also
found the theory limited, since it concerns a number of factors, which we believe are only
relevant for a market entry strategy. Those factors will not be of significance for our
research, since we will focus on current promotion strategies performed by an established
bank operating in the Baltic States. The concerned factors are all three of the factors
regarding the company as an influencing factor, and also one of the export market
influences: product familiarity of export consumers.
19
FRAME OF REFERENCE
Due to the facts stated above, we have decided to construct our own adapted version of
the theory by Cavusgil (1993). As mentioned before, all company factors have been
removed, partially because we see those factors as internal factors which to a great extent
would have been the same as in the home market, and also since the factors focus on a
company’s entry strategy. The export market influence called product familiarity of
export consumers also felt irrelevant, since banks exist everywhere and people tend to
know to some extent what kind of function they have, and this factor would have been
more relevant if we were looking at goods instead of services. Further adaptations have
been made since the theory concerns manufactured goods that are being exported to a
new country and our approach is to investigate promotion strategies of a foreign bank
established in the Baltic States. The remaining factors describing the external influences
on the choice of promotion strategy will be utilized, however, with some adjustments on
either their names or their purpose, in order to suit the situation. The export market will
be renamed to the international market, the competitiveness of the export market will be
renamed to the competitiveness of the market. Furthermore, the cultural specificity of the
product will be called cultural aspects, and will be adjusted to the theories found and
consider general cultural issues, such as differing expectations, attitudes and preferences,
facing the company, with focus on the influence on promotion strategies.
Apart from the theory of Cavusgil et al. (1993), we have also found a few other external
influences, which we consider to be relevant for our research. Papavassiliou &
Stathakopoulus (1997), state that country of origin image, economic factors and
advertising infrastructure also can affect promotion decisions. These factors will also be
considered and will help us to answer research question number two.
The new model used for our research will comprise the following factors: the type of
product, product uniqueness, technology orientation of the industry and cultural aspects
(product and industry factors), similarity of legal regulation and competitiveness of
export market (international market factors) and country of origin image, economic
factors and advertising infrastructure (other external factors).
The factors presented in figure 3.2 are the ones that have been selected and adapted to
serve the purpose of answering research question number two.
20
FRAME OF REFERENCE
PRODUCT & INDUSTRY
Technology
Product
Type of Product Orientation of Cultural Aspects
Uniqueness
Industry
OTHER EXTERNAL INTERNATIONAL

FACTORS MARKET
Country of Origin Similarity of Legal

Image Promotion Regulations
Strategy
Economic Factors Competitiveness of

the Market
Advertising
Infrastructure
Figure 3.1 External Factors Influencing the Choice of Promotion Strategy
The third research question regards to what extent the promotion is standardized or
adapted. In order to answer it, theories regarding adaptation and standardization will be
applied. We believe that the theories mentioned in this section will enable us to describe
the adaptation vs. standardization of an international bank’s promotion strategy in the
Baltic States, and thereby answer research question number three.
We will look at a number of basic conditions that have to be fulfilled in order to choose
strategy and arguments in favor for choosing one or the other of the two strategies.
There are three basic conditions, stated by De Mooij (1994), that have to be fulfilled in
order to use a standardized approach, and if these are not realized adaptation should be
considered.
1. A brand’s advertising cannot be universal if different national markets are in

diverse stages of maturity.
21
FRAME OF REFERENCE
2. A brand’s advertising cannot be universal if the idea depends on a large budget

which is unsupported in some markets
3. A brand’s advertising cannot be universal if it defies local customs and
regulations and ignores the efforts of the competition.
De Mooij (1994) has stated eight arguments in favor for choosing an adaptive promotion
strategy:
1. The heterogeneity of the countries concerned.

2. The “not invented here” syndrome: the desire to create own campaigns.
3. Differences in the media scene.
4. Differing regulations regarding service or advertising.
5. The nature of the competition in different markets.
6. The service is at different stages of its life-cycle in different markets.
7. The danger of being seen as a foreign company.
8. Reduced economic advantage because of higher co-ordination costs.
Furthermore, de Mooij (1994) also states nine arguments for choosing a standardized
promotion strategy.
1. Cost reduction is the most important argument for standardization.

2. A uniform brand image and corporate image worldwide avoid confusion.
3. The globalization of media.
4. Simplified planning through uniform objectives.
5. Maximum use of good ideas and transmission of know-how.
6. Centrally managed international enterprises.
7. Better use of manage abilities and resources.
8. Universal guidelines and quality standards.
9. Better access to know-how and experience of other countries.
Furthermore, we will use the theories presented below.
Brassington & Pettitt (2000) presents some theory regarding adaptation and preferences
of the customers, which is relevant for our research questions. According to O’Donnel &
Jeong (2000) products or services directed to the industrial market are seen as more
suitable for standardization than consumer products or services. Moreover, Czinkota &
Ronkainen (2001) claims that adaptation has to be carefully investigated in emerging
market economies, where the people are interested in rational advertising and see it as
information. Finally, Cavusgil et al. (1993) state that the development of communication
possibilities together with the increased travel contributes to the globalization of markets.
3.4 A Conceptual Frame of Reference
In order to fulfill the purpose of this study concerning international banks’ promotion
strategies in the Baltic States, the three research questions will be applied to cover all
22
FRAME OF REFERENCE
significant parts of the area. The first research question will provide the different
promotion tools available for banking services. Research question number two will
describe the external factors influencing why and how a specific promotion strategy is
chosen. Finally, research question number three will clarify how the strategy will be
implemented in terms of adaptation and standardization of the original concept. These
research questions are interrelated and together they will serve the purpose of this study.
Below the conceptual frame of reference model provides an overview of the theoretical
parts that have been chosen, and which will aid the collection of data, and later also
facilitate the data analysis.
Promotion Strategy for

Banking Services in the
Baltic States
RQ1: RQ 2: RQ 3:
The Promotion Mix for External Factors Influencing Adaptation vs.
Banking Services the Choice of Promotion Standardization of the
1. Advertising Strategy Promotion Strategy
2. Sales Promotion 1. Product and Industry 1. Standardization of the
3. Public Relations 2. The International Promotion Strategy
4. Personal Selling Market 2. Adaptation of the
5. Direct Marketing 3. Other External Factors Promotion Strategy
Figure 3.2 A Conceptual Frame of Reference
23
METHODOLOGY
4 METHODOLOGY
This fourth chapter will discuss and motivate the methodological issues connected to this
study. First, the purpose of the research and the research approach will be provided. This
will be followed by the research strategy and the method used for the data collection.
After that, the sample selection will describe the case company and respondent.
Thereafter, the strategy for analyzing the data and the method problems that can occur in
this type of study will be discussed. Finally, a figure summarizing the methodological
path chosen will be provided.
4.1 Research Purpose
According to Eriksson & Wiedersheim-Paul (2001) the purpose of a research can be

exploratory, descriptive or explanatory depending on the nature of the problem.
Exploratory studies are useful when the aim of the research is to seek new insights into
phenomena, to ask questions and to assess phenomena in a new light (Saunders et al.,
2003). Furthermore, it is useful for clarifying ambiguous problems. Usually, exploratory
studies are an initial research conducted with the expectation that subsequent research
will be required. (Zikmund, 2000) An advantage with exploratory research is that it is
flexible and adaptable to changes. The focus tends to initially be wide and then narrows
down as the research develops. (Saunders et al., 2003)
Descriptive studies are designed to describe characteristics of a population or a

phenomenon. It seeks to determine the answer to questions asking; who, what, when,
where and how. Furthermore, descriptive studies are, unlike exploratory research, based
on some previous understanding of the nature of the problem. (Saunders et al., 2003)
According to Wallén (1996), descriptive research is suitable when the problem is clearly
structured but the intentions are not to establish connections between cause and symptom.
Explanatory studies are according to Saunders et al. (2003) studies with the emphasis to
study a situation or a problem in order to explain the cause and effect relationship
between given variables. In order to accomplish that, well-defined research problems has
to be done and hypotheses need to be stated (Eriksson & Wiedersheim-Paul, 2001).
Explanatory research is mostly used within areas where extensive research has already
been done (Wallén, 1996).
As mentioned, the purpose of this thesis is to gain a better understanding of international

banks’ promotion strategies. In order to attain this better understanding we are describing
the different tools in the promotion mix used by financial services, external factors
influencing the choice of promotion mix and adaptation and standardization theories.
Thus, the thesis can be explained as mostly descriptive. However, since we have not been
able to find studies that focus on the exact same problem as we have chosen to study in
this thesis, the topic area will also be explored. Finally, towards the end of the thesis our
own conclusions are presented and through this we are beginning to explain the
24
METHODOLOGY
phenomena we have explored and tried to describe. This makes our study mainly
descriptive but with both explorative and some explanatory influences.
4.2 Research Approach
According to Saunders et al. (2003) research can be categorized into either qualitative or
quantitative approach. Whether the research should be qualitative or quantitative depends
on the defined problem and the investigated type of data, in order to solve the problem
(Holme & Solvang, 1997).
For a qualitative research, information is gathered to gain a deep and thorough

understanding, and to describe a holistic view (Saunders et al., 2003). It involves
gathering, analyzing and interpretation of data impossible to quantify (Holme & Solvang,
1997) and is based on meanings expressed through words (Saunders et al., 2003).
Furthermore, Holme & Solvang (1997) state that a qualitative approach is characterized
by a closeness to the respondent or source and intends to capture its values , attitudes and
perceptions regarding of the investigated area. Therefore, the researcher strives to obtain
a complete understanding and overview of the problem rather than just focusing on
certain specific variables. (ibid)
Quantitative research, on the other hand, is a research approach that is formalized and
highly structured. Through the study of some specific variables on a great number of
objects of investigation, this approach enables the researcher to make universal
generalizations. All variables are measured by statistical methods, since the information
is transformed into numerical data and thus easy presentable in figures. Finally, a
quantitative approach is characterized by selectivity and distance between the researcher
and the source. (Holme & Solvang, 1997)
The choice of research approach should be based on the purpose of the study. In order to
gain a better understanding of our purpose, we have chosen a qualitative approach that
enables us to obtain more in-depth information.
4.3 Research Strategy
Which strategy to use in the research can, according to Yin (1994), be determined by
looking at three different conditions. These conditions are:
1. The type of research question posed

2. The extent of control an investigator has over actual behavioral events
3. The degree of focus on contemporary as opposed to historical events
Table 4.1 shows how Yin (1994) relates each condition to the five alternative research
strategies.
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METHODOLOGY
Table 4. 1 Relevant Situations for Different Research Strategies
Requires control Focuses on

Form of research
Strategy over behavioral contemporary
question
events? events?
Experiment how, why yes yes

who, what, where,
Survey no yes
how many, how much
who, what, where,
Archival analysis no yes/no
how many, how much
History how, why no no
Case Study how, why no yes

Source: Yin, 1994, p. 6
The purpose of this thesis is to gain a deeper understanding for international banks’
promotion strategies in the Baltic States. In order to obtain this purpose, all three research
questions have been stated as openly as possible. The intention with this strategy when
stating the research questions was to avoid questions that would not cover the broad
understanding sought in our purpose. This is also the reason why all our research
questions were stated in the form of “how”.
An experiment is done when an investigator can manipulate behavior directly and

precisely. This can occur in a laboratory and focus on isolated variables. (Yin, 1994) In
our study, we could not control behavioral events and thus the experiment strategy was
not used. Survey research is according to Yin (1994) concerned with systematic gathering
of information from respondents, generally in the form of a questionnaire. It often
answers questions of what, where and who. (ibid) With this strategy, we could have
investigated a few variables, but we would not have been able to cover all the aspects of
financial promotion that we believe are necessary to obtain the understanding sought after
in our purpose. Therefore, we decided not to use the survey strategy. Moreover, Yin
(1994) states that analysis of archival records is advantageous when the research goal is
to describe the incidence or prevalence of a specific occurrence. Since our purpose is to
gain an understanding, archival records were excluded. Yin (1994) further presents a
historical strategy as dealing with the “dead” past. That is, when no relevant persons are
alive to report and the investigator must rely on documents and cultural and physical
artifacts as the main sources of evidence (ibid). However, since this thesis focuses on
contemporary events, which occur at the present moment, the historical strategy was
eliminated. This leaves us with only one strategy – the case study.
A case study involves investigating few entities but many variables, in order to get an in-
depth situational picture (Wiedersheim-Paul & Ericsson, 1997). In general, case studies is
the preferred strategy when “how” and “why” questions are posed, when the investigator
has little control over events and when the focus is on a contemporary phenomenon
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METHODOLOGY
within some real-life context (Yin, 1994). He further describes a case study as an
empirical inquiry that investigates a contemporary phenomenon within its real-life
context, especially when the boundaries between phenomenon and context are not clearly
evident (ibid). Since the research questions that we base this thesis on are of “how”
character and because our purpose is to gain an understanding of our research area, we
have chosen to adopt the case study as our research strategy.
According to Yin (1994) a case study can involve either a single-case or multiple-case
study. The single-case study investigates one case thoroughly whereas a multiple-case
study investigates several cases. Furthermore, in a single-case study, the research is
compared with existing theory. (ibid) Due to the time limitations we have chosen to do a
single-case study.
4.4 Data Collection
According to Yin (1994), data can be collected for case studies via six different sources.
No single source has a complete advantage over all the others. Instead, they are highly
complementary and a good case study should include as many sources as possible. The
author calls this use of multiple sources “triangulation”, which gives the researcher an
opportunity to obtain multiple measures of the same phenomenon. This will in turn
increase the validity when performing any scientific study (ibid). The six sources of
evidence are presented below.
Table 4. 2 Six Sources of Evidence: Strengths and Weaknesses
Source of Evidence STRENGTHS WEAKNESSES

Documentation # Stable: can be reviewed # Retrievability: can be low
repeatedly # Biased selectivity: if
# Unobtrusive: not created as a collection is incomplete
result of the case # Reporting bias: reflects
# Exact: contains exact names, (unknown) bias of author
references, and details of an # Access: may be deliberately
event blocked
# Broad coverage: long span
time, many events, and many
settings
Archival Records # (Same as above for # (Same as above for
documentation) documentation)
# Precise and quantitative # Accessibility due to privacy
reasons
Interviews # Targeted: focuses directly on # Bias due to poorly constructed
case study topic questionnaire.
# Insightful: provides perceived # Response bias
causal inferences # Inaccuracies due to poor
recall
# Reflexivity: interviewee gives
what interviewer wants to
hear
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METHODOLOGY
Direct Observations # Reality: covers event in real # Time consuming

time # Selectivity: unless broad
# Contextual: covers context of coverage
event # Reflexivity: event may
proceed differently because it
is being observed
# Cost: hours needed my human
observers
Participant Observations # (Same as for direct # (Same as for direct
observations) observations)
# Insightful into interpersonal # Bias due to investigator’s
behavior and motives manipulation of events
Physical Artifacts # Insightful into cultural # Selectivity
features # Availability
# Insightful into technical
operations
Source: Yin, 1994, p.80
Archival records are produced for a specific purpose and a specific audience. When those
conditions are not fully fulfilled the usefulness of an archival record cannot be assured. In
addition to that, they have the same strengths as documentation, but are focusing on past
events and will thus not be used in this study. Direct observations and participant
observations could have been used in this study, however they are ruled out as possible
sources of evidence, due to limitations regarding time and financial recourses. Physical
artifacts are described as insightful when it comes to cultural features and technological
operations, but since our study is concerned with perceptional questions, this type of
evidence is not relevant. In this research, the two sources of documentation and
interviews were used, allowing for multiple sources of evidence. (Yin, 1994)
According to Yin (1994) interviews are the most important source in case studies. An
interview can be based on three different strategies:
1. Open-ended interviews
2. Focused interviews
3. Structured interviews
Case study interviews are mostly of an open-ended art, where the interview does not
follow any structured questions. The investigator can ask the respondent for the facts of a
matter as well as for the respondents’ opinions about events. Sometimes, the investigator
can ask the respondent to propose his or her own insights into certain occurrences and
might use such propositions as basis for additional inquiries. In a focused interview the
respondent is interviewed for a short period of time. In such situations, the interview may
still remain open-ended and assume a conversational manner, but the investigator is more
likely to follow a pre-determined structure derived from the case study protocol. Finally,
a structured interview follows a set of strictly pre-determined questions and can thus be
characterized more as a combination of a survey and an interview. (Yin, 1994)
The type of interview used in this study is a focused interview. We will use an interview
guide (provided in Appendix 1 & 2) to be able to discuss a limited number of issues
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METHODOLOGY
connected to the frame of reference. This way, the focused interview can be used to
confirm or dismiss certain facts, or in this case, theories. In general, a focused interview
can be conducted by telephone or in person. Telephone interviews are less costly and
time consuming, which makes them useful when contacting a distant respondent
(Lundahl & Skärvad, 1992). We have conducted a telephone interview, due to the long
distance to our respondent and the time we were able to save compared to a face-to-face
interview.
According to Yin (1994) the use of a tape recorder during the interview is essential to
register the empirical data with an absolute accuracy. We used a tape recorder and by
registering the data, we were provided with the possibility to transcribe the interview
word by word. The respondent was aware of the tape recorder and had no objections.
In order to collect secondary data about the sample company, we visited the different
websites of Nordea as well as their intra-websites. There, we found general information
about the company. The exactness and trustworthiness of this documentation makes it
valuable for the background information about the sample company.
4.5 Sample Selection
After having determined the appropriate sources of evidence, it is essential to find

relevant and manageable samples to collect the empirical data from. The choice of
sampling technique is dependent on the feasibility and sensibility of collecting data to
answer the research questions and to address the objectives (Saunders et al., 2003). In
accordance with Saunders et al. (2003), non-probability sampling was chosen since a
better understanding of a problem was required. To answer the research questions and to
meet the objectives with this study, an in-dept study was carried out, focusing on one
small case purposively selected in accordance with Saunders et al. (2003).
We have chosen to conduct a single-case study on promotion strategies within the

Banking sector, due to the fact that the banking sector is one of the most internationalized
service sectors and has been influenced by the changes in the globalization process. The
Estonian market was chosen since it is one of the most developed transition markets,
being a new member of the European Union. After research, we discovered that Nordea
is the only Nordic bank acting on the Estonian market with a full ownership of the bank,
and therefore this bank was chosen.
According to Holme & Solvang (1997) the selection of respondent is crucial. If the wrong
persons are being interviewed, the research may turn out to be invalid or worthless (ibid).
First, we contacted the company via e-mail and explained the intentions of our study.
Thereafter we were recommended the most appropriate interview respondent. In order to
fulfill our purpose, it was essential to reach the person who possessed the most
knowledge and experience of our research area. The country manager of Nordea bank
Finland plc Estonia branch was the most suitable person for our interview, since he had
the knowledge relevant to answer the questions brought up in the interview guide.
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METHODOLOGY
4.6 Data Analysis
According to Yin, (1994), research studies should begin with a general analytical strategy
providing the researcher with a system by which he or she can set priorities for what to
study and why. That includes examining, categorizing, tabulating, or otherwise
recombining the data used for the study. Two general analytical strategies are available
when performing a case study;
! Relying on theoretical propositions: the results from previous studies are

compared to the researchers’ findings from the case study. This is the most
preferred strategy and also the strategy used in this study.
! Developing a case description: a descriptive framework is developed for

organizing the case study. This is used when there is little previous research on
the subject.
According to Yin (1994) specific techniques can be used to analyze the data; within-case
analysis compares the collected data with the used theory whereas cross-case analysis
compares data from one case with another case. As mentioned before we have chosen to
do a within-case analysis since the study is analyzing only one case.
Miles & Huberman (1994) states that qualitative data analysis consists of three
concurrent flows of activities;
! Data reduction: This stage of qualitative data analysis selects, abstracts,

simplifies, focuses, and transforms the collected data. The purpose is to organize
the data in order to draw and verify conclusions.
! Data display: After having reduced the data, it should be displayed in an

organized and compressed way to enable easy conclusion drawing.
! Conclusion drawing and verification: In the last stage the researcher decides the
meaning of occurrences, noting regularities, patterns, explanations possible
configuration, causal flows, and propositions.
The propositions presented by Miles & Huberman (1994) concerning how the analysis-
activity should flow, were followed when the empirical data of the study was analyzed.
Firstly, the data was reduced by selecting and simplifying data relevant to the research
questions. Secondly, the data was presented in a structured and feasible way, following
the structure of our research questions. Finally, conclusions of the study were drawn and
verified.
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METHODOLOGY
4.7 Quality Standards
When determining the quality standards of a case study research, Yin (1994) suggests
four commonly used tests; construct validity, internal validity, external validity and
reliability. Since Yin (1994) claims that internal validity only is used for explanatory or
causal studies and this study mainly is descriptive, this test will not be dealt with.
Furthermore, Yin (1994) states that external validity deals with the problems of making
generalizations of the case study. The aim of this study is mainly to gain a deeper
understanding and not to make generalizations. However, some generalizations regarding
the Baltic States will be done, but this will be carefully performed and to a limited extent.
Thus, the test of external validity will not be taken into consideration.
Construct Validity
Validity is the extent to which the researcher is able to study what he or she had sought to
study rather than studying something else (Gummesson, 2000). More specifically,
construct validity establishes correct operational measures for the concepts being studied
(Yin, 1994). Furthermore, he states that there are three different tactics to increase
construct validity. The first tactic is the use of multiple sources of evidence during the
data collection. The second tactic is to establish a chain of evidence. This is based on the
principle to allow an external observer to follow the derivation of any evidence from
initial research questions to the conclusions of the case study. The third and last tactic is
to have the draft case study report reviewed by key informants. (ibid)
In this study we have followed all of the recommendations from Yin (1994) to increase
the construct validity. During the data collection, we have used a multiple strategy for
source of evidence since we have conducted an interview as well as used documents. In
order to create strong chains of evidence we have throughout this study made citations to
all the sources from where evidence has been collected. This in turn makes it possible for
any external observer to follow any evidence throughout the study. Finally, our
supervisor has read and improved our drafts as well as the interview guide before we
conducted the interview.
Reliability
Reliability demonstrates that the operations of the study such as the data collection
procedures can be repeated with equal result. A researcher that repeat the exact same
procedure and research as described by an earlier researcher should arrive at the same
result and draw the same conclusions. (Yin, 1994) In order to obtain a high degree of
reliability, we have in this thesis carefully explained the procedures of our research, in
this, as well as in every other chapter. Moreover, we have followed a structured approach
in which every sequential chapter, from introduction to conclusions, is based on the
preceding one. This in order to provide readers and other researchers with a study that
follows a logical flow and thus is easy to read and use in future research.
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METHODOLOGY
4.8 A Visual Design of Methodology
RESEARCH PURPOSE
EXPLORATORY DESCRIPTIVE EXPLANATORY
RESEARCH APPROACH
QUALITATIVE QUANTITATIVE
RESEARCH STRATEGY
ARCHIVAL
EXPERIMENT SURVEY HISTORY CASE STUDY
ANALYSIS
DATA COLLECTION METHOD

DOCUMEN ARCHIVAL DIRECT PARTICIPANT PHYSICAL
INTERVIEWS
TATION RECORDS OBSERVATIONS OBSERVATION ARTIFACTS
SAMPLE SELECTION
• ONE CASE
• NORDEA IN ESTONIA
• RESPONDENT: COUNTRY
MANAGER
DATA ANALYSIS
• WITH-IN CASE
ANALYSIS
QUALITY STANDARDS
• CONSTRUCT VALIDITY
• RELIABILITY
Figure 4. 1 A visual design of Methodology
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EMPIRICAL DATA
5 EMPIRICAL DATA
In this chapter the empirical data collected for our case study will be presented. The first
section gives an introduction to the company and thereafter data covering the points
raised in our frame of reference will be presented. The material presented in this chapter
is based on two interviews with Mr. Christer Rosenstöm, Country Manager of Nordea
Bank Finland plc Estonia branch and information from websites of Nordea.
5.1 The Nordea Group
Nordea is the result of an extensive chain of Nordic fusions in 2001 between the Finnish
Merita Bank, the Swedish Nordbanken, the Danish Unibank and the Norwegian
Christiania Bank og Kreditkasse. Nordea AB now includes Nordea Bank Norway,
Nordea Bank Sweden and Nordea Bank Denmark, Nordea Bank Finland, the insurance
companies Vesta, Livia and Nordea Life as well as a number of subsidiaries dealing with
leasing, real estate and securities services. Together they form the largest financial group
in the Nordic region. The market share in the Nordic banking markets is significant with
40 percent in Finland, 25 percent in Denmark, 20 percent in Sweden and 15 percent in
Norway. The Nordea share is listed in Stockholm, Helsinki and Copenhagen.
(http://www.nordea.com)
Figure 5. 1 The Nordea Group

Source: http://www.nordea.com, 2004-04-20
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EMPIRICAL DATA
In addition to the Nordic countries, the Baltic States and Poland, which are commonly
referred to as the home market, Nordea is present in 13 countries where it operates
through full service branches, subsidiaries and representatives’ offices. In the United
Kingdom, Germany and USA Nordea is present through branches. In Russia presence
through a jointly owned bank is managed and in Iran, Singapore, Brazil and China it has
representative offices. Nordea also has a private banking entity, Nordea Bank S.A. in
Luxemburg and Switzerland with representative offices in Belgium, France and Spain.
Nordea operates through three business areas: retail banking, corporate and institutional
banking and asset management & life. The retail operations provide a complete range of
financial services and products for a broad circle of private individuals, companies and
institutions as well as the public sector. In order to make some of its services tangible in
the mind of the customer, Nordea has chosen to refer to them as products.
Business Concepts and Objectives

There are three fundamental principles, which Nordea is based on: focus, speed and
performance. Focus should be on creating value for customers and shareholders and to
concentrate on strengths and core activities. Nordea strives to adjust to market conditions
and to carry out its operations. Continuous improvement in order to deliver better
solutions than competitors is also of great importance. (http://www.nordea.com)
Nordea’s objective is to be valued as the leading financial services group, with a

considerable growth potential, in the Nordic and Baltic markets. It is also of importance
to be in the top league or show superior and profitable growth in every market and
product area where it chooses to be present. Other objectives are to have the leading multi
channel distribution with a top world ranking in e-based financial solutions and a high
level of use of its e-services. Lastly, Nordea aims to be a good corporate citizen ensuring
confidence and trust. (http://www.nordea.com)
Nordea in Estonia
The Nordea Bank Estonia is a part of the Nordea Bank Finland, and it belongs to the
Retail Banking Poland and Baltic countries. Nordea launched its first branch office in
Estonia in 1995, under the name Merita Bank. Today Nordea is the third largest bank in
Estonia and it is the only fully foreign owned bank established there. It has four offices
and five sales points3, a total of 200 employees, and it has a market share of 7% in
deposits and 12% in credits. It offers a full range of financial services to both corporate
and private customers. These services include payment services, cash services, currency
exchange, deposits, investment funds, documentary payments for import/export, loans
and guarantees, corporate and private banking services. The primary customers of Nordea
are Estonian companies, subsidiaries of foreign companies doing business in Estonia,
companies in neighbouring countries, municipalities, employees of corporate customers
and high income earners. (http://www.nordea.ee)
3
Offers same services as regular offices except cash expenditure (Nordea, 2004)
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EMPIRICAL DATA
Throughout the rest of this thesis, Nordea in Estonia will be referred to as Nordea unless
something else is stated.
5.2 The Promotion Mix for Nordea’s Banking Services
According to Mr. Rosenström, Nordea is cooperating with an external media agent, who
is taking care of practical and organizational matters in terms of promotion, such as
making media reservations at press conferences and ordering the material needed. Once a
year, the media agent, together with Nordea, discusses marketing strategy and target
market planning. Moreover, Mr. Rosenström states that the five promotional tools
advertising, sales promotion, public relations, personal selling and direct marketing are
all used to a certain degree when promoting banking services of Nordea.
Advertising
Institutional advertising is currently the most frequent form of advertising used by
Nordea. It was especially important after the merger in 2001 in order to make people
aware of the new brand name, Nordea. Institutional advertising is mostly exposed
through television or out-side media, such as ad-pillars and posters. Furthermore,
television commercials are mainly used for the purpose of building the brand name and
brand recognition. However, since the market became aware of Nordea, advertising in
magazines and radio also has become significant.
In addition, brand advertising, which is concentrated mostly on specific services, is also

of great importance. It focuses on reaching the customers who are most likely to be
interested in the service, and on being cost efficient. It is performed in order to reach
short-term goals such as selling a specific amount of home loans or credit cards within a
certain period of time. However, in order to conduct brand advertising, the target segment
firstly needs to be defined, since the aim is to advertise specific services to specific
customer-segments. Thereafter, the type of media is chosen. Magazines and circulars are
the most commonly used distribution channels whereas television is a less used media
channel.
Over-the-line advertising is frequently used through television, radio, poster, magazine

and news paper advertising. However, the usage of banners on websites of other
companies are also an important way to promote Nordea. Under-the-line advertising is
commonly used at the offices and sales-points. Leaflets, pamphlets, explanatory guides
and manuals are made available, either in combination with personal selling or for
customer self-service.
Normally, Nordea has about ten advertising campaigns in one year; however this depends
on the economical and competitive situation on the market. The duration of each
campaign varies from one to six months. The individual brand advertising campaigns
follow the image the bank has created through its institutional advertising in form of
having the same color scheme and always using the Nordea logotype. According to Mr.
Rosenström, advertising is the second most important promotional tool after personal
35
EMPIRICAL DATA
selling, since it effectively creates awareness of the brand, and helps to create a brand
image.
Sales Promotion
Nordea does to some extent use sales promotion, in the form of special offerings and
giveaways. An example of a special offering is when a customer decides to sign up for
internet banking, telephone-banking or a credit card. The customer then receives
beneficial charges or home loan offerings. Currently, Nordea is promoting special home
loan offers, using low interests as a way to attract customers. However, special offerings
are not commonly used by Nordea and only when the market conditions are favorable.
Giveaways are mostly offered to corporate customers and private customers in the upper
segment. Examples of giveaways include Nordea branded gifts, such as pens, calendars
and torches. These are handed at meetings with the corporate or private customers.
Public Relations
Public relations are handled through a number of media and ways, with varying
objectives. In order to inform the public about Nordea and its products, the company tries
to appear in news television-programs and to write articles in financial magazines. There
are a number of well-respected financial magazines in Estonia, in which Nordea is active.
Approximately once a month Nordea tries, on its own initiative, to make a contribution in
a magazine, and at least once a week journalists contact Nordea for a statement. Nordea
has no specific person hired to take care of the public relation activities in Estonia,
instead it is managed by external agents at press releases and by the personnel at the
marketing department.
For the creation of goodwill, Nordea is sponsoring a number of social projects, where the
main fields include culture, sports and social affairs. The sponsorship principles are based
on the objectives established by the Nordea Group, as well as the local circumstances,
relevance and significance of the supported projects to the whole society or certain social
groups. First and foremost, integrity, cultural value and social background of the projects
are evaluated. The budget and significance of the project as well as the bank's current
resources also influence the volume of the sponsorship and the choice of projects. Most
attention include projects related to children's social problems, for example the UNICEF
jubilee concert "Right to be a Child", the soccer event "No to Drugs" and the purchase of
reanimation ambulance for the Tallinn Children's Hospital.
Nordea has never experienced a crisis in Estonia. According to Mr. Rosenström, the
reason for this is the customer segments Nordea has chosen to focus on. On the contrary,
Nordea has been able to benefit from different crises, for example, the Estonian bank
crisis in 1995 and the Russian crisis in 1998 that generally deteriorated the situation of
the banking sector of Estonia.
Personal Selling
Personal selling is performed through the Internet, telephone, and personal interaction at
the offices. Services such as accounts, credit cards, loans, investment funds and home
insurance are offered to the customers. In order to effectively manage the personal selling
36
EMPIRICAL DATA
activities, Nordea has segmented its customer-groups. Customers in the upper segment
have their personal banking advisor, as well as corporate customers with a turnover above
a certain level also have their own contact person. All customers can reach Nordea’s
telephone central, and they can expect to get the same service as they get at an ordinary
office. Furthermore, the customers who have their own banking advisor can also contact
that person directly. Additionally, the telephone bank calls customers, mostly from the
upper segment, to inform about offerings and new products. Less profitable customers are
mostly informed about these offerings via mail. This concept is called one-to-one and
one-to many, and was developed in order to be more cost efficient. Customer relations
are also handled on commission by telemarketing companies who contact Nordea’s
customers to inform about offerings or new products. Customers of competing banks are
also contacted and provided with information in order to convince them to choose Nordea
over other banks.
As technology develops, self-services such as banking via the Internet or telephone is

partially replacing the traditional interaction of personal selling. This enables the
customers to manage their banking errands on their own. Most of the personal selling,
however, is performed in the everyday work at the offices. It is commonly used in order
to reach customers “right on the spot”, for example by promoting Nordea’s services to
employees of a firm that is already a customer of the bank. Making “right on the spot”
selling is a very central part of the promotion strategy, since Nordea believes that this is
what generates the most sales. This is sometimes performed when the customer visits the
office for another cause than actually buying a service. However, personal selling is also
often performed on request of the customer. The employees working with personal
selling annually acquire additional education, in order to increase their competence.
According to Mr. Rosenström, personal selling is the most important tool in the
promotion mix, since it focuses on the different target segments and builds relationships
with individual customers. Personal interaction covers a great part of the bank’s
operations and is the most determining factor for the success of Nordea.
Direct Marketing
Direct marketing is mostly related to new products, price changes and special offers. The
bank has a data base with customer information in order to perform segmentation and
targeting efficiently. Firstly, the already existing customers are targeted, and thereafter
potential customers within Nordea’s target segment. After deciding which target segment
to focus on, the choice of media is made. Direct marketing is mostly performed through
post circulars. Nordea also uses telemarketing companies, which contact the customers
and offer them special services and offerings. Nordea has not been able to make a lot of
direct marketing via the Internet, since it does not have a complete list of e-mail
addresses of private persons. However, this is something Nordea is working on, and an
external agent has been hired in order to get access to these e-mail addresses.
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EMPIRICAL DATA

According to Mr. Rosenström, Nordea offers a full range of financial services to both
corporate and private customers. The type of service offered does not influence the
promotion strategy. Promotion is performed in a similar way, regardless of the product or
service, but the segments are targeted differently. For example, advertising is used mainly
to reach private customers and is presented through television, magazines, radio and by
using out-door media. Promotion to corporate customers normally only consists of post
circulars and personal selling. The most significant promotion concerns the brand Nordea
and not a particular product or service. However, Mr. Rosenström points out that it is
very important to promote the features of each service, and therefore Nordea always
encourages its potential or established customers, through its advertising, to read more
about them on the web site.
Nordea has no products that are unique in comparison with those provided by their
competitors in Estonia. However, corporate customers are offered a specialized service
where Nordea helps them to avoid financial risks, something that competitors in Estonia
do not offer in the same way. In order to be competitive, Nordea continuously strives for
improvement in order to deliver better solutions than competitors. Since Nordea is a cost
efficient bank, it can manage to provide lower prices than competitors and still receive a
high profit margin. Nordea has three experienced people in the marketing department
working solely with the process of making the marketing mix as cost efficient as possible.
These people are primarily self-taught through “learning by doing”, but have great
experience of the banking sector. It is very important for Nordea to maintain a good
overall image and remain consequent in its actions. Nordea aims to be a good corporate
citizen ensuring confidence and trust.
The technology within the banking industry is of great importance, since Estonia is a
forerunner in adapting modern technology. One of the Nordea group’s objectives is to
have the leading multi channel distribution with a top world ranking in e-based financial
solutions and a high level of use of its e-services. Nordea has been using the Internet as a
promotional tool since 2001. Nordea believes that it is necessary to adapt technology into
its operations, in order to keep up with the external pressure, and also to reduce costs,
since it strives for cost efficiency. In all of its advertising, Nordea refers to the website,
http://www.nordea.ee, for further information. Customers of Nordea can, apart from the
traditional way, handle their bank errands through an Internet bank, telephone bank or
WAP and GPRS phones. Banners on other companies’ web pages are of great
importance. However, Nordea initiated its technological development rather late and has
not yet reached the development it desires. Currently, the major problem of making
advertising through the Internet more efficient is that e-mail addresses of private persons
are often hard to find. According to Mr. Rosenström, Internet and other high
technological information channels are important tools for the segment that Nordea
focuses on. However, it is not possible to state that customer satisfaction has increased
due to the more extensive use of technology.
38
EMPIRICAL DATA
Nordea considers cultural aspects to be of great importance, since it affects almost

everything that it does. Most of the promotion is created locally to fit the needs and
culture of the Estonian market. The preferences and expectations of Estonian customers
somewhat different in comparison with Scandinavian customers. However, it is hard to
describe what the actual differences are. Generally, the Estonian market is becoming
more and more like the Scandinavian in terms of customer preferences and expectations.
The promotion in Estonia applies the Nordea group concept and is as standardized as
possible when it comes to colors, music and the information given. The Nordea bank
offices also look similar to the Scandinavian regarding furnishing and equipment. The
people working at Nordea in Estonia are Estonians, since “banking business is local
business”. All promotion developed is translated into Estonian. Normally, commercials
developed in Scandinavia include no dialogue, which makes it less complicated to adjust
these. As mentioned before, Nordea has chosen to segment its customers. According to
Mr. Rosenström, the primary customers of Nordea are corporate customers and high
income earners, since these segments are the most profitable ones. This focus has enabled
Nordea to avoid being affected by banking crises to the same extent as competitors.
The International Market

Laws and regulations on the Estonian market are quite similar to Scandinavian. The
country is liberal and following these regulations has never been a problem for Nordea.
Naturally, there are restrictions on promotion, but Mr. Rosenström claims that they are
not better or worse than the Nordic ones. Estonia is at a rapid pace becoming more and
more like any west European country.
The competition in Estonia is tough, and there are a number of large banks which Nordea
is benchmarking itself against. The three major competitors are three banks partially
owned by the Swedish banks Föreningssparbanken and Skandinaviska Enskilda Banken
and the Finnish bank Sampo. Since Nordea’s establishment, the competitive situation has
intensified dramatically, including a number of consolidations between different banks
and establishment of totally new banks. Only this year, two new banks have established
on the Estonian market. As a consequence, the product range has broadened, prices have
decreased and the overall costs for Nordea have increased. Nordea has been forced to
conduct promotion much more intensively, and in accordance with the promotion of
competitors. As a result, more effort has been put on television commercials. The
competitive situation tends to determine the number of advertising campaigns Nordea
conducts every year.

In order not to be seen as a foreign company, Nordea tries to highlight the local aspects
rather than the Nordic. Since Nordea attempts to promote itself as a local bank, the
country of origin image is of less importance. Nordea has never met any difficulties due
to its origin and the promotion strategy in general has not been affected by the fact that
Nordea is a foreign owned bank.
Economic factors are of great importance when making a decision about the promotion
strategy. If the economy is growing, it is essential to make sure that the growth of the
39
EMPIRICAL DATA
bank is more rapid than the growth of the market. In order to manage this, Nordea
intensifies its promotional activities. However, if the economy does not grow at all,
Nordea diminishes its promotional actions. The economic situation does also to a great
extent control which products that are most demanded. If, for example, the interest level
is low, Nordea will choose to promote loans and if the stock market has a positive
growth; mutual funds will be prioritized over funds based only on interest.
The advertising structure in Estonia is well-developed, including commercial television

and radio channels and numerous magazines. According to Mr. Rosenström all the media
Nordea needs are available and are working satisfactorily.
Adaptation
Nordea has to adapt almost all its promotion to a certain level. Firstly, when Nordea
launched the new brand name in 2001, institutional advertising developed for Nordea in
Scandinavia was used. However, this turned out to be less successful, since the people of
Estonia were not aware of what kind of company the brand name represented to the same
extent as the Scandinavian people were. Therefore, the bank had to adapt its promotional
approach of the institutional advertising, so that the market could understand what the
brand actually symbolized. Thereafter, pictures from the local market have been used for
this type of advertising. The design of the website also has to be adapted with regard to
the differing preferences of the customers. Moreover, in order to make it easier to
standardize, the television advertising of Nordea in Scandinavia often does not include
any dialogue. However, this type of advertising did not suit the Estonian market, since the
Estonian people prefer talking commercials. As a result of this, all commercials are now
created locally. Furthermore, promotion developed for the whole Nordea group always
has to be translated. Additionally, promotion directed towards the private customers has
to be more adapted than promotion towards the corporate customers, since the promotion
towards the latter group generally includes mostly personal selling. The competition is
tough, and the situation has intensified dramatically since the establishment of Nordea.
This has forced Nordea to intensify its promotion, especially television commercials.
Nordea uses the same media channels as in Scandinavia, including commercial television
and radio as well as papers and financial magazines. According to Mr. Rosenström,
television is the best way to create awareness of the brand name and building a brand
identity. Due to this fact, Nordea has adapted the advertising media used to focus on
television. In order not to be seen as a foreign company, Nordea tries to highlight the
local aspect rather than the Nordic when making statements in magazines. However, the
promotion strategy in general has not been adapted due to the fact that Nordea is a
foreign corporation, since it is not seen as a major problem.
40
EMPIRICAL DATA
Standardization
The cost of adapting promotion material is considerable, and therefore Nordea tries to
standardize as much as possible in order to reach economies of scale. The logotype,
colors used and giveaways are mostly standardized in order to create a consistent brand
image. Since the services offered in Estonia are the same as the ones on other markets, a
great part of the promotional material, such as pamphlets and leaflets, used for personal
selling, only has to be translated. Internet marketing such as banners, as well as
giveaways can also be partly or totally standardized. Moreover, some posters are totally
standardized with the same slogan in all Nordea markets. Currently, a poster with the
slogan “You are always at home with Nordea” is present at all larger airports in Nordea’s
home markets. Although, the media available in Estonia are the same as in Scandinavia,
this does not enable Nordea to standardize, since the Estonian market has other
preferences regarding media. According to Mr. Rosenström, the Estonian market
becomes more and more equal to the Scandinavian when it comes to customer
preferences and expectations.
41
DATA ANALYSIS
6 DATA ANALYSIS
In this chapter a within-case analysis will be presented, comparing the theories from the
frame of reference with the empirical findings attained from Mr. Christer Rosenström
and the Nordea web sites. The structure of this chapter will follow the order of the
research questions presented in chapter one.
Research question number one concerns the different promotion tools for banking
services in the Baltic States. The promotion tools discussed are advertising, sales
promotion, public relations, personal selling, and direct marketing.
Advertising
Nordea uses both institutional and brand advertising to promote itself. This is in
accordance with Meidan (1996), who states that a financial organization can use both
institutional and brand advertising activities and often in combination with each other. In
order to build up its brand name and for brand recognition, Nordea uses institutional
advertising, exposed through television and outdoor media. Since the merger in 2001,
Nordea has extensively used institutional advertising, but as the market has become
aware of the brand, the method of advertising has developed. The institutional advertising
today is also exposed through magazines and radio. Meidan (1996) confirms that
institutional advertising can be used for the long-term build-up of its brand name and the
firm’s image as a whole. However, he further states that institutional advertising can be
used to promote specific products offered, which is not done by Nordea.
The brand advertising of Nordea focuses on promoting the specific services the bank is
offering to selected segments. This is done in order to reach the customers who are most
likely to be interested in the service and in order to be cost efficient. It is also performed
in order to reach its short-term goal such as selling a specific amount of home loans or
credit cards within a certain period of time. Meidan (1996) agrees that, while institutional
advertising is directed towards the whole population, the brand advertising of particular
products has to be much more selective, since it is has to show that the consumer will
benefit from the specific services. Nordea’s individual brand advertising campaigns
follow the image the bank has created through its institutional advertising in the sense
that it uses the same color scheme and the Nordea logotype. Meidan (1996) also mentions
that all the individual campaigns of brand advertising has to be compatible in tone and
presentation, and match the image the bank has created through its institutional
advertising.
Nordea has divided its advertising into “under-the-line” and “above-the-line” advertising.
For its “above-the-line” advertising Nordea communicates with its customers through
television and radio, magazines and newspapers. According to Meidan (1996), above-the-
line advertising can be communicated through television, radio, posters, magazines, and
42
DATA ANALYSIS
newspapers. Furthermore, Nordea also has banners on company websites, which is not
mentioned in theory.
Nordea often uses “under-the-line” advertising at its offices and sales points. Leaflets,
pamphlets, explanatory guides and manuals are made available, either in combination
with personal selling or for customer self-service. This corresponds with Meidan’s (1996)
statement that under-the-line advertising represents an important part of a financial
organization’s indirect advertising.
Sales Promotion
Nordea is careful with the usage of sales promotion. It has some special offerings, for
example for customers signing up for its Internet bank. At the moment, it has a special
loan offering, using low interests to attract new customers. Peatti & Peatti (1994) claim
that normally, coupons, special offers and other forms of price manipulation are the
dominant forms of sales promotion. According to Meidan (1996) sales promotion tools
have the advantage of an attention gaining quality and it provides a “bargaining chance”
with the consumers. On the other hand, although it appeals to a wide range of buyers, it
could make the consumers more suspicious whether the service is reliable or reasonably
priced. Thus, financial organizations must be careful in the use of sales promotion. (ibid)
Additionally, Nordea uses giveaways, which are mostly intended for corporate customers
and for its main private customers of the upper segment.
Public Relations
Nordea is active in a number of well respected financial magazines in Estonia. Once a
month it tries to make a contribution in a magazine, and every week the bank gets
contacted for statements. As a part of Nordea’s charitable activities, it is sponsoring
different social projects. Nordea has never experienced a crisis in Estonia. Instead, it has
benefited from the two crises that have affected the banking sector since 1995, due to its
choice of customer segments. According to Brassington & Pettitt (2000) PR covers a
range of activities including media relation, charitable involvement as well as crisis
management. Nordea does not have any specific person hired to facilitate the public
affairs. Instead it is managed by different persons working with more general duties and
by external agents when it comes to press releases. This is not in accordance with Meidan
(1996), who states that many financial organizations have special public affairs officers,
working actively to generate publicity.
Personal Selling
Personal selling is the most important promotion tool for Nordea, since it builds
relationships with the individual customers and focuses on the different target segments.
This is confirmed by Verhallen et al. (1997) who state that due to the extensive
competition within banking services and the fast changing environment they are working
in, banks need to develop and maintain comprehensive relationships with their customers.
Because of this, Nordea attempts to nurture the relationships with its customers. All
customers can reach the bank through the bank offices, via telephone or the Internet.
Customers belonging to the upper segment as well as corporate customer also have the
ability to contact their individual sales person. To increase the competence of the sales
43
DATA ANALYSIS
persons, they annually obtain further education. Julian & Ramaseshan (1994) also
comment the importance of a good relationship between the customer and the bank and
they agree that the sales force within a financial organization therefore needs to be trained
in the art of selling.
Direct Marketing
Nordea normally uses direct marketing in connection with price changes, new product
launches and special offers. It is mostly conducted through post circulars, but also
through telemarketing companies contacting existing and potential customers. The bank
has a data base for the customers, which confirms Brassington’s & Pettitt’s (2000) theory
of the importance of having extensive information of customers collected in a database.
However, the lack of e-mail addresses of private persons hinders the bank from using the
Internet to reach the customers. Lee (2002) brings up how the development of technology
has reshaped the interaction between financial institutions and their customers. According
to the author, the financial sector has extended its “face-to-face” selling towards direct
marketing of products and services in the form of telephone, mail and computer
transactions. Nordea has not yet achieved to fully use the Internet for its direct marketing,
however, it has hired an external agent to solve the problem.
Research question number two concerns the external factors influencing the choice of
promotion strategy for banking services in the Baltic States. The chosen factors of
influence are the product and industry, the international market and other external
factors.

Nordea offers a broad supply of services to private as well as corporate customers, which
according to Meidan (1996), is generally needed by a bank in order to meet a variety of
financial and related needs from different customers in different areas. The type of
service offered does not influence Nordea’s promotion strategy, and all services are
promoted in a similar way, with different approaches towards its different segments. The
most significant promotion concerns the brand Nordea and not a particular product or
service. Meidan (1996) agrees that the general promotion strategy focuses on the brand
rather than a specific product. Nordea considers it to be important to inform about the
features of each service, and therefore in its advertising, it always encourages its potential
or established customers to read more about them on the web site. Meidan (1996) states
that since financial services cannot appeal to a buyer’s physical senses, it is very
important for the marketer to explain what the service actually comprises.
Nordea has no products that are considered unique in comparison with those provided by
its competitors in Estonia. Meidan (1996) claims that since banks offer similar products,
it is very hard to stand out. According to Marquardt (1994) a bank’s services are seldom
unique and they are easy for competitors to copy. However, one of Nordea’s main
objectives is to strive for continuous improvement of its offerings to its customers.
44
DATA ANALYSIS
Corporate customers are offered a specialized service where Nordea helps them to avoid
financial risks, something which competitors in Estonia do not offer in the same way.
Another way of maintaining its competitiveness is that Nordea focuses on being a price
leader. Since the bank is cost efficient, it can manage to provide lower prices than
competitors and still receive a high profit margin. According to Julian & Ramaseshan
(1994) the pressure within banking forces the banks to constantly attempt to improve
customer service. It is also very important for Nordea to maintain a good overall image
and remain consequent in its actions. The bank aims to be a good corporate citizen
ensuring confidence and trust. Meidan (1996) confirms that since banking services tend
to meet general needs rather than specific, a bank must strive to attain a good overall
image.
Nordea believes that technology within the banking industry is of great importance,
particularly since Estonia is a forerunner in adapting modern technology. According to
Meidan (1996) there is an increasing demand of technology within the financial services
sector. One of the Nordea group’s objectives is to have the leading multi channel
distribution with a top world ranking in e-based financial solutions and a high level of use
of its e-services. In all of its advertising, Nordea refers to the website for further
information, and it frequently uses banners online. Customers of Nordea can, apart from
the traditional way, handle their bank errands through an Internet bank, telephone bank or
WAP and GPRS phones. Despite this, Nordea has not yet reached its desired level of
technology. According to Flohr-Nielsen (2002) Internet banking is a general trend in
which customer relationships as well as new Web-technologies have become very
important. Internet and other high technological information channels are considered
important tools for the segments that Nordea focuses on. Nordea believes that it is
necessary to adapt technology into its operations, in order to keep up with the external
pressure, and also in order to reduce costs, since Nordea strives for cost efficiency. Flohr-
Nielsen (2002) agrees that the banking industry provides strong incentives for banks to
use the Internet, since they can reduce their costs considerably. Nordea claims, however,
that it is not possible to state that customer satisfaction has increased due to the more
extensive use of technology. This does not fully correspond with the statement by Flohr-
Nielsen (2002) who claims that a bank at the same time can meet potential demands of
customers, such as convenience and cheap transactions.
Nordea considers cultural aspects to be of great importance, since it affects almost

everything that it does. Root (1994) also indicates that culture can affect many, if not all,
of an organization’s strategic decisions. Most of Nordea’s promotion is created locally to
fit the needs and culture of the Estonian market. Papavassiliou & Stathakopoulus (1997)
state that the advertising messages must correspond with the beliefs and traditions of the
citizens in each country, since cultural values have an impact on advertising message
appeal. The preferences and expectations of Estonian customers are somewhat different
in comparison with Scandinavian customers. However, they are becoming more and more
alike, and it is hard to describe what the actual differences are. Albers-Miller et al.
(2000), confirm that consumer expectations can differ tremendously and the issues of
culture should therefore be thoroughly examined in order to create effective promotion.
All promotion developed is translated to Estonian. Normally, commercials developed in
45
DATA ANALYSIS
Scandinavia include no dialogue, which makes it less complicated to adjust these.

Papavassiliou & Stathakopoulus (1997) claim that the development of a basic advertising
campaign with country-specific adaptations is very important, especially when there are
great linguistic differences across different host countries.
Nordea has chosen to segment its customers and focuses on corporate customers and high
income earners. This due to the fact that these segments are the most profitable ones.
Meidan (1996) also stresses that market segmentation is essential and that consumer
behavior towards financial services is very much a function of social class. (ibid)
The International Market

Naturally, there are restrictions on promotion, but Nordea believes that they are not better
or worse than the Nordic ones. Estonia is at a rapid pace becoming more and more like
any west European country. Cavusgil et al. (1993) state that in a market where the legal
regulations are comparable with those in the home market, firms have less pressure to
modify their promotional program. Fleming et al. (1997) claim that the Baltic States are
some of the most developed transition economies. Ghauri & Holstius (1996) claim that
out of the Baltic countries, Estonia has done the most to harmonize laws with Western
ones.
The competition in Estonia is tough, and there are a number of large banks which Nordea
is benchmarking itself against. Czinkota & Ronkainen (2004) mean that there is a greater
variance of competition in the international market compared to the domestic one. To be
successful, an organization has to learn about the competitive activities and evaluate the
actual and potential impact it has on its own operations (ibid). Since Nordea’s
establishment, the competitive situation has intensified dramatically, including a number
of consolidations between different banks and establishment of totally new banks.
According to Quintana (2003) increased competition has strongly affected banking
organizations, and facilitated internationalization of banking firms. Arnold et al. (2001)
claim that tens of companies within the banking industry have been established after 1991
in the Baltic States. The consequence of the intensified competition is that the product
range has been broadened, prices have decreased and the overall costs for Nordea have
increased. Nordea has also been forced to conduct promotion much more intensively, and
in accordance with the promotion of competitors. The competitive situation tends to
affect how many advertising campaigns Nordea conducts every year. Papavassiliou &
Stathakopoulus (1997) confirm that competition may force organizations to adapt
promotion.

Nordea attempts to promote itself as a local bank, and therefore country of origin image
is of less importance. Nordea has never met any difficulties due to its origin. Claessens &
Jansen, (2000) mean that the increasing internationalization of financial services
eliminates discrimination in treatment and removes barriers between foreign and
domestic providers.
46
DATA ANALYSIS
Economic factors are of great importance when making a decision about Nordea’s
promotion strategy. If the economy is growing, it is essential for Nordea to make sure that
its own growth is more rapid than the growth of the market. In order to manage this,
Nordea intensifies its promotional activities. However, if the economy does not grow at
all, Nordea diminishes its promotional actions. The economic situation controls, to a great
extent, which products that are most demanded. If, for example, the interest level is low,
Nordea will choose to promote loans and if the stock market has a positive growth;
mutual funds will be prioritized over funds based only on interest. Papavassiliou &
Stathakopoulus (1997) agree that the economic conditions prevailing in the host country
are of major concern. Brassington & Pettitt (2000) mean that economic factors include
inflation, exchange rates, income, consumption potential, rate of unemployment and
exchange control regulations.
Nordea believes that the advertising infrastructure in Estonia is well-developed, including

a great supply of different media such as commercial television and radio channels and
numerous magazines. Arnold et al. (2001) confirm that in the latter years, a great deal of
money has been invested in advertising in the Baltic States, and this in turn has increased
availability of media and development of the advertising structure.
In the table below an overview of the comparison between theory and empirical data will
be provided and show how the findings correspond and if the factors were considered to
influence the promotion strategy of Nordea. The first column shows the possible factors
influencing the promotion strategy. Column number two explains if the factors were
considered to influence the choice of promotion strategy for Nordea. Moreover, since the
theory is based on manufactured products, a comparison between theory and empirical
data is presented in column number three.
Table 6. 1 Comparison between Theory and Empirical Data
External factors influencing the Influences the promotion Corresponds with theory (yes,
promotion strategy strategy (yes or no) no or partially)
Type of product no yes
Product uniqueness no yes
Technology orientation of the industry yes partially
Cultural aspects yes yes
Similarity of legal regulations no yes
Competitiveness of the market yes partially
Country of origin image no partially
Economic factors yes partially
Advertising infrastructure no yes
Research question number three concerns the adaptation and standardization of the
promotion strategy for banking services in the Baltic States. Since the facts presented by
47
DATA ANALYSIS
De Mooij in table 6.2 and 6.3 are interrelated and to some extent concern the similar
issues, these facts will be analyzed simultaneously.
Adaptation
The people in Estonia have somewhat dissimilar preferences from the Scandinavian,
although it is hard to describe exactly in what way they differ. Estonian people prefer
talking commercials, and since most of the Nordea group’s television commercials
developed for Scandinavia include no dialogue, Nordea now creates all commercials
locally. The Estonian website also has to be adapted because of the differing preferences.
According to Brassington & Pettitt (2000) an organization acting on an international
market always has to consider to which degree customer’s needs and wants differ
between different markets. They further state that promotion mixes often have to be
adjusted in order to suit the local environment and the target market preferences.
De Mooij (1994) means that the advertising of a brand cannot be universal if it defies
local customs, and in these cases adaptation should be considered. He further states that
one argument in favor for choosing an adaptive approach is the heterogeneity of the
countries concerned.
Nordea uses the same media channels as in Scandinavia, including commercial television
and radio as well as papers and financial magazines. De Mooij (1994) claims that if there
are differences in the media scene it might be an argument for adaptation. Furthermore,
television is the best way to make people aware of the brand name and building brand
identity. Therefore, Nordea has adapted the media used to focus on television advertising.
The regulations regarding financial services and advertising are quite similar to the
Nordic ones. Following these regulations has never been a problem. According to
De Mooij (1994) differing regulations regarding service or advertising should be
considered when making decisions concerning adaptation. Moreover, competition is
tough and the competitive situation has intensified dramatically since the establishment of
Nordea, which has forced Nordea to intensify its promotion, especially television
commercials. The nature of the competition in different markets is according to De Mooij
(1994) a reason why companies might find it preferable to choose to adapt parts of the
promotion strategy.
When Nordea launched the new brand name, standardized institutional advertising
created for Scandinavia, was used. However, this was not very successful since the
people in Estonia were not aware of what the brand name represented. Nordea now
creates all its institutional advertising locally, including pictures from the local market
and also dialogue, which is preferred by the Estonian market. De Mooij (1994) confirms
that a brand’s advertising cannot be universal if different national markets are in diverse
stages of maturity, and therefore adaptation must be performed. He further argues that if
the service is at different stages of its life-cycle in different markets adaptation is
favorable. Furthermore, in order to not be seen as a foreign company, Nordea tries to
highlight the local aspect rather than the Nordic, especially when making statements in
financial magazines. This is, however, not seen as a major problem and therefore no other
promotional activities have been adapted because of the fact that Nordea is a foreign
48
DATA ANALYSIS
company. De Mooij (1994) argues that if there is a danger with the fact that the company
is seen as foreign, an adaptive approach is preferable.
Nordea’s promotion directed towards the private customers has to be more adapted than
promotion towards the corporate customers, since promotion towards the latter group
include mostly personal selling and no television or radio commercials. O’Donnel &
Jeong (2000) agree that products or services directed to the industrial market are seen as
more suitable for standardization than consumer products or services.
In Estonia, television is seen as the best medium to use in order to make people aware of
the brand name. However, Czinkota & Ronkainen (2001) argues that adaptation has to be
carefully investigated in emerging market economies, where the people are interested in
rational advertising and see it as information. They further state that this has led to the
fact that many customers tend to prefer advertisement in newspapers to those on
television. One of the basic conditions for adaptation or standardization, and two of the
arguments for adaptation were not mentioned by Nordea.
In the tables below an overview of the comparison between theory and empirical data
presented above, will be provided and show if the factors presented in the data analysis
affect the level of adaptation or standardization of Nordea. Table 6.2 shows if the basic
conditions motivate the use of either adaptation or standardization. Table 6.3 illustrates if
the provided arguments pro adaptation are reasons for adapting according to Nordea.
Table 6. 2 Basic Conditions for Adaptation or Standardization
Basic conditions Fulfilled for adapting Fulfilled for standardizing
A brand’s advertising cannot be

universal if different national
Yes No
markets are in diverse stages of
maturity
universal if the idea depends on a
Not mentioned Not mentioned
large budget which is unsupported
in some markets
universal if it defies local customs
Yes No
and regulations and ignores the
efforts of the competition
49
DATA ANALYSIS
Table 6. 3 Arguments for Adaptation
Arguments for adaptation Reason for adapting at Nordea
The heterogeneity of the countries concerned

Yes
The “not invented here” syndrome: the desire to
Not mentioned
create own campaigns
Differences in the media scene
Yes
Differing regulations regarding service or
No
advertising
The nature of the competition in different markets
Yes
The service is at different stages of its life-cycle
Yes
in different markets
The danger of being seen as a foreign company
No
Reduced economic advantage because of higher
Not mentioned
co-ordination costs
Standardization
The Estonian market becomes more and more equal to the Scandinavian when it comes to
customer preferences and expectations. Cavusgil et al. (1993) state that the development
in communication together with the increased travel contributes to the globalization of
markets. He further claims that this has resulted in emerging global customer groups,
which might make a standardized approach preferable.
The cost of adapting promotional material is of great importance, and therefore Nordea
tries to standardize their promotion as much as possible in order to reach economies of
scale. A great part of the material used for personal selling, such as leaflets and pamphlets
have a uniform layout and only have to be translated into Estonian. De Mooij (1994)
agrees that cost reduction is the most important reason for choosing a standardized
promotion strategy. Moreover, some posters are totally standardized with the same layout
and slogan in all of Nordea’s markets. Promotional material such as giveaways as well as
colors used at the promotional material and interior at the offices and the logotype are
standardized in order to create a uniform brand image. This is also a reason, which
De Mooij (1994) points out as an argument for standardizing the promotion strategy. The
media available in Estonia are the same as in Scandinavia; however, this does not enable
Nordea to standardize, since the Estonian market has other preferences regarding media.
Several of the arguments for standardization were not mentioned by Nordea.
50
DATA ANALYSIS
In the table below an overview of the comparison between theory and empirical data will
be provided and show if the factors presented in the data analysis affect the level of
standardization of Nordea. The table illustrates if the provided arguments pro
standardization are reasons for standardizing according to Nordea.
Table 6. 4 Arguments for Standardization
Arguments for standardization Reasons for standardization at Nordea
Cost reduction is the most important argument for

Yes
standardization
A uniform brand image and corporate image
Yes
worldwide avoid confusion
The globalization of media
No
Simplified planning through uniform objectives
Partially
Maximum use of good ideas and transmission of
Not mentioned
know-how
Centrally managed international enterprises
Not mentioned
Better use of manage abilities and resources
Not mentioned
Universal guidelines and quality standards
Not mentioned
Better access to know-how and experience of
Not mentioned
other countries
51
CONCLUSIONS
7 CONCLUSIONS
In this chapter the conclusions will be drawn from the analysis, and thereby the answers
to the research questions will be provided.
Before drawing our conclusions we have taken into consideration that some of the
theories used were developed for manufactured products rather than for services. Since
only one case study has been done, general conclusions regarding banks cannot be drawn.
However, since the Baltic States are considered to be similar in terms of development and
culture, we believe that some general conclusion concerning the Baltic States can be
drawn from the case study. When making conclusions regarding banks, we refer to banks
in the Baltic States.
7.1 How can the promotion mix for banking services in the Baltic States
be described?
Our research shows that all parts of the promotion mix are used to some extent for
promotion of banking services.
Personal selling is considered to be the most important promotional tool, as it aims to

build relationships between the customer and the bank. Relationships are crucial, since
they make the customer loyal to the brand and enable the bank to reach its long-term
goals. It is also of great importance to make a thorough segmentation of the customers in
order to make the personal selling as cost-efficient as possible.
Concerning advertising, banks use both institutional and brand advertising. Institutional
advertising is conducted for brand building, which is vital due to the fact that all banks
offer similar products. It is of great importance to have a strong brand in order to attract
customers. Institutional advertising is conducted through television, magazines and
outdoor media, in order to combine a strategy that reaches a broad crowd and that is
somewhat cost efficient. Thereby less profitable and potential customers are also targeted.
The brand advertising aims specific services towards specific customer segments. Banks
tend to be selective when it comes to promoting specific services and they focus on their
primary customers. Brand advertising is primary used in order to reach short-term goals.
Above-the-line and under-the-line advertising are both of importance for banks. A
combination of the two in their promotion strategy is preferable, as they are a great
complement to one and other. Furthermore, under-the-line promotion is an essential
complement for personal selling, since it provides the customer with information
regarding the different services that are offered.
Banks are careful in their use of sales promotion. However, special offerings and other
forms of price manipulation are used to some extent. Public relations are performed in
order to create goodwill and to spread information. This is done through participation in
magazines as well as via sponsoring of social projects. The aim of direct marketing is to
inform as well as to promote. It is commonly used through post circulars, but the use of
Internet is also considered to be of importance.
52
CONCLUSIONS
From the discussion above, the following conclusions are drawn:
! All promotion tools in the promotion mix are used to some extent for the
promotion of banking services
! Personal selling is the most important promotion tool when promoting banking
services.
! Segmentation of customers is an essential part of the promotion for banking
services.
! A strong brand is crucial in order to attract customers.
7.2 How can the external factors influencing the choice of promotion
strategy for banking services in the Baltic States be described?
Concerning the external factors influencing the choice of promotion strategy, we found
that theory and empirical findings to a great extent corresponded. We also found that less
than half of the factors actually influence the promotion strategy.
The only factors that truly affect banks choice of promotion strategy are cultural aspects,
technology orientation of the industry, competitiveness of the market, as well as
economic factors. The technology orientation factor influences the choice of promotion
strategy to a great extent. Banks have faced increased competition and pressure to apply
technology in its operations. This has led to some changes of the promotion strategy as
telephone banking and Internet, for instance, have been added as tools for reaching
customers. The factor concerning cultural aspects is the most important one, since it
affects almost all of banks decisions regarding promotion. The competitiveness of the
market is a very important influence that affects banks promotion strategies. The
competition is tough, and that in turn, affects the promotion intensity. Concerning the
economic factors, the overall economic situation of the country also affects the promotion
strategy.
Many of the factors that influence the choice of promotion strategy according to Cavusgil
et al. (1993) and Papavassiliou & Stathakopoulus (1997) were not considered to affect
banks. We believe that this is partially due to the fact that very little research has been
made within our chosen research area and that we therefore had to apply theories
regarding export companies and manufactured products instead of services. We also think
it is a consequence of the case study we chose to conduct, since factors influence to a
varying extent in different industries and countries. The similarity of legal regulation
factor is not a problem for a Scandinavian bank operating in Estonia, since it is such a
liberal and westernized country. However, it could very well have been a very restraining
factor in other countries. The country of origin image is not an issue relevant, since banks
in many ways try to act locally. The advertising infrastructure is not an issue for banks
operating in Estonia, since they have access to the communication channels needed.
53
CONCLUSIONS
We consider a bank to be such a distinct form of institution that it cannot be separated

from its offerings. Additionally, banks offer similar products and therefore the promotion
of a product is mainly promotion of the brand. As a consequence, we believe that factors
such as type of product and product uniqueness are not applicable. We also believe that
since influences are somewhat abstract, it is very subjective and individual amongst
companies what they themselves believe is influencing promotion decisions.
From the discussion above, we have drawn the following conclusions:
! The cultural aspects- factor is the most important external factor influencing the
choice of promotion strategy.
! The other external factors that influence the choice of promotion strategy are the
technology orientation of the industry, the competitiveness of the market and the
economic factors.
7.3 How can the adaptation vs. standardization of the promotion

strategy for banking services in the Baltic States be described?
Banks use neither a pure adaptation nor a pure standardization strategy and therefore the
conclusion is that a contingency approach of the promotion strategy is applied. The most
important reason for adapting seems to be the different preferences and expectations of
the Estonian market. Our empirical data shows that television and radio commercials
have to be adapted, with regard to the fact that talking commercials and pictures with a
local connection are preferred. The fact that Estonian people prefer television
commercials to other forms of advertising, forces banks to adapt their choice of media.
Furthermore, our case study indicates that the language barrier must be taken into
account. Consequently, all promotional material has to be translated. When a brand is in a
different stage of the life cycle in different markets, the amount and type of advertising
has to be adapted. Banks are also forced to adapt their choice of media. Moreover, harsh
competition forces banks to adapt their promotion intensity. Lastly, promotion directed
towards private customers needs a higher degree of adaptation than promotion directed
towards corporate customers.
The most important reasons for standardizing are cost-reduction and economies of scale.
Our empirical findings points out that a lot of material, especially connected to personal
selling, should be standardized. Another important reason for standardizing is the creation
of a consistent brand image. Our findings show that promotional material such as
giveaways, as well as the usage of colors and the logotype are standardized for this
reason. However, since the preferences and expectations of the Estonian people are
becoming more similar to the Scandinavian people, more focus on the standardization
approach might be suitable in the future. Moreover, the fact that Estonia has the same
media channels as Scandinavia, including commercial television and radio, as well as
papers and financial magazines, this might be a reason for a higher degree of
54
CONCLUSIONS
standardization. Moreover, since laws and regulations regarding banking services and
advertising in Estonia are quite similar to Scandinavian this is not an obstacle for
standardization of promotion.
From this discussion the major findings gives us the following conclusions:
! A contingency approach with emphasis on adaptation is used for the promotion of

banking services.
! The most important reason for adapting is differing customer preferences and
expectations.
! Adaptation is carried out with regard to media, language, competition and stage in
the life cycle of the bank as a brand.
! The most important reason to standardize is cost-reduction and economies of

scale.
! The second most important reason for standardizing is to be able to create a

uniform brand image.
55
IMPLICATIONS
8 IMPLICATIONS
With the findings of this study as a basis, this chapter will provide implications for
managers within the banking industry. Furthermore, implications for theory and future
research will be provided.
8.1 Implications for Management
! Managers who wish to conduct promotion in Estonia should focus on personal

selling, since it is the most important promotion tool and it involves establishment
of relationships with individual customers. We believe that it is of great
importance to provide specific education for the sales personnel, since they are the
ones interacting with customers, and thereby affecting customer perception of the
bank. Advertising should also be emphasized, due to its ability to reach a broader
public and create awareness and interest among potential customers. The
remaining three promotion tools are also applicable, and should be used as a
complement to personal selling and advertising.
! The factors that are most influential on the choice of promotion strategy, and
therefore should be taken into extra consideration, are the cultural aspects, the
technology intensity of the industry, the competitive environment of the market
and the economic factors involved. Culture can affect all managerial decisions,
and it is significant for managers to consider the needs, attitudes and preferences
of the host market in order to conduct effective promotion. As modern technology
is increasing in importance in Estonia, managers also need to make an effort in
developing and extending its usage of technology. This is essential for
development of a bank’s operations and helps to reduce costs. Additionally, the
increasing competition in Estonia forces managers to adapt and intensify their
promotion strategies to keep up with the competing banks.
! Managers should attempt to standardize their promotion to the extent possible, in

order to diminish expenses and achieve economies of scale. However, due to
differing preferences and expectations of the customers as well as the local
conditions prevailing in Estonia, a great deal of the promotion must be adapted.
8.2 Implications for Theory
The purpose of this thesis was to gain a deeper understanding of international banks’
promotion strategies in the Baltic States. In order to reach this purpose we have described
the different tools in the promotion mix used by financial services, external factors
influencing the choice of promotion strategy, and adaptation and standardization theories.
The study has been exploratory since we have gained a deeper understanding of the area
of research. Towards the end of the thesis our own conclusions were presented and
through this we begun to explain the phenomena we have explored and tried to describe.
56
IMPLICATIONS
This thesis’ contribution to theory is based on empirical studies of the investigated

phenomenon in one case study. No prior research with the exact same approach as our
study has been conducted; therefore it can serve as a base for further research within this
area. As theories are directed towards the product industry we recommend the theories to
be revised in order to better fit the service industry, particularly considering the external
factors that can influence the choice of promotion strategy.
8.3 Implications for Further Research
! It would be highly interesting to conduct another study within the same area of
research, however, investigating less developed transitions countries such as
Romania or Slovenia and comparing it with this study regarding the Baltic States.
This would highlight the similarities and differences between different markets
and how promotion strategies are influenced. A study like this is best conducted
as a multiple case study of two different firms active in the chosen markets of
research.
! Since our study only focuses on one element of the marketing mix, namely
promotion, it would be of interest to conduct a study of the other three elements,
i.e. price, place and product. It would give an overview of how banks are acting in
transition countries, which might be helpful to banks planning to enter transition
countries or banks already active within this type of market. A study like this
could be conducted through a multiple case study of two banks active in different
transition countries.
! Furthermore, it would be of great interest to investigate the mode of entry

strategies for banks when entering a transition country. This connects to our
study, since the promotion strategy is highly affected when launching a new
company or brand on a new market. This might help financial institutions
interested in entering transition countries and could be conducted through a single
case study of one firm entering two or more different countries.
! Another interesting field of study is brand management within the banking

industry. Due to the fact that banks offer similar services and the fact that it hard
to stand out makes it a stressing issue to create and maintain a well known and
positive brand. Such a study could be conducted through a multiple case study of
two or more different banks.
! It would also be of interest to study how the Internet should be used as a

marketing tool for banks in the most efficient way. There is little previous
research made within this area and research on this subject would be a useful
contribution to existing theory. This is best conducted through a multiple case
study of banks, or other companies within the service sector, using the Internet to
a great extend as a promotional tool.
57
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61
APPENDIX 1
APPENDIX 1 – Interview Guide: English Version

I Company Facts:
• Name and title of the respondent

• General facts about Nordea
o number of employees in Estonia
o establishment year in Estonia
o type of products in Estonia
o annual turnover in Estonia
• In how many countries is the company operating
• Market share in Estonia
II The Promotion Mix for Banking Services
Which promotion tools are applied by Nordea on the Estonian market? Examples are
stated below.
• Advertising
o Institutional advertising
o Brand advertising
o Above the line advertising
o Under the line advertising
o Etc.
• Sales Promotion
o Special offers
o Giveaways
o Etc.
• Public Relations
o Publicity in financial journals
o Sponsorship
o Etc.
• Personal Selling
o Face to face
o Internet
o Etc.
• Direct Marketing
o Internet
o Direct mail
o Etc.
APPENDIX 1
III External Factors Influencing the Choice of Promotion Strategy
• The Product and Industry

o Type of product, for example bank loans compared to saving accounts
o Product uniqueness, for example differentiation of services
o Technology orientation of the industry, for example use of internet
o Cultural aspects, for example culture specific adaptation
o Etc.
• The International Market

o Similarity of legal regulation between countries, for example promotion
constrains and financial laws
o Competitiveness in Estonia
o Etc.
• Other External Factors

o Advertising infrastructure, for example structure and availability of media
o Country of origin image
o Economic factors
o Etc.
IV Adaptation and Standardization of the Promotion Strategy
• To what extent, and why, is standardization versus adaptation applied in the different
countries?
o Elements of the promotion mix

o Media used
o Etc.
APPENDIX 2
APPENDIX 2 – Interview Guide: Swedish Version

I Företags Fakta:
• Respondentens namn och titel

• Generell information om Nordea
o Antal anställda i Estland
o Etableringsår i Estland
o Typ av produkter i Estland
o Årlig omsättning i Estland
• Hur många länder är Nordea etablerade i, vilka?
• Nordeas marknadsandel i Estland
II Marknadsföringsmix för banktjänster
Vilka marknadsföringsverktyg används av Nordea på den Estniska marknaden? Vi har

nedan angivit olika exempel på marknadsföringsverktyg.
• Reklam
o Institutionell reklam
o Varumärkesreklam
o ”Above the line” reklam, t ex. kommunikation via TV, Radio, tidningar
o ”Under the line” reklam, dvs. osynlig reklam såsom reklamblad, broschyrer och
informationsfoldrar
o Etc.
• Försäljningsaktivitet
o Special erbjudanden
o Gåvor
o Etc.
• PR
o Publicitet genom finansiella magasin
o Sponsring
o Etc.
• Personlig försäljning
o Face to face
o Internet
o Etc.
• Direkt reklam
o Internet
o Direkt brev
o Etc.
APPENDIX 2
III Externa faktorer som påverkar valet av marknadsföringsstrategi
• Produkt och industri

o Typ av produkt, t ex. banklån jämfört med sparkonto
o Produktens unikhet, t ex. differentiering av service
o Teknologins betydelse för industrin, t ex. användningen av Internet
o Kulturella aspekter
o Etc.
• Den internationella marknaden

o Likhet mellan ländernas lagar och bestämmelser, t ex. reklamrestriktioner och
ekonomiska lagar
o Konkurrenssituation i Estland
o Etc.
• Övriga faktorer
o Kommunikations infrastruktur, t ex. struktur och tillgång till media
o Betydelse av företagets/produkternas härkomst
o Ekonomiska faktorer
o Etc.
IV Standardisering och Adaptering av marknadsförings strategi
I vilken utsträckning, och varför används standardisering respektive adaptering
o Elementen i marknadsföringsmixen
o Valet av media
o Etc.

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2004:152 SHU

Social Science and Business Administration Programmes

INTERNATIONAL BUSINESS AND ECONOMICS PROGRAMME

2004:152 SHU • ISSN: 1404 – 5508 • ISRN: LTU - SHU - EX - - 04/152 - - SE

Luleå, May 2004

Anna Grankvist Carolina Kollberg Anna Persson

REFERENCE LIST ....................................................................................................58

APPENDIX 1 – Interview Guide: English Version

1.1.1 Internationalization of the Banking Industry

1.1.2 Promotion of Financial Services

1.1.3 Financial Services in the Baltic States

1.2 Problem Discussion

Promotion of financial services is an understudied area. Much of the bank marketing

1.3 Purpose & Research Questions

Estonia is called a transition economy, but appears to be relatively comparable to the

2.1 The Promotion Mix for Banking Services

2.2 External Factors Influencing the Choice of Promotion Strategy

PRODUCT & INDUSTRY

COMPANY EXPORT MARKET

Firm’s International Promotion Adaptation Similarity of Legal

Figure 2.1 A Testable Framework of Product and Promotion Adaptation

The Product and Industry

• Cash accessibility (for instance telephone banking)

Technology Orientation of the Industry

Cultural Specificity of Product

Firm’s International Experience

Export Sales Goal for the Venture

The Export Market

Similarity of Legal Regulation

Competitiveness of Export Market

According to Quintana (2003) increased competition has strongly affected banking

Product Familiarity of Export Consumers

Other External Factors Influencing the Choice of Promotion Strategy

Country of Origin Image

2.3 Adaptation and Standardization of the Promotion Strategy

1. A brand’s advertising cannot be universal if different national markets are in

1. The heterogeneity of the countries concerned.

According to Czinkota & Ronkainen (2004) adaptation also has to be carefully

preferable. In order to succeed in the global market it is of importance for companies to

1. Cost reduction is the most important argument for standardization.

The Contingency Theory

3.1 The Promotion Mix for Banking Services

Concerning advertising, we will look at institutional and brand advertising, which

Concerning personal selling, we will look at the importance of interaction and

3.2 External Factors Influencing the Choice of Promotion Strategy

PRODUCT & INDUSTRY

OTHER EXTERNAL INTERNATIONAL

Country of Origin Similarity of Legal

Economic Factors Competitiveness of

Figure 3.1 External Factors Influencing the Choice of Promotion Strategy

3.3 Adaptation and Standardization of the Promotion Strategy

1. A brand’s advertising cannot be universal if different national markets are in

2. A brand’s advertising cannot be universal if the idea depends on a large budget

1. The heterogeneity of the countries concerned.

1. Cost reduction is the most important argument for standardization.

Furthermore, we will use the theories presented below.

3.4 A Conceptual Frame of Reference

Promotion Strategy for

Figure 3.2 A Conceptual Frame of Reference

4.1 Research Purpose

According to Eriksson & Wiedersheim-Paul (2001) the purpose of a research can be

Descriptive studies are designed to describe characteristics of a population or a

As mentioned, the purpose of this thesis is to gain a better understanding of international