Conducting Business in the Emerging Markets of Central & Eastern Europe
Jun 22, 2007 - After 14 years of transitioning from a centrally planned economic system to a capitalistic market system, eight Central and Eastern European (CEE) countries (Poland, Hungary, the Czech Republic, Slovakia, Slovenia, Estonia, Latvia, and Lithuania) joined the European Union. According to Dr. Keith Absher, Dean of the McAfee School of Business Administration, the expansion of the European Union has "created immense challenges and opportunities for retailers as they seek to expand into the new eastern regions." As a result, an unprecedented number of retailers are exploring opportunities for internationalizing their operations.
“In order to be successful in these new member states, retail strategists must have the answers to several key questions,” says Dean Absher
- Do the preferred attributes in a customer’s selection of retail stores differ between the founder member states of the European Union and the CEE accession states?
- Can a retailer pursue a standardized retailing mix strategy when entering CEE countries or is it necessary to make significant adaptations to the strategy?
- What factors differ significantly between the compared western and eastern EU cultural groups?
- What similarities exist between the compared western and eastern EU cultural groups?
- What are the salient and non-salient attributes in selecting retail stores in the CEE accession states?
Dean Absher and his co-author Dr. Darin White have spent the last two years thoroughly investigating answers to these questions in one of the first ever empirical studies to examine the diversity of retail preferences across the newly expanded EU. Their findings will be published in the April 2007 edition of the European Journal of Marketing.
Utilizing a well established retail customer decision criteria scale, the authors collected data from 1,221 eastern and western EU customers. They found that CEE shoppers hold very high expectations of what they desire in a retail store. Indeed, their expectations were higher than those of founder member state customers on 21 of the 22 dimensions measured. In addition, the findings provide further support for the notion that retailing strategies for one country cannot be effectively extended to other countries without adaptation.
It is apparent that retailers should thoroughly evaluate new target markets, especially when they are distant and unfamiliar. Drs. White and Absher conclude that retailers should pursue country-adapted strategies when entering the new CEE accession states.
For more information about this story contact Dean Keith Absher at kabsher@uu.edu or 731.661.5367.
MCAFEE SCHOOL OF BUSINESS ADMINISTRATION
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