Kandidatuppsats
Business Administration and Economics Programme 180 credits
How Svenska Spel, BET365 and MGM
develop message content due to the effects of legislation and cultural behaviour
Bachelor's thesis in business and international marketing 15 credits
Halmstad 2020-05-06
Emil Granath & August Carlander
PREFACE
We want to send kind regards to our supervisor Ulf Aagerup and opponent groups that have supported this study with their feedbacks and useful pieces of advice throughout its process.
Furthermore, we grateful for the course of International Marketing, where Venilton Reinert taught us about the importance of marketing on an international scene that created the foundation for our research.
We have both gained much experience from this study, and we want to thank one another for the patience and hard work we have equally put into this study. We are delighted to present a study that can help companies in the betting industry construct a favorable message content in an international environment due to the effects of legislation and culture in Sweden, Great Britain, and Nevada (US).
SUMMARY
Title: How Svenska Spel, Bet365, and MGM develop message content due to legislation and cultural behavior.
Subject: Bachelor’s thesis in business and international marketing, 15 credits Authors: Emil Granath & August Carlander
Key concepts: Culture, Consumer behavior, Message content, Legislation and Betting Research questions:
What role do culture and legislation have when it comes to the message content of betting companies?
Do the culture and legislation influence the companies to use either emotional or rational marketing?
Do culture and legislation influence the companies to use either hard or soft-sell in marketing?
Purpose: The intention of writing this paper is to give the reader a full concept on the market of betting/gambling and get an explanation of how the changes in communication can differ in the Swedish, British and American markets depending on legislation barriers and cultural diversity.
We strive to build a more comprehensive explanation of how these factors influence Svenska Spel, Bet365, and MGM to use either an emotional or rational marketing strategy and a hard- or soft- selling approach when they construct a favorable message content.
Method: This is a qualitative research study with an abductive approach. The information used in the study is thoroughly researched, and the laws and cultural norms that are investigated are relevant within the study’s framework. The literature study was carried out by collecting theory from credible scientific articles, public regulations, and a carefully worked out Hofstede model.
Conclusion: The results of this study show that the culture heavily influences the actual message content of each company on the market as well as the laws and legislations. Evidence to support this claim is that the traits of emotional and rational marketing combined with either soft-sell or hard-sell reflect the cultural traits of both the consumers and the market as a whole.
2 TABLE OF CONTENT
1.0.INTRODUCTION 3
1.1. BACKGROUND 3
1.2. PROBLEM 4
1.3. RESEARCH QUESTIONS 5
1.4. PURPOSE 5
1.5. DEFINITIONS 5
1.6. KEY CONCEPTS 6
2.0.FRAMEOFREFERENCE 7
2.1. MESSAGE CONTENT IN PRACTICE 7
2.1.1. MEASURING SOFT-‐‑SELL VERSUS HARD-‐‑SELL ADVERTISING APPEALS 9
2.1.2. RATIONAL VERSUS EMOTIONAL MARKETING 11
2.2. CULTURES CONNECTION TO CONSUMER BEHAVIOUR & HOFSTEDE MODEL 13 2.3. LEGISLATION, AND ITS EFFECTS ON MESSAGE CONTENT 15
3.0.METHOD 17
3.1. THE OVERALL RESEARCH APPROACH 17
3.1.1. ABDUCTIVE RESEARCH APPROACH 19
3.2. THE LITERATURE STUDY 19
3.3. EMPIRICAL STUDY 20
3.3.1. SELECTION OF COMPANIES 20
3.3.2. METHOD OF ANALYSIS 20
3.4. TRUSTWORTHINESS 20
4.0.EMPIRICALDATA 22
4.1. SWEDISH CULTURE, LEGISLATION ON BETTING AND THE MESSAGE CONTENT OF SVENSKA SPEL 22
4.1.1. SWEDISH CULTURE 23
4.1.2. SWEDISH LEGISLATION ON BETTING 23
4.1.3. ADVERTISING STRATEGIES AT SVENSKA SPEL 25
4.2. BRITISH CULTURE, LEGISLATION ON BETTING AND THE MESSAGE CONTENT OF BET365 26
4.2.1. BRITISH CULTURE 26
4.2.2. BRITISH LEGISLATION ON BETTING 27
4.2.3. ADVERTISING STRATEGIES AT BET365 28
4.3. AMERICAN CULTURE, LEGISLATION ON BETTING IN NEVADA AND THE MESSAGE CONTENT OF MGM 29
4.3.1. AMERICAN CULTURE 29
4.3.2. THE AMERICAN (NEVADA) LEGISLATION ON BETTING 30
4.3.3. ADVERTISING STRATEGIES AT MGM 33
5.0.ANALYSIS 35
5.1. ANALYSIS OF SVENSKA SPEL IN SWEDEN 35 5.2. ANALYSIS OF BET365 IN THE UK 38 5.3. ANALYSIS OF MGM IN THE US 40
6.0.DISCUSSION 42
6.1. LIMITATIONS 45
6.2. FUTURE RESEARCH 45
7.0.CONCLUSION 46
8.0.REFERENCES 47
8.1. APPENDICES 54
8.1.1. Campaigns made by Svenska Spel 54
8.1.2. Campaign made by Bet365 55
8.1.3. Campaigns made by MGM 55
3
1.0. INTRODUCTION
1.1. BACKGROUND
7,2 billion SEK is the amount of money spent in Sweden alone on investments connected to betting commercial in 2018 (Spelinspektionen 2019). This is a growth in 35% compared to 2017, where total spending was 5.5 billion SEK, and if we go back just two years, it is a growth in 95% when we compare 2016 to 2018. 23,4 billion SEK represents the revenue of the betting companies located in Sweden in 2018. The amount represents betting companies with a Swedish gambling license (16,687 billion SEK) and betting companies without a Swedish gambling license (6,739 billion SEK). This gives a spending total of 2929 SEK per year per citizen over the age of 18 when it comes to betting in Sweden. That the market has become big is an understatement, and similar numbers per capita exist in both the U.K. and the U.S. Thanks to technology, betting has become a global trend (Boniface et al., 2012; Griffiths, 2003; Kalb 2011) but also because of the phenomenon that is online betting (Griffiths & Barnes 2008).
The gambling industry is within an area where international activities are overgrowing. Electronic commerce has opened up new horizons for global services reach and drastically reduced the meaning of distance (Michael R. Czinkota & Ilkka A. Ronkainen 2018). Therefore, the gambling industry can use the whole world as its market, which gives the companies within the industry an enormous potential. Today these companies are so-called ‘‘born global,’’ which means that recently started gambling companies on the market is born as a multinational company with the same basis all over the world (Ingemar Wiktor 2012).
For most people, sports betting and gambling are nothing more than a pastime activity (Dean 2011), yet there is a lot of controversy around the betting industry with cases that have changed the climate around the topic. Legislations have been actual and given governments around the globe more control over the problem. 2019 is a year where many countries in the European Union have operated under strict surveillance and rules around the gambling industry, and the climate on the European market has changed (European Commision 2019). These changes have made it difficult for companies to reach their customers, and their message content looks different, where information about bad betting habits is crucial to prevent addiction. This is something that affects their marketing strategies in order to reach potential customers. The companies message content may look different depending on what segment of customers they want to reach, and this means that companies within the betting industry have to choose its marketing approach wisely and carefully adapt its approaches towards the different targeted cultures. At the same time, it also takes into consideration the laws and legislation on the market.
Gambling is a global phenomenon practiced on all continents of the world. Everyone with a financial responsibility can go through their own game of taking risks to allow themselves to return a profit. Depending on the level of knowledge, the gameplay differs from severe to humorous situations, although the majority of gambling is practiced by individuals that view gamble as entertainment. Risk propensity looks different depending on culture presented in the Hofstedt model, a person is more likely to take risks when there are conditions to make more significant profits, but this can also adapt to situations where one is in debt (Hofstede 2020). The population’s acceptance of limited freedom of play has also shown to depend on the country’s culture; the higher the PDI score (power distance index), the more accepted it is for the individuals in the country to accept restrictions on gambling (Abarbanel & Brett 2012). Allowing making use of gambling services is freedom, and it is the individual’s responsibility when making gambling-related choices.
4 The gambling industry should serve as a tool for entertainment, where people are triggered by the feeling of winning and where the game is a complement to other entertainments. However, gambling does also contribute to negative consequences, and especially to those who have trouble controlling their spending. With that aspect, one gets into the topic of responsible gambling. People have the task of securing their finances, but the gambling industry must always inform and never confuse people in difficult situations to play more than they can master in the light of laws.
Gambling addiction is a mental illness that puts people in social and financial risk. The gambling industry has to conduct to the principle of responsible gambling and by that take its social responsibility. The primary responsibility for gambling-related harm is the emergence of the individual gambler. Gambling-related harm heavily relies on the individual’s capacity to control and adjust its consumption. If the gambling industry is real to itself when it comes to social responsibility, a message content push methodology would be harmful in preventing gambling- related harm (David Forsström 2019). There are many similarities between licensed and unlicensed gambling companies on the Swedish market on how they define problem gambling and responsible gambling. Both parties lack a critical perspective when discussing responsible gambling. The companies conceptualize the problem by seemingly arguing that offering responsible gambling measures on their website is enough. The core difference that unlicensed companies do is behavior tracking and monitoring gamblers in a more extensive way, a behavior that today are delimited by strict legislations to prevent a harmful marketing communication (Susanna Alexius 2017).
1.2. PROBLEM
Does this global trend that is betting look the same all over the world, or can we find differences in the message content of betting companies, and is there a connection between message content and culture/law and legislation around betting? How does this affect the betting companies’
marketing approach, especially the message content consumers are being exposed to?
The problems around gambling addiction and money laundering have made it harder for companies active in the gambling market to present their marketing strategies while taking care of customer needs (Mills 2000). The protection against specific marketing and consumers concerning this new feature online betting is not regulated as the monetary gambling. Research tells us that online betting companies often use pictures that appeal to the younger crowd (Abarbanel 2016).
Europe advocates free borders and free markets, but with a few exceptions, one of these exceptions is a more restricted approach to betting legislations (2014/478/E.U.). The governments of each country protect its citizens, and full control can be seen as necessary. Nevertheless, when the companies have shown their responsibility and background with a positive outcome, the differences appear on how to work with the companies, and how to restrict the companies from doing what they want. For example, Sweden has both a government-owned gambling company and external companies from other countries, in which case is a problem for lost tax incomes (Spelinspektionen 2019).
5 1.3. RESEARCH QUESTIONS
What role do culture and legislation have when it comes to the message content of betting companies?
Do the culture and legislation influence the companies to use either emotional or rational marketing?
Do culture and legislation influence the companies to use either hard or soft-sell in marketing?
1.4. PURPOSE
The purpose of this study is to conduct a qualitative study to investigate how the message content of betting companies may connect to legislation and laws but also depending on the cultural aspect.
There is much research around gambling and the issue of addiction that comes with it (Meyer, Hayer & Griffiths 2009), our research takes care of a different aspect of the subject that is important in today’s society.
We wish to understand how the different national legislations and cultures on the betting markets may or may not affect the message content of companies that are active on the market. Another factor we wish to study is the use of emotional or rational traits in the message content as well as the hard-sell or soft-sell approach.
The intention of writing this paper is to give the reader a full concept on the market of gambling and get an explanation of how the change in communication can differ in these three different markets depending on legislation barriers and cultural diversity. The field of the study is within international marketing, which means that the message content is essential in understanding how multinational gambling companies handle their communication towards their customers when markets differ because of the new legislation on free trade and content. Through an increased understanding of the subject, we strive to build a broader explanation of how these factors influence Svenska Spel, Bet365, and MGM to use either an emotional or rational marketing strategy and a hard- or soft-selling approach to construct a favorable message content. We wish to understand the importance of different conditions in different markets and build a broader explanation of how message content can change in contrast to legislation and the culture of gambling.
6 1.5. DEFINITIONS
It is important to have limitations in this study because of the global point in the gambling industry.
Gambling companies are active everywhere globally, which means that this study can not give the reader a global perspective on legislation and structure. The focus is on the market of Sweden, The United Kingdom, and the market of Nevada (U.S.A.). The companies were selected due to their similarities and differences in culture, law, and legislation. There are many legislations on trade;
this study focuses on the legislations that obstruct the message content within the gambling industry. To further limit the study, one company on each market was studied, their work represents the three markets because of their influence. The fact that Svenska Spel is organized as a government-owned company could be a dilemma for this thesis because Bet365 and MGM have a different posture to their separate markets. However, we want to create the most demonstrative picture as possible, and that is why we have chosen to work with the three most prominent representatives on each market. It is a strength for this research to represent both governmental controlled and private representations since a comparison will be carried out. This study answers to how culture and legislation on each market may affect the message content; this means that other aspects as micro- and macro environments (such as company ownership) within the markets will not influence this study’s conclusions.
1.6. KEY CONCEPTS Culture = Cambridge dictionary describes culture as: ‘‘The way
of life, especially the general customs and beliefs, of a particular group of people at a particular time.’’
Consumer behavior = Consumer behavior is defined by (Bagozzi 2002) as the social and psychological processes people undergo in purchasing, handling, and removal of a specific good.
This behavior is studied from different standpoints, both from a marketer’s view and from the behavioral and social science views.
Message content = According to Article 1381(2018), by the BMC Public Health, the message content is defined as: ‘‘Message content refers to the simplicity, degree of directness, and comprehension of the words that communicate the appropriate level of danger, consequences, and/or actions to avoid harm.’’
Legislation = According to the Cambridge dictionary, legislation is:
‘‘a law or set of laws suggested by a government and made official by a parliament.’’
Betting = Spelinspektionen describes betting as: ‘‘activity in which the participants have a chance to win a prize and a wager is made on the outcome of a future event or that a particular event will or will not occur in the future.’’
7
2.0. FRAME OF REFERENCE
“In the frame of reference, this study presents theories from present studies that lay the foundation for our research. The frame of reference is focusing on three major themes; First, the message content, which emphasizes soft- vs. hard-sell advertising appeals and rational vs. emotional communication. The frame of reference then covers the field of culture and its connection to consumer behavior and Hofstede model as well as legislation and its effects on message content.’’
Figure 2.0. An illustration of our frame of reference
2.1. MESSAGE CONTENT IN PRACTICE
Message content plays a vital role in international marketing. The purpose of delivering messages to customers is necessary for providing a sustainable business referring to both sales and relationships. Message content is especially relevant within the gambling industry when referring to responsible gambling and its causes (Gainsbury 2018).
It is essential to understand that language used depends on individuals, on culture, emotional state, level of a gambling problem, and the consumer’s sense of self-esteem. The messages in the context of responsible gambling inform the targeted audience to see the probabilities of winning and how outcomes are determined. It is hypothesized that if gamblers understood the games and probabilities of winning, they would be able to make informed decisions regarding their involvement (Gainsbury 2018). It is hard for the industry to follow the balance of a successful message plan. It is a dilemma for the involved to promote responsibility at the same time as they have to sell their services. The strategy they use is the so-called informative messages. The respondents still believe that their chances of winning are higher than the information contained within the messages, and not modify their behavior.
Prospect theory shows that people’s behavior differs when messages are framed in different ways as either gains or losses (Gainsbury 2018). Positive messages focus on the benefits of making improvements in behavior, while negative messages contain harmful consequences related to behavioral risk. The betting industry is focusing on educating consumers about the risk of a product. The theory predicts that attitude is a factor when communicating the messages and that a negative message can provoke a reduction in play. The usage of positive messages has been found to have a more significant impact, and neuroimaging research has found that gain-framed messages are more effective in improving risky choice behaviors. The targeted group of customers tends to
8 respond with more enthusiasm for positive messages. Health is also a factor that reinforces messages; when talking of betting, the most effective messages are positive messages that strengthen mental health. So why does a company need unique message content to succeed? In the study, she showed that people respond differently to campaigns depending on how they are addressed. Therefore, companies must know how their customer groups are addressed and how they optimize their communication. Message content also changes; one factor is the change of language, i.e., how one speaks today may differ from how it used to be. Another factor is the restrictions imposed on betting, that the betting industry is required to provide information about safe betting.
To practice message content globally, companies that are active in the market must know how the outside world looks and be aware that communication works differently in different cultures. “The rest of the world” has to become ‘‘most of the world” in the mindset and practices of global executives and leaders. The betting industry is a global digital service, and to receive international recognition is what effective globalization is all about. Since the content must be seen as a product, it means that global objectives must be translated into engaging experiences locally, a digital experience that is common ground for everyone. According to Herman Bruno (2016), it is crucial to get to know customers well and understand how they live and behave in their preferred environments. That business performance globally is deeply rooted in insufficient local customer experience. Local experiences are strongly influenced by what customers do, like, prefer, and expect. The usage of correct message content can make a difference in the presentation of customer valuation. People talk to each other in different ways in the world, and the focus is to understand these communication patterns.
The betting industry has predetermined conditions for being able to give time to several different markets at the same time. In order not to risk unsustainable communication strategies, companies read up on which messages are received with the best feedback. If a company has not read about other area’s approaches to communication, it must read and acquire more knowledge before a campaign can be established. Muriel Saville-Troike says that the same expressions can have different meanings in different cultures. An example is the perception of individuals as “voluble”
or “taciturn” are in terms of cultural norms, and even expressions of pain and stress are culturally patterned: people in the English-speaking community learn withdrawal or anger, in Japanese nervous laughter or giggling and a Navajo silence (Saville-Troike 2002). His studies take an ethnographic viewpoint on how communication is presented. Due to Muriel Saville-Troike, the ethnography of communication is concerned with how communicative units are organized and how they pattern in a much broader sense of “ways of speaking” and how these patterns interrelate systematically with and derive meaning from other aspects of culture. It is not only the foreign culture that the industry has in mind when presenting message content globally. Patterning occurs at all levels of communication: societal, group, and individual (Hymes 1961). So it is crucial to distinguish the most relevant group and present the message in different ways when targeting an audience. If the business fails to represent its message accurately, there are significant risks for communication problems. If the company does not adopt the communication and think about the global aspect, message content will not have any effect. Proper communication is one of the essential tools for the business if they want to maintain an arbitrary reputation. By establishing good and adapted communications to the market, the company will establish excellent customer relations. It is exciting for companies to learn how customers behave, which is best understood if the customer relationship is good.
No company in the betting industry develops its message content, in the same way, it can be stated that message content is handled with different commitments because each company has its unique
9 target image of how the communication should look and be communicated. They use their information in different directions depending on the goals they set for themselves. The betting companies live under fierce competition, and the more significant companies own more shares of the markets. If companies want to succeed, they need to establish smart and sustainable communication with their customers. Especially start-ups have a difficult time growing in this market because the more significant companies have already managed to create customer loyalties, which is particularly evident as betting companies’ reputation varies. At the same time, it is a lucrative market where companies that succeed draw in large margins, i.e., companies’
representatives have much to gain from being briefed about message content. However, following restrictions that have now been introduced in Europe, companies have had to adapt their strategies, and it has become increasingly difficult to differentiate between the various campaigns as everyone now has to deal with responsible betting. The companies do now have typical content to convey but have to use different approaches in dependency on statements. In a study by Elena Delgado- Ballester, it appears that companies often like to emulate their campaigns by others to succeed. She talks about the influence of brand familiarity and measures what level of consistency among brand messages is more effective in terms of customer-based brand equity. Considering the results, the effectiveness of consistency among messages depends on brand familiarity. Both awareness and networking are strengthened, which is favorable for communication with customers (Delgado- Ballester 2010). All companies want (must) convey the same messages about responsible gambling, but different strategies give different results.
In a research study by Simon Phil (2015), the discussion of broken communication within a company is described, aiming at the importance of correct messages in managing it. The most fundamental part due to the study is when message content deteriorates, which often happens when the audience gets ignored. If this is the case, many available messages send out the wrong signals, which disadvantages the campaigns. The author believes that the process of communication plays a significant role in a company’s success
2.1.1. MEASURING SOFT-SELL VERSUS HARD-SELL ADVERTISING APPEALS
In a journal of advertising by Charles R. Taylor, Barbara Mueller, and Shintaro Okazaki (2010), a presentation of soft- and hard-selling strategies is performed. They focus on distinguishing the presented advertising appeals by opening up about differences in the significant measures of soft- sell and hard-sell. When ones think of hard-sell, they often refer to a more direct selling approach, with a focus to attract quick sale, whereas soft-sell approaches are more subtle and indirect. This is indirect a conventional explanation, and these definitions have remained as concepts through time. However, the concepts have become more transparent in recent years, with a stock full of widely explored academic research. The authors have used these new concepts on a larger scale to include related rational and emotional appeals to the question and then conceptualize it further.
Every industry has an interest in exploring advertising strategies to see which one is the most effective one and its role depend on which market it is perceived because of cultural background.
The authors emphasize the importance of focusing on the benefits of a product and that the correct ways of doing that involve an informational appeal. They then conceptualize its transformational appeals, emphasizing the experiences that a good or service consumes will provide the consumer.
Barbara Mueller has thru her early studies established following explanations to the meaning of soft and hard-sell advertising appeals;
10 Soft = “Mood and atmosphere are conveyed through a beautiful scene or the development of an emotional story or verse. Human emotional sentiments are emphasized over clear-cut product- related appeals.” (Taylor, Mueller & Okazaki 2010)
Hard = “Sales orientation is emphasized here, specifying the brand name and product recommendations. Explicit mention may be made of competitive products, sometimes by name, and the product advantage depends on performance.” (Taylor, Mueller & Okazaki 2010)
In order to discover global positioning strategies, it is crucial to operationalize the overall sales appeal of an advertisement by labeling the two contrasting approaches: the soft-sell or the hard- sell. Alden, Steenkamp, and Batra explain soft-sell as an “image” approach, content that conveys the consumer to associate with the brand rather than push the consumer to a purchase of the product/service. In contrast, hard-sell is explained as a direct approach which includes a sales- oriented and restricted content. In their studies, it is concluded that a soft-sell strategy is better suited for an international approach. Cultures vary and to specify how well suitable the approach is on a specific markets does not contain in the author’s conclusion, but over half of the global consumer culture is better suited with a soft-sell approach and therefore does this subtlety, implicitness and abstractness approach work better (Alden, Steenkamp & Batra 1999).
To enable customers to understand an advertisement, professionals need to create either an overt or an underlying meaning (Williamson 1978). Overt meaning is direct communication with convincing messages via explicit communication, according to McQuarrie and Mick (1996), a rhetorical approach is the most efficient in a given situation because it visualizes the features of a product. Underlying meaning creates interest in a product while using an indirect approach, advertising with underlying messages (McQuarrie & Mick 1996).
Through her research, Professor Barbara Mueller (1987) operationalized these four following statements of soft- and hard-sell approaches;
“Soft-sell appeals are associated with more positive attitudes toward the ad than are hard-sell appeals.”
It is of interest to know what degree the type of appeal has towards an ad’s attitude. While hard- sell focuses on specific information soft-sell uses its focus to create a positive feeling and, thus, build a more positive impact than the hard- sell (Mueller 1987).
“Hard-sell appeals are associated with higher levels of ad believability than are soft-sell appeals.”
The primary outcome of informational ads is to evaluate favorable thoughts regarding the ad’s believability. Hard-sell focuses on factual information in messages are this appeal more likely to be believed, whereas soft-sell is more diffuse and general.
“Hard-sell appeals are associated with higher levels of advertising irritation than are soft-sell appeals.”
Important causes of ad irritation is an advertisement’s execution, such as tone, style, and format (Fennis & Bakker 2001). It is especially irritating when it is argumentative; hard-sell is more direct, which resembles the statement above.
11
“Soft-sell appeals are associated with higher levels of purchase intention than are hard-sell appeals.”
Attitude is a robust, direct, and positive predictor of intention (Bagozzi 1981). The goal of ads is most commonly to increase sales. Both soft- and hard-sell appeals will be associated with a definite increase in sales and purchase intention. Soft-sell, however, leads to stronger intentions because of its favorable attitude. The authors differentiate each dimension in the degree to which it is perceived, ranging from high to low to measure the understanding of how soft-sell or hard-sell appeals as an advertising strategy. It is vital to create positive messages that get well received from the audience. In contrast, negative messages disrupt. Ads that do not lead to increased purchase intent should be avoided, ultimately leading to more successful commercial messages.
Another article made by the same authors compares global consumer positioning when tests of soft versus hard-sell advertising appeals have been made between the American, British, and Japanese markets. Results show that the hard-sell appeal is more common in the U.S. because of its nature of living, and its customers appreciate direct communication. Ads in the U.S. focuses on presenting the pros of a product, and the advertisers intend to emphasize facts and suggestions from credible sources. (Taylor, Mueller & Okazaki 2010)
According to an article by Nevett (1992), the American and British markets have different advertising despite their cultural similarities. Especially is television advertisement different, whereas the British commercials tend to contain less product information than the American. They use a more soft-selling strategy to entertain the viewer. According to Charles R. Taylor, Barbara Mueller, and Shintaro Okazaki (2010), the soft-selling appeals are received as homogeneously, and the hard-selling appeal was received heterogeneously. Hard-sell is being received as more favorable in the U.S. in terms of attitude towards an ad, believability, and purchase intention.
Furthermore, in contrast, is the soft-selling appeal more favorable in Japan and the U.K.
2.1.2. RATIONAL VERSUS EMOTIONAL MARKETING
The definition of emotional appeal in marketing is the usage of feelings to address and influence the consumer through advertising (Kotler & Keller 2012). The opposite of emotional marketing is rational marketing, which is defined as a purchase being made on the grounds of logical or rational considerations (Rini & Absah 2017). Advertises that use rational arguments focus on the consumer’s functional and practical needs of the good and emphasizes the benefits or reasons for owning or using a particular brand or right. Advertising, which contains rational arguments, uses the following features: the price of the good, function, quality, place, science, and statistics behind the product, material, purchase time, packaging. The advertising would be regarded as emotional advertising if it would contain none of these traits mentioned (Albers-Miller & Stafford 1999).
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The figure 2.1.2 displays the differences in rational and emotional appeals. (Grigaliunaite & Pileliene, 2016)
According to Grigaliunaite & Pileliene (2016), emotional marketing can be defined as a way to bring out the customer’s positive or negative emotions to motivate the good’s purchase. The authors also describe that emotional marketing, in most cases, showcases real-life situations; this creates a psychological need for the consumer. The main reason for the usage of an emotionally appealing advertisement is to convince and create either a sense that the goodwill rewards the consumer a “positive reward” or a “negative reward.” Thus, the use of emotional marketing can be divided into positive or negative, depending on the purpose of the advertising. A large number of scientific researches regarding emotional marketing show that positive emotions are usually the preferred or desired result; such a result could be favored as the emotions of feeling good either for yourself or other are desired when customers make their purchasing decisions.
Rational marketing focuses on making the consumers purchasing decisions based on the good or its brand’s logical or rational attributes. The use of the rational advertisement approach influences the consumers’ thoughts and beliefs regarding the advertised object and uses a persuasive argument about the attributes of the brand or its good (Albers-Miller & Stafford 1999). (Albers-Miller &
Stafford 1999) states that through research, there can be seen a difference in the attraction between rational and emotional advertising where the emotional advertises fail to attract the same number of consumers as rational advertisements. Rational advertisements have a more appealing effect than the emotional ones on consumers because the rational advertises lowers the doubts as well as the uncertainty of the consumer toward the brand or the good. The argument is also made that there is a view of rational advertising as boring and not attention-grabbing. The author describes it as the opposite of emotional advertising, therefore, stating that rational advertising can be more ineffective than emotional advertising.
There are arguments regarding the use of rational and emotional marketing regarding hedonic and utilitarian products (Armstrong 2010). The author believes that utilitarian products are more relevant with a rational marketing approach while it is the opposite of hedonic products, which are more relevant for emotional marketing advertising. According to Belch & Belch (2004) and Berman & Blakeman (2009), there is relevance to consider when we talk about the use of either emotional or rational marketing for brands regarding their differences. From the author’s views,
13 the usage of rational marketing is better suited to a brand that has high differentiation from other competitors, while emotional marketing is better-suited brands with little differentiation from competitors.
2.2. CULTURES CONNECTION TO CONSUMER BEHAVIOR & HOFSTEDE MODEL
By using the Hofstede model, we were able to analyze each countries culture and also compare them to each other. The Hofstede model is a framework for cross-cultural communication. What the model does is that it describes the impact of the society’s culture on the member’s values and how that is related to behavior. The model shows this by using a structure derived from factor analysis.
The model analyzes and compares six different areas, and these areas are explained in quotes by the Hofstedeinsights.com as:
● Power Distance: ‘‘This dimension deals with the fact that all individuals in societies are not equal – it expresses the attitude of the culture towards these inequalities amongst us. Power Distance is defined as the extent to which the less powerful members of institutions and organizations within a country expect and accept that power is distributed unequally. Power being defined as the degree to which a person is able to influence other people’s ideas and behavior.’’
● Individualism: ‘‘The fundamental issue addressed by this dimension is the degree of interdependence a society maintains among its members. It has to do with whether people’s self- image is defined in terms of ‘I’ or ‘We’. In Individualist societies people are supposed to look after themselves and their direct family only. In Collectivist societies people belong to ‘in groups’ that take care of them in exchange for loyalty.’’
● Masculinity: ‘‘A high score (Masculine) on this dimension indicates that the society will be driven by competition, achievement and success, with success being defined by the winner / best in field – a value system that starts in school and continues throughout organizational life.’’
‘‘A low score (Feminine) on the dimension means that the dominant values in society are caring for others and quality of life. A Feminine society is one where quality of life is the sign of success and standing out from the crowd is not admirable. The fundamental issue here is what motivates people, wanting to be the best (Masculine) or liking what you do (Feminine).’’
● Uncertainty Avoidance: ‘‘The dimension Uncertainty Avoidance has to do with the way that a society deals with the fact that the future can never be known: should we try to control the future or just let it happen? This ambiguity brings with its anxiety and different cultures have learnt to deal with this anxiety in different ways. The extent to which the members of a culture feel threatened by ambiguous or unknown situations and have created beliefs and institutions that try to avoid these is reflected in the score on Uncertainty Avoidance.’’
● Long Term Orientation: ‘‘This dimension describes how every society has to maintain some links with its own past while dealing with the challenges of the present and future, and societies prioritize these two existential goals differently. Normative societies. which score low on this dimension, for example, prefer to maintain time-honored traditions and norms while viewing societal change with suspicion. Those with a culture which scores high, on the other hand, take a
14 more pragmatic approach: they encourage thrift and efforts in modern education as a way to prepare for the future.’’
● Indulgence: ‘‘One challenge that confronts humanity, now and in the past, is the degree to which small children are socialized. Without socialization we do not become ‘human’. This dimension is defined as the extent to which people try to control their desires and impulses, based on the way they were raised. Relatively weak control is called ‘Indulgence’ and relatively strong control is called ‘Restraint’. Cultures can, therefore, be described as Indulgent or Restrained.’’
Figure 2.2. above shows a Hofstede model diagram where we have compared the three specified markets.
● Sweden
● UK
● US
A research made by (Nayeem 2012) showed that cultural differences could influence the consumers’ choice to buy a specific good or not if they were displayed in the message content. An example of this was the fact that Asian-born consumers relate to what is suitable for the group and not the individual to the same degree, hence making it more useful to communicate to these consumers by making the message content focusing on the consumers on a group level. Traits like family values and family security would be desired instead of traits focusing on the needs of the individual. Kau & Jung (2004) studied if there could be a connection between consumer behavior and culture, and they established that there indeed was one. The study shows the connection between Hofstede’s dimensions and consumption behaviors and how they match each other.
Hofstede’s dimension of the so-called individualism-collectivism is connected to the consumer behaviors of the individuals in a group environment. This can either be the individual’s role in a group or its perception concerning others. Group influence and family orientation are examples of consumer behaviors related to this dimension and its traits (Kau & Jung, 2004).
Uncertainty Avoidance is the dimension of the Hofstede model linked to consumer behaviors like brand loyalty and perceived risk. The reason is that Uncertainty Avoidance is described as the way individuals in a given society cope with uncertain factors that may or may not happen around them.
The individuals cope with these uncertainties with the help of religion, law, and technology (Kau
& Jung 2004). If the culture in a society is classified as masculine instead of the feminine, consumer behavior would be displayed in this dimension as focused on money, achievements, and
15 performance since traits of masculinity are defined as aggressive, dominant, and self-reliance as well as exhibition. The opposite traits would be displayed if the culture were classified as feminine, since feminine traits are associated with responsibility, nurturance and, hence, connected to consumer behaviors like helping others and placing value on the quality of life. The authors also found that power distance is connected to opinion seeking behavior among consumers since power distance is described as ‘‘the extent to which less powerful members of organizations and institutions accept and expect that power is distributed unequally.’’ This makes the consumer behavior connected to power distance influenced to differences is a society’s culture; for example, the power and respect are given to influential individuals in society.
2.3. LEGISLATION, AND ITS EFFECTS ON MESSAGE CONTENT
Every company is dependent on the macro environment, which is a collection name of all external effects on a company, one of these external effects is a governmental change, which includes the changes of legislation (Kotler & Keller 2012). The level of what is seen as appropriate may vary from country to country, which means that the impact on firms differs substantially. It is especially crucial in multinational corporations to create an appropriate corporate culture that includes external communication or marketing public relations, focusing on the interaction with customers (Czinkota & Ronkainen 2018). Because of the significant shifts in the business environment and the innovation in new technology, international services marketing has experienced a rapid rise, and these shifts have changed the perspective on global marketing on service. One primary change has been reducing governmental regulation of service. The European Union, for example, have established frameworks to encourage trade of services between borders; they have the ambition to build united economies without limitations (Weiler 2001). However, obstacles to service trade are necessary for providing a safe and sustainable international market, typical obstacles to service trade are usually categorized into two major types: barriers to entry and problem in performing services. Barriers to entry can only be justified by referring to national- and economic security (Czinkota & Ronkainen 2018).
The gambling industry has a long history of controversy; it causes problems like crimes and gambling addiction. The European Union has, therefore, questioned the gambling industry as a trustworthy market. Due to the effects, the gambling companies are causing. The services need to be under control; the supply of services providing gambling cannot be too widespread, and legislations on gambling has been made. Therefore, the European Council has decided to allow all member states to set their own rules on gambling and to limit the services on the domestic market
“Article 45 of the E.C. Treaty.” The defense of justice minister in the Netherlands (Hein Donner) explains the article as follows: “The main purpose of gambling policy is to regulate and control gambling, which emphasis on preventing gambling addiction, protecting consumers and combating illegality and crime” (Toine Spapens 2008). Article 45 of the E.C. Treaty is one of the very few legislations in the European Union that gives a nation the right to restrict free trade on an international scene. Many E.U. member states have considered changes in their policy on gambling and are currently rethinking their gambling laws to adapt to European law. Many legal experts believe that the European Commission’s initiative to establish an E.U. regulatory framework is enhancing, considering the borderless nature of gambling (Toine Spapens 2008).
Political and legal factors play a critical role in providing international marketing activities.
Wherever a firm is located, government policies and the legal system play a critical role in all industries because of its affection. To avoid problems that can occur due to the changes in the political and legal environment, the international marketer must anticipate changes and predict modern strategies to cope with these changes (Czinkota & Ronkainen 2018). Companies within the gambling industry that is active on a global market have to develop new products or modify
16 old ones, to cater to new or changing customer needs. The most common form of market structure to provide revenues for the public and prevent fraud, money laundering, and black-market gambling are the monopolies. Many governments within the European Union have therefore cherished this structure, in which case means that external operators get rejected to enter the foreign markets. A monopoly is a market controlled by one company, and in most cases, it is controlled by the government (David Hyman 2003).
The edicts of the E.U. Commission and the E.U. court has made the governments and state-owned gambling companies more aware of the rising problem. Action has been made, and responsible gambling is a priority. In some countries, governments openly encourage or even demand state- owned gambling operators to act as role models in the industry to balance their communication act of satisfying customer needs (Alexius 2017).
Two strategies that gambling companies implement when coping with betting regulations are direct and indirect consumer responsibilization, which attempt to shift responsibility away from themselves and onto the consumers. Direct consumer responsibilization is defined as a tool that targets consumers directly, that focus on the contact contained with preventive information and help tools through education and coaching that target the consumer directly. A direct strategy helps gambling companies to ignore all intermediaries and not be committed to sharing its profits.
Instead, their businesses are directly aimed towards consumers. All eventual intermediary costs disappear when the customer makes a bet with the company directly (Weill & Vitale 2001). This method is also useful when gathering information. Gambling companies educate themselves about customer needs using the collected personal data; the collected information improves consumer relationships and makes customized offers possible. Indirect consumer responsibilization is activities, measures, and tools that target non-consumers, a method that has the aim to involve consumers into direct consumer responsibilization.
Every company within the betting industry has to cope with the changes in legislation. The message content must be trustworthy to reach its potential; a company’s credibility is dependent on trustworthiness, and patterns of trust occur when customers can choose a preferable brand. It was concluded that a company that progressively work with there public relations had a more satisfied customer base and then a better working message content strategy.
Due to Michael R. Czinkota and Ilkka A. Ronkainen (2018), public relations are defined as: “The marketing communications function charged with executing programs to earn public understanding and acceptance.” Public trust in business may be seen as a measurement that corresponds to societies’ willingness to allow international marketers greater leeway to do business. In 2000 did a firm called Edelman construct a global survey on public trust towards the government, business, and other institutions called the Edelman Trust Barometer. By observing the results of this study, researchers could explore that trust in business is generally stronger when a more significant number of people realize the benefits of business. The authors explain that trust has indirect implications for international marketers because Edelman recommends that listening to customer feedback and putting customers ahead of profits are vital to build future trust. “To do what is right” is seen as a highly executed parameter when gaining trust, the studied barometer of Edelman showcases where countries have shown low results in trust in both the government and in companies when cases of public scandals and mounting debt concerns have occurred.
When planning promotional campaigns, companies need to determine a message and a campaign approach; the company also needs to determine its effectiveness, which means that the content may change by type of campaign situation. A particular situation may be the effect of change in legislation, and that is why companies, primarily in the betting industry, have to create sustainable strategies while coping with them (Czinkota & Ronkainen 2018). Message content is useful when it is positive. In her research, Sally M. Gainsbury (2018) shows that the positive effects create interest around a product and its features, which means that every company on the market wants to be seen as positive.
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3.0. METHOD
3.1. THE OVERALL RESEARCH APPROACH
This study is a qualitative research study with an abductive approach. Since the purpose of this study is to investigate legislation and culture in different markets and its correlation with the message content, this thesis is limited from being able to drive the issue out of a quantitative approach because these factors cannot be asked for, they are determined throughout the Hofstede model and legal documents which are presented in theory. We choose to investigate three companies, one company from each market, by examining their background, public statements, and marketing campaigns to give the reader a broad and accurate picture of the issue.
What kind of knowledge is needed to live up to the purpose?
To analyze the role that culture, and legislation may or may not have on the message containing the study needs to capture vital information through a qualitative approach. When working qualitatively, one must define the current information available for later reasoning and develop answers to the researched question. This study must follow this concept because of its character.
By analyzing previous studies made by authors within the area of conceptualizing the same problems as this study, we give the reader a clearer understanding of the subject area in the background and theory. The central parts of this study (culture and legislation) cannot be interpreted but processed with valid representative facts. This information is determined, statutory, and described by the Hofstede model, thus limiting other arguments. Laws can always be called into question, but we have chosen not to devote any time to individual interviews as opinions do not reflect credibility in scientific theory. The opportunity to interview global companies about their management of markets other than the Swedish market is limited. Since the Hofstede model represents our interpretation of culture in different countries, the quantitative theory has also been neglected here, and there is no point in interviewing individuals about how to perceive culture. It can only be presented with a comprehensive model, such as the theoretical Hofstede. The interviews’ statistical scope would have been too small and counted as incorrect, and it would be an incorrect test. Hofstede helps us to present factual reasoning. This study carries out an investigation of three different markets with different conditions and attitudes on betting. In order to give the work as sincere expression as possible, we focus on investigating three companies that may represent the influence on the three specific markets. By studying their daily work, we can consider how different companies with the same interests adopt their message content of the restrictions that exist.
A scrutinizing approach has pursued the method of presenting empirical data. The presented empirical data is gathered from the company’s various online marketing campaigns to adapt our theories as explanatory later in our conclusions. The examined method is the most effective because we allow ourselves to compare the various campaigns and see how this may have been affected by legislation and culture or not.
The content might look different in different markets, and that is why we are focusing on presenting the message content and its influences in Sweden, the U.K., and Nevada (U.S.A.). We have chosen these three countries because we hope each country’s culture and laws will result in a mindset and legislation to gambling that differs from one another and see if that combined with specific legislation will have another outcome on the message content. The betting companies that we have chosen from these countries are Svenska Spel (Sweden), Bet365 (U.K.), and MGM (U.S.A.). These
18 three companies were chosen because of their geographical location but also since their structure on creating marketing strategies differs from one another. Svenska Spel is a government-owned and controlled company while Bet365 and MGM are privately owned companies. MGM and Svenska Spel differ from Bet365 because they have physical organizations in the form of casinos and not only online betting functions.
This study has the mission to understand how the three selected companies adapt their message content towards their different customer segments by illustrating theories such as emotional/rational marketing and hard/soft- sell approaches. We have chosen to observe campaigns that have been carried out over the past two years to maintain the study’s timeliness. Thanks to the selection of these three specific markets, this study has discovered similarities and differences throughout this research approach by comparing the engaging online campaigns. We enable our self to create an honest discussion by examining the different properties of content. We have focused on a scientific approach where we study articles relevant and highly prosecuted by scientists in the field of betting studies, gathered information from government websites and the Hofstede model, and studied the various companies’ marketing campaigns to conclude an answer to our questions.
In what way does the method help us to respond to the purpose?
By limiting ourselves to only using a qualitative approach, we can arbitrarily create a general understanding for the reader. The fact that we analyze the material critical is a prerequisite as we have taken a qualitative approach, the information used in the study is thoroughly researched, and the laws and cultural norms investigated are relevant within the study’s framework. The method section is always an essential part of any scientific work because of the chosen material. It lays the foundation for the theoretical frame of reference, empiricism, and the analysis.
3.1.1. ABDUCTIVE RESEARCH APPROACH
‘‘What role do culture and legislation have when it comes to the message content of betting companies’’ uses the existing knowledge as a basis for its conclusions combined with present studies and theories and thus adopts an abductive research approach. The approach goes from theory to empiricism and vice versa. The work begins with searching for existing theories and studies and well-known empirical data that we can switch between to identify answers to our research question.
3.2. THE LITERATURE STUDY
The literature study was carried out by collecting theory from credible scientific articles, public regulations, and a carefully worked out Hofstede model. By credibility, we mean articles with representative sources, i.e., sources that can be proven by research. This study is strictly limited from opinions because many arguments are based on rules that cannot be changed. In particular, it is the companies’ relationship to the rules that can be analyzed and interpreted in several ways, which allows us to investigate various scientific articles about the work. The scientific articles were obtained from the database Emerald and Researchgate. Keywords have mainly been about
‘‘legislation on betting,’’ ‘‘message content within the betting industry,’’ and ‘‘how does culture affect message content.’’ The laws presented in the study are Swedish, British, and American
19 Nevada law. The Swedish and British laws are based on the same European general regulations;
the information has thus been obtained from the public procurement of the European Parliament.
And then American Nevada law has been obtained separately. The Hofstede model is a central theory in our study, and it has been examined with great interest to create credible arguments about differences in culture. The literature study is subject-focused, i.e., it adheres to the limitations of the work by taking into account only three markets. Besides, it only answers how message content affects companies and does not affect individual humans. Reference management has been carried out according to the American Psychological Association (A.P.A.), which means that the author’s last name and the reference year of publication are presented in brackets in the running text (Söderbom & Ulvenblad 2016). This reference management was chosen because we feel confident in the handling and that we have been trained in this theory at Halmstad University.
3.3. EMPIRICAL STUDY
3.3.1. SELECTION OF COMPANIES
When choosing companies, we decided on what the question should answer in the study and quickly carried out an analysis of which players represent the gaming market to the greatest extent in the three given countries. The study is from a company’s point of view, so three influential representatives must be presented. We took into account their working methods, size, and geographical origins and landed in the companies Svenska Spel (with its monopoly power structure), Bet365 (the world’s largest betting company), and MGM (the leading gaming company in U.S.A.). There are many active companies in the gaming market, and new companies are formed every day, our choice landed on these representatives also because they act as role models in the market, because of their significant influence. All companies have also published their strategies, which means that we have been able to use the companies as a direct source among our references.
Also, many scientific articles involving the work of these companies have meant that we have also been able to give the work an outside view of the companies' handling of message content. By presenting each company’s work in the theoretical frame of reference, this study has demonstrated the similarities and differences of the companies that have also created discussion later in the analysis.
3.3.2. METHOD OF ANALYSIS
Our analytical model is based on a qualitative method, which means that we conceptualize data and develop concepts and theory based on both empirical data. We code line by line in the empirical material and select the best applicable parts in our study. This method “opens up” to interpretations, which means we can compare material. Codes are continuously merged and categorized, creating conditions for us to develop credible concepts. (Glaser & Strauss 1967). We document all methodological and analytical choices to reflect on what information is likely to affect the results.
