Reorganization

A second feature is the move towards new organization structures in anticipation of a unified Europe.' For example, Philips reorganized its consumer electronics business by replacing its 60-year-old structure of autonomous national subsidiaries - a Dutch Philips, a British Philips, etc.-with Europe-wide, product-based businesses. Pilkington, Europe' second largest glass manufacturer, relocated its headquarters from St Helens in north­west England to Brussels and, at the same time, reduced its head office staff numbers from 500 to 130. Electrolux rationalized its production of white goods, manufacturing all front-loading washing machines in Pordenone, Italy, all top loaders in Revin, France, and all microwave ovens in Luton, England.

Pan-European marketing

There has been a great deal of discussion about just how much the single European market will advance the cause of pan-European marketing. On the one hand, the increasing mobility of European consumers, the accelerating flow of information across borders and the publicity surrounding the introduction of the Euro has promoted a pan-European marketing approach; on the other, the persistence of local tastes and preferences means that the elimination of formal trade barriers may not bring about standardization of marketing strategies between countries. Standardization appears to depend on product type. In the case of many industrial goods, consumer durables (such as cameras, toasters, watches, radios) and clothing (Gucci shoes, Benetton sweaters, Levi's jeans) standardization is well advanced. However, for fast-moving consumer goods (fmcg) such as food, standardization of products is more difficult to achieve because of local tastes. Even a global brand like McDonald's has to make concessions to national tastes. For example, in Norway customers are offered a salmon sandwich invented to cater for Norwegian tastes, and in Italy where the demand for fresh foods is strong, the chain offers salad bars, the only country in Europe where it operates this service.

Each element of the marketing mix may be affected by the changes accompanying the arrival of the single European market:

1. Product: manufacturers should benefit from the harmonization of standards, testing and certification procedures, by avoiding expensive product modifications and avoiding market entry delays (e.g. in pharmaceuticals) due to different country-specific requirements. For example, Philips will no longer have to produce seven types of television set to cope with different national standards in Europe. As cross-border segmentation of markets develops, new 'Eurobrands' may be launched, targeted at newly identified pan-European consumer segments. The patenting of products may become even more important because of the larger potential market.

Price: the price of goods and services throughout the EU could decrease by as much as 8 per cent according to European Commission estimates. The introduction of the Euro has increased levels of price trans­parency, enabling consumers to easily and accurately compare prices across the 12 countries using the currency. Therefore, the potential for parallel importing, whereby goods sold in different countries at varying prices are exported from low- to high-price countries, is increased and this may also serve to depress price levels. A countervailing force may be that, as European consumers become wealthier, quality rather than price becomes the major strategic weapon for producers.

2. Promotion: despite the obvious attractions of potentially being able to use a single advertising campaign (with different voice-overs) to reach 320 million Europeans, vari­ations in tastes, attitudes and perceptions restrict such an application. Even Coca-Cola, the ultimate 'one sight, one sound, one sell' global brand modifies the advertising of its other drinks, such as Fanta, to national markets. A study of advertising standardization practices by Whitelock and Kalpaxoglou concluded that many fast-moving consumer goods do not lend themselves readily to standardization, except for products that are not culture bound (cosmetics, for example). Similarly, difficulties In sales promotional regulations mean that premiums (gifts), given as promotional items with products, and money-off vouchers are not allowed in Denmark or Western Germany, but are perfectly acceptable in the UK or France.

3. Place: Franchising is likely to increase as global companies link with local franchises combining buying and marketing muscle with local know-how. European-wide competition between supermarkets is likely to increase. For example, companies like Ahold (The Netherlands), Aldi (Germany) and Carrefour (France) have been rapidly expanding throughout Europe.

In spite of these implications, the impact of the Single European Act has not given rise to the antici­pated tidal wave. The restructuring of industries has not taken place at the pace that was expected across Europe. However, while the introduction of the Euro will give integration a further boost, it appears that the transformation of European industry will be a relatively slow and gradual process.