The Euro: Six months later
Cultural differences, knowledge, and attitudes towards the Euro

Author: Bernhard Wirtz, Dr. Thomas Rodenhausen
Published in Planung & Analyse, 8/2002

ABSTRACT
The conversion to the Euro is an event with no historic model to follow, which makes it difficult to develop a questionnaire for a quantitative survey covering all relevant aspects over different cultures and nations. The study has been conducted amongst 400 respondents from France, Germany, Italy and Spain, in order to test the differences in attitudes towards the Euro. In terms of content, two key findings should be emphasised: Firstly, something which is interesting to both govemments and organisations, is the fact that knowledge drives acceptance. Secondly cultural differences do exist.

The steps taken to introduce the Euro, in the twelve European Monetary Union (EMU) countries, have been widely discussed over the last couple of years. Both consumers and companies have to adapt to the new currency, but the perspectives differ in retrospect.

For companies, the Euro conversion has been a fundamental change in the macro-environment (i.e. political, legal, fiscal, social, cultural, economical, technological, ecological and geographic aspects of a certain location, which can not usually be controlled by the companies). For this reason, the relevance of the Euro cash kick off date to the consumers also marks a prominent milestone for companies.

The conversion to Euro cash
As soon as the currency was introduced, the consumers started to really feel the consequences of the single currency on a daily basis. Important questions which were widely discussed before January 1^st, 2002 are:

• Will the introduction of the Euro effect price levels in general?
• Who will try to protect the consumers from rising prices as a result of the introduction of the Euro?
• How stable will the new currency be?
• Which difficulties will be encountered in adapting to the new currency?
• Which legal and fiscal steps will be taken next?

The answers - or maybe the expectations - that were formulated before January 1^st, 2002, are not necessarily the same as those, which are asked today, six months later. Apart from these practical experiences, which are currently being collated, other factors have been influential. Besides global factors, e.g. the worldwide slump in the stock market, there are also potential country-specific influences, e.g. the sudden increase in ecological tax on fuel and petrol in Germany, which increased three cents per litre synchronously with, and independently from, the introduction of the Euro. Of course, it is not easy to disentangle global and local factors from the influence of the Euro.

The tool: Meta-Moderation
The conversion to the Euro is an event with no historic model to follow, which makes it difficult to develop a questionnaire for a quantitative survey covering all relevant aspects over different cultures and nations. lf a researcher sits in his office, meditating about the complete mapping of the different dimensions of what is perceived in direct relation to the new currency, the questionnaire item "too many coins are making my purse too heavy"would probably not come to mind.

This situation of uncertainty is the origin of the "Meta-Moderation" tool, which has been developed for the consumer goods industry, to meet the needs of innovation centres in particular. The ongoing reduction in product life cycles, the increasing international competition and the near impossibility of generating long lasting and unique product benefits creates the ever-increasing demand of the rapid generation and evaluation of new product ideas.



In the context of the necessity to reduce "time-to-market" and high "flop rates", the companies have to acknowledge that

• the majority of product innovation ideas are not the result of brainstorming or other well established tools (over 80 percent of the ideas come to the experts during their leisure time: travelling, sports)
• the integration of consumers during the early stages of idea generation, encourages greater input from all possible directions and sources.

The collaboration with the consumer leads to the difficulty of constructing a questionnaire that captures the different attitudes of a heterogeneous group of respondents. Usually, in a situation where the domain to be explored is largely undetermined, qualitative pretests are recommended in order to create an initial structure, be it for a new product or a new questionnaire.

However, there is always the risk that important topics or aspects are not considered, when a lange group of heterogeneous respondents, which have not, as yet, participated in the pre-tests, evaluate a new concept or participate in a questionnaire.

On top of that, the requirement for additional quantitative surveys leads to increased time and costs. One would hope that a method exists, with which the opinions of a great number of respondents can be collated, and that these opinions can be automatically enlarged and elaborated upon. To this end, MediaTransfer AG Netresearch & Consulting developed a "Meta-Moderation" tool. lt is based upon an online survey using Online Transmitted and Administered Questioning(OTAQ) and reveals in-depth consumer insights (see diagram 1). Our tool helps to reduce the time requirements of innovation management, ideally allowing the major phases - idea generation and evaluation - to be accomplished in one step:

The respondents can be easily sampled out of an online access panel and/or through more traditional methods of recruitment. Qualified respondents enter the main questionnaire and are asked to answer explorative questions. At this point, test material (e.g. written concepts, storyboards or complete video clips) can be integrated into the survey. After sorne open ended questions, the respondent is presented with the answers of former respondents and is asked to evaluate them in terms of their relevance. These statements are generated semi-automatically by the database, where all answers are stored in real time. In order to maintain quality standards, the researcher has the possibility to intervene and delete answers, which are

• superfluous ("don't know", ...)
• redundant / doubled ("Everything is getting more expensive", ...)
• explicit / drastic wording (e.g. "I hate company X"). This is necessary because in online data collection, the incoming answers are not censored easily.

Contrary to many qualitative studies, our tool allows the researcher to rapidly receive an initial impression of whether single attitudes or ideas have any relevance for a broader group of consumers. The risk that statements of group dominating consumers are overemphasised is avoided. Furthermore, a large variety of evaluations is a good indication of polarised attitudes to this particular topic.

Test Design and Hypotheses
In order to test the differences in attitudes towards the Euro, the study has been conducted amongst 400 respondents from France, Germany, Italy and Spain. Two groups of 50 young (up to 20 years) and 50 older (over 40 years) respondents for each country were sampled out of our Interactive Dynamic Online Panel (IDOP).

Before the main part of the questionnaire, the respondents should rate which of 20 European (inclusive Turkey) countries have actually introduced the Euro as their official currency. The main part consisted of 43 attitude items, partly taken from the preceding Meta-Moderation, partly formulated on the basis of extensive research in public media.

Great care was taken in the formulation of these items in order to capture a wide array of possible meaning facets. Different hypotheses and expectations were formulated in advance:

• The more people know about the Euro, the more positively they rate it.
• The introduction of the Euro is seen more positively in those countries Mich have had more inflationary tendencies in the past.
• The introduction of the Euro is seen more positively amongst the younger people than older.
• A short and long term perspective can be distinguished in the evaluation of the Euro. The average completion time for filling in the questionnaire was ten minutes. Data was collected in July.

Results - Structure of the questionnaire
Six meaning facets or dimensions could be extracted from the 43 attitude items using a principal components analysis with subsequent varimax rotation (see diagram 2):

• "Behavioural consequences" means generally shopping less, buying cheaper brands, visiting cafés and restaurants less frequently, being more thrifty with money.
• "Forward thinking" captures attitudes that refer to a positive outlook towards the future of Europe, the Euro being a decisive step to unify Europe.
• "Political regulation" refers to legal and political means to suppress rising prices as a result of the Euro and to penalise greedy shopkeepers.
• "Money traditionalism" comprises attitudes reterring to the everyday use of the new money: too many coins, value of the money not easy to recognise.
• "Loss of trust" means that manufacturers and retailers have lost consumers' confidence.
• "Flexibility" expresses a flexible coping-style with the new situation.

It is interesting to observe that more actionable and concrete aspects can be separated from more attitudinal and future oriented facets. Despite a strong focus of the public discussion on the negative consequences of the Euro conversion, positive and long-term attitudes form a strong dimension of the attitude space.

In order to study the influence of knowledge upon the attitudes towards the Euro, a knowledge score was constructed. To this end, the respondents had to indicate which countries, from a list of 20, are adopting the European currency. For each correct response, one point was added to the score, and for each false response, one point was subtracted.

Differences in attitudes
One can expect that older people´s relation to their former currency is more affectionate and that it is less easy for them to adapt to the new situation. As a matter of fact, age differences can be found: The respondents aged over 40 years report that they have restricted their consumption more, that they spend less money now, buy cheaper brands and delay the purchase of large items ("behavioural consequences"). At the same time, they have more problems handling the new money, they have more trouble recognising the value of the new coins and report more problems related to price comparison after the conversion ("Money traditionalism"). No statistical significant differences can be found between the age groups in the other four attitude scores.

How, then, are the attitudes influenced by knowledge? Of course, the score, as described above, is a rather simple indicator for knowledge about the Euro. Firstly, it should be noted that the distribution of the score is wide enough to yield a good discriminative power, and secondly, that there are pronounced differences between the four countries. Germany and France on one hand and Spain and ltaly on the other are significantly different. It can be observed that knowledge, as an isolated factor, is associated with the following effects: People with a high knowledge score are less influenced by the Euro in terms of their behaviour (their consumption is less restricted, they are less thrifty with money; ("Behavioural consequences"), they are more inclined to see the Euro as being a positive move towards an unified Europe, they hold more belief in the free market, than in juridical or political regulation, they report fewer problems with the handling of the new currency ("Money traditionalism"), and they are more flexible in coping with the new situation ("Flexibility"). No differences in "loss of trust" are attributable to differences in knowledge. Finally, it should be pointed out that there is not even a spurious correlation of the knowledge score to the household income. The main focus of the article was on cultural differences in Euro-related attitudes. In order to study the pure influence of the respondents' national back-ground, the confounding correlations of age and knowledge with nationality have been partialled out (e.g. they have been held statistically constant by an analysis of covariance). A remarkable pattern can be observed: The German respondents report the most pronounced restrictions in their consuming behaviour ("Behavioural consequences") compared to the three other countries, whereas only marginal differences between the other three countries occurred (see diagram 3). Conversely, the Germans are the most pessimistic about the positive future effects of the Euro ("Forward thinking "), again the other three countries do not differ much. On the other hand, the Germans are least affirmative about juridical and political means to control prices ("Political regulation"), here the French express the highest consent, narrowly followed by the Spanish and the Italians. The French and the Germans report more problems handling the new money than the Spanish and Italians ("Money traditionalism"). This is a rather surprising finding. One hypothesis to explain this might be that the Germans have the easiest calculation to convert Deutsche Mark into Euro (2: 1), whilst the Spanish and Italians have a more complicated exchange rate to deal with. Additionally, this might be a reflection of a decades' experience with an inflationary currency, which has required the quick adaptation to a constantly declining value of the money in the past. Germans and Spanish show greater mistrust towards manufacturers and retailers than both French and Italian respondents ("Loss of trust"). Finally, French and German respondents report a more flexible coping-style with the new situation, than Italians and the Spanish in particular ("Flexibility").



Conclusions
Studies about the Euro are currently popular due to necessity. Although some of the hypotheses and expectations formulated beforehand have been supported by other research in the meantime, the strength of the differences between the countries is remarkable. Furthermore, the influence of knowledge upon the respondents' attitudes has not been studied, to our knowledge, to date. Methodologically, the Meta-Moderation developed for innovation management and concept testing, proved to be a promising tool to examine the impact of changes in the macro environment on the consumer attitudes and the resulting implications for company strategy (see diagram 4). In terms of content, two key findings should be emphasised:
Firstly, something which is interesting to both governments and organisations, is the fact that knowledge drives acceptance. Secondly, cultural differences do exist. These can be demonstrated even if one takes the influence of age and knowledge into account.


Bernhard Wirtz and Thomas Rodenhausen
Bernhard Wirtz is member on the management board of MediaTransfer AG Netresearch & Consulting, Hamburg. His role, alongside Thomas Rodenhausen, is the management and strategic development of operational business on a national and international basis. Wirtz studied product marketing, brand communication and psychology in Cologne and has worked with various companies active in communication research since 1991, before he joined MediaTransfer AG Netresearch & Consulting early 1999.

Dr. Thomas Rodenhausen is member on the management board of MediaTransfer AG Netresearch & Consulting, Hamburg. His role, alongside Thomas Rodenhausen, is the management and strategic development of operational business on a national and international basis. One of his main interests is the development of methods and tools for the measurement of attitudes and preferences. Rodenhausen studied psychology and computer science in Berlin and worked as a lecturer before he joined Mediatransfer AG Netresearch & Consulting in 2000.
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