Brand Origin and Perceived Foreignness Matter

Brand Building and Marketing in Key Emerging Markets

25 Strategies and Frameworks for Brand Growth

Part VIII

Welcome yet again to our series on the 25 strategies that will support your brand building and business development activities in key emerging markets. Today, we will provide an inside look on the influence that perceived foreignness and brand origin has on the BRIC consumers.

Most consumers in the BRICs agree that there are strong foreign influences, which are further fueled by the internet and social media. From the consumers’ point of view, foreign influences come in many different forms – new trends and ideas, foreign movies or commercials, tourists from overseas or simply new chain stores or brands. For the consumer, the non-local origin is usually identifiable through an indication about the country of origin (COO).

The importance of COO is even higher than expected

It is a proven fact that the COO plays an important role in the formation of brand preferences and purchase intentions. In a globeone survey of over 4,000 urban consumers across the BRICs, we found that the importance of COO was even higher than expected. The percentage of consumers recognizing the importance of the COO-image for purchases was 90 percent, 69 percent, 65 percent and 61 percent of the Russian, Indian, Brazilian and Chinese respondents respectively.

Research shows that consumers intuitively associate positive or negative attributes with a product, company or brand if they recognize it’s COO. What happens is an image transfer of associations from the country to the brand. Considering the high percentages of BRIC consumers saying that COO matters to them, there are some good arguments why COO is generally relevant.

A very valuable competitive advantage

A positive COO image is in many cases a key driver of brand performance. However, in emerging markets it is even more than that. In high competition countries such as China or India, a favorable COO and the related quality perception is a very valuable competitive advantage that local champions cannot easily imitate. Therefore, the decision about positioning as more foreign or more local in a new market is one of the most strategic decisions a company can face when considering how to position itself as well as their products.

Countries currently benefitting most from the COO image include Germany, the United States, Japan and Switzerland. This is due to their long-standing traditions of quality, cutting-edge technology or engineering craftsmanship. Labels such as “Designed in the USA”, “Made in Germany”, or “Swiss Made”, are not only descriptions of origin but also valuable quality statements that convey prestige and reputation on the products that bear them.

“Made in Germany” is a powerful quality statement

For global marketers, this data leads to a simple but critically important conclusion: the more favorable a country’s image is, and the more relevant a country’s associations are in a specific product category, the more prominently the “Made in…” label should be communicated.

At the end of the day, the question that arises is: if the COO effect has such a positive leverage, why is it used so intermittently? The answer is that, on the one hand, many foreign brand managers, the majority of whom are not natives of the country they operate in, simply forget to make their “foreign roots” part of the brand positions. On the other hand, most of the global brand positioning models have been developed back home in Europe or the US, and exclude references to COO which are obvious references at home, but not in foreign markets. Consequently, it is important for global brand models to offer a certain degree of flexibility so local marketing strategists can incorporate the COO or other strategic “drivers” of brand performance as an additional growth market-specific message that can be vital to success in the chosen market.

Niklas Schaffmeister - Brand Building and Marketing in Key Emerging Markets

 

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