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The Post-9/11 Resilience of American Brands

Research suggests that opposition outside America to U.S. foreign policy doesn't necessarily affect consumer choice.

American foreign policy initiatives have generated rising anti-U.S. sentiment in many corners of the globe. American multinational corporations (MNCs) have grown increasingly concerned that such perceptions might influence how foreign customers value their brands. They are particularly worried about their businesses in Islamic countries, where anti-American feelings are fierce.

Our research suggests, however, that American MNCs should not overreact. Strong public opposition to American foreign policy doesn’t necessarily affect consumer choice. American companies should carefully weigh the costs and benefits of abdicating the “American-ness” of their brands. They should be honest and open about their heritage, and they should not overdo introductions of locally adapted products. That tactic could appear more patronizing than culturally sensitive.

Islamic countries account for only a small fraction of business for most multinationals, even though Muslims represent more than 20 percent of the world’s population. Coca-Cola derives only 2 to 3 percent of sales from the Islamic world; only 1 percent of McDonald’s restaurants worldwide are in Islamic countries. Furthermore, only 5 percent of people in Islamic countries can afford Western brands.

It’s true that American MNCs must succeed in Islamic countries to grow. By 2015, Muslims will account for 30 percent of the world’s population. Flat population growth in the developed world overall will require multinationals to seek incremental business in those markets.

Multinationals recognized this trend in the 1990s, when they began to pay more attention to local cultures to improve their penetration of fast-growth markets. They appointed experienced expatriate managers and established Arab regional headquarters in places like Dubai, instead of directing operations from their European headquarters.

Since September 11, 2001, however, American MNCs have lowered their profile in Islamic countries, and they appear confused about how they should proceed. Their new policy seems to be to withdraw senior expatriate staff for security reasons, and generally to lie low. From a brand development perspective, this approach may be counterproductive.

We surveyed consumers in 11 countries about their preferences for American global brands. Our sample came from a broad cross-section of the populations of developed countries, and drew from about the top half of the socioeconomic spectrum in these countries. We looked at preferences for seven global U.S.-based brands in six categories: athletic wear (Nike); dairy products (Kraft); cell phones (Motorola); petroleum products (Exxon-Mobil); automobiles (Ford); and soft drinks (Coca-Cola and Pepsi).

We wanted to know whether these brands were valued differently in Islamic countries. We looked at consumer perceptions in Egypt, Indonesia, and Turkey, and then compared them with perceptions in other countries — the United Kingdom, Japan, France, Poland, South Africa, Brazil, China, and India. We measured the extent to which our respondents attributed American values to each brand. Then we solicited preferences for these brands over other global corporate brands. When we looked for correlations between the brands’ American values and the respondents’ preferences, we found none in Islamic or in any other countries.

In addition, we looked generally at whether antiglobalization sentiments affected global brand preferences. Does an antiglobalization segment exist, and is it particularly strong in Islamic countries? We did find a significant antiglobal segment, about 13 percent of our sample. But, remarkably, this segment was not the largest in the three Islamic countries; in fact, the strongest responses came from China and the United Kingdom.

These findings suggest that American multinationals have exaggerated beliefs about how anti-American sentiment is affecting consumer choice, and, therefore, that the current retrenchment is unwise.

An American global brand — whether it is Coke, Pepsi, Nike, Motorola, Ford, or Kraft — is understood foremost as global, not American. Even brands that use American values as part of their symbolism don’t seem to positively or negatively sway consumers’ opinions of the brand.

 
 
 
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