By GEOFFREY A. FOWLER and ERIN WHITE
Staff Reporters of THE WALL STREET JOURNAL
For years, U.S. companies operating abroad have tried to strengthen their image as local brands. Now those efforts are about to be sorely tested as anti-American sentiment flares.
New data suggest most consumers in Europe and Asia aren't turning away from American brands, even if they oppose the war with Iraq. But a sizable minority say they avoid buying American -- a strong signal that even the most resilient brands can't ignore the potential fallout from sustained anti-Americanism, marketing experts say.
Across the world, iconic American companies, often popular targets for political protest, have drawn heat in the past few months from groups opposed to America's policy in Iraq and the Middle East. In December, a bomb set off at a McDonald's in Indonesia killed three. Recently launched knockoffs Mecca-Cola, Muslim Up and Arab Cola have appealed to anti-American sentiment in Europe's large Muslim population and among other Europeans, too. Last week, Adbusters, a Canadian organization that promotes curtailing consumer excess through events such as "TV Turn Off Day" and "Buy Nothing Day," launched a global "Boycott Brand America" campaign.
Yet for a surprising number of people, shopping habits appear to be politics-proof. Asian shoppers, in particular, seem to disassociate their political selves from their brand choices. "People are much more concerned about the impact that a war would have on their daily lives," says John Woodward, a regional planning director for Publicis Groupe's Leo Burnett Asia-Pacific.
New research from Leo Burnett backs that up. Some two out of three Asian shoppers aged 15 to 35 interviewed late last month agreed with the statement, "I buy the brands I like regardless of where they come from." Still, 23% said they avoid American brands. A total of 1,000 people in China, South Korea, Indonesia, India and the Philippines were interviewed for the survey. Leo Burnett didn't provide the survey's margin of error.
A similar survey by Ipsos Public Affairs in nine countries around the world found many respondents who said that they, too, avoid buying American brands. Among Europeans interviewed, 21% mostly agreed with the statement, "I currently avoid U.S. products and services." The survey was conducted between Feb. 28 and March 8 and covered 1,000 people in each of the following countries: the U.S., the United Kingdom, France, Germany, Italy, Japan, Canada, Russia and Spain. It had a margin of error of plus or minus three percentage points. Ipsos Public Affairs is a unit of French market-research firm Ipsos Group SA.
In recent years, the biggest global brands have gotten savvier at talking about their local roots as brand America has lost some of its cool. Food companies, for example, adapt their menus to local tastes. In China, Kentucky Fried Chicken, franchised by Yum Brands Inc. of Louisville, Ky., now offers a Peking-duck-flavored "Chicken Roll of Old Beijing." And in France, Coca-Cola Co.'s new vanilla-flavored cola has a different flavor, packaging and name -- "Vanille" -- from the American variety. "We do share a common brand but we are local companies throughout Europe," said Louise Marcotte, spokeswoman for McDonald's Europe. McDonald's says efforts such as sports sponsorship and community involvement help strengthen ties with local markets. Coke has done the same in recent years.
The efforts appear to be paying off. When Leo Burnett asked Asian shoppers whether particular brands have "my country's interests at heart," American brands such as McDonald's and Coca-Cola actually scored best of all multinationals. Some 17% of the surveyed Asian shoppers thought Coca-Cola was a local brand, and 49% thought of it as a global brand.
Shoppers haven't been as forgiving in the Middle East, where some companies such as Coca-Cola have seen sales decline in recent months. Yet consumer habits can be hard to suppress even in unlikely places. Late last year, a small Muslim consumer group in Malaysia and an association of Muslim restaurant owners began a boycott against Coke to support Palestinians, but the boycott fizzled out because customers kept asking for Coke. Apart from the Middle East, Coca-Cola hasn't seen any drops in product sales elsewhere, says Coke's Asia-Pacific spokesman David Cox. "The biggest thing that affects our business is the weather," Mr. Cox says.
That doesn't mean American brands can afford to be complacent. "Consumer attitudes toward American brands can change quickly," says Shih-Fen Chen, an international marketing professor at Brandeis University in Waltham, Mass., "if a bomb lands in the wrong place."
Appeared in the Wall Street Journal on 24 March
-- Cris Prystay in Kuala Lumpur contributed to this article.