When brands go global, their country of origin can play a vital role as brand ambassador. As Giana Eckhardt, a professor in international marketing at the Australian Graduate School of Management, probed COO issues with Asian brand managers, it prompted consulting major McKinsey to join hands with her for a similar study in Asia. The study covered 400 people across four countries, all aged between 19 and 49.
In India to address the market research fraternity at the ESOMAR Asia-Pacific conclave, Eckhardt and Sunny Hahn, a consultant from McKinsey's Seoul office, tell Prasad Sangameshwaran & Priyanka Sangani that brands should consciously use the COO association while planning their global strategies.
Is the country of origin as important as companies and consultants make it out to be?
Eckhardt: Within Asia, it's a big deal because there aren't a lot of prominent Asian brands. With the exception of a couple of countries, there has been a long history of products from Asian countries not being of the highest quality.
So Asian consumers need something extra to give them a sense of trust in a product. If you have a brand that's not from the West, you have an additional hurdle to overcome, because of the perceptions. The study substantiates the fact that COO perceptions are very important in Asia.
Do COO perceptions matter even in the West?
Eckhardt: Brands from the West have a long history in the marketplace. For whatever reason, they are associated with prestige - more so than brands from other corners of the world.
Hahn: However, the interesting thing is, the way Asian consumers look at brands from the West is different from the way the West looks at its own brands.
For instance, brands that are not popular in the West are accepted by Asian customers. Take the case of Buick. The car is not popular in the US, but customers in China prefer it. Or take Wrangler. Even that's doing well in China. This clearly shows that there are differences in the way Asian customers look at western brands.
Can products be successful simply on the strength of COO?
Eckhardt: There is a higher willingness to try on behalf of the consumer, if the brand is from a country that has strong positive perceptions.
For instance, if there is a new television brand from Japan that nobody has heard of, customers will be more willing to try that rather than a brand that came out of, say, Malaysia. Of course, if the brand is terrible, it will obviously fail.
Do customers see the connection between product categories and COO?
Eckhardt: Consider Yoga. There is a very positive perception of it being from India. The same is the case with IT outsourcing. When you have a strong connection for the product category and the COO, that's one way it overcomes any negative global perception of the country in general.
But yoga is a millennia-old practice. IT outsourcing has been spoken about for less than a decade. Does longevity of a existing product segment have anything to do with the positive connection with its COO?
Eckhardt: In the past, I would have said, yes. But it's not true anymore as there have been rapid changes.
Samsung is one of the world's leading brands. But it's only recently - less than 10 years - that customers have come to know about it outside of Korea. I think it's possible for a product category or a brand in particular to rise in prominence globally, much faster than it could in the past.
But aren't brands bigger than the COO?
Hahn: When the COO has a favourable association, brands from that country try to associate themselves with the COO. But when it is the reverse, then brands try to not associate with the country, but be on their own.
A good example would be Tiger, a beer brand from Singapore. There is no positive association between beer as a category and Singapore. Hence, the brand does not highlight its country association. In this case, the brand is investing all its resources into being seen as just a beer brand.
However, if we see things only from the COO angle, then we are vastly simplifying things. Apart from the COO, there is the quality of the product, investments on the brand and the market conditions. What we are saying is that COO is one of the drivers of customer perceptions and intention to buy.
This is one aspect that companies in Asia have overlooked so far while tailoring their marketing strategies. The COO affects customers when they see brands in different markets. Our experience with consumer electronic companies is that they have never looked at how COO can affect consumer decisions and attitudes. They look at marketing spends, media channels and so on, but overlook COO.
Apart from underplaying their country's identity, can brands also disguise their country of origin? Nokia is a Finnish brand, but sounds like a Japanese name.
Eckhardt: In the case of Nokia, the reasons could have been the same as Tiger beer - people do not associate Finland with high-tech products. So the reason they chose that name could have been because it does not sound Finnish, but Japanese. Or Haier, the consumer durables brand from China. The name sounds German. That's part of a strategy.
When you know that your country is not associated with the category, you can use a brand name that's not associated with the COO, and never refer to the origins in your marketing efforts. I think it's a deliberate strategy and not a matter of chance.
How about the negative effects of COO? Have brand fortunes been negatively influenced because a company played up its COO?
Eckhardt: Look at the way Malaysian Airlines branded themselves until recently. They associated themselves with the country and featured the culture, traditional dresses and so on, in their communication.
That did not help them at all, as most foreign customers did not relate to Malaysian-ness. It did not impact the airline positively. That is one case where customers have a negative association about the COO.
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