Interesting article in the December edition of Harvard Business Review entitled, “Why You Aren’t Buying Venezuelan Chocolate” (http://hbr.org/2010/12/why-you-arent-buying-venezuelan-chocolate/ar/1) by Rohit Deshpande.
Mr. Deshpande describes the provenance paradox as one where the product’s country of origin establishes its authenticity.
Consumers associate certain geographies with the best products (e.g., French wines, Italian sports cars and Swiss watches). Competing products from other countries, especially developing markets, are perceived to be less authentic.
There are five strategies presented for combating the provenance paradox:
- Stick to colonial history — focus on pure-play commodities that made your country’s economy successful in the colonial era. Continue to be a low-cost supplier by achieving scale. Note that competing on price is increasingly difficult in a global economy.
- Build a brand for the long haul — follow Japanese companies that, over decades, created brand-building strategies to overcome stereotypes and misperceptions. Eventually move upmarket to create luxury brands like Infiniti, Acura and Lexus. This approach requires a long-term strategic and financial commitment.
- Flaunt your country of origin — take an aggressive approach to change cultural perceptions. Colombian coffee built two brands — “100% Colombian coffee” and “Juan Valdez” — to transform the country’s image from negative (source of drugs) to positive (robust coffee). This strategy requires deeply engaged and integrated brand management.
- Downplay your country of origin — focus branding aspects of the product unrelated to provenance or invent a new position in the category. Corona positions itself as a lifestyle beer and under-emphasizes its Mexican roots. This strategy runs the risk of appearing inauthentic.
- Hide behind a front country — create a separate, local brand to avoid the market biases against the country of origin. Exposure could reinforce negative stereotypes about your brand’s home country.
Social media is a tool that can be used in the pursuit of any of these five strategies by touting positive consumer reviews and disseminating the brand message.
Do any of your products or services suffer from the provenance paradox?