Slide 1
WHY YOU ARENT BUYING VENEZUELAN CHOCOLATE
VENEZUELA:
Producer of cacao that is costlier than caviar and chocolate
that is well.... not quite on the luxurious side
THE PROVENANCE PARADOX
A products country of origin establishes its authenticity.
Consumers associate certain geographies with the best products:
French wine, Italian sports cars, Swiss watches. Competing products
from other countriesespecially developing marketsare perceived as
less authentic.PROVENANCE PARADOX AGAIN
As developing countries gain global economic power, the
provenance paradox is becomingthemarketing and branding challenge
for the next decade.
IT CAN BE OVERCOME
STRATEGY 1:1. Stick to Colonial HistoryExamples:Turkish rugs,
Indian spices, Egyptian cotton, Brazilian iron ore
The strategy:Focus on the pure-play commodities that made your
countrys economy successful in the colonial era. Continue to be a
low-cost supplier by achieving scale. Hope you can compete with low
wages elsewhere.
The threat:Competing on price is increasingly difficult in a
global economy.
STRATEGY 2:2. Build a Brand for the Long HaulExamples:Nissan (ne
Datsun), Honda, Toyota
The strategy: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.
The threat:This patient approach requires strategic and
financial commitment that many arent willing to make.
STRATEGY 3:3. Flaunt Your Country of OriginExample:Colombian
coffee
The strategy:Take an aggressive approach to change cultural
perceptions. Colombian coffee built two brands100% Colombian Coffee
and Juan Valdezto transform the countrys image from negative
(source of illegal drugs) to positive (robust coffee).
The threat:This risky strategy requires deeply engaged brand
management.
STRATEGY 4:4. Downplay Your Country of OriginExample:Corona
beer
The strategy:Focus branding on aspects of the product unrelated
to provenance, or invent a new position in the category. Corona
positions itself as lifestyle beer and underemphasizes its Mexican
roots. It focuses on fun, sun, beachwhether the beach is in Bali,
on the French Riviera, or in Cancun isnt part of the brand
story.
The threat:This strategy carries risk of appearing
inauthentic.
STRATEGY 5:5. Hide Behind a Front Country
Example:None that wants to talk about it.
The strategy:Create a separate, local brand to avoid the markets
biases against the country of origin.
The threat:Exposure could reinforce negative stereotypes about
your brands home country.
Even when companies are successful, it can be a very slow
process. Thats partly because emerging markets are developing
faster than the stereotypes are eroding. Even today, most of the
goods from emergent economies that are considered high qualityand
can command a price premiumare raw materials or at the low end of
the value chain in categories that these countries became famous
for during colonial times.
ONE BIG TOOL TO CIRCUMVENT PROVENANCE PARADOX
OUR TAKE ON THE STRATEGIESThe safest bet in todays scenario is
to flaunt your country of origin. However, if you do not have
anything to flaunt, take the tough route and build a brand for the
long haul. It is unwise to stick to colonial history because it
does not give any substantial returns and it might not be a great
ploy to hide behind another country or downplay your country of
origin; the internet and social media might sting you if you try
that.
We wonder if this guy and his country has any issues with
provenance paradox
