When starting a business, it makes sense to mine the region/country of origin for opportunities that may accrue to your brand. It may even be worthwhile to locate it in a place that would add to the credibility of your brand
“Even in the early days, the use of the place of origin was not limited to identification purposes. Places of origin were also used to signal quality. It is communicated that even in the Greek world, Thasian wine (from the island Thasos, Macedonia region, Greece) yielded a price premium of 20 drachmas for 20 liters” (Nevett and Nevett 1994) (The Role of Region of Origin in Consumer Decision-Making and Choice–Koert van Ittersum)
 |
| Rupin Jayal |
What does geo-psychology mean? In the current context, it is the impact that a geographic location has on the perceptions that people have about a brand. This perception can be purely rational, emotional or sensory, or it could be a mixture of these. As can be seen, region or country of origin has played a very important role in influencing choice over the centuries. Indian spices and Chinese silk created strong geo-psychological value and helped build two of the richest countries in the world at the time. Through the ages, the origins of many products were important in determining the regard and value that these products would command.
With the advent of brands this has been diluted to some extent. It could be argued that globalization, mass production and diversified sourcing have diluted the importance of the region/country of origin further in many categories. However, this is still a potent means of influencing the choice of brands. Dehradun basmati rice, Kinnauri apples, Banarsi silk, Agra petha, etc are all good examples of this. Many single-malt whisky brands use the region where they are distilled to drive the perception of distinctiveness for the final product—the depiction of the region actually sets up a virtual product experience even before the bottle has been opened. Likewise, German cars versus Japanese or Italian ones set up distinctly different expectations. A Swiss watch still commands greater respect than watches from any other countries despite a brief period when electronic watches captured people’s imagination. Arguably, the center of the IT world still lies in the Silicon Valley, and Hollywood still has a pivotal impact in the world of movie entertainment.
While the region/country of origin plays a stronger role in certain categories such as food products, spirits, wine and luxury goods, it can play an important role in almost any category. It also does not require a large period of time to elapse before a region acquires credibility as a source. As the global world of brands evolve into “glocal”, more and more people will seek out interesting brands from varied sources across the world. Nothing exemplifies this better than the world of wine—where “new world” wines have carved out a very distinctive place for themselves, and Australian, Chilean, South African and increasingly Indian wines credibly match wines from France and the US (California).
And this is because while the world is getting increasingly homogenized with global brands and global manufacturing, there is a corresponding desire among people to try and be more unique and distinctive rather than belong to a large grey mass. There is a desire to often avoid the obvious and seek the new and unusual. “Foregoing developments have stimulated the marketing of traditional regional products, but additionally have triggered the search and development for new regional products that might be marketed at a profit. This revival of the interest in regional specialities can be noticed throughout the world. For instance, in the Netherlands, SMEs search for the lost regional specialities or introduce new regional products (for example, Van der Meulen 1998). Sanitch (1999) reports the increased interest in local produce in Australia, while Tsurumi (1997) reports the increased awareness among Japanese consumers of high-quality regional products and the growing number of local manufacturers who are looking for new markets for their products. “Today, the resurgence of regional identity, coupled with competitive pressures, leads increasing numbers of producers of a broader spectrum of products to group together at the sub-national level to promote common origin-based characteristics (eg, Florida’s orange and grapefruit growers, California wines and raisins, and Silicon Valley technology)” (Papadopoulos 1993, pp. 18-19) (The Role of Region of Origin in Consumer Decision-Making and Choice – Koert van Ittersum).
Region/country of origin credibility can be authentic, acquired, imagined or assembled. 'Authentic' means that the product is sourced, designed/created and manufactured/produced from the area from which it draws credibility. Hence, scotch whiskies need to have been sourced from Scotland and should have been aged for at least three years there. In cases when the brand is unknown to prospective customers, the country of origin becomes a very effective way of ensuring that the brand at least enters the consideration set of prospective buyers. Thus, launching a new apparel brand from Italy would have the inherent “style” credibility of that country and could arouse interest, especially if it is priced attractively, as most well-known apparel brands from that country are luxury brands. People choosing this brand would get the satisfaction of wearing clothes from one of the style destinations of the world, yet not have to pay such a high price for the privilege. Similarly, it is important for a new premium watch brand to carry the “Swiss made” tag if it is to have any impact at all on prospective buyers. Technology products too need to be perceived to be designed in “hi-tech” regions or countries even though, thanks to widespread globalization, they could be manufactured anywhere. In fact, for many categories, especially hi-tech ones, where the product was designed, it would possibly be the best opportunity to use the country of origin to add credibility rather than its place of manufacture. Alternately, a local brand could capitalize on the country of manufacture of its products if it adds credibility.
However, implying authenticity when there is none could seriously impact the brand. Recently basmati rice raised a controversy when growers outside India tried to use the label on their produce. Similarly, a Swiss watch does need to be sourced from Switzerland. Attempting to inject pseudo-authenticity by blurring, with phrases such as “designed in”, “inspired by”, “containing” etc, could boomerang as people today have access to far greater levels of information far more quickly and can identify pretenders rapidly, thus seriously impacting brand credibility.
Region/country of origin credibility can be acquired by bringing in a brand that was originally from that country. The brand, therefore, still carries the cachet of that country while it may or may not still be manufactured there. Thus, Rolls Royce still rests on the reputation of authentic British workmanship at its best, even though it is now owned by a prestigious German marque. There are similar examples from other luxury brands and the world of fashion. Certain fashion and apparel brands carry Italian or English sounding brand names to acquire an aura of belonging to those sources of quality and credibility.
A region/country/source of origin could also be created. This is used to encapsulate the ability and strengths of the manufacturing company by consolidating all its capability and expertise in a mythical place. That place is projected to be where the magic that imbues the brand is created. This could be especially effective with brands for children. Today, with the Internet, these imagined places from which these exciting brands come could actually be “explored” by children and thus be made virtually tangible, adding greatly to the magic of the brand. Even for adults, creation of fantastical places to build credibility and magic for a brand is a powerful way to add to brand belief. Thus, the mythical world of James Bond lends its credibility to many high-technology brands. Various cosmetic brands have “institutes” where exciting new solutions are created. Retail environments can be created to further the ‘tangibalization’ of these mythical places. Brands that operate just below luxury brands could create mythical worlds of style and fashion, and use these as credibility creators. As the “country/region” of origin is a created one, it could also be unique to the brand, thus adding to its distinctiveness.
Sometimes brands “assemble” components of their products and use the region/country of source of these components to build credibility for the final product. Examples abound, such as coffee brands, food products, apparel (for example, Egyptian cotton) and automobiles (for example, engine designed/tested in Germany/Italy/UK). This can also help new or relatively small brands to appeal to wider audiences and gain credibility.
Service brands too have used country of origin as a powerful builder of brand credibility. For example, the use of myriad interpretations of Asian hospitality to promote hotel chains and airlines, the use of German or Swiss origins to create the aura of efficiency, or the use of British origins to sell trustworthiness.
When starting a business, it makes sense to mine the region/country of origin for opportunities that may accrue to your brand. It may even be worthwhile to locate it in a place that would add to the credibility of your brand. For example, a wine brand from Maharashtra, an automobile components brand from the south of India, and an ITES brand from Bangalore. Efforts could also be made to promote regions in terms of specialization and hence build source credibility, thereby benefiting all the companies in that category in the region. If Maharashtra emerges as another California in terms of the reputation of its vineyards, it would greatly benefit all vintners from there. Similarly, the reputation of the key regions where large automotive projects are located could be coalesced to create a strong region of origin credibility for the components and automobiles sourced from there.
As the world enters a time of extreme turbulence, many existing regions/countries of origin will lose their pre-eminent positions. This will open up opportunities for others to take their place. Similarly many brands will be affected and it will effectively create opportunities for new ones to come in. These could well leverage their region/country of origin to gain credibility and enter “preferred” baskets. Who knows, you might well be situated in a place that could have the potential to add to the credibility of your offering or you might be able to do so by setting up in a region that allows you to do so. So factor this in when you look at all the benefits that a region offers you before you decide where to locate your business.
The author is Director-Strategic Planning at M&C Saatchi.
Subscribe to this comment's feed
| < Prev | Next > |
|---|
