Marketing: Branding America

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If a fine antenna for the political mood were all you needed to create a successful consumer brand, Tawfik Mathlouti would be a happy man by now. Mathlouti is a French Muslim lawyer who vigorously opposes U.S. foreign policy in the Middle East and believes the world should protest it by boycotting American products. In the fall of 2002, he began marketing Mecca-Cola, a distinctly non-American imitation of Coca-Cola, in France, Britain and elsewhere in Europe.

The timing, a few months before the invasion of Iraq, seemed perfect. Polls showed that many Europeans were upset with the U.S. and less inclined to buy its brands. Mathlouti reaped acres of free publicity, especially in France, where the Iraq war was deeply unpopular and Muslims account for about 10% of the population. Yet after a promising start, Mecca-Cola has fizzled. In France, its biggest market, sales dropped about 10% in 2004; its market share there is negligible--1% or less.

The natural question: What kind of risks, really, do U.S. brands face abroad? People outside the U.S., and especially in Europe, are increasingly telling pollsters that they no longer like or feel good about familiar U.S. brands, including Coca-Cola, McDonald's, Marlboro and Heinz. A poll of 8,000 consumers in eight nations taken last December by GMI Inc., based in Seattle, shows that 61% of French consumers and 58% of Germans feel negatively toward U.S. firms. Another poll by the Edelman public relations firm, based in New York City, found that the image of brands including Merck, Procter & Gamble and Kraft has taken a substantial hit in the past year.

Beyond scattered anecdotal evidence, though, this so-called trust deficit hasn't been reflected in sales. "American brands continue to sell very well in all continents," says Maurice Lévy, chief executive of the big French advertising agency Publicis. "The danger [is] that one day behavior could follow attitudes, and then the reaction can be brutal."

Some of America's most iconic brands, including McDonald's and Pepsi, have banded together in an attempt to counter that possibility. The initiative, called Business for Diplomatic Action, was founded a year ago by Keith Reinhard, the chairman of DDB Worldwide, and Thomas Miller, an ex-pollster at NOP World. Its mission statement: "To sensitize American companies and individuals to the rise of anti-Americanism in the world and to enlist the U.S. business community in specific actions aimed at addressing the issue and reducing the problem." It has already published a quarter of a million copies of a World Citizens Guide underwritten by Pepsi and UPS for U.S. students overseas. "It's not good news for American businesses that people don't like America," Miller says. While there's no massive boycott, "the question is, what is the time lag between attitudinal shifts and behavior?"