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Wednesday, June 5, 2013

American Marketing Chauvinism

Webster’s Dictionary's original definition for chauvinism was “exaggerated, bellicose patriotism". Over the years, it took on meaning of one group thinking that they were superior over another.

In recent months, I had three slightly jarring experiences with American marketers who were guilty of chauvinism.  A few people who read a draft of this post said they were simply living in a time warp. I am not so sure. Here are the examples:

1) I received an e-mail from someone whom I do not know well but does read the blog. He wrote to tell me that “Coca-Cola, as a company, was toast.” I smiled and we fired back e-mails over a 36 hour period. His thesis is that the mayor of Cambridge, Massachusetts was following the lead of other mayors and considering a limit of the size of sugary soft drinks that could be served in her fair city. He said this would snowball across the country and eventually the world and Coke would be in real trouble. I wrote back the following: “Coca-Cola, as best as I can count, has nearly 500 non-alcoholic beverage brands around the world. In fact, of the five top soft drinks (Coke, Pepsi, Diet Coke, Fanta, and Sprite), they own four. They sell in 200 countries and are always introducing new products customized to local appeal. Their growth potential overseas is stunning. Take Indonesia, the fourth most populous place on earth. The middle class is arguably growing faster there than anywhere on earth and 95% of the population cannot drink alcohol for religious reasons. This would seem to be a fabulous growth market for many Coca-Cola beverages.” He countered that the obesity epidemic must be stopped. I said “Well, if more people drink water and fruit juices, I agree that would be a good thing. But, who do you think controls bottled water and many juices? The answer is Coca-Cola, Pepsi, and Nestle.  So if sugary water cola sales decline in the US and perhaps elsewhere, a great deal of money will flow to these companies as they own a huge number of soda substitute brands.” He wasn’t buying any of it but the reality is that the US is not the most important market looking ahead for non-alcoholic beverages. It has to be overseas.  My friend’s America chauvinism was getting in the way of clear thinking.
2) Interestingly, the next episode involved a beverage as well--Budweiser. A reader who sold radio in the Midwest was concerned that Budweiser had cut radio advertising in his mid-sized mid-American market in the last few years. The company had to be hurting since AmBev had bought out Anheuser-Busch. I laughed and told him that they were focusing on growing more overseas and gave him two great examples. Last year, I was in a beautiful little town outside the US and a mere eight degrees below the Artic circle. After a round of golf, I really enjoyed having a glass of a local brew each day. When the trip was ending, I traveled three hours south to an international airport.  In the city, at a restaurant the night before I left, the barman told us that Bud had incentivized them so much that they tore out the tap for the local brew and replaced it with Bud. He added that sales were great. A few months later, I was six thousand miles away in another country and found that Bud taps had replaced local brews in more than one location. My friend looks at the world as his own little market. Bud was not hurting and is not. They appear to be reallocating marketing emphasis and growing the brand.
3) The last encounter is more of a macro-economic issue. At a party, I was speaking with someone whom I really admire. I brought up the issue of how the US industrial base was in decline and we needed to have policy and tax changes to help grow jobs here at home. He said, “How can you say that? XYZ Corporation just added 12 workers this past week (XYZ is a cover for an industrial concern in a rural county).” I started to laugh but realized that he was serious. Here was a bright and successful business executive summing up a big issue with a ridiculous leap of faith about job growth.

So, what is going on? I realize that I follow global trends far more than most. Yet, American business people need to understand that it is not 1958 any more. We are not always where the growth is, or the opportunity, or the highest margins. Most people seem to react to what is right in front of them. And, they interpret the world by how events affect them and them alone. Smart marketers need to get acquainted with the whole picture. You do not have to become sophisticated international marketers but you do need to know that only 4% of the world’s population was born in the US and we are only 5% of the world’s population. As other nations and even continents grow, our share of volume for thousands of products has to decline. So, in many categories, we will only be trying to maintain share in the states but go for growth abroad.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

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