ANALYSIS: New strategies needed for French and German goods

Just as US companies are touting their local contributions in other countries, French and German companies must do the same here to avoid boycotts.

Just as US companies are touting their local contributions in other countries, French and German companies must do the same here to avoid boycotts.

While US-based multinationals face anti-American protests abroad, French and German companies in the US face possible American consumer backlash because their governments aren't supporting the US in Iraq. A recent survey by Fleishman-Hillard and Wirthlin Worldwide found American opinion of French and German goods was in decline as a result of those countries' decision not to support US involvement in Iraq. The survey, done in late March, found 64% of respondents feeling less favorable to French companies and products, while 52% felt less favorable to German companies and products. In addition, 29% said they are likely to boycott French goods, and 19% said they are likely to boycott German goods. So far, concerted boycotts haven't materialized, but that doesn't mean companies shouldn't be preparing PR messages and strategies to deal with anti-French and anti-German feelings, PR experts agree. "It's a very mediagenic issue," says Jere Sullivan, GM of Edelman's Washington, DC office, hinting that the problem isn't likely to go away anytime soon. "The first call to action for French and German companies is simply to step back and think about their branding and marketing strategies in the US," says Philip Diehl, co-chair of Fleishman's public affairs practice in Washington. "The entire context under which those branding and marketing strategies were designed has changed." Emphasizing local commitment The strategy French and German companies should follow parallels what American companies are doing abroad: Emphasizing the jobs they produce locally and for the US economy as a whole, talking about their community involvement in the towns and cities where they have facilities, and reaching out to use third-party sources who can bolster the overall concept that boycotting French or German goods hurts the US economy more than it helps US foreign policy. "There's a lot of potential innocent bystanders who can get caught up in this," Diehl says. At the Organization for International Investments, which represents foreign companies operating in the US, Todd Malan, executive director, has been advising members to do all of the above - although he disputes some of the anti-French and anti-German sentiments found by Fleishman. "It didn't jive with our results," he says. In early April, his organization gave The Wall Street Journal the results of a consumer survey it conducted showing that if Americans are told boycotts would cost US jobs, their interest in boycotting drops dramatically. "If people understand that jobs are at stake in the US, not France or Germany, they feel much differently," Malan says. Edelman's Sullivan agrees that emphasizing local connections is key. "All politics is local, and I think all communications is too," he says. Doing its own research, Edelman found that "we were seeing a spike in the negative coverage [of France and Germany], and clients were concerned," Sullivan recounts. Volkswagen has received fewer than 50 letters and e-mails on the war issue, but it answers VW owners with a letter detailing that it has been operating in the US for 50 years and employs 50,000 Americans, explains Steve Keyes, director of corporate communications with Volkswagen of America. It also uses its US dealers as an early-warning system to relay consumer concerns back to headquarters. "What the dealers keep telling us is they don't see this on the showroom floor," says Keyes. The lackluster US economy is having a greater impact on sales than political machinations by the German government, he contends. Rob Mitchell, manager of corporate communications with BMW, agrees that business hasn't been affected by anti-German sentiment. That doesn't mean he's ignoring the issue, however. "We're monitoring it," he says. He's seen the strongest anti-German sentiment on the web, but "right now it hasn't had an impact on our business." Focus on luxury, not France French-owned wine and spirits importer Schieffelin & Somerset plans to talk about such brands as Dom Perignon champagne as a luxury product, not particularly a French product. "Our feeling is the market for Dom Perignon buys the item for the quality and not the country it comes from. I think people buy it for what it is," says Michael Doneff, an EVP at the Susan Magrino Agency, which works on the Dom Perignon account. "Hopefully, we won't have this issue," adds Kai Rosenthal, VP of PR for New York-based importer Schieffelin. "We just have to be sensitive, and hopefully the world will be in a better place shortly." US sales held up well during the recession last year, she says. Schieffelin is co-owned by Moet Hennessy Louis Vuitton and Diageo. PR firm Teuwen One Image is working with the Loire Valley Wine Bureau. Rather than pull back on PR, it conducted tastings and a two-week promotional tour in New York during late March, believing that politics wouldn't impact Loire wines' US consumer base. To show its connection with the local community, though, the Loire group worked with anti-hunger organization Share Our Strength, donating the $35 admission fee members of the public paid to attend the tastings. Share Our Strength provided "an umbrella for the event. That was our statement - that French wines and an American cause work really well together," explains agency founder Stephanie Teuwen. As the war approached early this year, the French government's tourist office in New York postponed an annual PR campaign it normally launches in mid-February. "It became clear to us in January that the way things were escalating, it would not be a good idea," says Marion Fourestier, assistant director of communications. But the board has maintained its usual b-to-b communications efforts with travel agents and at travel trade shows. It's planning to hold its annual PR campaign in mid-May, but is remaining flexible as it watches US progress in Iraq. "Our goal is to have a good summer season and to have our media tour and our special recovery marketing campaign out and wrapped up by mid-June," Fourestier says. Requests for information on travel to France were up 10.4% this January compared with January 2002, but as war clouds gathered, requests plummeted, falling 21% in February and 34% in March, compared with the same month last year. Anti-French sentiment last month led some in Congress to talk about dumping French food service company Sodexho, which has an eight-year, $881 million contract to supply food to the US Marines. Edelman worked with Sodexho to talk not only about the jobs its US operations generate, but also about its commitment to fighting hunger through programs it runs with YMCAs in the US. It also found elected officials to weigh in on the issue. The Marines have said they plan to honor the contract. "At the end of the day, I don't think it was a problem," Sullivan says. How much longer French and German companies will need to fret about this issue is an open question. "Most of our members haven't seen an impact, but they're worried about it because the story continues," says Malan. His group plans to reach out to US-based multinationals to develop coordinated messages that can be used to stem possible national boycotts both in the US and abroad. "People can be made to understand that not buying Dannon yogurt is not going to change Jacques Chirac's mind any more than dumping Coke in the streets of Berlin is going to affect anybody else's mind," Malan says. "Boycotts hurt local workers, not the government you're mad at." If French and German companies can get that message across to US consumers, hopefully they can maintain their US market shares despite the bickering going on between their governments and ours.

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