Why we won't buy British

Enduring consumer perceptions about the quality and exclusivity offered by foreign brands have resulted in their UK counterparts losing ground.

'Buy British' is a slogan with a ring to it. Strong, direct, powerfully alliterative and emotionally engaging, it has an obvious appeal. The only problem is that ever since it was coined in the 70s, the British have not been prone to act on it.

Foreign brands are more popular than ever with British consumers and are eating away at the market share of those domestic firms that have yet to react to the higher-quality levels and cheaper pricing of overseas competitors.

Research from MasterCard shows that UK consumers spent almost £1.8bn using the brand's debit and credit cards in Europe last year, nearly double that spent by Europeans in the UK over the same period. A rise in the number of holidays taken abroad, and in people buying holiday homes in France, Spain, Italy and now the US, plus the growth of internet shopping across national borders has given Britons access to a wider range of foreign goods and an increased desire to buy them.

This trend appears set to accelerate. A report published this month on regional airport expansion by Friends of the Earth showed that the deficit between the total amount the British spend abroad versus that spent by tourists in this country could rise from £15bn to about £30bn by 2020.

These findings are backed up by trade figures. According to the Office for National Statistics, the import versus export trade deficit for food and beverages has been increasing over recent years and is now at £11.6bn, while for manufactured goods it is £45bn. Car imports rose from £30.6bn in 2003 to £31.5bn in 2004, while the value of footwear coming into the country rose by £50m to £2.5bn over the same period, according to HM Customs and Excise.

In some sectors the rises are small, but they have been continuing year on year and cannot be ignored by marketers of British brands. 'We have a demanding consumer culture and we won't buy things just because they are British,' says Jez Frampton, chief executive, at Interbrand. One of the factors driving apathy toward UK brands could be currency. Countries that have adopted the euro have become cheaper due to the mood of uncertainty this has caused. Those that haven't gone over to the euro, such as the UK, are more expensive.

Frampton adds that UK consumer resistance to buying British harks back to the days when its manufacturing was associated with poor quality.

The car sector is an obvious instance. German manufacturers, for example, have been happy to promote their Teutonic origin with its overtones of reliability and solid engineering as it sits in marked contrast to the values that British brands are perceived to lack.

Renault offers a case in point when it comes to showing how comfortable UK drivers are about not buying British. The marque has consistently emphasised its 'Frenchness', first with the 'Papa and Nicole' ads and more recently with the strapline 'Createur d'automobiles.' It was assumed that this phrase would have to be translated into English for the UK market, but research showed that 60% of British buyers preferred the French version compared with just 12% who opted for the more prosaic 'We make cars'. 'We wanted to talk about French flair, chic, stylishness and sexiness,' says Olivier Genereux, marketing director of Renault UK.

Even issues such as the battle between London and Paris for the 2012 Olympics or President Chirac's less than diplomatic comments about British food do not seem to have harmed the appeal of Renault. 'We have always been aware of the rivalry between France and Britain, but against this you have the British idea of French quality of life,' adds Genereux.

The choice of footballer Thierry Henry to front the Renault Clio advertising campaign continued the theme, featuring a Frenchman known to, and admired by, British men and women; someone who in cultural terms could straddle the Channel comfortably.

In June, TBWA\London issued a report claiming that 'provenance is emerging as one of the most important tools in the European market's arsenal to unite people around a brand'. It outlines ways in which foreign branding can be developed and tweaked, arguing that the practice of creating a brand that taps into more than one nationality can be a useful technique.

The report cites BMW Mini as a good example of this, as it is seen by consumers as being 'neither exclusively German nor British, with all the reliable qualities and performance you would expect from the Germans and the quirky personality you get from the British'.

However, just because a product is presented as foreign, it is no guarantee that the British will flock to it. US beer Budweiser, for example, was marketed on its foreign appeal, but initially struggled to make an impact in the UK.

'Budweiser had several failed attempts on the market before it finally cracked it,' says Interbrand's Frampton, who worked with the brand. 'It started off being too brash - all cheerleaders and Wall Street traders, but the image that worked with the British market was of Route 66 and a more laid-back US experience,' he says. 'It was just a question of tweaking, but it made a massive difference.'

Nor is success dependent on the advertising strategy. Much of Budweiser's problems stemmed from its product delivery, which was flawed. 'Budweiser needs to be served cold in bottles, whereas pubs were selling it on draft,' says Frampton.

A marketing strategy reliant on a brand's provenance might be attractive to the British, who have proved open to influences from abroad. However, it is also risky, as consumers are becoming increasingly aware of foreign cultures and consequently resistant to national, or even regional, cliches.

'More people can tell you about Tuscany and Puglia and what they're known for. Using marketing cliches or old-fashioned images will put people off,' says Andy Nairn, head of planning at Miles Calcraft Bringshaw Duffy.

This knowledge is driven by concerns about food traceability and ethical issues, which are encouraging consumers to find out more about a product's origin and how authentic it is. Updated perceptions of countries and their national characteristics are now vital to the success of a foreign brand.

'The world is becoming a smaller place and our customers' tastes are changing to reflect this,' says Gill Smith, Waitrose media and communications manager. 'We are finding that dishes from all corners of the globe are becoming mainstream additions to the British dinner table.'

For example, Waitrose's oriental range now extends beyond Chinese dishes to Japanese, Malaysian and Thai foods, while increased customer awareness of Indian dishes has led to Goan and Keralan meals hitting the shelves.

'You need to keep innovating - Carlsberg and Lurpak have long been associated with Denmark, but they've been changing their campaigns around this theme,' says Nairn. 'There are also opportunities among other countries for the countries themselves and for marketers. For instance, what is Lithuania known for, or Bulgaria - apart from female shotputters?'

He points to Miles Calcraft Bringshaw Duffy's latest campaign for Greene King IPA, which introduces audiences to the beer's Indian heritage - it was originally brewed to be exported and drunk by colonials in the subcontinent - as well as maintaining its image as a quintessentially British beer.

To better exploit heightened consumer interest in all things foreign, countries are working to develop their own brand values, not just for the tourist trade, but also to enable their exporters to present a clear, positive national image. Estonia, for example, has been working with Interbrand to change the way it is viewed by the international community. 'People think of it as part of the former Eastern Bloc, but we want people to think of it as being Nordic - more like Sweden,' says Frampton.

Lingering associations

So where does this leave Britain? 'The problem is that people associate Britain with heritage brands such as Jaguar, Asprey or Dunhill,' says Simon Anholt of EarthSpeak, a consultancy that specialises in how countries are branded. 'They don't associate it with innovative businesses such as IT - how many people know, for example, that Lara Croft is a British creation?'

EarthSpeak's Nation Brands Index, published last month, placed Britain fourth in the world league table, after Australia, but ahead of the US, in terms of positive attributes. However, it showed that people here and abroad regard Britain as dull and predictable. But Anholt has some good news for the British marketing community.

'Countries can change their image. For years Japanese products were perceived to be poor quality, but now they are considered among the best in the world. Every brand is now trying to tap into this appeal for all things Japanese. Even Dixons is calling its in-house products Matsui. If Japan can do it, so can we. After all, consumers are always looking for something new.'

Andy Annet, managing director at relationship specialists Liquid Communications, says countries can promote products that have not previously been associated with them.

He quotes the example of a small but growing vodka brand from New Zealand called 42 Below. The country's associations with clean, fresh air and water are tied in with the vodka manufacturing process and the alcohol's clear, transparent nature. Perceptions of New Zealand as being a good place for young people to engage in outdoor activities and wholesome fun are also woven into the proposition.

Closer to home, various industries have been working hard to sell 'British' as a brand, with some success. HP has marketed itself as the Great British Sauce and Ford has exploited the 'glocalisation' phenomenon, where consumers regard an international brand as one of their own, through its 'Backbone of Britain' ad campaign for its Transit van.

The British food sector has suffered perhaps the greatest onslaught from foreign imports. However, it is now rediscovering the value of products such as meat and cheeses, as it emerges with renewed purpose after the BSE crisis. Waitrose, for example, which prides itself on its locally produced initiative, has been successful in supporting many small-scale suppliers in Britain.

There is still value in portraying the Britishness of UK domestic brands. However, if they are to succeed, such marketing strategies need to be much cleverer.

CASE STUDY - PERONI

Mention Italian drinks and most people think of wine, coffee and perhaps mineral water, but not beer. However, Peroni has made a feature of its Italian origins and growth has been impressive.

On-trade sales have risen 30% year on year since 2003, despite negative growth of about 3% for the on-trade premium lager market, according to ACNielsen.

As a result, Peroni has decided to play up its Italian heritage to greater effect. 'It is about Italian flair,' says Chris Taylor, international brands director at SABMiller. 'People associate Italy with the good things in life, such as great food, as well as style and attention to detail.'

With a label and point-of-sale redesign, which increases the Italian feel, Peroni's positioning has emphasised its associations with the urban chic of Rome and Milan, rather than rustic Italy. Glasses for on-trade sales have also been designed to emphasise the connection with Italian style.

A promotion was recently held in a specially decorated store in Sloane Street, Knightsbridge. Christened Emporio Peroni, and dressed to look like any number of the surrounding upmarket clothing retailers, it was intended to build Peroni's connection with Italian fashion and style. 'We wanted to literally put it on a pedestal,' says Taylor.

But authenticity has been an important message. SABMiller has been keen to promote the beer as chic and hip, but at the same time genuinely Italian and a drink with a history. 'There is a genuine heritage here. It was founded in 1846 and really is brewed in Rome,' says Taylor. 'It is also a refreshing, clean-tasting beer, which is what people would expect of something Italian.'

Sector Insight, page 32

ESSENTIALS - FOREIGN BRANDS

- Foreign brands are seen as more exclusive, unattainable and exotic than British brands.

- They are often considered to be more authentic or of better quality, such as German cars or Italian shoes, for example.

- Foreign consumer brands are often associated with travel, holidays and good times.

- Even consumers who are not regular travellers feel comfortable purchasing foreign brands and can buy into that culture with an Italian fashion item or a French cheese.

- Consumers' attitudes to many British brands hark back to the days when Britain was considered to be the 'sick man of Europe', with poor food and low-quality manufactured goods.

DATA FILE - COUNTRIES' CONTRIBUTION TO OTHER ECONOMIES Contributor Recipient pounds m 1 UK France 552 2 Germany Italy 536 3 UK Spain 512 4 Netherlands France 312 5 Netherlands Germany 261 Source: MasterCard

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