October 24, 2003

Made in Portugal doesn't sell?

Why is it that commodities made in Portugal or even portuguese national brands are perceived as poor quality in the global consumer mind? For example: While a pair of shoes or a suit produced in Italy is perceived as being better just for the sake of being Italian, the very same pair of shoes with the same quality, but made in Portugal is perceived as a poorer relative.

But a completely different thing, occurs when these commodities are sold as global brands, whose positioning of quality and prestige is undisputed. When a label "Hugo Boss" is added in top of a label "made in Portugal", the same pair of shoes or suit gains a intangible dimension in the consumer's mind. It's a "Hugo Boss" suit - it doesn't really matter if it was made in Portugal or not.

We cannot claim the prestigious asset, because that's a consequence of the product branding management, but we can claim the quality of the product that helped to build the brand. So my insight is: why can't we benefit of the free-riding effect that this global brands manufactured in Portugal, can provide us? (I honestly believe that our competitive advantage is in this kind of "leverage"). It's extremelly difficult for portuguese brands to be perceived or recognized as of superior quality or buyable. Therefore a pragmatic approach would be to use these global brands recognized worldwide, but that are made in Portugal. Thus saving us the trouble of working out the "sweet spot" positioning in the consumer minds. A free-riding effect might work well!

Here's the Hidden Persuader © suggestion:

"What's the difference between these labels? None. They're all made in Portugal."

No comments: