The Provenance Paradox
The provenance paradox describes the challenge for brands originating in a number of regions in the world failing to compete in the top tier markets. Their origin carries a stigma which places them at an inferior position to brands that originate in supposedly more developed and reputable regions. Certain geographies are perceived to produce better products than others, despite the essence being that the products are of the same quality.
Following the examples from the case on how they built their up market positions with the strategies for combating the provenance paradox have been detailed: Flaunt Your Country of Origin and Stick to Colonial History Example: Chocolates El Rey and Concha y Toro Chocolates El Rey fails to find a position in the market where it can compete with the famous brands solely because it comes from Venezuela.
For this chocolate brand, breaking through the barrier may be through emphasis on the fact that the reputable European chocolate brands actually acquire their main ingredient- cacao beans from El Rey. If El Rey processes these cacao beans, what would prevent it from maintaining the same quality in taste and richness when producing their own chocolate product?
However, this may still be a weak point to stress on for El Rey, as consumers may still doubt them having the supposed expertise in refining the ingredient into the final chocolate product. Furthermore, Concha y Toro, the Chilean winemaker should deeply engage in brand management, like El Rey, in order to build stronger awareness of Chile’s exclusive varietals. By this, we describe wines made primarily from a single named grape variety typically displaying the name of that variety on the wine label.
Both of these brands should stick to what they do best, in the case of El Rey, them processing some of the best cacao beans in the world, and Concha y Toro having its country, Chile producing great varietals and having a long viticultural history dating to the 16th century, should keep on the combat to get their brands known by firstly establishing price competition and continuing to be low-cost suppliers as they continue to focus on the commodities that made their countries successful way back, and hence achieve scale.
Downplay Your Country of Origin Example: Corona Beer Other producers counter the effects that arise with the branded product origin on the positioning of the brand in the market by deviating focus from where the brand really comes from. Where the product is manufactured becomes an insignificant factor in the promotion, and other attributes of the branded product place it on the upper market segment. Corona Beer is one of the brands that use this strategy of ‘downplaying the country of origin’.
This type of combat to the provenance paradox renders the brand at risk of not being strong enough to sustain growth in popularity and trust as consumers eventually want to relate the product to where it really comes from. Not establishing the origin raises doubt of authenticity by the consumers. Nonetheless it works well in preventing the brand from being harmed by geographical undermining. Hide Behind A Front : India IT consulting companies Companies known to produce relatively cheap products are associated with low quality as well.
This is the example of IT consulting companies from India as they are presumed to be good for outsourcing IT grunt work, but not for high-level strategic consulting. Hence, these companies tend to consider the “hide behind a front country” strategy by setting up fronts in Europe to be able to earn premiums for their services in Europe by downplaying the fact that they are Indian companies and choosing to hide behind a front country. Build a Brand For the Long Haul Example: Korean LG & Samsung and Japan automobiles
In the electronics industry, brands such as LG and Samsung did not just reach great heights overnight. The fact that they are of Korean origin raised many doubts about their product being of quality competent enough to compete with top electronic brands. The perception of the Brands not being good quality was gradually countered through a strategy of building a brand for the long haul. They did not just emulate high performing brands overnight, but they let the consumers realize their quality through the smaller markets that hey were initially able to penetrate. With time, consumer confidence in the brands positioned them in the upmarket segment. Furthermore, Japan can serve as the best example of how the slow progression to upmarket positioning is nothing easy as after 50 years the Japanese brands in the automobile industry (Nissan, Honda and Toyota), and electronics (Sony) have achieved the upscale position commanding steep premiums with strategic and financial commitment.
End note. Having also learnt about “The Champagne Effect”, where the Protected Geographical Status is a framework of labeling restrictions enforced by the European Union, this framework is more of a tool to insulate brands from quality competition by reinforcing stereotypes about provenance and limiting opportunities for new players from new markets, and not really to prevent inauthentic, cheaper products. This only serves as another hurdle for emerging-market companies.
However, as brands compete to overcome provenance paradox, they should consider social media, such as facebook, as this is an inexpensive channel to tout positive consumer reviews and hence get their brands known globally. They should follow what the top brands are already doing. The brands seeking for acceptance have a long way to go as emerging markets are developing faster than the stereotypes are eroding. Hence, with the help of the strategies for combating the provenance paradox they will be able to get out there and be globally recognized with patience, and long standing perseverance.
