Pocketbook Patriotism

POCKETBOOK PATRIOTISM

The Marketing and Myths of ‘Made in America’

ENGAUGE.COM

POCKETBOOK PATRIOTISM The Marketing and Myths of ‘Made in America’ Eminem is not your classic American pitchman. And that’s exactly why he’s the face of Chrysler’s attempt to reconnect with American consumers. Debuting with a Super Bowl spot featuring Marshall Mathers slow-rolling through the decrepit streets of Motor City, Chrysler’s gospel-themed “Imported from Detroit” campaign pushes a compelling mix of tradition, dignity and perseverance. It’s more than a pitch for a luxury car. It’s a tribute to a way of life.

The appeal to American pride isn’t unique to Chrysler. The domestic car industry has been waving the flag for years. But this new campaign’s tone is pitch-perfect and the timing couldn’t be better.

Recently, a number of companies have turned their American roots into a major selling point. Pushing everything from cars to clothes, these brands have converted loyal citizens into loyal customers. To emulate their success, marketers will need to assess how cultural relevance can influence opportunity size and advertising strategy.

The cultural landscape has shifted. There’s a palpable fear that America’s best days are behind it and that the “American” way of life no longer exists.

And yet, according to a recent Harris Interactive survey, over 60 percent of U.S. consumers say they are more likely to purchase goods marketed as “Made in America.”

The vast majority believe the best way to jumpstart the struggling economy is to buy more American goods, an assessment supported by nearly 75 percent of adults polled

by BIGresearch in January 2011.

BY DAVID GRZELAK & MYA FRAZIER

It’s increasingly clear that Made in America isn’t what it used to be. Chrysler’s patriotic pitch was the brainchild of a Frenchman, CMO Olivier Francois, and an Italian-Canadian, CEO Sergio Marchionne. The automaker’s corporate parent, Fiat, is headquartered in Turin, Italy, a world away from Motown.

Nevertheless, brands with a distinctive American character – even without a purely domestic manufacturing base – can gain an edge on competitors if they recognize and move beyond the myths surrounding “Made in America” marketing.

Myth: Made in America is Moot for Global Brands

For global brands with complex supply chains, some part of production will likely be overseas. That’s a reality that most consumers seem to accept. Outsourcing to foreign manufacturers does not automatically disqualify companies from proclaiming their American heritage or commitment to U.S. workers.

Certain product categories, such as hand tools and motorcycle boots, may seem more naturally appealing to pocketbook patriots, but marketing strategies that emphasize American roots have been used to boost sales of everything from khakis to skis to cars.

New Balance launched a new national campaign in 2009 promoting its shoe line as “Made in America.” Closer inspection of the sneaker labels revealed that many were merely assembled in this country. In fact, only 25 percent of the company’s footwear is produced here in the U.S. While the American-made claim may seem disingenuous, the company’s five New England factories represent a commitment to the American workforce that none of its main competitors can claim, because other athletic shoe manufacturers produce zero percent of their goods domestically.

Two years ago, Japanese automaker Toyota was voted the Most “American Manufacturer” by Cars.com in a poll based on popularity and domestic production. The Toyota Camry – built in Kentucky – dethroned the Ford F-150 from the top spot on the American-Made Index. While foreign companies have been relocating manufacturing facilities to the U.S., American carmakers have been shifting production to Asia and Mexico, making the definition of an “American car” increasingly difficult to nail down.

Consider that the Korean-built Chevy Aveo, for example, is reportedly made with

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99 percent foreign parts, and the Ford Mustang, an American classic, now comes off the assembly line with 40 percent foreign parts.

For a product to be called “Made in U.S.A.” it must be “all or virtually all” made in the United States, according to FTC guidelines. Yet heritage brands that no longer have a purely domestic manufacturing base can still derive value from their American roots, even if they’re not formally labeled “Made in U.S.A.” Woolrich, maker of classic outdoor clothes that your great-grandfather – or Ernest Hemingway – might have worn while hunting stags or splitting logs, has experienced a resurgence in recent years. Its classic buffalo-checked coat is the cornerstone of a full line of apparel that has been embraced as an antidote to metrosexual Italian chic and cheap Asian knockoffs. The company operates a wool mill in Woolrich, Penn., where it was founded in 1830 and still maintains its headquarters, yet the clothes are actually assembled in Europe. Despite the lack of local production, the Woolrich brand has maintained its reputation as a high-quality U.S.A. original because their clothes look American.

Still, many consumers who actively seek to buy American believe they are supporting U.S. workers like themselves. It’s a decision based on practical patriotism with a personal appeal, not blind support of corporate brands or abstract ideals.

“If it’s made in America and you buy in America, there’s a job in America. And I’m creating jobs,” said Scott W. Anderson, describing the rebirth of the Anderson-Little clothing line that his grandfather founded during the Great Depression, and which recently relaunched from a factory in Florida. In an interview with Adweek, Anderson said: “Eighty-five percent of the time, made in America is the determining factor in the sale.”

At the Red Wing Shoe factory in Minnesota, which has been using local labor to handcraft boots for over 100 years, global marketing manager Jenny Tauer agreed that consumers “want to be proud of keeping people employed.” Red Wing work-wear products are made in the U.S.A., a distinction that created a reported uptick in sales and brand visibility during the downturn.

FTC guidelines apply to what can be marketed, whether implicitly or explicitly, as “Made in U.S.A.” There are also alternative certifications that acknowledge the complex realities of globalization, including My America Jobs, which ranks brands from one to five stars, based on their relative amount of domestic manufacturing and assembly.

The success of companies touting “Made in America” credentials is atypical in the apparel business, which has been defined by European styles and Asian production for the better part of two decades. In 1980, 70 percent of clothes sold in the U.S. were made here; that figure had slipped below 50 percent by 1995. Today, it’s below 10 percent, according to Women’s Wear Daily.

Common sense suggests that patriotism levels rise when a nation faces a common threat, such as the recent economic downturn, and decline again as the threat recedes.

This isn’t actually true. The proportion of people saying they are very patriotic has varied by just four or five percentage points over the last two decades, according to Pew Research and Gallup. The percentage of people who say they are extremely patriotic, however, increased to 32 percent of the total population in 2010, which is one-third more than 2002 (24%) and two-thirds more than 1999 (19%), according to Gallup/USA Today polls. Brands that are facing strong foreign competition should consider how this peak of patriotism impacts their positioning.

There are nearly 20,000 active U.S. trademarks that incorporate “America” in their name, according to the U.S. Patent and Trademark Office, but only a handful of brands have the cultural cachet – and workforce credentials – to live up to the name.

Myth: The Youth of America Just Don’t Care

It’s a common misconception that the youth of this country do not care about where their products are made. Marketing analysts will tell you that older buyers are more

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loyal and more likely to skew toward domestic brands. That’s accurate in many cases, but it is not an inviolate rule. Far from it, in fact.

Opinion polls are partly to blame for this mistaken impression. In a Harris Interactive survey, fully three-quarters of adults aged 55 and over said that they would be more likely to purchase goods marketed as “Made in America.” That figure fell to 44 percent among U.S. consumers aged 18-34. It’s also noteworthy that consumers over the age of 65 are nearly twice as likely to be extremely patriotic (40%) than consumers aged 18 to 29 (22%), according to Gallup/USA Today surveys. Among these self-identified super-patriots, there are far more men (37%) than women (28%). Consumers in the Midwest also tend to be more sympathetic to domestic brands than shoppers in California and the Northeast.

Based on this data, male Midwestern septuagenarians would seem most likely to prioritize and patronize American brands over foreign competition. If that’s the case, why did Chrysler choose a controversial 38-year-old hip-hop star as its new front man?

Classic American heritage brands like Pabst Blue Ribbon, Zippo lighters and Red Wing Shoes have surged to popularity by engaging and motivating younger demographic groups. In this context, the choice of Eminem makes sense. Because even behind the leather-wrapped wheel of a luxury vehicle like the Chrysler 200, Eminem is clearly not a pitchman for the senior set.

Opinion polls often fail to predict actual buying behavior, and on issues of patriotism, they may be missing the mark of what America really means to Millennial and Generation X consumers. Young working-class men, in particular, face severe unemployment and dwindling prospects for well-paying jobs. Among young males aged 16-24 who are looking for work, the unemployment level peaked at around 20 percent last year. The domestic manufacturing base has already been dismantled and is not likely to return. Patriotism, in this context, represents a connection to an American way of life – and buying into the familiar heritage of strong American brands may offset the fear among some consumers that the country’s best days are behind it. Brands ranging from muscle cars, such as the Charger and the Mustang, to popular media programs, like Dirty Jobs and American Chopper, tap into the powerful ideals of America.

In the current economy, price will often trump the patriotism card for the majority of consumers. However, even in this environment, brands that build an emotional connection with consumers may outmaneuver those that compete on price alone.

The cultural relevance of the brand can actually outweigh (or at least compete with) traditional differentiators like cost and performance. Brands can elevate their message above the commoditized conversation about product attributes into a more meaningful connection.

Country-of-origin effect and consumer ethnocentrism have been examined in over 1,000 research studies, beginning with the seminal “Elasticity of Product Bias” by Robert Schooler and Albert Widlt in 1968. Yet there has been criticism that Ivory Tower research increasingly lacks relevance to business practitioners.

Likewise, industry opinion polls on patriotism and product preference often fail to predict actual buying activity.

“People are starved for things that are true to what they are,” said Bill Thomas, founder and CEO of Bills Khakis, who told Women’s Wear Daily that the “Made in America” label has served his brand well lately. “There’s more relevance for these products now.”

Myth: Patriotic Pitches Require Flags and Fireworks

Eminem may be the most-liked person on Facebook, but he also has a reputation as a scrappy workaholic from a hardscrabble hood. He’s not Steve McQueen. He’s not James Dean. But like those past icons of American cool, he exudes confidence and charisma without looking like he’s trying too hard. He’s a guy who tells it like it is.

These days, one-third of Americans define “luxury” as being able to pay the bills on time, and three-quarters are now living a simpler life as a result of the recession, according to a survey last year from BIGresearch. In terms of advertising

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tone, triumphalism can safely be ruled out. A low-key approach is often more effective. So unless your brand is the National Football League, skip the cheerleaders, flags or fireworks.

Pabst Blue Ribbon is a useful case study in how subtle marketing can build allAmerican brand equity. During the depths of the recession in 2009, annual sales of PBR jumped 25 percent, even though PBR prices were higher than other subpremium beers like Miller High Life, which had dramatically outspent PBR in terms of measured media.

Pabst Brewing Co. studied how it was being consumed and perceived in the marketplace. The brand had an anti-establishment edge and appealed to a retro crowd of nonconformists, according to one major market wholesaler consulted

by Advertising Age. PBR expanded that niche fandom among urban hipsters into mainstream success as recessionary drinkers looking to trade down opted for the beer with the most cultural cachet.

Clint Eastwood, playing a cranky old ass-kicker in Gran Torino, appears in several scenes holding an open red, white and blue can of PBR. It was a well-conceived placement that bridges the traditionalist, patriotic PBR customer base and the new generation of loyalists. The brand has managed to hold onto both demographics, partly because these guys don’t drink at the same bars, but also by eschewing mass media marketing. The beer voted “America’s Best” at the Chicago World’s Fair in 1893 has recaptured its status as a true standout.

Digital, social and events marketing can be highly effective for promoting an allAmerican image that doesn’t pander to patriots. These channels are also useful for activating existing enthusiasts and leveraging their energy to generate mainstream awareness. Red Wing boots, for example, are popular with professional truckers, hence the company’s sponsorship of the National Truck Driving Championships. But the footwear is also a favorite of well-heeled, male hipsters who dig the trucker vibe and old-school machismo. For them, Red Wing Shoes created a website featuring sepia-toned photos of work boots and the factory alongside a timeline that stresses the brand’s connection to the heartland since 1905. Red Wing Shoes also produced a series of videos (viewable on YouTube) showcasing their down-to-earth employees in their Midwestern plant, including an interview with a cobbler that has been viewed over 50,000 times in its first two weeks online.

There’s a big shift we’re starting to already see,” Rob Kozinets, an anthropologist and professor of marketing at York University’s Schulich School of Business, told Advertising Age. “People are becoming more concerned about production, not just consumption. It’s interesting to see it showing up in advertising.”

The Takeaway

• “Made in America” isn’t moot for global brands. Major brands with complex supply chains may not meet the formal standards for “Made in U.S.A.” marketing, but buying American isn’t just about labels, it’s about cultural brand relevance that motivates and affirms consumers.

• The youth of America do respond to patriotic appeals. While older residents of the Midwest and High Plains tend to profess the highest levels of patriotism and related purchase intent, a number of brands – from Pabst Blue Ribbon to Red Wing Shoes – have built their reputations as purveyors of classic American cool by also appealing to younger urban hipsters.

• Forget the flags and fireworks. A low-key approach is better suited to the postrecession dynamic and will be more credible in establishing bona fides. Digital, social and events marketing can be highly effective in this regard.

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ABOUT THE AUTHORS David Grzelak, Executive Vice President, Consumer Culture David runs the Columbus Project, an Engauge ethnographic research initiative that has been tracking media consumption and purchase habits in the homes of 100 families in the American heartland since 2007. As a cultural anthropologist and researcher, he has dedicated his career to combining cultural and theoretical thinking with sound marketing strategies in order to influence consumer behavior in the marketplace. It’s his goal to truly understand consumer beliefs; that’s why he spends his time visiting consumers in their natural habitat, where opinions are formed and decisions are made. He then uses this firsthand knowledge to guide strategic thinking for clients and brands. His brand experience includes Nationwide Insurance, Huntington National Bank, ZonePerfect, Kraft Foods, and American Electric Power.

Mya Frazier, Director of Trends and Insights Prior to joining Engauge, Mya spent more than a decade as a business journalist, including stints as a staff writer at Advertising Age and The Cleveland Plain Dealer. Her writings on business and culture have also appeared in The Economist, The New York Times, Sky Delta and American Demographics. She currently writes a blog for Forbes.com and PBS, chronicling the impact of digital, mobile and social marketing trends on content, culture and commerce.

Follow her @myafrazier.

ABOUT ENGAUGE

One of the nation’s largest independent agencies, Engauge leverages creativity and technology to connect brands and people. The agency’s client roster includes Nationwide Insurance, Perkins Restaurant & Bakery, Ainsworth Pet Nutrition, CocaCola, Best Buy For Business, Chick-fil-A, Brown-Forman, Food Lion, The State of Georgia, Donatos, NGK Spark Plugs and more. Engauge, which has offices in Atlanta, Austin, Columbus, Orlando and Pittsburgh, is a portfolio company of Halyard Capital.

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Image Credits: p1: Nesster, http://flic.kr/p/545kBa p2: Jason Kuffer, http://flic.kr/p/4jKGQ2 p4: Stewart Butterfield, http://flic.kr/p/fUUDz p5: Quinn Dombrowski, http://flic.kr/p/4vRUEL

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