Even before the war in Iraq began, American CEOs and marketing mavens fretted that their products might be made scapegoats by controversial U.S. foreign policies. Influenced by images of a lovely Bordeaux being drained into an American toilet, pundits predicted that U.S. goods would likely be boycotted as well. The widely hyped emergence of local alternatives in the Mideast, such as Mecca Cola, seemed to support their reasoning. But a Harvard Business School study, released at a dinner on global branding in Davos last week, may temper some corporate fears. The study, which looked at six product categories in 12 countries, showed that only 12 percent of those surveyed preferred a local brand to a global–and often an American–one. “Globalness means quality,” says John Quelch, the Harvard marketing professor who ran the study with Research International last year. Especially in emerging markets–the study included Turkey, India and Egypt–global products represent standards people can trust. Quelch pointed out that 88 percent of those surveyed didn’t express their opinions about American policy in the products they consume. Instead, for some, wearing Nikes or drinking Pepsi conveys a sense of status and connectedness with the world.

Still, it helped that some top brands were beginning to think about how to get around the negative connotations associated with being a global icon well before the war, Quelch said. He called Coca Cola’s March 2000 launch of the slogan “think local, act local” one of the “seminal moments in marketing history.” The anti-globalization movement and Naomi Klein’s book, “No Logo,” a polemic against the undue power of global brands, have made companies re-think the way they market their products. This has “helped to inoculate them against further backlash,” Quelch added. That’s not to say brands are untouchable. Last summer, a Roper ASW survey of 1000 people in each of 30 countries found that a declining affinity toward American culture was linked with declining affinity to American brands. –Karen Lowry Miller

Where Have All the Chinese Gone?

China has the hottest economy in the world, and is one of the most popular topics at Davos–so why are there no top Chinese officials here? After all, Dick Cheney took the trouble to helicopter in. Hong Kong venture capitalist Victor Chu offered one explanation: it’s Chinese New Year–a time of strategic planning and numerous social obligations within China, including paying respects to retired officials. (Happy New Year, Chairman Jiang!) Zhang Weiying, a vice dean at Peking University, had a different hypothesis: there are now so many forums held within China that top officials are all forumed out. But the most persuasive explanation may have come (unintentionally) from U.S. Secretary of Commerce Donald Evans, who was also at Davos. Commenting on China’s internal problems, including mass unemployment and internal migration, he said that on his recent trip to China, he was impressed that all the officials he met were completely alert to these problems. He described China as a nation “focused inward” and “not looking outward at all.” Chu said he is deeply involved in bringing Chinese officials to Davos, and would work hard to bring more of the top brass next year.

Currency Considerations

As the dollar plunges versus the euro, yet holds steady–albeit artificially so–versus the Chinese yuan, another much-discussed topic in Davos is the currency war. Does the United States really care about the artificial strength of the Chinese yuan? On recent trips to Asia, high-ranking U.S. officials sent public signals that China should allow the yuan to rise. The move would make U.S. exports cheaper in China, giving a boost to U.S. manufacturers and unions in an election year. Last week, however, U.S. Secretary of Commerce Donald Evans, after noting that it is the Treasury secretary’s job to address dollar issues, expressed public sympathy for China’s argument that allowing the yuan more flexibility could be destabilizing to China. “Be mindful that there are serious risks,” said Evans. Noting that China’s household savings represents 100 percent of its GNP, he raised the specter of capital flight without quite naming it: “If allowed to float, what are they going to do with all that currency? … I don’t know the answer, but you’ve got to think that through.”