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U.S. 'Misconduct' Abroad Could Affect Brand Loyalty
October 01, 2004
By Janet Alicea
Multinationals with problems in Latin America, beware. Hispanic consumers are watching, and your brand name may not be enough to exonerate you from the issues that come up.
Coca-Cola may be ranked number one among Latinos, but at the "Amigos de América" gala at the Republican National Convention in August, co-sponsored by Coke, some delegates were left with a sour taste after being greeted by pot-banging demonstrators. At issue is the company's alleged complicity in human rights violations in Colombia. New York City Council member Hiram Monserrate recently went on a fact-finding mission with regard to the apparent murders of labor organizers trying to unionize bottling plants.
Organizer Ray Rogers, director of "Campaign to Stop Killer Coke," says his goal is to unravel "what Coca-Cola has spent decades and millions of dollars in creating — the Coke brand and image."
Coca-Cola spokesperson Kari Bjorhus says, "We were found not guilty by two courts in Colombia and dismissed from the lawsuit filed in Miami. The bottlers are still a party to the lawsuit, and we feel very confident the court won't find any evidence against them either."
He adds, "We have a lot of faith in Hispanic consumers."
In Mexico City, Wal-Mart has run into a wall of opposition with its Latin American expansion program. Plans for a store, 10 miles from the archaeological site of Teotihuacán, have activists and companies accusing the retailer of unfair business practices and cultural insensitivity.
Wal-Mart spokesperson Bill Wertz counters, "What we're building there is not a Wal-Mart as you might understand in the U.S. It's a bodega." Unswayed, Mexican demonstrators continue.
Corporations that shrug off actions like those in New York or Mexico City may find themselves caught in a cultural and economic divide. Underestimating the Hispanic consumer's strong links to Latin America may hurt a company's ability to capture and retain the kind of brand loyalty usually attributed to Hispanics.
A strong brand can survive rocky times, says Hayes Roth, vice president of worldwide marketing at Landor Strategic Brand Consulting and Design. "People gravitate to global brands because they know the promise of brand," he says.
But as Latinos become a mightier market force, branders may find that techniques such as design colors and using culturally appropriate language may not assuage Latin Americans when companies are accused of misconduct in countries of origin.
David Galarza, a member of the Labor Council for Latin American Advancement, an advocacy group for Hispanic union members working in the United States and Puerto Rico, initiated an anti-Coke motion in August to return all monies Coca-Cola had donated as co-sponsor of the group's meeting. Now the organization is considering a boycott. As he sees it, "Nobody wants to be tied to an organization committing human rights abuses, especially to Latino brothers and sisters."
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