Provenance Paradox

Every sale has five basic obstacles : no need. no money, no hurry, no desire, no trust.
------Zig Zagler
It started with an experiment with my friend when I told him that I bought a Brazilian watch , swiss coffee, Egyptian rug and Turkish cotton and he said “Are you insane , I think you have mismatched the country and the items they are famous for and that too horribly “
What does this mean that if I am swiss I can sell only watch , if Turkish then only rugs , if Indian then only spices , then how Toyota , LG , Samsung became big brands despite coming from small countries like Japan and Korea . How they entered developed markets
I was sitting in a cafe indulging in my favourite dessert, ice cream. The double-scoop portion contains two flavors called “French Vanilla” and “Belgian Chocolate”. Then a question crossed my mind, “Why on earth vanilla is often associated with ‘French’ and chocolate with ‘Belgian’?” No vanilla ever grew in France nor chocolate in Belgium. In fact, the best chocolate grows in Columbia and Madagascar contributed 97% of world’s total vanilla export.
El-Rey : Leading cacoa processing industry and sells its product at a 30% price premium. El-Rey tried their hand in coming up with finished chocolates but it never became an international brand because no one will pay a price comparable with that of , Lindt or Godiva for a venenzuelan chocolate . This is the Provenance Paradox as mentioned in Dec 2010 edition of HBR authored by Mr Rohit Deshpande .
Following are 5 strategies of combating the effect of Provenance paradox :
1> Stick to colonial history (Egyptian cotton. Turkish rug,Indian spices etc)
2> Build a brand for long haul (Toyota, LG, Samsung etc)
3> Flaunt your country if origin (Swiss knife,Columbian coffee)
4> Downplay your country of origin (Corona lifestyle beer )
5> Hide behind the front country (Apple –designed by apple California,made in china)
Indian Product Case study :

Tata Motors is the largest multi-holding automobile company in India and it is the fourth largest truck producer in the world. In addition, Tata Motors is also the second largest bus producer in the world, with the revenues of US$ 8.8 billion in the financial year 2008. Since its establishment in 1945, Tata Motors has grown significantly in the past 60years with the strategies of joint venture, acquisition and launched new products in different market segments (i.e. passenger cars, commercial vehicles and utility vehicles). A significant breakthrough for Tata was the development and commercialization of the truly Indian cars and they are Tata Indica (1998) and Tata Indigo (2002). Tata Motors has experienced many joint ventures with Daimler Benz, Cummis Engine Co. Inc., and Fiat and successfully acquired Daewoo Commercial Vehicle Co. Ltd. In the year 2008, there were two most significant events which have had a momentous impact on the scale of the Company’s operations and its global image. The launching of Tata Nano, the world cheapest car and the acquisition of Jaguar and Land Rover, the two iconic British brand have made Tata Motors well known to the people in the world. Tata Motors has proven excellence over the years through continuous strong financial results, market expansion, acquisition & joint ventures but the important question is how this salt to car manufacturer has been able to have great sales in European market . Generally companies in order to downplay their origin country try to acquire global brands . Following are the benefits which helped them to avoid “Provenance Paradox”
Following are the benefits which Tata motors got from JLR acquisition from Ford

TATA motors acquired three plants in Europe
All these plants were developed and maintained by FORD , so by this TATA motors was playing safe

TATA motors acquired 2 state of the art design centers in Europe from Ford
People trust European Car designs , so by this TATA motors avoided Provenance paradox

Sales support from Ford motors
Initially in order to penetrate European Market TATA motors used FORD’s name

P.S : This is the reason why TATA motors despite knowing the fact that JLR was just a liability for Ford invested huge in this M&A deal .
In my opinion the key to success for us in the developing countries is investment in our Intellectual Property. For e.g. the Venzualans should try to get a Geographic Indication protection on their chocolate product, just like how it has been done for Swiss chocloates and Champagne. Getting GI protection will go a long way in promoting traditional products and help in their branding. Similarly Infosys needs to develop a robust patent portfolio to shed off its back-office image. Innovation and protecting your innovation and then branding yourself is the key to success.

* Geographical indications have long been associated with Europe as an entity, where there is a tradition of associating certain food products with particular regions. Under European Union Law, the protected designation of origin system which came into effect in 1992 regulates the following geographical indications: Protected designation of origin (PDO) and protected geographical indication (PGI) and Traditional Speciality Guranteed (TSG)