Bentley College Marketing- Honors

This blog is for MK 402-H01 and the greater Bentley College population.

Sunday, April 23, 2006

What do you do when your brand becomes the target of xenophobic rumors?

The blog posting “What do you do when your brand becomes the target of xenophobic rumors?” presents this question of how brands should deal with rumors and criticisms that “either appeal to fundamental cultural anxieties or that are framed in popular worldviews.” It raises the case of Lenovo, which is a Chinese IT company that recently acquired IBM. Lenovo is under fire because “xenophobes” are voicing allegations that the computers sold by the company to the State Department “could provide shadowy spooks in the Chinese government with an ideal means of conducting espionage.” This idea is being “marketed” to the public as a “buy American” and “national security” issue. It is marketing related because with raised cultural anxieties, Levono must decide how to deal with these negative connotations to its brand, as it is the first of Chinese IT companies to experience a merger with an American company. Any way that the company tries to approach the issue, its brand image is at stake. They face the challenge of either fighting the allegations or waiting until it “all blows over.”

This story informs marketing because it clearly illustrates the power of cultural identity on brands. The author alludes to the fact that some of the criticism may be stemming from the strong cultural and national ties that American consumers had with IBM that were tainted by the company’s acquisition by a Chinese company. Clearly, this cultural identity not only impacts the brand, but also other factors such as customer loyalty, customer satisfaction, and employee relations, just to name a few. While a regular merger or acquisition between two companies of the same national origin may have negative brand impact, bringing another nationality into the equation impacts many internal and external matters in the company.

To me, this post improves my understanding of marketing because it illustrates the immense complications of the global economy on brand image. While the world is supposedly “getting smaller,” cultural anxieties and worldviews still play a prevalent role. Since the Levono/IBM merger is the first of its kind, it must be dealt with caution in order to set a precedent. It will be interesting to see how future decisions are made on how to approach brand image in these delicate situations as our generation gains management positions in the future since Dianne Durkin described our generation as the “global generation:” we have been exposed to more globalism than any other generation. It would seem that we would therefore understand how to prevent these problems or if they did occur, how to implement damage control.

The concept of “Buying American” also made me think of the theme that “consumerism won in America.” How are these two ideas related? Did only “American-made” consumerism win in America? Does this connotation apply to all product categories? Or only those that we associate with “American” or have some pride in, such as IBM? It is hard to believe that Americans stand by “Buy American” with the popularity of Wal-Mart in our country. What would happen if Wal-Mart was acquired by a company of another origin?

This posting does an excellent job of just stating the bottom line being that Lenovo is between a rock and a hard place in deciding how to handle this situation. It would have been more helpful to have a better explanation of the Lenovo-IBM acquisition at the beginning, because I had no prior knowledge of this situation but found some information on another blog. It really made me think of how I would approach a “damage control” situation such as this one. Damage control seems to be something that cannot be “taught” in a classroom, but is a vital lesson to be learned the hard way – by experience – in the workplace.


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