U.S. marketers try to head off boycotts

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Marketers of some of the world's biggest brands-including Procter & Gamble Co., Pepsi-Cola Co., Coca-Cola Co., H.J. Heinz Co., Xerox and McDonald's Corp.-are going on the offensive to combat boycotts of American products in hot spots around the globe.

In markets from Egypt and Argentina to Europe, U.S. companies are plotting strategy, usually focusing on how to emphasize their ties to local communities and economies.

Sensitivity is particularly high in the Middle East. Mostafa El Halwagy, a board member of Heinz Egypt, said fliers have been circulated in Egypt, Bahrain, Oman, Qatar, Saudi Arabia, Tunisia, Morocco and Algeria, urging a boycott of a long list of U.S. companies. He said Heinz has not yet felt the impact, but that, "We have seen our name and other familiar names on the leaflets."

CAIRO MEETING

Heinz executives, along with representatives from targeted companies P&G, Pepsi, Coca-Cola, Xerox and McDonald's, attended a meeting in Cairo last week to discuss the situation with U.S. Embassy officials. P&G, Coke, and Pepsi rank among Egypt's top 10 advertisers.

"The level of anger is probably higher now than it has been any time since the [Palestinian] Intifada began" in 2000, said Mr. Halwagy. "Consumer product companies in general expect a resurgence of the boycott campaign. There are some early indications ... it could be a stronger campaign than previously."

Marketers at the meeting in Cairo advocated PR campaigns emphasizing that the products targeted for boycott are manufactured by Egyptians at Egyptian-run plants. "This is what people discussed, that it will hurt the economy of Egypt much more than it will affect the United States, and what is the best way to make people understand," said Mr. Halwagy.

In Argentina, anti-war demonstrators blocked the entrances of a number of McDonald's stores during March 26 protests. They laid down in front of the restaurants to symbolize casualties and waved signs with such statements as "Here they sell `Happy Meals' to finance the war." (Argentines already blame U.S. backing of the International Monetary Fund for their country's economic collapse).

McDonald's countered with a national newspaper campaign showing a Big Mac with the words "Made in Argentina" stamped in bold, black letters. The ad explained that McDonald's is a local company employing more than 10,000 Argentines.

local angle

P&G's German headquarters in Swalbach receives five or ten letters a day from consumers calling for a boycott of U.S. products. Each gets a personal reply. "We explain our products are mostly manufactured in Germany and that the boycott is dangerous for jobs," a P&G spokesman said. "However, we are afraid that this is only the beginning, and that the boycott may become much bigger the longer the war lasts."

Egyptian consumers are drawing up their own lists of brands to boycott. Reda Hassanein, a 40-year-old Cairo accountant, said she had decided to boycott Pizza Hut, KFC, Marlboro, Pepsi and Coke. "This boycott is necessary because Americans are killing our Iraqi brothers," she said. "We can give up these products and depend on our local ones." She said that Egyptians employed by U.S. companies "should look for other jobs."

So far, McDonald's is the most visible target, since the fast-food retailer has outlets that can be picketed or attacked. In the last two weeks, images flew around the world of protestors burning a Ronald McDonald figure in Ecuador and pointing a toy gun in his face in Indonesia, smashing McDonald's windows in France and attacking an outlet in Spain. In Korea, a gun-toting demonstrator who scaled the Golden Arches wore a George Bush mask. "We have 30,000 restaurants around the world and a handful of those have received demonstration attention," said a McDonald's spokesman. "Nothing serious has happened at our restaurants."

At lunchtime last week at Tahrir Square in Cairo, normally packed fast-food outlets were virtually deserted except for riot police standing guard. On March 26, only five people were eating at Pizza Hut and 11 at McDonald's.

In Indonesia, Ati Kisjanto, managing director of Publicis Groupe's Leo Burnett, Jakarta, said, "There's no real boycott from the consumer side, only from fundamentalist groups." Even so, she said clients such as P&G have stopped PR and below-the-line marketing for brands with strong U.S. connections, and are shifting media spending to secondary brands that are less obviously made by U.S. marketers.

disdain

David McCaughan, Hong Kong-based director-consumer learning at Interpublic Group of Cos., said he's concerned that Muslim communities-in Asia, the Middle East and Europe-are translating anti-American sentiment into widespread distrust and disdain for American companies.

"We're not seeing open protests yet," he said. "People are just talking about it in Indonesia and Malaysia, and even then, it's hard to get them to name specific brands. They don't want to see companies waving the [American] flag, but people aren't willing to give up Coke and McDonald's yet."

contributing: advertising age correspondents

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