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Michelle Boockoff-Bajdek, MCM '03
Director of Marketing, Harte-Hanks
mbb@hartehanks.com

"Brands in Crisis: A Case Study of How Global Food and Beverage Companies Deal with Shifting American Sentiments in Arab Countries"

"I wasn't sure what I was going to do my ALP on," Michelle Boockoff-Bajdek recalls, "and then I saw a TV news show about Saudi Arabia and how the locals felt about America in the wake of the Israeli/Palestinian conflict." With an undergraduate degree in political science and as marketing professional, she became interested in researching the subject, focusing specifically on the fast food and beverage industries in an extremely traditional country.

Through secondary research and the Internet, Michelle found that there has been a tremendous amount of backlash, although Saudis were not critical of American people per se but of the American government and American products. A Gallup Poll study reported that only 16 percent of Saudis have a favorable view of American products and services. Multinational companies - McDonalds, Burger King, Starbucks, Coca Cola, Pepsiqwere all feeling the effects of the weakening political bond between the US and Saudi Arabia. According to a Business Week report, sales of U.S. exports were down 30 percent and according to The Economist, sales of QSRs (quick service restaurants) were down 50 percent.

Feeling the effects, multinational QSRs realized they had to adapt their business practices. Through ads, companies stressed that they were owned by Arabs, employed Arabs and used 100 percent Arab products (i.e., meat and vegetables), noting that boycotts hurt mostly local people. Companies donated a portion of sales to Palestinian relief funds and children?s organizations ("Buy a burger, help a Palestinian child."). Others complied with the custom of sex segregation, providing separate sections for men and women. Because Saudi culture prohibits the depiction of the human form, Starbucks altered its logo and removed the image of the mermaid.

Despite the efforts, regional products continued to gain an increasing foothold. Companies such as Zam Zam Soft Drinks, Mecca Cola, Halla Fried Chicken, Manfoods (in Egypt) entered the market as important new players. Michelle's research showed the growth of regional companies increasing by 31 percent.

After compiling the data, Michelle identified four key points she felt were crucial during times of strained political relations:

Determine the impact that a hostile and difficult regional environment can have on the business plan.
Know and respect the Saudi Arabian customer and adhere to local customs.
Consider licensing options and if possible, market under a different name.
Promote local equity; at least 25 percent of the staff and products should be Arab.

"This is not a boycott against or criticism of the American people," Michelle stressed. "It is more of a cry to the government, a statement of how the people feel. But it is an issue that affects Americans."