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COMMENT: Coca-Cola - a brand in the cross-fire

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CATALYST: A Malaysian consumer group has called for Muslims to boycott Coca-Cola.

Coke once wanted to teach the world to sing but some are starting to think the only song it knows is the star spangled banner. Coke's highly recognisable brand - normally its great strength - can be a lightening rod for anti-Western sentiment. While calls for a boycott in Malaysia are unlikely to damage Coke severely, such initiatives could create opportunities for the brand's local rivals.

A Malaysian consumer group has startled Coca-Cola by calling on restaurant owners to boycott its products. The Muslim Consumers Association normally concerns itself with ensuring adherence to Islamic dietary laws and the posting of prayer signs. However, it has widened its remit to try to protect Malaysia from what it describe as "a symbol of Western dominance over developing countries".

Coca-Cola is an obvious target for such an initiative; it is one of the world's most recognised brands, has developed a truly global presence and is clearly associated with western values. There can be no doubt that when opening up new markets, Coca-Cola plays on these strengths to win consumers.

The boycott is unlikely to have too great an effect. The Muslim Consumers Association previously tried to organize a boycott on western goods following the US and Britain's bombing of Iraq in 1998, with little success.

But, Coca-Cola says it would be wrong to think of the company as a US, or even western oriented brand. The company insists that it makes strenuous efforts to develop a local presence in each country or region it enters, hiring local bottlers, distributors and managers by preference.

Should the boycott take hold, it is not just Coke's market position that stands to be affected, but also the 1,700 Malaysians who work for the company.

More and more food, drink and foodservice companies in the region are learning to present themselves as a local, Islamic alternative to western products. Zam-zam Cola, for example, is a straightforward carbonated soft drink - but one named after a sacred spring in Mecca.

Copying western style products while giving them a distinctive Islamic positioning has worked well in other moderate Muslim nations such as Bahrain. Should the boycott succeed, consumers will be pushed towards more "acceptable" alternatives.

Related Research: Datamonitor, "Ethical consumers"


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