Flying the flag gives brands a real advantage

British business is being used as a political tool in the general election battle. The Conservative manifesto promises to weed out those brands making false claims to be British, while the Labour Party promises to make it harder for foreign companies to complete hostile takeovers of British businesses.

These policies address valid concerns among the British public, according to new research from agency Leapfrog. The study shows three-quarters of Britons think about a brand’s nationality when they go shopping.

Just over a quarter of people (26%) say they actively support British business because they want to keep money in the country. And 23% worry that if a brand is sold to a foreign company, it will lose its British identity. Understanding a product’s provenance is also a reason for 22% of people to buy British. 

Older generations are worried about keeping jobs in the country and have a much stronger sense of British culture than younger consumers, says Leapfrog director Sarah Buckle. “They are more likely to think that they are doing their bit for their country by buying British,” she says.

The 55-plus age group are more concerned with supporting the country’s economy, with 32% saying they want to boost local jobs, compared with 29% of 16- to 34-year-olds.

When people are out shopping, they like to see British brands on supermarket shelves, says Buckle. “There’s a nostalgia element to these associations – people have grown up with these brands,” she explains.

The research suggests Premier Foods-owned brands such as Hovis, Bisto and Oxo are synonymous with Britain. The UK-owned brands have been known to shoppers for several generations and the fact that they are still based in this country makes them appealing to consumers who want to actively buy British brands.

Food and drinks brands are most likely to risk reputational damage if they sell up to foreign owners, warns the survey. Indeed, 31% think it would negatively affect a food and drinks business if it was no longer a British company.

Automotive and financial services brands also risk reputational damage if they fall into the hands of foreign owners, with 15% believing a motor company’s reputation would be damaged if it was sold to an overseas firm. And 13% believe the same when it comes to financial services companies.  

However, there is confusion about which brands are British and which are foreign-owned. Many brands that have overseas owners are believed to be British, according to the survey. Thirty-eight per cent believe that Hamley’s, which is part-owned by an Iceland bank, is wholly British owned. Buckle says that’s no surprise as the toy store is “synonymous with London”.

Land Rover, which is owned by Indian company Tata Group, is also believed to be a British brand by 39% of respondents. Brands like Land Rover, which is known by several generations, have built up an association with Britain over time. The fact that an overseas company now owns it doesn’t appear to have been noticed by a large segment of the population.   

Buckle suggests that even if businesses are foreign-owned, if they have British values they can use those to endear themselves to the UK public. “It’s key for marketers to understand the emotional response to Britishness. Making sure that resonates with consumers is really important,” she argues.

But Britishness means different things to different people, the survey shows, with 41% believing a company is not British if a foreign company has bought it. But 35% still consider a company to be British if its manufacturing remains in the UK, and 12% say they still consider a company to be British if the business operates out of the UK.

It isn’t just ownership that interests people. The study suggests consumers also respond well to marketing which reflects British culture, with 12% considering a company to be British if its advertising reflects the country’s heritage. 

Different demographics and genders have varying priorities. Women are more concerned than men about British values, while men and those aged 55 and over are concerned about what will happen to jobs if a company falls into foreign hands. And young people are less concerned with Britishness, but do consider “business ethics” to be important, says Buckle.

She adds that globalisation has resulted in a younger generation becoming used to exposure from foreign brands and this group doesn’t worry as much about corporate origins. They are more interested in how a business is run.

After all, consumers may aspire to buy products from British companies but the reality is that shopping baskets are filled with brands from a mixture of origins. No matter what the pull to home-owned brands, the cost of the items is still an issue, says Buckle. 

And there are even those that simply don’t care about provenance at all. A quarter of respondents say they don’t ever worry about whether products are British or not. And a few people say they actively buy foreign products because they think they are more exotic. Brands from overseas are more interesting, agree 4% of 16- to 34-year-olds. This compares to less than 1% of the 55-plus age group.

This research indicates that politicians may be right to focus on Britishness in the build-up to the election because consumers still buy brands such as Hovis and Bisto because of their British origins. And communicating such values will remain an important part of many brands’ identities. UK airline BMI recently decided to use its old moniker British Midland International abroad as this resonates better with customers than an acronym.

So while brands should try to remain as authentic as possible in their marketing, foreign-owned companies with UK heritage should not hesitate to use their roots. Although many people claim to be uneasy about Kraft’s takeover of Cadbury, if its British values are communicated carefully, much of the British public won’t even notice.