The intertwining of lives has never been more evident than that demonstrated by two recent independent events – the financial crisis and the Influenza A (H1N1) pandemic. The global financial landscape has changed ever since the sub-prime crisis in 2007. From its U.S. origins, the crisis has spread to all corners of the world. Almost two years later, the world is barely recovering from its blows.

The flu crisis is another example of how vulnerable countries are to developments in distant lands. After its outbreak in Mexico, the flu spread
to North and South America, Europe, and eventually to the Asia Pacific.

These crises may also have far reaching economic repercussions. How will the rest of the world view the countries where the crises originated? How will consumers in countries to which such crisis are exported react
to products and brands from countries which they are perceived to be caused by?

History has shown that when animosity is triggered by major political, military, social, or economic events, trade suffers. For example, the Korean ban on Japanese products was only completely lifted some 50 years after the end of World War II. More recently, anti-US sentiment from the Iraq war resulted in some Middle Eastern consumers switching from American to local brands. Conversely, sales of French wine in the U.S. fell after France failed to support U.S. Iraqi policies.

Our research found that the greater the perception a country has control over a crisis and its outcome, the more likely people will blame that country for triggering the crisis or for failing to curtail it. For instance, regional consumers adversely affected by the 1997 Asian economic crisis tended to blame the U.S. if they believed U.S. speculators attacked Asian currencies to undermine their economies and influenced the IMF to impose tough bail out conditions on their countries to forestall economic recovery. When such animosity adversely affects consumer liking for and judgments of products from countries they blame for the crisis, their willingness to buy products from the blamed countries is reduced. Consequently, trade suffers.

People are likely to take a similar stance in the current crises.

  First, they will consider whether the U.S. and Mexico were responsible for the financial and flu crises.
The financial crisis may be perceived to have been caused by greed and mismanagement among U.S. financial institutions and regulators, while the flu pandemic may be attributable to forces beyond the control of Mexican authorities.

  Second, people will determine whether the crises damaged their lives or quality of life.
Here, the financial crisis severely reduced asset values and significantly increased unemployment, while the flu crisis had a minimal health and safety impact outside Mexico, at least in its first wave.

  Third, people will consider the duration of the crisis.
The longer it is, the greater the animosity towards the blamed country. Here again, the financial crisis has lasted longer than the flu crisis.

  Fourth, were genuine efforts being made towards the resolution of the crisis?
Until recently, there appeared to be no cohesive and unified approach to resolve the financial crisis, while the flu crisis was more forcefully and immediately addressed. Based on these considerations, it would appear that people are likely to harbor greater animosity towards the U.S. than Mexico . Should such animosity decrease liking for and judgments of U.S. products, consumer willingness to buy U.S. brands will be reduced.

What should businesses do in response to animosity arising from such crises? Among other strategies, firms from countries blamed for the crisis could downplay associated “Made in” labels and brand names; emphasize other aspects of their brand image that may have more universal appeal; engage in marketing and manufacturing alliances to develop and offer hybrid products; employ public relations to improve country perceptions and address sources of international tension; localize their brands by using local names, production facilities, and raw materials; invest in the affected country possibly in conjunction with a local partner; use cause-related marketing and event sponsorship, possibly to raise money for those adversely affected by the crises; hire local talent and placing them in key management roles; foster closer partnerships with local distributors and dealers by providing them with financial and marketing assistance; and incorporate local subsidiaries to demonstrate a long-term commitment in the affected country.

How can local entities respond? Among other initiatives, they can promote “buy local” campaigns, such as when the Thai government urged its citizens to “Eat Thai, Use, Thai, Buy Thai, and Travel Thai” during the Asian economic crisis. More extreme action may involve local action groups organizing boycotts of products from the blamed country. Proactive local businesses may launch niche brands targeting consumers sympathetic to their cause and resentful towards the blamed nations. Qibla Cola, whose tagline is “Liberate your taste,” is among the brands introduced by Arab cola makers as alternatives to U.S. offerings. However, expansion beyond niche markets may require a broadened positioning, as well as depend on how successfully these brands market their alternative values and lifestyles globally.

Clearly, while crises are usually bad for business, they must bring out the best in business.