Amid heated debate among economists, politicians and industrial analysts on the future of Iran’s manufacturing sector, experts have pointed to the failure of domestic companies to advertise their products effectively, leading to lower popularity of domestic brands compared to their foreign counterparts.
With the rise of a plentitude of tech start-ups, many of which offer high-quality services modeled in part on their international counterparts, the importance of branding has become more evident than ever for the young businesses. Other more established industrial companies also seem to be catching up in a bid to augment their chances of survival in a market which could soon be bracing for foreign competition.
Persian economic newspaper, Forsat-e-Emruz, recently published an article in which it shifted the blame from technological deficiencies to ineffective branding.
In a visit to Amin Hozur junction in the south of Tehran, known as the hub of household products in the capital, “foreign products are seen covering the doors and walls of the bazaar’s shops,” points out the article.
The word for foreign or foreigner in Persian, khareji, has specific cultural connotations and relates almost exclusively to products from the West, Japan and South Korea. In the words of Forsat-e Emruz: “There are many people who prefer a foreign product right away to the domestic equivalent without even considering other aspects of the product.”
Head of Tehran’s Association of Household Appliances Traders, Mohammad Tahanpour, believes foreign firms should not be prevented from selling in Iran. In fact, he argues that arriving at agreements with these firms to set up production lines in the country could lead to investments and transfer of advanced technologies.
Some foreign brands, such as LG, Bosch and Samsung are already common household items for Iranians and have over the years managed to take a larger share of the domestic market.
However, many home appliances are already produced in Iran and the trend has deepened in recent years. Since the western sanctions – imposed against Iran over its nuclear program – were tightened in 2012, imports of these goods have fallen while domestic production has gone up. Iran produces two million TV sets yearly, according to data provided by Forsat-e Emruz, adding that import of home appliances declined by up to 22% in the past Iranian year (ended March 20).
Iranian brands produce a wide range of household items, ranging from ovens and boilers to fridges and microwaves. However, Iranian companies are racing against time to transform cultural perceptions of their products, as sanctions might potentially be lifted in the coming months.
Tahanpour believes the Iranian companies should invest more on effective advertising for their brands and products. The expert hopes that better advertising can eventually change public perception of foreign brands offering superior products. He argues that Iranian companies should take four key factors into consideration when creating their advertisement strategies: promoting public acquaintance with the product, providing quality after-sale services, fair pricing and mass advertising.
