Rona may have been struggling in recent years but it remained a jewel and a source of pride for Québec Inc. This pride in being Québécois (and Canadian) ran deep. And Rona flaunted it to differentiate itself from U.S.-owned competitors.
In the days following the announcement that Lowe's was acquiring Rona, signs in and out of stores were still up touting Rona's Canadian pride.
We offer a wide selection of Canadian products.
Because we are proud of being a Canadian-owned company.
Shop at Rona and you'll be served by "The Canadian How To People".
I leave it to others (including Québec's opposition parties) to debate whether or not this is further evidence of a disturbing trend of Québec-based companies being sold to foreign interests. For marketers, this change in ownership raises questions from a branding and positioning standpoint. Lowe's has indicated that it intends to maintain the Rona name. As it loses its ability to stress its Canadian ownership and leverage this as a differentiator, will the Rona brand be weakened? Does it matter that a retailer is a proud Canadian?
Country-of-origin does matter, in some cases. Empirical studies conducted over several years suggest that when consumers are aware of certain country characteristics, they are more inclined to use country-of-origin as an external cue in evaluating product quality; think Swiss watches, German engineering, French wines, or Italian garments. However, most studies on the impact of country-of-origin on purchase decisions have been conducted on status and image-oriented products.
Do contractors and do-it-yourselfers care that a drill, a light fixture or roofing shingles are made in Canada? Some might. Studies on country-of-origin have demonstrated that it matters to consumers with ethnocentric belief systems. These consumers are more likely to select locally made products and likely rate their country's products more favourably than those made in foreign countries. In the food sector, many consumers view locally produced or grown products more favourably. For example, the designation Aliments du Québec has become an important brand cue in Québec’s grocery stores. While country-of-origin may matter to some consumers particularly for some product categories like apparel, many researchers believe that the biases are fading as globalization, outsourcing, alliances, technological advancements and other country-specific factors change the image and product quality of many countries.
If the perceived quality of Canadian products isn't a strong differentiator, could corporate ownership be? Again, it's unlikely. Take Canada Goose. The iconic Canadian brand was sold to U.S. private equity giant Bain Capital in 2013. It's doubtful that even those who are willing to pay close to a thousand dollars for an Expedition Parka care about the company's ownership. "We’re authentic and we’re real and we’re made in Canada.” declared Dani Reiss, the chief executive officer and grandson of the company’s founder to the Globe and Mail. He added “I think the market’s tough out there, but we’re committed to manufacturing in Canada.”
That's when corporate social responsibility intersects with branding as CSR becomes a bigger shaper of corporate identities. Lowe’s commitment to keep the Rona name in Québec and a head office in Boucherville, Que., and not to shed jobs in the province is now part of the brand. And it matters.
Walmart learned this the hard way twenty years ago when, citing financial reasons, it closed its store in Jonquière near Chicoutimi, Que. after it became the first Walmart in Canada to vote to become unionized. Quebeckers boycotted Walmart en masse. Reputation surveys by Léger Marketing at the time revealed that positive predispositions to Walmart among Québec shoppers had dropped from 71% in 2004 to just 11% after the store closure in 2005. Today Walmart has regained Quebeckers' respect. One of the main reason was the creation in 2006 of the "buy Québec" program that clearly identified products purchased but not necessarily manufactured in Québec. Walmart also prominently featured a Québec supplier of the month in its stores' entrance.
Perhaps as a way to signal to Rona that it intended to enter the Québec market in one way or another, Lowe's made it known last year that it was meeting with Québec suppliers to understand what products they could offer. Whatever the real intention was, it would suggest that Lowe's management understands the value of "buying in Québec". In fact, some of these suppliers might see their market expand given Lowe's North American footprint and the value of the Canadian dollar. Customers may also see lower prices. And employees may have a more stable employer.
Rona may no longer be a proud Canadian but it would be wise to keep acting like one.