Mr. Hayek, famous founder of the Swatch group, mentioned in an interview this week how he turned around a troubled Swiss watch industry facing total collapse when the Japanese flooded the market with much cheaper electronic watches. Here's his story:

Wir haben drei identische einfache Uhren produziert und sie in Uhrenläden verteilen lassen. Auf eine schrieben wir »Swiss made« und verlangten 107 Dollar dafür, auf eine andere schrieben wir »Made in Japan« und verlangten 100 Dollar. Auf der dritten stand »Made in Hongkong«,sie kostete 93 Dollar. Das Ergebnis war: Über 60 Prozent der Kunden wollten die Schweizer Uhr. Damit wussten wir: Auch wenn wir sieben Dollar höhere Produktionskosten haben als die Japaner und 14 Dollar mehr aufwenden müssen als die Chinesen, können wir die Uhr immer noch verkaufen. Das Problem waren also nicht die Kosten, wie damals viele behaupteten. Das Problem war das unfähige Management.

The Made in Switzerland badge made a big difference - most customers bought the same watch at a 5-10% higher price, so the problem was poor management, not the market. We still see this badging strategy today used by Swiss and German companies.

Of course, you don't have to use the "Made in..." slogan so excessively: your company's headquarter location will in itself make the connection clear, and along with it any associated positive and negative attributes. These are what you need to be aware of when expanding outside your home market.

Well, now the key question: What about using Made in... messages for high-tech companies in B2B? Mr. Hayek would probably say immediately "yes", but I think that could also backfire. While I see certain product markets where e.g. Made in Switzerland is an advantage (e.g. in IT security, associating with Swiss values can be an advantage) in general I would not do it. Not only does it bring a flavour of nationalism, but it also conveys any negative attributes that may be less supportive. In the example of Switzerland, Swiss business is not only seen, for example, as reliable, trustworthy and high-quality but also as having high costs and a few others that I leave to you to think about. Bottom line is that what worked well for Swatch at the time is only in to be recommended in certain tech product markets in B2B. Of course, to really find out how perceptions of your own national characteristics will affect your market, you can always do a trial like Swatch did...