EU NATION BRANDS

Written by: Paul Temporal  based at Said Business School, University of Oxford, prior to which he lived in Asia for over twenty years. He has written several best-selling books on branding including his latest on “Branding for the Public Sector”.

“Branding activities carried out by nations have been on the increase for the last two decades, although there is some debate as to whether the branding of an entire nation is actually possible given its complexity. What is very clear is that countries are trying to maximize the strong elements of their identity and image and improve more negative perceptions in order to be more competitive in the global marketplace. Several countries are undertaking some form of nation branding activities in the sense that they are not confining their activities to one industry or sector, but instead are addressing many sectors in an attempt to raise their profiles and build their images in a holistic way. Some are developed nations such as South Korea, Canada, Switzerland and Australia, and some are developing countries classified as NICs (Newly Industrialized Countries) such as South Africa, India, China, Turkey, Malaysia, Mexico and Brazil. In different ways, they are all trying to ensure that their national brands are stronger than their competitor brands.

Every country already has a brand in the form of an identity and image (or images) made up of various perceptions held by different people, organizations or other governments that know of or have had experience of it. It is the identity (what the country wants to be seen as) and the image (how it is actually seen) that governments try to influence through branding. For example, Singapore has not systematically created a country brand image but it does have one and possesses many images and associations held by various groups of people at home and abroad. It has many brand strengths such as efficiency, safety, reliability, confidence, good organization, forward looking government and more, but like other countries it has some more negative perceptions and is seen as a little unfriendly, strict and slightly arrogant. Removing the negatives and leveraging on the strengths is the focus for government policies and brand activities in Singapore and many nations.

Sometimes, a country’s image that arises from collective perceptions can be very favourable for its products based on heritage in terms of national characteristics or reputational skills; for example, Japan with consumer electronics, Germany with automotive engineering, and Switzerland with precision watchmaking. . “Made in Germany”, “Made in Japan” and “Made in Switzerland” bring to mind associations of high quality and innovative products. These positive images produce a powerful country-of-origin effect. Where brand images do not match desired brand identities then there will be perception gaps that need to be closed. For example, Canada has wanted to be seen as a high-tech player in Asia for some time, but the reality is that it is not perceived in this way, despite having many strong technology companies such as Bombardier. Research shows that its image is largely confined to education and holidays. Nations often have to work hard on perception management to improve brand image. China is in exactly that position now as it has an image challenge regarding product and service quality. Major changes can be accomplished, as Japan proved when it had a similar challenge in the 1960’s, but China wants, and needs, to move at a faster pace.

Many countries have undergone different types of branding exercises but the main objectives of these remain the same. The overarching goal of any nation branding exercise is to find and exploit areas of strategic competitive advantage that will lead to a powerful image and gains in terms of:

• Promotion of tourism and national culture.
• Attraction of investments and global capital.
• Increases in the exports of products and services.
• The retention and attraction of talent.

Countries are turning to branding techniques demonstrated so successfully by the private sector in order to differentiate themselves from competitor nations and manage their image to achieve these four broad goals. They have seen that, just as in the corporate world, image power leads to economic power, wealth, national confidence and success.

Traditionally, the tourism industry has been used by countries as a driver for country branding and country brand image, especially by emerging countries. In some respects, the reason for this is that it’s a relatively easy market to analyse, well researched and global in nature. Moreover, most countries have the basics there to satisfy the needs and wants of tourists, such as sea, sand, sun, shopping and culture. But it is very difficult to drive a whole country brand via one industry and in tourism it is now becoming very difficult to achieve clear differentiation. If we look at a selection of slogans from a variety of countries, we see, “Amazing Thailand,” “Incredible India,” “It’s more fun in the Philippines,” and “Wonderful Indonesia.” It is hard to make sense of these and very difficult to differentiate between them in terms of what they offer. One country that has differentiated itself quite well as a tourist destination is Malaysia, with its “Malaysia, Truly Asia” brand, established and managed consistently from the 1990’s to now. With its mix of races including Malays, Chinese and Indians, Malaysia opted for a positioning designed to attract those tourists who were looking to see and engage with Asian culture and global research revealed that there is a large-enough segment of people seeking a multi-cultural experience who would visit somewhere that could offer it to them. Importantly, this choice of brand positioning fits the political agenda of the government who see the country as multi-racial and multi-cultural. Branding cannot be really successful without the relevant political will and policies being in place.

Neither are successful tourism brands necessarily relevant to other national objectives and thought has to be given to areas of importance such as direct foreign investment, exports, talent and other areas of need and importance. Some countries are focusing one or more industries other than tourism in order to get wider brand involvement. Canada, for example, is focusing heavily on branding its food and agriculture industry, while Costa Rica and South Africa are both trying to enhance their brand strategies to gain more foreign direct investment and export business in addition to tourism. Tourism is a great economic contributor and brand builder for a country, but this and other sectors have to be brought together. Nation branding should be done in a holistic way to avoid mixed messaging and a multiplicity of logos, slogans and other brand communications.

The Nation Brand Effect (NBE) – Private and Public Sector Partnership

To achieve strong and sustainable brands nations need corporate brand ambassadors; companies with strong brands themselves who are operating in international markets. National and corporate brands need to work together and enhance the national brand and this can happen in two ways. If a nation has a strong brand and reputation for certain skills or abilities it will be easier for its industries and companies to move out into international markets and succeed.

This is one half of the NBE. However, the reverse situation can also be helpful, where industries and organizations from a country go out into markets and are successful, and this has a positive impact on the image of the nation. When these two situations are in play there is a virtuous circle. If either of the halves is in a negative situation then the result tends to be a negative image for all. For example, Germany is associated with precision engineering, and feeds off brands like Mercedes-Benz and BMW, just as the brands themselves do with the “Made in Germany” label. France is the home of chic and luxury with Chanel, Christian Dior, L’Oréal and many other famous brands. Brands such as these successfully move around the world and help improve a nation’s image, not to mention its “bottom line.” They are national brand ambassadors. This interaction of public and private sector brand images via the NBE is probably the most important source of a nation’s brand value, especially in developed economies. The challenge that emerging economies have to deal with is that they have not yet achieved this virtuous circle and tend not to have a strong national reputation or global corporate ambassadors.

The existence of a strong NBE is critical to a nation’s brand value and although some emerging countries are moving up, for most of them their progress is slow. As the valuation of commercial and nation brands becomes even more popular and meaningful, it is in emerging countries where I would expect to see most national branding activities occurring in the next few years.

Brand Management

It is worth emphasising that branding is not about creating logos, slogans, advertising and public relations – it is about developing competitive strategies and intentions that must not only be communicated but also delivered on.

At country level, this involves policies and public diplomacy as well as changes in behaviour across both public and private sectors. Inclusiveness is critical to success, and a failure to include all stakeholders in the national branding process will almost certainly lead to a sub-optimum outcome with intra brand competition, a duplication of resources, and probably some confused consumers.

It is imperative that country-wide brand management must not only be top-down driven but must also involve cross sector representation. It is tempting for governments to avoid this challenge as branding just one or two industries can help drive a country’s brand image and achieve certain national objectives. However, in the absence of a holistic strategy, special attention is often given to certain strategic industries where improvements can be made that will impact economically and help enhance a country’s image.

This need for inclusiveness creates many challenges for governments in gaining “buy-in” and commitment to brand strategies, policies and initiatives from all stakeholders, including national citizens. The size and complexity of the country branding process means that it takes time and there are no quick fixes. It is a long term process. It also means that there must be a firm structure to deal with all the issues that arise in the branding process – a structure that is designed both to give direction as regards brand priorities and the resource to manage the branding activities across private and public sectors.

As nation brands become more serious about creating value they also have to become more astute at managing this valuable property just as commercial brands do. For example, Switzerland views its national brand as so important it is set out in the Federal Act and Ordinance on the promotion of Switzerland’s image abroad, managed within the Federal Department of Foreign Affairs. And South Korea has a Presidential Council on Nation Branding, which includes 47 members from the public and private sectors to ensure inclusiveness and ‘buyin’ on the brand.

Brand management is critical to the growth and success of any brand, and emerging countries (some developed ones too) should put a structure in place to ensure that the implementation of the brand strategy is carried out in a consistent and relevant way as markets and national priorities change, and competition increases. Given the importance to economies of nations, their brands should be managed at a very high level. There is much to learn from the private sector and including corporate brands and other stakeholders in national brand management is advisable.

Ranking EU Nation Brands (2014) Source: BrandFinance

In parenthesis World Rank out of 100 countries

1. Germany (3)
2. United Kingdom (4)
3. France (7)
4. Italy (11)
5. Netherlands (15)
6. Sweden (17)
7. Spain (18)
8. Poland (20)
9. Austria (21)
10. Belgium (24)
11. Denmark (29)
12. Finland (31)
13. Ireland (38)
14. Czech Republic (41)
15. Romania (48)
16. Portugal (50)
17. Hungary (52)
18. Slovak Republic (57)
19. Greece (59)
20. Slovenia (60)
21. Luxembourg (61)
22. Bulgaria (65)
23. Lithuania (67)
24. Croatia (73)
25. Latvia (75)
26. Estonia (82)
27. Cyprus (87)