The Concept and Benefits of Nation Branding

By Thomas Cromwell & Savas Kyriacou

The concept of branding has been traditionally associated with corporations and their products and services, in either the consumer or the business-to-business markets. But today the concept is also being used for the shaping of a country's image. More often than not, this has been accidental, perhaps occurring as a bonus to a national tourism promotion campaign. But the fact remains that today we have realized the notion of a global village and competition among nations has reached a new level of sophistication.

Governments are tasked with the economic and political development of their countries. National development cannot be achieved in isolation of the international community, as markets and foreign policies compete in the international arena. The complex of these elements and a nation's political, economic, legal and cultural environment all contribute to a nation's identity and image.

In this sense, every nation is already a brand: it already exists in the minds of others as an entity with positive and negative attributes. Based on these perceptions, other nations and individuals will interact with it, either contributing to its development or hindering it.

This raises a question for any nation wishing to raise its profile in the world and increase the key factors in development: trade, investment and tourism. How do I manage my brand and compete at all levels more effectively? For most nations the issue is indeed brand management. For others, such as countries which have undergone a major political and economic transformation, the issue is re-branding.

DOES BRANDING MATTER?

Ivory Coast has some 40 percent of the world's cocoa and coffee bean market. It is the number one exporter of cocoa, and number three exporter of coffee. Colombia has less of a market share, but its coffee is traded at premium prices, while Ivory Coast's is regarded as a poor quality variety. It sells at low prices and is usually blended with other beans before going to market. Without a strong brand of its own Ivory Coast coffee is subject to market pressures and ultimately brings in less revenue and generates less investment and employment for Ivory Coast. Colombian coffee, on the other hand, has been sold under the now famous image of Juan Valdez with his mule since 1981. A 1995 survey found that 83 percent of Americans interviewed associated the logo with coffee, and 53 correctly identified it with Colombian coffee. Café de Colombia has over 40 percent of the American specialty coffee market.

In the aftermath of the Balkan conflicts of the 90s, war-torn Croatia was left with a very negative international image. The government decided that trying to rectify the situation head-on would directly play into the hands of its critics by making it an easy target to counter. The strategy chosen, still in effect today, was to promote the tourism sector aggressively. This paid off in a number of ways. First Croatia came to be seen as a country of lovely beaches and quaint towns: an ideal vacation spot. Second, based on this attractive image, investors and tourists brought much-needed revenue to the economy. In a short time, Croatia has managed to escape from its negative image and brand itself as an attractive place to visit and do business.

There are many other examples of both conscious and accidental branding in recent years, including Ireland's great success in developing as an IT center from scratch; Egypt's projecting an image as a moderate and democratic nation on the back of massive advertising spends on tourism, etc.

The point of these examples is that unlike countries such as the US, UK or France, which have developed their image and brand value through decades of political and economic development, against a background of rich cultural and tourist offerings, many countries now have to consider how to catch up and compete with these well-established brands. However, they also demonstrate that even without decades of image-building, it is possible for a country to shape its brand in a relatively short time if it has a clear strategy to do so and devotes the necessary resources to the task.

An excellent example of this is Spain, which under the anachronistic fascist rule of Franco was an impoverished European backwater. After the death of Franco in 1975, Spain stirred. Armed with an attractive, modernistic sun symbol designed by Joan Miro, it mounted an aggressive marketing campaign to reshape its image, offering 'Everything Under the Sun' to visitors. The 1992 Barcelona Olympics and Seville World's Fair helped propel it into the international spotlight, and today Spain is a major modern European player.

It would be hard to find someone who would argue that Spain's branding efforts were not the key to its modern transformation. Yes, it had a long and rich history and fabulous tourist destinations, but without 'collecting' them under a unifying and heavily promoted brand, the development of the tourism industry, and with it the nation as a whole, could not have been achieved.

HOW CAN BRANDING HELP A COUNTRY?

For some years now, it has been almost universally recognized that government promotion of tourism is a good idea that brings excellent results for the money invested. The tourism industry generates jobs as no other, and its development typically leads economy-wide advancement, in everything from infrastructure to education and related construction and service industries. To facilitate this development, governments set up tourism ministries or agencies and assign budgets for national tourism promotion.

However, tourism is only one of several areas that every nation needs to develop and only one of the sectors that can benefit from nation branding. After all, a country with fine beaches might not also be an easy or safe place to invest in if relevant legislation is not in place and the rule of law firmly established. And where does a nation fit into the world community of nations? How does it stack up in security, convenience of location and infrastructure, for example? How reliable a partner is it in international affairs?

How a country is perceived, both domestically and from abroad, from the quality of its goods and services, to the attractiveness of its culture and its tourism and investment opportunities, to its politics, economic policies and foreign policy, can be shaped under a brand. The branding process strengthens democracy and helps both internal development and successful integration into the world community, on all levels.

THE IMPORTANCE OF WASHINGTON

Corporations brand their products to reach targeted markets. For countries, the most important market to reach is Washington. In the current world order, as capital of the only superpower, Washington plays an outsize role in shaping international policies. Whether you like it or not, what Washington decides is very likely to affect every nation. There can be positives for a country, such as favored nation status and free trade agreements; or there can be negatives, such as decisions that damage a nation's political and economic well-being. How can branding help a nation achieve its objectives in Washington?

Traditionally, governments with the means have resorted to lobbying and public relations firms to represent their interests to the power elites in Washington. However, these means, while often effective, by their nature are limited. They can be expected to have far better results if carried out under a brand that positively differentiates a nation in the minds of decision-makers in Washington.

This is where a branding effort, which uses mass media and other tools to feed little-known information and positive images to decision-makers, can be very important. It is simply impossible to provide this sort of input on a one-to-one basis, or to small groups. Furthermore, with changes in administration in Washington, policies towards a country can change if they are based on individual relationships and friendships rather than widely-held perceptions across all levels of government.

Branding can greatly assist a nation achieve its domestic and international objectives with Washington, such as FTA agreements, in the following ways:

Diplomatically - A positive and clear image of a country in Washington can help generate FTA interest by the administration. It can speed up initial briefings and negotiations on how ready and able a country is to negotiate an agreement. Washington is a highly competitive city, and a positive brand can help propel a country to be considered earlier than others for preferential treatment.

Economically - A qualitative and quantitative benchmark of your country's economic abilities and competitiveness creates an image conducive to close business ties. This can facilitate trading concessions and incentives as well as greater flows of investment. These in turn stimulate the national economy, creating jobs and increasing wealth, with consequent increases in taxes.

THE IMPORTANCE OF A TRUTHFUL BRAND

As the world demands greater accountability from corporations, it also does so for governments. Terms such as transparency, accountability and good citizenship increasingly are applied to government institutions as well as private corporations. Many corporations have used sympathetic labels to burnish their images, and governments will have to do the same to protect and develop the good will of others.

A government's image internationally will affect its domestic economy and policies, and vice versa. By the same token, nation branding should be developed in the broadest possible context, helping shape national identity at home and abroad.

However, a brand must be truthful. That is, it must be based on reality. Any attempt to brand a nation untruthfully will backfire, as people and organizations discover the brand to be dishonest. This is no different than for any product or service. If customers find the claims of quality and reliability to be false, the brand will be discredited. For a nation, this can have far-reaching consequences.

WHO BEARS THE RESPONSIBILITY FOR NATION BRANDING?

By its very nature, country branding must be initiated and developed by national governments. The private sector can, of course, play a very important role in the process, but governments exist to serve the people of a nation as a whole, and branding must therefore remain a function of government. Failure to do so can mean significant losses to the nation.

For example, in the years after Athens won its bid to host the 2004 Olympic Games, the political, economic and international standing of Greece were at their highest levels in decades. As the whole country prepared for the 2004 Olympics, huge infrastructure projects were pushed ahead and Greece was clearly moving aggressively to close the economic gap with West European nations. Greece was accepted in the euro zone with the first group of EU members, and during its 2003 EU presidency 10 new members were formally accepted. At the same time, Greek companies were leading foreign investment in the Balkans and Greece managed to achieve historically good relations with long-time rival Turkey.

Most Greek government ministers and business leaders agreed that the conditions provided a rare opportunity for Greece to realize a new and much-enhanced international profile, and that Greece should capitalize on this by conducting a major campaign to develop and promote its image internationally. The result would be greater clout in world affairs, increased tourist arrivals and more trade and investment.

In short, it was a perfect opportunity to develop its international brand. But who should lead the effort? No person or government body was given the task and none of the existing government departments and ministries saw it as part of its mandate.

Did Greece lose out? Undoubtedly yes. It is always hard to quantify the impact of a national brand, but there is no evidence that Greece has benefited for the long term from its good fortune. Its international profile is no greater than previously, tourism has not increased and neither has trade and investment.

So far there has been little recognition of the need for country branding by governments, and it is rare to find organizations with specific budgets for this. For the moment, most countries rely on tourism promotion to build a positive image. Also many have set up organizations to promote trade and inbound investment. However, tourism, trade and foreign investment are only some of the areas that can benefit directly from a nation brand.

Sporadic efforts to develop a country's brand do little to help in the long run. As with any corporation, product or service, branding is a process that takes time and consistent marketing. For success, governments need to create and fund organizations specifically tasked with nation branding. Relevant activities need to be pursued in key locations around the world, and most importantly in Washington.

LONG-TERM BENEFITS OF SUCCESSFUL BRANDING

A successful branding effort delivers benefits that transcend any government or administration. In the same way that Coca Cola is sold through a successful global branding and marketing campaign, year after year, irrespective of who owns or runs the company in Atlanta, so too a good branding and marketing campaign for a country can reap benefits for it, irrespective of who is at the helm of its government. The long-term benefits are evident in improved international standing abroad and greater success and prosperity at home. And while the costs of nation branding and related promotion can be in the millions of dollars, the economic rewards can be measured in billions of dollars.

Savas Kyriacou and Thomas Cromwell are the principal partners of East West Communications.