Excerpt
Table of Contents
Abstract
Table of Contents
List of Figures
List of Tables
List of Appendices
Acronyms
1. Introduction
1.1. Problem Statement
1.2. Objectives
1.2.1. General Objective
1.2.2. Specific Objectives
1.3. Scope and Limitations
1.4. Justification
1.5. Structure
2. Main Concepts of Branding and Nation Branding
2.1. Main Concepts of Branding
2.1.1. Definition of Brand and Branding
2.1.2. Brand Positioning
2.1.3. Brand Equity
2.1.4. Benefits of a Brand
2.2. Main Concepts of Nation Branding
2.2.1. Definition of Nation Branding
2.2.2. Creation of Nation Images
2.2.2.1. National Identity and Nation Brand Identity
2.2.2.2. Nation Images
2.2.3. Nation Brand Positioning
2.2.4. Nation Brand Equity
2.2.4.1. Internal Assets
2.2.4.2. External Assets
2.2.5. Measurement of Nation Brands and Images
2.2.5.1. Main Indices and Rankings
2.2.5.1.1. Anholt-GfK Roper Nation Brands IndexSM
2.2.5.1.2. FutureBrand Country Brand Index
2.2.5.1.3. Comparison of the NBI and CBI
2.2.5.2. Alternative Indices and Rankings
2.2.6. Benefits of Nation Branding
3. Nation Branding Strategy Development
3.1. Principles of Nation Branding Strategies
3.2. Start-up, Organization and Research
3.2.1. Start-up and Organization
3.2.1.1. Formation of an Organization
3.2.1.2. Inclusion of the Key Stakeholders
3.2.1.3. Financing of the Nation Branding
3.2.2. Research Stage
3.2.2.1. Internal, External and Competitor Analysis
3.2.2.2. Interpretation of the Research Results
3.3. Formation of the Brand Identity
3.3.1. Five Key Factors for the Development
3.3.2. Examples of Chosen Brand Identity Elements
3.3.3. Choice of a Slogan and Logo
3.4. Implementation Plan
3.4.1. Use of Marketing Communication Tools
3.4.2. Nation Branding through the “Six Natural Channels”
3.4.2.1. Tourism
3.4.2.2. Brands
3.4.2.3. Policy
3.4.2.4. Investment
3.4.2.5. Culture
3.4.2.6. People
3.4.3. Implementation and Control
3.5. Concept Critics and Difficulties
3.5.1. Appropriateness of the Term “Brand”
3.5.2. Difficulties in Controlling
3.5.3. Robustness of Nation Images
4. Analysis: Nation Branding in Latin America
4.1. Nation Branding in Latin America
4.1.1. General Information about the Region
4.1.2. Nation Branding Practices
4.1.2.1. Current Nation Branding Campaigns
4.1.2.2. Performance of Latin American Nation Brands
4.1.2.3. Nation Branding Potential for Brazil, Chile and Colombia
4.2. Country Examples of Nation Branding Practices in Latin America
4.2.1. Brazil
4.2.1.1. Country Background Information
4.2.1.2. Brazil’s Nation Image
4.2.1.3. Prior Nation Branding Campaigns Plano Aquarela 2005-
4.2.1.3.1. Advertisements
4.2.1.3.2. Events and Further Activities
4.2.1.4. New Nation Branding Campaign Plano Aquarela 2010-
4.2.1.4.1. Advertisements
4.2.1.4.2. Events and Further Activities
4.2.1.5. Effectiveness of Brazil’s Nation Branding Activities
4.2.2. Chile
4.2.2.1. Country Background Information
4.2.2.2. Chile’s Nation Image
4.2.2.3. Prior Nation Branding Campaign “Chile, All Ways Surprising”
4.2.2.4. New Nation Branding Campaign “Chile is good for you”
4.2.2.4.1. Key Messages
4.2.2.4.2. Advertisements
4.2.2.4.3. Events and Further Activities
4.2.2.4.4. Diaspora Activation and Nation Brand Ambassadors
4.2.2.5. Effectiveness of Chile’s Nation Branding Activities
4.2.3. Colombia
4.2.3.1. Country Background Information
4.2.3.2. Colombia’s Nation Image
4.2.3.3. Prior Nation Branding Campaign “Colombia is Passion!”
4.2.3.3.1. Advertisements, Events and Further Activities
4.2.3.3.2. Campaign “Colombia, the risk is wanting to stay”
4.2.3.4. New Nation Branding Campaign “The Answer is Colombia”
4.2.3.5. Effectiveness of Colombia’s Nation Branding Activities
5. Discussion
5.1. Scope of Nation Branding Activities
5.2. Inclusion of Elements in Nation Branding Strategies
5.3. Overall Comparison of Nation Branding Activities
6. Conclusion and Recommendations
6.1. Conclusion and General Recommendations
6.2. Recommendations for Further Research
Reference List
Appendices
Abstract
In the globalized world of today a well-elaborated, long-term oriented nation branding strategy which includes the government, the public and the private sector as well as the nation´s citizens themselves can help nations to improve and to better control their nation image. Nation branding activities increase the countries´ competitiveness in the global marketplace and help to foster the tourism arrivals, inward foreign direct investment flows and exports as well as they help to attract talented workforce and students.
Despite its growing importance, most Latin American countries still have not engaged enough in the area of nation branding and mostly only focus their activities on the tourism promotion. The region´s countries have a good image regarding soft factors such as their people and tourism attractions but have a weak image regarding their products, services and investment opportunities. Brazil has a relatively good nation image in many dimensions but still has not developed an extensive nation branding strategy. Chile and Colombia are among the Latin American countries which have started to conduct more complete and advanced nation branding activities. Although such advances can be observed, there is still a lot of improvement potential in the nation branding practices of Latin American countries.
List of Figures
Figure 1 - Aaker's brand equity model
Figure 2 - Hexagon for creation of a nation image
Figure 3 - Model of Asset-Based Nation Brand Equity
Figure 4 - Nation Brand Hexagon
Figure 5 - Strategic plan for the creation and maintenance of nation brands
Figure 6 - Nation brand competitor analysis matrix
Figure 7 - Logo from German´s campaign “Germany – Land of Ideas”
Figure 8 - Logo from South Africa´s campaign “South Africa – Inspiring new ways”
Figure 9 - "Plano Aquarela"´s logo
Figure 10 - Advertisement example for the Brazilian sun and the beaches
Figure 11 - Advertisement example for Brazil's diverse tourism offer
Figure 12 - Advertisement example for the campaign “Brazil is calling you. Celebrate life here.”
Figure 13 - Advertisement example for the campaign “The World meets in Brazil. Come to celebrate life.”
Figure 14 - “Chile, All Ways Surprising” logo
Figure 15 - Published print advertisements from “Chile is good for you”
Figure 16 - “Colombia is Passion!” logo
Figure 17 - “Colombia is Passion!” on a package of Margarita potato chips
Figure 18 - Print advertisement for “Colombia, the risk is wanting to stay” in Ecuador
Figure 19 - “The answer is Colombia” logo
List of Tables
Table 1 - Anholt-GfK Roper Nation Brands IndexSM and FutureBrand Country Brand Index overall brand ranking for the “Top 10” nations
Table 2 - Current nation branding campaigns in Latin American countries
Table 3 - CBI for Latin American Countries from 2010 to 2012
Table 4 - Promoted sectors in Brazil´s, Chile´s and Colombia´s nation branding activities
Table 5 – Included elements in Brazil´s, Chile´s and Colombia´s nation branding activities
List of Appendices
Appendix 1 - CBI 2012 Full List of Countries
Acronyms
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1. Introduction
Due to the rapid advance of globalization, the world is becoming an interdependent marketplace. This trend does not only increase the competition between companies, but also the global competition between nations. Every country must compete with each other for its share of the worldwide tourists, foreign direct investors, consumer preference for their export products, talented workforce and students (Dinnie, 2008; Fan, 2006; Kaneva, 2011). Since in this crowded and competitive global marketplace, the majority of people, foreign investors and organizations neither try nor take enough time to learn what other countries and nations are like, they do not build informed and balanced views about them. Therefore, most countries and even entire regions are stereotyped and their images are not always reflecting the whole reality of the country: France is about fashion and design, Brazil is associated with beaches, carnival and happy people, Paraguay is just a small neighboring country of Brazil, Germany stands for good engineering and cold humorless people, and most Latin American countries are about poverty, violence and beautiful landscapes (Aldunante, 2011; Anholt, 2007; Anholt, 2010; Favre, 2008; FutureBrand Consultancy, 2012; Kotler & Gertner, 2002; Pipoli 2009 a; Pipoli, 2009 b). Nation images are considered to be very powerful and important drivers in consumer purchase decisions, investment decisions and the country´s attractiveness for tourists as well as talented workforces and students. For this reason, positive nation images result in a significant competitive advantage (Anholt, 2010; Dinnie, 2008; Moilanen & Rainisto, 2009).
The practice of the so called nation branding is increasing in frequency and importance thanks to the observation that many branding techniques for products and services can be applied to nations. Similar to companies, nations develop brands which help them to be more competitive in the global marketplace. Nevertheless, to improve and to better control nation images is only possible by developing a long-term oriented nation branding strategy which ensures the coordination between the government, the public, and the private sector as well as the country´s population (De Chernatony, 2008; Dinnie, 2008; Kaneva, 2011).
Especially Latin American countries are considered to have a great potential in the practice of nation branding. The region´s countries are highly stereotyped and suffer from generic and negative images in many dimensions, even though they have a lot to offer to tourists, consumers, investors, and talented work force and students (Anholt qtd. in Oppenheimer, 2008; Anholt qtd. in George, 2010; FutureBrand Consultancy, 2012; Pipoli, 2009 a). In this paper, the author makes a diagnosis of nation branding activities in the region, and analyzes in detail the cases of Brazil, Chile and Colombia.
1.1. Problem Statement
Latin American countries have many natural resources, some good export products, significant economic growth rates, an increased political and economic stability and many tourism attractions (Economist Intelligence Unit, 2012 a; OECD, 2013 a; Ruggles-Brise, 2012). Nation branding could help the Latin American countries to make use of these assets and be more competitive in the global marketplace. Despite the huge potential and the increasing importance of nation branding, until the date the practice of nation branding has only limitedly been adopted by most of the region´s countries. While nation branding aims to improve the overall image of a nation and to increase the tourism arrivals and exports, to attract FDI, talented workforce and students, the majority of the Latin American countries are focusing their nation branding activities solely on the tourism sector. Moreover, when analyzing the region´s nation images, the countries generally have a good image on the soft factors such as their people and tourist attractions but have a weak image on hard factors such as their products, services and investment opportunities (Anholt qtd. in Oppenheimer, 2008; Anholt qtd. in George, 2010; FutureBrand Consultancy, 2012). In order to enable the achievement of the countries´ whole potential in their nation images and to be more competitive in the mentioned sectors, the Latin American countries need to develop better-coordinated nation branding strategies.
1.2. Objectives
1.2.1. General Objective
On the basis of an extensive literature review, the general objective of this paper is to develop a diagnosis of the nation branding activities Latin American countries have conducted in the last years by taking Brazil, Chile and Colombia as examples.
1.2.2. Specific Objectives
The specific objectives of this paper are the following:
- To define what a nation brand and nation branding are
- To give an overview of how nation images are built and how they can be measured
- To give an overview of how a nation branding strategy should be developed and what elements it should include
- To find out which Latin American countries are active in nation branding and which sectors these initiatives embrace
- To find out what general nation images the Latin American region has
- To give an overview of the most important aspects of the economic and political situation of Brazil, Chile and Colombia in order to improve the understanding of their current nation images and areas for improvement
- To analyze what nation images Brazil, Chile and Colombia have and how they perform in the nation brand indices
- To analyze what nation branding activities Brazil, Chile and Colombia have conducted from 2005 to 2010
- To make a comparison between the nation branding activities of the three countries by evaluating to what extent they have implemented the recommended steps and elements of a nation branding strategy
- To make a short personal evaluation and recommendation for further improvement of the Latin American nation branding activities based on the prior findings.
1.3. Scope and Limitations
This document gives the reader an overview of the concept of nation branding. It moreover explains how a nation branding strategy should be developed and what elements it should contain. Based on this information on nation branding strategies, the thesis describes which current activities Latin American countries are implementing and analyzes in detail the nation branding practices of Brazil, Chile and Colombia from 2005 until the date. The nation branding practices of the Caribbean countries are not included in this description. The practices of other countries such as France and Germany are included as references and examples but are not further analyzed.
Expert opinions on the effectiveness of nation branding practices in general and from different countries are mentioned. Nevertheless, no detailed evaluation of the effectiveness of nation branding strategies is conducted. Such an evaluation is nearly impossible due to the lack of available metrics to make a causal link between the nation branding activities, the nation image improvement and the country´s success in the different areas. Nation images are furthermore driven by many uncontrollable factors whose extent of influence cannot be measured. Since nation images are subject to many different factors and stakeholders, the measurement of nation images is highly complex and requires the conducting of various different studies as well as extensive research over a longer period of time. Such a research would go beyond the scope of this thesis and therefore it will only make use of secondary sources such as expert opinions and nation brand indices.
Due to the newness of nation branding, this paper will shed light on the topic. Nevertheless, the novelty of the topic also leads to a limitation of this paper because it has to rely on the little theory available on the field of nation branding.
1.4. Justification
The realization of nation branding activities is relatively new but it is growing in frequency and importance because of the increased global competition nations nowadays face for the attraction of tourists, inward investment and the sales of export products (Anholt, 2010; Dinnie, 2008; Fan, 2010; Moilanen & Rainisto, 2009). In recent reports such as the Country Brand Index 2012 from the FutureBrand Consultancy, Latin America is identified to be the world´s region which has the greatest potential in the area of nation branding. Brazil, Chile and Colombia are even mentioned among the 15 countries which are considered to have the worldwide greatest potential in nation branding and will be some of the leading nation brands in the near future. Moreover, the analysis of these three countries is interesting because each has a different starting point in nation branding (Anholt qtd. in Oppenheimer, 2008; Anholt qtd. in George, 2010; FutureBrand Consultancy, 2012). Besides the increasing importance of nation branding activities and the identified great potential in the region, Latin America´s economic and political importance has also constantly increased during the last years (Economist Intelligence Unit, 2012 a; OECD, 2013 a). For these reasons a diagnosis of the region´s nation branding activities appears to be highly interesting. Furthermore, until the date nearly no theoretical or empirical engagements on Latin America´s nation branding practice exist.
Therefore, the findings of this research paper will be of a particular interest for the academic field as well as for the organizations being responsible for the nation branding practices of the respective Latin American countries. The thesis may additionally contribute to the development of a deeper understanding of the necessity of more structured nation branding practices in Latin America.
1.5. Structure
The main concepts of brand and branding are introduced in the second chapter. This chapter further gives general definitions about nation brands and nation branding as well as the creation and measurement of nation images.
The third chapter presents the three strategy phases with its main steps which have to be implemented in a nation branding strategy. The chapter also informs about the most important factors and elements which have to be taken into consideration in order to make nation branding activities more effective. The chapter ends by mentioning the most common critics and difficulties in the nation branding practice.
Chapter four analyzes how the mentioned elements and phases of a nation branding strategy have been conducted in the Latin American countries. The chapter starts by giving an overview of general information on the region and current nation branding practices of all countries. It additionally informs about the nation images Latin American countries have. Since a great potential in nation branding is seen in Brazil, Chile and Colombia, the nation branding practices in these three countries are analyzed in more detail. After giving some background information about each country, the nation images and current nation branding activities are analyzed.
The subsequent discussion in chapter five compares the nation branding activities being conducted in Brazil, Chile and Colombia. The comparison is based on the analysis of promoted sectors and the inclusion of important elements in the nation branding activities mentioned in chapter three. This chapter also makes statements on how the nation branding practices of the three countries and in Latin America in general could be further improved.
Finally, chapter six draws general conclusions on the analysis and the concept of nation branding and gives general recommendations. Moreover, this final chapter gives recommendations for further research on the concept of nation branding in general and more specifically on Latin American countries.
2. Main Concepts of Branding and Nation Branding
2.1. Main Concepts of Branding
2.1.1. Definition of Brand and Branding
The American Marketing Association defines a brand as a "name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers" (American Marketing Association, 2012, Resource Library, Dictionary, B, para. 106). Essentially, a brand is the seller´s promise to deliver the buyer a unique and specific set of characteristics, benefits and services consistently (Kapferer, 2012). Furthermore, a brand is defined as an impression of a product or service in the client´s minds embracing all tangible and intangible elements (Moilanen & Rainisto, 2009). Strong brands also help to distinguish one product or service from others satisfying the same needs (Kotler & Keller, 2012).
Brands are very complex constructs which can communicate up to six levels of meanings:
1.) Attributes: brands bring to mind specific attributes. Mercedes for example suggests good quality, expensive, durable, high prestige vehicles
2.) Benefits: the attributes are translated into functional and emotional benefits. “Durable” as one of Mercedes´ attributes could be translated into the functional benefit that the buyer does not have to buy another car for a long time
3.) Values: a brand says something about the values of the producer. Mercedes for example stands for high performance, security and prestige
4.) Culture: a brand may also represent a specific culture. Mercedes for example represents the German culture of good organization and efficiency
5.) Personality: the brand can project certain personality which could for example be a person or animal fitting well to the product´s attributes. In the case of Mercedes it could be a lion king
6.) User: the brand suggests the type of buyer or consumer of the product via for example the models in the advertisements (Kotler, 2002).
Anholt (2007) describes branding as “the process of designing, planning, and communicating the name and identity” (p. 4) of a brand with the objective of building up or managing its reputation. Companies and organizations invest a lot of financial resources in this process in order to create a brand or to change the actual perception of a brand by for example removing stereotypes or false judgments (Anholt, 2007; Kotler & Keller, 2012). Nevertheless, it is important to distinguish between the brand identity and the brand image. A brand identity is assembled by the brand´s owner and is the way how he wants the consumers to experience the brand (Harvard Business Review, 2000). The brand identity normally does not coincide with the consumer perceptions of a brand, the so called brand image (Kotler & Keller, 2012; Moilanen & Rainisto, 2009).
Consumers create their own images of brands in their minds every time they observe something related to the brand. These “brand contacts” (Schultz, 2009, p. 225) can come from various sources: planned messages, product messages, service messages and unplanned messages. Only the planned messages are intended by the brand owners and can be planned and controlled by them. Planned messages include chosen factors of the brand identity which are communicated via the application of marketing techniques as for example advertising, merchandising materials, press releases and events. The product messages include all messages sent by the products´ features or physical characteristics as for example the design and pricing. Service messages originate from all contacts in the service processes such as service representatives, secretaries or delivery staff. Whereas the mentioned three sources can be at least partly planned and controlled by the brand owner, other messages are unplanned. Unplanned messages include for example brand or company related news stories, word of mouth or comments made by competitors.
All these messages serve as little pieces of information from which the customers develop their own opinion of a brand like a “jigsaw puzzle” (Moilanen & Rainisto, 2009, p. 174). As every customer has a different and unique set of brand contacts, the brand images in the customer´s minds can vary a lot from one to another (Moilanen & Rainisto, 2009). Another concept related closely to brand image is the brand positioning.
2.1.2. Brand Positioning
Kotler and Keller (2012) define brand positioning as the “act of designing a company´s offering and image to occupy a distinctive place in the minds of the target market” (p. 298). The key task of brand positioning can be seen in the establishment of relevant and distinctive “points of difference” in the customer´s minds (Kotler & Keller, 2012, p. 298). Points of difference are the attributes and benefits consumers generally associate with a brand, evaluate as positive, and which they believe not to find in the same extent in a competing brand. The company´s positioning decision is considered as a “crucial strategic decision for a company or a brand” (Harrison-Walker, 2011, p. 1) because it influences not only consumer´s perceptions and choices but also strategic marketing decisions. A company´s positioning strategy should ensure that all elements of the marketing strategy are consistent and supportive. The result of successful brand positioning is the creation of a “customer-focused value proposition” (Kotler & Keller, 2012, p. 298) that is to say the reason why customers should buy products and services from that specific brand (Harrison-Walker, 2011; Kotler & Keller, 2012).
The value of a brand, the so called brand equity, largely depends on how successful a brand´s positioning strategy results. Innis Maggiore, a leading advertising agency in brand positioning, even states that “without positioning, brand value isn´t sustainable because the position itself is where a brand´s (…) value lies” (Innis Maggiore, n.d., para. 2).
2.1.3. Brand Equity
Although the basic branding principles stay the same, there exist many different models of brand equity. One of the most cited and established models is from David A. Aaker (Bamert, 2005), a marketing professor and brand consultant (Aaker, 2004). Even though this model was developed for branded products, according to Moilanen and Rainisto (2009) it can be applied to places. In their opinion it “focuses on the most central strategic issues in marketing planning” (p. 12) which is also valid for the marketing of places.
According to Aaker´s model, the brand equity represents “a set of brand assets and liabilities linked to a brand, its name and symbol that add to or subtract from the value provided by a product or service to a firm and/or that firm´s customers” (Aaker, 1991, p. 15). This model includes five main categories that have a significant influence on the value of the brand:
Figure 1 - Aaker's brand equity model
illustration not visible in this excerpt
Source: Own elaboration based on Aaker, 1991, pp. 47 - 56
The brand loyalty refers to the extent of faithfulness and commitment consumers have to specific brands. Consumers with a high loyalty to a particular brand evaluate that this brand “satisfies their needs to a greater extent than others do” (Hoyer & MacInnis, 2008, p. 258) and therefore decide to repeatedly purchase products or services from the brand rather than from competing brands. The extent of the loyalty is usually measured through the consumer purchase patterns. Consumers, who show a certain proportion of purchases such as buying at least seven out of ten times the same brand within a product class, are also considered to have a high loyalty to this brand (Hoyer & MacInnis, 2008; Kotler & Keller, 2012). In Aaker´s brand equity model the brand loyalty is described as the most or one of the most important dimensions since it protects the company or organization against actions of the competitors. Furthermore, a high loyalty implies that more clients are retained. The maintenance of clients is easier and less expensive than gaining new ones (Arnold, 2006). In addition to that, loyal customers are usually willing to pay a higher price (Kotler & Keller, 2012).
The awareness of the brand name and the brand symbol as the second influencing category is decisive in the comparison with similar products. Familiarity is perceived positively and makes the customers to include products or services from the brand into their purchase decision (Bamert, 2005).
The brand image, also named “perceived quality” contains the subjective customer´s perception of the quality of a product or service when related to alternatives (Aaker, 1991).
The value of a brand as well depends a lot on the brand associations, that is to say everything that customers link directly or indirectly to a brand. Brand associations can be a sustainable asset for companies and organizations, since it is very difficult to “dislodge a brand that has achieved a dominant awareness level” (McLoughlin & Aaker, 2010, p. 177).
The dimension “other proprietary brand assets” includes all legal and institutional advantages a brand has in comparison to other brands such as patents or also sales channels (Aaker, 1991). These rights and registrations help the expansion and protection of the brand (Moilanen & Rainisto, 2009).
So, according to Aaker´s model, the higher the brand awareness and brand loyalty, the wider the property rights, the more positive the brand image and brand associations, the more valuable is the brand. It is important to mention that these five dimensions cannot be seen independently, because there are many links between them. A strong and positive brand image and a high brand awareness and loyalty entail various benefits for the brand owner.
2.1.4. Benefits of a Brand
One of the benefits generated by a strong brand is that the brand´s points of difference help consumers to identify products or services more easily and facilitate their decision making (Kapferer, 2012). Moreover, brands reduce the perceived risk of choice for consumers since they identify the brands with certain levels of standardized performance and quality. Another advantage of having a strong brand is the emotional dimension because customers who have had positive experiences with certain brands tend to be loyal and build a strong relationship of familiarity and intimacy to these brands (Temporal & Lee, 2003; Kapferer, 2012).
This brand loyalty helps to create entry barriers for other companies and makes the demand more predictable and secure. Customers are also often willing to pay a higher price for a good brand. Due to all these benefits a strong brand offers, brands are very valuable assets and can help to “secure a competitive advantage” (Kotler, 2012, p. 26).
Brands are not only beneficial for companies and its products but can additionally bring a lot of benefits for nations. Branding nations is a relatively new concept with growing importance (Fan, 2008 a). In the globalized world of today, nations are increasingly competing with each other for the attraction of tourists, investors, talents and the sales of their exports. In order to succeed in the mentioned areas, a good nation image is becoming essential. Therefore, more and more nations try to improve their image by applying nation branding activities (Anholt, 2010; De Chernatony, 2008; Dinnie, 2008; Fan, 2006; FutureBrand Consultancy, 2012; Harrison-Walker, 2011).
2.2. Main Concepts of Nation Branding
2.2.1. Definition of Nation Branding
The term “nation branding” was coined by Simon Anholt in 1996 (GfK Custom Research North America, n.d.) as a result of the observation that “the reputations of countries are rather like the brand images of companies and products, and equally important” (Anholt, 2007, p. xi). The concept of nation branding is also often mentioned under the term “country branding”. The terms “country brand” and “nation brand” as well as “country branding” and “nation branding” are used interchangeably and all describe the same concept (Fan, 2008a; GfK Custom Research North America, n.d.; Moilanen & Rainisto, 2009; Outhavong, 2007). Even though used synonymously, the words country and nation have different meanings. Country refers to an area of land with borders which is “occupied by a nation” (Fan, 2008a, p. 2) whereas a nation is generally defined as a “group of people who are connected to each other through common aspects such as culture, ethnicity, and ideology” (Outhavong, 2007, p. 16). A nation also includes the concept of physical boundaries (Outhavong, 2007). Nevertheless, for the description of the concept, the terms nation brand and nation branding are the more frequently used and are also considered to be more appropriate (Hanna & Rowley, 2008). This is especially the case when taking into account the creation process of a nation image which is built upon elements of the national identity and its scope (Dinnie, 2008; Fan, 2008a; Outhavong, 2007). Besides that, some countries consist of more than one nation as for example the United Kingdom. The United Kingdom consists of four different nations: England, Ireland, Scotland and Wales which all have different national identities and are therefore mostly branded independently (Watson, 2011; Dinnie, 2008).
Despite being an “emerging area of interest” (Fan, 2008 a, p. 2), nation branding is a comparatively new subject for academic research (Fan, 2006) and most information relies on case studies rather than a conceptual and theoretical approach (Fan, 2008 a; Outhavong, 2007). A large contribution to the topic has been made by Simon Anholt who is considered as the leading expert on nation branding. He has published about ten books and many articles on this topic. As an independent branding advisor he advised more than 40 governments on nation branding including Afghanistan, Australia, Bhutan, Croatia, Denmark, Ecuador, Germany, Norway, Saudi Arabia, Scotland, Singapore, South Africa and Turkey (Burkeman, 2006; Dinnie, 2008; GfK Custom Research North America, 2012; Scottish Government Analytical Services, 2009; Simon Anholt, n.d. a). Keith Dinnie is seen as another leading expert on the area of nation branding. He is the author of the first academic text book on nation branding: “Nation Branding – Concepts, Issues, Practice” which was published in 2008. As the founder of Brand Horizons, a consultancy firm specialized on place branding, he advised many governments and cities (American Marketing Association, n.d.; Brand Horizons, n.d.). Although some books and articles were published on nation branding, there is no consensus about its scope and meaning (Dinnie, 2008; Fan, 2008b; Fan, 2010). According to Fan (2008a) and Outhavong (2007) most approaches still show the concept too narrowly. Kotler, Haider and Rein (1993) and others view nation branding as a form of place marketing. The concept of place branding or place marketing encompasses the marketing of cities, regions and countries, so that nation branding is to be seen as a sub-concept (Moilanen & Rainisto, 2009).
The same authors (Kotler, Haider and Rein, 1993) also state nation branding is simply another term used for the country-of-origin effect or a tourism issue. The country-of-origin effect and product-country image (Fan, 2006) as well as destination branding (Moilanen & Rainisto, 2009) and public diplomacy (Fan, 2008 b) can be considered as related concepts and the main sources of nation branding but it is necessary to make a distinction between these (Fan, 2006). The country-of-origin effect and product-country image refer to the impacts the products´ country of origin and the country´s image have on the consumer´s evaluation or vice versa (Kotler, Haider, & Rein, 1993) and may only show one side of the nation. On the other hand, in the case of nation branding, the branding applies to the overall nation image. Nation brands are generally defined as “the total sum of all mental associations about a nation” people tend to have (Fan, 2008 a, p. 5), as the “unique, multi-dimensional blend of elements that provide a nation with culturally grounded differentiation and relevance” (Dinnie, 2008, p. 149) or as a perceived image and picture of a nation. Nation branding is defined as the “process by which a nation images can be created, monitored, evaluated and proactively managed in order to improve or enhance the country´s reputation among a target international audience” (Fan, 2006, p. 6).
Nation branding also goes beyond the objectives of traditional tourism marketing or destination branding and includes a wider range of objectives (Dinnie, 2008). In addition to the attraction of tourists, the other two main objectives are the stimulation of inward investment and the increase of exports (Dinnie, 2008; Fan, 2006; Harrison-Walker, 2011). The talent attraction of higher education students and skilled workers can be seen as a further objective. To increase currency stability, restore international credibility and the confidence of investors, increase international political influence, to reverse international ratings downgrades and to stimulate stronger international partnerships are suggested as additional objectives by the Temporal Brand Consulting (qtd. in Dinnie, 2008). Moreover, strengthening citizens´ identity and increasing their self-esteem are also mentioned as nation branding objectives (Moilanen & Rainisto, 2009).
Considering the complexity of a nation as well as the wide range of stakeholders and objectives of nation branding, it is controversial if the term “brand” is appropriate for the management of a nation´s reputation (Dinnie, 2008; Anholt, 2010; Moilanen & Rainisto, 2009). Usually brands are associated with products and corporations, but in the opinion of many marketing experts, the fundamental branding techniques, as explained before, are applicable to the branding of nations (Dinnie, 2008; Moilanen & Rainisto, 2009; Olins. 2002). Fan (2010) believes that each nation for certain is an international brand because each “has a unique name and images in the mind of people” (p. 2). From Anholt´s perspective (2010) “brand” and “branding” also serve as a “perfect metaphor” and “useful comparison” (p. 1). He considers that in both contexts, product and company brands as well as nation brands, images can have great impacts and consequences on the performance of the prevailing company or nation (Anholt, 2007). According to Leslie de Chernatony (2008), professor of brand marketing, the “concept of brand remains invariant” when applied to nations since a nation brand as well as a product brand is just “a cluster of values (…) to make promise about a unique and welcomed experience” (p. 16). Nonetheless, nations are much more complex than corporations or products and therefore the brand creation and branding process are different (Dinnie, 2008; Moilanen & Rainisto, 2009; Olins, 2002). Moreover, because of the complexity of a nation brand and the difficulty of branding of nations, the incorporation and combination of elements from various academic disciplines such as politics, communications and cultural studies are necessary (Fan, 2008b; Hermann, 2010). The implications and restrictions of considering nations as “brands” will be discussed in more detail under point five of chapter three of this thesis: “Concept Difficulties and Critics”.
As reported by Dinnie (2008) and Anholt (2007), in order to understand the process of nation branding it is necessary to explain the relationship between national identity and the nation image. These concepts can be transferred from the branding theory to the context of nation branding (Dinnie, 2008).
2.2.2. Creation of Nation Images
2.2.2.1. National Identity and Nation Brand Identity
According to Fan (2010), national identity and a nation brand identity are related concepts, but have to be distinguished. The national identity plays one of the key roles in nation branding and is the basis for the development of a nation branding campaign (Anholt, 2010; Dinnie, 2008). The national identity embraces all the characteristics of a nation which its citizens perceive to be the most important, distinctive and permanent taking into account the past and future (Fan, 2010) and constitutes the nation´s uniqueness. According to Dinnie (2008), the key aspects of the national identity are “an historic homeland, common myths, historical memories and a common, mass public culture” (p. 113). Moreover, the essence of the national identity derives from companies and brands of the country, its landscape as well as from its culture in the “widest sense” such as literature, language, music, sport and architecture (Dinnie, 2008). Fan (2008 a), also describes national identity as a “psychological bond that binds fellow nationals together” (p. 3).
A nation brand identity, on the other hand, terms the identity of the nation brand and is built upon a “limited range of all the constituent parts of national identity” (Dinnie, 2008, p. 46; Moilanen & Rainisto, 2009). The nation brand identity should be constructed on the elements which are the most useful and important for the objectives of the nation branding campaign, because national identities are too complex and some information may not be relevant to external audiences (Dinnie, 2008; Moilanen & Rainisto, 2009). The national identity and the nation brand identity have direct impacts on the nation image which itself can be defined as the perceived picture of a nation by foreigners.
2.2.2.2. Nation Images
Even though a nation does not plan and implement any nation branding activities, nations always have an image (Anholt, 2007; Fan, 2006; Papadopoulos & Helsop, 2002). As stated by Papadopoulos and Helsop (2002), nation images are multifaceted, originate from various different sources and can include factual as well as affective information. Moreover, a nation image may also be mainly positive or negative, strong or weak, rich and complex or simple (Anholt, 2007; Papadopoulos & Helsop, 2002). A nation is considered to have a strong image if it has the same associations to many people whereas a nation with little or widely different associations has a weak image. Strong images are not necessarily positive since for example North Korea and Afghanistan mean the same things to a lot of people but the associations are rather negative (Anholt, 2007).
A nation image can be created through many different ways which include first-hand such as personal experiences through working in or travelling to a country. Furthermore, second-hand experiences such as word-of-mouth, the use or ownership of a product made in that country, the behavior of people associated with the country, mentions of the country in films and other media, acts of war and charity, sporting and cultural events, the history and music determine the images people hold of different nations (Anholt, 2010; Dinnie, 2008; Fan, 2006).
Kotler and Gertner (2002) claim that most nation images are built upon stereotypes which are usually of a negative nature. Widler (2007) defines stereotypes as “outdated simplifications, as generalizations based on impressions instead of facts” (p. 5). In many cases the stereotypes are “essentially wrong and unfair” (Widler, 2007, p. 5) and additionally difficult to change (Kotler & Gertner, 2002).
According to Anholt´s theory (Anholt, 2007), the nation image is created through the cumulative effect of communication via “six natural channels” (Anholt, 2007, p. 25), the so called hexagon. It is the most cited model of how a nation image is created (Dinnie, 2008).
Figure 2 - Hexagon for creation of a nation image
illustration not visible in this excerpt
Source: Own elaboration based on Anholt, 2007, p. 26
1.) Tourism: this dimension includes a country´s tourism promotion and people´s first-hand experience from visiting the country as tourists or business travelers. Tourism is one of the most important contributors in nation branding because usually the biggest budgets are allocated in the tourist boards
2.) Brands: the country´s export brands have the role of “powerful ambassadors” (Anholt, 2007, p. 25) of the country´s image abroad. This is only the case if the country of origin is explicit, because only this way it can affect the people´s feelings about the country. Strong ambassadors are brands like Mercedes from Germany or Sony from Japan because their provenance is strongly branded
3.) Policy: the country´s government foreign and domestic policy decisions which affect other countries or are reported in international media also influence the nation image
4.) Investment: this dimension is especially important for business audiences. They observe how the country tries to attract inward investment, foreign work force and students and the expansion of foreign companies within the country
5.) Culture: cultural exchanges, activities and exports such as national sports teams, famous musicians, poets, authors or film-makers play a role in building the nation image. So called “cultural products” (Anholt, 2007, p. 25), such as “Crocodile Dundee”, can also influence the image of a nation
6.) People: this dimension does not only include famous people as for example media and sports stars or politicians from the country. The behavior of the general population is also very important (Anholt, 2007).
According to Dinnie (2008), the nation image usually does not reflect the reality, that is to say what the nation really is. This “identity-image gap” (Dinnie, 2008, p. 112) can result as very negative if the nation is not appreciated by the external audience due to ignorance and negative stereotypes. Consequently, one of the main tasks of nation branding is to reduce and if possible close this gap. The nation image can also be influenced by the way a nation positions its brand.
2.2.3. Nation Brand Positioning
Such as for companies, the brand positioning for countries is one of the key tasks of branding in order to differentiate the nation´s offering and value proposition from that of competing nation brands. Effective nation brand positioning needs to have both, distinctive and relevant points of difference. Moreover, these points of difference need to be believable and trustworthy and not being “fabricated” of a “false promise” (Dinnie, 2008, p. 18). Gilmore (2002) states that four essential factors should be considered in order to develop a competitive nation brand positioning: general macro-trends, the nation´s target audiences, nation brand competitors and the nation´s core competencies.
Nevertheless, positioning nation brands as highly distinctive can result in a big challenge or drawback. By making a strong and also compelling appeal to particular consumer segments, the brand will have to “sacrifice” the alienation from other consumer segments ( Bauer, Bloching, Howaldt & Mitchell, 2006; Harrison-Walker, 2011). Dinnie (2008) claims it as “much more daunting” (p. 52) for nation brands than for product brands to consider the alienation of potential consumer segments or audiences. In contrast to product brands, nation brands have significant influence on all areas of the nation´s economy. It is very difficult how to position the nation in a way it will not be perceived for example as solely a tourist destination but also an attractive location for investment, a source of high-quality products (Dinnie, 2008). As a result nations often try “to be all things to all people” (Harrison-Walker, 2011, p. 7) and select “bland, inoffensive positioning platforms” (Dinnie, 2008, p. 52). With these undifferentiated positioning none of the nation´s stakeholders will be offended but due to the meaningless no consumer segment is inspired either. Anholt (2010) states that many nation brands do not offer anything particular to the consumers and that in many cases the “sum of the message (…) is really nothing more than ´we think our country is wonderful´” (p. 87). Furthermore, Anholt (2010) considers that many nations do not establish any relevant or believable points of difference, thus customer-focused value propositions for their brands and therefore their branding efforts do not show any effects. When developing and implementing the nation branding strategy, it is also important to ensure that all strategy elements are consistent and supportive to the nation´s brand positioning.
Quelch and Jocz (2005) mention Costa Rica as an example of a successful clear and positive nation brand positioning platform. By committing to democracy and rejecting a standing army, the country positioned itself successfully as a peaceful country and an ecotourism destination. Another example given by Quelch and Jocz (2005) is Singapore which positions itself as the best point of entry to Asia for Western companies. Singapore reached this positioning by having an outstanding rule of law, good working institutions and English-speaking workforce which makes doing business safe and easy (Quelch & Jocz 2005). The overall success of a nation brand´s positioning determines its brand equity to a great extent (Dinnie, 2008; Đorđević, 2008; Harrison-Walker, 2011).
2.2.4. Nation Brand Equity
As already mentioned before, most of the existing branding techniques such as the concept of brand equity can be applied to the context of nations (Dinnie, 2008; Đorđević, 2008). Dinnie (2008) defines nation brand equity (NBEQ) as the “tangible and intangible, internal and external assets (or liabilities) of the nation” (p. 67). A positive and strong nation brand can represent an asset whereas in other cases when the nation brand is weak and or mostly negative it is rather a liability (Farooqi, 2009).
Built upon the identified sources of the NBEQ, Dinnie (2008) developed an asset-based model which includes the internal and external assets of a nation brand. A strategic management of these internal and external assets is necessary in order to “deliver maximum benefits to the nation” (Dinnie, 2008, p. 71). The internal assets are either innate or nurtured whereas the external assets are divided into vicarious assets and disseminated assets.
Figure 3 - Model of Asset-Based Nation Brand Equity
illustration not visible in this excerpt
Source: Dinnie, 2008, p. 68
2.2.4.1. Internal Assets
Innate assets are defined as unique and “enduring elements of national identity” (Dinnie, 2008, p. 68) which play an important role in the differentiation of a nation´s brand. The innate assets include the nation´s iconography, landscape and culture. These three components are authentic manifestations which are not artificialized by marketers and “represent a truly unique and authentic face of national identity” (Dinnie, 2008, p. 69). The iconography embraces symbols, visual images and further representational elements which are associated with a nation such as national flags. Also individuals such as Nelson Mandela for South Africa, places as for example the Acropolis for Greece and products such as whiskey for Scotland can be icons because they are symbolically representative for the nations (Dinnie, 2008). As stated by Álvarez and Siles (2008), a great landscape can also bring uniqueness and value to countries. This applies especially for countries which are economically poor but have a great landscape such as Bolivia. Culture is to be seen as one of the key elements of the NBEQ because it “offers an infinitely rich source for nations attempting to fashion their nation-brand” according to Dinnie (2008, p. 69). At the same time the nation should promote its traditional culture while presenting itself as a modern economy (Dinnie, 2008).
On the other hand, nurtured assets derive from the contemporary efforts of people in the nation in order to ensure a good environment for the development of the nation brand equity. These assets include internal buy-in, support for the arts and loyalty levels. To secure the “internal buy-in to the nation-brand” (Dinnie, 2008, p. 70), the people´s commitment to the nation brand, is an often overlooked issue in nation brand equity. This buy-in must come from domestic stakeholders, the public as well as the private sector. Otherwise, if the domestic stakeholders do not “live the brand” (Dinnie, 2008, p. 70), it would lead to a dissonance when for example tourists and foreign investors recognize that there exists a gap between reality and the projected image. The second key nurtured asset, support for the arts, can either come from the state or sponsorship by private companies and is aimed to promote the nation´s cultural life. Loyalty, as another important source for the nation´s brand equity, refers to the loyalty level among the nation´s “customers” such as the “country´s own citizens, trading partners, foreign consumers of the nation´s goods and services, international organizations, political allies, tourists and inward investors” (Dinnie, 2008, p. 70 f.).
2.2.4.2. External Assets
The vicarious assets refer to those that are experienced second-hand. These assets embrace nation image perceptions as well as external portrayal in popular culture. Nation image perceptions can be a powerful asset when they are strongly positive or can also constitute a severe liability when they are rather negative. In case the nation image perceptions do not reflect reality, it is important to implement a nation branding strategy so that negative or out-of-date perceptions do not affect the overall nation brand equity negatively (Anholt, 2010). Moreover, a nation image that is very positive in only one dimension can also be problematic because this “limits the nation´s potential scope of activity” (Dinnie, 2008, p. 71). Nonetheless, a nation exerts relatively little control over the nation image perceptions and the external portrayal of a nation in popular culture. In popular culture such as films and books positive and negative stereotypes may be repeated endlessly and the only thing a nation can do is try to manage the effects and consequences of such phenomena (Anholt, 2010; Dinnie, 2008).
Disseminated assets are defined as “tangible projections of the nation brand existing beyond the nation´s homeland and throughout the wider world” (Dinnie, 2008, p. 71) and include brand ambassadors, the diaspora as well as branded exports. Brand ambassadors are persons who represent the brand in one or two functions: by either sparking people´s interest in the brand or maintaining people´s loyalty once experienced the brand (Healey, 2008). The nation brand ambassadors should reflect the nation´s personality and positive attributes the nation wants to project. Moreover, they should have a good knowledge of the nation and be able to effectively communicate the brand values to the targeted audiences. Nations tend to employ ambassadors in a more discrete manner, so that “few people outside the diplomatic circles will know much, if anything, about them” Dinnie, 2008, p. 228). Internationally known individuals such as the Peruvian composer and music producer Jean Pierre Magnet Vargas Prada for Peru[1] can be assigned as nation brand ambassadors (Agro Enfoque, 2011; Comisión de Promoción del Perú para la Exportación y el Turismo, 2011). However, many individuals such as the famous soccer player Ronaldo Luís Nazário de Lima for Brazil are nation brand ambassadors without being officially appointed to this role. Even individual citizens in foreign countries represent their home nation by the way they behave (Dinnie, 2008). The second type of disseminated assets is the diaspora a nation possesses. A diaspora is defined as the dispersion or spread of people from their original homeland (Leautier, 2006) and could also be seen as a “pre-existing network of potential nation-brand ambassadors awaiting activation” (Dinnie, 2008, p. 72). According to Leautier (2006), an international policy expertise, managerial and marketing knowledge are important resources of diaspora networks since people within “can be crucial bridges between state-of-the-art in policy, technological, and managerial expertise and local conditions in their homeland” (p. 3). A financial benefit of diaspora networks is provided through individual remittances and the provision of foreign direct investment. Branded exports are also a valuable disseminated asset since branded exports may help establishing and improving the nation´s reputation abroad. Therefore, it is important that the “nation´s export promotion agency is adequately resourced” (Dinnie, 2008, p. 73).
All these assets mentioned contribute to the nation brand equity. Even though brand equity and brand images in general and in particular in the case of nations are difficult to measure (Denman, 2012; Dinnie, 2008), there exist some nation brand indices, which measure the image and reputation of a selected number of nations. The best-known and most cited or also described as the “most high profile existing measures which assess a country brand” (Fetscherin, 2010, p. 3) are the Anholt-GfK Roper Nation Brands IndexSM and the FutureBrand Country Brand Index (Fetscherin, 2010).
2.2.5. Measurement of Nation Brands and Images
2.2.5.1. Main Indices and Rankings
2.2.5.1.1. Anholt-GfK Roper Nation Brands IndexSM
In 2005 Anholt founded the Nation Brands Index (NBI), one of the “first and best-known indexes” (Moilanen & Rainisto, 2009, p. 161) in order to measure the image and reputation of several nations (Anholt, n.d.; Dinnie, 2008). Since its foundation in 2005, the index was modified and extended its scope several times. From 2005 until 2008, the index “Anholt-GMI Nation Brand Index” was carried out in a partnership with the Global Market Insite Inc. (GMI) (Anholt, n.d.). In 2008 S. Anholt started a partnership with GfK Roper Public Affairs & Corporate Communications, a division of GfK Custom Research North America[2] (GfK Custom Research North America, n.d.). The index was renamed into “Anholt-GfK Roper Nation Brands IndexSM” and increased the number of countries which are measured from 35 to now 50 countries. Each year approximately 20,000 persons with the minimum age of 18 are interviewed online in 20 “core panel countries”[3], including both developed and developing countries. GfK Custom Research North America defines these “core panel countries” as major countries that “play important and diverse roles in international relations, trade, and the flow of business, cultural and tourism activities” (GfK Custom Research North America, n.d., para. 2).
The Anholt-GfK Roper Nation Brands IndexSM measures the “power and quality of each country´s brand image” (GfK Custom Research North America, n.d., para. 2) through the combination of six dimensions: exports, governance, culture and heritage, people, tourism and investment and immigration.
Figure 4 - Nation Brand Hexagon
illustration not visible in this excerpt
Source: GfK Custom Research North America, n.d., para. 6
Anholt and GfK Roper Public Affairs & Corporate Communications define the dimensions as followed (GfK Custom Research North America, n.d.):
1.) Exports: determines the public's image of products and services from each country and the extent to which consumers proactively seek or avoid products from each country-of-origin
2.) Governance: measures public opinion regarding the level of national government competency and fairness and describes the individuals' beliefs about each country's government, as well as its perceived commitment to global issues such as democracy, justice, poverty and the environment
3.) Culture and heritage: reveals global perceptions of each nation's heritage and appreciation for its contemporary culture, including film, music, art, sport and literature
4.) People: measures the population's reputation for competence, education, openness and friendliness and other qualities, as well as perceived levels of potential hostility and discrimination
5.) Tourism: captures the level of interest in visiting a country and the draw of natural and man-made tourist attractions
6.) Investment and immigration: “determines the power to attract people to live, work or study in each country and reveals how people perceive a country's economic and social situation” (GfK Custom Research North America, n.d., para. 2).
These six dimensions are adapted to the survey´s context from Anholt´s theory of the Hexagon for the creation of a national image (Anholt, 2007).
The overall NBI score is calculated as an unweighted average from the six indices or dimensions explained above. For the evaluation of the dimensions, three to five questions are designed for each. Answer ranges are between one and seven with seven being the highest appeal (Anholt, 2009).
In addition to the overall scores and scores for the six sub-indices, the respondents of the survey of 2012 also indicated, what they most admire about a country. The top five of the attributes mentioned are: “democratic, open, and treats its citizens fairly”, “good quality of life and work/life balance”, “respects nature and keeps a clean environment”, “safe and orderly society with well-behaved people” as well as “people are warm and friendly” (GfK Custom Research North America, 2012, para. 3). Especially the environmental awareness can be seen as a relatively new concern on a global level and is increasing annually (Dinnie, 2008).
GfK Custom Research North America advertises its index as a “powerful tool” and “cost-effective and comprehensive system for measuring and managing national reputation around the world” (GfK Custom Research North America, n.d., para. 2). The NBI is widely used by countries in order to assess and monitor their competitive position and to identify strengths and weaknesses. Based upon this assessment they can take strategic actions in the areas where it is seen necessary (Dinnie, 2008; Fetscherin, 2010).
Even though these benefits of the NBI are obvious, the index´s scope is criticized as too limited since it only includes 50 countries which perceptions are measured in only 20 different countries (Hermann, 2010; Fetscherin, 2010). Besides this point of criticism, the index is considered as too subjective due to the fact that the results rely only on “subjective perception survey data” (Fetscherin, 2010, p. 3 (Council on Foreign Relations, 2007). Moreover, since the scope, content, structure and the number of countries included vary annually, year-to-year comparisons are difficult to make (Hermann, 2010).
In addition to the NBI, the “Country Brand Index” (CBI) developed by the FutureBrand consultancy[4] can be seen as the second most important and most relevant index in order to assess a nation brand (Fetscherin, 2010).
2.2.5.1.2. FutureBrand Country Brand Index
Since 2005 FutureBrand assesses more than 110 nation brands on an annual basis[5] (FutureBrand Consultancy, 2011 a). For this, FutureBrand developed its own methodology, which in contrast to the NBI is based on many different sources. The quantitative part of this methodological procedure includes an information collection from 3,600 “opinion-formers and frequent international business or leisure travelers” (FutureBrand Consultancy, 2012, p. 5) from 18 countries. Applying the “FutureBrand´s proprietary Hierarchical Decision Model” (HDM), FutureBrand determines the respondents´ perception of a nation brand “from a baseline of awareness all the way up to brand advocacy” (FutureBrand Consultancy, 2012, p. 5). Moreover, according to FutureBrand, their HDM also enables the measurement of the relative performance and year-to-year progress of the countries.
The following seven areas are taken into consideration in the CBI:
1.) Awareness: measures if the key audience knows of the country´s existence and how top-of-mind it is
2.) Familiarity: measures how well the knowledge of the country and its offerings is
3.) Associations: refers to the associations people have with the country
4.) Preference: measures the audience´s esteem for the country and if it resonates
5.) Consideration: assesses if the country is taken into consideration for a visit, how likely people would think of an investment in that country and how likely they would acquire or consume products originating from there
6.) Decision/visitation: measures to what extent people follow through and visit the country and to which extent the establishment of a commercial relationship takes place
7.) Advocacy: states if visitors of the country recommend it to their friends, family and colleagues (FutureBrand Consultancy, 2012).
Apart from the mentioned quantitative sources and in contradistinction to the NBI, FutureBrand also conducts “deep dive” interviews with global experts in “policy and governance, international relations, economics and trade, international law, national security, energy and climate change, urban and regional planning, immigration and media” (FutureBrand Consultancy, 2012, p. 5). These experts are for example professors of international universities, ambassadors or directors of international institutions such as the Center for Strategic and International Studies (CSIS) in Washington, United States of America (USA) (FutureBrand Consultancy, 2012; FutureBrand Consultancy, 2011 a). As reported by FutureBrand (2012), these interviews allow the identification of the “broader themes and future drivers” (p. 5) which could have impact on the future country brands (FutureBrand Consultancy, 2012).
Based on the associations of the interviewees, FutureBrand publishes sub-rankings of the nation images in five different dimensions: “Value System”, “Quality of Life”, “Good For Business”, “Heritage and Culture” and tourism. The country´s value system is measured by the factors political freedom, environmental friendliness, a stable legal environment, the level of tolerance and the freedom of speech. “Quality of Life” is composed by the quality of the country´s education system, the healthcare system, the standard of living, the safety level, job opportunities and the attractiveness of living in the respective country. “Good for Business” is measured by the general investment climate in the country, the advance of technology, characteristics of the legal environment and how skilled the country´s workforce is. The nation image in “Heritage and Culture” is composed by the national history, the offer of art and culture, the authenticity and the perception of the country´s natural beauty. Tourism as the fifth dimension is measured by the value for money relation, the offer of tourism attractions, resort and lodging options and the country´s food offer (FutureBrand Consultancy, 2011 a; FutureBrand Consultancy, 2012).
In addition to the annual ranking of the overall nation brands, FutureBrand also provides an annual “Region Report”[6] which gives short information on the performance of the brands from different regions in the world and some countries within that region which are developing particularly well. Furthermore, FutureBrand´s annual reports include a part called “Tomorrow´s Leading Country Brands: The Future 15”, a ranking of the 15 countries which have the highest potential to improve their brands exceptionally (FutureBrand Consultancy, 2012).
Due to the inclusion of interviews with global experts and in general using a different methodology, the results of the CBI differ from the ones obtained in the NBI.
2.2.5.1.3. Comparison of the NBI and CBI
The following table shows the NBI score of the 2012 survey and the CBI score of the survey from 2013 for the ten best ranked countries. The rankings for NBI of 2011 and the CBI of 2011 are each shown in parentheses after the country name.
Table 1 - Anholt-GfK Roper Nation Brands IndexSM and FutureBrand Country Brand Index overall brand ranking for the “Top 10” nations
illustration not visible in this excerpt
Source: Own elaboration based on GfK Custom Research North America, 2012, p. 1; FutureBrand Consultancy, 2012, p. 4
Analyzing the indices it is noticeable that the rankings differ significantly from each other. The USA for example is ranked first in the NBI and only on rank eight in the CBI. Nevertheless, seven of the Top Ten countries of the NBI are also positioned in the first ten ranks in the CBI. The other three countries, the United Kingdom, France and Italy, are also mentioned in the Top 15 of the CBI.[7] These differences are obvious since the NBI and CBI build their rankings based on different methodologies.
Comparing the results it is also remarkable that the countries with the best brands are developed countries with a high gross domestic product. The best ranked countries tend to be democratic Western countries which are stable and liberal, tend to be politically neutral, have a “strong international presence in the media” and are often home to “several well-known branded products” (Anholt, 2007, p. 45). On the contrary, the countries ranked at the bottom are developing countries with low gross domestic products (Anholt, 2007).
Analyzing the rank changes of the countries, the ranking in the NBI is relatively stable from 2011 to 2012 and also when comparing the rankings from 2005 until 2012 (Anholt, 2010). The CBI shows more changes over the years but there are only few remarkable changes. Some of these remarkable changes are the improving nation images of Chile and Estonia. According to the CBIs, Chile´s image shifted 25 ranks from 59 in 2009 to 34 in 2012. This improvement is mainly explained by the country´s stable economic and political situation, its nation branding activities in the last years and an increased international awareness since 2010. In 2010 Chile was the center of international media attention because of the massive earthquake in February[8] and the successful rescue of 33 trapped miners in October[9] (Anholt qtd. in George, 2010; FutureBrand Consultancy 2010; FutureBrand Consultancy 2011 a; FutureBrand Consultancy 2012; Illiano & Wade, 2010; Santos, Byrnes & Lane, 2010). According to the CBIs, Estonia´s image increased from rank 90 in 2009 to rank 56 in 2012. The FutureBrand Consultancy (2010; 2011; 2012) explains the significant image improvement with the country´s growing economy and adoption of the Euro as the national currency in 2011. Furthermore, Dinnie (2008) claims that Estonia´s image improved thanks to its nation branding efforts of the last years. Examples of nations which experienced a remarkable negative change in their image are Syria and Venezuela. Due to an increasingly unstable political and economic situation according to the annual CBIs both nations decreased more than 20 ranks from 2009 to 2012 (FutureBrand Consultancy, 2010; FutureBrand Consultancy, 2011 a; FutureBrand Consultancy, 2012). The otherwise relatively stable nation images in both indices approve the observation that the nation brands are robust and that nation images are a “remarkably stable phenomenon” as Anholt states (2010, p. 6).
Thomas Cromwell, the founder and president of East West Communications, a nation branding consultancy (East West Communications, n.d.), considers that the methodologies for Nation Brand Rankings as for example the NBI and the CBI are “too weak” (para. 5) and other additional metrics should be considered when assessing a nation brand.
2.2.5.2. Alternative Indices and Rankings
Alternative metrics for the assessment of a nation brand could be for example the volume of foreign direct investments, tourism arrivals and trade levels of a country (East West Communications, n.d.). Fetscherin (2010) adds the level of immigration and the government environment as further indicators. The latter includes the government´s “exercise of political rights, rule of rights, rule of law, public trust, free flow of information, and level of corruption” (Fetscherin, 2010, p. 7). Despite applying a different methodology, the ranking suggested by Fetscherin (2010) shows a similar result as the NBI and CBI. Additionally, research on the relation of for example the NBI ranking and the foreign investment flows shows a clear correlation. The better a country ranks in the NBI, the more foreign investment it receives (Kalamova & Konrad, 2010).
In addition to the mentioned nation or country brand indices, which measure the overall nation brand and reputation, there exist various other indicators and rankings for countries. Albeit not being “designed with nation branding in mind” (Dinnie, 2008, p. 230) and only measuring a limited number of dimensions of the country, they can also be of great importance for the country to know its position and reputation in different areas. Furthermore, the countries´ performance in such indices and rankings can have an important impact upon the overall countries´ nation brand image and may encourage the countries to improve the areas where they obtained poor scores (Dinnie, 2008). The results of these assessments of different areas of a country such as its competitiveness or its business regulations probably also affect for example investor´s decisions on the countries. The methodology approach (for example more quantitative or qualitative research), the scope, the impact on for example media and public opinion differ along these indices and rankings.
A worth mentioning assessment of the competitiveness and economic development of a country is the annual “Global Competitiveness Report CGR” by the World Economic Forum providing a measurement of the “drivers of economic performance of more than 140 economies” (World Economic Forum, n.d. a). The World Economic Forum also publishes country ranking reports for another area: tourism. The tourist´s appeal of 139 countries is assessed through the “Travel and Tourism Competitive Index TTCI” (World Economic Forum, n.d. b). A further widely known and cited ranking is the World Bank Group´s “Doing Business Report” which evaluates the business regulations in 185 countries on an annual basis (World Bank, n.d. a). The “Index of Economic Freedom” from the World Heritage Foundation shows annual rankings of the economic freedom of countries by measuring for example the rule of law, the regulatory efficiency and the openness of the markets of each country (World Heritage Foundation, 2013 a). Moody´s, Standard & Poor´s and Fitch, the three world´s largest credit rating agencies, rate the solvency of countries. These rankings influence the economies of countries since investors base their decisions on which countries ensure safe investments according to the agencies´ ratings (Anholt, 2007). Countries are also ranked according to their position in human development through the “Human Development Index HDI” by the United Nations. The position of 187 countries in human development is evaluated through the scores in three dimensions: health, education and living standard (United Nations Development Programme, n.d. a; United Nations Development Programme, n.d. b).
Besides the indicated indices, reports and rankings, a lot of other reliable and widely recognized indices are for example the “Corruption Perception Index” by Transparency International for the perception of corruption within countries (Transparency International, n.d.), various sustainability indices such as the “Environmental Sustainability Index” for the measurement of the countries´ profiles of “national environmental stewardship” (Socioeconomic Data and Applications Center, n.d.) or the “Environmental Vulnerability Index” developed by the South Pacific Applied Geoscience Commission, the United Nations Environment Programme and others (Environmental Sustainability Index, n.d.). Several reports on for example the countries´ health systems and safety such as those published by the World Health Organization (World Health Organization, n.d.) are also relevant.
According to Anholt (2010), in addition to such rankings and indices, the countries´ performance in contests such as the Eurovision Song Contest, the Miss Universe Contest, the Olympic games, the football World Cup or for example the mention of a countries´ building in contests such as “New seven World Wonders of the World” can also be considered as “good branding” for the countries. They can “help to raise the profile of the place” (Anholt, 2010, p. 66), attract tourists and even help to increase the foreign investment and trade (Anholt, 2010).
Anholt (2005) argues that countries which perform poorly in the listed indices and rankings generally “lack of a powerful strategy” (p. 2) for their nation brand. In order to obtain a positive nation image and achieve good results in the mentioned indices and rankings, it is necessary to plan and implement a long-term nation branding strategy. The realization of such a nation branding strategy is expected to bring a lot of benefits to the nation image and the country´s success in different areas such as the attraction of investment and tourists or an increase of the country´s exports (Anholt, 2010; Dinnie, 2008; Moilanen & Rainisto, 2009).
2.2.6. Benefits of Nation Branding
According to experts in the nation branding field, it is indisputable that the importance of nation images is constantly increasing. In the globalized world of today, traveling for example is every time cheaper, the economic systems are more tightly linked, the international media´s power increases and consumers are offered a wider range of products from different countries. These tendencies lead to a more intense competition between nations for inward investment, tourists, talented immigrants and consumer preferences for their export products (Anholt, 2007; Anholt, 2010; Dinnie, 2008; Kotler & Gertner, 2002; Olins, 2002).
As mentioned previously, nation branding primarily aims to improve the overall nation image and the nation image in specific sectors such as the export or the educational sector. This improved nation image again is seen as a prerequisite to increase the country´s exports, inward FDI flows and tourism arrivals as well as to increase the attraction of talented work force and students (Anholt, 2007; Anholt, 2010; Dinnie, 2008; Fan, 2006; Fan, 2010; Govers, 2011; Moilanen & Rainisto, 2009; Kotler & Gertner, 2002; Olins, 2002). Nevertheless, very little research has been conducted to determine if a nation image as well as its exports, inward FDI flows and tourism arrivals improve and if attracted talent increased thanks to the nation branding activities of the respective country or if other uncontrollable factors play a more important role in these results. Countries may have spent a lot of financial recourses and efforts in the realization of nation branding activities but their nation image did not improve because for example one of the country´s famous political leaders behaved in an unethical way. Therefore, it is nearly impossible to make a causal link between the nation branding activities, the nation image improvement and the country´s success in the different areas (tourism, exports, inward FDI flows and talented workforce and student attraction) (Anholt, 2010; Dinnie, 2008; Fan, 2006; Kaneva, 2011; Moilanen & Rainisto, 2009; Morgan, Pritchard & Pride, 2011). On the other hand, Anholt´s (2007) research shows that nation branding activities at least surely succeed in improving the awareness of the nation and even creating recall among the target groups.
Additionally, a nation branding strategy helps to coordinate the country´s stakeholders´ promotion in order to create a more consistent and coherent nation image. Without a nation branding strategy the country´s different agencies, ministries, companies and other organizations promote their sectors independently and therefore transmit conflicting or even contradictory messages about the country (Anholt, 2007; Dinnie, 2008).
Moreover, despite the little research made on the effectiveness of nation branding efforts, it is indisputable that nation branding efforts help to accelerate the natural time lag between the country´s changed reality and its image in the world (Anholt, 2010; Fan, 2010; Gilmore, 2002; Olins, 2002). Spain, Ireland, South Africa and Australia are cases which successfully used nation branding in order to project their changed reality to the world. Spain for example until the 1980s under the dictator Franco had the image of an “isolated, backward, poverty-stricken dictatorship” (Olins, 2002, p. 6). Many experts (Gilmore, 2002; World Tourism Organization, 2009; Quelch & Jocz, 2005) affirm Olin´s observation that Spain´s nation branding activities have played a major role in changing its nation image into the current image of a “democracy, an active and lively member of the EU, with a decent standard of living, some pretty good companies by world standards” (Olins, 2002, p. 6).
Furthermore, cases such as for example Colombia also show that nation branding campaigns cannot only bring benefits to the economic sector but also help to improve the nation citizen´s national pride and therefore bring domestic benefits to the country (Anholt, qtd. in Gutiérrez, 2010).
Nonetheless, the experts in the field of nation branding (Anholt, 2007; Anholt, 2010; Dinnie, 2008; Fan, 2006; Moilanen & Rainisto, 2009) also emphasize that it is only possible to improve a nation image and succeed in the different areas (tourism, exports, inward FDI flows and talented workforce and student attraction) when a long-term orientated and well-coordinated nation branding strategy is developed.
3. Nation Branding Strategy Development
3.1. Principles of Nation Branding Strategies
Building up a nation brand takes a long time. Promotional exercises of a short duration and quick short-term advertising campaigns may show ephemeral effects but do not improve the nation brand image for a longer period (Moilanen & Rainisto, 2009). In most of the cases such short-term efforts result in “wasting money” (Anholt, 2007; Dinnie, 2008). Therefore, it is necessary that nations build their brand on a “long-term strategic basis” (Dinnie, 2008, p. 19). Even though there is “no universal template for nation-branding strategy” (Dinnie, 2008, p. 219) and very little theory on nation branding strategies exists, according to Anholt (2007) and Dinnie (2008) certain basic principles of corporate strategy can be applied to the context of nation branding. Strategy can be defined as the long-term direction and scope of an organization which obtains advantages through configuring resources and competences according to the changing environment. The strategy´s aim is to meet the market´s needs and to fulfill stakeholder´s expectations (Dinnie, 2008; Johnson, Scholes, & Whittington, 2011). As companies, nations also need to decide their long-term direction and scope. Nations have to make strategic decisions on how to configure resources and competences to achieve their aims in areas such as inward Foreign Direct Investment (FDI) flows, export promotion, tourism and talent attraction. These strategic decisions on the nation brand´s direction are necessary because nations will “rarely be able to excel in all of these competitive domains” (Dinnie, 2008, p. 220).
Dinnie (2008) proposes three guiding key questions which can provide nations a framework for the complex task of their strategy development:
1.) Where are we now? This question leads to a strategic analysis of the nation brand´s current competitive position
2.) Where do we want to go? In order to answer this question a strategic planning with the setting of goals and targets is necessary
3.) How do we get there? This last question involves the implementation of the strategy chosen in the preceding stages (Dinnie, 2008).
Based on these basic guiding questions, Moilanen and Rainisto (2009) developed a more complete strategic plan for the creation and maintenance of a nation brand. This plan is composed by five stages: “Start-up and Organization” (p. 148), the research stage, the formation of the brand identity, the establishment of an implementation plan as well as the implementation itself and the control of the progress. These five stages can be allocated to the three questions: the start-up and organization stage and the research stage belong to the question “Where are we now?”, the formation of the brand identity to “Where do we want to go?” and the establishment of an implementation plan as well as the implementation of this plan and its control to “How do we get there?”.
Figure 5 - Strategic plan for the creation and maintenance of nation brands
illustration not visible in this excerpt
Source: Own elaboration based on Moilanen & Rainisto, 2009, p. 149; Dinnie, 2008, p. 220
The objective of the first stage “Start-up and Organization” is to initiate the organization of the nation branding process. It includes the formation of a work group with representatives and responsible persons from the most important stakeholders. The second consecutive stage of Moilanen and Rainisto´s plan is the research stage which consists in finding out how the country is perceived both internally and externally by applying qualitative and quantitative research methods. Moreover, this stage includes the competitor analysis and the analysis and interpretation of the results in order to have extensive information for further decisions on the nation brand. The third stage´s main goal is to create the core idea and elements of the nation brand identity. Based on the strategy´s objectives, the fourth stage aims the establishment of an implementation plan. The fifth´s stage of Moilanen and Rainisto´s plan starts with the implementation of the planned elements of the previous steps and also includes the control, that is to say the tracking of the outcome and the progress of the nation brand development (Moilanen & Rainisto, 2009).
3.2. Start-up, Organization and Research
3.2.1. Start-up and Organization
3.2.1.1. Formation of an Organization
The “Start-up and Organization” phase is essential for the strategy´s success. It begins with the formation of a work group also called “Branding Group” (Moilanen & Rainisto, 2009) which is in charge of the organization, coordination and management of the nation branding process. Since the nation brand activities embrace many stakeholders with different agendas, goals and interests, the Branding Group as the coordinating body helps to “avoid the fragmentation and duplication of activity by the different stakeholders” (Dinnie, 2008, p. 189) and to harmonize the goals, communications and behaviors (Anholt, 2010). Anholt (2010) and Moilanen and Rainisto (2009) recommend that the Branding Group should be appointed by the country´s government in order to ensure the “requisite high status and credibility” (Moilanen & Rainisto, 2009, p. 150) of the work group. In the case of Switzerland for example, a new organization “Presence Switzerland” was created within the federal administration as such a Branding Group. This organization assumes the coordination of the different stakeholder groups´ activities such as Switzerland Tourism[10], Pro Helvetia[11], Swiss Info[12] or OSEC Business Network Switzerland[13] (Pasquier, 2008). In the case of Scotland a similar new organization as the nation brand´s Branding Group was created: “Scotland the Brand” (Dinnie, 2008, p. 24) and in Hungary´s case the Branding Group is the “Country Image Centre” (Szondi, 2008, p. 1).The Branding Group should itself determine a steering group, a small number of about 20 persons. The steering group is in charge of leading the nation brand building process and taking the important decisions for the Branding Group. Ideally, this steering group includes the “highest management of parties with international visibility” (Moilanen & Rainisto, 2009, p. 150) such as leaders in politics, business life and representatives of science and sports. It is also recommendable to personify the branding activities in a leader of the whole Branding Group. The leader should be an internationally-known and appreciated person with a lot of influence such as the country´s Prime Minister or the managing director of a large company (Moilanen & Rainisto, 2009; Quelch & Jocz, 2005).
Dinnie (2008) considers that after having created an organization for the nation branding process, the key challenge of the first stage is the decision on which stakeholder groups should be included and involved in further decisions and the development of the nation brand.
[...]
[1] Jean Pierre Magnet Vargas Prada was officially assigned as a Peru´s nation brand ambassador in May 2011 (Agro Enfoque, 2011).
[2] GfK Custom Research is part of the GfK Group, one of the largest market research companies. The division GfK Roper Public Affairs & Corporate Communications is specialized in customized public affairs and public opinion polling, media and corporate communications research as well as the measurement of corporate reputation in the USA and the rest of the world (GfK Custom Research North America, 2010).
[3] The 20 countries are:
- Western Europe/North America: U.S., Canada, U.K., Germany, France, Italy, Sweden
- Central and Eastern Europe: Russia, Poland, Turkey
- Asia-Pacific: Japan, China, India, South Korea, Australia
- Latin America: Argentina, Brazil, Mexico
- Middle East/Africa: Egypt, South Africa
(Anholt, 2009).
[4] FutureBrand is part of the Interpublic Group of Companies Inc., offering services from “consumer branding and corporate identity, to brand identity, brand management and beyond”. It has 25 offices in cities worldwide.
[5] For the CBI 2012 until 2013, FutureBrand measured 118 countries.
[6] The regions included are Middle East and North Africa, Europe, Latin America, Africa and Asia Pacific (FutureBrand Consultancy, 2012).
[7] The United Kingdom is ranked 11th, France 13th and Italy 15th (FutureBrand Consultancy, 2012).
[8] Chile was the center of international media in February of 2010 because of the 8.8 magnitude earthquake at the coast of Central Chile. About two million Chileans were affected and the earthquake brought many structural damages (Santos, Byrnes & Lane, 2010).
[9] In August of 2010 33 miners were trapped 700 meters underground after a mining accident in San José in Copiapó in the north of Chile. While already believed dead by many experts, after 69 days all miners could be rescued in a complicated operation. The rescue operation was reported internationally and many politicians showed their admiration for Chile´s successful operation such as Barack Obama: "This rescue is a tribute not only to the determination of the rescue workers and the Chilean government but also the unity and resolve of the Chilean people who have inspired the world” (Illiano & Wade, 2010, para. 3).
[10] According to the information on the website Switzerland Tourism (n.d.) is the “national marketing and sales organization for Switzerland” (para. 1) and promotes traveling to Switzerland for vacations or congresses. The organization collaborates closely with tourism suppliers (Switzerland Tourism, n.d.).
[11] The organization Pro Helvetia aims to promote Swiss arts around the world. Cultural practitioners are supported by financial means and also with professional service such as providing contacts (Pro Helvetia, n.d.).
[12] Swiss Info fulfills “the federal government´s mandate” (Swiss Info, 2012, para. 1) to distribute online information about Switzerland internationally on its website swissinfo.ch. The website informs about news in Switzerland as well as a Swiss view on topics, covering “politics, business, culture, society and research” (Swiss info, 2012, para. 2).
[13] OSEC (from the French: “Office Suisse d´Expansion Comerciale”, translated into English as the Swiss office for trade expansion) Business Network Switzerland is commissioned by the Swiss government and has the aim to promote Swiss foreign trade. It also promotes Switzerland as a business location abroad (OSEC Business Network Switzerland, n.d.).
- Quote paper
- Eva Niesing (Author), 2013, Nation Branding Practices in Latin America, Munich, GRIN Verlag, https://www.grin.com/document/214691
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