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    Plug into Your National Brand

     

     
     
    © International Trade Centre, International Trade Forum - Issue 4/2005

    Photo: Photos.com, collage M. Langfeld

    Interview with Simon Anholt, Earthspeak

    A country's "brand" can help or hinder its exports. Plugging into the essence of its people, institutions, geography, history and culture, a nation can create a brand strategy that shows its true, distinctive self.

    Q: Can establishing a brand really help a developing country to improve its market position and international profile?



    A: Yes, but only if it's true. The first rule of nation branding has to be a long, hard look at the reality of the country and asking a painful question: "To what extent do we have the brand image we deserve?" If the answer is: "Our image is out of date, unfair, biased" and we do something about it, so that people want to visit, or invest or buy our products or engage in cultural or political relations with us - then branding can make an enormous difference.



    Q: It still sounds like a tall order. Has anyone been able to succeed, in your experience?



    A: Very few poor countries. But it's not usually because they lack money. It's because they spend it unwisely. The biggest danger is people making naïve comparisons between branding in the private sector and what it can do for countries. There is a persistent belief that if a country can only raise the funds and carry out a global advertising campaign like Nike or Toyota, then overnight the country will fi nd itself with the popularity and the profi tability of such companies. It simply doesn't happen that way.



    Building a global image



    Q: How long does it take to build a global brand image?



    A: If you're talking about branding a product and the product is good, if you have the distribution and marketing, if you have the money - and it does cost money - then you can start building a global brand within a couple of years. If you are talking about the reputation of a country, it depends very much from what base you are starting. If you are starting from a strongly negative base, then I would normally say 15 to 20 years, but things are changing so fast these days that it might be 10 to 15 years. If you are a transition economy, and things are going pretty well for you anyway, it could be achieved in 5 to 10 years. In all of these cases, the brand image is never changed by spending huge amounts of money on logos, slogans and advertising campaigns but by having a good strategy and investing in change. In the end it comes down to creating a culture of innovation in the public and private sectors.



    Q: Can you point to some of the more interesting developments in recent years?



    A: In nation branding, the most interesting thing is the speed with which the idea is catching on. There is recognition that image may be one of the primary barriers to economic development, but methodologies from the corporate sector applied clumsily onto national development are extremely dangerous.



    Even the nation brand of a least developed country (LDC) can be one of its biggest problems: many LDCs have a strongly negative brand image which is constructed in some cases quite deliberately by non-governmental organizations, for the very good reason of getting as much aid into the country as possible. It doesn't matter then how much money donors put into the country to promote it as something else, because the overwhelming popular belief is that the country is a basket case, and who would want to go on holiday or invest money there, or buy its products?



    Part of the problem is that the development industry suffers from what I call the "better mousetrap syndrome", the belief that if you build a better mousetrap the world will beat a path to your door. It's simply not true.



    What countries can do now



    Q: Is there anything they can do now?



    A: We all know that the products which succeed aren't always the best products. They are the products that people believe in: in other words, the best brands. The product has to be good, but that's not enough on its own. The brand has to be as good as the product. Even professional investors make decisions based on their hearts. But developing countries can't wait for their reputations to catch up with the reality; that can take 30 to 50 years.



    Countries can prepare a brand strategy that shows what their image would need to be to achieve their economic and social goals, and how to deserve that image. In this context, a brand strategy is little more than a very focused and efficient way of doing development. Unlike most development strategies, however, it bears in mind that there is a marketplace out there that needs both rational and emotional reasons for buying. A nation brand strategy, as with most corporate brand strategies, makes decisions a lot easier, and the speed with which you get results is much faster. It ensures that you get payback on your investment.



    But having a good brand strategy is not an easy thing to come by, because it is not a question of a few people sitting in a room and dreaming one up. It really has to come from the country itself, from the people and from the institutions, its geography and history and culture. Somewhere within that there is a correct vision, a good brand strategy that will identify the country's particular genius, a niche positioning which is theirs and theirs alone, which guides how the country is going to compete in the global marketplace. In the end that is down to good leadership. The deeper you go into the subject, the closer it comes to conventional statecraft. It depends to a great extent on having good leadership with a good vision with the power to get the population behind that vision.



    Q: What then is Brand New Justice?



    A: Branding is not what most people think it is. It's not a superficial little marketing trick that companies use to squeeze more value out of the marketplace. It's actually an economic tool of critical importance. It is one of the key creators and sustainers of wealth in developed countries. Brand value accounts for nearly a third of all the wealth on the planet. Brand New Justice asks: how come that tool is only understood, only owned and only wielded by rich countries? Isn't that one of the reasons why the gap is increasing between nations despite all our efforts?



    Executive Forum lessons



    Q: What are the lessons you brought away from the Executive Forum?



    A: At the Executive Forum I was surprised to hear so many countries debating their chances of becoming a back office for companies in rich countries. I would rather see outsourcing as a means to an end. It is a good way for companies in poorer countries to earn revenue and at the same time get an apprenticeship to learn how they can provide the services themselves, and ultimately be the owners of the service brands which supply the customer directly. This is the route to sustainable prosperity, not remaining forever a faceless, unbranded, low-cost, low-grade supplier to companies in the northern hemisphere.



    Q: In many cases the impetus is not going to come from the government, though...



    A: Good point. At the Executive Forum we saw the example of two countries - Ecuador and Romania - where the nation branding initiative started from the trade promotion organization (TPO), with the aim of creating a powerful country-of-origin effect. That is a powerful and perfectly legitimate way of proceeding, and in many cases it is the only politically expedient one. I seem to spend my life trying to persuade heads of government and heads of state that it is their responsibility to manage their national brand. If the TPO or Export Board can show that branding is beginning to work, they can go to the head of government and then get support for sharing their learning with other sectors and get agreement on strategy at the national level. And successfully branded exports can benefit the country as a whole. If someone buys a good product or service from one country they become statistically more likely to go on holiday to that country, and if they go on holiday to that country they are statistically more likely to want to invest in that country and increase cultural relations with that country. There are very sound arguments for linking this all together into a national strategy.



    Breaking down "Brand Africa"



    Q: You have a "Nation Brands Index" . Why do you want to start an African Nation Brands Index?



    A: I have been doing the Nation Brands Index since the beginning of the year. It takes in 25 countries. We have a panel of 5 million consumers in 18 of those countries. We basically test the world's perceptions of the 25 countries. We have some developing countries in there just to see how they stack up against the big-brand countries. I only have one African country in there, South Africa. What I very much want to do - and sooner rather than later - is to start to break down "Brand Africa" and build a picture of what these countries do individually and what people's perceptions are about them. The problem is that these countries don't have an image of their own, apart from South Africa. As I said before, they all have to share the brand of Africa, and it's an incredibly unhelpful brand for any kind of fruitful engagement with the rest of the world. The most successful African states have to share their international reputation with the least successful, a reputation composed of war, corruption, disease, famine and poverty. The consequence is that even a relatively prosperous and stable country like Botswana finds it virtually impossible to get its message out. You get the same "continent branding effect" in Asia and Central America. Most developing countries don't have a lot to spend on research, so the African Nation Brands Index could be a very useful public-domain development tool, if we can find the funding for it.











    Build your own brand



    A Thai factory started to export its own branded garments, making many times the profit it did when it manufactured for brands in the United States. BeBe-Bushh children's clothing is now sold in around a dozen countries.



    • A chemicals company from Mumbai, India, is taking on the Parisian fashion houses at the perfume game, and winning. Well-to-do shoppers in Paris splash on Eau d'Urvâshi as fast as Deepak Kanegaonkar can ship it. 


    •  A Russian entrepreneur created a premium international vodka brand and now wants to follow it up with banking services and become Russia's answer to Sir Richard Branson. Russki Standard is a super-premium vodka which retails in the Baltic republics, Bulgaria, Greece, Hungary, Italy, the United Kingdom and the United States, for at least 10% more than the market leader.


    • A Czech furniture business, which markets itself with art, is taking on the multinational giants. Techo UK's revenues rose to nearly € 3 million a year after its founding, and its first customers included the London branch of Accenture, the Royal Air Force, the Financial Times and even Buckingham Palace.



    Source: Simon Anholt, Brand New Justice: How branding places and products can help the developing world, Butterworth-Heinemann, 2005 (2nd edition).











    Benefits of brand strategies



    Branding, once the brand is established, should create an increase in profitability and customer acquisition and retention, so there's every reason to kick-start it early in the process - as long as the products are good enough to sustain the brand promise, of course.



    Branding creates highly visible success stories which encourage other companies to follow suit, more enthusiastically and faster than they otherwise would. Brands are the rock stars of commerce, and create many fans, both at home and abroad.



    Branding creates expectations of product quality which the manufacturer has to work twice as hard to maintain: this accelerates the development of a first world-style approach to both quality control and innovation. Putting your own brand name on your products "raises the bar".



    Examples of single companies in the West tend to show that the companies that understand the importance of brand early on in their growth - and practise it well and build their corporate strategy around it - are often the ones which grow fastest.



    Having a powerful brand - even if it is merely in strategic form, without solid customer recognition yet behind it - makes companies more powerful. They are perceived by investors, competitors, suppliers and other businesses as more valuable, and carry more weight in all kinds of negotiations. Potential value, if it is clearly reasoned and intelligently planned, is universally recognized as real value; strategy, creativity and ambition are universally recognized as indicators of potential.




    Source: Simon Anholt, Brand New Justice: How branding places and products can help the developing world, Butterworth-Heinemann, 2005 (2nd edition).





    Simon Anholt is a leading specialist in creating brand strat-egies for countries, cities and regions. He is the author of Brand New Justice: How branding places and products can help the developing world. Natalie Domeisen and Peter Hulm interviewed Mr Anholt for Trade Forum after he moderated the session on branding at ITC's 2005 Executive Forum.