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Why Country Branding Matters

Why Country Branding Matters
07/9/13
by Scott Siff
When people hear the word “brand,” they typically think of corporate and product brands. But people, countries, cities, conventions, and lots of other things are brands as well. In fact, we have a number of countries and even cities as brand clients. Which raises the question: If a company or product brand is ultimately about making money, what benefit does a country’s brand bring? And that leads to the follow-up question for national governments and national business organizations: Should they actively manage their country brand – is it worth the effort?

For a recent speech I gave at the Council on Foreign Relations, we identified two important impacts that a country brand can have, and the aspects of the BAV model that quantify those impacts. The work provides some important insights for national governments and national business communities.

The first impact that a country brand can have is in the political arena. Having a strong country brand means that when the company speaks in the political realm of national and international affairs, it is more likely to be listened to. Having that sort of clout makes it more likely that the country will be able to gets its national priorities implemented – sometimes on issues that have critical importance for the country. In the BAV four-pillar model, the Esteem pillar provides the quantitative measure of a country’s political respect, and country esteem is also tightly connected to perceptions of a country’s Leadership, one of the BAV brand attributes.

The second impact that a country brand can have is in the economic realm, and according to our analysis, that impact can be direct or indirect. The direct impacts a country brand can have are in attracting tourism and business investment, both of which are driven in significant part by the emotional attraction that a brand creates among the target audience (i.e., the country’s brand).

The indirect impact a country brand can have is by creating premium pricing power for brands in the country. Sometimes this impact is within particular categories. For instance, the same bottle of wine costs more if it’s from France, and (to go to a city or regional level), the same electronic gadget may cost more from a Silicon Valley company. But our analysis shows that this impact operates at the aggregate level as well. Brands across the board from particular countries can command higher prices than those from other countries, simply by virtue of the strength of the country’s brand.

The pillars in the BAV model that quantify these direct and indirect economic impacts of a country brand are Energized Differentiation and Relevance. That is perhaps no surprise, given that in the corporate realm those pillars, taken together, are the strongest predictor of future stock market returns.

The lessons here for governments and business communities are perhaps obvious. A strong national brand provides both political and economic lift to the country and its brands, and so it’s worth managing country brands with the same tools and focus that the best companies bring to the management of their own brands.

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