THIS ARTICLE BY MARK DI SOMMA IS TITLED:
Branded countries:
Where in the world…?

Will the place you live affect the power of your brands?

National branding has been the subject of much discussion lately. Luminaries like Olly Wallins have been singing the praises of branding countries to facilitate trade, raise investment, lift national pride and provide better understanding.

Place branding offers opportunities to raise, or change, a country's profile in the global marketplace, and to then use those rearranged perceptions to negotiate new economic arrangements with other nations and economic blocs or simply increase its attractiveness - a legitimate strategy in a world where cross-border trading can only intensify in the years ahead.

However, as Simon Anholt observes with his characteristic insight in an editorial in the Journal of Brand Management, "a country is not a product, and while there is huge potential in the enlightened, imaginative and responsible application of product marketing to places, it is certainly not the case that countries may be dealt with as if they were soap powder. A more accurate and more useful metaphor than ‘country as product brand' is, of course, ‘country as corporate brand' — in other words, the country itself may not be the primary brand, merely the manager of a group of related sub-brands".

National vox pops

My own experience is that national branding projects are very challenging. But strange as it may seem to summarise a whole nation in a few words, the fact is national brands can be very effective because we live in a world of "snapshots". Vox pop views of the world suit the new attention span, and collectively build images in the heads of consumers that can be very powerful. Think about China. The shift in perception from backward, agrarian, anti-Western economy to powerhouse, advancing, new market of choice has taken place over a very short period of time. The goldrush to do business there is on, fuelled by the commercial ‘legitimacy' of WTO membership and the upcoming Olympic Games. China is achieving what Hong Kong struggled for years to gain - commercial credibility in the eyes of the West. But as this regional powerhouse does so, Chinese brands take on new credibility. Like the huge Korean brands before them - Samsung, Hyundai and more - the change in understanding about the country is directly echoed in the take-up and acceptance of the brands. Just as importantly, the equity exchange works the other way. The might of Hyundai and others further confirms Korea as a world-class industrial force.

New Zealand has leveraged its clean and green image to good effect for years, for tourism and for its primary sector exports in particular. More recently, national marketers have used a range of international successes, including the America's Cup and the massive acclaim of the Lord of the Rings trilogy, to broaden the positioning of the country to one of being creative, edgy and a force to be watched in areas where innovation is prized. Once known only as a place that produced bulk levels of butter, meat, milk and wool, New Zealand is increasingly associated with brands worldwide - Fonterra, the All Blacks, 42 Below, Trade Me, Enza, Karen Walker, et al - many of them highly respected within their sphere of influence.

Could your country come back to haunt you?

But there's a flipside to living in a world of brands, and that is this. Brands are now so firmly integrated into the way the world works that they are subject to influences that stretch well and truly beyond the realms of marketing or even business. What happens in your country, how your government behaves, the image that your homeland has in the world, even how pressure groups regard you nationally has the potential to influence how people in turn perceive, rate, respond to and interact with your brand.

9/11 had a huge impact on the airline industry generally - but on the airlines of some countries specifically. The planes themselves were no different. The brands were just as strong. If anything, the security was far tighter. But the associations people made totally outside of those parameters influenced who they travelled with, and even if they travelled at all. While I don't have the statistics - my goodness, they'd make interesting reading - there's plenty of anecdotal evidence to suggest that in the months after 9/11, even hardened travellers were steering clear of "politically charged" airlines.

Harder and harder to separate brand and state

All of this means that brands are now vulnerable to wider agendas that are beyond anyone's direct influence or control. Global media, the internet, blogging ... they have all changed not just the level of information that consumers receive, but also the level of interest that consumers take, and the opinions they may bring to bear in purchasing decisions. It follows that brands have the potential therefore to be tarred and feathered with the same brush of world opinion as a government's policies or actions - whether they actively agree with or endorse those policies, or not. Conversely, brands associated with countries with good reputations politically and socially have opportunities to use those to advantage in their marketing. National branding may be the mot du jour, but actually international "country of origin" reputation has the potential to be even more influential.

Example: according to a world poll by GMI, half of European consumers polled by the company in late December 2004 distrust American companies. The study found that 1/3 of the 8,000 international consumers who took part said American foreign policy, including the war on terror and the war in Iraq, most influenced their image of America. European and Canadian consumers, asked to characterise the American government and President Bush, described both as arrogant and self-centered. American multinational companies like AOL, Exxon Mobil, and Starbucks were seen in much the same light. According to the study, these multinational American companies were also among the top brands most likely to be boycotted by European consumers.

These companies don't appear to have done anything specifically to warrant this behaviour. I'm not aware of any of them making worldwide statements of support for the Administration or its actions. It is what their Government has done, as it has been reported globally in the media, and the fact that they are directly linked with that because they share being American - that has incensed consumers in Europe to the point where they are choosing to steer clear.

Are their actions effective? I have no way of knowing. Do these companies care? You'd think so - but I'm told never to under-estimate the capacity of Americans to think and assess within their own borders.

Before going any further though, let me take a moment to qualify my use of these figures. I presume GMI are impartial in their assessment of the situation - in the absence of evidence to the contrary, let's assume they're not working an agenda of their own in releasing these results. I'm also not privy to the political opinions or influences of any of the above brands, so I have no idea whether consumers are right to believe what the research says they believe about these companies or not.

I don't think that's the point. What is important here is the caution: as brands have widened their circle of influence, so they have become subject to influences that are beyond their immediate control. And actions, real or imagined, are less important than perceptions in terms of how they prompt consumers to behave.

Judging by these results, companies can't run the "separation of brand and state" argument any more. Just as business practice is now subject to deeper scrutiny than ever before, so public perceptions of, and trust for, brands have a wider basis than before, and it's intensifying. Brands are now judged by the country, and not just the company, they keep. And if you're responsible for a brand, you now need to be seriously assessing those national perception impacts, because the potential for them to do you damage or deliver you advantage is palpable.

There are some interesting implications that emerge from this thought.

The politicisation of consumers is stepping up.

As companies come under increasingly moral scrutiny, mirrored by more and more investors showing an interest in ethical stocks, we could see increasing mainstream pressure for "fair trade" at a national level as well as a brand level.

Faced with choice from every direction and multiple regions, consumers will have the option to extend their scrutiny of fairness beyond just how a company behaves, and to increasingly use purchasing choices to comment on how they feel about national behaviours. If shoe companies can be put in the spotlight over their use of slave labour, then it's not a huge leap for consumers to consider the human rights record, fair trading access policies, international behaviours and other factors of those brands' country of origin. In other words, lobbying to change the status quo of a nation could become a consideration for the many rather than the isolated act of the keenly politically aware. And it could extend beyond just what's in the news this week to encompass longer term issues. Consumer activities over brands could prove a very effective lever in prising open issues that countries have so far isolated as their own affairs.

The point was brought home very powerfully recently when I was in a homewares store. I witnessed a woman considering the purchase of a rug. As the assistant showed her the carpet she had picked out, the woman asked for proof that it had not been knotted by children. "I have no idea," replied the assistant. "Do you care?" asked the woman, and walked out. The assistant was speechless … Exactly. THAT easy. And look at the effect on the retailer. The inactions of a country thousands of miles away had a direct effect on their bottom line. The woman clearly wanted the carpet, was reassured by the quality of the carpet and trusted the brand of the retailer enough to spend time there - but left because the reputation of the country overshadowed the need for the purchase.

In this case, it was slave labour. But it could just as easily be an unclean environmental track record, the way an ethnic group within a country is treated, human rights abuses, the sale of immoral products, a lax attitude on child pornography … almost anything at all.

If such behaviour were to gain traction, then the impacts for that retailer and many many others could be noticeable. They may lead to a need to look beyond the quality of the goods they stock. Increasingly, these shop-keepers may find themselves under scrutiny to show - even prove - they are not-guilty by association. Faced with a plethora of options, consumers may impose the ultimate trade barrier to those they disapprove of - choice.

The exercising of choice could even extend into the work done by non-profits. Consider this reaction recently from a client who had been approached to give money to help the victims of the hurricane that devastated New Orleans: "After what the Americans have spent on the war in Iraq, there's no way I'm giving a cent." He wasn't the only person I knew who reacted this way. And his reaction shows that even altruistic, non-political organisations have the potential to be affected by the moral judgments that consumers make about where aid agencies are choosing to extend the hand of help.

So far, most of the actions I have observed have been negative - Europeans boycotting companies because they don't like the actions of the Bush administration - but it is just as plausible to look at this issue the other way. In other words, there is no reason why national actions, initiatives and reputation could not be used positively to maintain or raise pricing in well-off economies.

Country as part of brand story

Under this scenario, brands that hail from countries with a high reputation rating internationally could actively use that to full advantage in their fight against discounters. In other words, they would use national actions and reputation as compelling reasons for brand preference. If one accepts this as a potential trend, then national branding still has a long way to go. It's not enough to just crow about what a country is, has or does. Globally aware branders need to be weaving national aspects into their brand stories, and using actions and initiatives that add value for humanity as legitimate consumer considerations.

The cynical will see this profitability potential as carte blanche for brands to directly influence the actions of governments. But the converse argument is that as companies rely more and more on national reputation for a level of competitive advantage in global marketplaces, they will have greater and greater incentives to add their clout to groups lobbying for a greater good.

In an interview on branding website allaboutbranding.com recently, the brand futurist Martin Lindstrom commented that far too few corporates seem prepared to go out on a limb, take a position and voice an opinion. They just want to mind their own business. But as national reputation awareness climbs, and consumers increasingly factor nationality and more particular national attitudes and actions into their consideration sets, companies may find they have little option but to think through and articulate where in the world they stand on a whole range of issues. It's a whole new take on globalisation.