Wednesday, 15 August 2012

The Comparative Place Branding Advantage Theory for Nation Branding

I was advised by Professor Jasmine Simi A.H my Brand Management professor at Christ University to look into a very heated topic of Place Branding. As I did look into the topic and read about it I got an idea.

I related the Branding segment of studies to that of economics and tried to understand that can the theory of Comparative cost Advantage be used in Branding.

In economics, the law ofcomparative advantagerefers to the ability of a person or a country to produce a particular good or service at a lower marginal and opportunity cost over another. Even if one country is more efficient in the production of all goods (absolute advantage in all goods) than the other, both countries will still gain by trading with each other, as long as they have different relative efficiencies.

Source: Wikipedia (Sure many have disputes with the information being not accurate on wiki. However I am pretty sure this one is correct !)

The theory really says that if a country A has comparative cost advantage over country B for making a particular commodity say X and country B has the same over country A with product Y, then country A should produce only commodity X and country B produce only commodity Y. Then these two countries should trade. Now this is really amazing sounding in theory. However with the insecurity of countries having over their security I guess politicians will not like to be dependent of factors that determine their economic power. For example if commodity X is weapons and commodity Y is an agricultural product then I guess that country B will not just make agricultural products and be dependent on its defense from country A.

However I feel this theory can be applied in Branding. Lets take the same example of country A and country B. Now country A and country B have similar tourist spots. Applying the theory above there will be one attraction which is more fitting for one country. Country A can specialize in one type of attraction and country B can specialize in another. It is somewhat like saying that one restaurant specializes in pizz and the other restaurant specializes in burgers. Even though both serve pizza and burgers.

For a country to decide which is that attraction that best fits them , the country should study the attraction in comparison with their culture , nature , technology and their geographic location.
  1. Culture: Does the attraction reflect the culture ? 
  2. Nature: Is it in the dominating natural environment of the region ? or Is the natural environment unique to the country ? 
  3. Technology: Does the country have the technology to deliver ? 
  4. Geographic location of country: Is the location in sync with the attraction ? 
  5. Cost: Is it economically effective and most importantly efficient ?
Different tourist spots in a country can be related to the above factors and weighed to see if the attraction best describes the true meaning of the country. Then the countries should sit on negotiation tables and decide brand identity the countries tourist industry must hold.

They can determine their Brand Mantra and Brand Image based on that attraction.

Do leave comments below. Just click on comments. Then add comments.

Cheers ,
Until next blog post

- Anant Agnihotri

Thursday, 19 July 2012

Not So Serious About Nation Branding ?

I was doing some research on the topic of Nation Branding and I came across a very interesting page. It had a list of all the slogans of country tourism. Slogans that establishes an identity or position of the country in the minds of the customers (tourists). I came across the following list :
  1. Abu Dhabi, UAE – A Destination of Distinction 
  2. Australia – There’s nothing like Australia 
  3. Bhutan – Bhutan, happiness is a place 
  4. Brazil – Sensational Brazil 
  5. Brunei – A Kingdom of Unexpected Treasures 
  6. California, USA – Find Yourself Here 
  7. Canada – Keep exploring 
  8. Dubai – Definitely Dubai 
  9. Egypt – Where it all begins 
  10. Greece – Greece, the true experience 
  11. Hawaii, USA – The Islands of Aloha 
  12. Hongkong – Asia’s Word City 
  13. India – Incredible India 
  14. Indonesia – Wonderful Indonesia 
  15. Israel – Come find the Israel in you 
  16. Japan – Endless Discovery 
  17. Korea – Korea, Be Inspired 
  18. Laos – Simply Beautiful 
  19. Macau – Touching Moments Experience Macau 
  20. Malaysia – Truly Asia 
  21. Maldives – Always Natural 
  22. Mexico – The Place You Thought You Knew 
  23. Nepal – Naturally Nepal. Once is not enough. 
  24. New York, USA – I love New York 
  25. New Zealand – 100% New Zealand. 100% Pure You 
  26. Peru – Peru. Live the legend 
  27. Philippines – It’s more fun in the Philippines 
  28. Qatar – As Independent as you are 
  29. Singapore – Your Singapore 
  30. South Africa – It’s Possible 
  31. Switzerland – Get natural 
  32. Taiwan – The Heart of Asia 
  33. Thailand – Amazing Thailand, Always Amazes You. 
  34. Vietnam – Timeless charm
There are a total of 34 countries in the list. I got this list in a matter of minutes on the internet. I will not be surprised to find many more if i spend a day and systematically track down more slogans of more countries . My question is , What is the power of a brand if I ( the customer ) need to 'Track' down their slogans? The entire point of a brand is to enable the country to reach to its customers (tourists). There is simply not enough aggression seen in this industry. Perhaps it is seen as a small contributing factor to the economy of a country.

Is it really a small industry with low potential ? I fail to see it that way. Lets take Malaysia for example. It was one of the first country to actually advertise for its tourism on international television. It did this to escape the reliability it had for being dependent of exports. It wanted to diversify its economy and become more independent and strengthen its economy. Well Malaysia did for sure pick up the right industry for its self.

With aggressive advertising and making the slogan famous around the world and also setting a very noticeable position in the minds of the customer (tourist) , Malaysia managed to make tourism a 7% contribute to its GDP. In the yer 2001 Malaysia had 17.5 Million International Tourist Visits , France had 79.1 Million visits , Spain had 58.5 Million Visits , USA had 51.1 Million visits and Italy had 41.1 Million visits. Now in the year 2010 , Malaysia had 24.58 Million International Tourist Visits , France had 76.8 Million Visits , Spain had 52.68 Million Visits , USA had 59.75 Million Visits and Italy had 43.63 Million visits. Did you notice the percentage change ? Here it is:

  1. France : -2.3% (NEGATIVE) 
  2. Spain : -5.82% (NEGATIVE) 
  3. USA : 8.65% (POSITIVE) 
  4. Italy : 2.53% (POSITIVE) 
  5. Malaysia : 40.45% (POSITIVE) 

Malaysia grew nearly 4.5 Times more than USA from 2007 to 2010. Well many will say that there is a difference of 35Million between both the countries , USA leading , however that is not the point. The point is that the efforts of Malaysia to make such a drastic increase in its International Tourist Visits was remarkable with a 40.45% increase. Tourism Malaysia now has 34 overseas and 11 marketing representative offices. As of 2011 Malaysia ranks 9th in the most visited countries list.

Could this be possible without Malaysia realizing the importance of aggression in Nation Branding ?

Do leave comments below. Just click on comments. Then add comments.

Cheers ,
Until next blog post.

- Anant Agnihotri

Tuesday, 17 July 2012

Tourism Truly Brand-able Segment in Nation Branding.

With a little research and study on the topic , I have discovered some existing theories on the same topic. Research done by Simon Anholt has brought a lot of insight into the topic. A very famous model developed by him describes all the segments or areas that are focused on to achieve National Brand.

Many personalities are completely against the concept of Nation Branding. It generally boils down to international policies and diplomatic relation making. In other words it turns out to be political.

Out of the 6 segments shown there I believe that the main segment that Branding really fits is the Tourist Segment. A country has its identity or character by the policies it has for export and import. The governance also establishes its own identy by the talks and relations it maintains with other countries. The people have an identity which is reflected by their culture and heritage. Investment and immigration another segment influenced by the government and the people.

The tourism industry is the area that interests me more. It would make more sense if the concept of Branding is limited to this segment.

In the tourism industry tourists are attracted to the country to have a vacation and spend some fun time. Here the country is providing a services to the tourists in return for the foreign exchange they provide. The scope of branding increases when the branding has to be done of a geographical haven , a resort , a monument , an experience , an adventure , etc. Countries can brand them self's to be the most relaxing place on Earth or the most happening place to be in . As per me the concept of branding should be concentrated on tourism as differentiated positioning will be more effective. It would make more sense. We all know from the stock market news , investment magazines and other economical source of information as to which is the best country to invest in or whoes government is doing what . There is nothing to 'Brand' here. The only and very difficult thing to do is to make policies and handle relations.

Branding a country and the various tourist spots should be something like what a company has to offer to its customers , a wide variety of products/services/experience.

The image at the starting of the post has many branches extending to what is required for a brand.
  1. Company Name : Tourist spots name. 
  2. Logo : Logo's can be established for individual tourist spots. 
  3. Value Proposition : Values need to be offered to customers (tourists) 
  4. Price : A central Body, controlled by the government, can make packages for tourists. 
  5. Product / Service benefit : The main features and experience delivered by visiting the tourist spots. 
  6. Customer Service : Add a customer feed back method so that tourists can easily make comments and feedback's on their experiences.
This concept of branding should probably be kept independent of any political agenda or influence. Their should be no relation with what a country does to attract tourists and which MNC is investing in it. Branding a Country should imply, Branding ones tourist destination. Integrating all the tourist spots in the country to give it one unique image. This image should be used as a brand position for the country.

Do leave comments below. Just click on comments. Then add comments.

Cheers ,
Until next blog post.

- Anant Agnihotri

Monday, 16 July 2012

The Next Big Brand Just Might be a Country !

In the recent times when we would put our televisions on we would get a blast of companies advertising their brands. Out of a 1 hr show on the television nearly 15 to 20 minutes were dedicated to advertisements. A really good way to make a brand a 'Brand Power'. However an expensive way also. Majority of the firms in India are small scale owned by families and cater to the local needs. They clearly cannot advertise on national television. According to me to advertise on television with good results we need to have the following :
  1. A very clear purpose of advertising. 
  2. A proper position to be fixed in the minds of the consumer. 
  3. A clear plan on how to structure the advertisement. 
  4. Good music , actors , graphics 
  5. A good Channel
Now the first three points can be achieved by entrepreneurs creative mind. The 4th and 5th point is where the problem generally lies. These two points require a huge amount of investment. This is where the small entrepreneurs have trouble , finance.

With giant Multi National Companies and other giant corporations the problem of finance is not even noticed. They can afford to invest in advertisements when ever they feel the need to. The act of advertisements from the companies started in the selling era , 1920's. When they realised that the simple act of making a product is not enough to sell it. It needs to be advertised and informed to the masses of its availability.

The Marketing Concept Era came after the end of World War two. This existed till the late 1900's. In this business were focused on determining what consumers wanted, their overall level of satisfaction, and producing the goods and services that would produce the profits.

The Customer Relationship Era started from the late 1900's and early 200's and continuing today. Companies have extended the Marketing Concept by creating customer relationship models. Relationships with the companies and the customers started to come under the spot light.

Now read the above Eras and replace the word Company with Country. With the core business of a country being tourism the country can easily meet the 5 requirements to advertise. They definitely have ample amount of resources to do so. Also they have the power to make it a compulsion to advertise them!
  1. A Very Clear purpose of Advertising: Attracting Tourists
  2. A Proper Position to be fixed in the minds of the consumer: Give the country a tag line , a brand image , a meaning , a position in the mind.
  3. A Clear plan on how to structure the advertisement: Creativity of the government's head perhaps ! or it can be outsourced to an advertising agency.
  4. Good Music , Actors , Graphics: Sure this can be purchased by the resources available to the government.
  5. A Good Channel: This depends on the amount the government is willing to spend or they can give some tax reduction for channels who give some amount of time slot to them.

With the power a brand holds in the minds of the customers some selected countries already doing this act of 'Branding Countries' , the time of the next big brand being a country might just be in the near corner. Also Brand rating agencies might find it interesting to rate companies brand power vs country brand power. Lets just see how Malaysia was advertising for it self. The image it wanted to show was "Malaysia truly Asia".

Do leave comments below. Just click on comments. Then add comments.

Cheers ,
Until next blog post.