Country Branding and Public Diplomacy. Attracting International Investors

1. Table of contents

1. Table of contents

2. Introduction

3. International Relations

4. Market globalization

5. Brand, symbol and sign
4.1 Branding – business practice
4.2 Brand image
4.3 Corporate Branding
4.4 Aspects of branding
4.5 The country branding concept

6. Business diplomacy

7. Political strategy choices

8. Country branding
7.1 The origins of country branding

9. Reputation
8.1 Reputation-based decisions
8.2 Reputation capital

10. Advertising

11. Social causes

12. Branding importance

13. Elements of branding

14. Empower the country with branding

15. Country brand personality
14.1 Brand Personality
14.2 Understanding Brand Personality
14.3 Brand Personality Vs. Imagery
14.4 Enhances Your Brand Story
14.5 Brand Personality Framework
14.6 Brand Personality Traits
14.7 Successful Brand Personality
14.8 Brand personality vs. brand identity
14.9 Develop the brand personality

16. Country branding for investment attraction
15.1 International Business
15.2 Investors
15.3 International Business and Comparative Advantage
15.4 Foreign direct investment
15.5 Investor country of origin
15.6 Location choice and international market choice
15.7 Soft and hard factors in foreign direct investment decisions
15.8 Place Development
15.9 Place marketing for foreign direct investment
15.10 Country branding for foreign direct investment
15.11 Decision making and location choice in foreign direct investment

17. Country branding and public diplomacy
16.1 Country Economics
16.2 Country Brand Architecture

18. Brand Cultures

19. Country reputation
18.1 World Image
18.2 Leveraging Soft Power
18.3 Business diplomacy

20. Branding your country

21. Author

22. References and Bibliography

Abstract

In order for a country to attract global investors, the country needs to claim a divergent brand positioning in the minds of the investors. This positioning will also help to coordinate the various efforts and investments endeavors of the country in order to attract global investors. The most successful nations in the world have a clear image that helps them become irresistible to investors. USA is an eternal explorer, always experimenting with pioneering ideas, Germany is about control and hard work, Italy is all about creativity etc.

Investors, far from just basing their decisions on functional advantages and opportunities, they invest in countries with a clear identity that shows commitment to its development in a professional way. A clear brand image for the nation helps to attract global investors in the international arena, sustain them and a halo effect will boost its products, tourism etc.

As nations compete for investments in the global marketplace, the best way to achieve distinctiveness, attractiveness and even irreplaceability is to root the nation’s image on biological concepts that transcend time and cultures. Tools such as the Wheel of Motives leverage the advances in modern disciplines such as biology, neuroscience, cognitive science, bio - semiotics etc. can capture with precision the DNA of a country and build a true-to-self, authentic and irresistible strategy to attract investors.

2. Introduction

Branding is the way a country creates a favorable reputation through communication efforts. Branding is the marketing approach of shaping the brand to break the chaos and appeal to the ideal investor’s attention, transforms them into permanent customers and turns an indifferent audience into brand supporters, to create an attitude and make an impact and upgrade the country (Ataman, Van Heerde and Mela, 2010). Country branding is the process of applying business branding techniques to stimulate countries. The main objective of country branding is to build and manage the reputation of a country. For a country’s success, branding is obliged, that’s the reason that in the present book, we are going to explore what branding is and how a country can earn benefits in the most effective way (Badenhausen, 2012). When we look in the past, we find in Norse language, the word means the mark that farmers burned on cattle to signify ownership which is an originator of the modern logo (Ataman, Van Heerde and Mela, 2010). But branding nowadays is more than a logo, it signifies the emotional reaction a country can stimulate from its clients (Dahlen, Lange and Smith, 2010). Because, the brand is the set of perceptions that investors have about the country, branding is the set of actions undertaken to cultivate that brand (Erdem and Swait, 2004). In order to compete more effectively in the global economy, the countries started using brand management techniques. (Dinnie, 2008).

Since 1990s we observe an increased in interest in culture of international relations. We explore terms such as multiculturalism, cultural differences and specific regional values, and their correlation to international issues.

Facing the challenges of an increasingly complex world the existence of cultural commonalities and universal values all cultures share and intercultural sensitivity within groups surfaces the way for acceptance and tolerance of other cultures and allows members to be open to values which are universal among all groups, such as law and justice, which globalized society should then build upon together. Diplomats are not the only actors involved in the diplomatic process because due to globalization, many actors such as NGOs, international organizations and individuals can be seen practicing diplomacy.

Globalization requires governments to operate in a context different than before, which is to integrate other participants of diplomacy in its own decision-making processes. Governments have been focusing on new strategies, such as involving ministries and non-state actors and institutions, providing greater transparency, and acting collectively as often as possible.

3. International Relations

International relation is the study of interconnectedness of politics, economics and law on a global level. International relations dates from the time of the Greek historian Thucydides, and, in the early 20th century, became a discrete academic field within political science. In practice, international relations and international affairs form a separate academic program or field from political science, and the courses taught therein are highly interdisciplinary.

Although there are many variations of realism, all of them make use of the core concepts of national interest and the struggle for power. According to realism, states exist within an anarchic international system in which they are ultimately dependent on their own capabilities, or power, to further their national interests. The most important national interest is the survival of the state, including its people, political system, and territorial integrity. Other major interests for realists include preservation of the culture and the economy. Realists contend that, as long as the world is divided into nation-states in an anarchic setting, national interest will remain the essence of international politics. The struggle for power is part of human nature and takes essentially two forms: collaboration and competition. Collaboration occurs when parties find that their interests coincide (e.g., when they form alliances or coalitions designed to maximize their collective power, usually against an adversary). Rivalry, competition, and conflict result from the clash of national interests that is characteristic of the anarchic system. Accommodation between states is possible through skillful political leadership, which includes the prioritizing of national goals in order to limit conflicts with other states.

In an international system composed of sovereign states, the survival of both the states and the system depends on the intelligent pursuit of national interests and the accurate calculation of national power. Realists caution that messianic religious and ideological crusades can obscure core national interests and threaten the survival of individual states and the international system itself. Such crusades included, for Morgenthau, the pursuit of global communism or global democracy, each of which would inevitably clash with the other or with other competing ideologies. The attempt to reform countries toward the ideal of universal trust and cooperation, according to realists, runs counter to human nature, which is inclined toward competition, conflict, and war.

Exceptional economic integration, unprecedented threats to peace and security, and an international focus on human rights and environmental protection all speak to the complexity of international relations in the twenty-first century. This means the study of international relations must focus on interdisciplinary research that addresses, anticipates, and ultimately solves public policy problems.

International relations has a broad purpose in contemporary society, as it seeks to understand:

- The origins of war and the maintenance of peace
- The nature and exercise of power within the global system
- The changing character of state and non-state actors who participate in international decision-making

International Relations and Globalization

Although international relations has taken on a new significance because of our increasingly interconnected world, it is certainly not a new concept. Historically, the establishment of treaties between nations served as the earliest form of international relations.

The study and practice of international relations in today’s world is valuable for many reasons:

- International relations promotes successful trade policies between nations.
- International relations encourages travel related to business, tourism, and immigration, providing people with opportunities to enhance their lives.
- International relations allows nations to cooperate with one another, pool resources, and share information as a way to face global issues that go beyond any particular country or region. Contemporary global issues include pandemics, terrorism, and the environment.
- International relations advances human culture through cultural exchanges, diplomacy and policy development.

As our global society evolves, international relations will evolve and expand along with it as we continue to explore new and exciting way to link our complex world. Traditional dimensions of international relations related to international peace and prosperity include topics such as international diplomacy, arms control, and alliance politics. Contemporary studies in international relations, on other hand, include topics such as international political economics, environmental politics, refugee and migration issues, and human rights.

4. Market globalization

Market globalization gave huge power to international companies, whose influence keeps growing in international politics in analogous relation to their contribution to the gross domestic product of the countries where they invest (Ordeix-Rigo, 2009). The international companies have obligation and risks, particularly in an international business environment that is less probable, instable, and involves more politics than before (Bolewski, 2019). These include health problems as pandemics, cyber-attacks, fake news that make the international companies more exposed to geopolitical risks (Van der Putten, 2018). The international companies recognize that an innovative corporate mindset is crucial to operate in the global environment, since they are in an evolution into the diplomatic field, where the business legality as a sense of societal authorization to function, and the identification of stakeholder management convert into essential elements for the existence of international businesses (Ruel, 2020). The international companies that have the most positive results are the ones that have developed the proficiency in international affairs as the main aspect to their operations and expand their ability to function in the worldwide market through business diplomacy (Molleda, 2011). There is the need for international companies to alter the modes of thinking, through a multifaceted practice, in order to meet the business requirements worldwide, by making careful interpretation about the competitive setting can be extremely altered by unforeseen modifications in the factors, external to the market (Ruel, 2020). These modifications are related to the technological environment, the forceful competences such as the foundation of company competitive advantage in systems of speedy technological change, company performance, research and development and innovation (Teece, 2007). In order to handle the situation of shifting business settings, international companies strive beyond their organizational limitations to go into peripheral sources of information, increasing and updated research on the open innovation concept (Yun, 2020b). The international companies’ competitive geopolitical and social sphere of influence setting can be altered by new contestants carrying new tools and numerous stakeholders external to the value chain (Henisz, 2016). The motivators of competitive advantage in unindustrialized markets relate to the technological environment and the political and social environment (Sawyerr, 1993). The international companies should have the ability to comprehend the effect of the technological change and the stakeholder environment on the company strategy (Henisz, 2016). So, the international companies within the existing international economic and political context, should improve approaches to get successfully activated in the markets abroad (Egea, 2017). The value of the figures that the company receives must be filtered through intelligence tools that let managers identify and interpret the indications in the environment, external to the market and expect potential future conflicts (Egea, 2017). The keys for the international companies to succeed is situated in the marketplace, the political field and the host country people, which drives companies to identify, learn about, get involved with the stakeholders and try to influence them (Henisz, 2016).

This requires that international companies obtain new institutional roles to get insight of the legitimacy and to increase the competitive advantage, having in mind that the added value is created by the customers, the shareholders and the society to develop good reputation to become favorable to the company and the response time to the increasing uncertainty and the interconnection of geopolitical events happening daily. (Henisz, 2016). The international companies, as they try to meet the demands of the stakeholders, are playing roles relative to the governments, the political settings, the economic situation and the social power (Ordeix - Rigo and Duarte, 2009).

Understanding the value of country brands helps countries better feature the funds they allocate in areas that affect their global image. Governments hire Branding Consulting Companies to help launch branding campaigns aimed at attracting foreign investment, encouraging trade and even improving overall geopolitical influence. Country branding is cultural diplomacy in action it enhanced open communication of the stereotyping of countries and cultures and questions if the country branding represents a sincere opportunity to meet and understand the culture of a country.

This book explores the changing relationship between investor value and how it has been interpreted within the country. Also,this book deals with the conditions under which country communication efforts lead to associations regarding a country, and with the conditions under which these associations subsequently influence investor’s judgments and choices. The country communication efforts that may be used to influence investor’s associations may include advertising, annual reports, public interviews by country spokespersons, sponsoring, etc (Brown, 1998). When investor’s associations are established, these may influence many different kinds of attitudes and behaviors regarding the country, including investment, international trade decisions, buy in decisions, attract high qualification job applicants in the country (Sheinin & Biehal 1999). Regarding the development of corporate associations through corporate communication, research has primarily focused on the effects of corporate advertising (Grass, Bartges & Piech, 1972). While these studies illustrate the general importance of a specific corporate communication tool in establishing corporate associations, there is a remarkable scarcity of research investigating the conditions under which favorable corporate associations are more likely to be established (Winters, 1988).

Globalization requires governments to operate in a context different than before, which is to integrate other participants of diplomacy in its own decision-making processes. Governments have been focusing on new strategies, such as involving ministries and non-state actors and institutions, providing greater transparency, and acting collectively. Facing the challenges of an increasingly complex world Diplomats are not the only actors involved in the diplomatic process because due to globalization, many actors such as NGOs, international organizations and individuals can be seen practicing diplomacy. Diplomacy is a course of actions, based on the exchange of ideas, values and traditions to reinforce the business relationships, improve the social cooperation and stimulate the national interests, with respects to globalization.

Diplomacy, due to globalization the mass communication technology help access between people to promote peace & stability all over the world because it influences the opinion globally of businesses, trade, individuals, communities, cultures and countries (Kamsaris, 2020). The tactics to form international relations can be described either hard or soft power and according to Nye soft power is the ability to persuade and get what you want through culture, values and ideas through attraction rather than coercion or payments, while hard power involves activating forces. Through soft power, the use of cultural diplomacy becomes significant (Kamsaris, 2020).

Regarding the international business world, the will and ability to appreciate and embrace the diverse values and needs of dissimilar cultures is important for the strategic decisions and adopt diplomacy models tactics by increasing social awareness of international companies engaged in the development of culturally sensitive marketing plans and campaigns in order to build positive public opinion, form a good image, free of local problems, conduct research regarding the cultural differences of the new country and international companies with local focus (Kamsaris, 2020).

Bound states that the internet has created a world where cultures meet and mix and reform easily and constantly and countries are increasingly finding that they need to reaffirm their sovereignty to stop their cultures being swamped or changed by access to other cultural outputs. As Mark says, a state’s international cultural mission now involves a more active role in protecting and developing country culture. A country’s cultural identity needs to be strong and constantly reinforced and revitalised, or it will be flooded and lost. A culture is the set of values which underpins a country and the way that other countries use to understand you. Culture for Ribeiro is a non-threatening, inclusive way of communicating with people. It is powerful because it is universal and is shared as it is a manifestation of human genius and achievement and is charged with symbolic meaning.

5. Brand, symbol and sign

It is the human desire to be someone of consequence, to create a personal and social identity, to present oneself as both like other people, to belong and unlike other people, to stand out, and to have a good reputation. The term brand is often used as synonymous with trade-mark, although it does not always have the same significance as the trade-mark implies an exclusive property right, while brand, may be merely a label describing a particular variety and grade of goods (Brown, 1925).

Branding is divided by application to oneself, to other people, and to property and is perceived either positively or negatively. While the understanding of branding as the naming is essentially, the applications of this idea and the thinking about it have evolved and requires awareness of the difference between a sign and a symbol (Jung, 1964). Symbol is a term, a name, a picture that may be familiar, yet that possesses specific connotations in addition to the conventional and obvious meaning. A sign is the tangible item of intellectual property such as the logo, name, design, or image, on which the brand rests. But brands also incorporate intangibles such as identity, associations, and personality (Mercer, 2010).

Branding begins as a sign, a way of denoting what an object is and then becomes a form of naming something (Mercer, 2010). Instantly, the denotation is not enough and connotations arise (Mercer, 2010). The brand on an animal or a person promptly becomes a symbol of ownership and reputation (Mercer, 2010). To indicate proprietorship and the status of the one branded, a mark is a positive sign of distinction (Mercer, 2010).

Branding uses aggressive sales methods through trademarks and labels, and saw quality as an essential supplement to branding (Cherington, 1920). Branding is important means of selling and tends to establish in the minds of prospective customers an idea of character and quality (Maynard, Weidler, and Beckman 1927).

4.1 Branding – business practice

The evolution of branding is largely a phenomenon that could have only occurred starting at the end of the nineteenth century and into the twentieth century, due to the media (TV, radio, print advertising, e-marketing, etc.) (Moore and Reid, 2008).

Psychological theoriesand methods began to enrich marketing thinking and marketing research started to show signs of growth as managers of competing brands sought to understand the increasing segmentation of the mass market (Moore and Reid, 2008).

4.2 Brand image

With the productive resources created for the Second World War effort, the accumulation of capital, and the consumer demand, produced an flood of goods and a flow in buying, a Consumer Revolution, a, occurrence led to severe competition and increase of brands (Moore and Reid, 2008). Consumers were challenged with making choices among products and the brands made the claims of superiority (Gardner and Levy, 1955). That was the greater awareness of the social and psychological nature of products – whether brands, media, companies, institutional figures, services, industries, or ideas (Gardner and Levy, 1955). The consumers are guided by their brand image, that is, a governing product and brand personality that is unified and coherently meaningful (Gardner and Levy, 1955). The managers should think of the elements of the marketing mix as a contribution to the complex symbol that is the brand image – as part of the long-term investment in the reputation of the brand (Gardner and Levy, 1955). There are influential symbols for sale, which offers a completer clarification of the symbolic nature of products and brands (Levy, 1959). People buy things not only for what they can do, but also for what they mean (Gardner and Levy, 1955). Every advertisement is part of the long-term investment in the personality of the brand (Schwarzkopf, 2008).

Resistance to the idea of branding persists among managers who dislike being associated with marketing despite having to market their goods (Seabrook, 2010)

The branding concept expanded in terms of both application and thinking (Brown and Fisk, 1984). At a more emotional level a prime function of advertising is to achieve for a brand a particular personality or character in the perception of its market, achieved by infusing the brand with specific values, a particular feature of all great brands is their association with specific values, both functional and symbolic (Meenaghan, 1995). Both function and fantasy are important; an idea that reflects postmodern thinking (Firat and Venkatesh, 1995). A public image, a character or personality...may be more important for the overall status of the brand than are many facts about the product (Gardner and Levy, 1955). Products are psychologically significant as extensions of the self (Belk, 1988). If brands are seen as having personalities comparable anthropomorphically to those of people, it follows that people can have relationships with them (Levy, 1999). The dramatic shift in the importance of branding to the consumer, and the awareness of such a shift by managers and marketing researchers were expressed in several ways Fournier (1998).

The broadening of marketing’s application to all organizations and individuals, and thus highlights the widespread contemporary use of branding, as reported below (Kotler and Levy, 1969).

Places also have brand images and people were oddly unaware that it was going to cause more problems for the state’s brand (Mc Clay, 2010). Besides commodities and places, abstract and intangible entities such as political parties are also managed as a brand and the appropriations for parochial projects...undermined our brand as Republicans and our entire anti-big government agenda (Moore, 2010).

Brands have become learning and communication devices through which we define and convey aspects of our selves (Schulz and Stout, 2010), of our national identity (Dong and Tian, 2009), and of the groups we desire to be associated with and those we wish to be disassociated from (Han et al., 2010). Brands have been anthropomorphized (Aggarwal and McGill, 2010) and, as such, they can have sincere or exciting personalities (Swaminathan et al., 2009), which can be malleable or fixed (Yorkston et al., 2010). Those personality traits influence not only brand choice but also how consumers judge brands’ actions related to social causes (Torelli et al., 2010). Brands also give birth to other entities called brand extensions where their personifications make brands worth developing committed and loyal relationships (Raju et al., 2009). Based on particular characteristics, those relationships can be categorized as exchange or communal (Aggarwal, 2004). The relationship becomes such a regular part of life that the brands become invisible or unnoticeable, they exist in the background (Coupland, 2005). Brand-relationships can develop in children as young as seven years old (Chaplin and John, 2005) and, as in human relationships, the parties are free to break away as soon as the connection becomes unprofitable (Fournier and Alvarez, 2010). However, younger consumers tend to switch brands more often than do their older counterparts (Lambert-Pandraud and Laurent, 2010).

Branding offers the plasticity, the freedom, and the potential to play with meanings, a valuable asset in post-modern times (Firat and Venkatesh, 1995). Discussion of the vast number of metaphors currently used to make sense of brands, such as brand identity, brand reputation, brand image, brand personality is a testament to brand’s flexibility and complexity (Stern, 2006).

4.3 Corporate Branding

Corporate branding evolved from a name given to products to brands signifying relationships built between the company and its customers (Dall’Olmo and de Chernatony, 2000).

Promoting a whole company under corporate branding is more efficient for differentiation purposes compared to using product branding; a company can then use image, company attributes as well as reputation as additional differentiation opportunities (Olins, 2000).

Corporate branding is distinct from product branding in that a corporate brand encompasses associations and communications with people, relationships, programs and values, corporate credibility, and benefits of products; corporate brands include who the company is, not just what the company does (Keller and Richey, 2006). Corporate brands are more likely to lead to associations of product benefits, attributes, relationships and values (Barich and Kotler, 1991).

Corporate branding focuses on the company and not the products product brands focus on customers only through the product sold (Gylling and Lindberg-Repo, 2006). Corporate brands focus on the whole company’s image to include the community, investors, partners, suppliers, and has the propensity to relate all the organization’s multiple stakeholders with one another to form a relationship between these stakeholders and the company (Gylling and Lindberg-Repo, 2006). Corporate branding is more suited to professional services as the emphasis of corporate branding is on the capabilities of the provider (McDonald, 2001).

The benefits of corporate branding include

the ability of the company to differentiate itself, a positive image from its stakeholders resulting in profitability or other favorable outcomes (Gylling and Lindberg-Repo, 2006),

sustainable competitive advantage as per the resource based theory, and the fact that corporate brands cannot be substituted with other brands (Balmer and Gray, 2003).

corporate credibility where brand extensions and product innovation receive improved evaluations (Keller and Aaker 1998).

4.4 Aspects of branding

Core values are central concepts summarizing the corporate brand to guide the brand building process (Urde, 2003). It is commanding that all stakeholders are in agreement as to what the core values are and what each core value represents (Gylling and Lindberg-Repo, 2006). The connections between these stakeholders will form the culture of the organization (Gylling and Lindberg-Repo, 2006).

Customers have a much better understanding of product based brands compared to service based brands (Dall’ Olmo Riley and de Chernatony, 2000). Services attributes of intangibility, variability, heterogeneity, and perishability make for an abstract and complex relationship between customers and the company when trying to understand and implement a brand ( Dall’Olmo Riley and de Chernatony, 2000).

There is a link between the quality of staff and the quality of the brand, so better performing companies tend to reinvest in improving their staff who can then improve the company and increase the competitive advantage (Gray, 2006).

Corporate culture is as embodying total behaviors from a collective mind of the organization, the total of neural connections of that company (Gylling and Lindberg-Repo, 2006). This provides the organization’s identity (Karjalainen, 2004).

The collective view point comes from the core values which provides a summary of the corporate brand and guides the branding process through linking vision, mission and corporate values (Urde, 2003).

This brings about the essential role of employees as they:

- provide the link to all stakeholders (including investors, suppliers, partners, regulators, special interest groups or the community) (Balmer and Wilson, 1999)
- are key to building internal and external relationships and actually provide the ability to build a brand (de Chernatony 2001).
- consistent message needs to be given to all stakeholders particularly in a company with a diverse group of products (Gylling and Lindberg - Repo, 2006).

There is the link between all the stakeholders which seems to be crucial for a successful corporate brand in an educational institution (Harris and de Chernatony 2001). Corporate branding is a concept that binds the whole organization, and it would behoove the organization to communicate one message from the whole institution to internal stakeholders (teachers and administrators) and the external stakeholders (parents, students and the wider community) (Hatch and Schultz 2001). There is important to training and communication to employees and customers so that they know what the brand stands for (Wilson 2001).

Corporate brand personality involves the human traits attributed to a brand (Keller and Richey, 2006). This personality incorporates the three dimensions of affective, cognitive, and conative aspects of a personality, associated with the company having a passionate and compassionate “heart”, a creative and disciplined “mind” and an agile and collaborative “body” (Keller and Richey, 2006). There were 5 main clusters of personalities: sincerity, excitement, competence, sophistication, and ruggedness (Aaker, 1997). Corporate brand identity is the mix of characteristics that an organization possesses as a subject and provides the basis for a company’s reputation (Gylling and Lindberg-Repo, 2006).

A company’s reputation is formed from a relationship between the company’s collective standing with its employees and external stakeholders, state that a company’s reputation is a company’s ability to provide valued outcomes to a representative group of stakeholders, in this case, the students and parents who made a decision to attend the institution (Gylling and Lindberg - Repo, 2006).

Brand strength appears to be increased in the event of:

- Increased marketing communications (internal communication so that staff can understand what customers need),
- Integrating marketing communications of all the stakeholders,
- Investment in people – internal branding and personalization, and

Corporate branding and investing in branding and then the formal market research including community contributions (Gray (2006).

Corporate brand names do not just indicate to customers what the organization is about: it also give the employees of a company an infused corporate culture about what the brand values are (Gronroos, 1990) to allow the delivery of appropriate services and customer orientations; these notions can then indicate to employees what to do when new untested situations arise (Gummesson, 1991). In fact, the link that branding plays between customers and employees is so vital that relates customer loyalty to employee satisfaction and retention strategies (Reichheld, 1997).

There may be employees who are resisting adapting to organizational norms and values and an organization, in accordance to may also have more than one culture (Hulberg, 2006). The brand image of the company may also differ amongst different stakeholders; it is unclear as to how an educational organization reconciles these differences between different stakeholders and within the same group of stakeholders (Hulberg, 2006).

Customer based brand equity can be defined by the differential effect that brand knowledge has on a customer’s response to the marketing of the brand (Keller, 1998). This means that when a brand is marketed, an institution is making an investment as to what customers know, remember and perceive about the brand (Gregory and Wiechmann, 2002).

Brand equity is the key determinant for the value of a corporation (Doyle, 2002). A strong customer brand means high brand equity (or goodwill) for the organization which can be measured through customer, company and financial outcomes (Keller and Lehmann, 2006). As state, the views of the stakeholders, organization and customers are therefore combined to build on the brand’s value (Gylling and Lindberg-Repo, 2006). The resulting customer based brand equity results in differential brand knowledge which draws upon brand awareness, brand image and brand identity (Keller, 1993).

Corporate brand equity for educational services can be defined as including the brand value that all stakeholders associate with an business and this value includes all educational outcomes, personal development, behavior and financial results of that relationship (Bailey and Ball, 2006). The effect that brand intangibles have on brand equity may be the cause or formative aspect of brand equity, as opposed to constructed or reflective reasons for brand equity (Keller and Lehmann, 2006).

An important part of brand equity is brand experience where brand experience can affect brand equity. Certain experiences are under the control of the organization – but there are some which are not (Keller and Lehmann, 2006). In addition, some experiences can be taken advantage of by companies to enhance their brand equity. Schmitt (2003) researched 5 experiences that can create a brand: sense, feel, think, act, and relate.

4.5 The country branding concept

Country branding is the process of applying corporate branding techniques to promote countries, the main objective is to build and manage the reputation of a state. The concept of country branding is the systematic process of aligning the actions, behaviors, investments, innovations and communications of a country around a clear strategy for achieving a strengthened competitive identity. It can be as modest as linking the promotions, or it can be a decades-long policy of coordinating all internal and external national strategies into a coherent, planned process (Anholt, 2007). There is a rising concern among less wealthy countries to exercise country branding. Country branding provides the ability to advance their image overseas and promote trade, tourism and direct foreign investment, while it helps to fight stereotypes that are associated with certain countries.

The effects of country branding are that the countries have become more aware of the value of their brand as an asset (Anholt, 2007). Understanding the value of country brands helps countries better feature the funds they allocate in areas that affect their global image. Governments hire Branding Consulting Companies to help launch branding campaigns aimed at attracting foreign investment, encouraging trade and even improving overall geopolitical influence. In various countries, a remarkable economic turnaround has encouraged investment, exports have been valued for their quality on the international markets. Political perceptions and international respect has been shown to improve, with endeavors that enjoyed the active governmental support, through Strategy Country Brand, through a newly Inter Ministerial commission responsible for exporting the Brand of the country.

When investors have an opinion about the country behind the investment opportunity, this leads them to regard the offerings more favorably than the offerings of a country of which they have no associations (Maathuis, 1999). The influence of country associations on investor offerings evaluations depended on the degree to which investors perceive the offerings to fit well with the company (Madrigal, 2000). The investor perceptions of the way a country treats its people affects investor’s investing intentions, but only when they believe that it does not distract the country from making good offerings (Sen and Bhattacharya, 2001). Associations are a heterogeneous set of perceptions, which may relate to a wide variety of aspects of a country (Brown, 1998).

- Branding is a strategic point of view, not a select set of activities.
- Branding is central to creating customer value, not just images.
- Branding is a key tool for creating and maintaining competitive advantage.
- Brands are cultures that circulate in society as conventional stories.
- Effective brand strategies must address the four distinct components of brand value.
- Brand strategies must be “engineered” into the marketing mix.

Product: A product is anything that can be offered to a market to satisfy a want or need, including physical goods, services, experiences, events, persons, places, properties, organizations, information, and ideas (Kotler & Keller, 2015).

Brand: A brand is 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). A brand is the idea or image people have in mind when thinking about specific products, services, and activities of a company, both in a practical and emotional way (Dahlen, Lange and Smith, 2010). It is therefore not just the physical features that create a brand but also the feelings that consumers develop towards the company, a country or its offerings (Badenhausen, 2012). This combination of physical and emotional cues is triggered when exposed to the name, the logo, the visual identity, or even the message communicated (Dahlen, Lange and Smith, 2010). A product can be easily copied by other players in a market, but a brand will always be unique.

Branding definition: Branding is endowing products and services with the power of a brand (Kotler & Keller, 2015). Branding is the process of giving a meaning to specific organization, company, products or services by creating and shaping a brand in consumers’ minds (Badenhausen, 2012). It is a strategy designed by organizations to help people to quickly identify and experience their brand, and give them a reason to choose their products over the competition’s, by clarifying what this particular brand is and is not (Erdem and Swait, 2004). The objective is to attract and retain loyal customers and other stakeholders by delivering a product that is always aligned with what the brand promises (Fill, 2009).

A theme present in this book is the evolution of the brand from a simple entity with limited application and whose creation, interpretation, and control are mostly enacted by one actor, to the brand as a complex entity that is multi-dimensional and multi-functional, and that receives influences from a variety of actors such as the brand manager, the investor, the consumer, the media, the marketing researcher, technology, the competitor (Price, 2010). Also, we check the relationship between perceived country offering images in conjunction with political images and investors’ purchase intentions (Harzing and Sorge, 2003).

6. Business diplomacy

Geopolitical risk does not stop firms from operating in conflict zones, it functions as an aspect that firms have distress assimilating into wider management and commercial strategies. The business diplomacy offers a way to deal with and form a company’s geopolitical setting so as to diminish the effect of geopolitical risk, by giving the companies the diplomatic skills and the mind-set through focusing on:

- Geopolitical Risk Audit: examine the geopolitical dangers to a company’s international operations to integrate it in long term profitable plans.
- Geopolitical Stakeholder Audit: recognize the crucial players who shape the company’s geopolitical risk profile to form the basis for local and global information and influence networks.
- Developing effective networks: enable the companies to shape policy in their favor and to anticipate future problems.
- Implementing innovative public diplomacy strategies that go beyond lobbying to engage with societies.
- Developing a business diplomacy Strategy to generate alliances among crucial stakeholders based on common interests to promote the firm’s geopolitical objectives and to isolate problem actors.
- Developing innovative training to give executives skills to carry out business diplomatic functions within the firm.

Corporate political activity includes lobbying, campaign contributions, having a government relations office, trade political committees is a firm’s efforts to influence, manage political entities and contact to politicians to influence policymaking processes in favor of the international companies. (Hillman, 2004). The corporate political activity is used to protect potential business and to adjust costly regulations (Hansen and Mitchell, 2000). The practices are expanding as trade transfers gradually across borders, which involve more political organizations and players (Hillman, 2004).

The international company’s representation in the country such as Embassy, General Consulate and Honorary Consulates have boundaries in the support that they can offer, making companies normally turning to public affairs strategies, including government and political lobbying, to deal with the dangers of geopolitical risks that hazard their operations.

The government and political lobbying is an action intended at persuading key stakeholders as the host country government, can enflame antipathy and refusal and bring reactions in other countries that can harm the companies’ operations somewhere else.

The political lobbying risks descending into corruption in authoritarian and poorer countries.

Corporate political strategies are intended at influencing public officials to shape a favorable business environment for the international company (Baron, 1997).

Strategic political management is a set of strategic actions planned and endorsed by companies to exploit financial returns from the political environment (Oliver & Holzinger, 2008).

The international companies receive wider stakeholder obligation to develop and renew their public commitment that is added to the legal requirements in jurisdictions, through the corporate social responsibility that improves their competitive advantage, reduces their political and social risk, provides better understanding of local markets and improves the workforce quality (Detomasi, 2007).

Corporate citizenship and corporate social responsibility, drives the success of a company to a part on its capability to commit to a variety of stakeholders on social and environmental concerns (Muldoon, 2005).

There are building blocks which expand the cooperative relationships between international companies and governments, and these are resource commitment, personal relations, political accommodation, and organizational credibility (Luo, 2001). The governmental relations are serious for the potential to development and expansion worldwide since local authorities influence the parameters of production, management and investment (Boddewyn & Brewer, 1994)

The international companies try to find new or try to sustain policies that affect the business functions or exploit future opportunities by politics (Bonardi, 2005). The politics is a set of individual markets characterized by the interface between demand such as voters, interest groups, firms, political parties and other governments and supply (Hillman & Hitt, 1999). Suppliers include politicians and their workforce, elected members of parliament, legislatures, members of the judiciary, and any number of appointed, elected, or career bureaucrats who staff government agencies (Hillman and Keim, 1995). Every public policy has a different set of players each with its own competitive dynamics (Bonardi, 2005).

Governments have impact on international companies by helping to stay informed about policies, government regulations, and public policy which are the consequences of a process in which new issues are entered into the plan constantly and businesses would not be aware of changes in regulations and legislations (Hillman, 1999).

International companies with political activity skills have healthier awareness about PESTEL environments, better bargaining skills, and more direct access to decision and opinion makers (Porac & Thomas, 1990).

The political skills and political behavior are essential since governments have control of the legitimate power, and international companies need authorization to enter and function in a host country which is the extent that their activities are compatible with the values in the environments and can help international companies become efficiency, market power and legitimacy (Miles & Cameron, 1982). Legitimacy enables to add value in resources, gives access to policy makers, influences policy making and decreases the hostility, because governments are hurdles but also gives incentives for cost and market effectiveness strategies of companies (Boddewyn & Brewer, 1994). The political activity has a positive effect on international companies’ performance involved gross profit margin, load factors, and changes in market share (Shaffer and Hillman, 2000). The political activities of international companies’ way they manage and influence political entities is an important factor in determining performance (Baron, 1997). The corporate political activity is an investment decision when they expect to generate better returns and the benefits from obtaining beneficial policy outweigh the costs (Mitchell, 1997).

The government can be a competitive tool to create the environment most favorable to a firm’s competitive efforts (Hillman & Hitt, 1999). The international companies’ size’ provides an indication about its ability to become politically involved and represents different values of organizational power such as economic and political power (Schuler & Rehbein, 1997). The international companies with better financial resources are more expected to get involved in political activity alone, while smaller companies work collectively with others (Hillman and Hitt, 1999).

Market share influences international companies’ will to activate in political activities as large market share employ numerous employees and various assets, which enables them to engage in this practice (Schuler, 1996). Resource dependency is the extent to which international companies’ depends on governmental resources that they control, which are critical for companies (Hillman & Hitt, 1999). Acquiring and upholding the resources is critical for international companies’, therefore it becomes necessary to become politically involved (Keim and Baysinger, 1988). The international companies face organizational slack an important factor that influences them to become politically active is (Schuler, 1996). Organizational slack mitigate the actual or potential resources which allows an organization to adjust well to internal and external pressures for change in policy, and to initiate changes in strategy with respect to the external environment (Bourgeois, 1981). The international companies with a high level of organizational slack will be possible to become politically active since they possess the necessary financial recourses (Meznar and Nigh, 1995).

The international companies with business diversification level is accepted as an originator of political activity (Schuler, 1996). The greater the diversification level of the international companies, the more probable they are to use the political activity integrated with the corporate strategy (Aggarwal, 2001). The international companies that follow diversification strategies, connect with a diversity of society are exposed to greater social pressures and firms with diversification strategies are more politically active (Lux, 2011).

Age of the firm is perceived as a proxy of visibility of the firm (Hansen and Mitchell, 2000). Also, firm age designates experience and credibility (Hillman, 2003). The sensible executives interprets and responds to political signals by establishing programs, routines, and structures to assist decisions making (Schuler and Rehbein, 1997). The company structure facilitates the relationship between political variables and political activities (Schuler, 1999).

Also, the international companies’ industry-level variables, like as industry concentration, and affect the ability to establish political action (Hillman, 2004). The international companies can attain benefits when working together with other firms to influence public policy outcomes (Olson, 1965). The international companies which are concentrated, it is easier for to organize cooperation, and firms can influence legislators as there is an encouraging association between industry concentration and political activity (Schuler, 2002). The international companies in a highly concentrated business will receive a higher return on their political investment (Olson, 1965).

When global antagonism is high, governments create entry barriers and tariffs for international companies to protect domestic firms (Lux, 2011). The international companies that occupy a relatively small size take a free ride on the political efforts of larger companies in the industry (Schuler, 1996). The economic opportunities in a market are negatively related to the political activities (Lux, 2011).

The variables on political activities such as politician incumbency, ideology, political competition, government regulation, government sales and government dependency (Lux, 2011).

Politician incumbency: The international companies should appraise a politician’s ability to deliver the demanded policies (Lux, 2011). It is part of their ability to get legislation passed (Evans, 1988). So, the political incumbency is positively related to the political activities (Lux, 2011).

Ideology: the political ideology, positively related to the political activities, concerns if politicians are willing to provide the desired policies (Lux, 2011).

Political competition is the number of parties interested in and competing for a policy (Lux, 2011). The politicians will not supply policy when opposing demands exists, then the international companies will employ in political activities, every time other competing companies or special interest groups seek policy that will undesirably affect the international companies’ business activities (Lux, 2011).

Governmental regulation: when regulations block operations and are costly for firms, they will employ in political activities (Lux, 2011).

Government sales: international companies that conduct large business with governments will employ relationships through CPA (Boies, 1989). The politicians depend on international companies as resources of votes and sponsors. (Lux, 2011).

The international companies that want to exploit the government dependencies will employ in political activities and the company’s decision to become politically active depends on the attractiveness of the political market (Bonardi, 2005).

The attractiveness of the demand side is relevant to election issues where international companies are expected to have a relative benefit on decisions on non-election issues because of the reduced rivalry among the demanders, the attractiveness of the political market in which the benefits of policy issues are concentrated and costs are spread are attractive for companies that promote these issues and whether the issue is new or concerns an existing policy, since political markets are more attractive for firms when defending existing regulations or policies (Bonardi, 2005).

The attractiveness of the supply side has two characteristics, the bureaucrats and the elected officials. When there is high competition between bureaucratic suppliers and agency with full regulatory power, this decreases the probability of changing the policy status quo and makes a political market less attractive for demanders (Bonardi, 2005).

When the competition is high during elections, each representative will be particularly open to the needs of firms in order to collect votes and the attractiveness is high (Bonardi, 2005). The international companies with high level of political activities will gain higher performance such as returns on investment, returns on assets and government-derived revenues (Lux, 2011).

7. Political strategy choices

The international companies appear to make politically strategic choices based on internal firm characteristics and external environment characteristics (Hillman, 2003). Internal firm characteristics significantly influence the firm’s political strategy (Rehbein and Schuler, 1999). A political strategy is intentional to stimulus governmental decisions that affect the international company’s operations (Baron, 1997). It is helpful for international companies to increase access to a political market and influence local regulation in favor of the firm (Hillman, 1999).

The political strategy embraced by an international company should be aligned with the external and internal environment (Galbraith and Kazanjian, 1986). There is a proactive and reactive political actions or buffering and bridging (Hillman, 2004). Buffering is the proactive political actions, which contains updating policy makers about the properties of legislation on international companies and trying to influence these regulations, through lobbying and campaign contributions (Blumentritt, 2003). Bridging is reactive political actions, which embraces activities like exceeding compliance levels of regulation, and following the development of regulation to have compliance ready when approved, though not sufficient for international companies that want to impact regulation in their favor (Hillman & Hitt, 1999). In transactional approach political strategy, the international companies postpone for a new public policy to develop before generating a political strategy, which is not frequently used because they follow lasting political strategies build long-term relationships with governments to influence policy-making in their favor (Hillman & Hitt, 1999).

The adaptation of relational or transactional tactic depends on several elements such as the extent to which international companies are affected by the government policies and companies with a high government policy dependency are expected to use a relational approach, the company product diversification level, where the more diversified products are more probable to use a relational approach towards political strategy and the companies with standardized products are expected to use a transactional approach (Hillman and Hitt, 1999). The degree of corporatism and pluralism in the country where the international companies in corporatist countries, use the relation approach, while the transactional approach is favored in pluralist countries (Hillman, 2003). The number of employees working in international companies also determine the approach adopted towards political strategy, where the bigger reliability and larger number of employee will adopt a relational tactic, because relationships with political players develop quicker (Hillman, 2003).

Regarding the participation level two types can be used by international companies in the public policy field, individual action refers to private struggles of individual companies to affect public policy and the collective action theory which emphases on the collective goods of political actions, which can be categorized as collective or selective benefits (Olson, 1965). The collective benefits favor various players and companies that haven’t contributed in political efforts and consist of quotas, standard settings, and trade barriers and politically passive businesses can free ride on the efforts of politically active firms and benefit from favorable policy outcomes (Schuler, 1996). The selective benefits increase for the companies that contributed in determining the policy (Hillman, 1999).

The international companies with resources are expected to influence public policy outcomes individually while the ones that are deficient resources possibly to use collective participation (Hillman and Hitt, 1999). Corporatist countries promote positive-sum policies in the population and not specifically for the interest of one group, while companies in pluralist countries probably to use individual participation, whereas firms in corporatist countries are expected to participate collectively in the public policy field (Hillman & Keim, 1995). The international companies adopt a relational tactic and participate collectively in the public policy arena (Hillman, 2003). The international companies with high market share are further politically active than smaller firms, which are more likely to engage in free-riding behavior (Schuler, 1996).

There is a system of business decisions when the international companies formulate a political strategy trying to influence political decision makers by providing information through lobbying, bringing position papers and technical reports to create information asymmetries between the company and public policy makers who need evidence for measuring public opinions and voting behavior concerning particular policies (Hillman & Hitt, 1999).

The international companies use financial contributions to political parties to influence political decisions (Baysinger, Keim, and Zeithaml, 1985). They try to influence decision makers indirectly through constituent support. This includes a company’s energies to become politically active on public policy issues in which stakeholders share solid joint interests (Lord, 2000). The information and financial motivation approaches’ purpose is to stimulate the public decision makers directly, while constituency-building approach effort to impact public policies indirectly, by nurturing the support of voters (Hillman and Wan, 2005). The chosen strategy depends on the whether it has a transactional approach, the life cycle stage of the particular policy issue becomes relevant. (Hillman and Hitt, 1999).

The leading stages of life cycle are the public opinion formation where the international company use a constituency-building strategy to communicate and shape opinions with the public to influence public policy makers and public policy formulation where companies can either resist or back up the new issue through the information or financial plan (Ryan, 1987). Businesses with relational method adopt a political strategy, based on their own recourses and information is supposed to be trustworthy, a quality that defines the success of political its political actions, to influence political decision makers (Boddewyn and Brewer, 1994). The international companies with advanced trustworthiness levels embrace either an information strategy or a constituency-building strategy which is easier to use in organizations with a huge number of employees to whom the company can provide training to become politically active and impact the political arena (Hillman and Hitt (1999). Companies can associate and connect the information strategy to the financial incentive strategy, while the information strategy cannot connected and associated to constituency building due to the difference in point ofview (Schuler, 2002).

The information strategy is used by bigger with international companies that employ lobbying (Hillman, 2003).

Political strategies are assumed by companies to create or maintain value in the political environments that contribute to their effectiveness and these were the anticipatory, reactive, anticipatory, defensive and proactive (Oliver and Holzinger, 2008). The companies’ specific assets and competences define which strategy to adopt where the reactive political strategy, the businesses protect their strategic assets by supporting their internal processes efficiently and effectively with the public policy demands (Oliver and Holzinger, 2008). Companies In the anticipatory political strategy, combine the resources to improve the scanning and knowledge ability to influence the political environment by discouraging policies that are not favorable through lobbying (Oliver and Holzinger, 2008).

The companies in the proactive political strategy try to outline the basic nature of how public policies are developed (Oliver & Holzinger, 2008). The international companies are influenced by the host country’s political environment due to their exposure to sources of authority (Sundaram & Black, 1992).

Companies must operate in an impulsive geopolitical environment of higher instability and many of the risks challenging the businesses rise from the nature of globalization and contain the operations risk and reputation from non-state actors, whose campaigns in human rights, labor conditions, poverty, financial instability, organized crime, climate change and environmental degradation, are enhanced by the information and communication technologies and social media which can destroy the ethical reputation in its home markets and face the risks of expropriation, nationalization, political blackmail, physical and economic threats of civil war, ethnic conflict and war.

The political activities is inclined by characteristics of the international companies and their host country authorities with efforts to produce a joined and steady approach towards authority actors, though there are forces that make companies to diverge from typical procedures to interact with political actors (Blumentritt & Nigh, 2002). The governmental procedures diverge significantly between countries in which these companies are active, they need to manage different political policy issues and the recourses of a company and the role it plays has an effect on the political strategy decisions and they need to respond to the local political possibilities of the host countries (Brewer, 1992).

The companies assimilate their political activities with partners, based on the strategic factors and on host country environments (Blumentritt and Nigh, 2002). The companies have their specific strategic patterns, as they need to obey to the legality forces in the host country and the internal forces of the parent firm used the political strategy classification (Hillman and Wan, 2005).

Legitimacy forces such as the tenure in a country, company size, the degree of corporatism in the host country, and the level of diversification influence the political strategy of international company’s local company (Hillman & Wan, 2005).

The international companies implement multiple political activities to influence legislative decisions (Schuler, 2002). Political campaign contributions, constituency building, executive lobbying, use of professional lobbyists, and advocacy advertising are some of the political activities of international companies (Lord, 2000). The direct influence activities include lobbying and campaign financing while the indirect influence activities involve popular mobilization, non-governmental stakeholder management, and media relations (Windsor, 2007).

Companies have to steer between competing rules, value systems where the prevailing international law does not provide a consistent protection, where the government needs to equilibrium between the various interests, intermediaries have their own agendas, negotiating in an out of court settlement. The international companies practice different political behavior concurrently to achieve favorable policy outcomes (Mahon, 1993). The campaign contributions are mentioned as typical activities used (Keim & Zeithaml, 1986). Lobbying is an activity in which information regarding a firm’s policy preferences is transferred to public legislators (Hansen & Mitchell, 2000). Lobbying as an activity that can be conducted by external professional lobbyists or company lobbyists trying to obtain special benefits, such as regulatory relief or government contracts (Lord, 2000). Lobbying is the most common political activity for firms (Hansen and Mitchell, 2000). Constituency building is the most effective activity according to congressional respondents (Lord, 2000). Corporate constituency building is a highly effective activity of creating political influence (Baysinger, 1984). In order to gain access to political markets, companies combine campaign funding with lobbying and firms in concentrated industries are more likely to engage in lobbying and campaign contributions than those in fragmented industries (Schuler, 2002).

Policy networks are the interactions of different interest groups in public policymaking and their actions (Rhodes & Marsh, 1992). The international companies’ political influence, also depends on the option of being involved in policy networks (Rizopoulos and Sergakis, 2010). This network stresses the exchange processes between organizations and the complexity of ties binding major stakeholders by resource interdependencies” (Rizopoulos & Sergakis, 2010). Firm-specific assets such as employment, knowledge, and financial supremacy, enable international companies to influence public plans that are associated with their operative goals and have to keep valuable resources that other actors pursue (Dahan, 2006).

The perception of the international companies and their strategic goals are created in relation to the policy networks in which they are involved (Rizopoulos & Sergakis, 2010).

There are two types of policy networks, the closed policy network which consists of a solid connection between a small number of public and private actors who share the identical interests, preferences, and values (Schaap and van Twist, 1997). On the other hand, the closed policy network is characterized by cohesion, centralization, convergence, exclusivity, and constitutes a formal setting, and it is appropriate to structure a leading station esoteric to the specific issue area (Rizopoulos & Sergakis, 2010).

An open policy networks contains of weak ties amongst participants with well-balanced negotiating influence and slight interdependence and it is characterized by little centralization, density and cohesion, the interconnectivity is missing, and exchanges are created on discussion about of information and the type of policy network and a firm’s position in it determines the political leverage (Rizopoulos & Sergakis, 2010).

Backing up from the international companies’ home governments could ascend when firms have dominant positions in closed home-based policy networks, or if companies have the ability to establish alliances with stakeholders in open networks. Furthermore, the international companies have a leading situation when they deliver the resources on which public decision-makers depend (Dahan, 2006).

A dominant position in a home-based country allows growth to international marketplaces through the production and distribution of practical information, used as the key resource delivered to policy decision-makers, such as writing export reports, commissioning scientific studies and publishing documents among officials and the media (Dahan, 2006).

8. Country branding

Principles of branding apply to countries as they do to businesses, but it will compete with other countries and regions foreign investment and export sales. The countries that start with an unknown or poor reputation will be restricted or downgraded and they cannot enhance their profitmaking success. When the reputation is clear, products made in that country carry quality, bringing business and investment. The country branding demands an integration of the ability to communicate in a coordinated and repetitive way about themes that are the most motivating and differentiating a country can make. The benefits of a consistent country branding, include the ability get investment business because the country image contacts about the factors of taxation, labor skills, safety, environment, political stability.

Country branding is increasingly examined by researchers and practitioners because of the potential economic, political and strategic values inherent in developing a favorable country image (Dinnie, 2008). The objective of nation branding is to promote a positive nation image for the country and its people, to establish its brand identity, to enhance the export of its products and to attract tourists and foreign direct investment (Anholt, 2003). Country branding concerns the image and reputation that a country enjoys in the world which can directly influence its appeal as a destination for investment (Fan, 2010).

The countries have an image that is shown to the international audience (Fan, 2010). The need for countries to actively manage their images through branding has been stressed repeatedly in the literature (Kotler and Gertner, 2002). The branding of countries have definite difficulties that are not faced in the corporate world (Papadopoulos, 2004). These encounters are coming from various parties involved, such as the numerous stakeholders, rambling social and political objectives, and the difficulty to precisely measure the outcomes (Papadopoulos, 2004). It is broadly known that places can be hypothesized as, and behave as commercial brands, as well (Anholt, 2003).

As promotion is one out of four main components of the marketing mix, equating the part to the whole or using the two interchangeably portrays the erroneous impression that marketing is nothing but promotion (Wells and Wint, 2000).

7.1 The origins of country branding

Brand origin is the place, region or country to which the brand is perceived to belong by its target consumers (Chisik, 2003). The countries should use the set of meanings attached to them as compare to the approaches which are used for the branding of offerings (Askegaard and Ger, 1998).

Countries are managing their brands in order to attract tourism, foreign investments and exports (Anholt & Simon, 2003). The countries recognize that they have to consciously adopt the branding techniques (Kotler & Gertner, 2002). In a few years’ time countries will be managing their own identities and the process will be considered perfectly normal and a successful brand will be considered as a domestic asset of the country (Olins, 1999). There is also the situation of an unbranded country which finds it difficult to attract political or economic attention from the rest of the world, because the reputation of a country along with its image plays a vital role to develop a country’s strategic equity (Van Ham, 2001).

The country branding concept can be used to achieve national competitiveness through developing and increasing the nation brand equity (Anholt, 2003). Aligning the efforts to improve the identity and image of the nation through the application of strategic management (Anholt, 2007).

The governance, planning and economic development of a country is concerned with its use of brand management techniques (Anholt, 2008). There are specific practices which constitute the nation branding (Dzenovska, 2005). Without the backing of the people such activities will not be successful, so these projects should be backed up by the people and they must live the brand (Anholt, 2002). The perception of a country in the outer world is dependent on the capabilities of that nation which is generally dependent upon its reality (De Gouveia & Plumridge, 2005).

In the case of a non attractive reality, the branding efforts will not bring much for the country and advertising can bring the investor to the country, but whether the investor stays with the country, depends on the offerings (Walsh & Wiedmann, 2008).

National stereotypes has much stronger effect on consumer attitudes than the opinions about the specific products (Schooler, 1965). Investors attach a stereotype, reputation or a picture to the products from a specific country (Nagashina, 1970).

There is an impact of a country’s products and its marketing efforts on the consumer’s perception about that country (Roth and Romeo, 1992). The concept is very much applicable to this product category and even the business, while buying from abroad, give more weightage to this factor (Chinen, Enomoto and Costley, 2000).

The globalization has impact on country branding, where there are many offerings produced and designed in various countries (Papadopoulos & Heslop, 2002). Because of this, the country of the brand which is producing these products has got more significance in the eyes of the consumers (Samiee, 2005). This also helps the investors in a way that they can categories the countries having a particular type of domestic image in certain categories (Leclerc, 1994).

The origin of country branding study can be traced to four different sources, namely, country of origin (Papadoplous and Heslop, 2002), place or destination branding (Kotler and Gertner, 2002), and more recently, public diplomacy (van Ham, 2001), and national identity ( Bond, et al, 2001). Country branding is concerned with a country’s whole image on the international stage covering political, economic and cultural dimensions (Quelch and Jocz, 2004). Country branding is determined by practitioners and there is an urgent need for conceptual and theoretical development of the subject (Stets and Burke, 2000). Country branding can benefit from the rich literature of organization identity and organization reputation (Hatch and Schultz, 2002). Compared with other three sources, national identity is a less visible but more promising one. The link between organization identity and national identity with nation branding has yet to be fully understood (Stets and Burke, 2000).

A brand is a complex bundle of images, meanings, associations and experiences in the mind of people. A brand is a multidimensional assortment of functional, emotional, relational and strategic elements that collectively generate a unique set of associations in the public mind (Aaker, 1996). Every country has a unique name and images in the mind of people, so a nation does have brands (Hatch and Schultz, 2002). A country brand is the total sum of all perceptions of a nation in the mind of international stakeholders containing elements such as people, place, culture/language, history, food, fashion, famous faces (celebrities), global brands etc (Quelch and Jocz, 2004). Each country has a current image to its international audience, be it strong or weak, clear or vague (Fan, 2006).

A country brand is considered as an aegis brand that endorses many sector brands (Dinnie, 2007).

A country brand concerns the country’s image, reputation and positioning, a role quite similar to that of corporate branding (Roth and Diamantopoulos, 2009).

- The country branding purposes to form and sustain a country’s competitiveness (Lee, 2009).
- Country branding helps enhance a country’s soft power (Fan, 2008a).
- The country branding relates to national identity (Dinnie, 2007).

The country branding concept shows significant differences in the focus and purpose or outcome of branding the nation:

- To mold national identities (Olins, 1999)
- To boost nation’s competitiveness (Lee, 2009)
- To encircle the political, cultural, business and sport activities” (Jaffe and Nebenzahl, 2001).
- To stimulate economic and political interests at home and abroad (Szondi, 2007)
- To amend, improve or enhance a country’s image and reputation (Gudjosson, 2005)

Identity, image and reputation refer to mental associations generated by knowledge and past experience. Identity is about self perception (Whetten and Mackey, 2002).

Country’s identity refers to the essentially irrational psychological bond that binds fellow nationals together and which is supposed to constitute the essence of national identity(Whetten and Mackey, 2002). The different parts of a country’s identity come into focus on the international stage at different times (O’Shaughenssy and O’Shaughenssy, 2000). The identity of the country considerably contribute in domestic branding and we can take the viewing of the country as imagined community as one of the key issues in national identity (Dinnie, 2008). The process of nation branding is a systematic and planned activity, the strategic approach behind this process will link the economic development of a country with the improvement and creation of a nation’s realities and its identity (Anholt, 2007).

Image is what is projected to other while reputation is the feedback received from other (Whetten and Mackey, 2002). It is what a nation’s people want the world to understand is most central, enduring and distinctive about their country (Whetten and Mackey, 2002). The image of a country is so multifaceted as to deny the clarity implicit in a term such as brand image (O’Shaughenssy and O’Shaughenssy, 2000). Since the social concept of the country consists of the people sharing key elements of a shared culture such as norms, values, beliefs, institutions, the image of the nations is very much attached to it (O'Shaughnessy & Jackson, 2000). Considering the importance of national image and nation brand discouraged the idea of categorizing different countries as being developed, developing or under developed, (Jaffe & Nebenzahl, 2001).

Reputation is components of a symmetrical communications process between the country and its international stakeholders (Whetten and Mackey, 2002). It is a type of feedback received by the nation from the outside world, concerning the credibility of the nation’s identity claims (Whetten and Mackey, 2002). The way to gain a good reputation is to endeavor to be what you desire to appear (Socrates, 469BC-399BC).

It is impossible to develop such a simple core message about a country that can be used by different industry sectors in different countries (Fan, 2007).

9. Reputation

Reputation or image of a social entity is an opinion about that entity, typically as a result of social evaluation on a set of criteria. Reputation is global, spontaneous, and highly efficient mechanism of social control in natural societies. It is a subject of study in social, management and technological sciences. Its influence ranges from competitive settings, like markets, to cooperative ones, like firms, organizations, institutions and communities. Reputation acts on different levels of agency, individual and supra-individual. Reputation is a fundamental instrument of social order, based upon distributed, spontaneous social control. The concept of reputation is considered important in business, politics, education, online communities, and many other fields, and it may be considered as a reflection of that social entity's identity.

Image is a global or averaged evaluation of a given target on the part of an agent. It consists of social evaluations about the characteristics of the target. Reputation, as distinct from image, is the process and the effect of transmitting a target image. To be more precise, we call reputation transmission a communication of an evaluation without the specification of the evaluator, if not for a group attribution, and only in the default sense discussed before. More precisely, reputation is a believed, social, meta-evaluation; it is built upon three distinct but interrelated objects:

- a cognitive representation, or more precisely a believed evaluation - this could be somebody's image, but is enough that this consist of a communicated evaluation;
- a population object, i.e., a propagating believed evaluation;
- an objective emergent property at the agent level, i.e., what the agent is believed to be.

Reputation is a highly dynamic occurrence:

- subject to change, especially as an effect of corruption, errors, deception, etc
- emerges as an effect of a multi-level bidirectional process
- how others know and perceive

While image only moves from one to another, the anonymous character of reputation makes it a more complex phenomenon. Reputation proceeds from the level of individual cognition to the level of social propagation and from this level back to individual cognition again. Once it gets to the population level, reputation gives rise to a further property at the agent level. Reputation has become the immaterial, more powerful equivalent of a scarlet letter sewed to one's clothes. It is more powerful because it may not even be perceived by the individual to whom it sticks, and consequently it is out of the individual's power to control and manipulate.

8.1 Reputation-based decisions

Image and reputation concern properties of another agent, and they are shared by a multitude of agents but they operate at different levels.

Image is a belief, namely, an evaluation.

Reputation is a meta-belief, the belief about others' evaluations of the target with regard to a socially desirable behavior.

To better understand the difference between image and reputation, the mental decisions based upon them must be analyzed at the following levels:

- Pragmatic–strategic: use image to decide whether and how to interact with the target.
- Memetic: transmit my evaluative beliefs about a given target to others.
- Corporate reputation: Sociologists view corporate reputation as descriptions of the relative status that countries occupy in an institutional field of rivals and stakeholders.

8.2 Reputation capital

Reputation is one of the most valuable forms of capital of a country. Delivering functional and social expectations of the public on the one hand and manage to build a unique identity on the other hand creates trust and this trust builds the informal framework of a country. This framework provides return in cooperation and produces reputation capital. A positive reputation will secure a company or organisation long-term competitive advantages. The higher a company's reputation capital, the lower the costs of supervising and exercising control.

Reputation consists of the beliefs that stakeholders hold about a company and the feelings that stakeholders have about a country. While the cognitive element of reputation can reflect the uniqueness of a company or of products in term characteristics such as brand attributes, the affective element is always evaluative. In other words, it gives an indication of whether stakeholders like, admire or trust a company and its attributes. A unique and distinctive cognitive evaluation of a company only has value if this results in a positive affective evaluation and positive consequences of reputation. The consequences of reputation reside in the behaviors that stakeholders demonstrate towards a company. Behaviors such as advocacy, commitment and cooperation are key positive outcomes of a good reputation. Boycotts and lawsuits are key negative outcomes of a bad reputation.

Creating reputation

Morgan advices that when a nation has decided what images will be used to appeal to a market, core values are established, it is positioned and advertised successfully, it is placed in the market and a good reputation is created once it can generate an emotional response from the consumer.

Governments for Gudjonsson play a role by helping create a national identity that everyone shares in and which has a resonance for people overseas, and creating an environment where industry can grow and produce products that are valued offshore.

Morgan argues that the core values of the nation have to be tailored to suit the target market so to begin to create a response in the consumers.

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