National Branding

Inhaltsverzeichnis

1. Introduction

2. Theoretical Approach
2.1. Definition of National Branding
2.2. The Nation Brand Hexagon
2.3. The Nation Brand Architecture
2.3. The Process of Creating a National Brand
2.5. Concept Critics

3. National Branding in Practice
3.1. Brand Germany
3.2. The Benefit of a National Brand
3.3. The Nation Brand Index

4. Possible Future Development and Conclusion

List of Illustration

Illustration 1: Nation Brand Hexagon

Illustration 2: National Brand Architecture

Illustration 3: Phases of the National Brand Creating Process

Illustration 4: German National Brand Logo

Illustration 5: Export Volume Germany

Illustration 6: Development of the National Brand Index Ranking

1. Introduction

The globalization, describing the process of the increasing linkage between countries due to modernization, is the formative phenomena at the present. Whereas for the consumer this development leads to an enlarged range of products and services to choose from, for the supplier this means an increased competition. Companies have to install subsidiaries all over the world, in order to participate in this globalized competition. But not only companies face this strongly competitive structure, nations also deal with this problem. They have to find right answers for questions like: “Why should a company invest in our country?”, “Why should a tourist visit our country?” or “Why should someone want to live in our country?” (Association for Place Branding and & Public Democracy 2007a, date of retrieval: 06.06.2008). A significant answer to these questions can be provided by the image¹ of the nation, since every nation has its perception, history and culture, being responsible for the formation of an image. According to this image, people have associations about a nation, which influence them in their decision making process. These associations might not always be positive, especially in times when the image is for example incorrect or outdated (Anholt 2006a: 98). Then the image is no longer able to support the nation’s economical, political or developmental goals.

In order to avoid this, nations have to find new ways to promote themselves, and to attract the attention of people, might they be tourists, high potentials or investors. One of these new ways is National Branding. A concept, that already proved its positive effect on products by increasing the sales volume and the customer retention, seems to be the right idea for nations to face this challenge.

The following paper deals with the difficulty of adopting the concept of branding for the national level, and thus to attract the nation’s target group and to mark a decisive advantage over other nations. The approach is based on a theoretical and practical chapter about National Branding, and closing up with a possible future development and a conclusion.

2. Theoretical Approach

This chapter gives an overview over the theory of the National Branding, focusing on the points that have to be adhered to in the creation and the implementation process of a National Brand.

2.1. Definition of National Branding

In general a Nation Brand can be described as the unique, multidimensional blend of elements that provide the nation with culturally grounded differentiation and relevance for all of its target audience (Dinnie 2008: 15). Therefore the theory of National Branding uses the common brand idea that is defined as a name, symbol, design, or some combination, which identifies the ‘product’ of a particular organization as having a sustainable differential advantage (Dinnie 2008: 15). In summary National Branding is about shaping images and creating a favorable reputation. The target is to find the unique and relevant parts of the constituting identity elements and thus to make the nation more famous to their defined target group (Association for Place Branding and & Public Democracy 2007a, date of retrieval: 06.06.2008). Therefore it is not enough to just proclaim the image with several advertising activities, slogans and logos, but the nation has to represent its image with its behavior (Szarek 2006, date of retrieval: 11.06.2008). With an appropriate National Brand the nation targets to have an impact on tourism, export industry, foreign direct investment and foreign policy relationship (Werner 2007, date of retrieval 11.06.2008). Thus a National Brand should increase the wealth of a nation by improving their position in the international field.

2.2. The Nation Brand Hexagon

In order to develop an appropriate National Brand, it is important to have a closer look on the factors that have an influence on the image of a nation. As the aim of a National Brand is to have an impact on the nation’s image, it must consequently penetrate these factors. Simon Anholt, a National Brand consultant, who was the first to establish the adoption of branding elements to nations, defined six communication channels as the decisive reason for the image building of a nation. During his work he elaborated the Nation Branding Hexagon, which illustrates these six criteria on which the National Brand should have an equal influence. This hexagon is pictured as follows:

illustration not visible in this excerpt

Illustration 1: Nation Brand Hexagon

Own illustration with reference to Anholt 2004: 215.

The ‘Tourism’ channel represents the people’s experience of visiting the country, and plays a significant role considering the National Branding in terms of the promotion budget. The satisfaction level of the country’s products and services, the ‘Export’ medium, can be a powerful channel if the country benefits from the reputation of certain national products. With the ‘Governance’ channel, nations are judged by the fact how competent the nation is governed and what role it plays in international politics. The ‘Investment and Integration’ channel reflects the nation’s attractively to the business audience, such as foreign companies and talents. The Nation’s cultural activity and heritage, like famous authors and national sport teams, are summed up in the communication channel of ‘Culture and Heritage’. Finally the 6th channel is ‘People’ and describes the behavior of the nation’s inhabitant towards foreigners (Anholt 2004: 215).

It is important to make sure that the chosen National Brand has an equal influence on all of these six communication channels, as they all are responsible for building up the nation’s image. An unbalanced brand, with a domination of one channel, can lead to a collapse of the whole nation’s economy. This for example might be the case, if the nation is just focused on the ‘Tourism’ channel. Then in case if an environmental disaster destroys the tourist attractions, the nation’s image and economy cannot be maintained by another part of the hexagon (Anholt 2006a: 99).

2.3. The Nation Brand Architecture

As a National Brand targets to have a positive effect on several target groups, as e.g. the foreign direct investments, and it is impossible to reach these different target groups with just one brand, a whole brand structure consisting of a mother brand² and several sub-brands has to be built. This Nation Brand Architecture is characterized as follows:

illustration not visible in this excerpt

Illustration 2: National Brand Architecture

Own illustration with reference to Dinnie 2008: 197 – 200.

The Nation Brand Architecture is constructed like a building, with the mother brand as the roof and the several target groups of a National Brand as the columns. This means that the idea of the mother brand, representing the core value of the nation, has to be adapted to several sub-brands, who aim to attract the several target groups. Therefore the logo and the slogan of the mother brand, has to be adjusted to the specification of the different target groups, considering the core idea of the nation (Dinnie 2008: 197 - 200). Without a consistent architecture, the National Brand cannot achieve their aims.

2.3. The Process of Creating a National Brand

The development of a National Brand has to be seen as a long term and continuous process, which differentiate it from normal marketing activities, carried out by countries in the past. As a consequence a National Brand has to be well elaborated, in order to keep credibility and the competitive advantage on a high level and finally to achieve the aim (Dinnie 2008: 5). This process can be divided into four decisive phases, illustrated by the following figure:

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Illustration 3: Phases of the National Brand Creating Process Own illustration in reference to Dinnie 2008: 6 – 9.

The first phase defines a mother brand by developing a compelling brand position. This phase is the most research intensive part of the whole process, as it is important to identify the right basics at the early beginning, in order to avoid a wrong fundamental alignment of the National Brand. The mother brand can be evaluated by interviewing nationals and foreigners, as both parties influence the nation’s image. After evaluation the interview results, the most used, but also relevant, statements about the nation have to be picked for a testing process, aiming to find the best fitting image for the nation (Dinnie 2008: 6). In doing so, it is important to make sure that the National Brand is creative and ownable as well as relevant for the nation it is representing (Anholt 2006a: 100 - 101).

The second phase comprises the building of a Nation Brand Architecture, which should clarify the relationship between the mother brand and various sub-brands. These sub-brands, as explained in the chapter before, should attract the different target groups with consistent messages. A fact, that makes the creation of a National Brand very difficult, as some stakeholders, might them be national tourist organizations or institutions dealing with foreign investors, have already created their own brand platform. Therefore on the one hand this phase targets to create a common understanding between the stakeholders, representing the sub-brands, and the Nation, representing the mother brand, and on the other hand tries to establish a relation between them (Dinnie 2008: 8).

After defining the core idea of the National Brand, the third phase determines the realization strategy for the implementation of the National Brand.

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¹ An Image is defined as an “impression that a person, an organization or a product, etc. gives to the public” and “a mental picture that you have of what sb/ sth is like or looks like” (Oxford Advances Learner’s Dictionarry 2000: 646).

² In literature also the expression “umbrella brand” (Dinnie 2008: 199) can be found for naming the main National Brand.