The Challenges of Place Branding

Many think a country, place or region constitutes a brand, and not a few countries are currently working on strategies to spruce up their brand images. In the case of exports, the thinking goes something like this: once a country has become known as an exporter of quality branded goods, the country’s product brands and its place brand will work together to raise expectations overseas. Country branding should then become part of a self-perpetuating cycle: as the country promotes its consumer brands, those brands will promote the country.

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Does it work? Sometimes, but the relationship between product and place brands is by no means simple. While there may be similarities between product and place brands, “the idea of a nation as a brand – as Kellogg’s Corn Flakes is a brand – is a very big mistake,” cautions Wally Olins, chairman of the branding consultancy Saffron in London and Madrid.

Magne Supphellen, a professor at the Norwegian School of Economics and Business Administration in Bergen, explains, “In principle, [product] and place branding is the same. It’s all about identifying, developing and communicating the parts of the identity that are favorable to some specified target groups.…” But the analysis of identity and of target group perceptions, coupled with brand building activities, he notes, are much more complex for places than for products. “It is far more difficult to obtain a fully integrated communication mix in place branding,” he says.

Philip Kotler, a professor at the Kellogg Graduate School of Management at Northwestern University in Chicago, acknowledges the complexity by explaining that a new product comes into existence as a tabula rasa, to which a set of associations can later be mapped. Even after a product has been launched, companies are free to make modifications in response to consumer demand. Countries, however, may be more limited in altering their place brands. Obviously a country can’t replace its beaches with mountains, or grow bananas if its climate favors snow. Although it may be possible for a nation to attract more foreign direct investment or shift its economic base, there will always be some constraints over which it has little or no control.

Professor David Gertner of the Lubin School of Business at Pace University in New York City explains, “Products can be discontinued, modified, withdrawn from the market, re-launched and re-positioned or replaced by improved products. Places do not have most of these choices. Their image problems may be founded in structural problems that take years to fix.”

Professor Nicolas Papadopoulos of the Sprott School of Business at Carleton University in Ottawa, believes the most important challenges currently facing place branding are “lack of unity of purpose, difficulty in establishing actionable and measurable objectives, lack of authority over inputs and control over outputs, restricted flexibility, and relative lack of marketing know-how.” Consider the following examples:

– Place marketing involves multiple stakeholders, often with competing interests. Trying to market a country to tourists as a mountain hideaway inhabited by rustic peasants may not serve the interests of those wishing to promote the country’s budding industrial infrastructure to foreign investors.

– Measuring the effectiveness of place marketing is fraught with difficulties. The decision of a multinational firm to locate a plant in an offshore country may have little or nothing to do with promotional activities by members of the host country. Likewise, trying to measure success in meeting broad objectives, not to mention identifying the separate contributions to marketing outcome, can be a nightmare.

– Unlike product branding, place branding is seldom under the control of a central authority. Government or industry associations are rarely in a position to dictate policy to stakeholders.

– Marketers have far less control over place brands than over product brands. Besides country marketing campaigns, people may learn about a country in school; from media sources (including newspapers, books, TV and movies); from purchases; and from trips abroad or from contact with citizens or former residents.

– A typical business will have more experience with marketing issues than most countries. Many government officials who become involved in country branding are drawn to product marketing approaches because their countries are in desperate need of exports, tourism or foreign direct investment. But few in government have the skill sets required to design major marketing campaigns.

When marketing expertise is lacking within government, however, it may be possible for countries to enlist the help of outside professionals. Costa Rica beat out Brazil, Chile and Mexico to become the site of Intel’s first Latin American plant in 1996 by drawing on the resources of its own investment promotion agency and the Irish Development Agency. Likewise, Columbia is today the major exporter of coffee to the US, largely because the National Federation of Coffee Growers of Colombia built a successful marketing campaign for Café de Colombia.

Matthew Healey, former brand manager for T-Mobile in the Czech Republic, believes there are many paths to achieving a unique national identity. As examples, he observes that Spain has made tremendous strides in branding itself as a modern and developed country, while Denmark has successfully branded all of its government ministries and departments. Croatia for its part, he notes, has been working to reform its image in sports and tourism, and Poland has begun asserting itself in foreign policy.

According to Saffron’s Olins, some nations develop a national brand in a kind of controlled or formalized way, but with others it happens almost spontaneously. “If you look at what is happening in India today, and the perceptions around India, none of these are controlled. India has emerged in the last five years in terms of perceptions in a quite different way from the way it was perceived ten or fifteen years ago. It was spirituality and poverty, and now it’s software; it’s highly educated people. And in some countries, Indian clothing — textiles and fabrics, are fashionable.… None of this is managed. It’s all spontaneous.”

In other cases, promoting a country has involved identifying spokespeople, product brands, and events that can favorably influence public opinion in other countries. But because countries usually produce many products — not just one, a variety of marketing strategies may be needed. Tourism and exports often employ mass marketing techniques, for example, but personal selling may be better adapted to investment marketing.

Besides being brands, countries can also be products, particularly when they serve as tourist destinations or factory sites. In many cases the country brand must serve as an umbrella, in much the same way that General Electric serves as an umbrella brand for all its subsidiaries. Says Papadopoulos, “Once an umbrella brand concept that is unitary and clear is established, individual constituents can go their merry separate ways within it, without the risk of inconsistent messaging. Achieving this, of course, will take a lot of doing. There’s a steep learning curve, and there’s a great need to devise approaches for coordinating within and across diverse constituents.”

According to Juergen Gnoth, a senior lecturer in the Department of Marketing at the University of Otago in New Zealand, there are still other challenges in the offing. “The determining issue in place branding will be, how effectively has the brand been designed and who is to be its messenger. What qualities do these messengers have, and does that constitute a constructive basis? Does the brand fit with its environment? What is the relationship of the brand to other place brands in the area, country, or continent? And how will the brand attributes be perpetuated through time and from generation to generation?”

One of the chief difficulties for many countries has been deciding who should run their national branding campaigns. Allan Steinmetz, CEO of Inward Strategic Consulting in Massachusetts, does not see classical top-down brand building strategies working for most governments, citing by way of example the failure of the Bush administration’s Brand America campaign. “That [type of brand building] typically has to be done in a corporate environment by the CEO or senior leadership,” he says. Steinmetz believes that relying on government leaders to devise a country’s branding campaign is particularly risky if politicians have image problems of their own.

Adds Olins, “Inevitably [national branding campaigns] are inspired at least partially by governments. And governments like quick results. But governments […] often don’t stay in power for very long.” Olins therefore thinks that governments should work closely with the private sector when developing branding strategies.

But public opinion clearly counts for something too. Thomas Cromwell, president of East West Communications in Washington, DC, observes that Liechtenstein’s government had to abandon its attempts to brand that country as a convention destination after the population objected that the brand emphasized the country’s weak points (tiny size) but none of its pluses (strong economy and lovely countryside).

In principle, it is a country’s citizens who stand to gain the most from a successful nation branding campaign. Just as corporate branding campaigns can raise the morale, team spirit, and sense of purpose of a company’s employees, national branding campaigns can provide a country with a common sense of purpose and national pride – not to mention a higher standard of living.

According to Papadopoulos, however, most governments currently do not bother to consult their citizens when putting together national branding campaigns. That may change, he says, because “widespread buy-in by the population is a critical precondition of the success of any branding program.… To deliver, everyone in the ‘organization’ must believe in the brand.” Papadopoulos also foresees “a lot of soul-searching” as nations attempt to come to grips with their national images. Just as companies must solicit the trust of consumers by behaving transparently and accountably, so will country brands have to work at maintaining credible reputations.

In spite of the challenges, Olins sees a bright future for country branding. “What has always been part of the national attempt to influence the world around it will continue, and will continue to use sophisticated elements of marketing techniques,” he says. Presumably part of the reason for this is that competition between country brands need not be a zero-sum game. There will always be room in the global marketplace for many brands, including niche brands and brands that compete on cultural excellence. The presence of multiple country brands in the market place will almost certainly enhance overall interest in the offerings. [19-Apr-2004]