Country branding: The new global marketing strategy

By: Nathalia Rios Ballesteros
Universidad EAFIT, Colombia

“The public impression of a country is important as a source of national pride. Invariably, people source part of their own identity from the image of their country.” –Roberto Cevero, 2012.

Globalization, regional interdependence and global economic integration have traced the path towards a new global paradigm in which not only companies but also countries are engaged in competing at every level. Empirical and historical evidence have shown that countries compete to stimulate exports, attract tourism, appeal foreign direct investments and enhance immigration within its borders. In that respect, governments are turning to branding techniques to differentiate their country on the global stage in order to establish a competitive advantage over rivals “in the belief that a strong country brand can contribute to the country’s sustainable development” (Fetscherin 2010, pg. 1). However, even though this branding technique has become a trending topic nowadays, there is a disappointingly lack of progress in its conceptual development limiting and challenging nation branding’s ability to overcome cynical scepticism among the public (Fan 2010, pg. 2).

Regarding the notion of brand understood as a “multidimensional assortment of functional, emotional, relational and strategic elements that collectively generate a unique set of associations in the public mind” (Aaker 2012, pg. 68), one can say that every country has a unique set of elements ―such as people, places, culture, language, history, food, fashion, etc― and a current image to its international audience through which it can be recognize or associated with, nationally and internationally, thus reassuring the existence of what can be considered as “country brand”.

Thus, nation or country branding can be considered as “a process by which a nation’s images can be created, monitored, evaluated and proactively managed in order to improve or enhance the country’s reputation among a target international audience” (Fan 2012, pg. 6). This term emerged from the marketing literature related to four main marketing fields; country of origin[1], destination branding[2], country image or country-product image[3] and country identity[4] However, over the years, country branding became an interdisciplinary topic, encompassing multiple disciplines apart from marketing and branding topics, such as international relations and public diplomacy (Dinnie 2010, pg. 13)

Its main objectives are generally associated with: promoting a clear, defined and unified identity of a country in the international arena that integrates all productive activities in each country and creating a culture of national identity among its citizens around highly recognized ideologies and customs. At the same time, nation brand aims to: improve a country’s image; align the perception of citizens toward greater patriotism and national pride; provides a competitive advantage as countries compete in the economic and political scenario; reinforce the concept "made in" labels on products sold in international markets; among others (Dinnie 2010, pgs. 17-20).

In regard to its measurement, two main high profile indexes, annually published, has been created with a transparent approach, based on objective secondary data. These are; the Country Brand Index from FutureBrand consultancy and the Anholt GFK Roper Nation Brand Index (NBI) respectively. It is important to recall that these indexes do not account for all dimensions of country branding. However, they represent a starting point as an analytic tool when assessing current status of nation branding among countries.

As to the Country Brand Index regards, apart from being one of the most reliable indexes worldwide, it has expanded the knowledge and research field for nation brand and thus country branding. According to its latest ranking (2014), the five leading countries in this topic were Japan, Switzerland, Germany, Sweden, and Canada. By this, it means that people have stronger than average perceptions of these countries and perceive them equally strong in aspects relating to quality life, values and customs and business potential, as they do for their culture, history, tourism and ‘Made In’ expertise.

Even though any Latin American country appears to be leading the ranking, regional data shows that despite its weaknesses -such as the lacking political freedom, health and education infrastructure’s lag, low standards of living, etc. - the region has effectively offset them seizing its advantages and opportunities in; natural beauty, wide range of attractions, tourist destination and its historical points of interest.

Specifically, Colombia is ranked 63 in the overall list. At a regional level, it belongs to the top 10 Latin American countries included, and it also appears to be the 12 country with the most promising country brand along with 14 other countries including; UAE, Chile, Mexico, India, China, Qatar, South Korea, Brazil, Estonia, among others.

In this context, at a regional level in the last two decades, Colombia has become a key player among Latin American countries. It’s recent accomplishments in terms of; security, socioeconomic development, foreign investment, trade agreements and great tourism opportunities, have not only laid the foundations of national sustained growth but have repositioned the country as an attractive destination and a symbol of talent, hard work and passion. In achieving this, public and private alliances have played a fundamental role; transforming the paradigms and stereotypes surrounding the country for the international audience. This is why, since 2004, various entities ―former Proexport, Inexmoda and the Presidency― gathered around the need of sponsoring a positive country image, which in turn, gave birth to the initial phase strategy to promote Colombia internationally in 2005. The campaign was named “Colombia es pasión” and was enforced until 2011, when Colombia Country Brand was officially created.

Unlike "Colombia es pasión", the new campaign, “La respuesta es Colombia” (Colombia is the answer), is not focused on a specific socioeconomic or political aspect, it instead shows the country as a whole, highlighting all its strengths in terms of culture, biodiversity, tourism, foreign investment, among others.

Regarding the above, it is important to recall that nation branding still stands as an extremely wide and difficult subject to research define and proactively apply from country to country. It is thus a complicated, multifaceted and interdisciplinary construction that varies due to the national context and current framework each country faces. Moreover, its defiant task is how to communicate, in a coordinated and consistent way, a single image or message to different audiences in different countries at the same time. This means, “having one slogan, one campaign, no matter how clever or creative, can’t sell everything to everyone” (Fan 2010, pg. 7). In this sense, nation branding could be more meaningful and relevant if it was conceptualized, measured and executed separately at each one of sublevels (as a place brand, event brand or export brand) because in reality, “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 2010, pg. 7). 

In despite of the challenges and limitations nation branding might have, its impact should not be exaggerated or dismissed, it should, instead, be updated and widely shared with the rest of the world in order to seize its opportunities and extend its effects. As to the Colombian case regards, one can say that although Colombia still faces several challenges on the issue; recent public-private partnerships, government efforts and national commitment have helped improve national image internationally, allowing better and more opportunities to enhance sustained development for the country as a whole.

References

• Aaker, D. A. (2012). Building strong brands. Simon and Schuster.
• Dinnie, K. (2010). Nation branding. Routledge. Available at: http://www.culturaldiplomacy.org/academy/pdf/research/books/nation_branding/Nation_Branding_-_Concepts,_Issues,_Practice_-_Keith_Dinnie.pdf
• Fan, Y. (2010). Branding the nation: Towards a better understanding. Place Branding and Public Diplomacy, 6, (2), 97-103.
• Fetscherin, M. (2010). The determinants and measurement of a country brand: the country brand strength index. International Marketing Review, 27, (4), 466-479. Available on:http://scholarship.rollins.edu/cgi/viewcontent.cgi?article=1043&context=as_facpub
• FutureBrand (February 2nd, 2014). Country Brand Index 2014-15. From http://www.futurebrand.com/

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Footnotes


[1] Country of Origin or the meaning of ‘Made In’ “may associate a product with status, authenticity, and exoticness” (Verlegh & Steenkamp 1999, pg. 523)
[2] Destination branding is about how consumers perceive the destination in their minds.
[3] Refers to the “overall perception consumers form of products from a particular country, based on their prior perceptions of the country’s production and marketing strength and weaknesses” (Roth & Romeo 1992, pg. 480).
[4] National identity refers to a personal sense of belonging to one state or nation, oftenly shared with a group of people, regardless of one's citizenship status. Many professors see national identity in psychological terms as "an awareness of difference" - "a feeling and recognition of 'we' and 'they' (Lee Yonmi 2000).

How is the world doing in policy effectiveness?

Opinion article by: Catalina Tamayo Posada (catalinatamayop1@gmail.com)
Economics student at Universidad EAFIT, Medellin-Colombia.

Since the financial crisis in 2008, the world's economy has been in a constant state of change. While developed economies are struggling to maintain the levels of growth they had before the crisis, emerging and developing economies , in general, have been more effective smoothing the crisis effects in their economies.
This event has generated among the countries a sense of nonconformity towards the current monetary and financial system. “In 2008 and 2009, policymakers of several economically powerful countries had called for urgent reforms of the international monetary and financial system. However, since then, the momentum in pushing for the reform has all but disappeared from the international agenda. Consequently, the outlook for the world economy and for the global environment for development continues to be highly uncertain” (UNCTAD 2013:1). Clearly, there is a need of structural reforms for the purpose of improving economic performance in the international field.
The urgency of creating policies, in order to permeate the negative effect of the crisis, has led to the implementation of policies that have not been truly effective whether because they were designed from a merely economic perspective or because they were not addressed to attack the real causes of the crisis. According to Elinor Ostrom (1999:4), Nobel Prize in Economics in 2009, “Few policy situations are simple. Most involve knowledge from many different perspectives, activities are organized at multiple levels, and any given policy situation overlaps with other policy situations so that activities in one situation affect activities in another. No single discipline addresses all the issues that humans address when they interact in complex social situations. In order to understand what is actually going on in a policy area, as well as how things might proceed differently, it is important to incorporate input from multiple disciplines, multiple levels of activity, and multiple policy situations.” Creating policies is more than just looking at the surface of the problem, it is indispensable to dig deeper, to have an overview of the context of the determined moment and to try to predict people's reaction to that policy based on their culture, history, education levels, etc. (because ultimately is in them where relies the real end result).
Another considerable item for policymaker to keep in mind is that replicating models that worked in other countries won't necessarily work everywhere. Precisely because people's motivations and interests are different all across the world. “All policy situations are governed, for better or for ill, by institutional arrangements that are specific to the demands of a particular time, place, and people” (Ostrom, 1999:5).

Effective structural reforms to the international system are far from being a reality if all causes of the current crisis are not taken into account. Countries should not focus on conceiving several policies that do not have any long-term effects, but on designing some that can actually lead to economic growth and, of course, to sustainable development. There is still a long way to go.

References:

Ostrom, Elinor (1999). An Institutional Framework for Policy Analysis and Design. Available in: http://mason.gmu.edu/~mpolski/documents/PolskiOstromIAD.pdf

UNCTAD. (2013). Trade and development report, 2013. Nueva York y Ginebra: Naciones Unidas.

Maritime Transportation Services: Potential of developing economies

By: Manuela Ramírez Cárdenas*

Political Sciences and International Business student at Universidad EAFIT (Colombia)


Maritime transportation is the predominant mode of transport of global trade, as it handles over 80 percent of its volume and, most importantly, it accounts for over 70 percent of its value (UNCTAD, 2012, p. 44).

Due to the importance of maritime transportation UNCTAD has published annually, since 1968, The Review of Maritime Transportation, a publication in which they provide statistics and analyze the structure, changes, trends and challenges of international seaborne trade.

Although merchandise trade, either by containers or in bulk, composes most of the volume and value of maritime transportation, the provision of services related to international seaborne trade is also of relevance. The activities within the services sector related to the transport industry include: ship building, ship registration, ship operation, ship recycling, ship financing, classification and insurance.

Most of the services used in the transport industry have been traditionally provided by developed economies, however the current trend is that both developed and developing economies are specializing in few of the activities within the services sector, particularly those developing economies that have managed to increase their competitiveness in the maritime sectors. For example, Bangladesh has focused on providing the recycling of ships and has been quite successful at it.

UNCTAD has proposed that developing countries have a great potential for becoming important participants in the services market, however they also clarify that that incorporation in the market depends on several factors, like political and geographical circumstances. Also, developing countries face two main challenges to enter the services sector: the concentration of the market and the country’s level of economic development.

As mentioned previously, the trend is that countries specialize in few activities of transport services, and some of those activities are highly concentrated in a handful of countries. For example in construction, recycling and insurance of ships only four countries represent over 90 percent of the market. Activities such as financing and insurance require a high level of economic development.

UNCTAD suggest that if a developing country wants to incorporate itself in the maritime transportation services sector and it doesn’t have the adequate conditions to overcome the two challenges mentioned previously, it should focus on the activities that are less concentrated and require a lower economic development level, such as ship registration or seafarer or officers supply.

Sources:

UNCTAD (2012). World Economic Situation and Perspectives Report. p. 41-66.
UNCTAD (2011). Review of Maritime Transport.

Global Value Chains (GVCs): the path towards a global economy

Opinion article by: Nathalia Rios Ballesteros* (nriosba@eafit.edu.co) 

Economics student at Universidad EAFIT, Colombia.

Global capitalism has taken over the current economic field. Over the last two decades, terms such as ‘globalization’, ‘internationalization’ and  ‘international free trade’ have emerged and have jointly given rise to a new line of research and a new ‘form of trade’ which has increased greatly in importance nowadays: Global Value Chains (GVCs).  According to Gereffi (2003) a value chain is the range of activities –understood as a set of process that take place transnationally - involved in the design, production and marketing of a product before it is turn into a final good; it is ‘the functional integration and co-ordination of internationally dispersed activities’’ (Gereffi 1999: 41)

Within this broad framework; the growing integration of the global economy posed by the implementation of the GVCs in the various sectors of the economy, has provided the opportunity for substantial economic and income growth, creating and promoting significant opportunities for developing countries and regions as a way to potentially increase the rate and scope of industrial growth and the upgrading of their manufacturing and service activities as well as a way for addressing the poverty and inequality inherent to its internal situation.

However, at the same time, GVCs carry along not only positive but also negative attributes for these countries. As it was stated by the UNCTAD WIR for 2013, even though developing countries are increasingly becoming active participants of GVCs and thus gaining significant improvements in living standards and domestic value added in their exports - higher contribution to countries’ GDP- through it, it still remains a long way towards equity in contrast with developed economies. In this sense, as global trade grows, developed economies appear to increase import dependence for exports, allowing developing countries to add disproportionately to their domestic value; in a nutshell, innovation activities tend to attract higher incomes and continue to be concentrated in the developed countries.

In this context, it seems like the impact of GVCs on inequality is perhaps a complex and wide reality, but unraveling this ‘complexity’ is the key challenge for all developing economies in order to succeed in their path towards integral growth and economic development. What matters then, is how producers – whether firms, regions or countries – become active participants of the global economy and GVCs to narrow this disparity. Hence, there is a need to manage and control the mode of insertion into this ‘plural economy’, to ensure that incomes are not reduced or further transferred to developed countries. Thus, identifying the circumstances which enable developing countries to extend and transform their production capabilities into innovation capabilities along with profit maximization, acquisition of competitive and comparative advantage, reduction of reliance on developed countries to create own-domestic value added and the diversification and expansion of the range of production, which implies exploring other economic sector and fields, rather than sticking into the one that provides the least profit range: the primary sector, can become useful strategies to forge the way to a true global economy.

References: 

Gereffi, G., 1999, ‘International trade and industrial upgrading in the apparel commodity chain’, Journal of International Economics, Vol 48, No 1, pp 37-70.