By Stefan Paul Jaworski, Partner & Chief Brand Officer (North America)
“Govern A Family As Your Would Cook A Small Fish. Very Carefully” —Chinese Proverb
The power of culture, ethos, and just “being” within the living Brand of a nation is something each citizen on earth experiences every day. Yet, few stop to consider that since the dawn of time human beings are radically affected by the Brands they live within—and vice versa. From the hunter-gatherer group on the Serengeti, the ancient Egyptian nation built on the Nile, France Under Napoleon, newly emerging open-society China, to today’s United States of America, human beings live within Brands and Branded systems that shape the way they act, think, and are perceived. In other words, the Core Values and essence (the Brand identities) of nations big and small diffuse throughout the native populations which live, reinforce, and spread them- a gigantic, churning circle of Brand building.
Like any Brand, even more so, nations have individual DNA or fingerprints that are unique unto themselves—no two nations are alike. From language and skin color, to music and art style, to customs and religion, no two nations on Earth are exactly the same. Unlike company Brands where imitation/copying is too often a norm, Nation Brands are often free from this because of their diversity of thought, effect of differing opinion, geographic separation and language, unique histories and experiences, genetics, unlimited product lifecycle, and because of the desire of societies to be special and original. Human populations like to be strongly differentiated Brands—and this desire has great effect on Nation Brand identity.
But, how about the company brands inside the nations? How are they affected by the country Brands they live within?
Say the word “Italian” in conjunction with clothes, sports cars, food, perfume, art, and craftsmanship and suddenly the item gets a very desired position—premium, better tasting, high quality and price point, and stylish. I have seen many examples whereby a restaurant sets up in a space haunted by previous bankruptcy and failure only to thrive and attract competitors. The reason for success: it was an authentic, old family Italian “ristorante”, often run by non-Italians. The patrons being young, trendy, upper income, and stylish; the eatery being perceived, because of its Italian connection, as automatically the place to enjoy ”la dolce vita” (“the good life”). Perception is reality. The same with consumer goods such as suits—a Chinese mass garment maker putting a generic “Italian” designer name on its goods instantly increases their price point, perceived stylishness, and sell-ability. Franco Tassi is an excellent example—the Garment sells for more than its like China made competitors (which usually become store house Brand products) and is perceived as a stylish, higher quality garment because “it’s Italian.” Take a look inside the inner vest pocket and you can see the look change on consumers faces… Made in China. Better, yet, is their perception of the garment’s quality and stylishness with the new information—it goes down.
Swiss watches are a good example of Nation Brand power—anything with the “Swiss Made” moniker on it watch-wise receives tremendous punch. Of course, Swiss watch standards like Breitling, Piaget, and Rolex receive tremendous amounts (if not most) of their Brand equity from being Swiss made. But, recently, more moderate price point Brands such as Swatch, Guess, Anne Klein and even “no name,” ultra low price Chinese copies benefit from the words “Swiss Made” stamped on them. In fact, the first three Brands depend heavily on the Swiss connection to reinforce or even elevate their position as high quality, precise, and serious “time pieces.” Even third world counterfeit watch Brands make sure that the Swiss connection is evident on their offerings.
What we see here is simply the power of National Branding—the essence and Core Values (Brand identity) of the country of origin coming through- affecting everything from positioning, differentiation, and Brand identity to purchase decision. As Brand Strategist Mike Moser tells us, “Do any of your company’s Core Values mirror the Core Values of your culture (nation)? If they do, then leverage this advantage and you’ll find that your Brand resonates much deeper in people’s hearts and minds” (1). 1
Apple Computers is an excellent example of a Brand that is benefiting by tapping into the Nation Brand effect of the USA with its “Think Different Campaign”—which attaches to the US Core Values of independence, self expression, freedom, creativity, etc. Quite literally, when we purchase an Apple, we are really buying the Core Values of America (Nation Brand) and Apple (Corporate Brand) (2).
Moser Mike. United We Brand. Harvard University Press. 2003. Pg. 22. Moser Mike. United We Brand. Harvard University Press. 2003. Pg. 23.
Of course, the opposite effect is true, too: a Nation’s Brand identity can transfer negativity to a company Brand. For instance, Yugo cars were an abysmal failure in North America pulling out in no time simply because of their perceived “backward,” low quality origin (coming from the Soviet East Block). Datsun suffered the same problem—negativity transference of the poor quality Japanese Nation Brand to its early car-makers. Remember, the Japan Nation Brand in the 1950’s and 1960’s was quite correctly perceived by the world as a low quality producer (especially of toys)—before the Edward Demmings’ 14 points influence came to fruition. Hence, Datsun became Nissan and the other automakers spent decades on a total quality bent reinforced by just focusing on this one issue. Currently, we see the very same scenario being played out by Korean automakers like KIA and Hyundai. Hyundai has spent 2 decades and considerable efforts (especially over the last 10 years) trying to overcome the “Nation Brand Effect” whereby its Brand (and products) was disregarded as the “low quality Asian maker.” Regardless of the fact that Hyundai for decades has been a major player in building cargo ships, oil tankers, and numerous products that require considerable technology and engineering prowess, the negative Korean connection was just too powerful. Even television ads were commissioned to show that the car came from a super-ship building company—“hey, if we can be trusted to build one of those, we can easily be trusted to make a car!” It took most of the 1990’s, and a hell bent dedication to quality, engineering, design and image change- plus the longest warranty in the world at 10 years—but, Hyundai is emerging from the results of its past negative Nation Brand Effect. In 2002, a JD Powers Initial Quality Study ranked Hyundai, along with fellow Korean Kia, as the most improved automaker (with Hyundai up 21 percent and Kia bettering its 2001 rating by 19 percent). Especially impressive for 2003 is that Consumer Reports magazine ties Hyundai with much respected Honda in its “problems per 100 vehicle” rating—only slightly behind Toyota that holds the top rating. But, still, people’s minds and hearts are not fully convinced: Japanese, sure!… But Korean? The power of the Nation Brand Effect.
The Chinese are also an excellent example of how Brands (often unjustly) are affected negatively by the power of their Nation’s Brand identity. “Made in China” is a synonym for poor quality, plasticky, low value, bargain basement, copycat products. Of course, for decades, China has produced some very poor quality, low price point goods, but at the same time hidden behind many of the West’s largest Brand names like Nike, Adidas, Reebok, and New Balance are China-made products. But, with the Western Brand name, comes the perception of quality and the transferring of positive Core Values that instantly cover over the China Nation Brand Effect. In essence, Nike shoes being made in China are not “Chinese shoes”—they are still seen as American with all of the benefits of both the Nike Brand’s Core Values in combination with the USA’s very positive Nation Brand Effect. The USA’s NBE (and the cognitive shields formed regarding it) is so strong, that consumers are easily quite willing to overlook such hypocrisy Brand-wise.
The Brand Challenge & Opportunity for China:
One Chinese Brand that has learned the lesson of the Nation Brand Effect is Haier, a respected maker of high quality fridges and electronics. Once a state-owned company that made very low quality goods for the Chinese market (that would rather have much higher quality and better styled US goods like GE and Whirlpool), Haier radically changed its ways after privatization and adopted a philosophy and culture of “world class quality,” “innovation,” and “Brand-first attitude.” Haier also realized the power of the Nation Brand Effect—it knew that to be successful in the US it must circumvent the negative connotations of a “made in China” Brand. The strategy Haier used was very simple: Haier, “Made in America.” In other words, leverage the USA Nation Brand so as to overcome whatever China objections arise. Haier achieved this by first establishing its headquarters in a visible landmark building in New York. Next, they built a large plant in the Southern USA (Camden, SC) to make its products for the North American market, allowing for a “Made in USA” stamp on each product box. The result? In America, this Brand is on the march in a hyper-competitive, Brand name dominated market, quickly gaining acceptance in nearly every state in the Union all within less than a decade. Although relatively new to the US scene, and having nowhere near the Brand power of a GE or Whirlpool, Haier is making its mark—especially in the specialty refrigerator and appliance market. We will see the same for many Chinese Brands as their quality and innovation increase over time across multiple sectors, combined with the country’s intense dedication to becoming a first-world nation in every regard—especially in Brand Marketing skill. However, Chinese Brand power both nation and corporate are increasing slowly with many obstacles and Brand traps waiting.
First, past Brand perceptions of nation/country Brands are hard to change (if significantly changeable at all)- they live on like all Brands for decades in the back of consciousness. Nation Brands, especially, have very long life cycles- good or bad. The good news is that a positive Nation Brand identity tends to stay in the consciousness for a very long time, thus giving that country and its Brands significant leverage, leeway, and benefits to “live off of” for decades. One of these points of leverage (benefits) is helping to reduce purchase decision barriers—i.e. ‘if it’s Japanese it go to be good”— even if Japanese quality as a whole gets surpassed by a new nation contender like Korea (cars) or China (mass merchandise). Hence, China and its industries must collectively focus their efforts on all aspects of excellence in terms of quality, innovation, and Brand marketing—and associate this effort and the results to the China Nation Brand. This must be done for the long-term as Japan did during the 1960’s, 70’s, and 80’s, and still does to this day. A strong China Nation Brand transfers enormous equity to its company Brands—and vice versa.
Secondly, a common fatal mistake is to not look beyond the mantras and concepts of quality and innovation—to simply stop consideration at these two points (“Brands live and die by these two aspects only”). As Peter Drucker pointed out 4 decades ago, “business is based on two fundamental things only- Innovation and Marketing… to focus on only one means you are not in business.” Indeed, to focus on only innovation or quality (operations) is dangerous and misses half of the equation—as Canada’s Nortel clearly proved with its disastrous collapse. Chinese, and all nation and company, Brands must focus on gaining, refining, applying, and evolving world-caliber Brand building skills, the key of which are strategic ideation and planning capability. The massive time, people, and resource investment that will have to be made by China to build a positive Nation Brand Effect will be wasted if it fails to invest equally on its nation’s and companies Brand skill toolkit. In fact, any resulting rise in China’s Brand equity will be directly undermined by any lack of Brand skill and the resulting ability to grow, navigate, defend, and evolve its nation and company Brands. Development of Brand building skills, and mechanisms to develop/generate new applicable skills and models, is vital for China’s future success and must not be overlooked.
Finally, like any successful Brand, China and its companies must have a strong, proactive, and well-planned “path of evolution.” Such an evolution path will take into consideration numerous, vital factors including: relationships, goals and specified targets, Nation Brand Effect (NBE) over decades, political and geographic factors (past, current, projected), socioeconomic and demographic trends, and the cumulative effect of Asian culture on the global conscience—and vice versa. China and its companies must also be able to correctly discover their continuous Brand impact on the consumer, market, and society psyche both macro and micro wise—global, continental/regional, national, and local. The mechanisms and models for such vital insight are also a “key success factor” for China.
Like Japan in the 1970’s, China with its innovation and quality levels increasing at rapid rate, is poised to open new markets and expose the world to entire new brand phenomena. But, to be successful, it must generate world class, far reaching Brand building skill (and avoid the US style advertising/marketing communications trap). China at this critical point in its Brand history needs to take active control of its Brands (nation and corporate) by defining, focusing, differentiating, and uniformly promoting its Brand assets and interests—and do so skillfully. If China is wise, it will realize that both its nation and corporate Brands must work in unison as there is direct correlation between such a working philosophy and global Brand success.
The America Nation Brand Effect.
Before and during the 2003 Iraq war, we have seen a very good example of the power and effects of the Nation Brand Effect regarding “Super Nation Brand” America.
The America Nation Brand, the strongest of all for decades, is now facing its greatest challenge- especially since the last Gulf War, and which has only sped up since 911. In many nations around the world, from Muslim to the heart of Europe, the US Nation Brand is not a positive one in many respects. In a typical reaction to the long-time US Brand juggernaut, an entirely predicted response is occurring to USA Brand overload: resentment and even rejection. Combine this with recent US political and military actions, and the combination is volatile. However, let us realize that anti US sentiment is not necessarily the same thing as “Brand burn out” because one can still be pro US, yet still suffer from US Brand overload. For instance, Canada is still very pro America, yet the onslaught of US Brand messages, culture, and Brand identity from its next door neighbor has over decades created widespread backlash. Canadians sometimes feel overwhelmed by the ever- present USA Nation Brand dominating everything from the airwaves, to print media, to cultural events. How have Canadians dealt with this invasion? The same way France, England, and others the world over have—by a natural wave of nationalism. In Canada, a nation with a weak Nation Brand Identity, there has been a recent desire for discovery of what exactly Canada is, a searching of the national soul, and a subtle but strong rejection of what is American by many. In France and parts of Europe, there is much less subtlety in rejection of things American, especially since the war on Iraq, but nonetheless a strong return back to specific Nation Brand roots. The America Nation Brand is seeing a backlash on a scale not seen since the Vietnam War—or at least an insulation attempt within the nations it does business with. What future course should the America Nation Brand take bearing the new realities? With such a valuable Nation Brand, diffused globally and even entrenched into many cultures, what strategy does Brand USA take? Obviously, with such widespread acceptance globally, the America Brand has something behind its appeal: Core Valueeparated from politics. Indeed, we hear the words the world over: “it’s not America we dislike (we love it), but it’s America’s politics we hate.” Also, perceived insensitivity to other Nation Brands and their Core Values gets Nation Brand USA into trouble. With such perceptions, it is easy to see how the America Brand comes across in many countries as a take-over artist or “Brand Bully”—along with its corporate Brands. The next decade or so will see Brand America having to do one thing—keep its unique Core Value base strong, but carefully orient the America Nation Brand to the unique ways of each market it enters. In other words, keep the parts of America its Brand identity has been built on (which the world loves) strong, while being sensitive and even fine tuning (or “tweaking”) the Nation Brand to the sensitivities and needs of local markets. Literally, a Core Value-based Nation Brand America tailored to each market. We are not suggesting a “wimping out” by changing America willy-nilly for every naysayer on the globe—no self respecting or successful Brand does this. Simply, keep Nation Brand America Core Values strong and consistent—yet, make them relevant to the many markets America enters. This is especially important for American corporate Brands- like Coca-Cola, Budweiser, Energizer, etc. In fact, many of these Brands through trial and error (usually at great cost) have already found out this reality- keep the America Core Values that the world loves, but orient them to local markets. No doubt, the Nation Brand America Core Values are universal: liberty, freedom, know-how, quality, self-expression, creativity, innovation, splash, and all things “big.” But, to avoid backlash and negativity, the USA Nation Brand must apply these Core Values in concert with, and in appreciation for, local Core Values and cultural realties. For instance, as Budweiser learned the hard way in England, don’t march into a bastion of high quality beer with centuries-old tradition brandishing an “America is biggest and best (therefore our beer is better)” attitude. American Brands must research specific foreign markets looking for what Nation Brand Core Values exist, how the America Nation Brand is perceived, and what positives in perception it can work off of. Hence, Budweiser eventually learned it had to uncover the Core Values of England, its desire for discovery and trying of new American goods, the respect for American innovation and “know how”, its appreciation for American nostalgia (especially Hollywood), the still existing resentment for “big, rich America” (from WW2), and the fact that in quality Bud is no match for their heavy hand poured brews (that are enjoyed warm). Especially, the USA Nation Brand and its corporate Brands must distance themselves from politics whenever possible (both local and international). Over the next decade, points for the America Nation and its Corporate Brands to remember include: respect the local markets and culture they enter; when dominating a market “put as much a local face on themselves as possible” without diluting Core Values; keep as far away from politics as possible; all Brands, both nation and corporate, have Brand Strategy at the center of their success.
The “Internal” Nation Brand Effect (INBE)
Up until this point we have discussed how Nation Brands are effected by and in turn effect the world around them. But, what is the internal effect of the Nation Brand on its people, culture, and consumers? Germany for centuries has been a bastion of skill, craftsmanship, and hard work perpetuated largely in part due to the strong influence of craft guilds. Over time and reinforcing, these Core Values of hard work, quality, skill, efficiency, and innovation (esp. in engineering) have become a large part of the literal Nation Brand identity of Germany. This Nation Brand identity known the world over via German Brands like BMW, Mercedes, and Daimler had a big boost from the Nation Brand Effect (which in turn is sustained by the Core Values that give rise to the German Brand identity). In essence, a nation’s people, beliefs and history give rise to a Nation’s Brand identity (Core Values), which gives rise to a Nation’s Brand Effect (NBE), which in turn sustains and reinforces both—a literal full cycle of Brand building. There is no doubt that the rise and success of German companies globally (often setting standards for quality and innovation) was and is assisted by the NBE; the NBE in turn flowing back into Germany and reinforcing the ingredients (people, culture, and history) and Core Values that gave rise to it in the first place, making them stronger (reinforced), which in turn further reinforces the German NBE… and so on. Literally one big reinforcement cycle! The same with Japan. We can see that over the last decade, under tremendous pressure from US and other car makers worldwide, the Japanese have not reached a plateau regarding the quality differential between their products and other makers—as would be expected. Indeed, the significant investment in time, capital, and dedication by US and other major global car companies in “catching up to Japanese car quality” should have eroded any lead they had. For sure, we have seen a steady increase in quality of other automakers (especially US), but the Japanese still continue to have a progressive lead, which in some cases they are increasing, and show no signs of slowing down. Such a reality alone tells us that there must be some form of internal reinforcement within the Japanese Nation Brand—a phenomenon whereby Japanese society and its companies feed off of the identity and reinforcing successes of their Nation Brand. Simply put, Japanese Core Values of team/cooperation, hard work, diligence, goal achievement, and learning give rise to a Nation Brand Identity, giving rise to a Nation Brand Effect, which directly gives rise to the success of its global Brands, whose success in turn reinforces the ingredients (people, culture, historic) and Core Values that started the process. (Fig. A.) For a further confirmation of this thesis, one only has to look at the self-made society of Singapore—literally one very large, successful Nation Brand Effect Cycle.
Case Study Singapore: Building A Modern Nation Brand
The real first step of Singapore’s entry into the world market as an independent nation came with its separation in 1965 from Malaysia, which left the country with a great decision to make: what kind of identity would it form? …or better, yet, what kind of Nation Brand would it become? Would Singapore be Asian, cosmopolitan, democratic, colonial, or autocratic? First, the country decided on a path that would forever change its destiny: it would try and adopt all of the benefits Western societies had to offer such as personal freedoms of speech, lifestyle, and personal liberties -all within careful limits- mixed with a totally open business environment of ultimate capitalism. Yet, Singapore would also try and hold on to ancient Asian values of orderliness, discipline, and adherence to societal rules which benefited all (i.e. laws about where you can chew gum, littering, vandalism, etc.). Above all, Singapore decided that it wanted a role/place for itself in the world rather than in the regional economy and be differentiated from neighboring countries by its unique culture. Within a few short years, the Singapore Brand and its Core Values were formed, intentionally and not left to chance or an imposed world definition—an occurrence that I consider an act of significant Brand vision and an early model for today’s Nation Brands to examine. Although it is unclear if Singapore was intentionally thinking in terms of literal “Brand Strategy,” its actions were clearly reflective of such ideation. Indeed, a Brand and its Nation Brand Effect were carefully and skillfully constructed from day one. The result of having a Brand oriented genesis? By the late 1980’s and early 1990’s, Singapore became a vibrant, cosmopolitan, orderly, and prosperous country whose population was educated in English, whose people were skilled/educated, worked for multinational companies from around the globe, thrived on international business, and consumed large amounts of worldwide culture.
Singapore is a financial, technology, and manufacturing powerhouse with a significant diversity of industries; importantly, it is the center of the massive ASEAN nation free trading zone. Singapore is ranked the fifth most competitive economy by the World Competitiveness Yearbook 2002 and the fourth most competitive economy by the Global Competitiveness Report 2002-2003. The main languages, still, are based on the traditional cultural groups that make up the population: English, Chinese, Indian, and Malay . To this day, large amounts of time and effort are spent on “fine tuning” (Brand Evolution) the Core Values of Singapore—defining and fully understanding what it means to be “Singaporean” and what really is involved in traditional “Asian Values” and being cosmopolitan. Like any smart Brand, Singapore realizes that it must better understand itself, evolve its Brand over time, and perpetuate its Core Values across all aspects of its internal and external Brand environment consistently. Probably the linchpin Core Value of the Singapore Nation Brand and its Nation Brand Effect (NBE) is the following: it is the ultimate environment for any “entrepreneurial” company to do business in with nearly a free trade mentality, open markets, a business-oriented government, and both political and economic stability. Singapore’s only weakness (if there is one) is that due to its small size (both population and physical), geography, being void of any military might, and tremendous “pull” from its ASEAN allies, it has not been able to become a true global Brand powerhouse (nor its corporations). Singapore is more regional in nature, influence and Brand power. Of course with only four million people and a GDP of about $110 billion, plus a Brand name that when recognized immediately conjures up Core Value associations of technology, advanced, wealthy, disciplined, and successful, Singapore’s weakness is many a nation’s envy. The carefully crafted, well-defined, and Core Value based country of Singapore is a successful example of smart Brand thinking. Singapore is not just a country, it is a Nation Brand with a strong, positive Nation Brand Effect—all contributing to its cycle of success that reinforces itself over time. Indeed, a model to be examined closely.
Cases of failure also serve as proof such a Nation Brand Effect Cycle and internal effect exists—those without such a process in place show dismal and poor results. Canada is such an example.
The Canada Dilemma
One Nation Brand and its companies that have suffered over the decades is Canada—a country largely void of any defined, cohesive, or focused Core Values or Brand identity. Or Brand Strategy. Ask ,“what is Canada?” and the usual answer is “cold.” Even Canadians, themselves, fail to come up with a well-defined, consistent offering of what their Brand stands for. Often, Canadians seem to define themselves as to what they are not—“we are not American!” Canada is a country without a positive Nation Brand Effect (either internal or external)—and looking at its Brands this shows. Name a Canadian Brand? Canada Dry many answer! Sorry. Cadbury Schweppes owns that one (U.K.). If one thinks long and hard, and is North American, maybe the Brand names Molson and Labatt (beer) come to mind- both very minor league players in the beer world. Any others? Ask, “what do Canadian companies stand for?” Blank. “What kind of person would they be?” Blank. Some up on the business news are quick to point out the dismal failure of Nortel…”they are/were Canadian, right?” (see case study) That’s about it.
With huge natural resource assets, and a prime geographic place next to the massive US market, plus a free trade deal with the US and Mexico allowing for duty free flow of goods, Canada continues to behoove business and Brand experts, alike. “Why is Canada so Brand weak?” Maybe it’s because Canada is so lacking in its basic knowledge of Brand building, Marketing, and Brand Strategy. Indeed, Canada’s top entrepreneurial magazine Profit in its April 2001 edition ran an entire edition about Canada’s Brand problems aptly titled “Why Canadians Can’t Market and Why They Had Better Learn Fast.” The key finding of this report: Canada hasn’t a clue about the concept of Brand—as well as a host of other Marketing disciplines. As discussed, the Nation Brand Effect (NBE) is a powerful asset in building global Brands… and to possess it you must fully understand and appreciate the concepts of Brand and Brand Strategy. Yet, Canada has no such asset at work and has no future signs of one appearing. To many foreign markets, especially Asia, the Canadian Nation Brand identity is ambiguous, outdated, and even non existent—not much help to their company Brands trying to make a stake in the global marketplace. You can see it happening worldwide: German…”craftsmanship,” Japanese…”quality,” Swiss…precise, American…innovative, Canadian…???????? End of credibility and sale possibility. This is why when one looks at the US market, it is almost impossible to find a consumer product category leader from Canada. In fact, I don’t think there is one! This is the reality of the Nation Brand Effect- externally – or at least lack of it coming back to haunt Canada. A key Brand law for Canada to Learn fast: “No strong Nation Brand… means no strong corporate Brand credibility…means no leveraged benefit for a nation’s corporate Brands (in this case Canada’s)!”
Internally, we can see another significant reason for Canada’s Brand problem: no vital internal reinforcement of the Canada nation or its corporate Brands. How could there be as the main required catalyst is a strong Nation Brand identity, resulting in a strong Nation Brand Effect, which in turn create the self-perpetuating and reinforcing cycle? (Fig. A.) Canada has none of these vital ingredients required to generate the vital Brand building cycle—it is out of the loop. The Canadian version of the process looks like Fig. Canada Cycle. Canadian Brands are missing fundamental advantages enjoyed by their competition—if this persists, the future for Canada and its Corporate Brands becomes questionable in a world full of Brand savvy competition (including many up and coming second and third world countries). (Fig. A) Nation Brand Effect (NBE)Cycle. Fig. Canada Cycle
What Should Canada Do?
First Canada—political, societal, and corporate—must hold a number of national Brand building forums to discuss their lack of a National Identity and Brand Effect (especially international). There must be concurrent research on everything from the effect of a weak Brand identity, to understanding how Canada is actually putting its future success in jeopardy both nation and business wise. Case studies of how other nations have been built around a Brand orientation and experienced tremendous success must be presented, and scenarios generated of what Canada’s future will look like without and with a strong Nation Brand and its Effect. After quick, to the point discussion and consultation with leading global Brand experts, nationally televised and reported forums involving all aspects of Canadian society can then get the process underway to generating a much needed Core Value and Essence Base (defining what it means to be Canadian). From possible nation voting to a referendum, all Canadians must have a part in the choosing of its Essence, Core Values (Brand Identity) and key Brand Ideation. Such a participation based process also ensures “buy in,” awareness, and helps to generate “Brand Advocates” from Canada’s population, Canadians must literally see themselves as their country’s ultimate stakeholders—a key success factor of any strong Nation Brand and its Effect (NBE). There must agreed upon short and long term processes, goals/targets, deadlines, and results that need to be understood—regionally, nationally, continent-wise, and globally. Both quantitative and qualitative methodology must also be generated and agreed upon. Canada also has to be carefully segmented to decide how information and Brand building programs will be designed, targeted, and administered—the same for external markets. Will it be a mostly government effort or a public one contracted out? Vehicles from all media facets (PR, Advertising, etc.), to relationship marketing programs, geographic marketing initiatives, to reinforcement plans must be designed to diffuse the defined and accepted Canada Core Values internally and globally.
Indeed, long-term, highly focused educational campaigns of “what Canada is” will be launched across Canada (internal) and world- wide (key markets). From everyday society, to political leadership, to corporate Canada, to trading partners, the Internal and External Nation Brand Effects must be generated so they will provide their vital benefits and “kick start” Canada into the absent and much needed NBE Cycle (Fig A). This cycle, once started, is what will literally “power” the Canadian Nation Brand and its NBE, and give such tremendous benefits to its companies and people in a “Brand” New World Order.
Case: Study Nortel Who?
Over the last year and a half, we have been inundated by news stories and images concerning one very large company- a supposed “king of its industry.” No, not Budweiser, GE or P&G—I am speaking about Nortel. Every form of media has been plastered with news of the abysmal failure of this once $30 billion per annum company—from its share price plunging from a high of $90 down to a penny stock low of $43 cents on October 10, 2002. There were Enron-like charges of greed, incompetence and management mistakes, poor leadership, overpaying for acquisitions, poor customer and strategic planning- all with some merit, no doubt. But, what was essentially a key factor of Nortel’s dramatic fall has yet to be addressed: Brand Strategy (or lack thereof in Nortel’s case). To be succinct: Nortel who? And what is a Nortel? Any expert brand strategist examining Nortel’s history will quickly discover one constant: Nortel was void of any significant brand strategy (at least a good one). Poor brand strategy is a disaster for any company, its brand, and product(s)—as undifferentiated, ambiguous, and failing Nortel demonstrates. Indeed, Nortel would succumb to one of the key laws of both brand strategy and politics- those who don’t define themselves get defined by others far less generous and sympathetic (like competitors). Get your identity generated by someone other than yourself, especially the competition, and the result will be far from positive and very destructive—and nearly impossible to change/overcome. Like it or not, brand identities tend to stick around and can take on a life of their own—just ask Cadillac about its Cimarron (still negatively chugging away in the mind of consumers). Let us start with the vital brand identity of Nortel. Who and what is Nortel? Ask this question before the company’s collapse, even within its market, and few could answer confidently. The best guess: “some sort of technology company,” “telephones,” “communications,” and the more knowledgeable may answer “fibre optics”—I should mention that another key indicator (and a significant problem) of having no/poor brand strategy is a “lack of focus.”
Go deeper and the answers fade into oblivion. What does Nortel stand for? Blank. What kind of person would Nortel be? Blank. What emotions does Nortel evoke? Blank. At Nortel’s peak the average consumer on the street might have said “big.” No Brand is Nortel. After many decades of being in business (initially as a telephone company called Northern Telecom…hence, Nor-tel), and tremendous dedication to a growth philosophy, Nortel suddenly discovered this tragedy—only I argue too late. In reality, Nortel had the success equation backwards: it should be “build an effective brand first then focus on growth” (as in ¾ of markets the most profitable brands are not the market share leader). Growth is nice, but without a consistent, meaningful brand identity at its foundation it is at best temporary and baseless. The company came to the realization that even b2b brands to be successful need an identity- or else are really nothing more than an undifferentiated, value-less commodity. Sadly, in a knee-jerk reaction to the problem, what resulted was an obscure, ambiguous, and even obfuscating ad campaign for Nortel networks—“make the internet be what you want it to be"—that said little/nothing about the Nortel brand, its Core Values, personality, products, key selling point, or position. Although, somewhere embedded deep inside the campaign, agency creatives will argue, is a message—hat unfortunately current and especially potential customers failed to find. I am still looking through the chic creative to find anything that directly informs us about the Nortel brand and/or its identity. I argue that the campaign was simply a waste of space and shareholder money- supported by the fact it did not last very long due to the fact the company plummeted to oblivion soon afterwards. For brand experts, a key aspect of the brand identity is the Brand Promise: the specific tangible and intangible (esp. emotional) promises that the brand makes (with an often vital component being important goals the brand helps the customer to achieve). Nortel’s brand promise was never discovered, defined, understood, or communicated—I really don’t believe they consciously/knowingly had any. But, several promises made by the Nortel brand at critical times, and the breaking of them, became entrenched as a “pseudo brand promise”, adding significantly to its downfall via the identity created: an unreliable, incapable promise breaker (not credible). Three such promises, made at vital times with significant media attention, stand out.
#1. Deeply failing Nortel’s “last chance product” to save/redeem itself was a “switch” in development that was promised to the public and investors by mid 2002. On Feb 26, 2002 Nortel publicly broke this promise, stunning media and investors alike, by announcing the release date would be broken and delayed until summer 2003. With an already plummeting stock, and thousands of layoffs, what little brand credibility Nortel had was diminished by this occurrence, and the switch quickly labelled “too little too late” (the death blow to brand credibility).
#2. The much anticipated and highly touted high speed internet router Versalar 25000 was first promised for shipment in 4Q of 1999, then re-promised for summer of 2000, then delayed for over 2 months until fall 2000—all the while giving a boost to rivals such as Lucent coming up with their own versions.
#3. Nortel’s admission that it was unable to install shipped equipment customers had purchased- its product was en masse just sitting idle in customers’ storage (increasing customer inventory and costs, and effecting their earnings and very survival). In one of the rarest of cases, one can argue that Nortel directly, but unknowingly, defined its brand promise by breaking it- and by this fact was thus at its mercy.
Without a living script, a brand’s actions, in this case in-action, define it to the world. Another supreme brand law that Nortel unknowingly broke was that it failed to realize that brands must have strong emotionally bonded relationships with three specific and vital groups: the consumer, market, and society. Obviously the consumer relationship is foremost, and it is debatable that Nortel even possessed this—especially damaging when your product is a very long-term purchase with a low replacement rate (up to a decade) and possessing a long product lifecycle. In such a case consumer loyalty, and the relationship needed to sustain this loyalty, is everything. But, strong, well-guided brands with skilled marketing leadership would have also focused on the equally powerful and fruitful relationships with “future consumers” and “brand supporters” which are nearly always outside of the current customer base in the “market” and “society.” Nortel really bypassed/missed all three groups (which also tend to reinforce each other), leaving it void of the vital emotional bonds needed to transcend “commodity” status and allowing it to become entrenched in consumers minds (especially the evoked set) and hearts—in essence unable to become a “Brand” with all of the benefits a brand has. Brands have loyalty and earning power even in recessions (look at Nortel’s rival Cisco), they keep stock value over the long-haul, they are considered standards and invited guests into our lives, are believed to be reliable, are literally depended upon to solve problems and achieve goals with, when down bounce back in an instant, are usually immune to price wars, and are differentiated. Commodities die un-heroic deaths by the sword- their remains often being cut in parts for sale (a la Nortel 2002).
Nortel’s not having a brand strategy also left it vulnerable to one of the most powerful forces in business- paradigm shift. Like the roller skate foolishly ignored the circumstances that lead to the rise of the roller blade, Nortel refused to see the problems and even fall of its biggest customers- telephone companies (like embattled AT&T and WorldCom) and their inability to raise capital to buy new equipment. Great brands, hotwired and plugged into their markets, will often have mechanisms (I call the “brand machines”) in place to see paradigm shifts before they hit- or at the least capitalize on them when they are on the horizon (i.e. the Japanese automakers and the “cute” SUV). Indeed, Nortel’s brand largely became defined by its own brand mistakes—mistakes made at times of great public and media scrutiny and thus awareness. Ironically, what made and defined the Nortel brand has been all of the negative publicity of its goofs, misfortunes, shareholder pain, promise breaking, and near bankruptcy at a record pace. Sadly, Nortel has not learned that there is tremendous difference between getting a brand name known (simple awareness) and getting a brand name known as/for something (preferably positive)! In a bad twist of fate, Nortel’s brand finally got defined/known for something—with the press, media, business academia, and investors labeling it globally as a dismal failure.
Today (2002), how does Nortel and its new CEO Frank Dunn fare? In my opinion, not very well. The company’s complete dedication is to R&D, product development, and slashing of cost- not a single iota to Brand Strategy. After what it has been through, will Nortel ever learn? Even industry analysts have commented “you can’t get to breakeven by cutting costs”... better, yet, are the ominous words "it's not a time for a visionary," from Lynton R. (Red) Wilson, chairman of Nortel's board, quoted in the appropriately titled BusinessWeek article “Nortel: New Boss, Same Problems.” As Peter Drucker told us 1954 in his ground breaking work The Practice of Management, “because it is its purpose to create a customer, any business enterprise has two—and only these two—basic functions: marketing and innovation." Indeed, Nortel is missing half the picture. As Kotler (Phil) said so correctly said “the art of marketing is largely the art of brand building”… words that have come to haunt Nortel... and by the looks of it will continue to do so for a long time.
Future Implications for the Power of the Nation Brand (Internal & External):
With communications increasingly speeding up, coinciding with the rapid development of second and third world nations (many of whom are becoming Brand savvy), the necessity of having the advantages of a powerful, well managed Nation Brand will be exponentially more vital over the coming decades. Eventually, the Nation Brand Effect (NBE), both internally and externally, will be a “given” (basic) factor of Brand success, value, equity, and identity directly effecting Brand performance and results. As the world market continues to deregulate, Brand building skills diffuse across markets and societies, and competitive levels increase, only nations with strong Brands (both internally and externally) will be able to achieve and sustain leadership positions. This reality is where skillfully designed second world nations (especially from Asia) will have an opportunity to “overtake” current first world nations—or at least dominate desired niches. As more sophisticated models of Brand management evolve, there is little doubt that the power of the Nation Brand Effect will be a strong basis for any new toolkit generation in every part of the globe. Possibly, one day, even a direct calculation for NBE will be part of the asset section of the corporate balance sheet (differing per country). Even the company capability to capitalize on the NBE may, itself, be part of Brand equity valuation. With upwards of seventy percent of a Brand’s value not being reflected in the company balance sheet at this point in time, such a factor on Brand value as NBE, when properly understood and quantified, could even increase this percentage to as much as eighty percent. The new reality for the next two decades: nations that focus on Brand Strategy skill development, its incorporation into both the nation and corporate fabric, and on developing Nation Brand Effect (internal and external) skillfully, will be the key success stories and leaders of the true Brand based world order.
The Effects of “Animal Magnetism” By Don Fosher
In the case of Nation Branding Effects, let’s explore the potentiality of success from an analogous perspective...the human animal. Many forces can combine to draw consumers to products and services. The opposite is often true. Brand identification concentrates and focuses these factors, enabling magnetism to kick in and attract, or have quite the opposite effect. The mindsets of marketplaces are polarized for many reasons. In some instances, a population may not be attracted to one another any more than they are to Brands, including that of their country, its output, and imports. Deep in the process of discovery as to what attracts people to an acceptance of and loyalty to anything is an identification of what might best be described as positive and negative poles not unlike those of a magnet. Let’s go back almost a half-century to capture a visualization of the magnetic ramifications of bringing pluses and minuses into the open. A toy emerged that entertained, became an expression of affection, and offered a degree of scientific explanation all in one. Basically, it was two small magnets approximately an inch long . Glued on top of each was a tiny Scottie dog, one white, one black. When placed on a table top, one dog could be moved slowly toward the other with interesting effect as the two neared one another. The stationary pup would spin and slide up to the other, connecting in a “kiss”. The dogs were glued onto the magnets so as to position the positive magnet pole of one under its nose, while the other dog was attached with its nose over the negative pole of its magnet. As shown in the following reproduction, the toy became an expression of regard and love for many couples at the time, and may have even contributed to the old saying that, “opposites attract”. Children, too, loved to play with the “interactive” toy and many learned a lesson in the scientific aspects of what made it work.
THE MAGNETIC DOGS
In 1946 the Asturo Co. of New York City ran an ad in the black-owned Chicago Defender newspaper picturing them, with the following text: Magnetic! Alive! Powerful! Like powerful lodestones, these genuine magnetic pups symbolize the magnetic strength of true love. These high powered miniature Scotties are the latest sensation among lovers everywhere! HE wears one on his watch chain...SHE wears hers on charm bracelet or neck-chain; symbols of constant devotion. Mounted on powerful magnets, these colorful pups attract and draw to one another irresistibly, AND SEEM TO ACT ALIVE! Supply limited, so order today. As is often the case, something like this has a short-lived existence once the curiosity wears off. However, the Magnetic Dogs survived a bit longer than most in the hands of an importer who saw extended appeal in reversing the poles of one of the Scotties. The result was the same in terms of magnetic attraction, but now the dogs reacted in a more characteristic fashion...nose to tail rather than face to face. Although the years have distanced these toys, replacing them with ever more sophisticated ones, you can still acquire your own pair of Magnetic Dogs using one of those replacements called the Internet. Something not lost in the interim are similarities in the new field of Nations Branding .
Can opposites attract? Can a magnetism be created that draws the minds of diverse cultures, geographic locations, socio-economic backgrounds and ethics together? The answer is yes, but with critical attention to what it takes a Nation to be magnetic. Individual Brands, regardless of point of origin, have exhibited the ability to create and harness a virtual universal magnetism; often leaving the country of their birth and that of other brands behind. It is surprising that in doing so, the point of origin...the Nation...doesn’t hitchhike. Going back to our actual magnets and the “science” of their creation, we can draw a conclusion or two from the process. Most of us will recall an experiment in which something conductive, like a metal nail, when wound with wire attached to a battery became a magnet. Here was something that wouldn’t attract anything but a hammer before that is now capable of attracting a wealth of other items. The phenomenon doesn’t work when the core isn’t conductive. And, therein lies some interesting comparisons to Nations having Brand magnetism while others do not. Wrapping wire around a stick won’t result in any attraction regardless of how much current is applied. In many instances today, countries apply that “juice” in the form of a significant expenditure on advertising, PR, and promotion to little, no, or depreciating effect and fail because the core and message is wrong. Back to our Magnetic Dogs Story... “it’s hell to go to the dogs and not even get a kiss or sniff in the process”.
There are a couple of ways to look at the magnetics of Nation Brand Effect. In the case of Italy or Switzerland, those Nations are the winding that conducts magnetism to home-grown products, composed of a mental and physical “metal” of value...a core of innovation and “matchless”quality. The result is a worldwide attraction and Brand Demand so strong that it invites a host of imitators. In most cases, that attraction has taken years to generate. What of the Nations still seeking Brand Recognition? A real sense of urgency is essential, and in today’s economic climate there isn’t that kind of time for Brand-Desirous-Come-Lately-Nations to achieve the levels of success enjoyed by The Nation Brand Leaders. What we’re looking for is a Magnetic Unit. Let’s replace the non-conductive “stick” or core of our “experiment” with a Nation that realizes it must become “steeled” to the reality that it has to become conductive and wind itself with its own Brands that represent the best potential of attraction. Then, a source of energy must be applied that has far-reaching magnetism...a realization that it is a time when it is the Brands of the Nation that do the attracting, not necessarily the Nation’s name. This “improving lives” positioning can earn a Nation the enviable Brand Value Recognition that has been absent in the past. A tricky proposition, this.
For a Nation to accomplish Brand Superiority, it must put itself in the hands of Brand Strategists who scientifically construct the overall magnet. A Nortel must not “wind up” in the process. In effect, Nations must point only their “Pluses” at other Nation’s “Minuses” to maximize NBE. Can a Canada become the “House Brand” elsewhere by virtue of being the product of its more effective ingredients or components represented by its hand-picked and nurtured countrywide Business Brands and Corporate Identities? Yes! But, it will take an entirely new Core Concept to do it. Let’s not single out one Nation of which to be critical. All Nations, leading and emerging, need to be aware of the importance of sustaining Brand Attraction through a combination of Corporate and National Brand Identity that has an inviolate source of energy and core to guarantee standards of quality and service that reduce risk of failure when purchased. Once in place, this combination must be communicated with a gameplan that permits no “Adverse-tising,” “Dis-integrated Marketing,” or even alleged, free “Word of Mouth.” Only those strategically-evolved communications that represent content-rich “Word of Mind Penetrators” can achieve Nation Brand status with its roots deep in animal magnetism.
Note: This Article was first published worldwide in 2003 by the Boeing Institute's Multinational Business Review.
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| Stefan Paul Jaworski, Masters Degree Marketing, is Partner and Chief Brand Officer(North America) with SXTC (Studio X-Temporal Global Brand Consulting)—a 20 year old, leading global/multinational Brand Marketing Consultancy serving the USA, EU, Canada & Asia. Clients have included Coca-Cola, Anheuser-Busch, Monsanto, FCB, CP Rail, Citibank, Burger King, Motorola, Panasonic, Ralston Purina, TWA, Hewlett Packard, Apple Computers, Bosch, John Deere, JBL, Exxon, Microsoft, and the nations of the UK, Dubai, Malaysia, and many others. www.sxtcbrand.com | |  | |
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(Dec. 2002. St. Louis, MO). I am often confronted by business leaders and managers, especially in Canada, concerning the value of Brand Strategy. Or, as many of these businesspeople like to suggest, “the perceived lack of value in it”. Brand Strategy to some is just ‘hocus-pocus”- there is no real proof as to its merits or effectiveness. End of story. Of course, as a Brand Strategist, I pull out my case studies, theories, and ideas from greats like Kotler, Aacker, and Ries, etc. - but only to polite smiles. The names of huge multinationals and US gurus just seem too far away and on a scale that just does not seem applicable to many Canadian business leaders- especially small and b to b companies. So, I needed an example they can understand, relate to, and put into perspective: Eaton’s.
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