Soft Power and Nation Branding: A coordinated approach

by David Haigh, CEO, Brand Finance 

The effect of a country’s national image on its home-grown brands and the economy as a whole is now widely acknowledged. In a global marketplace, it is one of the most important assets of any state, encouraging inward investment, adding value to exports, and attracting tourists and skilled migrants.

For the past decade, the Brand Finance Nation Brands report has provided key benchmarks for diplomats, tourism boards, trade agencies, nation brand consultants and managers. The study analyses the benefits that a strong nation brand can confer, but also the economic damage that can be wrought by global events and poor nation brand management.

Brand Finance Nation Brands uses an ISO-approved methodology to measures the strength and value of the nation brands of 100 leading countries using a method based on the royalty relief mechanism employed to value the world’s largest companies. We extract our data from a variety of sources such as IMD; World Economic Outlook; FDI Intelligence; and the World Economic Forum.

In this year’s study, released in October 2019, we have observed the nation brands of developing economies growing at much faster rates than those of developed ones. With general stagnation in Europe and North America, nations from the Middle East and Africa have claimed 11 out of the top 20 spots for brand value growth this year.

Location brands can boost corporate brands

Location branding is a term encompassing nation, region and city branding and marketing, through which local and global businesses strive to create visual, emotional, and perceptual connections with locations in order to effectively market their products and services.

The concept of location branding stems from the idea that places evoke strong emotional connections that are highly effective in conveying characteristics and perceptions associated with the location.

Sweden’s reputation as a global design capital, the precision of German engineering, and Japanese efficiency, or Italy’s reputation in luxury fashion are perceptions and associations that countries have earned and established for themselves through a history of performance in the field over the years.

This concerted effort to retain association with the country of origin of the brands has been used by marketeers for years. Association of a brand with a country provides cues on the product’s quality, credibility, value and attributes.

British luxury sports car brand Aston Martin, favoured by James Bond and the younger members of the Royal Family, has benefited hugely from its quintessentially English connections. Aston Martin were selected back in 2015 to become ambassadors for the UK Government’s highly successful “GREAT” campaign. The initiative promotes British business, tourism, culture and education around the world – essentially showcasing the best of Britain. By affiliation, the British luxury carmaker represents British design and manufacturing excellence. Ongoing association with the British film industry and the Bond franchise no doubt adds a longer life expectancy because constructing a link between a brand and its products and services to its country of origin is a mechanism of elongating and protecting the lifespan of a brand. Trust and reputation are attributes that can take years to build and effectively communicate, however references to countries which have an already established reputation can help this process.

A recent study conducted by Brand Dialogue, a public relations agency part of the Brand Finance Plc group, on global geographic indication (GI) brands validates the view that brands with a geographic location association can drive positive perceptions about brands. The study revealed that for GI brands, having a geographical indication in the UK fairs well with British consumers. Phrases associated with protected status skew positive with “Authentic” (66.2%) and “Premium Quality” (62.2%) receiving the highest scores, followed by “Preserve Traditional Methods and Culture” (50.6%) and “Something to be Proud of” (49.6%). The two lowest-scoring phrases were “Only for Special Occasions” (8.6%) and “Rip-off” (4.4%).

Flexing soft power muscle

Public diplomacy efforts within the realm of soft power should be treated no differently from developing a corporate and marketing strategy of a nation brand. A successful nation branding campaign will help create a more favourable and lasting image among the international audience thus further enhancing a country’s soft power.

Essentially, soft power is a country’s ability to influence the preferences and behaviours of various actors in the international arena (states, corporations, communities, publics etc.) through attraction or persuasion rather than coercion.

With the combination of Brand Finance’s analytical experience in evaluating brands and our sister company Brand Dialogue’s core capability around content, communications, diplomacy and PR, we are creating a new Soft Power Index launching in 2020 that Brand Finance will run annually, incorporating authoritative published data together with new proprietary survey research.

In this time marked by change, it is more important than ever that governments, trade bodies, and businesses take steps to ensure that their nation brand is strategically appropriate and well-managed.

Missed the event in person? Don't worry...

The Place Brand Portfolio is City Nation Place's searchable portfolio of Awards case studies from the past five years.