Nation Brands
Muhterem İlgüner
Brand Finance plc
Countries, like corporations, have brands;
reputations that shape the decisions of
foreign consumers and investors
These brands can be positive (“German
engineering”) or negative ….(?)
Countries seeking to
boost their exports,
encourage foreign investment,
or attract tourists and talent
need to develop strong Nation Brands
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Brand Finance Nation Brands IndexTM
3
Introduction to the Nation Brands valuation exercise
Scope
Data
• High level valuation of
nation brands using publicly
available information
• GDP used as a proxy for
brand revenues
• Currency: USD$
• Brand Value calculated
using Royalty Relief method
• Countries included in scope
of exercise determined by
availability of financial and
market data as well as
consumer research
• Historic and forecast GDP
sourced from IMD (World
Competitiveness Yearbook)
• GDP was segmented into
the following categories:
 Primary (Agricultural/
Forestry/ Fishing etc)
 Secondary
(Manufacturing/ Industry
etc)
 Tertiary (Services/
Financial & Insurance etc)
Brand Profiling
• Brand strength determined
using IMD (World
Competitiveness Yearbook)
and World Economic Forum
Global Competitiveness
Index
• Brand strength analysis
includes three macro
categories consisting of:
 Infrastructure &
Efficiency
 Brand Equity
 Economic Performance
• Individual royalty rate
ranges determined for each
of the three categories
• Discount rate calculated
using WACC, data sourced
from Bloomberg
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The Nation Brand Impact FrameworkTM
This framework identifies the 4 segments in which countries can build the economic
value of their Nation Brand.
Segment
Investment
Internal
Domestic investment
Inward investment
Encourage local commerce to
invest domestically as opposed to
investing overseas
Attract Foreign Direct Investment
(FDI), including business
relocation
Domestic tourism
Tourism
Product
Talent
External
Foreign tourism
Encourage citizens to explore
domestic destinations rather than
vacationing abroad
Promote the nation to foreign
tourists and conference delegates
Domestic brands
Export brands
Encourage citizens to buy locally
made products and services
i.e. reduce imports
Promote nation’s products and
services to international markets
i.e. increase exports
Domestic talent
International talent
Encourage citizens to study and
work locally, rather than going
overseas i.e. avoid “brain drain”
Encourage foreign students and
skilled workers to come to study
and work in the country
The Nation Brand Impact™ framework identifies the 4 segments that enable countries to identify, build and unlock the potential
economic value within their nation brand.
These 4 segments each have a crucial role to play in leveraging and improving a Nation Brand’s ability to enhance GDP growth.
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Determining a nations brand strength
To conduct the valuation, it is necessary to determine the strength of the nation brand
against other nation brands under review.
Brand Strength Index (100%)
Infrast. & Effic.
33.3%
Brand Equity
33.3%
Econ. Perform.
33.3%
Productivity
1.8%
Image Abroad
8%
GDP
2.4%
Brain Drain
1.8%
Quality of life
8%
GDP Growth
2.4%
Attracting talent
1.8%
Customer Satisfaction
8%
National Debt
2.4%
Worker Motivation
1.8%
National Culture
8%
Resiliance of Economy
2.4%
Adaptability of Companies
1.8%
Exports of Goods
2.4%
Ethical Practices
1.8%
Exports of Services
2.4%
Social responsibility
1.8%
Trade to GDP Ratio
2.4%
Health Concerns
1.8%
Tourism Reciepts
2.4%
Globalization
1.8%
Imports of G&S
2.4%
Flexability
1.8%
Employment
2.4%
Value System
1.8%
Consumer Price Inflation
2.4%
Corporate Values
1.8%
Cost of Living
2.4%
Internet Users
1.8%
Investment Risk
2.4%
Tech Funding
1.8%
Fin risk factor
2.4%
Pollution
1.8%
Health Expenditure
1.8%
Sustainable Development
1.8%
Illiteracy
1.8%
This chart summarises the conceptual
approach of measuring brand strength
within a single index. Our BSI
incorporates a range of measures
covering Infrastructure & Efficiency,
Brand Equity (‘BE’) and Economic
related to the nation brand relative to
competitor nation brands.
The chart demonstrates that brand
equity is only one macro level
component (derived from various micro
level attributes) of brand strength.
Brand strength therefore measures
both quality and size:
i.
Quality - the equity the brand has
with users of the brand;
ii.
Size - the physical presence of the
brand in the global market. &
Brand strength is considered a snapshot of the brand’s performance at a
given point in time. BE is considered to
be a leading indicator of the brand’s
future performance.
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Top 10 Nation Brands 2011 ($ billions)
RANK 2011
NATION
BRAND VALUE ($ bn)
RATING 2011
1
USA
11,370
AA-
2
GERMANY
3,146
AA
3
CHINA
3,001
A+
4
JAPAN
1,940
A
5
UNITED KINGDOM
1,849
AA-
6
FRANCE
1,673
A
7
ITALY
1,515
A-
8
CANADA
1,309
AA
9
INDIA
1,266
A+
10
BRAZIL
959
A
73
LEBANON
31
A-
Source: Brand Finance® Top 100 Nations Brand Index
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Brand Lebanon
Source: Brand Finance® Top 100 Nations Brand Index 2012
Brand Value ($ Billion)
2011
2012
37
31
Change in Brand Value
-16%
INVESTMENT
A-
A-
TOURISM
BB
B
TALENT
A
A+
PRODUCT
A-
A-
Overall Brand Rating
A-
A-
Rank on the League Table
(Total= 100 countries)
65
73
Brand
Strength
Index
Brand Lebanon: Brand Strength Index components
INVESTMENT
Investment Development Authority of Lebanon
52
Effectiveness of anti-monopoly policy
52
Trade tariffs
51
Business costs of terrorism
Favouritism in decisions of government officials
50
Direct investment flows inward ($bn)
2009
2010
2011
2012
Venture Capital availability
PRODUCT (GOODS &
SERV)
Reduced burden of customs procedures
54
Time required to start a business
53
Exports as a percentage of GDP
World exports contribution (%)
52
52
Public trust of politicians
Judicial Independence
2009
2010
2011
2012
Source: Brand Finance® Top 100 Nations Brand Index
Brand Lebanon: Brand Strength Index components
TALENT (PEOPLE &
SKILLS)
56
Tertiary education enrolment rate
56
Internet access in schools
Quality of management schools
Reduced brain drain
54
54
Extent of staff training
Female participation in labour force
2009
2010
2011
2012
TOURISM
Visitor Satisfaction
49
49
41
39
Image abroad
Tourism Receipts
Cost of Living
Quality of overall infrastructure
2009
2010
2011
2012
Source: Brand Finance® Top 100 Nations Brand Index
Every brand is a promise to be demonstrated
«let visitors experience this promise!»
A soft factors world!
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… a story about gaining added value by
moving from:
Low complexity
Tangibles
High Complexity
Intangibles
starts with visiting..
Domestic
Companies
Potential
Residents
Tourists
Business
Investors
International
Companies
Visitors
Business
Visitors
Residents
Present
Residents
Nation Branding Agency
Nation
Branding
Strategy
Culture
History,
Famous people
Important events,
Etc.
Nature
Unique Produce
Talent
Location,
Climate,
Etce.
Food,
Natural source,
Minerals,
etc.
Capability,
Mastery,
Etc.
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Nation food branding is becoming more important
20 b. € revenue
from geographical
indication;
wine,
liquor,
cheese,
…
15 b. € revenue
from geographical
indication;
olive oil,
ham,
cheese,
...
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City branding is becoming more important
More than half of the world population is living in cities
«urbanisation»
Cities are now;
• attracting talent
• attracting visitors
• attracting investors
İstanbul, 2012
9 m. visitors,
53 multi-national congresses with more than 500 delegates (No.1)
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National and commercial brands work together
Commercial brands help define the nation brand and visa versa
Background
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Other developing nation brands
A huge opportunity
?
?
?
?
Background
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Segment
Investment
Internal
Domestic investment
Inward investment
Encourage local commerce to
invest domestically as opposed to
investing overseas
Attract Foreign Direct Investment
(FDI), including business
relocation
Domestic tourism
Tourism
Encourage citizens to explore
domestic destinations rather than
vacationing abroad
Domestic brands
Product
Talent
External
Foreign tourism
Promote the nation to foreign
tourists and conference delegates
Export brands
Encourage citizens to buy locally
made products and services
i.e. reduce imports
Promote nation’s products and
services to international
markets
i.e. increase exports
Domestic talent
International talent
Encourage citizens to study and
work locally, rather than going
overseas i.e. avoid “brain drain”
Encourage foreign students and
skilled workers to come to study
and work in the country
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An accreditation system encompassing all processes
from production to marketing, and from sales
to after-sales services, of products/services having a
competitive advantage and branding potential
Turquality has four principal mission statements given
the complex and tough structure of the hypercompetition which today reigns in international markets:
_ to support the branding expenditures of the selected
Turkish brands
_ to provide coaching and consulting services to Turkey’s
best companies in order to allow them to compete
globally
_ to act as a catalyst and incubator for the selected
Turkish brands
_ to provide PR and communications activities in order to
create and promote a positive Turkish image.
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An accreditation system encompassing all processes
from production to marketing, and from sales
to after-sales services, of products/services having a
competitive advantage and branding potential.
Including all expenditures/costs for this
purpose %50 refund
85 companies, 101 brands
A master’s degree education programme on
marketing/branding
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BRAND LEBANON
• quantitatively evaluate current
policies and develop a strategic
approach
• target limited resources to create
the best results
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STRATEGY
Nation Brand
Development Strategy
Stage 1: Macro Analysis
Nation as a whole at a high level.
Centrered around initial engagement with
key nation brand stakeholders and
building a base of research knowledge.
Stage 2: Micro Analysis
Detailed analysis of sectors within the
nation. Leads from initial research to
developing sector level development
strategies
Stage 3: Implement & Monitor
Development and implementation of
nation and sector level plans for nation
brand development in concert with
stakeholders. Cover’s immediate tasks
and implementation paths over 5, 10, 15,
20, 25 years
STRATEGY
Nation Brand Development Strategy
Stage 1: Macro Analysis
Step 1: Engage key stakeholders in government, business, finance,
media
Step 2: Research the nation as a ‘business’ and a ‘brand’
Step 3: Review legal rights, stakeholder research and national
accounts data
Step 4: Analyse key regional and global trends across the 4 segments
of the Nation Brand Impact FrameworkTM
Step 5: Set initial priorities for nation brand development
«The brand of a country has a direct impact on the wealth of
the nation and its ability to compete and grow in
the global economy.»
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