David Ryan
Oct 09, 2013

Where nations and business collide: what happens to brands when countries fall out

What can business and government teach other about the pitfalls of international marketing, asks David Ryan.

Where nations and business collide: what happens to brands when countries fall out
24-hour news places you under constant scrutiny. Social media enables issues to blow up spectacularly. Demographics in emerging markets shift at breakneck speed. Understanding and influencing how you are perceived is a delicate tightrope-walk that has never been easy. Welcome to the modern Diplomatic Service - it might sound remarkably familiar.
 
Managing your country’s global image and brand is a Herculean task, and in the current climate of trying to do more with less, even more so. Since May 2010, the government has made supporting UK business abroad and attracting investors a "core activity" for the FCO, a role traditionally fulfilled by UK Trade and Investment. Similarly, as part of the ‘global race’ there are always dozens of briefs floating round London agencies asking "how to reposition Freedonia for investors and stakeholders?" But what can adland and the mandarins learn from each other?
 
Porous relationship 
 
Brands can, and do, regularly imply associations with their country of origin, whether this is the quirky Britishness of the Mini, the sophistication of French fashion, or the precision of German engineering. The relationship between brand and country of origin can be porous. But relatively little thought is given to how one can affect the other.
 
National politics often spills over into popular consciousness, which can manifest itself in boycotts, or worse. Last year, the Senkaku islands’ dispute between China and Japan resulted in the shunning of Japanese products in China and South Korea, prompting a number of Japanese corporates to cut their production and profit forecasts. Some polls suggest two thirds of the Chinese population were involved in boycotts of Japanese products ranging from cars to fashion. Toyota reported the highest drop in output in a decade. Nissan underwent the largest decline in sales since 2009. Heiwado - a major department store - had to close stores for a month, which cost the company nearly £3 million. Inevitably, such conflicts involve trade-offs, but in the long-run which is more valuable to Japan –symbolic rocks in the ocean, or a billion consumers for the output of its factories?
 
In other cases, the failings of a business can turn a national or city brand toxic - consider the effect of the Nakheel debt crisis of 2009 on Dubai’s reputation. In a matter of weeks, Dubai went from being perceived as a boom town to the latest victim of the global financial crisis, with investment drying up, and expats leaving the territory at an astonishing rate. More recently, a botulism scare in Fonterra’s dairy products dented New Zealand’s international image, undercutting more than a decade of work to create the perception of "100% pure New Zealand".
 
From a corporate perspective this incident has been particularly damaging in China, where the national origin of a brand is viewed as a peculiarly powerful influencer of brand characteristics by consumers. Just a few years ago, foreign milk brand sales went through the roof as the melamine-milk contamination scandal destroyed trust in a large number of domestic Chinese milk powder brands. So how can diplomats get more involved in the branding of their country abroad?
 
Brands have always been used to champion national interests through their involvement in broader cultural conversations. The British Council has for years acted as the soft power arm of UK PLC, funding English-language learning and cultural exchange. However, in an increasingly interconnected world, brands are doing more and more of the heavy lifting. The symbolic opening of McDonald’s in Moscow in the twilight of the Cold War was a portent of a wave of change to come. The Samsung brand is better known in many countries than South Korea – suggesting that associations with the former are increasingly likely to colour the latter than vice versa. 
 
Facebook and Twitter
 
During the Arab Spring the significance of Facebook and Twitter being one of the catalysts for change, rather than President Obama in his capacity as leader of the 'Free World', cannot be understated. Diplomats therefore need to understand this shift – the days of using the British Embassy to host conversations between captains of industry and local government officials is not over, but it is quickly being supplanted by the need to brand Britain directly to consumers.
 
When Princess Eugenie and Beatrice drove a Union Jack-branded Mini through the streets of Berlin to celebrate the launch of the GREAT Britain campaign the link between brand and nation was clear. Indeed, one could argue that the royals represent an exceedingly well managed brand asset, but the time has come for more collaboration. Now more than ever there is a need for joined-up thinking between business and government when it comes to managing shared interests in consumer engagement with brands.
 
Good intentions in statecraft, and producing world-beating products alone are not enough: perhaps too often the left hand does not know what the right is doing. There is great value in both business and government understanding that they increasingly share the same brand territory.
 
David Ryan is a WPP Fellow who has been working at Penn Schoen Berland London for the last year, and is working for Grey New York from October.
 
This article first appeared on http://www.marketingmagazine.co.uk
 

 

Source:
Campaign India

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