1. Nation Brands
Muhterem İlgüner
Brand Finance plc

2. 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

3. Brand Finance Nation Brands IndexTM

4. Introduction to the Nation Brands valuation exercise
Scope
Data
Brand Profiling
High level valuation of nation brands using publicly available information
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
GDP used as a proxy for brand revenues
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)
Individual royalty rate ranges determined for each of the three categories
Discount rate calculated using WACC, data sourced from Bloomberg
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
Self explanatory. Key point – scope has increased from 57 nations to 138 following introduction of World Economic Forum Global Competitiveness Index to help determine BSI for each nation

5. The Nation Brand Impact FrameworkTM
This framework identifies the 4 segments in which countries can build the economic value of their Nation Brand.
Segment
Internal
External
Investment
Domestic investment
Encourage local commerce to invest domestically as opposed to investing overseas
Inward investment
Attract Foreign Direct Investment
(FDI), including business relocation
Tourism
Domestic tourism
Encourage citizens to explore
domestic destinations rather than vacationing abroad
Foreign tourism
Promote the nation to foreign tourists and conference delegates
Product
Domestic brands
Encourage citizens to buy locally made products and services
i.e. reduce imports
Export brands
Promote nation’s products and
services to international markets
i.e. increase exports
Talent
Domestic talent
Encourage citizens to study and work locally, rather than going overseas i.e. avoid “brain drain”
International talent
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.

6. Brand Strength Index (100%)
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.
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:
Quality - the equity the brand has with users of the brand;
Size - the physical presence of the brand in the global market. &
Brand strength is considered a snap- shot 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.
Brand Strength Index (100%)
Infrast. & Effic.
33.3%
Brand Equity
Econ. Perform.
Productivity
1.8%
Image Abroad 8%
GDP
2.4%
Brain Drain
Quality of life
GDP Growth
Attracting talent
Customer Satisfaction
National Debt
Worker Motivation
National Culture
Resiliance of Economy
Adaptability of Companies
Exports of Goods
Ethical Practices
Exports of Services
Social responsibility
Trade to GDP Ratio
Health Concerns
Tourism Reciepts
Globalization
Imports of G&S
Flexability
Employment
Value System
Consumer Price Inflation
Corporate Values
Cost of Living
Internet Users
Investment Risk
Tech Funding
Fin risk factor
Pollution
Health Expenditure
Sustainable Development
Illiteracy
How do we calculate BSI?

7. 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 6
FRANCE
1,673 7
ITALY
1,515 A- 8
CANADA
1,309 9
INDIA
1,266 10
BRAZIL
959 73
LEBANON 31
Source: Brand Finance® Top 100 Nations Brand Index

8. Brand Value ($ Billion) 37 31 Change in Brand Value -16% Brand
Brand Lebanon
Source: Brand Finance® Top 100 Nations Brand Index 2012
2011
2012
Brand Value ($ Billion) 37 31
Change in Brand Value
-16%
Brand
Strength
Index
INVESTMENT A-
TOURISM BB B
TALENT A A+
PRODUCT
Overall Brand Rating
Rank on the League Table
(Total= 100 countries) 65 73

9. Brand Lebanon: Brand Strength Index components
INVESTMENT
Investment Development Authority of Lebanon
Effectiveness of anti-monopoly policy
Trade tariffs
Business costs of terrorism
Favouritism in decisions of government officials
Direct investment flows inward ($bn)
Venture Capital availability
PRODUCT (GOODS & SERV)
Reduced burden of customs procedures
Time required to start a business
Exports as a percentage of GDP
World exports contribution (%)
Public trust of politicians
Judicial Independence
Source: Brand Finance® Top 100 Nations Brand Index

10. Brand Lebanon: Brand Strength Index components
TALENT (PEOPLE & SKILLS)
Tertiary education enrolment rate
Internet access in schools
Quality of management schools
Reduced brain drain
Extent of staff training
Female participation in labour force
TOURISM
Visitor Satisfaction
Image abroad
Tourism Receipts
Cost of Living
Quality of overall infrastructure
Source: Brand Finance® Top 100 Nations Brand Index

11. A soft factors world! Every brand is a promise to be demonstrated
«let visitors experience this promise!»
A soft factors world!

12. … a story about gaining added value by moving from:
Low complexity High Complexity
Tangibles Intangibles

13. starts with visiting.. Visitors Domestic Companies Tourists Potential
Residents
Business
Investors
Visitors
Residents
International
Companies
Business
Visitors
Present
Residents

14. Nation Branding Agency
Nation Branding Strategy
Culture
History,
Famous people
Important events,
Etc.
Nature
Location,
Climate,
Etce.
Unique Produce
Food,
Natural source,
Minerals,
etc.
Talent
Capability,
Mastery,

15. 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,
...

16. 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)

17. National and commercial brands work together
Commercial brands help define the nation brand and visa versa
Background

18. Other developing nation brands
A huge opportunity ? ? ? ?
Background

19. Promote nation’s products and services to international markets
Segment
Internal
External
Investment
Domestic investment
Encourage local commerce to invest domestically as opposed to investing overseas
Inward investment
Attract Foreign Direct Investment
(FDI), including business relocation
Tourism
Domestic tourism
Encourage citizens to explore
domestic destinations rather than vacationing abroad
Foreign tourism
Promote the nation to foreign tourists and conference delegates
Product
Domestic brands
Encourage citizens to buy locally made products and services
i.e. reduce imports
Export brands
Promote nation’s products and
services to international markets
i.e. increase exports
Talent
Domestic talent
Encourage citizens to study and work locally, rather than going overseas i.e. avoid “brain drain”
International talent
Encourage foreign students and skilled workers to come to study and work in the country

20. 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 hyper-competition 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.

21. Including all expenditures/costs for this purpose %50 refund
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

22. BRAND LEBANON
quantitatively evaluate current policies and develop a strategic approach
target limited resources to create the best results

23. Stage 3: Implement & Monitor
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.
Nation Brand Development Strategy
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

24. 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

25. «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.»