2Countries, like corporations, have brands; reputations that shape the decisions of foreign consumers and investorsThese brands can be positive (“German engineering”) or negative ….(?)Countries seeking toboost their exports,encourage foreign investment,or attract tourists and talentneed to develop strong Nation Brands
4Introduction to the Nation Brands valuation exercise ScopeDataBrand ProfilingHigh level valuation of nation brands using publicly available informationCurrency: USD$Brand Value calculated using Royalty Relief methodCountries included in scope of exercise determined by availability of financial and market data as well as consumer researchGDP used as a proxy for brand revenuesHistoric 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 categoriesDiscount rate calculated using WACC, data sourced from BloombergBrand strength determined using IMD (World Competitiveness Yearbook) and World Economic Forum Global Competitiveness IndexBrand strength analysis includes three macro categories consisting of:Infrastructure & EfficiencyBrand EquityEconomic PerformanceSelf 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
5The Nation Brand Impact FrameworkTM This framework identifies the 4 segments in which countries can build the economic value of their Nation Brand.SegmentInternalExternalInvestmentDomestic investmentEncourage local commerce to invest domestically as opposed to investing overseasInward investmentAttract Foreign Direct Investment(FDI), including business relocationTourismDomestic tourismEncourage citizens to exploredomestic destinations rather than vacationing abroadForeign tourismPromote the nation to foreign tourists and conference delegatesProductDomestic brandsEncourage citizens to buy locally made products and servicesi.e. reduce importsExport brandsPromote nation’s products andservices to international marketsi.e. increase exportsTalentDomestic talentEncourage citizens to study and work locally, rather than going overseas i.e. avoid “brain drain”International talentEncourage foreign students and skilled workers to come to study and work in the countryThe 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.
6Brand Strength Index (100%) Determining a nations brand strengthTo 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 EquityEcon. Perform.Productivity1.8%Image Abroad8%GDP2.4%Brain DrainQuality of lifeGDP GrowthAttracting talentCustomer SatisfactionNational DebtWorker MotivationNational CultureResiliance of EconomyAdaptability of CompaniesExports of GoodsEthical PracticesExports of ServicesSocial responsibilityTrade to GDP RatioHealth ConcernsTourism RecieptsGlobalizationImports of G&SFlexabilityEmploymentValue SystemConsumer Price InflationCorporate ValuesCost of LivingInternet UsersInvestment RiskTech FundingFin risk factorPollutionHealth ExpenditureSustainable DevelopmentIlliteracyHow do we calculate BSI?
7Top 10 Nation Brands 2011 ($ billions) RANK 2011NATIONBRAND VALUE ($ bn)RATING 20111USA11,370AA-2GERMANY3,146AA3CHINA3,001A+4JAPAN1,940A5UNITED KINGDOM1,8496FRANCE1,6737ITALY1,515A-8CANADA1,3099INDIA1,26610BRAZIL95973LEBANON31Source: Brand Finance® Top 100 Nations Brand Index
8Brand Value ($ Billion) 37 31 Change in Brand Value -16% Brand Brand LebanonSource: Brand Finance® Top 100 Nations Brand Index 201220112012Brand Value ($ Billion)3731Change in Brand Value-16%BrandStrengthIndexINVESTMENTA-TOURISMBBBTALENTAA+PRODUCTOverall Brand RatingRank on the League Table(Total= 100 countries)6573
9Brand Lebanon: Brand Strength Index components INVESTMENTInvestment Development Authority of LebanonEffectiveness of anti-monopoly policyTrade tariffsBusiness costs of terrorismFavouritism in decisions of government officialsDirect investment flows inward ($bn)Venture Capital availabilityPRODUCT (GOODS & SERV)Reduced burden of customs proceduresTime required to start a businessExports as a percentage of GDPWorld exports contribution (%)Public trust of politiciansJudicial IndependenceSource: Brand Finance® Top 100 Nations Brand Index
10Brand Lebanon: Brand Strength Index components TALENT (PEOPLE & SKILLS)Tertiary education enrolment rateInternet access in schoolsQuality of management schoolsReduced brain drainExtent of staff trainingFemale participation in labour forceTOURISMVisitor SatisfactionImage abroadTourism ReceiptsCost of LivingQuality of overall infrastructureSource: Brand Finance® Top 100 Nations Brand Index
11A 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 ComplexityTangibles Intangibles
13starts with visiting.. Visitors Domestic Companies Tourists Potential ResidentsBusinessInvestorsVisitorsResidentsInternationalCompaniesBusinessVisitorsPresentResidents
15Nation food branding is becoming more important 20 b. € revenuefrom geographical indication;wine,liquor,cheese,…15 b. € revenuefrom geographical indication;olive oil,ham,cheese,...
16City branding is becoming more important More than half of the world population is living in cities«urbanisation»Cities are now;attracting talentattracting visitorsattracting investorsİstanbul, 20129 m. visitors,53 multi-national congresses with more than 500 delegates (No.1)
17National and commercial brands work together Commercial brands help define the nation brand and visa versaBackground
18Other developing nation brands A huge opportunity????Background
19Promote nation’s products and services to international markets SegmentInternalExternalInvestmentDomestic investmentEncourage local commerce to invest domestically as opposed to investing overseasInward investmentAttract Foreign Direct Investment(FDI), including business relocationTourismDomestic tourismEncourage citizens to exploredomestic destinations rather than vacationing abroadForeign tourismPromote the nation to foreign tourists and conference delegatesProductDomestic brandsEncourage citizens to buy locally made products and servicesi.e. reduce importsExport brandsPromote nation’s products andservices to international marketsi.e. increase exportsTalentDomestic talentEncourage citizens to study and work locally, rather than going overseas i.e. avoid “brain drain”International talentEncourage foreign students and skilled workers to come to study and work in the country
20An 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 potentialTurquality 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.
21Including all expenditures/costs for this purpose %50 refund An accreditation system encompassing all processes from production to marketing, and from salesto after-sales services, of products/services having a competitive advantage and branding potential.Including all expenditures/costs for this purpose %50 refund85 companies, 101 brandsA master’s degree education programme on marketing/branding
22BRAND LEBANONquantitatively evaluate current policies and develop a strategic approachtarget limited resources to create the best results
23Stage 3: Implement & Monitor STRATEGYStage 1: Macro AnalysisNation 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 StrategyStage 2: Micro AnalysisDetailed analysis of sectors within the nation. Leads from initial research to developing sector level development strategiesStage 3: Implement & MonitorDevelopment 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
24STRATEGY Nation Brand Development Strategy Stage 1: Macro Analysis Step 1: Engage key stakeholders in government, business, finance, mediaStep 2: Research the nation as a ‘business’ and a ‘brand’Step 3: Review legal rights, stakeholder research and national accounts dataStep 4: Analyse key regional and global trends across the 4 segments of the Nation Brand Impact FrameworkTMStep 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 inthe global economy.»