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
4 Introduction to the Nation Brands valuation exercise 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 Performan ce DataBrand 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 Scope 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
5 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 TM This framework identifies the 4 segments in which countries can build the economic value of their Nation Brand. 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 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: 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 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 Equity33.3%Econ. Perform.33.3% Productivity1.8%Image Abroad8%GDP2.4% Brain Drain1.8%Quality of life8%GDP Growth2.4% Attracting talent1.8%Customer Satisfaction8%National Debt2.4% Worker Motivation1.8%National Culture8%Resiliance of Economy2.4% Adaptability of Companies1.8%Exports of Goods2.4% Ethical Practices1.8%Exports of Services2.4% Social responsibility1.8%Trade to GDP Ratio2.4% Health Concerns1.8%Tourism Reciepts2.4% Globalization1.8%Imports of G&S2.4% Flexability1.8%Employment2.4% Value System1.8%Consumer Price Inflation2.4% Corporate Values1.8%Cost of Living2.4% Internet Users1.8%Investment Risk2.4% Tech Funding1.8%Fin risk factor2.4% Pollution1.8% Health Expenditure1.8% Sustainable Development1.8% Illiteracy1.8%
7 RANK 2011NATIONBRAND VALUE ($ bn)RATING 2011 1USA11,370AA- 2GERMANY3,146AA 3CHINA3,001A+ 4JAPAN1,940A 5UNITED KINGDOM1,849AA- 6FRANCE1,673A 7ITALY1,515A- 8CANADA1,309AA 9INDIA1,266A+ 10BRAZIL959A 73LEBANON 31A- Source: Brand Finance® Top 100 Nations Brand Index Top 10 Nation Brands 2011 ($ billions)
Brand Lebanon Source: Brand Finance® Top 100 Nations Brand Index 2012 20112012 Brand Value ($ Billion)3731 Change in Brand Value-16% Brand Strength Index INVESTMENT A- TOURISM BBB TALENT AA+ PRODUCT A- Overall Brand Rating A- Rank on the League Table (Total= 100 countries) 6573
Source: Brand Finance® Top 100 Nations Brand Index Brand Lebanon: Brand Strength Index components INVESTMENT PRODUCT (GOODS & SERV) 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 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 Brand Lebanon: Brand Strength Index components TALENT (PEOPLE & SKILLS) TOURISM Tertiary education enrolment rate Internet access in schools Quality of management schools Reduced brain drain Extent of staff training Female participation in labour force Visitor Satisfaction Image abroad Tourism Receipts Cost of Living Quality of overall infrastructure
11 Every brand is a promise to be demonstrated «let visitors experience this promise!» A soft factors world!
… a story about gaining added value by moving from: Low complexity High Complexity Tangibles Intangibles
Domestic Companies International Companies BusinessInvestors Visitors Tourists Business Visitors Potential Residents Present Residents Residents starts with visiting..
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, Etc.
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 Background Commercial brands help define the nation brand and visa versa
18 Other developing nation brands A huge opportunity Background ? ? ? ?
19 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 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
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 Detailed analysis of sectors within the nation. Leads from initial research to developing sector level development strategies Nation as a whole at a high level. Centrered around initial engagement with key nation brand stakeholders and building a base of research knowledge. STRATEGY Nation Brand Development Strategy Stage 1: Macro Analysis Stage 2: Micro Analysis Stage 3: Implement & Monitor
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.»