IMPLICATIONS FOR MARKETERS

Place Branding:Promoting a Nation teaching Marketing

Alex MariUniversity of Lugano (USI), Switzerland

visiting student at Central University of Finance and Economics (CUFE), Beijing, China

International Marketing Course - Fall Term 2008

Beijing, January 2008

DEFINITION OF PLACE BRANDING

Place branding (also known as destination branding, place marketing or place promotion) is a relatively new umbrella term encompassing nation branding, region branding and city branding. The term was first developed by Philip Kotler1 and could refer to a city, country or a tourist detination, and to their competition for tourists, visitors, investors, residents and other resources2.

Place Branding is based on a strategic approach to public relations, stating that a change of image is an ongoing, holistic, interactive and wide-scale process, requiring much more than a quick change of logo or slogan3. In other words, brand management for a city, country or a tourist destination does not merely consist of attaching new labels, but consolidates the essential characteristics of the individual identity into a brand core 4. As Gary C. Sherwin pointed out, brand development was not a logo or tag line, but instead a commitment to a community-wide strategy on what distiguished the community from others, as well as a community-wide effort to effectively communicate and create that unique destination experience to the customer. Rather than being advertising-based, this brand effort focused on delivering an exceptional experience that was memorable and emotional. As part of this holistic process, the creation of a brand sets social, economical and cultural processes in motion which can nuance, strengthen or correct others' perceptions. The routine development of mechanisms leading to a strong and consistent brand is highly important for place branding5. Nowadays, the conideration of a place as a brand becomes common and even the most important experts of branding included “place” in their definitions. For instance, De Chernantony and McDonald defined a brand as: “An identifiable product, service, person or place augmented in such a way that the buyer or user perceives relevant unique added values which match their needs most closely.”

INTRODUCTION

Starting from the assumption that places are increasingly seen to be products, as subject to brand management practices as a book or a hat. The principle that cities and regions can be branded is a natural extention of corporate brand theory. Although, more and more nation are using place branding approach to develop their economy and tourism, there ramain foundamental differences in the implementation of marketing theories in the place environment. Some of the difficulties are due to the broad definition of the entity to be branded (city, regions, or country), understanding the role of government, the challanges of aligning internal stakeholders (residents, business owners, frontline workers etc...) and the difficulty of sustaining brand consistency and resources over time. Researchers also exposed that the place branding concept emerged from contemporary society is probably the strongest tool society will ever have to protect and maintain its identity and fight the trend of standardisation. A place, like any other product, is evaluated not only by its functional aspects but also by its symbolic faetures, which implies a place embedded with symbolic meaning6. In this respect, is interesting to consider how, from a consumer point of view, a place will always mean something even do, the country is not managed under a branding conceptual framework.Even if we assume that a place could actually be managed like a brand, there is a huge resistence to the application of these techniques. In fact, very often people do not accept that branding or any other marketing concept should be applied to places because they immediatly establish a negative link between marketing and the commercialisation of nation or local culture7.

1 Kotler, P. Haider, D.H. & Rein, I. (1993). Marketing Places, New York: Free Press. 2 Available on http://wikipedia.org3 Avraham, Eli and Ketter, Eran (2008). Media strategies for marketing places in crisis. Oxford: Butterworth-Heinemann 4 Branding territory: Inside the wonderful worlds of PR and IR theory, Millennium, 31, 2, 249–269, by Peter Van Ham, 2002 5 Marie Spiekermann (2007). Building Reputation - Communicating Identity. Identity and the Place Branding Process 6 Caldweill, N. and Freire, J. (2004). The differences between branding a country, a reagion and a city.7 MacCannel, D. (1999). The tourist: A new theory of Leasure Class.

Having a clear, differentiated positioning gives a country an advantage in attracting investment, business and tourism, and in building markets for its exports.A clear positioning strategy sets out, for each stakeholder group (tourists, overseas consumers, foreign direct investors, etc) a superiority claim (how the nation is better) and the reason why the superiority claim should be believed. As a rule of thumb, a clear positioning can be articulated in 20 words or less.Singapore, for example, traditionally positioned itself as the best entry point to Asia for Western multinationals — a position backed up by the reality that its laws, institutions and educated English-speaking workforce made doing business from there safe and easy8.

COMPETITIVE ADVANTAGE OF NATIONS

In past reseaches it has been on analysing the nation’s industries, economies and the opportunities that the nation’s industries hold or can produce very much intact with brand management. Less focus has been on other factors that influence nation brands or the nations’ brand portfolio 9. The reason for this is probably that some of the elements cannot be seen as brands, such as people or culture, but are clearly very influential features in nation brands’ performance in global markets.Porter10 deals with the issue in ‘The Competitive Advantage of Nations’ when he discusses the determinants of national advantage or competence, and he names four different factors:

1. Factor conditions. The nation’s position in factors of production, such as skilled labour or infrastructure, necessary to compete in a given industry.

2. Demand conditions. The nature of home demand for the industry’s product or service.

3. Related and supporting industries. The presence or absence in the nation of supplier industries and related industries that are internationally competitive.

4. Firm strategy, structure and rivalry. The condition in the nation governing how companies are created, organized, and managed, and the nature of domestic rivalry.

If a nation goes through an international conflict, for instance, due to its government’s environmental policies, it is likely that the nation’s brands will not endure if the nation’s image is not strong enoughto protect them. This can depend on the knowledge other nations have or do not have about the nation in question11.

DISTINCTION BETWEEN CORPORATE BRAND AND PLACE BRAND

Corporate Brand is defined here as brand as applied to products & services within a corporate organizational framework. Differently, Place Brand is defined ad as applied to products and services within political/geographical framework12. As you can see from the table below, the implementation of a place brand may differ in important respects.Nowadays, tourism is seen as a quintessentially consumerist activity. Indications now suggest that travel has become a “significant lifestyle indicator for today's aspirational consumers” and, indeed, may even be regarded as a fashion accessory13

8 Quelch, J. (2005). Positioning the nation-state.9 Kotler et al. (1997). The marketing of nations. A strategic approach to building national wealth.10 Porter, M.E. (1998). The competitive advantage of nations.11 Gudjonsson, H. (2005). Nation branding.12 Allen, G. (2003). Branding Beauty: Super, Natural British Columbia.13 Morgan, N. et al. (2002). Destination Branding: Creating the unique destination proposition.

As prof. George Allen14 pointed out, the concept of place branding is the need to provide clear product differentiation in an incresingly competitive, globalizing marketplace that rests on memorability and emotional connection with consumers, delivered throught all points of contact in the product/service value chain. This inscreasing substitutability can be observed in the standardization of serveces offered. Every destination have fantastic hotels, attractions and a huge number of differentiated services. Thus, every country claims a unique culture and heritage, each place describe itself as having the friendliest people and the most costumer-focused tourism and service and facilities15. This lack of differentiation make me appreciate even more the strategic role that place branding could have in tourism industry development.

Table 1 – Distinction between Corporate Brand and Place Brand

Corporate Brand Place BrandSingle component product/serviceCohesive stakeholder relationshipsLower organizational complexityFunctionalIndividual orientationSub-brand coherencePrivate enterpriseLack of overt government roleProduct attributes consistentFlexibility of product offering

Multiple component product/serviceFragmanted Stakeholder relationshipsHigher organizational complexityExperiential/hedonicCollective orientationSub-brand inequality & rivalryPublic/private partnershipsOvert government roleProduct attributes subject to seasonalityInflexibility of product offering

Source: Allen, G. (2003). Branding Beauty: Super, Natural British Columbia.

THE PLACE BRAND EXPERIENCE

According to Allen (2003), the place brand experience begins with a formulated image of place prior to arrival (pre-place experience), followed by the aactual experience of place (place experience), followed by momories of the place experience (post-place experience), figure 1. Each stage feeds into the other in a self-reinforcing process sometimes referred to as the virtuous circle16. In Internet era, the touchpoints between customers and service provider are multiplied. Internet may provide a two-way communication with a customer at both the pre- and post- stage of the place experience. During 2.0 web generation will be possibile meet guests of a resort before leaving, have an experience with them and exchange contents producted like photos or videos online (post-experince). In this respect, the resort will be always in the middle of discussions and has the opportunity to influence customer experience, using the contents to promote its business17.I personally assume that, each of the elements that compose post- place experience can give its contribution to successfully promote a place, especially through buzz or worrd-of-mouth generation.The experience of a place extends ahead of the physical experience of being there. In fact, there is a period during which the intent to visit a specific place is formed. The expectations toward this place are mainly composed by two elements: past experince (memory formation, loyalty reinforcement) and communication (word-of-mouth dissemination and communication of the brand). As prof. Leisen18 claims: “The travelers choice of a given vacation destination depends

14 Allen, G. (2007). Place branding: New tools for economic development.15 Morgan, N. et al. (2002). Destination Branding: Creating the unique destination proposition.16 Gilmore, F. (2002). A country: can it be repositionated?Spain: the success story of country branding.17 Available on http://alexmari.blogspot.com (International Marketing Communication)18 Leisen, B. (2001). Image segmentation: The case of a Tourism destination.

largely on the favorableness of his or her image of that destination. [...] The image connotes the traveler's expectation of the destination and a positive image promises the traveler a rewarding life experience. Conequently, the images held by individuals in the marketplace are crucial to destination's marketing success.” Having said that, can be easly understood why the ability to enrich the pre and post-physical experience of a place increases significantly. Thus, particular attention must be given to the creation of a compelling virtual brand experience outside the physical place. This process will substantially increase the overall service's perception and the service's satisfaction. A place branding activity can be also seen as a complex amalgam of strategic and tactical initiavites involving the management of multiple layers of stakeholder groups and multiple channel communication that, in a certain sense, can stimulate the predisposition and intent to buy of prospects19.

Figure 1 – The Place Brand Experience Model

Source: Allen, G. (2003). Branding Beauty: Super, Natural British Columbia.

ROLE OF STAKEHOLDERS AND GOVERNMENT ORGANIZATIONS IN A PLACE BRANDING STRATEGY

In a Place Brand implementation's strategy there are two principal elements to take into consideration. First of all, stakeholder groups need to be align behind brand objectives. This represent a challeging task and for some extention even impossible to control. For instance, a stakeholder may include resort owner, transportation authorities and government agencies. At large, everyone with whom the visitor interact can influence his experience's perception. This acotors could be residents, the media or others, that are in any case part of tourism industry and will

19 Allen, G. (2007). Place branding: New tools for economic development.

influence brand experience. The communication between the marketers and the place's stakeholders plays a key role. Thus, the relationships among these various elements of the brand are negotiated and aligned only if stakeholders understand and accept the policy of promotion. While in a fashion store, the experience depends in large part on the quality of its frontline employees, in the branding of places there are hundreads of perception's influences impossible to control.Government has a central role in constructing the brand framework since the tourism agencies are often the one that decide about marketing strategy. Thus, they decide the budget available and, as a consequence, the promotional tactics.Hence, the conclusions that successful place branding requires that attention be focused on the following20:

Understanding the role and dynamics of government Isolating key points of brand contact Focusing marketing campaigns internally, as well externally Understanding the physical and virtual requirements of the brand experience Developing new research frameworks that drive meaningful customer experience

THE ANHOLT-GFK ROPER NATION BRANDS INDEX

The Anholt Nation Brands Index (ANBI) is one thought leader in this category. ANBI founder, Simon Anholt, developed a nation brand hexagon which can be used to measure and benchmark a country ’ s global brand equity. Compiled from more than 25,000 respondents from 35 countries and published quarterly, this framework provides an analytical brand index based on the following six areas: (1) tourism; (2) exports; (3) governance; (4) investment and immigration; (5) culture and heritage; and (6) people21.

Tourism – Captures the level of interest in visiting a country and the draw of natural and man-made tourist attractions.

Exports – Determines the public's image of products and services from each country and the extent to which consumers proactively seek or avoid products from each country-of-origin.

Governance – Measures public opinion regarding the level of national government competency and fairness and describes individuals' beliefs about each country's government, as well as its perceived commitment to global issues such as democracy, justice, poverty and the environment.

Investment and Immigration – Determines the power to attract people to live, work or study in each country and reveals how people perceive a country's economic and social situation.

Culture and Heritage – Reveals global perceptions of each nation's heritage and appreciation for its contemporary culture, including film, music, art, sport and literature.

People – Measures the population's reputation for competence, education, openness and friendliness and other qualities, as well as perceived levels of potential hostility and discrimination.

20 Allen, G. (2007). Place branding: New tools for economic development.21 Berkowitz, P. et al (2007). Brand China: Using the 2008 Olympic Games to enhance China's image.

Each country's score across these six dimensions is succinctly captured in the Nation Brand Hexagon, a visual rendering of the total Index score. This easy-to-understand tool provides a consistent framework for country-to-country comparisons against the key factors impacting a nation's reputation, so you can see just where your nation's brand ranks and why. Together with the Index analysis, the Nation Brand Hexagon provides a thorough assessment of your country's standing, making it one of the most effective tools available for managing your country's reputation around the world.

CASE STUDY - BRAND CHINA: USING OLYMPICS AS A BRANDING TOOL

In the Q2 2005 ANBI survey, China’s overall ranking was 21st out of 25. While China shows a strong ranking for culture and heritage, it ranks in the bottom third for all other aspects of the index22. As can be seen, exports and governance are the two lowest scoring categories. China’s government is commonly criticised for its lack of transparency.When global citizens do not have visibility into the actions of government, it impairs their willingness to trust the country’s leaders. Other legacy decisions in China’s past may also play into the Governance score including decisions that impact the environment as well as human rights (Figure 2)23.

Figure 2 – China Brand performance results based on Anbi

Source: Berkowitz, P. et al (2007). Brand China: Using the 2008 Olympic Games to enhance China's image

As for exports, China’s score in this category should be no surprise either. This is where China’s mass production of low cost — and in many cases, low quality — items is a doubleedged sword. While the country has benefi ted by amassing a large percentage of the world’s manufacturing output, its image suffers as it attempts to gain recognition as an innovator and producer of high-quality goods24.According to the reserchers, while China has a long way to go in improving its nation brand equity, it has proven its resilience by capitalising on its rapidly growing economy. China does have the opportunity to rise quickly by executing on a carefully planned strategy.For the Olympic Games, host cities take centrestage in the international spotlight increasing tourism and global visibility both before and after the games. Host countries also have the opportunity to project their images to the world and the potential to boost their national GDP25.When branding a nation, it is important to have the right strategy. This should include some kind of professional model for the brand in such a way that the brand concept will be communicated; while

22 Anholt, S. (2005). How the world sees the world.23 Ibid24 Berkowitz, P. et al (2007). Brand China: Using the 2008 Olympic Games to enhance China's image25 Ibid

bearing in mind that different audiences will need different areas of interest (tourism is usually quite different than investment although they obviously are connected). China’s strategy seems to be fairlyrudimentary in nature: focus directly on the areas that require the most attention. The main goal that China would like to achieve is full acceptance from the international community.Furthermore, prof. Berkowitz, P. et al (2007) claim “China is addressing the core issues that have been raised in the past as a barrier of China’s acceptance.” The three most commonly held views of China are: (1) a general lack of human rights; (2) low-quality manufacturing of other countries’ goods; and (3) country with a poor record of environmental awareness. These themes are directly addressed in each of theOlympic committee’s stated initiatives: People’s Olympics, High-Tech Olympics, and Green Olympics.

CHINA'S IMAGE AFTER BEIJING OLYMPICS

A survey organized by the Communication University of China (CUC) in Beijing shows that foreigners like China better after the Beijing Olympics, but still hold negative opinions about some of the Chinese people's behavior.

According to the results, the more foreigners know about China and visit the country, the higher positive image it gets. Ashley Esarey, of the Fairbank Center of Chinese Studies at Harvard University, agreed at the forum that the Olympics did change the way most people look at China. Before the Games, some Americans were against China because of human rights and environmental issues, according to Esarey. “Today, many people's perspectives changed during the Olympics. They were astonished at how well the Olympic Games were organized, and showed more interest in China," he said26.

A total of 2,400 foreigners took part in the survey through either face-to-face interview or online questionnaire from July 23 to September 9 before, during and after the Olympics were held. Online survey was carried out among citizens in the United States, Britain and Singapore. Face-to-face interviews covered foreigners from Europe, America and Asia who were staying in Beijing during the Olympics. Last November results were showed by professor Ke Huixin at the Asia Communication and Media Forum in Beijing.

The survey was designed using the format of a typical five-level Likert items, the most widely used psychometric method in questionnaires developed by American educator and organizational psychologist Rensis Likert. When responding to a Likert questionnaire item, respondents specify their level of agreement to a statement, namely, "strongly agree", "agree","disagree", "strongly disagree", "don't know" or "not sure".

Statements on China's politics, culture and economy, of the Chinese people and the city of Beijing, such as "I think the Chinese people always keep their promises", "Most of the stuff I buy is made in China", "I love Chinese food", "In China, people enjoy religious freedom" were used in the survey.

The answers were transferred into figures which reflected the degree of affection toward China. According with the results, the higher the figures are, the better the images of China and the Chinese people are.

FINDINGSAccording to the survey, foreigners' general impressions of China were better after the Olympics, whether they came to the Games or not. The main findings are the following:

26 Available on www.chinadaily.com.cn

● China's economic image in their eyes rose from 3.1 to 3.2;

● Cultural image rose from 3.0 to slightly higher;

● Political image remained the same (at 2.6);

● Image of the Beijing city rose from 3.0 to 3.127.

Those interviewed got to know China by watching the Olympic Games, touring around China, making friends with the Chinese, watching Chinese films, using goods made here, eating in Chinese restaurants and so on. In any case, criticisms still existed, infact, the image of the Chinese people remained the same at 2.8 after the Olympics.

The interviewees who had traveled more to China gave lower ratings for Chinese people's friendliness, enthusiasm toward work and their ability to keep promises than those who have only limited travel experience.

In a interview professor Ke state: "This is very surprising and it is also beyond my expectation that they are less critical about littering after more contact with the people and the culture."

The survey found that foreigners who were staying in Beijing during the Olympics had more positive impressions of China than those who were not. According to Ke, this was because they had more chances to be in direct contact with Chinese society.

However, the statistics also point out an increasing usage of Chinese elements within films, the Beijing Olympic Games and Chinese products are the top three communication channels which have the strongest relationship with China's cultural image, the image of Beijing and China's economic image respectively.

Media outside of China, Chinese products, Chinese cities or Chinatown restaurants, and films with

Chinese elements rank the top of the list of how foreigners to get access to China.

But of all the channels to become familiar with China, Chinese media was at the bottom of the list, even though the credibility of Chinese media improved during the Olympics.

In the some survey was also showed that foreigners' knowledge about China was still at a low level. As Ke explained: "This low knowledge about China can be observed by lots of vague answers. For example, when asked who is the President of China now, even those who were staying in Beijing at the time didn't know it was Hu Jintao. Only 40 percent of them gave the right answer.”

CONCLUSIONThe Place Branding concept has been attacked by different sectors of society, and using branding techniques in regions and countries has been seen as sacrilegious. Although it is sometimes difficult, and even not recommended, to seek reconciliation of opinions, in the present case the arguments that are used to attack the geo-brand concept are flawed and should be reviewed28. Place Branding is

27 Available on www.chinabusinessreview.com 28 Freire, J. (2005). Geo-branding, are we talking nonsense? A theoretical reflection on brands applied to places

not a creation of ‘clever’ entrepreneurs but is a result of changes in society. In a semiotic society the communication process is conducted through the use of signs that are passed via brands. It is those signs that identify individuals in society. There are several objectives for the development of a place brand system model. First, a place brand system can be used to manage stereotypes. As argued above, the worst a community can do is not intervene in the creation of its own brand image. Secondly, this concept is extremely important for the protection of local culture, which contributes to local development by promoting diversity29.The implementation of a Place branding strategy has impact and relevance not only locally but also globally. Thinking about the great potentiality of developing countries, brand concept apllied to these realities cuoiuld contributes to sustainable local development.When allorganisations and agents in a specific place decide to embrace the promotion strategy, there are no limit to the positive effects a marketing campaign can generate.

“Branding places is not only possible, but a positive thing to do in order to help construct a better society.”

29 Ibid