How to Build a Strong Nation Brand

Jan-Benedict Steenkamp, C. Knox Massey Distinguished Professor of Marketing, University of North Carolina at Chapel Hill, U.S.A.

Introduction

The image people have of certain geographical locales has influenced their behavior since time immemorial. For example, Italian woolens were famous in the Middle Ages throughout Europe, Chinese porcelain were sought since the 17th century, and Sheffield steel stood for quality in the 19th century. International marketing scholars have spent considerable effort studying the role of the image of the country of origin (COO) in consumer judgments and decisions. COO image usually emerges organically in the minds of consumers as they read about or visit other countries, and experience their products. Nation branding, on the other hand, is an actively image building and management strategy, pursued by policy makers and organizations of the country in question. It is the process by which a nation’s image is created or altered, monitored, evaluated, and proactively managed in order to enhance the nation’s reputation among overseas target audiences.

Nation branding has captured the attention of policy makers around the world. (For ease of exposition, I will use the term policy makers in a broad manner, encompassing politicians, government officials, industry organizations, tourist boards, and any other stakeholder groups.) They believe that a strong nation brand helps attract tourists, foreign direct investment, and skilled labor, increases exports and creates jobs, and enhances soft power. Policy makers are aware of the importance of company (“commercial”) brands in consumer-decision making, and the enormous value that is captured in strong brand names. According to BrandZ, the value of the world’s 100 most valuable global brands increased from $1.4 trillion in 2006 (the year that the first BrandZ analysis was conducted) to a record $4.7 trillion in 2019. Policy makers also point to the benefits the nation brand bestows through COO image on products from their country.

Nation branding has attracted considerable research attention in political science, public diplomacy, urban planning, geography, tourism, and – to a lesser extent – in marketing. There are many who regard nation branding as its own discipline. I argue, on the other hand, that nation branding is an important, emerging area in the field of branding. The nation is a (relatively new) entity that is being branded. In other words, I approach nation branding squarely from a branding perspective. This allows me to use – and adapt - the vast and rich marketing literature on branding to deepen our understanding of effective nation branding.

Consequently, the purpose of this article is to propose a model for building strong nation brands that is derived from the branding literature, while taking into consideration unique elements of the nation context. I will first propose my model for nation branding, which consists of six steps. For each step, I identify tasks for the nation brand marketer. Then, I use this model and contemporary developments in the world to identify five issues that keep the nation brand marketer awake at night. I end with a conclusion.

A model for nation branding

A nation brand refers to a network of meanings in people’s mind based on the visual, verbal, and behavioral expressions of a nation. When these meanings are a result of active management of these perceptions and strategic efforts to advance specific meanings by policy makers in the country in question, this is called nation branding. Marketers have long known that they can imbue brands with elements of a country’s culture. Indeed, some brands have become veritable icons, representative of a (national or sub) culture. For example, the Brazilian flip-flop brand Havaianas imbued the brand with Brazilian cultural meanings of joy and fun. Haley-Davidson is not just a motorcycle – it stands unequivocally for rebellion, machismo, freedom, and America. Cultural brands exhibit the characteristics of strong brands described by conventional branding models. Cultural brands have distinctive and favorable meanings, they generate buzz, and they have a core following with deep emotional attachment.

Figure 1 shows a model for nation branding that extends and adapts my cultural branding model to nation branding (stages 1-4), and integrates this with brand equity models (stages 4-6). Globally recognized meanings are the building blocks of nation branding. The task of the nation brand marketer is to select particular meanings to associate with the country, and then to develop strategies that will transfer these particular meanings to the country. To achieve this transfer, the marketer can use three interrelated and mutually supporting pathways: brand development, brand communication, and brand reinforcement. These country meanings must be related to nation equity, which is the key mediator in achieving favorable nation branding outcomes. 

Step 1: Strategic Nation brand analysis

The starting point of any nation branding strategy should be a comprehensive strategic nation brand analysis. This should include 1) assessment of trends and motivations in key target markets (customer analysis), 2) analysis of the image, strengths, weaknesses, and vulnerabilities of competing nation brands (competitor analysis), and 3) a realistic assessment of the nation’s existing image (if any), its strengths, capabilities, weaknesses, heritage, and values (self-analysis). This third component may be the most challenging. Like brand managers, policy makers can easily have an inflated idea about the strengths and uniqueness of their country. 

Step 2: Select country meanings

The strategic nation brand analysis sets the context for the selection of specific globally recognized meanings with which the nation is to be associated. To help brand marketers develop specific meanings, I use and adapt Aaker’s brand identity system. Aaker’s system distinguishes between four meta-categories of meanings – brand as product, brand as organization, brand as person, and brand as symbol. Each of these meta-categories is further subdivided into more fine-grained categories of meanings. Table 1 shows my adaptation of Aaker’s brand identity system, modified to nation branding, and provides examples.

Selection of specific meanings to be associated with the nation brand has to be consistent with the results of the strategic nation brand analysis. More specifically, the nation brand marketer should be guided by four criteria in selecting meanings. First, choose meanings that the target segment will recognize anywhere in the world. Otherwise, the nation brand marketer must spend significant amounts of resources to educate foreign consumers about the nation aspects in question. Second, choose those meanings that the target segment regards as credibly linked to the nation. For example, a U.S. nation branding campaign can credibly draw upon a culture of individualism, something not credible for China. Visual images of wide spaces make little sense for tiny and cramped Bangladesh with its 2,500 inhabitants per square mile. Third, select meanings that are relevant, or that the nation brand marketer can make relevant, for the target segment. Fourth, if possible, preempt meanings that no other nation has claimed. Here, there is a clear first-mover advantage. The first nation to appropriate a meaning effectively “owns” that position and dislodging it is costly.

Step 3: Develop nation branding marketing strategy to convey these meanings

Nation-brand marketers transfer country meanings that have been selected to their nation brand through three interrelated activities: nation brand development, nation brand communication, and nation brand reinforcement. The first step is to choose the brand name, logo, and slogan that convey the intended country meanings. An effective nation branding strategy creates a storied brand – a brand that has distinctive features (mark, design, and so on). The brand name will typically just be the country, but there are exceptions. Dutch nation branding campaigns do not use the official name of the country (the Netherlands), but its informal name (Holland). (But rather bizarrely, the country has recently changed its approach to emphasizing the Netherlands, throwing away much of its equity.)

The “Make in India” campaign combines brand name and slogan in one. Its logo consists of gears, a quintessential symbol of manufacturing, of various sizes, arranged in the form of a lion, as symbol, a powerful animal.

Dependent on the existing knowledge about the country in overseas markets, the nation-brand communication strategy should aim to accomplish different tasks. If people are at best only dimly aware of the country’s existence, the goal should be to provide basic information about the country – this is what economists call the information function of advertising. For many countries, that will be the case. In a world of some 200 nations, many people will have almost no knowledge about Belarus or Paraguay.

For well-known and established countries that have already a firm reputation, advertising can be used to create nation stories and myths – this is advertising’s persuasive role. The nation is the conduit through which the consumer can participate in these stories. To visit Italy is to experience La Dolce Vita and relive the glories of ancient Rome. The U.S. can call upon the myth of the Wild West, its open spaces, independence, freedom, and machismo. For established countries, persuasive advertising is crucial in charging a nation brand with the intended meanings and myths through the setting (whether it is urban or rural, fantasy or real life, inside or outside, and so on), people (their gender, age, occupation, clothing, and body postures, celebrities, “experts,” the “common man”), and media used (type of media such as print, and specific outlets such as the Financial Times versus People). Each of these elements should reinforce the meanings associated with the nation brand.

The third role of nation brand marketer at this stage is to reinforce the meanings by working closely with policy makers to deliver on the promises implied by these meanings. For example, if a country is positioned as cosmopolitan and welcoming to foreigners, this requires friendly visa application procedures or visa wavers, relevant information (road signs, restaurant menus, train directions, etc.,) in English – as the world’s lingua franca, as well as English fluency among people who are likely to interact with foreigners, among others. For example, one of the promises of “Make in India” is to make the country more welcoming to foreigners by cutting red tape. I experienced that first hand. To get a visa for India five years ago was a hassle. I had to fill out multiple documents and had to send my passport to the Indian embassy. The whole process took three weeks. This year, I did it with minimal effort over the internet.

Step 4: Country meanings in nation brand

The result of a successful nation branding marketing campaign will be that the nation brand is imbued with specific meanings. To assess whether this is indeed the case, the nation brand marketer should conduct a survey among the target segment in key foreign countries. This survey should be administered twice - at the beginning of the campaign to obtain a benchmark and at the end of the campaign to evaluate the statistical and substantive significance of the shift in perceptions on the intended meanings. To allow for spillover effects, it is advisable to include also other (non-intended) meanings in the survey. If the marketer wants to compare the magnitude of the shift between target countries, appropriate statistical safeguards to ensure cross-national equivalence have to be taken.

Step 5: Measure and monitor nation equity

Successful transfer of the chosen recognizable, credible, relevant, and differentiating country meanings should have a positive effect of nation equity. I define nation equity as the differential preference and response to marketing and other efforts by home country actors in foreign countries by virtue of them hailing from that nation. Several measures of brand equity have been proposed, including Young & Rubicam’s Brand Asset Valuator (BAV). BAV consists of five pillars: differentiation, relevance, energy, esteem, and knowledge. BAV has been used in a wide-ranging set of studies. Academic research has shown that that BAV measures are associated with unanticipated changes in stock returns after controlling for changes in accounting rates of return; customer acquisition, retention, and profit margins; word of mouth; and brand marketing mix elasticities. Given that BAV’s validity has received strong support in the marketing literature, I use BAV in my model for nation brand building.

Differentiation is the extent to which the overseas target segment sees the nation as unique. Relevance is the extent to which the target segment considers the nation as fulfilling functional, emotional, or social needs in meaningful ways. It measures the connection the overseas target segment has to the nation—how much significance, impact, and purpose that nation has in their work or lives. Energy is the extent to which the nation is seen as innovative, dynamic, and responsive to changing tastes and needs in the target segment. As countries compete more intensely with each other, being a high-energy nation means being seen as trendsetting, leading, and shaping the economic, political, and cultural world. Esteem is the extent to which the overseas target segment admires a nation and hold it in high regard. It relates closely to political, economic, cultural, and moral leadership. Finally, knowledge is the extent to which the target segment deeply and truly understands the nation’s identity, heritage, and behavior. BAV views knowledge as the culmination of nation-brand building efforts. The target segment learns about the nation not simply by exposures to it in the media, but by first-hand experience with it or by hearing about first-hand experiences from friends. 

Nation equity power grid

The nation equity power grid (Figure 2) is a tool to locate the nation versus other nations on nation equity, and to track its trajectory over time. The grid maps nation vitality - the combined strengths of differentiation, relevance, and energy - against nation stature, the combined strengths of esteem and knowledge. What nation vitality is to growth, nation stature is to longevity. The figure shows two common trajectories, one going from being a weak nation brand via niche or emerging nation brand to becoming a dominant nation brand, and a second, more troubling, one going from being a dominant nation brand via receding brand to weak nation brand.

Dominant nation brands combine high stature with high vitality. Their dominant position makes them targets, but not necessarily easy ones. The U.S. falls into this category. Other countries that are dominant nation brands, at least economically, are Japan, Germany, Sweden, and Switzerland. Research has shown that these countries, next to the U.S. have a positive COO across a very broad range of B2C and B2B industries.

Receding nation brands are those that can draw upon a reservoir of esteem and knowledge in overseas markets but are losing their vitality. Nations in this quadrant have often been dominant in the past and people still respect them, but more nostalgically than expectantly. They struggle to maintain their relevance, energy, and perhaps even differentiation in a changed marketplace. One such example may be the U.K., which in in the past, was among the dominant nation brands in the world, with British steel, ships, financial services, government institutions, and culture seen as leading the world.

Niche and emerging nation brands have significant growth potential but are relatively low on stature because they have not been able to establish esteem and knowledge across a broad range of fields. Niche brands include countries that have a sterling image in a significant range of political, economic, cultural, and moral spheres of life, but are not universally regarded as strong and enviable. One example is Italy. It is seen as world leader in some economic categories (e.g., shoes, fashion, sports cars), and on culture, but is not held in high regard in other areas of economic activity (e.g., machinery, or regular cars), as well as on governance or financial institutions. In this category, we can also find emerging nations brands; countries that are seen as upcoming, dynamic, and innovative but do not have the required brand stature. Examples might include South Korea and China.

Finally, nations that are low on both vitality and stature are weak brands. In my view, many countries fall into this category. People around the world know little about these countries, and care about them even less. They may not even be aware of the country’s existence. While cultural branding theory suggests that persuasive nation brand advertising is powerful for niche, emerging, dominant, and receding nation brands, informative advertising is likely to be more appropriate for weak nation brands. A case in point is Spain, which according to Spanish policy makers suffers from a weak nation image compared to neighboring Italy and France. People around the world are aware that Spain exists, but know very little of the country – in short, it is a weak nation brand. Consequently, its national branding campaign Marca Espa?a has a broad focus. Within the span of some two minutes, its well-executed advertising messages range from natural beauty to history, from inclusion to high tech, from food to construction industry accomplishments, from literature to international refugee support, from sports to sustainability. 

Nation equity tracking instrument

The key tasks for the nation brand marketer in step 5 of the nation branding process are: 1) to measure and track nation equity over time; 2) to locate their nation’s position in the nation equity power grid vis-à-vis competitors; and 3) to link country scores on nation equity, and its pillars, to the meanings that have been selected for meaning transfer. This has to be done in all core target countries, using a consistent methodology. Table 2 provides a nation-equity tracking instrument for this purpose, which was adapted from my brand-tracking instrument. To track evolution of nation equity over time, the tracking instrument should be administered to at least once a year. 

Step 6: Quantify outcomes of nation branding efforts

The improvement of a country’s equity should ultimately lead to tangible and intangible outcomes, which can be economic (e.g., tourism, exports, price premium, foreign direct investment), social (e.g., attracting skilled immigrants), or political (increased soft power). It depends on the goals of the national branding campaign, what the relevant outcomes are. For example, the goals for “Make in India” are to lift manufacturing share in the Indian economy to around 25% by 2020 and to create 100 million new jobs by 2022. For India’s “Incredible India” campaign, the outcome metrics could be number of new jobs created and number of tourists. Regardless of the aims of the campaign, it is important to establish that the resources invested in the nation branding efforts lead to intended outcomes. Because these campaigns are often funded with tax payers’ money, accountability for nation brand managers is at least as important as accountability for brand managers.

For quantifiable outcomes, one approach is to regress a particular outcome on nation equity and a large set of control variables. This approach was used in one study examining the effect of nation equity on foreign direct investment in that country using cross-sectional data on 47 recipient countries and 20 source countries. The study found that after controlling for a wide variety of other country characteristics, nation equity had a significant positive effect on FDI.

Another, related approach is the brand intercept method, which has been widely used in marketing in the context of brands. In this approach, outcomes are regressed on intrinsic brand characteristics and other factors. What is left in the brand intercept is a measure of the effect of brand name on sales. This intercept is subsequently regressed on brand equity, and the resulting coefficient quantifies measured the effect of brand equity on market outcomes. Applied to nation equity, relevant outcomes (e.g., FDI or number of tourists) is regressed on country factors such as size of the economy, geographical location, etc. The intercept of that regression is regressed on nation equity. A third approach is the royalty relief approach pioneered by brand consultancy Brand Finance. It is based on a nation’s brand equity score, an estimate of the royalty rate averaged across sectors, forecasts of GDP, and the weighted cost of capital.

Nation branding challenges

Nation branding poses at least five challenges to marketing practitioners.

Conceptualizing nation equity

I use BAV to conceptualize and measure nation equity. BAV is firmly grounded in the marketing literature and its relevance for branding is firmly established. However, practitioners have proposed dedicated nation-equity models that have received extensive press coverage, including the Anholt-GfK hexagon model, Country RepTrak, Future Brand Country Brand Index, and Brand Finance. The Anholt-GfK hexagon model encompasses six pillars: exports, governance, investment & immigration, culture & heritage, people, and tourism. Country RepTrak has three pillars - advanced economy, appealing environment, and effective government. FutureBrand distinguishes between quality of life, value system, business potential, heritage & culture, tourism, and “made in” (COO). Finally, Brand Finance considers three pillars: goods & services, investment, and society. Each of these nation equity pillars consists of multiple facets.

These dedicated nation-equity models raise three important practical questions.

1. Do we need dedicated nation-equity models, or is it more fruitful to adapt an established and proven branding model like BAV?
2. What is the reliability of these dedicated nation-equity measurements? Are the factors truly different in real-life? The above mentioned study into the effect of nation equity on foreign direct investment reported that the lowest correlation between any of the six country dimensions specified in the Anholt-GfK model was .63, and two-thirds of the correlations exceeded .8. This suggests that these dimensions are largely tapping into the same thing.
3. Finally, and most disturbingly, the convergence between these dedicated models does not appear to be high. Table 3 provides the top-10 countries for each dedicated nation-equity model. Only two countries – Switzerland and Japan - appear in the top-10 of all four models, and even for these countries, there is large variation in rank order. The rank of Switzerland varies between #2 and #8 and Japan’s ranking varies between #1 and #8. There are also concerns with the face validity of some results. For example, how can Luxembourg, a country of 600,000 people most people would not even be able to locate on the map, be regarded as the #5 strongest brand in the world according to Brand Finance? As another example, according to CountryRepTrak, Belgium scores higher (#15) than Germany (#19). This makes no sense. How many people, especially outside of Europe, have a clear understanding of Belgium, a country that has few global brands, no international political heft, and barely able to keep itself together? As a third example, according to CountryRepTrak, the U.S. (#34) is ranked lower than Greece (#22), a country that recently teetered on the brink of bankruptcy. People may not like the Trump administration but do such results have face validity? 

Managing nation brands

Building a strong brand involves choices – what the brand is and what it is not. This is difficult to accomplish for nation brands where decisions involve multiple government departments, industry associations, tourist boards, and other organizations, each with their own agenda and constituency. As a consequence, a nation branding campaign runs the danger of encompassing everything, and as a result may not stand for anything. Aronczyk provides an interesting case study of the challenges and internal divides over the strategy to turn Canada from “bland” to “brand.”

Another challenge is to maintain consistency over time. Company brands nurture their brand values with campaigns that run for many years. Changes in the brand’s marketing strategy are made gradually, after careful consideration so that brand equity is not hurt. The marketing strategy of nation brands, on the other hand, is susceptible to the view of its political masters. In democracies, governments come and go, and new ministers may want to make their mark by changing things for the sake of change and by pursuing politically more expedient projects. It is hard to maintain brand consistency under such circumstances. For example, one of the parties in the Spanish parliament is a Catalonian separatist party, which opposes branding Spain as a nation. If the new Socialist government in Madrid needs their votes to achieve a majority, investment in Marca Espa?a suffers.

Multiple target segments

If a company wants to target multiple segments, they often develop multiple brands. For example, Volkswagen A.G. has Skoda for the value segment, Volkswagen for the mass segment, Audi and Porsche for the premium segment, Bentley for the prestige segment, and SEAT for people looking for fun. Likewise, nation brands appeal to different target segments, including e.g., overseas consumer and procurement managers (COO effect), tourists, investors, and politicians. These target segments value different things in the nation brand, e.g., quality for buyers, nature and culture for tourists, low taxes and immigration policies for investors, and governance for politicians. How should nation brands deal with multiple segments? Can all these elements be included in a strong, differentiated nation brand? Is it necessary to develop subbrands for different groups? Can they run separate campaigns – such as “Make in India” targeting foreign companies and “Incredible India” targeting tourists – and remain credible?

Vulnerability of nation brand building to external events

Any brand can be severely hurt, if not destroyed, by corporate scandals and marketing crises. Although no manager looks for such a crisis, often, they will have some responsibility for it happening to their brand. For nation brand managers, the situation is more challenging because they have virtually no control over adverse events. One type of adverse events is natural disasters like the 2004 tsunami, which hit South-East Asia and inflicted heavy damage on local ecosystems that are a big tourist draw.

Politics is another cause of adverse events beyond the control of nation-brand managers. The image of the U.S. in other countries declined considerably in recent years, due to the unpopularity of President Donald Trump. Similarly, the chaos surrounding Brexit almost certainly hurt the U.K. as a place to do business, while Chinese designs in the South China Sea have caused considerable concerns in Australia, Vietnam, and the U.S., among others. Civil wars (e.g., Syria), increasingly autocratic leaders (Turkey), assassination of opponents to the regime (Saudi Arabia), and foreign invasions (Ukraine) are other examples of adverse political events that undermine the success of nation building efforts.

Clearly, it is challenging to manage a nation brand when outside events can have such effects. But this also raises some interesting questions. Are these changes persistent or can they quickly turn around once the political climate changes? For example, America’s image improved markedly when Barack Obama succeeded George W. Bush as president in 2009. Further, what is the effect of such events on market outcomes? Do people really care, and, more importantly, do they change their behavior?

Nation branding in an era of global fragmentation

The world appears more fragmented today than it has been for a long time. Global tensions are rising, and nationalism, xenophobia, and ethnocentrism have made a comeback. Against this background, what is the future of nation branding? On the one hand, one could argue that investing in building one’s nation brand can be regarded as a waste of money. Target audiences in other countries will be less receptive to foreign messages extolling the strengths and values of that nation. Social judgment theory suggests that such efforts may even be counter-productive if the position advocated in marketing messages falls outside the audience’s latitude of acceptance. On the other hand, a strong brand can act as a buffer against negative information. Might this also be the case for nation brands? For example, if America’s image is under pressure, should nation brand marketers actively try to counter this by investing in brand America?

Conclusion

In this article, I have proposed a nation branding model that builds upon Aaker’s brand identity system, cultural branding, and brand equity theory. As such, my model is squarely anchored in the deep and rich marketing and branding literature and practice. This is no coincidence To me, nation branding is an exciting, relatively new, manifestation of the power of branding. Anything can be branded, be it goods, services, people, ideas, organizations, or places. While each of these application domains has special features and poses its own challenges, conceptualizing them within the broader branding literature allows marketing scholars to draw on, as well as extend, the vast branding literature. I believe such an approach is also fruitful for nation branding.

Acknowledgments: I thank nation branding marketers and policy makers from China, Lebanon, the Netherlands, South Korea, and Spain for sharing their insights with me.

Author: Jan-Benedict Steenkamp is author of Brand Breakout: How Emerging Market Brands Will Go Global, and Global Brand Strategy: World-wise Marketing in the Age of Branding, among others.

Further reading:

Aaker, David A. (1996), Building Strong Brands, New York: The Free Press.

Kumar, Nirmalya, and Jan-Benedict E.M. Steenkamp (2013), Brand Breakout: How Emerging Market Brands Will Go Global, New York: Palgrave MacMillan

Steenkamp, Iris R.M. (2014), “Soft Factors in Foreign Direct Investment,” Master Thesis, Erasmus University Rotterdam.

Steenkamp, Jan-Benedict (2017), Global Brand Strategy: World-Wise Marketing in the Age of Branding, New York: Palgrave MacMillan.

Steenkamp, Jan-Benedict E.M. (2019), “The Uncertain Future of Globalization: Implications for Global Consumer Culture and Global Brands,” International Marketing Review, 36 (4), 524-535.