Kotler - Country as Brand, Product and Beyond - A Place Marketing and Brand Management Perspective

Theoretical papers Country as brand, product, and beyond: A place marketing and brand management perspective Received (in revised form): 16th January, 2002

PHILIP KOTLER is the S. C. Johnson Distinguished Professor of International Marketing at the Kellogg Graduate School of  Management, Northwestern University, Evanston, Illinois. His ‘Marketing Management’ (10th edition) is one of the world’s leading textbooks on marketing, and he has published 20 other books and over 100 papers in leading  journals. His research spans strategic marketing, consumer marketing, business marketing, services marketing and e-marketing. He has been a consultant to IBM, Bank of America, Merck, General Electric, Honeywell and many other companies. He has received honorary doctorate degrees from nine major universities in the USA and other countries.

DAVID GERTNER   joined Pace University as a full-time permanent member of the faculty in 2001 after visting and serving as professor and programme chair in several universities in Brazil and the USA. Dr Gertner participates in a number of professional associations and has served as vice-president for research and publications of BALAS —  the Business Association for Latin American Studies. Along with his research and teaching activities, Dr Gertner has also consulted for many companies. He has published and presented in conferences over 30 articles and papers.

Abstract This paper examines how widely held country images affect attitudes towards a country’s products and services and ability to attract investment, businesses and tourists. It assesses the role of  strategic marketing management in promoting the country’s image, attractiveness and products.

COUNTRIES AS BRANDS AND PRODUCTS

Philip Kotler PhD S. C. Johnson Professor of  Marketing, Kellogg Graduate School of Management, Northwestern Northwestern University, University, Leverone Hall, Evanston, IL 60208-2008, USA

Beca Becaus use e prod produc uctt feat featur ures es are are easi easily ly copied, brands have been considered a mark market eter er’’s majo majorr tool tool for for crea creati ting ng produ product ct differ different entiat iation ion.. Even Even when when diff differ ere entiat tiatio ion n base ased on prod roduct uct charac character terist istics ics is possib possible le,, often often conconsumers do not feel motivated or able to anal analys yse e them hem in adeq adequa uatte dept depth. h. Theref Therefore ore the combin combinat ation ion of brand brand name ame and and bra brand sign ignifica ificanc nce e has has become a core competitive asset in an ever-growing number of contexts.1

Tel: 1 847 491 2725; E-mail: [email protected], [email protected] David Gertner PhD Assistant Professor of Marketing, Lubin School of Business, Pace University, University, Pleasantville/Briarcliff  Pleasantville/Briarcliff  Campus, Goldstein 120, 861 Bedford Road, Pleasantville, NY 10570, USA

Tel: 1 914 773 3704; E-mail: [email protected], [email protected], [email protected]

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The The Americ American an Market Marketing ing Associ Associaation defines a brand as a ‘name, term, sign, symbol, or design, or a combination tion of them them intend intended ed to identi identify fy the good goodss and and serv servic ices es of one one sell seller er or  grou group p of sell seller erss and and to diff differ eren enti tiat ate e them them from from thos those e of comp compet etit itio ion’ n’.. Brands Brands differen differentiat tiate e products products and represent a promise of value. Brands incite belief beliefs, s, evoke evoke emotio emotions ns and prompt prompt behavi behaviour ours. s. Market Marketers ers often often exten extend d successful brand names to new product launches, launches, lending lending existing existing associat associations ions to them them.. As a resu result lt,, they they spee speed d up

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consumers’ consumers ’ information processing and learning. Brands have social and emotional value to users. They have pers person onal alit ity y and and spea speak k for for the the user user.. They They enha enhanc nce e the the perc percei eive ved d util utilit ity y and desira desirabil bility ity of a produc product. t. Brands Brands have have the abil abilit ity y to add add to or sububtrac tractt from from the the perc percei eive ved d valu value e of a prod produc uct. t. On one one hand hand,, cons consum umer erss expe expect ct to pay pay lowe lowerr pric prices es for for ununbranded products or for those with low bran brand d equi equiti ties es.. On the the othe otherr hand hand,, they pay premiums premiums for their their treasure treasured d or socially valued brands. Brands have equity equity for both both custo customer merss and invesinvestors. tors. Brand Brand equity equity transl translate atess into into cuscustomer preference, loyalty and financial gains. gains. Brands Brands are appraised appraised and traded traded in the market marketpla place ce.. Brand Brand equity equity has been been poin pointe ted d out out to incl includ ude e many many dimensio dimensions, ns, such as performan performance, ce, social image, image, value, value, trustwor trustworthin thiness ess and 2 identifi identification. The question here is: can a country be a bra brand? nd? Is the there such uch thing hing as count country ry brand brand equity equity?? Shimp Shimp et al .3 applied the term ‘country equity’ equity’, referring ring to the emotio emotional nal value value result resulting ing from consumers’ consumers’ association of a brand with a country. Country names amount to brands and help consumers evaluate produc products ts and make make purcha purchasi sing ng decidecisions. They are responsible for associations that may add to or subtract from the the perce erceiv ived ed valu value e of a pro product duct.. Resear Research ch has suppo supporte rted d the idea idea that that cons consum umer erss are are more more will willin ing g to buy buy products from industrialised nations as a result of country equity.4 Products bearing a ‘made made in Germ German any y’, ‘made made in Switzerland’ Switzerland’ or ‘ or  ‘made in Japan’ Japan’ label are commonly regarded as high quality, due to the reputation of these countries as top world manufacturers and exporters. At the same time, ‘made in Surinam’ Surinam’ or  ‘made made in Myan Myanma mar  r ’ labe labels ls may may rais raise e 250

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doubts about the quality of the products due to the low country brand equity. In some some inst instan ance cess a coun countr try y may may deliberately use its name to promote its products. For almost two decades now, Amer Americ ican an cons consum umer erss have have rega regard rded ed Cafe´ de Colombia (Colombian coffee) as a top-quality coffee. The promotion of Colo Colomb mbia ia,, a coun countr try y name name,, as a brand brand of high-q high-qual uality ity coffee coffee has has been been done with the help of the Juan Valdez character character.. This ‘quintessential cafe  ´tero’ ´tero’, and and his his mule mule are are port portra raye yed d in a logo logo crea create ted d in 1981 1981 to be used used as a seal seal of guar guaran ante tee e issu issued ed by the the Nati Nation onal al Federa derati tio on of Coffe offee e Grow rowers of  Colo Colomb mbia ia.. The The Cafe Cafe´ de Colom Colombia bia logo logo has been been exte xtensive sively ly used in advertisi advertising, ng, promotio promotional nal materials materials and coff coffee ee pack packag agin ing, g, prov provid idin ing g a good good example of integrated marketing communi munica cati tion onss as well well as cons consis iste tenc ncy y. Effor ffortts to prom romote Colom lombia as a bran brand d of coff coffee ee incl includ uded ed the the spon spon-sors sorshi hip p of the the twotwo-we week ek-l -lon ong g US Open Open tenni tenniss tourna tournamen mentt in Flushi Flushing ng 5 Meadow Meadowss in 1995. 1995. Consumer Consumer adveradvertising tising featur featuring ing the logo has has paid paid off. off. Colo Colomb mbia ia is the the lead leadin ing g expo export rter er of  coffee to the US and Cafe´ de Colo Colomb mbia ia hold holdss over over 40 per per cent cent of  the the spec specia iali lity ty coff coffee ee mark market et in the the USA. A 1995 survey found that 83 per  cent cent of Amer Americ ican anss inte interv rvie iewe wed d asassociat sociated ed the logo with with coffee coffee and 53 per per cent cent prop proper erly ly iden identi tifi fied it with 6 Colombian coffee. Even when a country does not conscio scious usly ly mana manage ge its its name name as a bran brand, d, people people still still have have images images of countr countries ies that that can be activa activated ted by simply simply voicvoicing ing the the name name.. Coun Countr try y imag images es are are like likely ly to infl influence uence people people’’s decisi decision onss related to purchasing, investing, changing residenc residence e and travelling. travelling. Country image can be understood as

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‘the

sum of beliefs beliefs and impres impressio sions ns people people hold old abou aboutt plac places es.. Imag Images es repr repres esen entt a simplification of a large number of associations tions and pieces pieces of informati information on connected connected with with a place place.. They They are are a prod produc uctt of the the mind trying to process and pick out essential info inform rmat atio ion n from from huge huge amou amount ntss of data data 7 about a place.’

A coun countr try y’s imag image e resu result ltss from rom its its geography geography,, history history,, proclamat proclamations ions,, art and music music,, famous famous citize citizens ns and other  other  featu features res.. The entert entertain ainme ment nt indust industry ry and and the the medi mediaa pla play a par partic ticula ularly rly impo import rtan antt role role in shap shapin ing g peop people le’’s perceptio perceptions ns of places, places, especiall especially y those those vie viewed negat egativ ive ely. ly. Not only are are product categor gories such as perfumes, fumes, electr electroni onics, cs, precis precision ion instru instru-ments, wines, cars and software strongly strongly identi identifi fied with certain certain places, places, but so also are societal ills such as Aids epidem epidemics ics,, politi political cal riots, riots, civil civil rights rights violations, attacks on the environment, raci racial al con conflict, ict, econ econom omic ic turm turmoi oil, l, poverty and violent crime. All of these have have been been repe repeat ated edly ly and and stro strong ngly ly asso associ ciat ated ed with with cert certai ain n loca locale les. s. Of  course, different persons and groups are likely likely to hold hold differ differen entt stere stereot otype ypess of  nations nations since since the mental mental phenomen phenomenon on is inhe inhere rent ntly ly subj subjec ecti tive ve.. Some Someti time mess they they are are wide widesp spre read ad howe howeve verr, and and pervas pervasive ive across across elemen elements ts of the same same group —  they they are socia sociall cognit cognition ions, s, ment mental al repr repres esen enta tati tion onss shar shared ed by members of a given society. Most Most coun countr try y imag images es are are in fact fact stereotyp stereotypes, es, extreme extreme simpli simplifications cations of  the realit reality y that that are not necess necessari arily ly accurate. They might be dated, based on exceptions rather than on patterns, on impres impressio sions ns rather rather than than on facts, facts, but are nonethel nonetheless ess pervasive pervasive.. The simple simple pronu pronunci nciati ation on or spelli spelling ng of a brand brand name in a foreign language may impact 

on product product percepti perceptions ons and attitude attitudes. s. 8 Leclerc et al . foun found d in one one expe experi ri-ment that the French pronunciation of  a bran brand d name name affe affect ctss the the perc percei eive ved d hedonism of the products and attitudes toward the brand. They also found that the French branding infl influence persisted even in a product taste test —  that is, with with a direct direct sensor sensory y experi experien ence ce with with the product. Coun Countr try y imag images es,, or know knowle ledg dge e stru struct ctur ures es rela relate ted d to plac places es,, or plac place e sche schem mata ata, are are comm common only ly use used as short-cu short-cuts ts for informat information ion processi processing ng and and cons consum umer er deci decisi sion on heur heuris isti tics cs.. People, eople, especiall especially y in low involvemen involvementt situations, are sloppy cognitive processors. They resist changing or adjusting thei theirr cogn cognit itiv ive e stru struct ctur ures es or prio prior  r  knowledge. They prefer to adjust what they see to fit what what they know. know. They may fill in info inform rmat atio ion n that that is not not presen presented ted or distor distortt the realit reality y to fit their mental representations. People are also also more more like likely ly to pay pay atte attent ntio ion n to information that confi confirms their expectation tations. s. They They disreg disregard ard inform informati ation on that challenge challengess their their knowledge knowledge strucstructures in a process known as confi confirma rmation tion bia bias. The They avoid void the the effo effort rt nece necess ssar ary y to reco recons nstr truc uctt thei their  r  cognition cognitions, s, unless unless misrepre misrepresent sentatio ations ns have a cost for them or they find utility in the revisi vision on of the their sche schem mas. as. Theref Therefore ore,, images images can be long long lastin lasting g and dif ficult cult to chan change ge.. They They can can be asses assessed sed and measur measured, ed, and they they may be mana manage ged d and and infl influence uenced d by place place marketers as well.

THE IMPACT OF COUNTRY NAMES ON ATTITUDE ATTITUDES S TOWARD PRODUCTS In many countries, mandatory product labelling labelling requires requires marketer marketerss to disclose disclose a product product’’s plac place e of orig origin in.. This This lega legall

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requ requis isit ite e has has rais raised ed the the inte intere rest st of  marketing researchers and practitioners in understa understandin nding g consumer consumerss’ attitudes tow toward ard fore foreig ign n prod produc ucts ts.. For over  over  three three decade decades, s, the so-cal so-called led countr countryyof-ori of-origin gin effect effect (COO (COO)) has been been the object obj ect of extens extensive ive invest investiga igatio tion. n. In 1993, 1993, a book book edited edited by Papadop apadopoul oulos os 9 and Heslop Heslop presenti presenting ng only original original research on the topic was published. In 1994, Peterson and Jolibert10 identifi identified 184 184 pape papers rs publ publis ishe hed d in acad academ emic ic   journ journals als dealin dealing g with with count country ry image image effects. effects. Country Country of origin origin has become an inte integr gral al part part of the the repe repert rtor ory y of  extrin extrinsic sic cues cues to produc productt evalua evaluatio tions, ns, along with price, brand name, packaging and seller, as opposed to the study of the role of intrinsic qualities of the product such as materials, design, style, workmanship, colour, and smell. Country-of-origin studies have been deve develo lope ped d for for a vari variet ety y of dura durabl ble e and non-du non-durab rable le consum consumer er produc products, ts, incl includ udin ing g cars cars,, elec electr tron onic ics, s, appa appare rel, l, smoke detectors, and pickles. Findings consiste consistently ntly support the fact that consume sumers rs perva pervasi sive vely ly use use coun countr tryy-of of-origin origin inform informati ation on as an indica indicator tor of  quality. The simple manipulation of the country-o country-of-or f-origin igin or  ‘made-in’ made-in’ label has been observed to infl influence people’ people’s attitudes, even when subjects are given a chance to see, touch, feel or taste the very very same same phys physic ical al prod produc uct. t.11 Research has also evidenced that national stereotypes affect relationships between manufacturers and foreign clients.12 The effect of country of origin has been observed observed through through research research using using diff differ eren entt meth method ods, s, such such as surve surveys ys,, experi experimen ments ts and conjoi conjoint nt analys analysis. is. In most studies COO is used as an independe independent nt variable variable,, while while attitude attitudess towards a product or a country’s product serve as the dependent 252

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meas measur ure e. Perce erceiv ived ed qual qualit ity y has has also also been been used used as a depe depend nden entt meas measur ure e, operat operation ionali alised sed in many many ways. ways. Some Some autho authors rs conten contend d that that releva relevant nt qualit quality y dimens dimension ionss are differ different ent for differ different ent produc products ts,, and that a given given count country ry of  orig origin in can can be high highly ly rega regard rded ed in one one dimensio dimension, n, such as Volvo’ olvo’s reputati reputation on for for safe safety ty,, whil while e it may may scor score e low low in anothe anotherr, for examp example le servic serviceab eabili ility ty..13 Questions have also been raised about about wheth whether er countr country y image image would would rea really lly be a summa mmary cons onstru truct or  should should be decompoun decompounded ded in differen differentt 14 dimensions such as country of design and country-of-assembly country-of-assembly,,15 country country of  16 brand, coun countr try y of prod produc uctt desi design gn,, coun countr try y of part partss manu manufa fact ctur ure e and and 17 country of product assembly. Anothe Anotherr line line of invest investiga igatio tion n conconcern cernss the the impa impact ct of the the coun countr try y of  origin on highly valued global brands, such as Sony, Honda and Daimlerler-Me Merc rced edes es.. The The topi topicc has has prac practi ti-cal cal impl implic icat atio ions ns give given n the the fact fact that that,, for for cost cost or logi logist stic ical al reas reason ons, s, globa globall marketers constantly relocate manufacturing turing facil faciliti ities es or create create new ones ones to serve local, regional regional or global global markets markets better. Some studies report that COO info inform rmat atio ion n can can be less less impo import rtan antt when other indicators of quality exist.18 For example, a global brand like Sony could countermand a negative effect of  count country ry of origin origin..19 But the opp oppos osite ite can also also happen happen,, namely namely people people think think less of Sony when it is produced in a country of low esteem. Some Some inve invest stig igat ator orss sugg sugges estt that that coun countr tryy-of of-o -ori rigi gin n effe effect ctss can can only only be understood with respect to ethnocentrism. 20 Most studies using the cons constr truc uctt ethn ethnoc ocen entr tris ism m appl apply y the the CETSCALE developed by Shimp and Shama.21 One One exam exampl ple e of this this is the the 22 Malinchismo effect. In Mexi Mexicco the the

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term Malinchista designates betrayers of  Mexico Mexico,, those those who purcha purchase se foreig foreign n produc products ts and devalu devaluate ate the Mexica Mexican n iden identi tity ty.. The The name name come comess from from a Mexican woman known as La Malinche who served as interpreter to Cortez Cortez during during the Spanish invasion invasion in 1519 1519.. La Mali Malinc nche he beca became me Cort Cortez ez’’s confi confidant dante e and and mist mistre ress ss,, and and help helped ed him defeat the Aztec King Montezuma II. Extendin Extending g the understa understandin nding g of the ethnocentrism effect, Klein et al .23 have also researched how animosity towards a fore foreig ign n nati nation on woul would d affe affect ct neganegatively the purchase of products. To this end they they invest investiga igated ted the attitu attitudes des of  Chinese Chinese consumer consumerss toward toward Japan Japan and   Japane Japanese se products. products. The authors authors argue that ethnocentrism and animosity have different implications for perceptions of  product quality. Animosity is a country specifi specific construct, while ethnocentrism is desc descri ribe bed d as peop people le view viewin ing g thei their  r  own own in-g in-gro roup up as cent centra rall and and reje reject ct-ing ing what is alie alien n, unfa unfam milia iliarr. Exampl amples es of anim animos osit ity y woul would d incl includ ude e   JJew ewish ish consu consumer merss avoidi avoiding ng Germa German n 24 produc products, ts, discus discussed sed by Hirsch Hirschma man, n, and Aust ustrali raliaan and and New Zeala ealand nd consumers boycotting French products in protest at nuclear tests in the South Pacifi Pacific. Othe Otherr stud studie iess have have inve invest stig igat ated ed a numb number er of poss possib ible le medi mediat ator orss of the the countr country-o y-of-o f-orig rigin in effect effect.. Motiva Motivatio tion n has has been been stud studie ied d as a poss possib ible le one one, and research research supports supports that country-o country-offorigi rigin n effec ffectt is more like likely ly to occur cur when when cons consum umer erss are are unde underr low low 25 motivation. Rese Resear arch cher erss have have also also investigated the role of cultural dimensions in the COO effect. For example, indivi individua dualis lism m and collec collectiv tivism ism have have been been used used to explai explain n why why consum consumers ers pref prefer er home home coun countr try y prod produc ucts ts over  over  

impo import rted ed ones ones even even when when prov provid ided ed with with info inform rmat atio ion n that that the the fore foreig ign n 26 product is superior. In conclusion, extensive research has supp suppor orte ted d the the impa impact ct of coun countr try y of  orig origin in on atti attitu tude dess towa toward rdss fore foreig ign n products. Export promotion authorities in many countries countries recognise recognise that their  their  country’ country’s reputation constitutes an important asset to be managed.

MARKETING COUNTRIES AND MANAGING THEIR BRANDS In a worl world d of over over six six bill billio ion n peop people le living in nearly 191 independent states (and (and in many many othe otherr stil stilll fighting ghting for  thei theirr sove sovere reign ignty ty)) the the chal challe leng nge e of  building building a nation nation’’s wealth has become a critical business arena. Approximately 80 per cent of the world’ world’s populatio population n lives in the third world, most of them in pove povert rty y. Probl roble ems such as low low living living standa standards rds,, pop popula ulatio tion n growt growth, h,   job shortage and poor infrastructure are plaguing nations worldwide.27 The challenge of national economic deve develo lopm pmen entt has has gone gone beyo beyond nd the the lim limits its of pub public lic poli olicy. cy. The new new econ econom omiic ord order has has tran ransform formed ed economic economic development development into a market market chal challe leng nge e as well well.. Nati Nation onss comp compet ete e with other nations and strive to devise sour source cess of comp compet etit itiv ive e adva advant ntag age e.28 Thus today there are more reasons why nations must manage and control their  branding. The need to attract tourists, fact factor orie ies, s, comp compan anie iess and and tale talent nted ed peop people le and and to find mark market etss for for thei their  r  export exportss requir requires es that that countr countries ies adopt adopt strategic strategic marketing marketing manageme management nt tools and conscious branding. Strategic Strategic place marketin marketing g concerns concerns the enhancement of a country’s positi position on in the global global market market-pl -place ace.. It requ requir ires es unde unders rsta tand ndin ing g the the enen-

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viro vironm nmen enta tall forc forces es that that may may affe affect ct marketability —  that that is, is, the stren strength gthss and weakn aknesse sses of the the coun counttry to compet compete e with with others others,, such such as the size size of domestic domestic market, access to regional regional trade trade areas, areas, educat education ion of the the pop popula ula-tion, tax incentives, skilled labour, cost of labour, security and other factors. It also also enta entail ilss moni monito tori ring ng the the exte extern rnal al envi enviro ronm nmen ent, t, gain gainin ing, g, a dyna dynami micc unde unders rsta tand ndin ing g of oppo opport rtun unit itie iess and and thre threat ats, s, as well well as the the comp compet etit itiv ive e forces in the environment. The process must involve government, citizens and busine businesse sses, s, all with with a shared shared vision vision.. It requ requir ires es sett settin ing g and and deli delive veri ring ng the the ince incent ntiv ives es and and mana managi ging ng the the fact factor orss that might affect place buyers’ buyers’ decisions  —  the these facto actors rs inc includ lude imag image e, attractions, infrastructure and people. The following following subsections subsections will deal with with differ different ent tasks tasks of countr country y brand brand management —  managing managing the image, image, attrac attractin ting g touris tourists ts and attrac attractin ting g facfactories and companies.

large-scal large-scale e internati international onal campaign campaign has been been impl implem emen ente ted d to get get tour touris ists ts to perceive the ‘Turkey’ Turkey’ brand as closer to Greece’ Greece ’s position.29 Assessing a brand’ brand’s image and how it compares compares to its competito competitors rs’’ images images is a nece ecessar ssary y step tep in desi design gnin ing g the the country’ country’s mark market etin ing g stra strate tegy gy.. Today oday ther there e are are many many reas reason onss why why nati nation onss must manage and control their branding. ing. The The need need to attr attrac actt tour touris ists ts and and factories factories and companie companiess requires requires conscious scious brandi branding ng strat strategi egies es for the difdifferent ferent targe targett groups groups.. But some of the branding may be in conflict, ct, for  for  example when Ireland wants to attract tourists tourists (beautif (beautiful ul country country image) image) and software experts (high-tech image). Strategic ‘Strategic

image management management (SIM) is the ongo ongoin ingg proc proces esss of rese resear arch chin ingg a plac placee ’s imag imagee amon amongg its its audi audien ence ces, s, segm segmen enti ting ng and and targ target etin ingg its its spec speciific ima image and and its its demogr demograph aphic ic audien audiences ces,, positi position oning ing the place’s benefits to support an existing image or create a new image, and communicating those bene fits to the target audiences ’.30

Managing the image Why do many many more more touri ourissts visi visitt Gree Greece ce than than Turke urkey? y? The The Turki urkish sh clai claim m that that they they have have long longer er coas coasts ts,, unpol npollu lute ted d waters ters and and super uperb b ararcheologic cheological al sites sites to delight delight any visitor visitor.. Still, an overwhelmingly larger number  of vacati vacation oners ers seekin seeking g sun and and antiqantiquiti uities es pic pick Greec reece e ins instead tead of the the neighbour neighbouring ing Mediterra Mediterranean nean country country.. Turke urkey y has has trie tried d to repo reposi siti tion on the the country and manage its troubled image. It has has hired hired a pub public lic relati relation onss firm to promo promote te the countr country y world worldwi wide de as a major major democracy democracy, quite quite differen differentt from the image of a human human rights rights violator  violator  spread several years ago by the movie Midnight Midnight Express Express.. Touris ourism m is a pivota pivotall industry industry to Turkey’ urkey’s econ econom omy y, and and a 254

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To be effective, the desired image must be close to reality reality,, believable believable,, simple, simple, appealing and distinctive (there are alread ready y too too many many ‘friendly friendly places places’ out there). Brand managers use several tools to promote the country’ country’s image. One is a cat catchy chy sloga logan n, such uch as ‘Spain —  Everyt Everythin hing g Under Under the Sun’ Sun’, ‘Flanders  —  Europe’ Europe’s Best Best Busine Business ss Locat Location ion’’, ‘Miami —  Finan inanci ciaal Capit apital al of  South South Americ Americaa’, and ‘Scotland —  Sili Silico con n Glen Glen’’. Visual images or   symbols also play a role, such as the the Eiff Eiffel el Tower ower (Par (Paris is/F /Fra ranc nce) e),, Big Big Ben Ben (Lon (Londo don/ n/En Engl glan and) d),, Red Red Square (Moscow/Russia), the Statue of  Libe Libert rty y (New (New York York/U /USA SA), ), and and the the

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Corc Corcov ovad adoo-Ch Chri rist st Stat Statue ue (Rio (Rio de   Jane Janeiro iro/Br /Brazi azil). l). Events Events and deeds deeds are also also strong strongly ly connec connected ted to places places and used to promote a country’ country’s image, like the Oktob Oktoberf erfest est (Germ (Germany any), ), the Rio Carni Carnival val (Brazi (Brazil) l) and the the Wimbl Wimbledo edon n Tennis Tournament (England). Confr Confront onting ing a negati negative ve image image can be an ardu arduou ouss chal challe leng nge e. The The bran brand d mana anager ger has no cont contro roll over ver enviro vironm nmen enta tall fact factor orss that that may may keep keep tour touris ists ts and and inve invest stor orss away away,, such such as natural natural disasters disasters,, political political turmoil turmoil and economic economic downturns. downturns. Even more difficult cult can can be cont ontroll rolliing how the the medi mediaa and and the the pres presss diss dissem emin inat ate e a country’ country’s prob proble lem, m, ofte often n crea creati ting ng or  perpet perpetuat uating ing stereo stereotyp types. es. A Turkish urkish spokes spokesper perso son n once once said said that that Turkey urkey rece receiv ives es much much wors worse e pres presss than than it deserves. deserves. In some instances instances,, managers managers mist mistak aken enly ly try try to fix the coun counttry’ ry’s image without fixing the problems that gave rise to it. No advertising or public rela relati tion onss will will make make an unsa unsafe fe plac place e safer, for example. Attracting tourists to the place place witho without ut fixing xing the proble problem m will will lead lead visi visito tors rs to badbad-mo mout uth h the the country and worsen its image. To impr improv ove e a coun countr try y’s image mage,, it may may be easi easier er to crea create te new new posi positi tive ve associations than try to refute old ones. When hen many many peop people le hear hear the the name name Chicago, the Bulls and Michael Jordan come ome more more ofte often n to mind mind than than Al Capone.

Attracting tourists In the 1990s, 1990s, accord according ing to the World orld Tourism ourism Organ Organiza izatio tion n (WTO (WTO), ), internatio ternational nal tourism tourism arrivals grew at an average rate of 4.3 per cent a year. In 2000, 2000, intern internati ation onal al touris tourism m grew grew 7.4 per cent, cent, the number number of intern internati ationa onall tourism arrivals reached a total of 699 

millio million n and and travel travel and touris tourism m genergenerated ated dire direct ctly ly and and indi indire rect ctly ly 11.7 11.7 per  per  cent cent of glob global al GDP GDP and and near nearly ly 200 200 31 million million jobs. In 2020 2020,, the the numb number  er  of people people travel travellin ling g intern internati ationa onally lly is forecasted to increase to 1.6 billion and the revenue from international tourism should gross more than US$2 trillion.32 Touri ourism sm crea create tess dire direct ct and and indi indire rect ct   jobs in hotels, hotels, restaura restaurants, nts, consulti consulting, ng, transportation and training; it increases tax revenues; and it helps the exporting of loca locall prod produc ucts ts.. Thes These e bene benefi fits do not come come witho without ut a price price,, howev however er.. Touri ourism sm has has been been crit critic icis ised ed for for the the destruction of the natural environment and threats to local cultures.33 Count Country ry brand brand manag managers ers must must unders dersta tand nd that that diff differ eren entt plac places es attr attrac actt different different tourists tourists.. The tourism tourism market market can can be segm segmen ente ted d by the the attr attrac acti tion onss touris tourists ts seek, seek, such such as natura naturall beauty beauty,, sun, adventure adventure,, gaming, gaming, events/sp events/sports orts or culture/history. The market can also be segm segmen ente ted d by area areas, s, regi region onss or  loca locati tion ons, s, by seas season ons, s, by cust custom omer erss’ 34 character characteristi istics, cs, or by benefi benefits. To be succ succes essf sful ul in the the tour touris ism m indu indust stry ry a coun countr try y must must be very very spec speciific abou aboutt what it wants to market and to whom. Countries Countries with natural natural beauties beauties,, archeo cheolo logi gica call site sitess or a stro strong ng cult cultur ure e and history will attract natural tourists, those drawn to existing features of the plac place e. If too too few few natu natura rall attr attrac acti tion onss exist, exist, the countr country y needs needs to undert undertake ake investmen investmentt marketin marketing g to build attracattraction tionss or to prom promot ote e even events ts that that will will attrac attractt touris tourists. ts. Money Money also also has to be spent spent to build build an adequa adequate te infras infrastru truccture, safety and services. Touris ouristt manage managers rs must must undert undertake ake rese resear arch ch to unde unders rsta tand nd the the valu values es tour touris ists ts seek seek as user userss (per (perfo form rman ance ce,, social and emotional values), as buyers

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(conveni (convenience ence and personali personalisati sation) on) and payers (price and credit). The competitive environment must also be meticulously analysed. Consumers have lite litera rall lly y thou thousa sand ndss of dest destin inat atio ion n choices. They will be drawn to destinations that they perceive to offer  the best value either because they offer  the most bene benefits or becaus because e they they are inexpensive or more accessible. Tourism requires image making and bra branding ding gro grounded nded in the place lace’’s real realit ity y. The The tour touris istt mana manage gerr can can use use different tools. Jamaica invests millions of doll dollar arss each each year year in adve advert rtis isin ing g targ target eted ed to Amer Americ ican an vaca vacati tion oner ers. s. Franc France e ran a campai campaign gn to get French French peop people le to port portra ray y a warm warmer er atti attitu tude de towa toward rdss tour touris ists ts.. Famo Famous us resi reside dent nts, s, even events ts and and new new attr attrac acti tion onss can can also also help help buil build d or reva revamp mp a dest destin inat atio ion n’s image. The ultra-modern Guggenheim Museum in Bilbao, Spain, has given a stro trong facel acelif iftt to the cit city and has has help helped ed to attr attrac actt visi visito tors rs and and new new investors. Hosting sports events or the Olym Olympi pics cs can can give give anot anothe herr lift lift to a country’ country’s image In spit spite e of tour touris ism m’s import importanc ance, e, a coun countr try y cann cannot ot expe expect ct the the inco income me generated by tourism to solve all of its problems. On the contrary, the country may first need to solve its problems in order to be able to generate the wanted tourism income.

Attracting factories and companies In 1996, Intel Corporation’ Corporation’s worldwide site site locati location on team team was was asked asked to make make a reco recomm mmen enda dati tion on abou aboutt wher where e the the company should place its first plant in Latin Latin Americ America. a. Numer Numerous ous countr countries ies fiercely ercely compet competed ed to be the recipi recipient ent of the US$300 – $500M $500M investment —  money that would bring in new jobs, 256

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taxes, taxes, comple complemen mentar tary y indust industrie riess and new new expo export rtss (100 100 per cent ent of the produc producti tion on would would be export exported ed to the USA). It could also lso leverage the confi confidence of other global investors in the country country.. The analysis analysis took several months of hard work by a number of  high highly ly rank ranked ed Inte Intell exec execut utiv ives es.. It included included several several field trips trips before before the team was ready to recommend a shortlist of four countries: Brazil, Chile, Mexi Mexico co and and Cost Costaa Rica Rica.. The The final choice was not Brazil, the largest Latin Americ American an econom economy y and market market.. Nor  Nor  did Mexico, a member of NAFTA and the the most most acce access ssib ible le loca locati tion on to InIntel’ tel’s headquart headquarters, ers, become the choice. choice. Chile Chile,, the faste fastestst-gro growi wing ng and most most stable stable economy economy of the continent continent with with one one of the bes best and and leas leastt-exp -expe ensive telecommunication services in the world, also lost out. Surprisingly, Costa Rica won the prize.35 Costa Rica, the smallest of the four  finali nalissts, ts, a cou country ntry with ith only 3.5 3.5 million people, ended up winning the Intel plant. The country was not even on the the orig origin inal al shor shortl tlis ist. t. Cost Costaa Rica Rica won because it used many of the princi principle pless of place place market marketing ing.. It also also counted on the great job of the of ficials of CINDE —  Coalicio ´ n Costarricense de Iniciativ Iniciativas as para el Desarrolo Desarrolo (Costa (Costa Rica’ Rica’s Investment Promotion Agency). CINDE followed the recommendation of the World Bank to target the electronics industry. industry. A consultant from the Irish Developme Development nt Agency Agency (IDA), (IDA), that that coun countr try y’s succes successfu sfull invest investmen mentt prom promot otio ion n agen agency cy,, also also assi assist sted ed in Costa Costa Rica’ Rica’s effort effort.. Instea Instead d of waitin waiting g for Intel Intel’s question questions, s, CINDE CINDE’s of ficials anti antici cipa pate ted d them them and and prov provid ided ed the the info inform rmat atio ion n Inte Intell migh mightt need need.. The The pursuit pursuit for Intel Intel’s investme investment nt involved involved the the act active ive par partic ticipat ipatio ion n of many many

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people, including business professors at the the Inst Instit itut uto o Cent Centro roam amer eric ican ano o de Administracio ´ n de Empresas (INCAE), stat state e mini minist ster erss and and the the dean dean of the the Instituto Tecnolo ´ gico gico de Costa osta Rica Rica (ITC (ITCR) R).. Even Even the the coun countr try y’s form former  er  Presi reside den nt Jos Mari aria Figuer gueres es got got involv involved ed and person personall ally y discus discusse sed d the business business with Intel Intel’s executives executives.. PresiPresident dent Figu Figuer eres es,, who who was was educ educat ated ed at West est Point oint and and purs pursue ued d grad gradua uate te stud studie iess at Harv Harvar ard, d, had had been been comcommitted mitted to attrac attractin ting g high-t high-tech echnol nology ogy investments to Costa Rica, rather than inve invest stme ment ntss base based d on chea cheap p labo labour  ur  or the exploitation of national resources. 36 One of the most interesting facets of  place place market marketing ing deals deals with with countr countries ies’’ effo effort rtss to attr attrac actt new new fact factor orie iess and and busi busine ness ss inve invest stme ment nts. s. Thes These e are are exexpected to create new jobs and econ econom omic ic grow growth th,, with with an over overal alll benefi benefit on the country’s econom economy y. Because of the dramatic improvements in telecomm telecommunic unicatio ation n and transport transportaation tion servic services es world worldwi wide de,, global global comcompan panies ies are now searc earch hing ing for for new location locationss that might bring bring down their  cost costs. s. This This has has tran transf sfor orme med d supp supply ly-chain chain manage manageme ment, nt, logist logistics ics and site site selection selection in core competen competencies cies within within global companies. Country Country marketer marketerss must understa understand nd how compan companies ies make make their their site site selec selec-tion. Usually they begin the process by choo choosi sing ng a regi region on in whic which h to ininvest vest (eg, (eg, Latin Latin Americ America) a) and collec collectting ing info inform rmat atio ion n abou aboutt the the pote potent ntia iall country candidates (see Table 1). In this phas phase e, each each coun countr try y must must be able able to provide provide accurate accurate and reliable reliable informainformation. Better, it should anticipate informational needs, as CINDE did in the case of Intel’s sit site sele selecctio tion. The countr country y should should unders understan tand d the localoca

Table 1 Basic information sought by business searching for a location

Local labour market Access to customer and supplier markets Availability of development site facilities and infrastructure Transportation Education and training opportunities Quality of life Business climate Access to R&D facilities Capital availability Taxes and regulations Source: Kotler

et al .

(1993), p. 232

tion tional al char charac acte teri rist stic icss comp compan anie iess are are seeking as they relate to labour, tax climat climate, e, amenit amenities ies,, higher higher educaeducation, schools, regulation, energy, energy, communication and business (see Table 2). Today, countless countries and cities are are tryi trying ng to attr attrac actt high high-t -tec ech h inindustries. One of the reasons Costa Rica coul could d attr attrac actt Inte Intell inve invest stme ment ntss was was becaus because e of the high level level of techni technical cal edu educat cation ion in the the coun counttry and the the number number of electr electron onics ics firms alread already y 37 locate located d there there.. As Harv Harvar ard d prof profes es-38 sor Michael Michael Porter  orter  argues, argues, competcompeting or compleme complementar ntary y industri industries es tend to form form clus cluste ters rs of exce excell llen ence ce that that buil build d prod produc ucti tivi vity ty.. The The riva rivalr lry y and and comp compet etit itiv ive e pres pressu sure ress amon among g comcompanies panies locate located d in these these cluste clusters rs force force them to innovate. That would explain concen concentra tratio tions ns of simila similarr busine businesse ssess in places like Silicon Valley (IT and softw software are)) and New Jerse Jersey y (phar(pharmaceuticals). Countries must defi define the industries they wish to build, and plan site sitess to appe appeal al to thes these e spec speciific industries from the very beginning. To comp compet ete e, coun countr trie iess must must be pre prepare pared d to offe offerr stron trong g financial ince incent ntiv ives es to lure lure pros prospe pect cts. s. Thes These e ince incent ntiv ives es incl includ ude e tax tax exem exempt ptio ion, n, work work traini training, ng, infras infrastru tructu cture re inves investt-

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Table 2

Locational characteristics: old and new

Characteristics

Old

New

Labour Tax climate Incentives Amenities

Low cost, unskilled Low taxes, low service Least-cost production, cheap land and labour Housing and transportation

Schools Higher education Regulation

Availability Not Key Minimum

Energy Communication Business

Cost/availability Assumed Aggressive chamber of  commerce, etc

Quality, highly skilled Modest taxes, high services Value-added adaptable labour force, professionals Culture, recreation, museums, shopping, airport Quality schools Quality Quality schools schools and research research facilities facilities Compatible quality of life and business flexibility Dependability/reliability Technology access Partnerships

Source: Kotler

et al .

(1999), p. 227

ments, interest subsidies and even stake participation. Attracted by the potential proceeds of new factories and businesses, some nations fail to analyse the true cost of successfully attracting a company or plant. Incentive wars have led to a situation in which each created   job job costs costs tens tens of thous thousand andss of dollar dollarss that might never return to the communit community y. The inducemen inducements ts can far  exceed exceed the bene benefits that that the the coun countr try y migh mightt get. get. For exam exampl ple e, in the the late late 1990s a new governor of the southern Braz Brazil ilia ian n stat state e of Rio Rio Gran Grande de do Sul Sul questioned the incentives offered by his predecessor to an automobile manufacturer. Withdrawing from the deal, Ford decided to build the new facility in the state of Bahia, which offered Ford even more ore indu nducem cements nts to attr attraact the business. Studie Studiess have have shown shown that that althou although gh governme government nt inducemen inducements ts play an important role in the site decision process, they rarely determine the final resu result lt.. Proxi roxim mity ity to cons onsume umer or  supplier supplier markets, markets, qualifi qualified labour, labour, and confi confidenc dence e in the the admi admini nist stra rati tion on are are 258

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like likely ly to be more more cruc crucia iall aspe aspect ctss in the the deve develo lopm pmen entt of the the deci decisi sion on.. Numero Numerous us cases cases show show that that the decidecision sion is also also high highly ly infl influenc uenced ed by the the market market performan performance ce of the promotio promotion n agency agency and the commi commitme tment nt of local local authorities.

CONCLUSIONS A great great deal deal of empiri empirical cal resear research ch has attested that country images are important extrinsic extrinsic clues clues in product product evaluaevaluation tions. s. They They are are fami famili liar ar,, they they elic elicit it asso associ ciat atio ions ns and and they they can can infl influence product evaluations and purchase decisio sions. ns. Count untry images ages can can len lend a positive reputation to a whole category, such such as French French wines or perfum perfumes, es, or  even brand it —  Cafe´ de Colombia. Beyo Beyond nd serv servin ing g as bran brand d name names, s, countries can be products as well. They comp compet ete e in the the mark market et for for tour touris ists ts,, fact factor orie ies, s, busi busine ness sses es and and tale talent nted ed people people.. Thus Thus countr countries ies must must embark embark on more consciou consciouss country country branding. branding. This This requir requires es the follo followi wing ng strate strategic gic management approach.

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 —  The The coun countr try y need needss to carr carry y out out a SWO SW OT anal analys ysis is to dete determ rmin ine e its its chief chief strength strengths, s, weakness weaknesses, es, opporopportunities and threats.  —  The The coun countr try y then then choo choose sess some some indu indust stri ries es,, pers person onal alit itie ies, s, natu natura rall landmarks and historical events that coul could d prov provid ide e a basi basiss for for stro strong ng branding and story telling.  —  The countr country y should should then then develo develop p an umbr umbrel ella la conc concep eptt that that woul would d cove coverr and and be cons consis iste tent nt with with all all of its separa separate te brandi branding ng activi activitie ties. s. Among the possible concepts would be a countr country y of (pleas (pleasure ure,, qualit quality y, security, honesty, progress), or other  concepts.  —  The country then allocates suf ficient national funds to each branding activity deemed to have a potentially large impact.  —  The country creates export controls to make make sure sure that that ever every y expo export rted ed produc productt is reliab reliable le and delive delivers rs the promised level of performance. References

(1) Aaker, Aaker, D. A. (1991) (1991) ‘Managing Brand Equity: Capitalizing on the Value of a Brand Name’ Name’, Simon & Schuster Trade, New York. (2) Lassar, Lassar, W., W., Miittal, Miittal, B. and Sharma, Sharma, A. (1005) ‘Measuring customer-based brand equity’ equity’, Journal of Consumer Marketing , Vol. 12, No. 4, pp. 11 –  11 – 19. 19. (3) Shimp, Shimp, T. T. A., Saeed, S. and Madden, T. J. (1993) ‘Countries and their products: A cognitive structure perspective’ perspective’, Journal of   the Academy of Marketing Science , Science , Vol. 21, No. 4, pp. 323 –  323 – 330. 330. (4) See Wang, Wang, C-K. and Lamb, C. W. (1983) ‘The impact of selected selected environmen environmental tal forces forces upon consumers’ consumers’ willingness to buy foreign products,’ products,’ Journal of the Academy of Marketing  Science , Vol. 11, Winter, pp. 71 –  71 – 85; 85; Cordell, V. V. (1993) ‘Interaction effects of  country-of-origin with branding, price, and perceived performance risk’ risk’, Journal of    International Consumer Marketing , Vol. 5, No. 2, pp. 5 –  5 – 16; 16; Agbonifoh, B. A. and

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Elimimiam, J. U. (1999) ‘Attitudes of  developing countries towards country-of-origin products in an era of  multiple brands’ brands’, Journal of International  Consumer Marketing , Vol. 11, No. 4, pp. 97 – 116. 116. (5) Chicago Tribune  (1995) ‘In love with Juan Valdez at US Open’ Open’, Chicago Tribune , 12th September. (6) http://www.juanvaldez.com/menu/logo http://www.juanvaldez.com/menu/logo.. html, 15th July, 2001. (7) Kotler, Kotler, P., P., Haider, Haider, D. D. H. and Rein, I. (1993) ‘Marketing Places: Attracting Investment, Industry, Industry, And Tourism To Cities, States And Nations’ Nations ’, Free Free Press, Press, p. 141; Kotler, Kotler, P., Asplund, Asplund, C., Rein, I. and Haider, D. H., (1999) ‘Marketing Places Europe: Attracting Investment, Industry, Industry, And Tourism To European Cities, Communities, States and Nations’ Nations ’, Financial  Times/Prentice Times/Prentice Hall, p. 160. (8) Leclerc, Leclerc, F., Schmitt, B. H. and Dube, L. (1994) ‘Foreign branding and its effects on product perceptions and attitudes’ attitudes’, Journal of   Marketing Research, Research , Vol. 31, No. 2, pp. 263 – 270. 270. (9) Papadopoulos, N. and Heslop, L. A. (eds) (1993) ‘Product and Country Images: Impact and Role in International Marketing’ Marketing’, Haworth Press, Binghampton, NY. (10) Peterson, Peterson, R and Jolibert Jolibert,, A. (1994) (1994) ‘A quantitative analysis of country-of-origin country-of-origin effect’ effect’, working paper, University of Texas, Austin. (11) Examples of country-of-origin country-of-origin research include Nagashima, A. (1970) ‘A comparison of Japanese and US attitudes toward foreign products,’ products,’ Journal of   Marketing , January, No. 34, pp. 68 –  68 – 74; 74; Han, M. C. and Terpstra, V. V. (1988) ‘country-of-origin effects of uni-national and bi-national products’ products’, Journal of   International Business Studies, Studies , Vol. 14, Summer, pp. 235 –  235 – 255; 255; Chao, P. P. (1989) ‘The impact of country af filiation on the credibility of product attribute claims,’ claims,’   Journal of International Business Studies , Spring, pp. 75 –  75 – 92; 92; Hong, S. T. and Wyer, R. S. (1990) ‘Determinants of product evaluation: Effects of the time interval between knowledge of a product’ product’s country-of-origin country-of-origin and information about its specifi specific attributes’ attributes’, Journal of Consumer  Research, Research , Vol. 17, 16, pp. 277 –  277 – 288; 288; Wall, M., Liefeld, J., and Heslop, L. A. (1991) ‘Impact of country-of-origin cues on consumer judgments in multi-cue situations: A covariance analysis’ analysis’, Journal of the Academy

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of Marketing Science , Vol. 19, No. 2, pp. 105 – 113; 113; Johansson, J. K., Ronkainen, I. and Czinkota, M. R. (1994) ‘Negative country-of-origin effects: The case of the new russia’ russia ’, Journal of International Business Studies, Studies, Vol. 25, No. 1; Jaffe, E. D. and Martinez, C. R. (1995) ‘Mexican consumers attitudes towards domestic and foreign products’ products’, Journal of International  Consumer Marketing , Vol. 7, No. 3; pp. 7 – 27; 27; Liefeld, J. P., P., Heslop, Heslop, L. A., Papadopoulos, N. and Walls, M. (1996) ‘Dutch consumers use of intrinsic, country-of-origin, and price cues in product evaluation and choice’ choice’, Journal of Consumer  Marketing , Vol. 1, No.. 9, pp. 57 –  57 – 81; 8 1; Li, Z. G., Fu, S. and William, M. L. William (1997) ‘Country and product images: The perceptions of consumers of People’ People ’s Republic of China’ China’, Journal of International  Consumer Marketing , Vol. 10, No. 1, 2, pp. 115 – 139; 139; Papadopoulos, N. and Heslop, L. A. (2000) ‘Countries as brands,’ brands,’ Ivey Business   Journal , November/December, pp. 30 – 36. 36. (12) Khanna, S. R. (1986) ‘Asian companies and the country stereotype paradox: An empirical study,’ study,’ Columbia Journal of World  Business, Business, Vol .21, No.. 2, pp. 29 –  29 – 38. 38. (13) See Garvin, Garvin, D. A. (1987) (1987) ‘Competing on the eight dimensions of quality,’ quality,’ Harvard  Business Review , Vol. 65, November/ December, pp. 101 – 109; 109; Han and Terpstra, Terpstra, ref. 11 above. (14) Han, M. C. (1989) ‘Country image: Halo or summary construct?,’ construct?,’ Journal of Marketing  Research, Research , No. 267, pp. 222 –  222 – 229. 229. (15) Ahmed, S. A. and D’ D’Astou, A. (1999) ‘Product-country images in Canada and in People’ People’s Republic of China’ China ’, Journal of   International Consumer Marketing , Vol. 11, No. 1, pp. 5 –  5 – 22. 22. (16) Hulland, J. S. (1999) (1999) ‘The effects of  country-of-brand and brand name on product evaluations and consideration: A cross-country comparison’ comparison’, Journal of   International Consumer Marketing , Vol. 11, No. 1, pp. 23 –  23 – 40. 40. (17) Insch, G. S. and McBride, B. (1998) ‘Decomposing the country-of-origin construct: An empirical test of country of  design, country of parts and country of  assembly’ assembly’, Journal of International Consumer  Marketing , Vol. 10, No.. 4, pp. 69 –  69 – 91. 91. (18) See Heslop, Heslop, L. and Liefeld, Liefeld, J. P. P. (1988) (1988) ‘Impact of country-of-origin on consumer   judgments in multi-cue situations: A co-variance analysis’ analysis’, Working Paper No. 88 – 101, 101, Carleton University; Chao, ref. 11 above; D’ D’Astous, A. and Ahmed, S. A.

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