Opinion Piece Positioning the nation-state Received (in revised form): 22nd December, 2004

John Quelch is a marketing professor at the Harvard Business School and former Dean of the London Business School. He is a non-executive director of WPP Group plc and Chairman of the Massachusetts Port Authority. His latest books are ‘The New Global Brands’ (2005) and ‘The Global Market’ (2004).

Katherine Jocz is a researcher at the Harvard Business School. Previously she was Senior Thought Leader at Marketspace, a Monitor Group company, and Vice President of research operations at the Marketing Science Institute.

Abstract Having a clear, differentiated positioning gives a country an advantage in attracting investment, business and tourism, and in building markets for its exports. Countries like Greece, Spain and Chile are successfully repositioning themselves using coordinated marketing and highly visible events like the Olympics. Positioning and national image also matter greatly in public diplomacy and cannot be taken for granted. Recommendations are given for positioning a nation-state based on a frank appraisal of perceptions and realities.

Keywords: Country image, positioning strategy, public diplomacy, image management

POSITIONING THE NATION-STATE: and teams and in television advertising INVESTMENTS AND BENEFITS went away satisfied. Also, the Karamanlis Over 10,000 athletes from nearly 200 government possibly earned enough countries came to the 2004 Olympic political capital to push through overdue Games in Athens to compete to the best economic reforms that will cut of their abilities. At the end of the bureaucracy and encourage Games, 929 individual athletes and entrepreneurship. national teams left with medals and The costs of hosting the Games enormous pride in their approached $10bn, or about 5–6 per cent accomplishments. If medals were also of GDP — an enormous sum for a small awarded to the host, Greece would country of 11 million people. Many in surely have won one. Widely praised for Greece questioned the wisdom of playing carrying off a smoothly run Olympics, host on this scale (Vecsey, 2004). Yet the the nation defied the expectations of the prevailing sentiment among Greeks and John Quelch sceptics — internal and external — who outside observers is that the investment Harvard Business School, Morgan Hall 185, said it could not manage such a large, was justified. First, in successfully bidding Soldiers Field, complex and expensive undertaking (The to host the Olympics, Greece committed Boston MA 02163, USA. Economist, 2004a, 2004b). The itself to an aggressive improvement in Tel: 617 495 6325 Fax: 617 496 5853 multinational corporations that had infrastructure by a fixed date. The e-mail: [email protected] invested millions in sponsoring athletes government constructed a sorely needed

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new transportation system around Relatively obscure countries which Athens, including a new airport, roads, ‘punch above their weight’ in the trams and an expanded subway, that competition — that is, whose athletic could have taken 20 years to build performance exceeds expectations based otherwise (Cambanis, 2004). Private on their size, wealth and previous sports sector investment updated the cellphone record — likewise boost their public network. Container shipping through the image around the world. China, host of port of Piraeus increased due to facility the 2008 summer Games, has already improvements made for the Olympics announced building projects exceeding (Pangalos, 2004). Such improvements in $30bn, and is busy meeting with infrastructure, along with planned legal Olympic corporate sponsors (Kahn et al., and administrative reforms, will spur 2004). No doubt China will be working business development. Additionally, hard to surpass the USA in gold medals Greece plans to stimulate the economy and total medals won when it holds the by redeploying the sporting venues and Games on its own turf. housing built for the Olympics, under a The intense competition to host the mix of public and private ownership. Olympics and other international sporting Secondly, in hosting the Olympics, events increasingly requires nation-states Greece drew the world’s attention to to understand and practise good itself as an attractive tourist destination. marketing. But marketing for a Television networks broadcast spectacular nation-state covers much more than images of its scenery and classical competing to be selected as the one-time antiquities to 4 billion viewers venue for a cultural or sports event such internationally. Favourable press coverage as the Olympic Games, however depicted the nation and its people as significant that is. For Greece the cosmopolitan, safe, friendly and capable. challenge is to build on the foundation Thirdly, and more elusively, by rising of its updated infrastructure and the to the occasion, Greece captured the favourable awareness created by the world’sconfidence and respect. For Olympics to promote itself as a unique instance, by installing a sophisticated place for tourism and business. For security system, at a cost of $1.2bn, and nations in general, successful marketing cooperating with NATO partners to involves a long-term commitment to patrol airspace and seaways, the nation consistent and comprehensive execution joined ranks in the fight against of a positioning strategy that sets forth terrorism, acquired skills that would serve the distinctive strengths and benefits the it later on (Agence France Presse, 2004) nation offers to the people and businesses and countered the long-standing it wishes to attract. reputation of the old Athens international airport for lax security. Further, national pride soared as Greek athletes won six THE MARKETING CHALLENGES gold medals — twomorethaninthe While managing a national image is previous Games — and the country similar in principle to managing a ranked 17th among all countries in terms corporate brand, the marketing challenges of total medals won. facing nation-states and corporations do Greece is not alone in benefiting from differ in several respects. First, the chief the Olympics. Spain built on the success executive of a company is more likely of the Barcelona Games to reinforce its than a political leader to view ongoing repositioning programme. him/herself as the chief marketing

230 Place Branding Vol. 1, 3, 229–237 ᭧ Henry Stewart Publications 1744–070X (2005) Positioning the nation-state officer. The CEO is ultimately whole, especially when the nation, as in responsible for developing and retaining thecaseoftheUK,isidentified overseas the customer relationships upon which with a single world-class city like the cashflow of the corporation depends. London. In this case it becomes difficult The CEO sets a marketing strategy that for the central government to rally targets the likeliest customer prospects resources behind a single, integrated and ignores the rest. In contrast, the national campaign. The CEO of a political leader of a nation cannot pursue company is better able to develop a a clear-cut strategy so easily. A joined-up marketing programme; he or democratically elected leader cannot pick she sets the compensation of other and choose which citizens to serve. He managers in the company and that or she has to negotiate policies with compensation, including the value of legislatures and key constituencies and bonuses and stock options, depends on must make compromises among all of them striving to enhance competing interests in order to be shareholder value. re-elected. Fourthly, in the age of the internet, Secondly, when undertaking global 24-hour-a-day news and easy marketing campaigns to position or international travel for the masses, it is reposition a national or corporate brand perhaps harder than ever for a image, it is easier for the corporate CEO government to control the information to enlist the support of employees than flows that help shape its national image. for the national leader to enlist the Not only is information harder to support of the public, civil servants and control, but national images have deep other stakeholder groups. The CEO pays roots. As John Ruskin, the 19th century employees to follow the strategy; if they British writer stated: ‘Great nations write cannot in conscience do so, they are their autobiographies in three manuscripts invited to leave. But the national — the book of their deeds, the book of political leader in a democracy has only their words, and the book of their arts’ the power of persuasion to rely on in (Ruskin, 1885). trying to motivate a broad coalition of To illustrate these challenges for citizenry and stakeholder groups to nation-states, consider two examples. follow the marketing programme. If the Spain was reborn as a vibrant emerging vast majority of citizens do not buy into democracy in the , a transformation or are cynical about the marketing marked by its entry into the European proposition, it simply will not work. Union in 1986. Business and political Visitors to the country will discover that leaders jointly worked to restore national the reality does not reflect the promise; pride and economic performance, in part such a disconnection can only lead to by leveraging Joan Miro’ssunimageasa disappointment, low repeat purchase rates visual symbol of Spain’srebirth.The and negative word of mouth. 1992 Barcelona Olympics successfully A third difference is that power is showcased the new Spain to the world often more diffuse in a nation than a inthesameyearthattheEuropean corporation. Local governors and mayors, Union implemented the single-market along with their bureaucracies, will not programme to reduce non-tariff barriers necessarily pull in the same direction as and boost intra-European trade. Spain the national leadership. For example, they backed up its new image with public will often want to promote their regions sector reforms and improved and cities more than the nation as a infrastructure; Spanish GDP accelerated

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throughout the (Gilmore, 2002; 2002). Colombia’s association with drug Olins, 1999). production, for example, makes image More problematic was the Blair building almost impossible until this government’s ‘Cool Britannia’ marketing problem is corrected. No amount of programme (as it was dubbed by the good marketing can make up for press), launched in the late 1990s, to negative product perceptions. Austria, on update perceptions of Britain. The the other hand, was able to ride out the designers of post-Franco Spain’s negative image impact from the rise to marketing effort started with a clear power of Jorg Haider, thanks to positive break with the past. Britain, however, associations with Mozart, Salzburg and was widely known for things traditional the Vienna waltz. (the monarchy, the museums, the Merchant Ivory movies) that brought in substantial tourism dollars each year. NATIONAL IMAGE MATTERS FOR Britain’spolicymakerswantedtheworld THE POWERFUL AS WELL AS to learn about British creativity, THE WEAK adventurousness and entrepreneurship in Marketing may be relevant to small science, technology and business — a nations trying to build awareness and positioning presumably intended to break through the clutter on the world accord with the emergence of a new stage, but does it have any relevance to a knowledge economy where Britain has dominant commercial and military power competitive advantages. The resulting like the USA? Each of the 50 states in the campaign was widely derided in the USA markets itself internally and media, particularly outside London. externally to tourists and investors, but the Cynical media commentators also poked USA as a whole does not. Local and fun at the very idea of ‘rebranding’ a regional marketing, such as the marketing country like a packaged consumer around the hosting of the Olympics by product (Bagehot, 1998; Midgley, 1999). the cities of Los Angeles, Atlanta and Salt Any expectations that the campaign Lake City, can spill over to affect the US would produce quick results were national image, but probably not to the dispelled by a survey published by the extent that the images of much smaller British Council two years into the effort countries like Greece and Spain were (British Council, 1999). Not surprisingly, affected by the Athens and Barcelona the research showed that people in other Games, respectively. countries continued to see Britain as In the world of commerce, no brand, highly traditional (but favourably so). however long established and well The campaign lasted around three years known, can afford to take its image for before being dropped (Gill, 2001; The granted. A brand that is widely Economist, 2002). recognised but not liked is poised for a These examples show that it is often downward slide, because esteem drives harder to unfreeze an existing, perhaps consumer preference.1 (For example, outdated, image and build a new one British Airways — whose corporate than to start with a clean slate. Equally name was changed to BA plc — has challenging, though, is repositioning long sought to promote itself not as the small countries that, in the absence of world’s largest airline but as ‘the world’s positive impressions, have become, favourite airline’.) rightly or wrongly, tarnished with a When US government policy is negative image (Kotler and Gertner, unpopular, there is an effect on America’s

232 Place Branding Vol. 1, 3, 229–237 ᭧ Henry Stewart Publications 1744–070X (2005) Positioning the nation-state national image. The effect is not seen visitors from Muslim countries. In immediately because most of the world’s addition, the campaign was underfunded citizens do not let opposition to current at a mere $15m, expectations of a quick US government policy diminish their fix were too high, many in the Arab respect for individual Americans or world viewed the ads as patronising and American brands. The cumulative irrelevant, the government-controlled goodwill that the USA — and the values media in many Muslim countries refused it historically stands for — has built up to run the ads and media images over generations helps inoculate associated with real-time events, individual Americans against an including the detention of terrorist immediate backlash. In addition, suspects at Guantanamo Bay and the US American multinationals from invasion of Iraq, overpowered the McDonald’s to IBM have worked hard campaign (Quelch, 2003). during the past five years to localise their Any future State Department campaign brands, adapting product offerings to take to reposition the USA in the Muslim account of national cultural preferences, world will be further complicated by the promoting local managers to senior existence of a separate, uncoordinated positions in overseas subsidiaries and Defense Department public affairs contributing to local community programme in the Middle East. The development in host countries (Holt et Defense Department’s programme, whose al., 2004). Coca–Cola cans in China, for purpose is to provide truthful information example, recently carried portraits of the to the public and press, is, in turn, country’s leading Olympic athletes. compromised both by the department’s While some in the USA argue that covert efforts to shape opinions abroad by foreign policy should not be concerned planting news stories and misleading with matters of image, others contend information in the press and other media, that a sustained decline in positive and by its combat information operations attitudes, as tracked in Pew Research to deceive the enemy by spreading Center surveys, will eventually spill over deliberate falsehoods. The danger, as to affect every American citizen and critics inside and outside the department brand travelling and selling itself overseas have pointed out, is that the government (Pew Research Center, 2004). In Europe cannot confine information to its intended the undercurrent of anti-American- audiences; any false or misleading business resentment articulated by information that comes to light damages Jean-Jacques Servan-Schreiber almost 40 the credibility of the USA as a country years ago could rise to the surface that stands for truth and freedom (Shanker (Servan-Schreiber, 1968). and Schmitt, 2004). Aspecific concern with the national The lessons here are that a country’s imageoftheUSAintheMuslimworld positioning and image must be congruent in the aftermath of 11th September, 2001 with readily observable reality. Marketing led to several public diplomacy initiatives a nation cannot be successful if by the US State Department. These conflicting messages are sent out from included a television advertising different information programmes and if campaign showing American Muslims the programmes are not coordinated at enjoying the tolerance and freedom of the highest level of government. Further, the American way of life; unfortunately, good marketing cannot make up for a the timing coincided with tightened US product that the world’s consumers do visa and border-control policies for not want to buy, and certainly cannot be

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successful overnight and on an than its population or economic muscle inadequate budget. would predict. Securing membership in important international clubs, such as the World Trade Organization, European RECOMMENDATIONS TO Union and NATO, or better yet, NATION-STATES supplying the leaders of these It is axiomatic that a country will benefit organisations, ratifies a country’s from possessing a favourable image at new-found status (Van Ham, 2001). By home or abroad. What may be less leveraging its commitment to democracy evident is that compared to larger, and rejection of a standing army, Costa better-known countries, smaller nations Rica, for example, has positioned itself actually have several advantages they can successfully as a peaceful haven for leverage. Effective nation-state marketing ecotourism and American retirees. depends on stakeholders having a As mentioned earlier, changing a common cause and rallying around the long-established, well-known national chosen positioning. In smaller nations, image is often more difficult than starting there is often more homogeneity of the with a clean slate. A small country that is citizenry, and consequently more not a major player on the world stage is convergence of views (Alesina and less apt to face the problem of revising a Spolaore, 2003). In addition, the political strongly held image. and business elites know each other and For national political leaders interested can more easily formulate a common in nation-state marketing, especially those policy. They may be better able to come in charge of small countries, the to agreement on what constitutes the following five recommendations are nation’s competitive advantage, which offered. leads to clear, consistent positioning. In newly independent states, such as Slovenia or Croatia, a sense of national Develop a clear positioning purpose can underpin a worldwide With 191 members of the United marketing effort, particularly when a Nations, the world stage resembles the country is, in economic development cluttered breakfast cereal aisle of a terms, ahead of others in the same region supermarket. Nations are jostling to gain and therefore keen to develop a distinct notice and favourable attention. A clear identity. positioning strategy sets out, for each Another factor contributing to stakeholder group (tourists, overseas effective marketing is sustained consumers, foreign direct investors, etc) a commitment. A political leader of a superiority claim (how the nation is smaller country — or a city-state like better) and the reason why the Singapore or Dubai — who understands superiority claim should be believed. As the potential power of global marketing a rule of thumb, a clear positioning can can make significant strides, particularly if be articulated in 20 words or less. the leader is not subject to periodic Singapore, for example, traditionally elections and can therefore pursue positioned itself as the best entry point to consistently a ten- or 20-year vision. But Asia for Western multinationals — a even in smaller democracies it is possible position backed up by the reality that its to build long-term commitment. laws, institutions and educated Favourable global awareness of a country English-speaking workforce made doing canpropelittowieldinfluence greater business from there safe and easy. One

234 Place Branding Vol. 1, 3, 229–237 ᭧ Henry Stewart Publications 1744–070X (2005) Positioning the nation-state advantage of a clear positioning is that it the right reasons. But not at all costs: it helps nations avoid competing on price. is essential to track the economic results Offering nothing but excess tax credits of marketing investments and to adjust and discounts to attract new factories and the allocations against different target jobs ends up being counterproductive. It groups accordingly. The UK found, for is also not the primary criterion serious example, during the 1990s that £1m corporations use in selecting countries in promoting foreign direct investment had which to invest (Farrell, 2004). The much greater economic impact than the money attracted by price competition is same amount spent promoting British prone to leave as quickly as it arrived, exports (HM Treasury, 1998). chasing the next hot deal.

Work with the private sector Measure progress The most successful initiatives to secure It may be painful for anyone marketing a international sports events, promote nation to discover that only 1 per cent exports and attract foreign investment of the world’s population has any usually involve public–private awareness of the country. But it is partnerships. The costs of holding the important to measure awareness and to Olympic Games would be all but understand perceptions — both prohibitive without private sponsorships. favourable and unfavourable — held by ProChile, an agency co-funded by the target audiences. Market research should Chilean government and the private benchmark awareness, knowledge and sector, has for 30 years worked closely perceptions of what the nation stands for with businesses to develop export among key stakeholder groups both at markets and attract foreign investment. home and abroad. In order to know In selling Chile to new foreign direct what corrective actions to take, it is investors, the agency has leveraged essential to analyse the gaps between word-of-mouth endorsements from perception and reality (both current and foreign companies which have invested intended) for each target group. As the there already — satisfied customers are marketing programme progresses, often the best salespeople. In rebuilding performance should be tracked over time the brand name of Chile in the and compared to nations that are post-Pinochet era, ProChile has similarly sized or trying to attract the additionally leveraged the quality same targets. Working towards strong reputation developed by its own rankings on international scorecards, such exporters, including Chilean vintners and as the World Economic Forum National fruit growers, in much the same way as Competitiveness Report and the the national images of France and European Commission’s Innovation Germany are grounded in the worldwide Scorecard, can also be valuable. Chile, reputations of their manufacturers for for instance, has highlighted its jump superb fashion and engineering from number 28 in 2003 to number 22 excellence, respectively. in 2004 on the WEF Competitiveness Index. Whether targeting a prospective foreign tourist or a foreign direct Connect the dots investor, a nation needs to achieve the If the whole of a nation’smarketing top-of-mind awareness necessary to get efforts is to be greater than the sum of at least on the buyer’s shortlist, and for the parts, the national airline must work

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with the tourism board, those promoting foreign direct investments. Through exports must work with those promoting countless one-on-one meetings at World inward investment and national Economic Forum events and other marketing must be coordinated with city venues over a decade, Prime Minister and regional marketing. For example, in Mahathir Mohamed elevated the addition to working closely with the visibility of Malaysia in this way. private sector, ProChile has helped Chile Similarly, Prime Minister Jose´ Manuel enter into six regional trade pacts, Dura˜o Barroso’s appointment as president including the European Union, and was of the European Commission promises to instrumental in negotiating many do the same for Portugal. Thirdly, this additional bilateral agreements. Messages high level of commitment is needed to reaching different target audiences should motivate the citizenry — including the be coordinated and consistent, for these business, arts and sports communities — various audiences are distinct but not to walk the talk, to deliver on the separate: tourists at today’sOlympic promise that the country’s chosen Games may be tomorrow’s foreign direct positioning strategy makes to the outside investors. Conceivably, a cabinet minister world. Despite the potency of electronic could be charged with developing a communications in the global village, it consistent umbrella communications is, in the final analysis, the quality of strategy under which campaigns by personal one-on-one interactions that individual departments reinforce rather forms the most lasting perceptions of the than contradict each other. Because country. A nation that can persuade its people tend to combine their various own citizens to live, breathe and project exposures and interactions with a country an authentic national image, consistent into one overall impression — good, bad with its desired positioning, will or indifferent — paying attention to as maximise the impact of its marketing many aspects of the customer experience efforts. China’s leaders will doubtless as possible can be an important source of work hard to ensure its citizens deliver differential advantage (Kotler and in this way at the Beijing Olympics in Gertner, 2002). The speed and ease with 2008. which a foreigner can enter the country, the welcome given by an immigration Note officer and the modernity of the airport 1 Young and Rubicam Inc.’s brand asset valuator can all make a powerful positive database of consumer attitudes towards brands impression on the first-time visitor. shows that esteem and knowledge drive current brand stature; the database includes opinions on more than 20,000 brands collected from over 230,000 respondents in 40 countries since 1993. Involve the nation’s top leader

There are three benefits to having the References head of a country consciously invest Agence France Presse (2004) ‘Greek police draw on (without publicly announcing this) time Olympic experience in hostage crisis’, Agence and political capital behind the chief France Presse, 16th December. marketing role. First, it underscores the Alesina, A. and Spolaore, E. (2003) ‘TheSizeof Nations’, MIT Press, Cambridge, MA. importance to government agencies of Bagehot (1998) ‘Cognitive dissonance’, The connecting the marketing dots. Secondly, Economist, 4th April, p. 66. this personal involvement in selling the British Council (1999) ‘Through Other Eyes: How the World Sees the United Kingdom’,British country impresses the heads of Council, London, UK. multinational companies contemplating Cambanis, T. (2004) ‘Athens hopes to parlay

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᭧ Henry Stewart Publications 1744–070X (2005) Vol. 1, 3, 229–237 Place Branding 237 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.