Magazine article Kennedy School Review

The Brand Advantage in Economic Development: Creating Unique Nation Brands to Promote Tourism, Trade, and Foreign Direct Investment

Magazine article Kennedy School Review

The Brand Advantage in Economic Development: Creating Unique Nation Brands to Promote Tourism, Trade, and Foreign Direct Investment

Article excerpt

THE MALAYSIAN GOVERNMENT had a challenge. The country was ready to receive tourists, but visitors to Asia went mostly to Thailand, Bali, China, or Japan. Malaysia wasn't top-of-mind when it came to booking a holiday. In fact, a brand strength assessment of Malaysia as a tourist destination revealed that most foreigners had no basic concept of the country's location, let alone what it stood for. How could Malaysia ensure that tourists would consider the country as a holiday destination?

In 1999, the Malaysia Tourism Promotion Board took action and launched the "Malaysia: Truly Asia" campaign. At first sight, the catchphrase seemed like a superficial slogan--but it served a strategic purpose. The tagline educated potential visitors that Malaysia is, in fact, a country in Asia. Moreover, the slogan implied that tourists would miss out on the true Asia if they skipped Malaysia. The consequent use of the catchphrase "Malaysia: Truly Asia" and various public and private initiatives contributed to a steady growth of tourist arrivals to a record 25 million in 2012. The country is now ranked 10th on the United Nations World Tourism Organization's list of most-visited countries.

"Malaysia: Truly Asia" is a classic example of a nation branding campaign focused on tourism, but the development of a nation brand is no longer the exclusive domain of tourism authorities. In an era of continuing globalization and increased competition between states, investment boards and trade promotion agencies find that they have to go beyond merely creating the conditions for industries to prosper, since rival states can easily imitate these factors. It has become apparent that countries need to find a unique and sustainable competitive edge that is aligned with economic strategy and supported by public policy. A well-defined brand strategy helps countries gain a strategic long-term brand advantage. Unfortunately, nation branding often gets confused with short-term tactics, such as country commercials on CNN. These expensive advertisements often lack a consistent strategy and don't contribute to the creation of a true nation brand. So what is nation branding?

A PROMISE OF LUXURY

A brand is, in essence, a promise. If a country or a city sells a promise to a tourist, business executive, or investor, it must deliver on that promise. For example, Dubai promises luxury. It started delivering on this promise in 1999 with the opening of the Burj Al Arab, often referred to as the only seven-star hotel in the world. The sail-shaped hotel became an instant symbol of excessive luxury, sending the implicit message that the standard for all hotels in Dubai is luxury. In 2007, the emirate reinforced its positioning strategy by building the Burj Khalifa, the tallest tower in the world that houses the first and only hotel designed by Giorgio Armani. Even the police force has embraced the luxury brand, recently acquiring a Lamborghini Aventador worth US $450,000 to complement its fleet of police cars. These actions speak louder than words.

Dubai didn't inherit an Eiffel Tower, but the emirate was able to create a brand advantage based on its value proposition of luxury. This brand promise didn't come out of nowhere. It was rooted in the prevailing brand image of overindulgent sheiks in the Middle East. To signal its luxury positioning, it used symbols such as the Burj Al Arab instead of a logo, a Web site, an advertorial in Newsweek, or a commercial on CNN. The new brand identity was consistently managed even during the financial crisis, when the temptation to diversify was omnipresent. Dubai realized that brand strategy is as much about saying no as it is about saying yes. As a result, the brand advantage is undiluted, and Dubai consistently attracts tourists with high disposable incomes. Destinations in developing countries could achieve similar results if they consistently communicated their competitive edge to those abroad using striking symbols. …

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