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Journal of Promotion Management

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Country Equity
R. Charles Viosca Jr. PhD , Blaise J. Bergiel DBA & Phillip Balsmeier PhD
a a a a

Department of Management and Marketing, Nicholls State University, Powell 123, P.O. Box 2015, 906 East First Street, Thibodaux, LA, 70310, USA Available online: 08 Oct 2008

To cite this article: R. Charles Viosca Jr. PhD, Blaise J. Bergiel DBA & Phillip Balsmeier PhD (2005): Country Equity, Journal of Promotion Management, 12:1, 85-95 To link to this article: http://dx.doi.org/10.1300/J057v12n01_06

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Country Equity: South Africa, a Case in Point

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R. Charles Viosca, Jr. Blaise J. Bergiel Phillip Balsmeier

ABSTRACT. The idea of country branding, while controversial, has gained broad acceptance and is actively practiced at the national and regional levels. A number of new research studies are indicative of the growing interest and importance of the topic. This article focuses on practical opportunities for South Africa to become more adept at using marketing communications to promote itself to critical international audiences. [Article copies available for a fee from The Haworth Document Delivery Service: 1-800-HAWORTH. E-mail address: <docdelivery@haworthpress. com> Website: <http://www.HaworthPress.com> 2005 by The Haworth Press, Inc. All rights reserved.]

KEYWORDS. Brand equity, country image, international communication, nation branding, South Africa, tourism

INTRODUCTION In this global marketplace it has never been clearer that countries, regions and cities have to compete with each other: for tourism, for investR. Charles Viosca, Jr. (PhD, University of Alabama) is Assistant Professor of Marketing, Department of Management and Marketing, Nicholls State University, Powell 123, P.O. Box 2015, 906 East First Street, Thibodaux, LA 70310 (E-mail: mnmkrcv@nicholls.edu). Blaise J. Bergiel (DBA, Mississippi State University) is Professor of Marketing in the same program, Powell 129 (E-mail: blaise.bergiel@nicholls.edu). Phillip Balsmeier (PhD, University of Arkansas) is Professor of Management, also at Nicholls State, Powell 126 (E-mail: phillip.balsmeier@nicholls.edu). Journal of Promotion Management, Vol. 12(1) 2005 Available online at http://www.haworthpressinc.com/web/JPM 2005 by The Haworth Press, Inc. All rights reserved. doi:10.1300/J057v12n01_06

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ment, for aid, for buyers of their products and services, and for talent. So there is hardly a place left where people are not thinking hard about the brand image of where they are located. Furthermore, most countries, regions and cities are still in need of clear and realistic strategies for marketing themselves. The purpose of this article is to consider, from a marketing perspective, the brand equity of South Africa. The authors chose this country because, although South Africa can be classified as a growing industrial nation, it is also a controversial nation due to several high profile incidents over the past several years. This study defines and discusses the basic principles behind brand equity and utilizes this conceptual framework for assessing brand equity, applying it to South Africa. The research will also identify methods, using a brand equity strategy, which have possibly improved the equity of South Africa and created positive benefits for the nation. REVIEW OF THE LITERATURE Although there is no universally accepted definition of brand equity, there are several common characteristics of the many definitions that are used today. Some researchers in the field of marketing have defined brand equity as follows: According to David A. Aaker (1991), brand equity is a set of brand assets and liabilities linked to a brand, its name and symbol, that add to or subtract from the value provided by a product or service to a firm and/or that firms consumers. Philip Kotler and Gary Armstrong (2004) write that brand equity represents the consumers perception and feeling about a product and its performanceeverything that the product or service means to consumers. William M. Pride and O. C. Ferrell (2003) define brand equity as the marketing and financial value associated with a brands strength in the market. From these definitions it is clear that brand equity is multi-dimensional. There are several stakeholders concerned with brand equity, including the firm, the consumer, the channel, and the financial markets. But ultimately, it is the consumer that is the most crucial component in defining brand equity. Brand equity is comprised of three distinct elements:

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Brand Value: the total value of a brand as a separable asset. Brand Loyalty: a measure of the strength of consumers attachment to a brand. Brand Image: the associations and beliefs the consumer has about the brand. As marketers, we know that a brand can be imbued with values, images and impressions beyond the rational product attributes of that brand. In fact, the marketers job is often to create, develop or strengthen these values and impressions. Consumers use brands as external cues, associating the value of the product with the brand. The brand can convey either a positive or a negative message about the product to the consumer and it is affected by past promotion, product reputation, and product evaluation and experience. In short, many factors affect brand equity. One factor that is of great concern to countries and companies worldwide is the country-of-origin effect on the markets perception of a countrys products and services. Marketers know poor or declining brand equity is a serious problem requiring immediate attention. After all, when brand equity decreases, so does the stakeholders loyalty. Brands with greater equity are less vulnerable to competitive marketing actions and marketing crises. They have greater trade cooperation and support, and increased marketing communication effectiveness. COUNTRIES AS BRANDS References to countries and places envelop our daily life, social interaction and work. Papadopoulous and Heslop (2002) point out that we use these references in discussions of history (Soviet expansionism), war (Spanish Armada), and political or social phenomena (Balkanization) as we do in describing an impasse at negotiations (Mexican stand-off) or referring to our trench coat (London Fog). Shimp, Samiee, and Madden (1993) applied the term country equity, referring to the emotional value resulting from consumers association of a brand with a country. In global marketing, perceptions about and attitudes toward particular countries often extend to products and brands known to originate in those countries. These perceptions can be negative or positive. On the positive side: Germany is synonymous
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with quality engineering, Italy is synonymous with style, and Japan is synonymous with technology. Not only can brands be associated with certain countries, but also countries can become brands themselves (Anholt, 2000, 2002; van Ham, 2001, 2002). Country and city names amount to brands and help stakeholders evaluate the country or city. Country names are responsible for associations that may add to or subtract from the perceived value of a country and it products or services. These perceptions become part of a countrys image and contribute to country equity. Even if a country does not consciously manage its name as a brand, people still have images of countries that can be activated by simply voicing the name. Many remain skeptical of the idea of linking national states with branding. In fact the concept of the nation as a brand seems to evoke visceral animosity in some peopleit is not the concept they detest so much as the word brand, which appears for some people to have trifling and superficial implications unworthy of the nation state (Olins, 2002). Nevertheless, country images are likely to influence peoples decisions related to purchasing, investing, and traveling. Kotler and Gertner (2002) write that country image can be understood as the sum of beliefs and impressions people hold about places. Images represent a simplification of a large number of associations and pieces of information connected with a place. They are a product of the mind trying to process and pick out essential information from huge amounts of data. It is now well known among public relations practitioners that foreign nations which employ communications professionals on their behalf in other countries such as the U.S. tend to receive more favorable press coverage and are seen as more in harmony with administration policies (see for example, Manheim and Albritton, 1984; Albritton and Manheim, 1985; Cutlip, 1987; Perry, 1987, 1990; Kunczik, 1997; Giffard and Rivenburgh, 2000). This has led to the rise of public diplomacy, in which governments seek to communicate to foreign nationals directly to influence individuals outside of conventional politics (Signitzer and Coombs, 1992; Manheim, 1994; Leonard, 2002). However, even a nation as sophisticated as the U.S. can run into problems when its historic image and current deeds conflict, as has happened with the collapse of support for American foreign policy initiatives in the Arab world (Jansen, 2005). Several interesting branding studies have been done on specific countries, focusing on successes and failures (Lodge, 2002). For example, Irelands efforts in the 1980s have been exampled by John Fanning (1990),

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the Chairman of McConnells Advertising. Pantzalis and Rodrigues (1999), in a case study looking at the 1997 international financial panic which spread out from Thailand, discuss how geopolitical and ideological developments influenced that crisis precisely because countries are now being perceived as brands. Among a spate of new research is that done on Asia (Kleppe, Iversen and Stensaker, 2002), New Zealand (Morgan, Pritchard and Piggott, 2002), Spain (Gilmore, 2002), and the Balkan states of former Yugoslavia (Hall, 2002). BRANDING (OR RE-BRANDING) A COUNTRY The formation of country images relies heavily on perception and is intertwined with stereotyping, the process of generalizing to an entire class of objects from a limited number of observations. Therein lies the power of country equity (and the lack of power to easily control it). Whether positive or negative, focused or diffuse, developed deliberately or by default and formed from education, the media, travel, immigration, product purchases, business experiences or any combination of sources, every country has an image. The fact is that most countries already have some semblance of an identity; each carries with it certain associations, both positive and negative. Creating a branding program for a country demands an integration policy that most countries do not possess. Countries must strive to act and speak in a coordinated and repetitive way about themselves in order to best differentiate themselves from other nations. There has even been scientific research done involving slogans used by nations to focus on attributes attractive to others (see, for example, Supphellen and Nygaardsvik, 2002). The fact is countries compete daily with neighbors or block regions for tourism, inward investment and export sales. The costs of not employing a national branding strategy will keep rising as more and more nations engage in country branding. Also, those countries that have unknown or poor reputation will be limited or marginalized. They will not easily boost their commercial success. The benefits of consistent and professional country branding can be observed in every region. These benefits include the ability to win more investment business because the country image says the right things about taxation, labor skills, safety, the environment, and political stability. Another plus is the chance to apply a made in label because it will positively aid the sale of a product in an overseas market.

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BRANDING SOUTH AFRICA How important is country equity to South Africa? Yvonne Johnston (2003), CEO of International Marketing Council of South Africa, stated: The marketing of countries is our industrys greatest challenge. There is no bigger or more complex product to sell as it is often contradictory and it has a huge and diverse target audience. The principles of branding apply in equal measure to countries as they do to products and corporations. However, the methods are somewhat different. So, what can be done to improve the country equity of South Africa? The following will suggest directions for the nation and provide examples of support that corroborate with these suggestions. First, South Africa must secure the cooperation and involvement of representatives from government, business, social organizations, education, and most importantly the media. Everyone must have the same mission in mind. Progress has been made to this end through the creation of the International Marketing Council (IMC) in August of 2000. The IMC was established to create a positive and united image for South Africa. The IMCs central mission is three-pronged: 1. The establishment of a brand for South Africa which positions the country in terms of its investment and credit worthiness, exports, tourism and international relations objectives. 2. The establishment of an integrated approach with government and the private sector to the international marketing of South Africa. 3. The building of national support for the brand within South Africa itself. For this the IMC seeks the co-operation of government departments, public entities, the private sector and the non-governmental sector (The International Marketing Council, 2003). Second, South Africa has to find out how they are perceived internally and by people abroad whom they want to influence. Consult opinion leaders to look at national strengths and weaknesses and compare these perceptions with the research that has already been done. A good case in point has been the neglect of instances where gray brands have been given fertile ground to proliferate. Now that South Africa is being recognized as a viable market for further growth outside first world markets, technology brands are forced to battle with piracy, gray markets and inferior clone products (de Waal and Spark, 2003). A survey commissioned by the National Summit on Africa (2002) constitutes the most wide-ranging and thorough investigation ever un-

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dertaken into Americans knowledge of and attitudes toward the continent of Africa. The results reveal a public that has limited knowledge of Africa, yet also is eager to learn more and is supportive of efforts to raise public awareness. Some of the key findings of the nationwide survey are:
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Americans know only a little about Africa, but generally have positive feelings toward the continent. Many Americans want to learn more about Africa and the public support efforts, to raise awareness about Africa and African issues. Many Americans see signs of overall progress in Africa and are cautiously optimistic about its future. People feel that Africa faces serious economic, political and social challenges. Africas perceived strengths are its natural resources, both human physical, rather than its institutions. The public believes that the United States top priority in helping Africa advance should be improving education, with a secondary focus on promoting trade and investment and on environmental protection. Third, South Africa must craft a country branding strategy that includes a plan and the way that the brand idea will be communicated, bearing in mind that different audiences will need different approaches. For example, the tourist market is usually quite different from the investor market although they obviously have some relation. South Africas Consulate-General, Donovan Neale-May (2003), stated that the branding of South Africa is an ambitious, enduring, well-funded and strategically driven program that will occupy center stage in furthering national pride inside the country and brand appeal worldwide. The brand promise is reflected today in the tagline: South Africa Alive with Possibility. This is a promise that can be universally translated, adapted and embraced by all strategic audiences and citizens. Fourth, South Africa needs to work out a program to make the strategy tangible through improvement programs and campaigns. Organizers must make sure that they can point to tangible examples of change, otherwise critics will argue that the program is a waste of time and money. People want their country to have the best physical impression at ports of entry or cities where tourists visit. It is the nations actions, not its intentions, which really count.

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According to Trevor Manuel (2003), Finance Minister of South Africa, available data shows that South Africa is one of the fastest growing tourist destinations and that investments are growing. We need to eradicate the cancer of crime in our society to improve the standard of living of all our people and governments policy is one of zero-tolerance. Finally, South Africa needs to take the time to be consistent when building an integrated picture, always backing it with quality. Yvonne Johnston (2003), CEO of International Marketing Council of South Africa, stated: Out task is to collate and co-ordinate all the country marketing efforts to ensure that government, business, labor, civil society or ordinary men and women on the street all speak with one language on what this country is about. A well-designed and implemented branding program for South Africa has the potential to transform the nation and create lasting value for the country. It cannot, as a consequence, be the property of one person or one administration. Furthermore, it must have the ability to outstrip political issues to focus on significant and compelling aspects of the nation. CONCLUSION The strategic marketing of country equity and the recognition of its importance will be the key to successful global marketing in the years ahead. At the beginning of the 21st century, countries are finding that trade liberalization, globalization, and new technologies are forcing them to rethink their country equity. Nations are realizing that their competitors are growing more powerful, their markets are becoming less captive, and their customers are defecting to new players in the world marketplace. As a result, many countries are looking for ways to re-define the way they are perceived. South Africa must be able to differentiate itself and attempt to create a loyal customer base of those who want to do business with the nation primarily because of a positive image. A well-managed country branding strategy provides long-run marketing and economic success for the country. A countrys brand equity can be its most valuable asset. While competing countries can copy products, services, technology, and processes, they cannot easily imitate a well-managed country branding strategy. Understanding the importance of country equity will help South Africa take control of this asset and use it strategically to increase its value to the nation.

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In an International Marketing Council briefing, Yvonne Johnston (2003), in describing the IMCs key projects, provided the following comments. The last year has been one of clearly defining the role that the International Marketing Council will play into the future, articulating strategies that were mere ideas a year ago and starting to actually deliver on the those strategies. We are satisfied to report that all projects that were outlined . . . have taken form and are beginning to have an impact on their various markets.

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Received: January 18, 2004 Revised: March 1, 2005 Accepted: April 17, 2005