In his view “branding is everything”. Wally Olins, chairman of Saffron Brand Consultants, is regarded as one of the world’s most experienced practitioners of corporate branding. He has a particular interest in the branding of regions and nations — something which is becoming important in an increasingly globalised world in which the perception we have of a country often influences the way we view it as a destination to invest in and explore, as well as a place from where we buy branded products. In this conversation with Preeti Khicha, Olins throws light on the subject of nation branding and shares his views on some of the recent rebranding initiatives in corporate India. Edited excerpts:
How do you define nation branding? Haven’t countries always — wittingly or otherwise — worked to portray a certain image for themselves?
Nation branding is looking at the way the nation is perceived by a variety of audiences — both internal and external — and looking at those areas which are important to you, which include foreign direct investment, tourism and brand export. It also means creating an idea of your nation which is unique to you.
I do not think many countries have worked to portray an image of them. The truth is that for most nations, the perceptions don’t exist at all or they are completely distorted or out of date.
You have helped the governments of Poland, Spain, Northern Ireland and Lithuania define their country brands. Coming to India as a nation brand: What are the positive and negative characteristics of India’s nation brand?
The India brand is changing dramatically for many people. For some people, the perception of India is going beyond elephants, cows and spiritualism. However, India does not make any attempt to control its perception. It does so with tourism with the Incredible India campaign, which is a good piece of work. However, there is another aspect of the brand like foreign direct investment and export which has not been exploited.
Which specific nation-branding strategies do you believe India should adopt in order to build a competitive image and build a strong brand name abroad?
It is a very complex question. It involves a lot of political, economic and cultural issues and will be difficult to outline right now. There are many challenges in working for a nation — who is in charge of the nation (prime minister, president), how long are they there for, how can you work with the different silos, how many people will vote for it and how will political parties react. However, if you have a brand idea and you use it effectively in tourism, brand export and FDI, you can begin to create perceptions of a nation. Getting it right demands clarity, emotion, style and needs to be coordinated. It is difficult to do. For India, you need a brand idea that can be used flexibly.
Which are the countries that have done this well?
I think Spain has done nation branding relatively well. Since 1975, when Franco died, Spain was poverty stricken and at the edge of everything. However, since then, in business it has developed powerful companies like Telefonica and Repsol which are commercially successful. In sport it has Rafael Nadal. So in every aspect it has something that is brilliant and powerful. If you look at sport, 30 years ago it was bullfighting, whereas today it has Real Madrid and FC Barcelona.
South Africa has tried hard as well. Since Nelson Mandela, South Africa has changed a lot. The country is working hard with reasonable success to bring South Africa into a set of perceptions which relate to the way it is changing. It talks about the rainbow nation, by which it means that people of different ethnic backgrounds are beginning to cooperate with each other. Of course, it is not perfect, but I think it has handled it well.
Does the theory and practice of nation branding conflict in any way with globalisation that seems to undermine local diversity?
I think we have a series of trends which are paradoxical or contradictory, which move in separate directions but also relate to each other. For instance, look at Dubai or Singapore, both of which are city states. We haven’t had city states since the 17th century and they were dead. Now, they are alive again. Being hubs, city states derive their strengths from globalisation. However, paradoxically they are also entities that are real in terms of the nation.
Do you think the reputation of a country influences the promotion and marketing of its products? How would you explain the country-of-origin effect on consumer behaviour?
In certain situations, the country of origin absolutely makes the deal. For instance, Scotch whiskey comes from Scotland and does not come from Belgium. Also, everybody believes the best cars come from Germany. Hence, the country of origin can be very effective for certain types of products and the same applies for India. For instance, software is one. Another area where there is opportunity is health and wellbeing — Ayurveda, yoga and everything to do with the body. In India, companies have not exploited that well. According to me, other industries, where the country of origin will be influential will include the film industry, writers and Indian textiles and fashion.
How is social media changing the way we view brands?
Hugely! This is because consumers can now react fast and influence companies. Today, companies cannot control the brand in the way they used to earlier. The customer today is your ‘frenemy’. He will talk irrespective of whether corporations are listening or not. Brands are increasingly getting influenced by the way people talk to each other and the way they talk on blogs and social networking sites like Facebook and Twitter. Hence, companies have to be more thoughtful in the way they manage themselves.
Winning the race in any given market is much easier with the wind of a strong trend at your back. How important is consumer research in this?
Consumer research is good at telling you what you have done right and even better at telling you what you have done wrong. However, what it cannot tell you is that what you ought to do. For instance, we did a lot of research during inception of the Orange brand (mobile phone). However, during research people asked — why orange and not banana? They completely dismissed our idea. We still went ahead with it and it was hugely successful. Hence, you cannot get people to tell you what they think should happen next because they don’t know and they don’t care.
There are many sophisticated tools and techniques of measuring the strength of a brand. Which, in your view, is the best way to determine how much a brand is worth?
Organisations spend a lot of money developing brands and they want to put a value against their brand on a balance sheet. So there are a lot of organisations developing sophisticated econometric measurements that will tell you the precise value of your brand. For example, according to Interbrand, Microsoft was valued at $60,895 million. However, another study by Goldman Sachs valued Facebook at $50 billion and it was not even on the Interbrand list published a few weeks ago. Hence, brand valuation as practiced by most organisations is nonsensical. According to me, the value of a brand is what people are prepared to pay for it.
Saffron started its India sojourn with two clients — Bajaj and Apollo Tyres. What was the specific nature of the projects you worked on? What were some of your learnings from the India?
For Bajaj and Apollo Tyres, we were looking at branding and identity programmes, but I cannot discuss it in detail as it will not be appropriate. In essence, it was developing their brands so that they could operate effectively globally.
Some of the learnings from working in India have been that, in effect, every country and situation is different. The issue that India faces is that it collectively lacks self-confidence (with the exception of a few companies). It is important that companies in India use the country-of-origin effect to their advantage. They also need to invest money effectively over a period of time in branding. A lot of Indian companies do not understand the difference between branding and advertising. They do not understand that branding demands an investment which is a long-term strategic investment. It is an investment in their people and how they train their people to behave. In India, companies don’t like to spend money on intangibles. All this is fairly familiar in sophisticated markets, but every nation goes through a learning curve and India is going through it.
In terms of brand building, how does India compare with other emerging nations?
Brand building in India is similar to countries like Turkey and Brazil which are going through a similar stage of development. However, India is far more advanced than China because the country has difficulty in making connections with rest of the world. If you are owned by the state, and don’t have any competitors, it is much harder. India is much more plugged in into the rest of the world and will learn quicker. I think the next stage for Indian companies would be that a few big companies will brand very successfully and more and more companies will start imitating them.
Recently, Bajaj Auto announced plans to drop the family name from its branding. How would you react to such a decision?
The issue for any company is that you have a number of options. You can either use one name very powerfully like Apple or Virgin. This has huge strengths as you can extend the idea over a wide variety of activities. Also, it is much cheaper and economical to go with one brand name. However, one brand name has certain weaknesses. For one, if something goes wrong in one part of the business, it can affect all the other businesses. It is a decision where you can go one way or the other — there is no better way.
Let me share an example. A few years ago we were advising Renault and Volkswagen at the same time. We told Renault to focus on the Renault name for everything including trucks. For Volkswagen we advised them to use a variety of names. The reason is that the Volkswagen brand was associated with the cheaper and more family-oriented vehicle. Renault, on the other hand, did not have any connotations; so you could use it very flexibly. For that reason, we could extend Renault over trucks and everything else and we could not do that with Volkswagen. The decision is not an industry decision but is a based on what you decide is best for the company.
As brands like Mahindra & Mahindra go global, how do you think they should manage their corporate identity?
As Indian companies go global, they have to underline their strengths. In certain situations, it might be valuable to emphasise their country of origin, and in some situations it is not. Often companies from China, India and Brazil are embarrassed talking about where they come from.
For instance, Cemex, the world’s largest cement company, from Mexico do not do anything to show its country of origin as it feel its American subsidiaries will feel threatened. Embraer, a Brazilian aircraft manufacturer, doesn’t make a big deal about being Brazilian as it feels it will not help it. Going forward, Indian companies have to take the view that where you come from is not a hindrance, but can be helpful. Many Indian companies have not reached that level of self-confidence.