National Brand Identity & Its Effect On Corporate Brands: The Nation Brand Effect (NBE)

Multinational Business Review, Fall 2003 by Jaworski, Stefan Paul, Fosher, Don

The result? In America, this Brand is on the march in a hyper competitive, Brand name dominated market. Haier is quickly gaining acceptance in nearly every state in the Union, all within less than a decade. Although relatively new to the U.S. scene-and having no where near the Brand power of a GE or WhirlpoolHaier is making its mark, especially in the specialty refrigerator and appliance market. We will see the same for many Chinese Brands as their quality and innovation increase over time across multiple sectors, combined with the country's intense dedication to becoming a first-world nation in every regard-particularly in Brand marketing skill.

However, Chinese Brand power (both nation and corporate) is increasing slowly with many obstacles and Brand traps waiting. First, past Brand perceptions of Nation/Country Brands are hard to change (if significantly changeable at all). They live on like all Brands for decades in the back of consumer consciousness. Nation Brands, especially, have very long life cycles, whether good or bad. The good news is that a positive Nation Brand identity tends to stay in the consciousness for a very long time, thus giving that country and its Brands significant leverage, leeway, and benefits to "live off of for decades.

One of these points of leverage (benefits) is helping to reduce purchase decision barriers. For example: "If it's Japanese, it's got to be good," even if Japanese quality as a whole gets surpassed by a new nation contender like Korea (cars) or China (mass merchandise). Hence, China and its industries must collectively focus their efforts on all aspects of excellence in terms of quality, innovation, and Brand marketing. They must associate this effort and the results to the China Nation Brand. This must be done for the long-term as Japan did during the 1960's, 1970's, and 1980's, and still does to this day. A strong China Nation Brand transfers enormous equity to its company Brands and vice versa.

secondly, a common fatal mistake is to not look beyond the mantras and concepts of quality and innovation but, rather, to simply stop consideration at these two points ("Brands live and die by these two aspects only."). As Peter Drucker pointed out four decades ago, "business is based on two fundamental things only, innovation and marketing.. .to focus on only one means you are not in business." Indeed, to focus on only innovation or quality (operations) is dangerous and misses half of the equation, as Canada's Nortel clearly proved with its disastrous collapse. Chinese as well as all Nation and Company Brands must focus on gaining, refining, applying, and evolving world-caliber Brand building skills, the key of which are strategic ideation and planning capability. The massive time, people, and resource investment that will have to be made by China to build a positive Nation Brand Effect will be wasted if it fails to invest equally on its Nation's and Companies' Brand skill toolkit. In fact, any resulting rise in China's Brand equity will be directly undermined by any lack of Brand skill, and the resulting ability to grow, navigate, defend, and evolve its nation and company Brands. Development of Brand building skills, and mechanisms to develop/generate new applicable skills and models, is vital for China's future success and must not be overlooked.