This presentation aims to use empirical research data to demonstrate the superior value of brand and the role of businesses, which are often the brand owners, to influence the perceptions and value of the African brand. COMESA is really a part of the larger scheme to create an African economic block and the presentation thus focuses on Africa rather than COMESA. By examining the results of three researches, the National Branding Index by branding guru Simon Anholt, Global and COMESA GDP figures by the World Bank and the league of global brands by leading brand consultancy, Interbrand, logical conclusions of where true economic value in the global economy lies. The figures also give pointers as to what African economies. The final part of the presentation has some suggestions for the way forward for African businesses and their role in branding Africa.
Africa has largely played at the bottom level of the pyramid of economic value by supplying raw materials to the rest of the world. As one goes up the pyramid there is more economic value with brands and branding having the most economic value. Using the example of tea, at the raw material level, farmers grow tea and supply green leaves to a tea factory. The tea factory will handle fermentation, drying, and other processes in the production process to create tea as the consumer knows it. Value addition will include packaging, labeling and other basics that will allow the tea to reach the market. Value addition doesn’t necessarily create brands and it doesn’t tap into the highest level at which brand interact with consumers –emotions. Brands create relationships with consumers. In the case of a tea brand a combination of the tea quality, packaging, brand positioning, communication, experiential marketing and the sum of all other elements built into the tea brand through careful nurturing of brand stewards will create a tea brand with great economic value, the power to attract premium pricing and command loyalty among the target consumers.
The nation brand is the sum of people’s perceptions of a country and its people across six areas of national assets, characteristics and competence. Together, these areas make the Nation Brand Hexagon: Tourism Tourism is often the most visibly promoted aspect of the nation brand, since most tourist boards spend significant amounts of money on ‘selling’ the country around the world. Blue skies and golden sands or snow-capped mountains are only a tiny part of the reality of a country, but because these images are often so aggressively promoted, they have a disproportionate effect on people’s perceptions of the country as a whole. Exports In this point of the hexagon, we ask consumers about their tendency to actively seek out or actively avoid products from each country, what marketers call the country of origin effect: the power of the “Made In…” label to add value to products and services. We also ask what kinds of products people would expect to be produced in each country, and whether they think the country has particular strengths in science and technology. Whether we like it or not, commercial brands are increasingly performing the role of transmitting national culture: they have become one of the primary vectors of national image, and are more and more often the means by which people form their views about national identity. Governance Here, we ask respondents to rank countries according to how competently and fairly they believe them to be governed, and how far they would trust their governments to make responsible decisions that uphold international peace and security. We also explore people’s perceptions of the government’s sense of responsibility towards poverty reduction and the global environment. We also ask for an adjective that best describes the government in each country. Investment and Immigration This point of the hexagon looks at the ‘business-to-business’ aspect of the nation brand, asking respondents about their personal willingness to live and work in each country for a substantial period. We also ask them how much value they would ascribe to an educational qualification gained in the country. Finally, we ask for an adjective that best describes the country’s current economic and social condition. Culture and Heritage In this point of the hexagon, we ask questions that are designed to measure perceptions of the country’s cultural heritage as well as people’s appreciation of or intention to consume its popular, more commercial cultural products and activities. We also ask about the country’s sporting excellence. In addition, we ask respondents to name what kind of cultural activity they most expect to find in each country. People To understand how the ‘human capital’ of each country is viewed, we ask a ‘business-to-business’ question (“Imagine you are a manager and need to make an important hiring. Please rank the following countries in order of your preference for the nationality of your candidate”) and a ‘non-business’ question (“How much would you like to have a close friend from the following countries”). Respondents are also asked to select the adjective that best describes the people in each country. Anholt Nation Brands Index - Q4 Report, 2006
Comparing the ANBI and GDP rankings, a majority of the richest countries on the planet also have favourable national brand ranking.
The GDPs of COMESA states are significantly less than that of the nations in the top league of ANBI and GDP.
The traditional powers hold the most brand value on the globe while Asia has managed to nudge its way into this top league with brands like Samsung and Toyota. Africa is still missing a piece of this valuable action.
Different country and different regions of the world have been able to cut across national boundaries through their global brands. Mercedes has sold the German brand, Toyota has sold the Japan brand, Coca-Cola has sold the United States brand. Examples of global brands that have helped their countries of origin create real shillings and cents value for their people are many. What of our African nations? What of Africa? Which global brands can we boast of? Which brands can we say are uniquely African and positioned as African so as to create economic wealth for the continent on the global stage?
Role Of Business In Branding Africa With Notes
THE ROLE OF BUSINESS IN BRANDING AFRICA COMESA BUSINESS FORUM, MAY 18, 2007 Tom Sitati Chairman, Marketing Society of Kenya Executive Director, Interbrand East Africa
<ul><li>AGENDA </li></ul><ul><li>COMESA – The big picture </li></ul><ul><li>Branding and its role in global economy </li></ul><ul><li>The National Brand Index </li></ul><ul><li>Global and COMESA GDP figures </li></ul><ul><li>The League of Global Brands </li></ul><ul><li>Made in Africa? </li></ul><ul><li>Way forward for African businesses </li></ul>
COMESA – THE BIG PICTURE “ The member states of COMESA in setting up COMESA, set out a vision to establish “a fully integrated, internationally competitive regional economic community; a community within which there is economic prosperity as evidenced by high standards of living for its people, political and social stability and peace, and a community within which goods, services, capital and labour are free to move across national borders.” One of the six objectives of COMESA as enshrined in the COMESA Treaty is to contribute towards the establishment of the African Economic Community .
BRANDING AND THE GLOBAL ECONOMY What is a brand? A brand is a collection of perceptions in the mind of consumers that make a product, service, organization, person or place unique and either desirable or undesirable to the target audience. "The more complicated the world gets, the more comforting the familiar will seem, and the better it will get for brands." - Fortune Magazine
BRANDING AND THE GLOBAL ECONOMY Value Addition Production Raw Materials Branding ECONOMIC VALUE
THE ANHOLT NATIONAL BRAND INDEX The Anholt Nation Brands Index is the only analytical ranking of the world’s nation brands. Each quarter since 2005, ANBI has polled its worldwide panel of over 25,000 consumers on their perceptions of the cultural, political, commercial and human assets, investment potential and tourist appeal of 38 developed and developing countries. The 35 countries polled in ANBI may only be 17% of the countries in the world, but they account for 70% of its population and 82% of its GDP
THE ANHOLT NATIONAL BRAND INDEX CRITERIA Tourism Exports Governance Investment and Immigration Culture and Heritage People
GROSS DOMESTIC PRODUCT (GDP) – TOP 10 COUNTRY GDP (US$ mil) 1. United States 12,455,068 2. Japan 4,533,965 3. Germany 2,794,926 4. China 2,234,297 5. United Kingdom 2,198,789 6. France 2,126,630 7. Italy 1,762,519 8. Spain 1,124,640 9. Canada 1,113,810 10. India 805,714
GROSS DOMESTIC PRODUCT (GDP) – TOP 10 COUNTRY GDP (US$ mil) 1. United States 12,455,068 2. Japan 4,533,965 3. Germany 2,794,926 4. China 2,234,297 5. United Kingdom 2,198,789 6. France 2,126,630 7. Italy 1,762,519 8. Spain 1,124,640 9. Canada 1,113,810 10. India 805,714 <ul><li>THE ANBI – TOP 10, Q4, 2006 </li></ul><ul><li>COUNTRY SCORE </li></ul><ul><li>United Kingdom 131.44 </li></ul><ul><li>Germany 128.40 </li></ul><ul><li>Canada 127.81 </li></ul><ul><li>France 126.94 </li></ul><ul><li>Switzerland 126.21 </li></ul><ul><li>Australia 125.38 </li></ul><ul><li>Sweden 125.32 </li></ul><ul><li>Italy 125.04 </li></ul><ul><li>Japan 124.67 </li></ul><ul><li>United States 123.88 </li></ul>
COMESA STATES GDPS COUNTRY` GDP (US$ mil) Egypt 89,336 Libya 38,756 Sudan 27,699 Kenya 17,977 Ethiopia 11,174 Uganda 8,712 Zambia 7,257 D. R. Congo 6,974 Mauritius 6,447 Madagascar 5,040 Zimbabwe 3,364 Swaziland 2,731 Rwanda 2,131 Malawi 2,072 Eritrea 986 Burundi 800 Djibouti 702 Seychelles 694 Comoros 382
<ul><li>LEARNINGS FOR ANBI AND GDP RANKINGS </li></ul><ul><li>Most of the world’s top nation brands (70%) are in the top 10 GDP rankings </li></ul><ul><li>There’s a direct relationship between GDP and a the health of a nation’s brand </li></ul><ul><li>A waning national will have an effect on the nation’s GDP </li></ul>
INTERBRAND LEAGUE OF GLOBAL BRANDS Every year since 2001, Interbrand, the world’s leading brand consultancy, has ranked the top 100 brands in the world in real shillings and cents value. The Interbrand methodology is recognized by LSE, NYSE, among other stock exchanges and recognized by global accounting standards. Brand Valuation measures the potential of a brand to create actual “shillings and cents” value for its owners over the long term and uses NPV (net present value) to discount future earnings from brand.
INTERBRAND LEAGUE OF BRANDS – TOP 10 BRAND VALUE (US$ mil) 1. Coca-Cola (US) 67,000 2. Microsoft (US) 56,926 3. IBM (US) 56,201 4. GE (US) 48,907 5. Intel (US) 32,319 6. Nokia (Finland) 30,131 7. Toyota (Japan) 27,941 8. Disney (US) 27,848 9. McDonald’s (US) 27,501 10. Mercedes (Germany) 21,795
<ul><li>LEARNINGS FOR ANBI AND IB LEAGUE BRANDS </li></ul><ul><li>Brand value globally is superior to other economic measures </li></ul><ul><li>There’s a direct relationship between product/service brand value and country of origin brands </li></ul><ul><li>Africa has done a poor job of creating brand value and this is partly responsible for its poor economies </li></ul>
“ MADE IN AFRICA??” COUNTRY BRAND ASSOCIATION United States Coca-Cola Finland Nokia Toyota Japan Germany Mercedes Africa ????
<ul><li>WAY FORWARD FOR AFRICAN BUSINESSES </li></ul><ul><li>Africa must climb the ladder from mere suppliers of raw materials to brand builders </li></ul><ul><li>Africa must create centres of excellence within trading blocks and eventually, the continent so as to compete on the global market </li></ul><ul><li>Business must work with Government and Marketing professionals to build National, Regional and the African continental brand </li></ul>