Foreign Brand Power: How Countries Help Their Brands

04/20/2015 03:29 pm ET | Updated Jun 18, 2015

While brands are typically associated with companies and products, countries have brand identities too. In fact, the image of a country can greatly contribute to (or detract from) the brands that come from that country. For example, France is often associated with wine, Japan with quality cars and cameras, Germany with beer, and the United States with movies and entertainment. Even if people are not familiar with a foreign brand, they assume it is good if it comes from a country known for being good at making that type of product. If businesses want to export their brands to other countries or even sell them in their own countries, it can help to know the brand image of their country for the product in question.

Foreign is exotic

Taking this one step further, foreign products are generally considered exotic, and exotic typically has a positive brand image since it equates to a greater degree of uniqueness. Uniqueness, in turn, gives a brand a stronger identity and often enables it to command a higher price because there is little or nothing else to which it can be compared.

People have misconceptions about country brands - especially their own

A Pew survey as reported in the New York Times supported the notion that people often consider foreign country brands as superior to their own even though the reality may be different. When asked which country they considered to be the leading economic superpower, most of the countries in the developing world picked the United States over China. Surprisingly, most countries in the developed world considered China to be the greater economic power. What is most interesting about this survey is that in spite of patriotic considerations, people in China picked the United States as having the greater economic power (48% to 29%) whereas people in the United States picked China by a narrow margin (41% to 40%). Looking at the facts, while China has been growing rapidly and the developed world has not grown much since the Great Recession, per capita Gross Domestic Product is nearly 6 times greater in the US than in China ($48,100 versus $8,400). People in the European Union have the same misconception that China has greater economic power than the US and the EU. In Germany, 62% of those surveyed said China had greater economic power versus 13% for the US and 17% for the EU. In Britain, 58% picked China versus 28% for the US and 3% for the EU; and in France, 57% selected China versus 29% for the US and 6% for the EU.

Japan in the 1980s

The rise of China's brand image in the developed world is reminiscent of Japan in the 1980s when the image of "Japan Inc." rose while those of the US and Europe declined. At least, the pattern is familiar. Japan started out as a low-cost producer with a lower-quality brand perception. A group of Japanese businessmen headed by Akio Morita, the CEO of Sony at the time, led the charge to change this quality perception, and they did. The brand perception of Japan, Inc. went from meaning "low quality" and "cheap" to ranking amongst the highest quality country brands in the world. This same cycle seems to be happening with Taiwan, Korea, and now China. China has been the low-cost producer, but as the Chinese standard of living and quality goes up, this is likely to change. Some companies are already migrating to lower-cost provinces in China, Viet Nam, and other low-cost producers as the increasingly-developed areas of China have become more expensive.

The US brand shaken by a series of negative events

Watergate, the irregularities associated with the election of 2000, the September 11th attack of 2001, the wars in Iraq and Afghanistan, the Great Recession, and political gridlock in Washington have all contributed to erode the brand image of the United States. As a result, many have predicted doom and gloom as it relates to the US brand. When one listens to the news on a daily basis, it seems as if the naysayers are correct. When one looks at the data, however, a different conclusion is drawn.

Infrastructure and stability of the US brand

While there are dark clouds on the horizon, the US has weathered bad situations many times before. The attack on Pearl Harbor, Sputnik, and the Cuban Missile Crisis are just a few. What has caused the US brand to rebound again and again is the "free" political and economic infrastructure of the United States. The best and the brightest have come to the United States in continuous waves to make a better life for themselves and their families. They have innovated new products, and brought new ideas. Unlike so many other places, there are opportunities in the US based on talent and hard work irrespective of other factors that limit progress in other countries. Moreover, when there is instability in the world, as there always seems to be, most want to hold US dollars above all other currencies. Even though US infrastructure is continually threatened (especially as it relates to "free" education), the incentive to improve remains a constant. Talented and hard-working people from around the globe are drawn to the US to take advantage of that incentive.

So why do people often value other country brands above their own?

The psychology of thinking the grass is greener somewhere else is a well-known phenomenon. Too many people see the problems around them and assume that it is better elsewhere. That is part of it. The other part is that it enables people to escape their own reality and dream that it is better somewhere else. However, even Dorothy discovered that the Wizard of Oz was a sham and that Kansas wasn't so bad after all. This is one reason why foreign or exotic brands have so much appeal. Companies should try to understand this phenomenon and take advantage of it or at least know how to compete with it.

How do brands escape the grass is greener or exotic phenomenon?

When company and product brands are really successful, the force of those brands overtakes the grass is greener or exotic position. The relationship with the brand becomes so strong that it keeps devoted followers in the fold and attracts new devotees. Apple seems to have tapped into this brand strength where Apple lovers will always buy Apple products, and others will be pulled into the force field created by Apple's brand success. To keep this force strong, companies, such as Apple, need to continually innovate and create new reasons for people to buy its new products.

Exotic will win in absence of a strong brand force to counteract it

In the absence of a strong brand force, the exotic brand will attract the curious and those searching for something they are not getting in their domestic universe. As the Pew survey shows, people cannot be expected to know the reality of their situation. The perception created by the media, which bombards people's brains with 7,000 impressions every day, is just too strong of a force to overcome unless a country, company, or product brand is stronger. If your product's country of origin does not give you a brand lift, you need to strengthen your brand to outweigh any assists your competitors may receive from their home country. Best of luck.