Nation Branding and Place Marketing - The Place
IV. The Place
Some countries are geographically disadvantaged. Recent studies
have demonstrated how being landlocked or having a tropical
climate carry a hefty price tag in terms of reduced economic
growth. These unfavorable circumstances can be described as
"natural discounts" to a country's price.
What can be done to overcome such negative factor endowments?
In classical microeconomics, the element of "place" in the
marketing plan used to refer to the locus of delivery of the
product or service. Well into the 19th century, the "place" was
identical to the region where the product was manufactured or
the service rendered. In other words, textiles weaved in India
were rarely sold in Britain. American accountants were unlikely
to practice in Russia. Distribution was a local affair and
networks of dissemination and marketing were geographically
confined.
A host of historical and technological developments drastically
altered the scene and frayed the straitjacket of geography.
The violent disintegration of the old system of geopolitical
alliances led to the formation of massive, multiplayer trading
blocs within which and among which the movement of goods and,
increasingly, services is friction-free.
The vast increase in the world's population - matched by the
exponential rise in purchasing power - created a global
marketplace of unprecedented wealth and a corresponding hunger
for goods and services. The triumph of liberal capitalism
compounded this beneficial effect.
The advent of mass media, mass transport, and mass
communications reduced transaction costs and barriers to entry.
The world shrank to become a veritable "global village".
The value of knowledge (processed information) has fast risen to
surpass that of classical (physical) goods and services.
Information has some of the properties of a public good (for
instance, nonrivalry) - coupled with all the incentives of a
private good (e.g., profit-making).
Thus, the very nature of distribution had been irrevocably
changed. The distribution channel, the path from producer to
consumer (in our case, from country to foreign investor or
tourist, for example) is less encumbered by topography than it
used to be.
Even the poorest, most remote, landlocked, arid, and
disadvantaged country can nowadays leverage air flight, the
Internet, television, cell phones, and other miracles of
technology to promote itself and its unique offerings
(knowledge, plant and animal species, scenery, history,
minerals, cheap and educated manpower, cuisine, textiles,
software, and so on).
The key to success is in a mix of both direct and indirect
marketing. Nowadays, countries can (and do) appeal directly to
consumers (ads targeted at tourists or road shows aimed at
investors). They present themselves and what they have to offer,
circumventing brokers and agents of all kinds
(disintermediation). Still, they should not fail to cultivate
more traditional marketing channels such as investment banks,
travel agents, multilateral organizations, or trade associations.
With many of the physical obstacles to marketing removed in the
last few decades, with the very concept of "place" rendered
obsolete, promotion emerged as the most critical facet of nation
branding and place marketing.