BRANDS

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The rev­e­la­tion that as many as 11 mil­lion diesel ve­hi­cles have been fit­ted with soft­ware de­signed to de­ceive emis­sions testers, has dealt a ham­mer blow not just to Volk­swa­gen’s rep­u­ta­tion but to the en­tire Ger­man na­tion brand.

Ger­many has lost its po­si­tion as the most pow­er­ful na­tion brand ac­cord­ing to Brand Fi­nance. The firm, which spe­cialises in brand val­u­a­tion and strat­egy, eval­u­ates the fi­nan­cial im­pact of the im­age and rep­u­ta­tion of the top 100 coun­tries, pub­lish­ing the re­sults in an an­nual study, the 'Brand Fi­nance Na­tion Brands' re­port. The re­port shows mea­sur­able dam­age to the long-term fi­nan­cial po­ten­tial of ‘brand Ger­many’. Its value has dropped by US$191 bil­lion to US$4.2 tril­lion, down 4% on 2014.

“Ger­man in­dus­try is lauded for its ef­fi­ciency and re­li­a­bil­ity while Ger­mans as a whole are seen as hard-work­ing, hon­est and law abid­ing. That such an iconic Ger­man brand, the ‘peo­ple’s car’, could be­have in this way is be­gin­ning to undo decades of ac­cu­mu­lated good­will and cast as­per­sions over the prac­tices of Ger­man in­dus­try, making the Siemens bribery scan­dal ap­pear less a one-off than ev­i­dence of a broader malaise,” said Brand Fi­nance’s CEO, David Haigh.

Un­til this episode, 2015 had ac­tu­ally been a fairly pos­i­tive year for Ger­many’s in­ter­na­tional rep­u­ta­tion and the prospects of its na­tion brand. Ger­many has gar­nered world­wide ad­mi­ra­tion for its re­cep­tiv­ity to Syr­ian mi­grants. This in­flux of gen­er­ally young peo­ple and fam­i­lies will pro­vide a fil­lip for Ger­many’s labour force, though the good­will gen­er­ated by sym­pa­thetic stance has been over­shad­owed by VW’S de­cep­tion.

Re­plac­ing Ger­many as the world’s most pow­er­ful na­tion brand is Sin­ga­pore. As the city-state cel­e­brates its 50th an­niver­sary its cit­i­zens can be rightly proud of the na­tion they have cre­ated. The chief ar­chi­tect was of course Lee Kwan You. The vi­sion, prag­ma­tism, longevity, in­tol­er­ance of cor­rup­tion and rel­a­tive benev­o­lence of the coun­try’s first prime min­is­ter and el­der states­man are widely seen as the key rea­sons for its suc­cess.

Haigh con­tin­ues, “Though the pass­ing of Lee Kuan Yew in March this year is a sad loss, he leaves a legacy that few can hope to bet­ter. Sin­ga­pore is now seen as mod­ern, in­no­va­tive, in­dus­tri­ous, wel­com­ing to out­siders and in­creas­ingly cul­tur­ally rich and has left its neigh­bours, in­clud­ing Malaysia (from which Sin­ga­pore was ejected 50 years ago) far be­hind it.”

Though some way off the top spot, the fastest grow­ing na­tion brand this year is Iran. Its brand value is up 59% to US$159 bil­lion as Has­san Rouhani’s mod­er­ate ap­proach slowly

shifts in­ter­na­tional per­cep­tions of the coun­try’s po­ten­tial and eases re­stric­tive sanc­tions. A frac­tious re­la­tion­ship with Sunni states will re­main an im­ped­i­ment to trade and in­vest­ment lo­cally but with a mar­ket of 77 mil­lion peo­ple, vast hy­dro­car­bon re­serves and a highly ed­u­cated pop­u­la­tion, Iran cer­tainly has a re­cep­tive au­di­ence glob­ally.

David Haigh com­ments, “Iran will need to as­sid­u­ously man­age its com­mu­ni­ca­tions with its new­found suit­ors making a care­fully as­sessed na­tion brand­ing strat­egy al­most as im­por­tant as

tra­di­tional diplo­macy. Man­aged cor­rectly, Iran’s an­cient trea­sures, so­phis­ti­cated pop­u­la­tion, strate­gic lo­ca­tion and nat­u­ral as­sets could be used to trans­form its rep­u­ta­tion.”

Though Sin­ga­pore is the most pow­er­ful brand, be­ing closer to its full po­ten­tial than any other na­tion, in sheer value terms The US re­mains dom­i­nant. It is the most valu­able na­tion brand, with a na­tional brand value of US$19.7 tril­lion.

The USA is un­doubt­edly a pow­er­ful brand with an invit­ing busi­ness cli­mate, how­ever its value comes in large part from the coun­try’s sheer eco­nomic scale. Not only is there a large, wealthy mar­ket pre­dis­posed to ‘buy Amer­i­can’ but also an un­ri­valled group of es­tab­lished com­pa­nies and or­gan­i­sa­tions ex­port­ing world­wide whose Amer­i­can her­itage forms (to a lesser or greater ex­tent) part of their ap­peal.

The US’ world-lead­ing higher ed­u­ca­tion sys­tem and the soft power aris­ing from its dom­i­nance of the mu­sic and en­ter­tain­ment in­dus­tries are sig­nif­i­cant con­trib­u­tors too. This soft power will help the US to re­tain the most valu­able na­tion brand for some time af­ter China’s seem­ingly im­mi­nent rise to be­come the world’s big­gest econ­omy.

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