Apple, Starbucks, Singapore Airlines, and Cartier are all well-known. Their popularity is not a fluke — it comes from managing and investing carefully in building their brands. Why do companies invest in their brands? It is not just to feed their egos. They do so because it is economically beneficial to their firms. A strong well-known brand allows a firm to either sell more product or charge a higher price. Often, it is both.
Even when companies do not spend to create their brand, people form impressions of the products and services they offer. For years, Google never advertised, yet it is known as one of the best brands in the world. Starbucks has done minimal advertising, and it is recognized globally.
When we think of brands, our minds usually go to companies that we see on TV, in grocery stores or malls. Brands are more than just associated with products we consume. The countries we live in, visit and hear about on the news also are brands. As brands, countries elicit distinct attitudes and perceptions, and it is these attitudes and perceptions that countries should really care about.
A country’s brand is important for the same reason a corporate brand is important. Having a strong brand that people view positively increases the likelihood that consumers will purchase from that brand. When we walk down the beverage aisle of supermarket, we are bombarded with brand names. Pepsi, Coke, Sprite, Gatorade, Red Bull, all conjure up different images in our heads. Positive images make it more likely that we will take that brand’s products and put them in our shopping carts.
The same goes for a country. The Best Countries ranking is not merely a beauty contest and for bragging rights when ambassadors get together. A positive country brand brings money and economic growth to it.
For example, when we debate what country to visit, we think about the country’s brand. For a romantic honeymoon, a couple might want a country that has a sexy or romantic reputation, such as Italy or Brazil (Italy and Brazil are consistently viewed as two of the sexiest and most scenic countries in the world in the Best Countries survey, see Table 1). When deciding where to take our families, we might choose countries that are viewed as child friendly ( Spain and Australia top that list, Table 2). France’s brand for being a safe, family friendly country very unfortunately took a nosedive after the 2015 terrorist attacks. Tourism went down by 3 million people in 2016, according to NPR.
Top Countries for Sexy, Romantic, Adventurous Honeymoons
| Rank | Sexiest | Most Scenic | Most Adventurous |
| 1 | Brazil | New Zealand | Brazil |
| 2 | Thailand | Greece | Italy |
| 3 | Italy | Italy | Spain |
| 4 | Costa Rica | Thailand | Thailand |
| 5 | Argentina | Brazil | Greece |
Top Countries for Family Vacations
| Rank | Most Family Friendly |
| 1 | Spain |
| 2 | Australia |
| 3 | Italy |
| 4 | New Zealand |
| 5 | Norway |
A country’s brand, however, is not just about attracting visitors. A good brand also attracts direct foreign investment. When deciding whether to invest in a country’s bonds, real estate, or even currency, or to build a factory or open an office, several factors of a country’s brand matter — including how transparent the country is, how easy it is to do business there, and how much the country’s economy is growing. In addition, other economic factors are closely tied to a country’s brand. In 2015, when Volkswagen was issued a notice of violation of the United States Clean Air Act, Germany’s brand took a hard hit. Cars were Germany’s largest exporter and provided more than 800,000 jobs. The decrease in exports and loss of jobs hurt the German brand and its economy, according to Reuters.
The proof is in the numbers. Together with U.S. News and BAV of WPP, we produced a report — the 2018 Best Countries study — where we rank 80 countries by polling more than 21,000 people around the world. We have been doing this over the past three years. This gives us insight into how changes in a country’s brand affect the economic health of the country.
Take, for example, the United States. In 2016 the country was ranked the No. 4 country in the world. By 2018, the U.S. had fallen to No. 8. This is in part due to the fall in the global perceptions ranking of “open travel policies” (from No. 20 in 2016 to No. 51 in 2018). This decline in the U.S. brand has been associated with a sharp decline in overall tourism from all parts of the world. According to the U.S. National Travel and Tourism Office, tourist visits were down 2 percent in 2016 from the previous year and further down 6 percent in 2017. Visits from Africa and the Middle East were both down over 25 percent in 2017. This is due in part to the U.S. branding itself as anti-Muslim and anti-immigration via the Trump administration and campaign. This decrease in tourism translated into a loss of nearly $2.7 billion just in the first three months of 2017, according to The New York Times and Tourism Economics, a branch of Oxford Economics.
Historically, the U.S. has dominated the global market for college education. Students from around the world have flocked to the U.S. for higher education. Unfortunately, that industry has also been affected. With the fall of the U.S. brand there has been a decrease in international college applications and enrollment. According to the Graduate Management Admissions Council’s 2017 report, international business graduate applications for U.S. schools have declined, while schools in Asia and Europe have seen increases in applications.
This is in part from the tightening of the U.S. labor market. According to USA Today, this could cost the U.S. economy upward of $32 billion as international students generally pay full tuition, do not rely on financial aid, and are sometimes charged thousands of dollars more than American students to attend a U.S. school. This is not surprising as today, the U.S. is seen as only the 60 th best country in which to study abroad in the Best Countries survey (it was ranked No. 3 in 2016) and the 32 nd best country in which to start a career (it was ranked No. 3 in 2016). Moreover, the U.S. brand has taken a hit in other areas such as political stability (No. 11 in 2016 to No. 23 in 2018), gender equality (No. 9 in 2016 to #14 in 2018), and trustworthiness (No. 17 in 2016 to No. 25 in 2018).
A country’s brand effects not just tourism. Money flowing into the country can also be affected when a country’s economic brand is hurt. America’s brand on being ” open for business” declined from a ranking of No. 23 in 2016 to No. 43 in 2018. This has been associated with a decrease in foreign direct investment inflows of 2 percent according to the Organization for Economic Co-operation and Development.
Just as a company can rebuild and rebrand, so can a country. Changing a country’s brand for the better can create increases in economic prosperity. The United Arab Emirates was not ranked as a top country in 2016, but in 2017 reached as high as No. 22 overall. It is currently ranked as the No. 1 up-and-coming country in the world in the Best Countries ” movers” category. It’s not surprising then that Dubai visits increased 10 percent in the first three quarters of 2017, according to the Dubai Statistics Center publication from the government of Dubai. Even the UAE’s foreign direct investment inflows have increased year to year since 2015. In contrast to the United States, the country with the best “open for business” brand, Luxembourg saw an increase in foreign inflow of 271 percent from 2016-2017.
A country’s brand can have large impacts on its gross domestic product and economic growth. Developing and increasing a country’s reputation on a global scale is an important part of managing a country, just as developing and maintain a strong positive corporate brand is an important part of managing a company. Brands are ubiquitous, but the largest brands in the world are countries. A good country brand can mean great prosperity for its citizens and its future.
More from U.S. News
How Can the Best Countries Survey Help?
Learn More About the United States
The World’s Perceptions of the U.S. Are Going in the Wrong Direction
The Importance of Nation Branding and Why the U.S. Needs to Take Action originally appeared on usnews.com
