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Posted : 2008-10-13 18:19
Updated : 2008-10-13 18:19

Korea’s Promotion Overseas Mismanaged


By David Kilburn

The attraction of transforming a country into a brand is easy to understand. Brands add value, both for their owners and their consumers.

According to U.S. brand expert John Gerzema, author of The Brand Bubble, brand value now accounts for about 30 percent of the market capitalization of companies on the S&P 500 index, up from 5 percent 30 years ago.

Today, the 250 most valuable global brands are worth $2.2 trillion, more than the GDP of Italy.


David Kilburn
Google's brand value makes up 50 percent of its market capitalization. PepsiCo shows a tangible book value of $9.8 billion against a market value of $108 billion, showing how much investors bank on the value of brands rather than the company's more tangible assets.

Taking the S&P ratio as a guide, a government might assume that transforming their country into a brand might add 50 percent to the value of their economy.

However, this goal is more difficult to achieve for countries than for consumer products. The differences are fundamental. Product brand managers can choose the name, packaging, pricing, decide exactly what to pour into the package, how and where
to distribute it. They also change any or all of these variables and take their brand to consumers around the world.

Governments lack this degree of control. Geography, climate, language, population, history and many other factors are unchangeable. While a consumer brand might appeal just to one group of people, a country involves everyone.

Countries are multi-dimensional and far more complex than products. Copying an approach developed for consumer goods is no guarantee of success.

The complexity of country branding is revealed in studies by the U.S. consultancy FutureBrand which publishes an annual report (http://www.countrybrandindex.com) covering the top country brands, based on quantitative research among 2,500 frequent international travellers, plus data from other sources.

FutureBrand's 2007 report ranked countries across a wide range of criteria: Authenticity, History, Art & Culture, Resort/Lodging Options, Families, Outdoor Activities/Sports, Beach, Natural Beauty, Environmental, Rest & Relaxation, Safety, Rising Star, Value for Money, Fine Dining, Shopping, Nightlife, Friendly Locals, Nice to Live In, Ideal for Business, Easiest To Do Business In, Easiest to Extend A Business Trip In, Conferences.

Based on scores across these wide ranging criteria, the top country brands in 2007
were, in rank order: Australia, USA, UK, France, Italy, Canada, Spain, New Zealand,
Greece, and Japan.

Across all FutureBrand's categories, Korea only appeared once among the top 10. It ranked 10th for shopping. This is disappointing considering that Korea is home to eleven of UNESCO's world heritage sites, and has three intangible cultural treasures cited as ``Masterpieces of the Heritage of Humanity,'' also by UNESCO.

Korea also possesses vast expanses of beautiful unspoilt scenery, and a very distinctive cuisine ― all examples of factors that other countries have successfully exploited. Yet Korea only ranked 21st for history, 31st for Art & Culture and 39th for Authenticity. For natural beauty it ranked 58th, for Fine Dining 45th, and for Resort/Lodging options 53rd. There is only one conclusion: Other countries are more successful in competitively pitching their own benefits to travellers.

However, the news about Brand Korea is not completely bleak. Young & Rubicam's Brand Asset Valuator has been tracking brands for over a decade.

A recent analysis of trends from 1997-2007, found that Brand Korea has started becoming more approachable to Japanese consumers. It has achieved greater momentum among Thai adults, in such terms as ``Prestige,'' `Cutting Edge'' and ``Fashionable.''

Over this same period Brand Korea's personality for Chinese adults has improved, especially as ``Fashionable.'' This suggests, unsurprisingly, that different opportunities and problems pose themselves for each country.

Though Singapore was not ranked the first in any of FutureBrand's categories, it was still ranked among the top 10 on 10 different criteria. Only the United States, Australia, New Zealand, and Canada did better.

Singapore is one of the most successful countries at marketing itself. The rise from a swampy island to iconic brand status began when Singapore Airlines introduced their ``Singapore Girl'' advertising campaign in 1972.

In those distant days, flights from the Far West to the Far East stopped in Singapore to refuel, with a stopover opportunity for passengers. The Singapore Girl became a metaphor for ``Asian values and hospitality'' which conveniently projected Singapore itself and helped tourism.

Brand Singapore gradually came into being. By the early 1980's tourism had become the third most productive sector of Singapore's economy and contributed 5 percent to GNP. But by 1986, hotel occupancy was falling and the tourism growth rate was also in decline. With typical thoroughness, the Singapore government researched the views of visitors. They found that about 70 percent of tourists came from Asia to see Singapore's economic miracle, and were not disappointed.

However the 30 percent of tourists from outside Asia were hoping to experience something of the island's romantic historical image and were disappointed. Why travel half way round the world to see a modern city just like back home?

Since visitors from outside Asia had been tourism's growth sector, their disappointment discouraged friends from visiting. In a report, the Singapore government's Tourism Task Force concluded, ``In our efforts to build up a modern metropolis, we have removed aspects of our Oriental mystique and charm best symbolized in old buildings.''

Teams studied how other countries preserved historical legacy, especially their old buildings. Demolitions were stopped. Money was poured into the repair and preservation of what little remained of old Singapore.

Care was taken to ensure the historical authenticity of old buildings was retained. Within about six years, the remnants of Old China Town, Little India had been rescued. By 1993, revenues from Tourism had grown to 10.3 percent of Singapore's GNP.

From a tourist destination, Singapore successfully developed as a logistics hub, an international conference and trade show venue, and a financial centre. This year Formula 1 Sing Tel Singapore Grand Prix became the first floodlit night time race in F1 history. Night time, so that viewers in Europe could watch daytime.

About 30 million TV viewers watched the race in Singapore's main European markets. A sell-out crowd of over 100,000 watched the race track-side in Singapore. There was a time when a slogan, logo, advertising campaign, and a promotional film were enough to promote a country, but that is history.

Branding is not simply a logo or slogan that changes with each advertising campaign. While many follow this approach, it does not maximize what a country can achieve.

Traditional marketing tools are useful but, according to researchers at Media Edge/CIA, 76 percent of people now rely on what others say versus 15 percent on advertising. 92 percent of consumers now cite word of mouth as the best source for product and brand information, up from 67 percent in 1977.

The direct experience of others carries more weight than advertising campaigns or government pronouncements. In this new world, every visitor to Korea is a potential advocate. Every businessman, journalist, tourist, English teacher, overseas student, and migrant worker will have tales of experience to tell, whether in gatherings such as the World Economic Forum, via the Blogosphere, or simply talking to friends.

The internet facilitates the free flow of information, anecdotes, experience, opinion, and recommendation on a tremendous and growing scale. Review sites such as Digg (http://digg.com) and Reddit (http://www.reddit.com), are now the third-most-common use of the Internet after e-mail and search. Social Networks are increasingly important: if Facebook were a country, it would be the 10th largest, bigger than Japan.

Even consumer brands have been slow to recognize the significance of these changes, but now they are rapidly embracing the internet. One example of what internet strategies can deliver is the story of how the Mexican Tourist Board successfully promoted the Mayan ruins at Chichen Itza to become one of the new Seven Wonders of the World (http://www.new7wonders.com).

The project was devised by their long term PR agency, Burson-Marsteller, which re-created the site in the virtual 3-D world Second Life (http://secondlife.com), giving visitors a chance to experience this ancient civilization. The site drew more than 33,000 visitors on launch day, gained extensive media coverage, and many top PR awards. Chichen-Itza was voted one of seven new wonders in July 2007. The economic benefits were almost immediate and far outweighed the $17,000 spent on Second Life. ``Since being named a wonder of the world, the number of visitors to Chichen Itza has increased 75 percent,'' said Juan Jose Marti Pacheco, secretary of Tourist Promotion of Yucatan, this February.

The sad conclusion is that Korea's promotion overseas has been consistently mismanaged and has therefore achieved fewer results than countries that have accurately understood their opportunities and problems, and followed a strategic path to get results.







Who Is David Kilburn?

David Kilburn is from the U.K. He worked in the advertising industry for 20 years and has been a professional journalist in Asia for 25 years.

He has lived in Seoul for 20 years. He is also founder of kahoidong.com, an organization formed to protect the remaining original hanok of Gahoi-dong, and Chairman of 3c World, a social networking project.

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