Communications Director at public relations agency Brand Dialogue, Konrad Jagodzinski, reflects on the importance of geographic branding for value creation

What is geographic branding? For some, it refers to nation branding and how promoting a country helps strengthen local businesses. For others, it can be synonymous with geographical indication (GI) products that can only be produced in a specific region, such as Parmigiano Reggiano and Champagne.In fact, geographic branding can come in many forms, and covers commercial brands which evoke an immediate sense of identity, such as British Airways and Deutsche Bank, as well as companies relying on association with business clusters, like Silicon Valley or the City of London.

Appropriately leveraged, geographic branding can be a powerful tool for value creation. This is why many governments worldwide, and the OECD centrally, are promulgating geographic branding policies to grow brands and ultimately assist economic development.

LOCAL BRANDING – GLOBAL FORUM

This year’s Brand Finance Global Forum took place in early April. Focusing on understanding the value of geographic branding, the forum saw speakers unwrap various issues affecting brands which aim to leverage their geographic location for commercial success.

The first discussions tackled place branding as well as branding in tourism. Marcus Höpperger, Senior Director for Trademarks and GIs at WIPO, debated with Dr David Reibstein, Professor of Marketing at Wharton Business School, on who has the right to promote nation brands and whether this practice should be regulated. There was a general consensus that nations have to be treated as brands and that the country of origin effect has a huge impact on businesses.

This was made especially clear when Conrad Bird, Director of the GREAT Britain Campaign, demonstrated how the programme inspired the world to think differently about the UK, which has in turn delivered £4 billion to the UK economy with a further £2.7 billion in the pipeline. Brand Finance has been measuring the commercial impact of the GREAT campaign for several years now, contributing to the growing understanding of the value of nation branding to the British economy. The effect of a country’s national image on brands and the economy as a whole can be of significant importance, encouraging inward investment, adding value to exports, and attracting tourists and skilled migrants. In times of economic and political uncertainty like the Brexit process, apposite nation branding efforts may serve a stabilising purpose.

The Brand Finance Global Forum also looked at geographic branding in goods and services and some of the benefits and challenges from utilising a brand’s locality. Lucia Pennesi, Commercial and Marketing Director at Ferrari, looked at the relationship between the Italian origin and the global appeal of this luxury auto brand, while Stefano Fanti, Director of the Parma Ham Consortium, discussed the importance of promoting the protected status of GI products. GI brands like Parma Ham are in an interesting position compared to corporate brands, because they have to balance the awareness of individual producers with the awareness of the product in general. Striking that balance is key to ensuring that geographic branding serves its intended commercial purpose.

Moving on to geographic branding in services, Zahariah (Liza) Abdul Rahman, Head of Group Communications at Malaysian oil and gas company PETRONAS, stressed the importance of regional brands in building trust in an ever-changing world through ingenious storytelling and a commitment to Corporate Social Responsibility (CSR). Liza’s advice was echoed in a presentation by Abhinav Kumar, Chief Marketing Officer for Global Markets at Tata Consultancy Services (TCS). TCS utilised the rich heritage of the Tata Group and its importance within the domestic market to grow from an Indian champion to a truly global brand.

TRUTH WILL OUT

In short then, what role should geographic identity play in strategy and growth? And how does a brand gain value commercially by association with a particular place?

The key lies in authenticity. Brand managers and communicators need to play to their brands’ strengths but at the same time stay truthful to their identities. In the era of fake news, customers are extra sensitive to phoney propositions and false associations. Knowing your brand and your audience should go hand in hand with simple messaging and honesty across all communications activities.

For more than 25 years, Brand Dialogue has developed communications strategies to create dialogue that drives brand value, and we pride ourselves as the only public relations agency in the UK that specialises in geographic branding, including nation branding, city branding, and supporting brands with a geographical indication (GI).

Drawing on our experience and Brand Finance’s expertise in brand valuation, we understand the importance of sharing a brand’s story to reach business objectives. As an example, we have represented the Parma Ham Consortium as their first and only public relations agency in the UK. Over the years, we have coordinated a wide range of successful campaigns focusing on origin, tradition, naturalness, and traceability. Today, parma ham is one of the most well-known Italian products in Britain.

THE POWER OF GI

We are proud to work with some of the best brands in the world and have a keen interest in understanding the benefits of geographic branding and the GI status in particular. Brand Dialogue recently conducted original market research to shed a light on the perception of GI brands in the UK.

Interestingly, the study has confirmed that, for British consumers, GI is a sign of quality. Phrases associated with protected status skew positive with ‘Authentic’ (66.2 per cent) and ‘Premium Quality’ (62.2 per cent) receiving the highest scores, followed by ‘Preserve Traditional Methods and Culture’ (50.6 per cent) and ‘Something to be Proud of’ (49.6 per cent).

In addition, nearly three in four British consumers (71.4 per cent) believe that they are ‘much more likely’ or ‘somewhat more likely’ to purchase GI products over alternatives. It was promising to see that affinity with GI brands is closest in the youngest generation of consumers, with 42.2 per cent of 18 to 24-year-olds ‘much more likely’ to buy ‘protected’ products over ‘standard’ products.

The growing importance of authenticity in the new, experience-driven consumerist economy ensures that geographic branding will remain relevant for years to come.