It is possible not only to measure the value of brands from Germany, but also to assess the strength of Brand Germany itself. The Best Countries ranking does exactly that, comparing perceptions of countries around the world held by a broad spectrum of consumers. There is a close relationship between how people feel about a country, and their attitudes towards the brands they associate with that country. Strong countries fuel strong brands, and vice versa.
Developed by WPP’s Y&R BAV Group, the annual Best Countries ranking was first launched in 2016 at the World Economic Forum’s meeting in Davos, the world’s largest gathering of global leaders and heads of industry and influence. It is now in its third wave.
Ideas and excellence at heart of country’s global image
Germany has a rare combination of strengths that sets it apart on the global stage, even among other large and financially strong countries that similarly wield great international influence. What Germany has in its favor is that in addition to traditional measures of what makes a strong country – power, a thriving economy, and political influence – it is also a leader on key measures of “soft power”, which are increasingly important. Germany is seen as entrepreneurial, progressive, transparent, providing a good standard of public education, and offering a high standard of living. It’s also one of the highest ranked countries on having a well-developed legal framework and public health system.
How a country is viewed around the world is of huge importance to brands. The words “Made in …” can instantly lend credibility and trust to a product or brand that a consumer hasn’t previously encountered. That can be enough to convince someone to buy, and, beyond that, convince them to pay a premium. Likewise, “Made in …” can prove an instant turn-off if a consumer associates the country of origin with poor safety standards, or sees it as being behind the times on social issues or workers’ rights.
The perceptions and performance of brands abroad feed back into the development of the country itself. Willingness to invest is closely linked to the strength of a country’s brand, and as local brands and businesses succeed, they generate economic growth as well as lending further positive associations to their country’s brand.
The annual Best Countries ranking measures global perceptions of countries against a series of characteristics – impressions that have the potential to drive trade, travel, and investment, and directly affect brands. It was developed by WPP’s Y&R BAV Group, and The Wharton School of the University of Pennsylvania, with U.S. News & World Report.
The ranking is based on a large global survey, which asks a range of people about how they perceive different countries against a range of key attributes.
In the 2017 Best Countries ranking, Germany ranks 4th out of 80 major markets around the world across all measures.
The virtuous cycle every brand hopes for
The relationship between country brands and the products and services those countries produce is complex and changes over time. When a country and its brands represent consistent qualities and values, they lend one another credibility, and there is a multiplier effect for both.
Think of France and Chanel; both represent elegance, glamor and prestige. Chanel is intrinsically French, and France is synonymous with Chanel. The same could be said Italy and Ferrari, or Japan and Sony. In each case, the brand and the country are part of a virtuous cycle, a symbiotic relationship. In fact, Germany is a fine exemplar of this symbiosis in action: Germany has come to represent the quality, durability, and engineering that brands like Bosch, BMW, Audi, and Mercedes have shown the world that Germany can deliver.
Brands can both shape and be shaped by perceptions of their country of origin.
Japan in the 1970s was known as a cheap manufacturing base, but is now respected as a world leader for quality electronics and technology thanks largely to brands like Sony and Toyota. South Korea has taken a similar path, with Samsung and Hyundai demonstrating to the world what modern South Korea is and, in doing so, creating a consumer predisposition in international markets to favour other Korean brands.
In a relatively short time, China, too, has shifted perceptions from being seen as the world’s toy factory, to a place of entrepreneurship and innovation, particularly in digital technology. This is partly because of government strategy and a rebalancing of the Chinese economy, but also due to the ambassadorial role of some of China’s leading export brands, such as Haier, Huawei, and Alibaba.
How to measure a country
The Best Countries ranking incorporates the views of more than 21,000 individuals surveyed in 36 countries in four regions: the Americas, Asia, Europe, and the Middle East and Africa. These people included a high proportion of “informed elites” – college-educated people who keep up with current affairs – along with business decision makers and members of the general public.
Collectively, the 80 countries in the 2017 ranking account for about 95 percent of global Gross Domestic Product and represent more than 80 percent of the world’s population.
People surveyed for Best Countries were asked how closely they associated 65 attributes with a range of countries. These attributes were then grouped into eight categories that were used to calculate the Best Countries ranking:
State of a nation – the 8 elements of a country’s brand
Adventure: a country is seen as friendly, fun, has a pleasant climate, is scenic or sexy.
Citizenship: it cares about human rights, the environment, gender equality, is progressive, has religious freedom, respects property rights, is trustworthy, and political power is well distributed.
Cultural influence: it is culturally significant in terms of entertainment, its people are fashionable and happy, it has an influential culture, is modern, prestigious and trendy.
Entrepreneurship: it is connected to the rest of the world, has an educated population, is entrepreneurial, innovative, and provides easy access to capital. There is a skilled labor force, technological expertise, transparent business
practices, well-developed infrastructure, and a well-developed legal framework.
Heritage: the country is culturally accessible, has a rich history, has great food, and many cultural attractions.
Open for business: manufacturing is inexpensive, there’s a lack of corruption, the country has a favorable tax environment, and transparent government practices.
Power: it is a leader, is economically and politically influential, has strong international alliances and a strong military.
Quality of life: there’s a good job market, affordable living costs, it’s economically and politically stable, family-friendly, safe, has good income equality and well-developed public education and health systems.
Each of the eight measures is given a weighting in its contribution to the total score for each country, as follows .
The weight of each category in the final index was determined by the strength of its correlation to per capita GDP (at purchasing power parity). As seen in the above chart, a nation focused on providing great quality of life for its people, which cares about rights and equality, and has a focus on entrepreneurship, is seen as having the most powerful nation brand. This reflects how the world has changed; no longer is it just tanks and banks that give a country influence around the world. Hard power is making way for softer power that comes about as a result of entrepreneurship and cultural exports.
In addition to the eight categories above, a momentum metric called “Movers” represents 10 percent of the index, measuring how different, distinctive, dynamic, and unique a country is seen to be.
To see the full Best Countries methodology, click here.
Best of the best
Switzerland tops the ranking as it is highly regarded for its citizenship, being open for business, for having an environment that encourages entrepreneurship, offering its citizens a high quality of life, and for being culturally influential. All of the other countries in the top five also score highly across all of these measures. Canada is especially strong on the citizenship measure. Germany has a similar Best Countries profile to the UK, though Germany is stronger on entrepreneurship and is seen as offering a better quality of life. Japan’s greatest strength is also entrepreneurship, but it also scores highly across all the other measures.
A closer look at Brand Germany
#4 out of 80 countries
Germany consistently appears in the Top 5 of the Best Countries ranking, though in the past year it has slipped from 1st to 4th place. Some of this is a result of a change in the study, which now includes 80 countries, compared to 60 a year earlier. The number one spot is now claimed by Switzerland, which was not part of the earlier study. Canada and the UK have retained their grip on second and third places, relegating Germany to fourth. Scores are out of a possible 10, and rankings show Germany’s place on each attribute, out of 80 countries.
Keeping up with the neighbors?
Germany has much in common, from a perception point of view, with other large Western European countries, as well as other major world economies such as the US and Japan. Its attributes correlate most strongly with those of the UK – their profiles are 86 percent the same – followed by the US (71 percent), then Japan, Canada, and Sweden. These markets are all culturally quite different, but they are all major world economies and leading exporters with a strong sense of cultural and national identity.
Germany is the world’s most entrepreneurial country, and is among the top three in the world for prestige, progress, having a skilled labor force, strong international allegiances, and a well-developed infrastructure. Even some of what might be considered weaknesses could be seen as advantages: This is not a market associated with cheap manufacturing costs, but this helps German brands command a premium. Nor is Germany seen as adventurous or particularly fun, but again this links to more positive attributes such as dependability and trustworthiness. There is room to work on the country’s impression as a friendly place, however; Germany ranks 51st out of 80 countries on this score.
A look around the G8 table shows where Germany is strong – across traditional measures of international power and influence, but also as a modern center of production – it’s seen as a place of ideas and expertise.
When consumers think about buying products made in Germany, they don’t expect a bargain, but they do expect satisfaction. In fact, 73 percent of consumers worldwide say they would happily buy a German-made product – one of the highest figures in the world, after the US with 75 percent. A further 21 percent would buy German-made if there was no alternative. These are higher figures than many other large economies, and beat the UK, France, Italy, and Canada. Germany is also a favored hotspot for business. When senior decision makers are asked about the countries where they prefer to operate, over 36 percent say Germany first, the highest rate registered among western European economies.
Challenges for German brands
People believe what they do about a country because they gradually accumulate snippets of information that either reinforce or challenge what they think. Experiences with brands can provide those snippets, and leading brands don’t just represent themselves, they represent their country.
What a brand represents in people’s minds can gradually change. China, Singapore, Japan, and Korea have shown how international perceptions of what their country represents can deliver a change in perceptions relatively quickly. When there is a concerted and sustained effort by government bodies in collaboration with the private sector, change can happen fast.
Brands can use their country of origin to greatest effect when they align with values and positive attributes already associated with that country. This often means walking a fine line between using accepted wisdom to benefit a brand, and perpetuating stereotypes.
Striking the right balance is a matter for each brand, and will depend on their category and the market they are entering. For some brands, the reputation of their country will help fill gaps in what consumers know about an individual brand.
The following rules of thumb apply to most German brands:
* Germany is seen as modern, progressive, and forward-looking, though not very trendy or fun, despite its lively arts scene. Consumers around the world expect it to be associated with leading-edge technology and design.
* There’s a natural association in people’s minds between Germany and excellence in sport, something that repeated strong showings in football World Cups and Olympic Games underscore. Brands that use medal-winning performance and athleticism in their communications feed into this expectation of producing winners.
* Few people see Germany or German goods as being particularly affordable, but Germany ranks well on the measure of prestige (second in the world only to Switzerland). There is therefore a sense among consumers that German goods might be expensive, but that their premium pricing is justified, and this helps explain the strong predisposition to buy German-made. This demonstrates that while German brands are not cheap, they represent strong value for money and are “worth it”.
* Germany is seen as a leader with strong global connections, scale, and influence. Brands that reflect an international outlook and position themselves as leaders in their field will find this messaging resonates with what consumers expect from Brand Germany and will feel authentic.