The brand is one of the major factors considered for differentiation.Even though the fact that products can be differentiated on the basis of their characteristics, consumers pay minute attention to the product details. Instead,the product is differentiated from competitors based on the brand name and their awareness with the brand.
Brand develops a social and economic connection with the customers. A good brand name helps in increasing its perceived value of the product. Due to which, a buyer pays less money for the products or services offered by less known brands, but they are prepared to pay a premium cost for the established well-known brands. The brand is created on several factors like performance of the brand, perceived value, trust and identification.
The term 'country equity' refers to the evaluation of a brand based on the country from which it is originated. Research shows that the country from where the product has originated, has a major role in deciding the quality of the product. For example, consumers tend to get attracted by a tag like "Made in Germany", as it is an industrial nation and one of the top manufacturers in the world. Due to which consumers tend to recognize the product to be of a high quality, as compared to the products from countries having a low 'country equity'. This is what makes them pay for the premium products.
So a consumer forms an image of a country depending on information or fact sheet which is exposed to them. The image might be subjective in nature and the country tends to get stereotyped in the minds of the consumers. The image totally depends on the country's history; renowned personalities and existing well-known companies, geography and recent political and social activities happening in the country. "Country equity" majorly affects a low involvement purchase, where it supports consumer decision experience. The consumer tries to fit with reality with perception already present in their mind and they tend to ignore any other kind of information or knowledge which is against the perception already created. This is called "confirmation Bias".
Consumers try to judge based on their country and animosity towards the other countries which affects the purchase of products or services from it.
Poverty is a worldwide problem today, which has led to issues like unemployment, bad living standards and poor infrastructure. Currently, economic development has become a market challenge as nations are continually fighting against each other to establish a competitive edge over the other due to which nations are slowly adapting to branding strategies to attract a different set of consumers and enter into new markets.
Brand Management of a country involves:
1. Attracting factories and companies: Today, Global MNC’s are always in the pursuit of new locations where they can invest and set up their base in order to cut down their costs in the long run. Thus, countries should take a positive approach in defining the industries they wish to encourage investments to come in.
2. Managing the Image: Before Devising a strategy, it is essential to assess the country's brand image and compare it with their competitor's. Different Branding strategies are required for different target segments, which come in the purview of "Strategic Image Management".