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All BRAND USA

All BRAND USA

Situation stabilized: Brand USA maintains its hold on #8

In addition to measuring the value of brands from the US, we can also assess the strength of Brand USA itself. The Best Countries ranking does exactly that, comparing perceptions of countries around the world held by a broad spectrum of consumers. Developed by WPP VMLY&R’s BAV Group, it surveys 21,000 people across 36 countries to understand how a nation’s policies, politics, and people are affecting its perceived standing in the world. It then ranks countries against a series of attributes—such as education, culture, and openness to business—all of which have the potential to drive trade, travel, and investment. 

At #8 in 2019, the United States enjoys a prominent place among the world's countries. Above all, it is seen as an innovative force and a strong leader not merely on the world stage but culturally as well.

However, in recent years the United States has seen its ranking slip from four to eight. This is almost certainly due to the global unpopularity of its president, Donald J. Trump, whose policies are setting America on a much more isolationist and confrontational path. The country has also recently launched hostile trade actions against a range of countries, including some major allies, and ignited a trade war with the #2 economy in the world, China. All of this has had a ripple effect across the globe, unsettling world markets and causing the United States to lose its once excellent reputation as a partner for business.

A 2018 BAV survey found Trump’s global approval rating at only 25 percent with 58 percent disapproving. This added up to a net approval rating of -33, a remarkable score given that global boogeymen Rodrigo Duterte and Vladimir Putin shared a -11 rating.

That said, if we're looking for a silver lining, it’s that United States has held onto its ranking this year. In fact, on a huge range of metrics, it barely budged. Of the nine major attributes on which BAV ranks countries, the United States held exactly the same ranking on five. This shows a remarkable stability, which indicates that whatever damage has been done globally to Brand USA, it has at least stabilized.

The non-effect on brands

Generally speaking, this year also saw a continuation of a trend in which US brands seem largely decoupled from their home country. Often brands benefit from their presence in a particular place. French wines, for example, can charge a considerable premium over wines from other regions, even if their critical ratings are the same. German cars enjoy a similar premium, because of the long and excellent reputation of automakers in the country.

But as the United States has fallen in the rankings in recent years, its brands have only risen. This is largely because many US brands are seen as entities unto themselves, rather than products of a particular nation. No one thinks of BMW without realizing that the cars are German. And some brands are, of course, strongly American. One can hardly think of Marlboro or Budweiser without images of Americana coming to mind. That said, one can easily stay at a Marriott, use a Visa card, or purchase a bottle of Tide without strongly associating the brands with the US.

In addition, most American brands have either stayed out of the political conversation or come down strongly in favor of the kinds of inclusion and openness more amenable to international opinion. Brands like Coca-Cola and Microsoft, for example, have long had a tradition of inclusion, so they are natural counterweights to the country’s recent harsh anti-immigration policies.

The US by the numbers

The United States lends strength to its brands in a number of critical areas, and especially cultural clout, power and influence, and innovation and entrepreneurship.

To begin, the survey ranks the United States #4 in cultural clout. People around the world wear genes and baseball caps, listen to hip-hop, and follow its fashion influencers on Instagram. All of these help drive perceptions of the US as a culturally influential country.

Innovation and entrepreneurship are also no-brainers. The US is the home of Google, Apple, Microsoft, Amazon, and countless other companies that have had a transformative role in changing how people do everything from shop to get around. That tendency has only strengthened in recent years, as the appearance of Uber and Airbnb on the US rankings demonstrates. As a result, the country ranks #3 for innovation and entrepreneurship.

In fact, it might seem odd to some that a country that gave birth to Silicon Valley and countless other innovation centers does not rank higher for this measure. However, BAV does not merely consider track record but potential. As a result, its innovation ranking includes metrics like perceptions of educational systems, where the US ranks respectably, but not exceptionally.  

The United States also holds the top rank among the world's countries for power and influence. Even though it has turned increasingly inward, it is still a part of many major international institutions, like NATO, the UN Security Council, and the World Bank. It also has arguably the world strongest military, even though the survey’s respondents rank it at #4 for this metric, a judgment with which experts on the topic would likely disagree.

By and large, the US has not moved substantially in the ranking, except in a few metrics. One of them, interestingly, is manufacturing costs. The United States (at #75) is now seen as one of the most expensive places in the world to have a factory. This likely reflects concerns over the trade war and the strong dollar.

It’s worth pointing out, however, that global audiences may be equating labor cost with manufacturing cost—and labor has become decidedly less of a factor in the sector in recent years. Although the US experienced a temporary contraction in the earlier part of this year, it has been growing its manufacturing sector for the past decade, adding around 100,000 jobs a year. It is currently the world’s second largest manufacturer in terms of value of goods produced, trailing only China.

Where does Brand USA struggle? Given its trade policies and aggressive anti-immigration policies, the United States does not do particularly well when it comes to being business ready. It also ranks somewhat weakly, though still above average, in adventure. This metric reflects a variety of things that are not always the United States’ strengths, including climate, friendliness, and even sexiness, a metric on which most countries do not do particularly well.

On a positive note, the US jumped five ranks for political stability, where it now ranks #20. This likely reflects an easing of fears over the current administration and a recognition that while the country’s politics may be unpopular, its political system remains sound. The US experienced a smooth and peaceful election in 2018, in which the opposition party made substantial gains.

On most other measures, the United States does reasonably but not exceptionally well. The good news is that it has great potential to improve its standing in the world. Many of the things for which it is currently being viewed in a negative light can rapidly change. A country cannot greatly alter perceptions over rich history and heritage, but it's quite easy to change opinions around what kind of a business partner one might be. Time will tell.

The value of strong national brand attributes

Impressions of a country matter to brands because the feelings people have about a place are projected onto the brands that come from there. This, in turn, affects what people are likely to buy, and how much they’re willing to pay for it.

We certainly will pay more for wine and cheese from France than we do, in general, from Portugal or Chile. Likewise, if a new technology product comes from Silicon Valley, we’re more open to its consideration and purchase. We travel to have fun in Brazil and to soak up food and culture from Italy. Each country’s brand influences a product’s perception, especially if it is new or unusual to us.

And just as countries perform an ambassadorial role for the brands they’re home to, brands also perform the same role for their home country. Samsung has helped reshape international views about South Korea, for instance, Sony has done the same for Japan and Japanese products. The reason American technology products and services sell so well around the world is because companies like Apple, Facebook, and Google have profoundly changed how people live.

How Do We Measure a Country?

The Best Countries 2018 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.

Respondents are asked about the 80 countries that feature in the 2019 ranking; between them, these countries 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 are asked how closely they associate 65 attributes with a range of countries. These attributes are then grouped into eight categories, which are used to calculate the Best Countries ranking:

The 8 elements of a country’s brand

Adventure: a country is seen as friendly, fun, has a pleasant climate, and 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.

Switzerland tops the ranking as it is highly regarded for its citizenship, openness for business, and for providing an environment that encourages entrepreneurship. It offers its citizens a high quality of life and is quite culturally influential, with more Nobel prize winners per capita than most nations. Japan is seen as tops for entrepreneurship.  Canada is best for quality of life, while Germany has a similar Best Countries profile to the UK, though Germany is stronger on entrepreneurship. Meanwhile, Sweden is in the top five for green living and raising children, while the United States outranks everyone in power.

Being the best they can be

Overall, the United States has a strong country brand which resonates very well with global consumers. US brands can make most of what their country brand already represents and at the same time contribute to what “Made in the US” means. Brands use their country of origin to greatest effect when they align with values and positive attributes already associated with that country.

That’s why a focus on the following attributes should ring true to international consumers:

Leadership

The United States is a vibrant leader both the cultural and an absolute sense. Brands can certainly lean into its reputation for that by taking categories in new directions.  Amazon staked out a global leadership position in the smart speaker category period, because people in the United States and around the world were willing to give it a chance to provide leadership in an emerging field.

Innovation

If the Top 100 shows anything it's that innovation can exist in nearly any category and come from nearly any direction. In fact, more than half of the Top 100 rank highly on this measure. American brands that think out of the box will likely see their new ideas well received by the market. People around the world have come to expect innovation from American companies and they're quite open minded when it comes to trying new things from them.

Cultural dynamism

While the United States is a relatively young country and for much of its history it did not produce much of cultural value, it hit its stride in the early 20th century. Since then people around the world have looked to it for everything from hip-hop to blockbuster movies that have become increasingly internationalized in recent years. Brands that lean into American culture in its various forms should come off as both authentic and exciting in the global marketplace.

Foodies rule

For whatever reason, the United States has never ranked too high as a foodie destination in the eyes of international consumers. But most outside the country would be surprised to learn that it has many different regional cuisines, and many of its citizens would fight to the death over the proper way to baste a roasting piece of BBQ. American food brands may begin to find their host country an ally in their quest to get international consumers to try new things.

Dynamism

America today is seen as one of the few places in the world with dynamic job market. If failure to slow immigration shows anything, it's that plenty of people still want to come, whether they are received with open arms or not. Brands that managed to express the unique dynamism of the country and its bustling entrepreneurial spirit should find a welcome reception.

About Best Countries

Best Countries was developed by VMLY&R’s BAV Group, and The Wharton School of the University of Pennsylvania, with U.S. News & World Report. The ranking is revealed each year at the World Economic Forum in Davos, the world’s largest gathering of global leaders and heads of industry and influence. For more detail visit: www.usnews.com/news/best-countries.