Nation Branding and Place Marketing

I. The Marketing Plan

II. The Product

III. The Price

IV. The Place

V. Promotion, Sales, and Advertising

VI. The Sales Force

VII. Marketing Implementation, Evaluation, and Control

VIII. The Psychology and Demographics of the Consumer

By: Dr. Sam Vaknin

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VIII. The Psychology and Demographics of the Consumer

The country's "customers" are its investors, tourists, traders, market intermediaries, NGOs, and office-holders in other countries and in multilateral institutions. Understanding their psychology and demographics is crucial. Their interactions with one another take place in a complex environment, affected by governments, social forces, cultural factors, and markets.

The country must clearly identify its clientele: who are they, what motivates them, what do they do and buy (and how, where and when), what are their decision-making processes and priorities, who influences these and how. It is important to remember that people and institutions buy goods and services to satisfy needs. Nation branding is tantamount to casting the country as the superior if not exclusive answer to those needs it can cater to or even create.

The country's brand manager would do well to analyze the purchasing process: how, when, and where transactions are concluded. Understanding consumption and investment habits and patterns allows for better targeting and education of relevant market segments in order to influence and alter the behavior of target customers.

The brand manager must distinguish consumer customers from business customers and from institutional customers.

Consumer customers purchase goods and services from the country for their own consumption. Tourists are consumer customers.

Business customers buy goods and services from the country on behalf of third parties. Tour operators are business customers.

Institutional customers assemble information about the country and analyze it in order to make or to influence political and credit decisions. Banks, governments, NGOs, and lenders evaluate and finance tourism projects based on such data.

Business customers operate on a large scale and are, therefore, less numerous and less dispersed than consumer customers. Consequently, it is easier to foster long-term and close relationships with them. But, being dependent as they are on end-users, theirs is a volatile, demand-driven market. Moreover, business customers are tough negotiators (though some of them seek quality rather than price advantage).

To attract these movers and shakers, the country's brand manager must constantly monitor the global economy as well as the economies of the nation's main partners. Everything, from monetary policy to regulatory and fiscal developments affect purchasing and investment decisions.

The Encyclopedia Britannica 2005 Edition mentions some additional considerations:

"... Organizational factors, which include the objectives, policies, procedures, structures, and systems that characterize any particular company... Interpersonal factors are more salient among business customers, because the participants in the buying process—perhaps representing several departments within a company—often have different interests, authority, and persuasiveness. Furthermore, the factors that affect an individual in the business buying process are related to the participant's role in the organization. These factors include job position, risk attitudes, and income."

Consumer customers are the hardest to predict and "manipulate" because they are influenced not merely by hard-nosed intelligence - but also by rumors, age, education, stage in one's life-cycle, occupation, lifestyle, self-conception, past experiences, pecuniary circumstances, personal predilections and prejudices, as well as by a variety of cultural and social factors such as one's values, perceptions, preferences, one's status, reference groups, family, and role models. Thus, the customer's idiosyncratic background largely determines the economic outcome.

It is here that branding has an often decisive role. The more costly, infrequent, and risky the purchase, the higher the consumer's emotional involvement in the buying task. The more differentiated the country's brand, the less the anxiety provoked by the need to commit resources irrevocably.

The influence of branding on the buying process is the topic of our next article.

Go to Branding and the Buying Process

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