Nation Branding And Place Marketing Iii The Price

Nation Branding And Place Marketing Iii The Price



Nation Branding and Place Marketing - III .​
The Price
III .​
The Price
A product's price reflects the​ shifting balance between supply and demand (scarcity) as​ well as​ the​ value of​ inputs,​ the​ product's quality,​ and its image as​ conveyed and fostered by marketing and advertising campaigns (positioning) .​
Price is,​ therefore,​ a​ packet of​ compressed information exchanged between prospective buyers and interested sellers.
In principle,​ countries price themselves no differently.
But,​ first,​ we should see how the​ price mechanism comes into play in​ the​ global marketplace of​ sovereigns and their offerings.
The price of​ a​ country is​ comprised of​ two elements:
(i) the​ average (internal rate of) return on​ investments in​ its infrastructure,​ human capital,​ goods,​ and services - adjusted for (ii) the​ risks associated with doing business there.
The first component takes into account the​ costs of​ conducting business in​ the​ territory - everything from outlays on​ inputs to​ taxation .​
The second component considers the​ country's political risk,​ volatility (as measured,​ for instance,​ by fluctuations in​ the​ prices of​ its financial assets and obligations),​ quality of​ governance,​ transparency or​ lack thereof,​ dysfunctional institutions,​ stability of​ policies and legislation,​ and other hazards.
A country should strive to​ maximize it​ price and,​ thus,​ create an​ aura of​ quality and prosperity .​
Selling oneself cheap communicates desperation and compromised standards .​
The way to​ attract investors,​ tourists,​ and other clients is​ to​ project a​ kind of​ promised land but without resorting to​ exaggerations,​ confabulations,​ or​ outright lies.
The message should be relayed both directly (though not obtrusively) and subtly (though not incomprehensibly or​ deviously) .​
The country should enumerate and emphasize its natural and human endowments,​ capital stock and infrastructure,​ favorable tax and regulative regime,​ political stability,​ good governance,​ transparency,​ functioning institutions,​ and so on​ .​
It should also appear to​ be substantial,​ sophisticated,​ forward-looking,​ pleasant,​ welcoming and so forth.
As an​ increasing number of​ people around the​ world buy the​ country's self-perception (where it​ stands now) and its vision (about its future) - its price keeps climbing and its value is​ enhanced .​
It is​ much debated whether countries should engage in​ negative marketing and discount pricing .​
Negative marketing is​ the​ disparagement of​ sovereign competitors and their products and services which are comparable to​ the​ country's own offerings or​ substitute for them .​
Discount pricing is​ the​ strategy of​ providing at​ a​ discount products and services identical to​ those offered by the​ country's sovereign competitors.
An example of​ negative marketing would be to​ point to​ a​ neighboring country's uneducated and expensive labor as​ a​ reason not to​ do business there .​
An example of​ discount pricing is​ to​ offer tax holidays and rent-free facilities to​ a​ relocating multinational.
From my experiences,​ both practices diminish the​ country's perceived value and hence,​ its price .​
In the​ long run,​ the​ damage to​ its image far outweighs any dubious economic benefits engendered by these unsavory practices.
Still,​ some countries are geographically disadvantaged .​
Recent studies have shown that being landlocked or​ having a​ tropical climate carry a​ hefty price tag in​ terms of​ reduced economic growth .​
These unfavorable circumstances can be described as​ natural discounts to​ a​ country's price.
What can be done to​ overcome such negative factor endowments?




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