Luxembourg is a potent brand due to its geographic and historical position. It is mainly branded through the use of customer based brand equity through the personalization of communication and customization of its products and services. It has developed a “Made in Luxembourg” label to distinguish its products and services when exported abroad. Luxembourg also has the “Luxembourg for Business” (LfB) brand which establishes a corporate identity for Luxembourg as a “brand with a pro business reputation. This paper discusses the development and further improvement of Luxembourg’s country branding through the following brand management components: Building a strong brand; Brand positioning; Choosing brand elements to build brand equity; Designing and implementing branding strategies; and Developing a brand equity measurement and management system.
The Luxembourg brand strategy is very consistent. The brand image is concisely transmitted with the whole of the country details such as its being a green nation and a proponent of intellectual property rights. Luxembourg, as a country brand, sends a powerful message that it aims to project itself as a solid financial service center with a historic/cultural and industrial beginnings as well as being well-supported by advance technologies. The country’s branding strategies involved designating spokespersons, product brands, and trade events that enhance Luxembourg’s image and how people think about it. It involves various strategies which the Luxembourg government and private sector actively engage in. Hence, Luxembourg employs mass marketing techniques together with institutionalized and personal marketing and selling. The Luxembourg country brand becomes an umbrella brand by which it promotes various industries, products and trades. Its main branding strategy is the establishment of a clear and consistent message to its target market.
Luxembourg: An Introduction
Luxembourg is a potent brand due to its geographic and historical position. It was one of the six founding countries of the European Economic Community (which later formed the EU or the European Union) and it is also a member of the euro currency area. While it is just a small country, its economy is very stable. It also has the advantage of being neighbors to large economies in Europe such as Belgium, France and Germany. Luxembourg has a very low unemployment rate and inflation compared to its robust growth in its industrial and financial sectors. It has surpassed the global recession and the financial market turmoil. It has recovered quickly and has maintained the highest current account surplus due to its strong financial sector’s performance. (The World Factbook, 2012)
Keller (2001, p. 2) stated that building a brand is a powerful source of financial rewards for businesses. He also stressed that building customer based brand equity is a blueprint for a strong branding. Brand equity is “the essence of a brand based on the extent to which it has excellent name recall, brand loyalty, perceived quality, effective brand relations, and other brand assets such as patents, trademarks, and channel networks.” (Kotler & Armstrong, 2001, p. 32) There must be a powerful impact with regards to the coherence of how the company or organization perceives its offering to how the customers actually perceive it.
Made in Luxembourg Branding Strategy
The five areas in the book which this paper will explore are the following: Building a strong brand; Brand positioning; Choosing brand elements to build brand equity; Designing and implementing branding strategies; and Developing a brand equity measurement and management system.
Luxembourg is branded primarily through the use of customer based brand equity through the personalization of communication and customization of its products and services. For example, it has developed a “Made in Luxembourg” label to distinguish its products and services when exported abroad. The Luxembourg Chamber of Commerce and Chamber of Trades have registered this sign as a collective brand in the Benelux register of trademarks. (Your Europe Website, 2012) Luxembourg also has the “Luxembourg for Business” (LfB) brand which establishes a corporate identity for Luxembourg as a “brand with a pro business reputation.” (“About Luxembourg for Business,” 2012, p. 1) It functionally developed and implemented a unified and efficient international trade promotion of Luxembourg through a harmonized appearance of Luxembourg’s trade promotion activities in the international markets. These examples support the national branding of Luxembourg and how they help transmit a unified message about Luxembourg trade. Luxembourg country brand aims to promote the country as an international brand. It also aims to promote the global presence of Luxembourg companies and promote the country’s business platform in the international markets. (2012, p. 1)
Logo of the Luxembourg for Business
The objectives and the actual strategies of the Luxembourg for Business are actually a practical way to create and develop a unified and efficient branding by means of a coherent appearance of local and international business and trade activities and how these activities effectively reach the target audience. In conveying the said message, these brands excellently deliver its purpose in creating the intended brand identity and an international image of Luxembourg. Then the Luxembourg branding goes on to leverage its brand through customer based equity, specifically through cross selling and up selling. (2007, p. 48-50) It retains new customer base and also takes advantage of new customers and referrals. In essence, the brand consists of a fortified value proposition and it overcomes aspects of living, doing business, leisure and many more. It is excellently positioned to create customer expectations in terms of substance.
In terms of brand positioning, Luxembourg marks itself as a market player in the globalized world and a highly competitive market. While it conforms to the unified notion of the EU countries, it sets itself apart by emphasizing its unique selling point which is multi-dimensional and consistent and consolidated brand positioning. (Keller, 2007, p. 97-99) With regards to its people and native surrounding, Luxembourg positions itself as a friendly, green country with a very good quality of life. It conjures a brand image of being cosmopolitan, multi-cultural and a haven for families and businessmen. For more business related brand positioning, Luxembourg places itself as an excellent foreign place to set up one’s business due to its IP laws, favorable fiscal and regulatory regimes, etc.
As the Strategic Brand Management textbook discussed in its Second Part, Identifying and Establishing Brand Positioning and Values, to develop the position of a brand, a hybrid brand must transmit a unified and strong message of what it is and what services it can do for customers. The products and trade services of Luxembourg distinguishes itself from other country brands in the way that it conveys world class quality and reliability. The Luxembourg products and its respective logos (such as its wine brands, cuisine, clothing lines, etc.) distinguish the European country apart from its competitors. All of these products and features reinforce the concept of quality.
The brand elements are also consistent. It does not involve their country website, excellent products and services, logos, slogans, trademarks, and advertisements but also the overall projection and elements which contribute to the positive impact of the country. (2007, p. 140-142) Actually, the country is rebranding itself through these elements as it is trying to position itself as a trusted, reliable business partner. (Van Nest, 2012, p. 1) All these elements add to their intended image of national stability, quality of life, and multiculturalism. It slowly strengthens these values to its national image while it builds more reliable and excellent products and services which are supported by its sound business policies and good institutions.
To illustrate examples of the country’s brand elements, the Luxembourg for Business website is used. This paper shall refer mainly to the official website of Luxembourg for Business (LfB). (http://www.luxembourgforbusiness.lu/) This website was created in April 2008 by Luxembourg’s various ministries - Economy and Foreign Trade, Small and Medium-Sized Businesses and Tourism, Chamber of Commerce, Office du Ducroire, National Credit and Investment Corporation (SNCI), Chamber of Crafts, and the Business Federation (FEDIL).
It is a good country website. The logo, however, is not very impressive. It consists of small letters for Luxembourg with a dash of red. Somehow it is not a professional way of linking a very professional business impression for future trade partners. It does not convey the same business intentions which it aims to project. The logo is likewise a substandard and not a world class identity for the country’s financial and industrial sectors. As a leading economy in Europe and an active EU member, the logo is a poor representation of what Luxembourg truly is and what it stands for.
While the logo is not very remarkable, the content of the website and its quality services really mean trade business. Here is where the Luxembourg for Business (LfB) brand creates a more enhanced value for customers. It successfully links the customers to how Luxembourg conducts itself in international business and how the website can help prospect investors in effectively partnering with Luxembourg.
The Luxembourg brand strategy is very consistent. The brand image is concisely transmitted with the whole of the country details such as its being a green nation and a proponent of intellectual property rights. (2007, p. 434) At this point, it is also worth noting that the other highlights of the country (i.e. tourism, attractions, etc.). Luxembourg, as a country brand, sends a powerful message that it aims to project itself as a solid financial service center with a historic/cultural and industrial beginnings as well as being well-supported by advance technologies. (Meenaghan, 1995), p. 23 – 24)
The country’s branding strategies involved designating spokespersons, product brands, and trade events that enhance Luxembourg’s image and how people think about it. It involves various strategies which the Luxembourg government and private sector actively engage in. Hence, Luxembourg employs mass marketing techniques together with institutionalized and personal marketing and selling. (Keller, 2007, p. 435-440) The Luxembourg country brand becomes an umbrella brand by which it promotes various industries, products and trades. Its main branding strategy is the establishment of a clear and consistent message to its target market.
As brand strategy illustration, the Luxembourg for Business website reinforces the identity of the small country in relation to business and international trading. People around the world may perceive it as a special destination or a tax haven country, yet it strongly positions itself to its strategic economic place in the EU. This is what makes the brand identification successful. It is a unique selling point which caters to its brand image and brand identity. While others may view it as a simplistic and one sided image, it actually connotes the essence of stability, which then redounds to the images of ecological balance, quality of life, green living, among others. Thus, this goes to show that the Luxembourg brand can be further extended to a co branding strategy to include images coherent to its own unique people and environment. In short, the brand strategy is effective in meeting its purpose and its target market.
Why the “Luxembourg for Business” Brand is a Success
Nation branding for Luxembourg is a hard challenge because it consists of strategic marketing programs to enhance the country’s image, products and a general attraction to the global markets and most especially to international investors. (Teslik, 2007, p. 1) Luxembourg, as a national brand, has a brand equity which is strongly connected to the use of corporate branding strategies applied to commercial entities. (2007, p. 1)
Brand equity is the main essence of all nation or product brand management. (Keller, 2007, p. 3) Nation branding can be measured through the Nation Brand Index. This is a project conceived by a marketing guru on branding, Simon Anholt through the help of a polling firm, GMI (Global Market Insite). (Teslik, 2007, p. 1) Kotler and Gertner (2002) postulated that brand equity can be extended as national equity to express the “affection given by the consumers to a certain country.” The export promotions of Luxembourg illustrate the finer points of their endeavors in brand management. This is also reflected by the nation’s foreign direct investments. These two operationable and crucial elements are crucial to national equity. In the case of Luxembourg, it has supported the brand equity. Also, its business element is directly linked to the Luxembourg’s performance, particularly in economic aspects.
To illustrate how Luxembourg has successfully performed in these branding aspects, the Nation Brand Index (2010, p. 10) illustrated the following:
Luxembourg initially entered the Nation Brand Index with a general rank in the 22nd spot.
It has garnered the highest rankings from its European counterparts.
Its six dimension ranks varied extensively. For instance, it ranked 17th on Governance while it ranked 39th on Culture.
In terms of exports, Luxembourg ranked 27th on the Exports Index and received its highest rankings from some of its biggest trading partners.
Governance is ranked 17th as it reflects the strong element helpful in its exports ranking.
Subsequently, it ranked low on its Culture which is ranked at the 39th place.
In 2012, the Nation Brand Index Results show that Luxembourg ranked 22nd out of 50 countries and across 7 domains. (Luxembourg for Business Website, 2012) It shows that while Luxembourg is a famous among its European neighbors, North America and Russia, it is not well known in the rest of the world.
The 2010 and 2012 rankings somehow prove this paper’s initial assessment of the success of its brand strategy as exemplified by the Luxembourg for Business and Made in Luxembourg branding initiatives. These have shown how their consistency and service (aside from their brand names, logos, symbols, etc.) have very much contributed for its overall image in international trading. (Keller, 2007, p. 6) As the national indeces are basically survey results, this also reflects the success of Luxembourg’s branding efforts in convincing their trade partners that they are really worth the investments. The joint efforts of their business agencies and government organizations also help a lot.
As we all know, the target market’s perceptions are sophisticated and it includes significant external dimensions like governance and socio-cultural perceptions. This shows that Luxembourg sends a clear and concise message of its image and its identity as an excellent trade partner in Europe. (Kotler & Gertner, 2002, p. 23) To add, despite the European financial crisis, the country has shown its strong performance in the financial sector. This actually enhances the consumer or the target market’s confidence in its brand as a nation.
Recommendations
Appropriate branding strategies for specific business objectives
While the branding of Luxembourg seems a success, other aspects that constitute to a more fortified national branding should also be considered by the European country in view of its stiff competition with its neighbors. This is especially true in its other aspects of social and cultural dimensions as well as its image to other countries in the non European regions.
The promotion of “Made in Luxembourg” brand internationally should be supported by the overall recognition of more foreign markets. Hence, Luxembourg should be more strategic in promoting itself in the Asian, African and North American markets. It must formulate and apply market and communications techniques to further reinforce its country image and visibility all over the world. (Keller, 2007, p. 546)
The product branding of its local companies should also be strategically explored by the Luxembourg for Business branding. They must always promote their local companies in their global marketing efforts. This is where co branding can prove its worth. Co-branding is the application of multiple brand names (such as Luxembourg for Business, Made in Luxembourg, Luxembourg for Excellence, etc.) and grouping these multiple names together as one identity for all their products and services.
Various Luxembourg products and services can group together and carry an overall national brand. The LfB website can even make a new and signified corporate logo (and slogan) to transcend its focus on the international business dimensions and to a more general brand promotion of Luxembourg. With it, consumers, both investors and individual customers alike, can visit the website and conceive it as a joint promotion channel for the country’s general products and services.
When properly executed, co-branding can provide a means for Luxembourg companies to obtain the much needed synergy from the initial marketing efforts of the Luxembourg for Business website. (Chang, 2009, p. 77) This can provide a two way benefit for the local businesses involved and to the various Luxembourg trade organizations. As more and more of the intended audience know about the excellent Luxembourg products and the way the country handles international trading, the synergy could even be strengthened. (2009, p. 78) Thus, the website can actually accomplish its initial goal of being a "one-stop shop" for the business media for any query related to the country’s economy and business (as well as tourism and leisure).
The top three values of Luxembourg, namely, stability, excellence and multiculturalism, must be unilaterally enhanced in each of the sector and across the trading and commercial enterprises segments in co-branding. While there are many values which can be developed, the stability which the Luxembourg for Business has already established must be reinforced. While this instantly connotes to fiscal and economic aspects, it can be extended to other brand elements included in the intended co branding efforts. This is good for business related elements yet it can apply to their other aspects, i.e. local companies, local brands, etc. Yet, this value cannot be totally extended to tourism and culture.
Effective Branding Strategies and Program for Luxembourg
As mentioned earlier, the framework for the brand strategy and program for the Luxembourg is the Customer Based Brand Equity. The performance of this brand has god effects on its target markets’ responses.
The number one brand element which must be updated is the Made in Luxembourg logo. There must be one logo which signifies all the values embedded in the country branding of Luxembourg. There must be a brand new logo with a slogan. First, the logo should represent the excellence and stability which the brand for this country stands for. The new logo must integrate the concept of “excellence, stability and multiculturalism” and this must be extended if ever it decides to co brand its products and services. This will enhance the brand identity and values identified with Luxembourg.
A more sophisticated approach in the branding strategy for Luxembourg is to develop marketing strategies suited for the regions which are not yet very familiar with Luxembourg. For instance, it can devise a regional approach to impart its trade message to the regions and countries where it is not yet popular as an investment area. It can develop a global yet regional approach to its branding strategy. With it, Luxembourg can effectively transmit its trade message to the Latin American, Asian and African regions with the most successful prospect.
The branding strategies and marketing programs of Luxembourg should also integrate more non-business and investment aspects of the country in order to enhance its image not only for international investors but also for visitors, among others. At present, this European country does not appeal to general tourists and travelers. While it attempts to relate to friendliness and fairness of the Luxembourg people through multiculturalism, it has not yet reached an advantageous position in terms of general tourist attraction. Multiculturalism as a branding element and value should be projected with more appropriate images and profiles of their own people and how they relate and consider other races. This can be shown with various photos of their people and their interactions with other nationalities in their own country.
The cultural element should also be highlighted. While the country images connote an image of Luxembourg as a nation where there is good entertainment, classical music, very good cuisine, etc. Images about their arts, their culinary arts, their leisure activities must enthrall customers and future visitors. It should also attract investors as well. Hence, the crafty development of Luxembourg must be effective for both intended audience (both investors and visitors alike).
Another enticing brand element which must be explored in country branding is its “being a gateway to Europe.” (Luxembourg for Business Website, 2012) While the lines connote a leisure and recreational involvement, the representation actually relates to its being a magnet for ICT companies. The brand can extend the line to actually attract investors to enter business through Luxembourg while also appeal to their sense of adventure.
Country of Origin can also be introduced within the Luxembourg brand. “Country of origin” is also a good instrument to make their local companies’ products and service known to the world. Through co branding suggested earlier, Luxembourg products and exports can reach a wider audience and in turn, reinforce its image of excellence for its national brand, Luxembourg for Business and Made in Luxembourg, etc. (Pascale & Lim, 2003, p. 23)
Conclusion
There is a needed sophistication in branding a nation. This is because it is a concerted effort on the part of both private and public sectors and its success will be crucial to national development and economic and social growth. While Luxembourg started its brand management impressively, it can be further developed so as the general aspects suitable for trade and investments, tourism and other areas of success can be wholly reached. (Koranda, 2012, p. 7)
The principles of commercial brand strategies are applied in nation branding. However, some country brands fail because of several reasons. It did not have a concerted effort, especially on the part of its government and private sector. This is where Luxembourg for Business reached its successful height. It has presented a clear and concise marketing message and platform to attract trade partners with its accomplished government and private sector. Most especially, their cooperation and coordination in terms of international trading were rendered well. However, the general image for the more successful branding of Luxembourg has to be enhanced in areas emphasizing its multiculturalism, quality of life and overall stability.
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