Nation Brands Muhterem İlgüner Brand Finance plc

1. NationBrands Muhterem İlgüner Brand Finance plc

2. Countries, like corporations, have brands; reputations that shape the decisions of foreign consumers and investors These brands can be positive (“German engineering”) or negative ….(?) Countries seeking to boost their exports, encourage foreign investment, or attract touristsandtalent need to develop strong Nation Brands

3. Brand Finance Nation BrandsIndexTM

4. Introduction to the Nation Brands valuation exercise Scope Data Brand Profiling • High level valuation of nation brands using publicly available information • Currency: USD$ • Brand Value calculated using Royalty Relief method • Countries included in scope of exercise determined by availability of financial and market data as well as consumer research • GDP used as a proxy for brand revenues • Historic and forecast GDP sourced from IMD (World Competitiveness Yearbook) • GDP was segmented into the following categories: • Primary (Agricultural/ Forestry/ Fishing etc) • Secondary (Manufacturing/ Industry etc) • Tertiary (Services/ Financial & Insurance etc) • Individual royalty rate ranges determined for each of the three categories • Discount rate calculated using WACC, data sourced from Bloomberg • Brand strength determined using IMD (World Competitiveness Yearbook) and World Economic Forum Global Competitiveness Index • Brand strength analysis includes three macro categories consisting of: • Infrastructure & Efficiency • Brand Equity • Economic Performance

5. The Nation Brand Impact FrameworkTM This framework identifies the 4 segments in which countries can build the economic value of their Nation Brand. The Nation Brand Impact™ framework identifies the 4 segments that enable countries to identify, build and unlock the potential economic value within their nation brand. These 4 segments each have a crucial role to play in leveraging and improving a Nation Brand’s ability to enhance GDP growth.

6. Determining a nations brand strength To conduct the valuation, it is necessary to determine the strength of the nation brand against other nation brands under review. • This chart summarises the conceptual approach of measuring brand strength within a single index. Our BSI incorporates a range of measures covering Infrastructure & Efficiency, Brand Equity (‘BE’) and Economic related to the nation brand relative to competitor nation brands. • The chart demonstrates that brand equity is only one macro level component (derived from various micro level attributes) of brand strength. • Brand strength therefore measures both quality and size: • Quality - the equity the brand has with users of the brand; • Size - the physical presence of the brand in the global market. & • Brand strength is considered a snap-shot of the brand’s performance at a given point in time. BE is considered to be a leading indicator of the brand’s future performance.

7. Top 10 Nation Brands 2011 ($ billions) • Source: Brand Finance® Top 100 Nations Brand Index

8. Brand Lebanon Source: Brand Finance® Top 100 Nations Brand Index 2012

9. Brand Lebanon: Brand Strength Index components INVESTMENT Investment Development Authority of Lebanon Effectiveness of anti-monopoly policy Trade tariffs Business costs of terrorism Favouritism in decisions of government officials Direct investment flows inward ($bn) Venture Capital availability PRODUCT (GOODS & SERV) Reduced burden of customs procedures Time required to start a business Exports as a percentage of GDP World exports contribution (%) Public trust of politicians Judicial Independence Source: Brand Finance® Top 100 Nations Brand Index

10. Brand Lebanon: Brand Strength Index components TALENT (PEOPLE & SKILLS) Tertiary education enrolment rate Internet access in schools Quality of management schools Reduced brain drain Extent of staff training Female participation in labour force TOURISM Visitor Satisfaction Image abroad Tourism Receipts Cost of Living Quality of overall infrastructure Source: Brand Finance® Top 100 Nations Brand Index

11. Every brand is a promise to be demonstrated «let visitors experience this promise!» A softfactorsworld!

12. … a story about gaining added value by moving from: Low complexity High Complexity Tangibles Intangibles

13. startswithvisiting.. Domestic Companies Potential Residents Tourists Business Investors Visitors Residents International Companies Business Visitors Present Residents

14. NationBrandingStrategy Culture History, Famouspeople Importantevents, Etc. Nature Location, Climate, Etce. UniqueProduce Food, Natural source, Minerals, etc. Talent Capability, Mastery, Etc. NationBrandingAgency

15. Nation food branding is becoming more important 20 b. € revenue fromgeographicalindication; wine, liquor, cheese, … 15 b. € revenue fromgeographicalindication; oliveoil, ham, cheese, ...

16. Citybranding is becoming more important • Morethanhalf of theworldpopulation is living in cities • «urbanisation» • Citiesarenow; • attractingtalent • attractingvisitors • attractinginvestors • İstanbul, 2012 • 9 m. visitors, • 53 multi-nationalcongresseswithmorethan 500 delegates (No.1)

17. National and commercial brands work together Commercial brands help define the nation brand and visa versa Background

18. Other developing nation brands A huge opportunity ? ? ? ? Background

20. An accreditationsystemencompassingallprocessesfromproductionto marketing, andfromsales • toafter-salesservices, of products/serviceshaving a competitiveadvantageandbrandingpotential Turquality has fourprincipalmissionstatementsgiventhecomplexandtoughstructureof thehyper-competitionwhichtodayreigns in internationalmarkets: _ tosupportthebrandingexpenditures of theselectedTurkishbrands _ toprovidecoachingandconsultingservicestoTurkey’sbestcompanies in ordertoallowthemtocompeteglobally _ toact as a catalystandincubatorfortheselectedTurkishbrands _ toprovide PR andcommunicationsactivities in ordertocreateandpromote a positiveTurkishimage.

21. An accreditationsystemencompassingallprocessesfromproductionto marketing, andfromsales • toafter-salesservices, of products/serviceshaving a competitiveadvantageandbrandingpotential. Includingallexpenditures/costsforthispurpose%50refund 85 companies, 101 brands A master’sdegreeeducationprogramme on marketing/branding

22. BRAND LEBANON • quantitativelyevaluate current policies and develop a strategic approach • target limited resources to create the best results

23. STRATEGY Stage 1: Macro Analysis Nation as a whole at a high level. Centrered around initial engagement with key nation brand stakeholders and building a base of research knowledge. Nation Brand Development Strategy Stage 2: Micro Analysis Detailed analysis of sectors within the nation. Leads from initial research to developing sector level development strategies Stage 3: Implement & Monitor Development and implementation of nation and sector level plans for nation brand development in concert with stakeholders. Cover’s immediate tasks and implementation paths over 5, 10, 15, 20, 25 years

24. STRATEGY Nation Brand Development Strategy Stage 1: Macro Analysis • Step 1: Engage key stakeholders in government, business, finance, media • Step 2: Research the nation as a ‘business’ and a ‘brand’ • Step 3: Review legal rights, stakeholder research and national accounts data • Step 4: Analyse key regional and global trends across the 4 segments of the Nation Brand Impact FrameworkTM • Step 5: Set initial priorities for nation brand development

25. «The brand of a country has a direct impact on thewealth of the nation and its ability to compete andgrow in the global economy.»