PROJECT REPORT ON

“A Marketing The Brand INDIA”

SUBMITTED BY:

AMOL SHELAR

PG13062

PGDM (MARKETING)

2013-15

MET INSTITUTE OF COMPUTER SCIENCE

BANDRA

MUMBAI-400050

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DECLARATION

I, Amol Shelar student of MET’s Institute of Management, PGDM Semester IV, Division Marketing, declare that, the project titled

“Marketing the Brand INDIA”

is based on the original study conducted by me and this had not formed a basis for the award of any other degree of this/any university.

Amol Shelar

PGDM (Marketing)

Date: 30th April, 2015

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CERTIFICATE FROM GUIDE

MET Institute of Management

PGDM – [Semester IV] [Batch 2013 – 2015]

[Marketing]

This is to certify that the project entitled “Marketing the Brand INDIA” has been

successfully completed by Amol Shelar, under my guidance during the Second year i.e.

2013 - 2015 in partial fulfillment of her course, PGDM under the University of Mumbai

through the MET Institute of Management.

Name of Project Guide:

Signature of Project Guide:

Date: 30th March, 2015

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ACKNOWLEDGEMENT

“A master can tell you what he expects of you, but a teacher can awaken your own expectations”.

I take this opportunity to thank those without whom this project could not have been

completed. I would like to thank MET’s Institute of Management, Mumbai for giving me

opportunity to undertake this research project.

I am and shall ever be grateful to my project guide, for her advice which has not

only helped me complete this project but has also made me competent for the future. Time

spent from her hectic schedule to guide was admirable.

I would also like to extend my thanks to my colleagues, my friends who directly or

indirectly helped me to prepare this project report.

and for providing their valuable inputs regarding their perceptions and views. I wish to

take the learning forward throughout my career.

Contents

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EXECUTIVE SUMMARY....................................................................................................................6

CHAPTER- 1.........................................................................................................................................8

Introduction to the Project......................................................................................................................8

OBJECTIVES........................................................................................................................................9

Methodology..........................................................................................................................................9

Limitations of the Project.....................................................................................................................11

Country Branding.................................................................................................................................12

Country Brand Index............................................................................................................................39

CHAPTER 2........................................................................................................................................52

Competitiveness of India......................................................................................................................53

Make in India.......................................................................................................................................58

Can Make in India make Jobs?.............................................................................................................60

India- The Global Manufacturing Hub...................................................................................................1

Incredible India....................................................................................................................................10

Integration with Country Branding.......................................................................................................11

Brief on Recent Initiatives....................................................................................................................27

CHAPTER-3........................................................................................................................................30

Qualitative Research............................................................................................................................31

Analysis and Findings..........................................................................................................................35

CHAPTER -4.......................................................................................................................................36

Conclusion...........................................................................................................................................37

Bibliography.........................................................................................................................................27

Annexure..............................................................................................................................................28

EXECUTIVE SUMMARY

The project was an influence from the concept of Country Branding and the standing of India in

front of the entire world. In other sense, the contribution of India to the global economy over a

particular period and the future potential in various domains of businesses are accounted and

analyzed in order to infer the attainment of projected short terms goals and most importantly the

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coverage of the journey of becoming the third largest economy in the world valued at 38 trillion

dollars by 2050. The various campaigns and initiatives that are directly or indirectly leading to

accomplishment of the super power goal are as follows:

a) Make in India: The campaign launched by our dynamic Prime Minister with a

vision of accomplishing the position of being the Global Manufacturing Hub. It includes

strategizing skill development program and also taming down the level of difficulty of

doing business in India.

b) Incredible India: An International marketing campaign to boost tourism in India was

launched in 2002 and is still going on to promote the tourism sector of our country. The

latest initiative through this campaign is expansion of Visa on arrival provision to many

countries in order to amplify the foreigner traffic in the country.

c) Digital India: The rapid development and penetration of modernized form of technology

was the inspiration behind this campaign. It aims at integration of civilians and civil

through digital platforms in order to eradicate unnecessary paperwork. Also, empowering

rural areas with high speed internet and creation of smart cities is also the integral part of

this campaign.

d) Aero India: A premier Aerospace exhibition with 9 editions since 1996. It is a significant

platform in bolstering business opportunities in international aviation sector. This works in

synchronization with the Make in India campaign specifically focused on Aerospace,

Defense, Civil Aviation, Airport infrastructure & Defense Engineering.

e) A brief coverage of Clean India campaign will also be included in the project by

portraying examples of corporations leveraging through this campaign by formulating

their promotional activities with the background of Clean India campaign.

Apart from these initiatives, primary research was conducted and in that In-depth

interviews of executives associated with the diamond market were conducted in order to

grasp knowledge regarding the position of India on a global scale. Also, all the elements

and the actual happenings in the field of business will also be taken into aspect which

ultimately promotes the country, for instance, an Indian company setting up its operations

overseas or acquiring an international company and similar situations. The reason to study

this as well is that it is ultimately spreading the Indian heritage and also embarking the

presence of India across the globe.

The methodology consists of a blend of secondary as well as primary research. For

primary research, Qualitative Research is conducted by taking in-depth interviews of

stakeholders in the Dairy and Gems and Jewelry Industries. The reason of choosing these

two industries is because India has mastered in these two sectors by being the largest

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contributors to these respective industries. The other motive is to analyze their functioning

and to conclude a dossier stating universally applicable skill sets across all the sectors

which help them better their productivity and efficiency.

The project had a sole motive to understand and infer from various events and

campaigns, the position of India amongst the leading nations and the distance covered so

far to become one of the superpower of the world in the future course of time.

CHAPTER- 1 Introduction to the Project

Objectives

Methodology

Limitations of the Project

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Country Branding

Meaning

Why Country Branding?

Country Branding with respect to 4Ps

Country Branding Index by Future Brands

Introduction to the Project

The project is based on the concept of country branding which states and analyses the standing of

India in relation to the International standards. In order to achieve the position, the various

initiatives that have been initiated by India as an independent entity are the heart of the project in

order to understand the success rate of the respective campaigns. The management project with

respect to the specialization field is an attempt to encompass the execution of the knowledge

absorbed during the rest of the course. It also is an influence to learn something fresh along with

the liberation to choose a subject of our own choice. This leads to specification of certain field of

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study in order to get into the skin of the matter. India is considered as a brand and the size of the

economy is the brand’s value. This means the various initiatives and campaigns formulated and

executed by the government which contribute to the turnover of the economy will be the integral

part of my project. Apart from these initiatives the study of inflow of Foreign Direct Investments

from various countries based on the different industries is also done in order to grasp knowledge

regarding the position of India on a global scale. Also, all the elements and the actual happenings

in the field of business will also be taken into aspect which ultimately promotes the country, for

instance, an Indian company setting up its operations overseas or acquiring an international

company and similar situations. The reason to study this as well is that it is ultimately spreading

the Indian heritage and also embarking the presence of India across the globe.

The methodology consists of a blend of secondary as well as primary research. For

primary research, Qualitative Research is conducted by taking in-depth interviews of

stakeholders in the Dairy and Gems and Jewelry Industries. The reason of choosing these

two industries is because India has mastered in these two sectors by being the largest

contributors to these respective industries. The other motive is to analyze their functioning

and to conclude a dossier stating universally applicable skill sets across all the sectors

which help them better their productivity and efficiency.

The project has a sole motive to understand and infer from various events and

campaigns, the position of India amongst the leading nations and the distance covered so

far to become one of the superpower of the world in the future course of time.

OBJECTIVES

To evaluate the position of India with respect to the emerging economies of the world

To study the recently launched campaigns and also to infer their effectiveness in the

growth and development of the country

To relate the newly emerged concept of country branding with the elements of Marketing

Strategy

o To acknowledge the Indian companies embarking their presence in the international soils

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o To study the synergy among the current campaigns in order to boost their awareness to the

maximum level

o To understand How India is the Global Manufacturing Hub for processing i.e. Cutting &

Polishing of Diamonds

o To conclude a set of universally applicable skills from the study of the diamond market

which can be further executed among all the rest of the industries

Methodology

Research Approach:

The methodology opted for the creation of the entire project was a mixture of Primary and

Secondary Research. The major chunk of data has been processed and regulated from the

secondary sources of data like journals, magazines, online portals, etc.

Research Instrument:

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The research under the type of primary source was Qualitative Research. Under that, in-depth

interviews of executives associated to the dairy industry and Gems and Jewelry Industry.

Limitations of the Project

The limitation faced during the formulation of this project was related to the primary research

conducted. Under primary research, Qualitative Research was conducted and under that in-depth

interviews were scheduled. The executives associated with the Gems & Jewelry Industry and

Dairy industry had to be interviewed for the purpose of the project. Because of the unavailability

of executives working for the dairy king Amul, the in-depth interviews could not be scheduled

Country Branding

Country Branding is the creations of an emotional connect with the prospects of the country in

diverse forms like tourists, investors, dual citizenship seekers and various other stakeholders.

Country Branding has many different definitions. Nonetheless it is possible to find two broad

categories of definitions:

The first one describes it as the process of using branding methods to promote a nation or a place’s

image. It is the use of marketing and branding tools to ensure a change in the perception and the

attitude of a specific target group towards a place’s image.

The second avoids associating Country Branding with the processes of branding and marketing.

These definitions use terms such as “the strategic self-representation” of a country or “the vehicle”

that can help a country, a region or a city reach economic and social objectives. This second set of

definitions avoids the term branding in order to ensure that the strategy of country branding is not

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confused with a product branding campaign. It emphasizes the fact that places are very different

from products and that it would be wrong to approach the strategies similarly.

Very simply, it means applying corporate branding techniques to countries. Similarly, experts in

the industry refer to “place branding” and “city branding. The two main concepts separate new

forms of nation branding from more traditional forms of public diplomacy. Nations have become

far more cognizant of the value of their brand as an asset. Understanding valuation helps countries

better understand the investments they make in their image. For instance: To what extent does a

catchy slogan help attract foreign investment? How about a national radio station? As researchers

work to better quantify the answers to questions like these, countries see the possibility of more

efficiently investing in their futures. The second major change is a focus on the behavioral aspects

of managing a nation’s image. He suggests officials from government, nonprofits, and the business

world can better collaborate to make sure the messages a country is putting out represent what they

view as “the fundamental common purpose” of their country. Nation branding is a relatively new

area though studies of the effect of country image on product purchase have been around for

several decades. Despite the recent surge in interests amongst both academics and practitioners and

growing publications, research on nation branding is still in the infant stage, and the topic itself

remains as a complicated and somewhat confused construct. The purpose of this paper is to

explore the concept of nation branding; in particular, it discusses the following: a) what is being

branded? b) What are the differences between the nation brand and product brand? c) The link

between nation branding and the country of origin effect; and d) the paradoxical issues and the

wider context in which nation branding can be applied. A nation generally refers to a large group

of people of the same race and language while a country means an area of land occupied by a

nation. Although nation and country are used interchangeably in the literature there is a subtle

difference between nation brand/image and country brand/image. Various terms found in the

literature can be classified into three categories shown in Table 1. Terms such as the country of

original effect (COO) are closely related with the product. The product-country image is imbedded

as part of the product brand, and is meaningless if separated from the product. The concept of

nation brand or country equity refers to the nation as a whole; it describes the country’s intangible

assets without any explicit links with a product. Product-country image is a subset of the country

image. Other terms such as national identity and cultural stereotypes have little direct implication

in branding or marketing because they have a clear focus on the culture and people of a nation.

Table 1 Terms used in the literature

Product related National level Cultural focus

Country of origin Nation /country brand Country stereotype

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Product-country image Nation /country image National identity

Made-in country image Country equity National characteristics

Country image effect Country positioning E.g. “Britishness”

There is no single definition about nation branding. To some it is simply another term for country

of origin effect or place marketing. To others it refers to a consistent and all-embracing national

brand strategy which determines the most realistic, most competitive and most compelling

strategic vision for the country, and ensures that this vision is supported, reinforced, and enriched

by every act of communication between the country and the rest of the world. In nation branding

“the aim is to create a clear, simple, differentiating idea built around emotional qualities which can

be symbolized both verbally and visually and understood by diverse audiences in a variety of

situations. To work effectively, nation branding must embrace political, cultural, business and

sport activities. Noting the key words used in this statement: clear, simple, differentiating, diverse,

variety, this shows the complexity inherent in nation branding. More importantly, nation branding

involves not just marketing, but also almost all aspects of a nation’s character. Nation branding

concerns applying branding and marketing communications techniques to promote a nation’s

image.

What is being branded?

Nation branding can be interpreted in several different ways as shown in Table 2. At the simplest,

it is a synonym of product-country image. The country’s name or logo can be used by either a

single company or an organization to emphasize the COO. This form of nation branding has a

clear purpose of using the nation’s image to promote sales and exports. The second form of nation

branding is in fact place marketing – to promote the country (or maybe a city in the country) as the

destination for either tourism or inward investment. In political marketing, manipulating the

images of one’s own country against those of enemy countries has long been used as a powerful

weapon in propaganda, from the evil Soviet Empire in the Cold War to the recent labeling of three

countries as “Axis of evil”. A name could also be coined to brand a region, for example, Hong

Kong, Taiwan, Korea and Singapore were widely referred to Four Dragons in the 1980s. Real

examples of nation branding in its true sense are rare and far between: Cool Britannia failed to

make any significant impact and Deutschland Europe never took off.

Table 2 Examples in nation brandingExample What is being branded

Country of Rover cars use the Union Being part of the product brand

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Origin Jack as part of its logo

EffectThe New Zealand Way A quality mark to promote exports

Country 100 % Pure New Zealand Destination -place marketingNation Cool Britannia People, culture –nation branding?State “Axis of evil” Regime - political marketingRegion Four Dragons in Asia A term used in 1980s to refer to the

newly industrialized countries

According to the American Marketing Association (AMA), a brand is a “name, term, sign,

symbol, or design, or a combination of them, intended to identify the goods and services of one

seller or group of sellers and to differentiate them from those of competition.” However, a nation

is not a product in the conventional sense. A nation brand offers no tangible product or service;

instead, it represents and encompasses a wide variety of factors and associations:

Place- Geography, Natural resources, Tourist attractions

People – Ethnic groups History Culture Language Political and economic systems

Social institutions Infrastructure Famous people (the face) Picture or

image

combination of the above factors. As the message being communicated by the nation brand is

dispersed over such a nebulous collection of associations and attributes the intended audience may

be left confused, if not slightly bewildered by the precise nature of that which is being

communicated.

Nation branding and product branding

There are fundamental differences between a nation brand and a commercial product brand. As

there is no tangible offer in a nation brand, its attributes are difficult to define or describe. The

only benefits a nation brand could create for its audience are emotional rather than functional. In

product branding the brand has a sole owner whose legal right is protected by law. In nation

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branding, the nation itself has no control over the use (or abuse) of its name and image. A nation

normally has only one official name such as United Kingdom of Great Britain and Northern

Ireland or UK for short, which cannot be easily changed. However, a nation may have more than

one nation “brands”, depending on the purposes of branding, for example, Cool Britannia or

Green Britain. A nation brand is not owned by the nation but by an organization. As the nation

has no control of its image any outside third party could use the image for its own advantage. It is

in the public domain and any party with an interest could manipulate and exploit the “brand”

image to achieve their own ends. There are many well-known examples: Giordano, a Hong Kong

fashion retailer benefits greatly from its Italian name without having any connection with the

country. Similarly, a Mexican firm could use a French-sounding brand name to sell perfume that

is made in Mexico and has nothing to do with France. The distinctiveness and exclusivity of a

nation brand is hard to protect, as the nation has no natural monopoly on the precise qualities it is

seeking to promote. If there is indeed nation branding, the first issue to be addressed is who owns

the brand and is responsible for the branding because the development and management of a

nation brand requires a sustained amount of concerted action. In a recent seminar on branding

Britain, the panel was unanimous that there is a need for someone to be in charge of the British

reputation but they disagreed on whether the government or industries should take the leadership.

Without strong leadership, any campaign in nation branding, like a vehicle “with no one at the

wheel”, is doomed to fail (Brand Strategy, 2003).

Table 3 Comparison between nation branding and product branding

Nation brand Product brandOffer Nothing on offer A product or service on offerAttributes Difficult to define Well definedBenefits Purely emotional Functional and emotionalImage Complicated, various, vague Simple, clearAssociation Secondary, numerous and Primary and secondary,

Diverse relatively fewer and moreSpecific

Purpose To promote national image? To help sales and developRelationships

Ownership Unclear, multiple stakeholders Sole ownerAudience Diverse, hard to define Targeted segment

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Nation brand image and product-country image

Despite large volumes of research on the product-country image/COO, little is known about nation

branding: how the nation brand affects purchase decisions and how the nation brand relates to

COO. Is a nation brand a separate entity or an element in the product brand? These two concepts

are related but differ in a number of ways. As mentioned above, the concept of the nation brand is

not centered on any specific product, service or cause that can be promoted directly to the

customer. Nation branding concerns a country’s whole image covering political, economic,

historical and cultural dimensions. The concept is at the nation level, multi-dimensional and

context-dependent. The nation image may have little impact on the consumer and has no link with

the product offer. People may like or dislike a country for all kinds of reasons that may or may not

affect their purchase decisions. On the contrary, product-country image, as a kind of secondary

association (Keller, 1993), is part of the product brand and closely linked with a specific product

or product category. It has an immediate effect on people’s mind and directly affects their purchase

decisions. A nation has multiple images. China, for example, could conjure up the following

image: largest country with 1.3 billion people, the Great Wall, panda, kungfu, Made in China, etc.

Time seems to be an important factor here in determining people’s perceptions. In the Spring of

2003, China was associated with SARS epidemic; while in 1989 it was the Tiananmen Massacres,

but in 2008 it will be the Olympic Games. What image is retrieved depends on the audience and

the context. To mention Germany may still bring painful memories to some European countries

about the Nazi atrocities. To the Chinese, it is Japan that is associated with the war crimes

committed sixty years ago before anything else. Japan’s refusal to issue a formal apology to China

still casts a huge shadow over the political relationship between the two countries. However, the

economic and business relations between the two sides seem to be unaffected by this animosity:

China is the second largest market for Japan and Japan is the largest foreign investor in China.

Contradictory to the findings by Klein, et al (1998), negative national image does not necessarily

affect the purchase of products made by that country. Positive product-country image and negative

nation brand image can in fact co-exist. For example, a Chinese consumer may possess an

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unfavourable general perception of Japan, but this may not prevent his favourite make of camera

from being Japanese. In this specific case, COO out-weights national perceptions in the purchasing

decision. Given the deep-rooted anti-Japanese sentiment among majority people and numerous

calls to boycott Japanese products on the Internet, it is interesting to note that not only do Japanese

brands remain the most popular choice to the Chinese consumers, but the influence of Japanese

culture in the forms of fashion, film and pop music is also visible in most Chinese cities,

particularly among the younger generation. This again illustrates the time dimension intrinsic to

nation branding, as the painful memories of war seem to be too distant to be relevant to them.

Paradoxes

The correlation between countries that have produced strong brands and those that are strong

brands themselves is undeniable yet the direction of causation is unclear. Has the nation brand

emerged as a result of the success of a national industry, being simply rooted in economic patterns

of shifting comparative advantage and specialisation across the world, or has the mysterious and

intangible benefits of the nation brand been the initiator of a country’s success?

The purpose of the nation brand, the message it is trying to communicate and also the target

audience must be identified before any campaign is launched. The nation brand is faced with two

diametrically opposed prerequisites which must be satisfied to ensure successful communication of

its brand value: it must be distinctive to enable the country to position itself against competitors

whilst drawing upon the common associations shared by potential customers in order for the

psychological leveraging process to occur. This paradox is only significant at the nation level due

to the sheer amount and variety of associations that a nation may produce. On the one hand,

international audiences have a different degree of knowledge and experience about the nation; on

the other hand, each country has different cultural values that will affect its decoding and

perception of the image. For example, some cultures are more susceptible to certain types of

meanings, such as symbolic or sensory associations (Roth, 1995).

In the global marketplace, the nation brand should ideally act as a national umbrella brand, seeking

to differentiate the country’s products from international competitors, but the mechanism of its

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success operates at the micro level of individual customer psychology (O’Shaughenssy and

O’Shaughenssy, 2000). The challenge of nation branding relates to how the separate purchasing

decisions of a variety of customers across a vast spectrum of unrelated needs and intentions can be

consistently aggregated to create a harmonious and coherent value chain throughout a nation.

Nation branding involves promoting a nation’s image to an international audience. Like product

branding, nation branding has all types of techniques, technology and media at its disposal.

However, it also faces a number of unique challenges. Firstly, national identity is notoriously

difficult to define. For example, Taylor (2001) talks about the Seven Nations of Britain. It would

be equally hard to define the national characteristics, for example, what is Britishness given that

the UK now has a large ethnic population and multiple cultures. The difficulty lies in that it is

almost impossible to separate out something that is British (distinctiveness) from something more

general that is European or Western (common trait). In product branding brands such as Nokia

have been promoted as global, its Finnish country origin having been deliberately downplayed to

the extent that some consumers might assume that it was Japanese (another example of COO). In

the case of nation branding, should a country like Poland try to promote its unique national identity

-Polishness- or should it emphasises the common trait –Europeness when it joints EU in the near

future?

Secondly, the biggest challenge in nation branding is how to communicate a single image or

message to different audiences in different countries. It is almost impossible to develop a simple

image or core message about a country that can be used by different industry sectors. Imagine how

one advertisement for France could possibly help to sell cheese, perfumes, fashion, holidays as

well as cars? The dilemma in nation branding is trying to be one thing to all audiences on all

occasions. In order to resonate with the audience, the message /image needs to be relevant and

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credible. An image that appeals in one culture or 1n one situation may not do the same in another

culture or in another situation. Trying to be one thing to all audiences or all things to all audiences

renders the message meaningless.

Globalization is said to lead to the convergence of consumer needs and tastes across different

markets though there is little empirical evidence to support the claim. To what extent will this

result in a homogenization of the values being promoted by the nation brand? Will a nation be

forced to abandon its inherent, old but genuinely unique image in favour of the new image that

may (or may not) appeal to the audience? Cool Britannia failed exactly because it abandoned all

those traditional images associated with the country in favour of those hippy and trendy. It is ironic

that the nation has lost its distinctiveness in its search for distinctiveness. The “cool image” may

symbolize certain sectors like arts, fashion and music, but was almost irrelevant to the

manufacturing and export industries. Of the sixteen values identified

In Brand Britain (www.wollfolins.com), many can hardly be defined as a value and none of them

is universally regarded as British. Branding requires simplicity and clarity, but the image of a

nation is complexity and vagueness. Using one logo plus one slogan might be just sufficient to

promote a washing powder, but it is impossible for nation branding to develop a new national

image in the same way. A slogan such as “A small country with a big heart” is in fact not very

meaningful as it can be used by almost any small country. Similarly, values such as “trust,

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friendliness, and honesty” will not help develop a truly unique national image. A campaign

promoting a country’s highly skilled and innovative workforce will not appeal towards potential

tourists. In each context the customer has different needs and so a nation brand that tries to be all

things to all people will inevitably fail, as it will isolate a significant proportion of its target

audience through its vagueness. Thus it may be concluded that it is almost meaningless to talk

about a nation brand in general.

Thirdly, consider the time dimension of the nation brand. Many of the stereotypes and cultural

associations concerning a nation have their roots in centuries of history and will not be simply

forgotten by the customer in the face of a few marketing campaigns. The historical inertia

possessed by these unfavourable associations encapsulated by the nation brand represents a

significant barrier impeding its development. The evolution of a nation’s image may take years or

decades as shown in the example of Made-in-Japan in the west. However, the damage could have

been done by a single event overnight as in the case of Bali bombing that has probably changed the

island’s paradise image forever. As branding cannot alter any of the physical attributes of the

product, it can only seek to affect the customer’s perception. In the context of the nation brand, an

understanding of the customer’s existing perception of the nation becomes vital. Their assessment

with regards to the nation in question may be based upon the following factors:

Personal experience, e.g. visiting the country Education or knowledge Prior use or ownership a product made in that country. The depiction of the country through media channels Stereotypes, etc.

Any organization seeking to capitalize on a country’s nation brand must attempt to evaluate the

existing qualities the country possesses in order to reinforce the positive perceptions of their

country and filter out or perhaps deflect attention away from the negative aspects. Here again the

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importance of identifying the target audience becomes apparent, as some aspects of the country

may seem positive to one segment of the target audience whilst isolating a far greater majority.

Questions may also be raised with regards to the methodology of any such exercise: will such an

assessment be conducted on a qualitative or quantitative basis?

in the branding campaign – the internal audience? Lincolnshire County Council has been working

hard for the past few years to promote the county as “one of the best kept secrets in the country”-

“the place to live, work, invest and visit”. The marketing campaign was a success judged by the

fact that the county had the largest net internal migration inflows in the UK (The Economist,

2003). But this success has caused dismay and indignation among the county’s many local

residents. They challenged the whole idea of raising the county’s profileinsisting that a massive

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influx of people and jobs could destroy its unspoilt charm and lose forever many of the very

qualities that are being promoted by the council (County News Monthly, 2003). The same dilemma

could also arise in nation branding. The nation brand being promoted may seem ‘foreign’ to the

domestic audience. In some instances a domestic audience may even find the portrayal of their

country to outsiders insulting and offensive.

THE BROADER CONTEXT

The debate between Wally Olins and Michel Girard (a French academic) on whether France can be

re-branded (Olins, 2002) is in fact caused by the confusion over what is being branded. While

Olins talks about re-branding France the country in the marketing sense, Girard looks at France the

nation from the historical and cultural perspective. The current studies on nation branding are

characterised by an interesting phenomenon. Nation branding has been vaunted as a panacea -

something equivalent to a grand national economic development strategy – desperately needed by

developing countries. Nation branding is believed to be able to work miracles and solve much of

the world problems, for example, the poverty gap between the North and South. It is undeniable

that branding is an extremely powerful tool but it is equally important to realise that branding is

only one part of marketing strategy which itself is a part of the whole business strategy. Branding

won’t work if other components of the strategy (finance, R&D, production, distribution) fail to

deliver what the customers have wanted. Nation branding is no exception. To the proponent of

nation branding Spain has provided a most successful example of rebranding a nation

(www.wallyolins.com). However, this is a kind of misunderstanding. The change in the national

image of Spain is the result of fundamental changes in its political, economic and social systems

taken place in the past 20 odd years, not the result of some wishful campaigns in nation branding.

Branding might have played a role in the transformation, but its importance should not be

exaggerated. In contrast, Zimbabwe is a country with rich tourist resources. But under the tyranny

of the current regime the country is unable to exploit these market opportunities. Before political

reform takes place there is no role for nation branding.

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It can be said that some countries, often described as brand neutral, do not have many attributes to

build upon. Other countries may already possess a strong cultural heritage but still remain at an

economic disadvantage. Lacking the necessary capital formation, infrastructure and concentration

of enterprise, together with an unskilled workforce and perhaps other factors beyond their control

(political instability, natural disasters etc.) their capacity to increase their wealth through exports or

tourism is greatly diminished. The nation brand cannot assert itself as the tangible sources from

which its value is accrued are not in place. It is not sufficient for the country to enthusiastically

promote its image to other nations if the economic basis for the nation brand is not there.

Conventional wisdom would say that a firm must succeed in its own domestic environment before

competing in the global marketplace. Similarly, for a nation brand to have creditability and

integrity the country must create the macroeconomic climate required to nurture successful

business, otherwise attempts for business to exploit nation branding will seem sadly quixotic.

Other factors in the political and economic environment also affect a nation’s image, and probably

to a greater degree. There are places where branding, no matter how ingenious and creative,

simply won’t work. A case in the point is North Cyprus. 30

years ago before the island was divided, the northern region had two thirds of 260,000 tourists

visiting what was then known as the United Republic of Cyprus. The North is generally perceived

as the last unspoilt Mediterranean place with stunning landscape, sleepy mountain villages and

around 330 days of sun a year. The tourism sector in the North also enjoys an advantage over its

rival in the South in terms of environment, culture, historical attractions as well as hotel prices. But

the change of fortune couldn’t be bigger now: while the South receives more than two million

visitors each year the North has only a little over a quarter of million. The biggest problem faced

by the tourist industry is not nation branding but a political one. The self-styled Turkish Republic

of Northern Cyprus is not recognised by any other country except Turkey. With UN sanctions still

in place, all the marketing and branding activities, “like walking with one leg nailed to the ground”

are doomed to be ineffective. Another example is the image of the United States in the Arabic

world after the Iraq War. No matter how clever and appealing the marketing campaign is; major

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policy changes are needed to change people’s perception and this may take many years.

From the marketing perspective, nation branding has its aim of helping the nation to “sell” its

products and places. To succeed in this end, it needs to have a clear purpose, being product

specific, i.e. having a link with an “offering”, and a target audience. Beyond marketing, nation

branding could perhaps play a potentially important role in cross-cultural communications. Instead

of reinforcing old stereotypes or creating new ones for the short-term economic gains, nation

branding could help different countries to develop better mutual understanding and improve the

international relations. For example, at least part of the UK’s troubled relationship with its EU

partners could be traced in the misunderstanding on the both sides. Can nation branding be used

here? This then becomes a topic in political marketing.

Nation branding should be distinguished from nation brand as there is not necessarily a direct link

between the two. A nation’s “brand” exists with or without any conscious efforts in nation

branding as each country has a current image to its international audience, be it strong or weak,

clear or vague. In theory nation branding could help a nation to improve its image; in reality there

are many other factors that affect the image and perception of the country, resulting in only a

marginal role for nation branding. Anholt calls for the poor countries in the Third World to use

nation branding in developing their economy but they first have to find or make something to sell:

a product or service, which is competitive in the market place. To achieve this, they need

investment, technology and knowhow far more than they need nation branding. Without a good

product, branding would work to no avail. There is rather like chicken and egg situation here. How

can nation branding help a country’s image building if it is plagued by war, poverty, crime or

terrorism? Nation branding will not solve a country’s problems but only serves to add icing on the

cake. If economic development in a country is like completing a gigantic jigsaw, nation branding

is probably the last piece.

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Country branding w.r.t. 4Ps

I. The Marketing Plan

In the decades since World War II, economics prowess replaced military power as the crucial

geopolitical determinant. The resilience of a country is measured by its inflows of foreign

investment and by the balance of its current account - not by the number of its tanks and brigades.

Inevitably, polities the world over - regions, states, countries, and multinational clubs - behaves as

only commercial businesses once did. They actively market themselves, their relative advantages,

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their history and culture, their endowments and assets, their mentality and affiliations. In short,

they aggressively promote their brand names ("brands" throughout this article).

To cast countries in the role of brands implies that they act as "producers" to some "consumers"

out there. But what do countries - as distinct from firms - produce? And who are the consumers

enticed by said statal brand placement and regional location marketing? And how does the process

of exchange take place - who gives what to whom and where?

Few governments know the answers to these economically crucial questions. Ministers of finance

and industry the world over religiously repeat the mantras of "attracting foreign direct investment"

and "encouraging entrepreneurship". They recite the list of advantages proffered by their country

to the lucky investor, manager, scientist, expatriate, or businessman. But they lack a deep

understanding of the process and meaning of nation branding.

Few countries - Britain being the notable exception in the past decade - conduct serious market

research and bang heads together in think tanks or inter-ministerial committees to redesign the

national brand. Even fewer maintain long-term, sustained branding campaigns supported by proper

advertising. Only recently did a few pioneering polities hire the services of nation branding

experts. None has in place the equivalent of a corporate "brand manager".

One of the critical mistakes of countries the world over is the self-centered lack of emphasis on

customer satisfaction. Meeting and exceeding the "client's" expectations is merely an afterthought

- rather than the axis around which the planning, evaluation, control, and revision of the marketing

mix revolve. At best, countries concentrate on concluding specific transactions instead of on the

development and cultivation of long-term relationships with their "clients".

It is as though countries arrogantly refuse to acknowledge their dependence on the goodwill of

individuals and firms the world over. The traditional and impregnable supremacy of the sovereign

nation-state has gone the way of the dodo - but decision-makers still have to be appraised of this

startling development. Most countries - and nowadays there is a surfeit of sovereigns - are nothing

more than bit players in the global marketplace. It takes getting used to. Many politicians mentally

equate self-marketing with humiliating mendicancy.

Instead, decision makers should hire marketing (and, more specifically, brand name) experts to

prepare a thorough and comprehensive place marketing and nation branding plan for them:

Strategic Marketing Analysis

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I. Identify what needs and whose needs can the country meet and satisfy. What preference groups

(of investors, for instance) or even market niches (e.g., stem cell scientists) should be targeted to

optimize economic outcomes?

II. Compile databases of past clients of the state, its resources, offerings, laws, regulations,

international treaties, and economic opportunities (e.g., state companies to be privatized). These

allow for micro-branding (or segment branding as opposed to mass branding): tweaking the

national brand to suit the preferences, likes, dislikes, and wishes of specific target groups, down to

single, important, individuals.

III. Position the country in relation to its competitors, emphasizing its natural and human

endowments and its relative advantages. The process of positioning aims to identify the nation

with an image, perception, concept, or trait which captures its essence and furthers its appeal to the

clients it had identified in stage I above (investors, other countries, diplomats, scientists, and so

on). Great care should be taken to align the positioning messages with realities on the ground.

Anything perceived by the preference groups as being a lie or an exaggeration will backfire.

IV. Marketing is about optimal allocation of resources in view of objectives and opportunities.

The classic STP model calls for:

I. Segmentation - Identify potential customers - for instance, foreign direct investors, or expatriates

and the diaspora.

II. Targeting - Concentrate on those "clients" you can serve most effectively, to whom you are

most valuable and thus can "charge" the most for your offerings

III. Positioning - Communicate effectively the main benefits you offer to the targeted group.

The marketing mix comprises 4 P's which are perfectly applicable to nations as they are to

businesses:

Product - Your "products" as a country being tax incentives, infrastructure, natural endowments,

human resources, a geographic vantage point, helpful laws and regulations (or absence thereof),

etc.

Price - Demonstrate a relative or absolute advantage in terms of return on investment

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Place - Facilitate the unhindered exchange of goods, services, and capital (tax holidays, free

processing zones, no red tape, double taxation treaties and free trade agreements with other

countries, etc.)

Promotion - The advertising and dissemination of news and information, lobbying, public

relations, media campaigns, etc.6

But what products do countries offer and market and how are they tailored to the needs of specific

market segments?

II. The Product

What products do countries offer and market and how are they tailored to the needs of specific

market segments?

In a marketing mix, the first and foremost element is the product. No amount of savvy promotion

and blitz advertising can disguise the shortcomings of an inferior offering.

Contrary to entrenched misinformation, the role of marketing precedes the development of the

product. The marketer gathers information regarding the expectations of the target market (the

customers). In the case of a country, its clients are its citizens, investors (both foreign and

domestic), tourists, export destinations, multilateral organizations (the international community),

non-governmental organizations (NGOs), and neighboring nations-states.

The marketer communicates to statal decision-makers what features and benefits does each of

these disparate groups desire and suggests how to reconcile their competing and often

contradictory needs, interests, preferences, priorities, and wishes.

The marketer or brand manager then proceeds to participate in the design of the country's

"products": its branding and public relations campaigns both within and without its borders, its

investment laws and regulations, the development and presentation of its tourist attractions, the

trumpeting of the competitive or unique qualities of its export products, the tailoring and

monitoring of its mutually-beneficial relationships with neighbors, NGOs, and international

organizations.

In designing its "products" and, thus, in acquiring a brand name, a country makes use of and

leverages several factors:

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1. Natural Endowments

The country's history, geographical location, tourism sites, climate, national "mentality" (hard

working, forward looking, amicable, peaceful, etc.)

2. Acquired Endowments, Public Goods, and Externalities

Level of education, knowledge of foreign languages, quality of infrastructure, the court, banking,

and public health systems

3. Risk Mitigation

International standing and the resolution of extant conflicts (political risk), the country's laws,

regulations, and favorable international treaties, its credit history, insurance available to investors

and exporters

4. Economic Prowess

Growth promoting policies, monetary stability, access to international credit, the emergence of

new industries

Governments can influence many of these factors. Granted, there is little they can do about the

country's past history or climate - but pretty much all the rest is up for grabs. Aided by input from

its brand managers and marketers, a country can educate its population to meet the requirements of

investors and exporters. It can improve infrastructure, reform the court system, pass growth-

promoting laws, cut down red tape, support monetary stability, resolve conflicts with the

international community and so on.

It is important to understand that the "products" and brand name of a country are not God-given,

unalterable quantities. They can and should be tailored to optimize the results of the marketing and

branding campaigns.

Maintaining the country's brand name and promoting its products are ongoing tasks - not one off

assignments. They require a constant infusion of financial and human resources to conduct

research and development to evaluate the shifting sentiments of the country's clients. States and

regions are no different to corporate entities. They, too, must gauge and study their markets and

customers at every turn and respond with alacrity.

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Exactly like commercial outfits, political entities seek to extract a price for their offerings and

products. Increasingly, the price they can obtain is settled by highly efficient global markets in

perceptions, goods, and services. As competition stiffens and the number of state-players

increases, the barriers to entry become more formidable.

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.

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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?

IV. The Place

Some countries are geographically disadvantaged. Recent studies have demonstrated how 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?

In classical microeconomics, the element of 'place' in the marketing plan used to refer to the locus

of delivery of the product or service. Well into the 19th century, the 'place' was identical to the

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region where the product was manufactured or the service rendered. In other words, textiles

weaved in India were rarely sold in Britain. American accountants were unlikely to practice in

Russia. Distribution was a local affair and networks of dissemination and marketing were

geographically confined.

A host of historical and technological developments drastically altered the scene and frayed the

straitjacket of geography.

The violent disintegration of the old system of geopolitical alliances led to the formation of

massive, multiplayer trading blocs within which and among which the movement of goods and,

increasingly, services is friction-free.

The vast increase in the world's population - matched by the exponential rise in purchasing power -

created a global marketplace of unprecedented wealth and a corresponding hunger for goods and

services. The triumph of liberal capitalism compounded this beneficial effect.

The advent of mass media, mass transport, and mass communications reduced transaction costs

and barriers to entry. The world shrank to become a veritable 'global village'.

The value of knowledge (processed information) has fast risen to surpass that of classical

(physical) goods and services. Information has some of the properties of a public good (for

instance, nonrivalry) - coupled with all the incentives of a private good (e.g., profit-making).

Thus, the very nature of distribution had been irrevocably changed. The distribution channel, the

path from producer to consumer (in our case, from country to foreign investor or tourist, for

example) is less encumbered by topography than it used to be.

Even the poorest, most remote, landlocked, arid, and disadvantaged country can nowadays

leverage air flight, the Internet, television, cell phones, and other miracles of technology to

promote itself and its unique offerings (knowledge, plant and animal species, scenery, history,

minerals, cheap and educated manpower, cuisine, textiles, software, and so on).

The key to success is in a mix of both direct and indirect marketing. Nowadays, countries can (and

do) appeal directly to consumers (ads targeted at tourists or road shows aimed at investors). They

present themselves and what they have to offer, circumventing brokers and agents of all kinds

(disintermediation). Still, they should not fail to cultivate more traditional marketing channels such

as investment banks, travel agents, multilateral organizations, or trade associations.

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With many of the physical obstacles to marketing removed in the last few decades, with the very

concept of 'place' rendered obsolete, promotion emerged as the most critical facet of nation

branding and place marketing.

V. Promotion, Sales, Public Relations, Marketing, and Advertising

Advantages have to be communicated to potential customers if they are not to remain unrealized

potentials. Moreover, communication alone - the exchange of information - is not enough. Clients

have to be influenced and motivated to visit a country, invest in it, or trade with it.

This is where promotion comes in. Not to be confused with marketing, it is concerned with setting

up a trained sales force, and with advertising, sales, and public relations.

We deal with sales forces at length in our next installment. Suffice to say, at this stage, that poor

countries will be hard pressed to cater to the pecuniary needs of high-level and, therefore,

expensive, salespersons. Setting up a body of volunteers under the supervision, guidance, and

training of seasoned sales personnel maybe a more suitable solution.

Advertising is a different ballgame. There is no substitute for a continued presence in the media.

The right mix of paid ads and sponsored promotions of products, services, and ideas can work

miracles for a country's image as a preferred destination.

Clever, targeted, advertising also ties in with sales promotion. Together they provide the customer

with both motivation and incentive to "buy" what the country has on offer. Brand switching is

common in the global arena. Investors and tourists, let alone exporters and importers, are fickle

and highly mobile. This inherent disloyalty is a boon to new and emerging markets.

An interesting and related question is whether countries constitute similar or dissimilar brands. In

other words, are countries interchangeable (fungible) as investment, tourism, and trade

destinations? Is cost the only determining factor? If countries are, indeed, mere variants on given

themes, acquiring and sustaining permanent market shares (inducing a market shift) may prove to

be a problem.

The answer is that the issue is largely irrelevant. Specialization and brand differentiation may be

crucial inside countries - in domestic markets - but, they are not very important in the global arena.

Why is that?

Because the global marketplace is far less fractionated than national markets. Niche investors, off-

the-beaten-track tourists, and boutique traders are rarities. Multinationals, organized package tours,

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and commodity traders rule the Earth and they have pretty similar tastes and uniform demands.

Catering to these tastes and demands makes or breaks the external sector of a country's economy.

Enter public relations.

While advertising and sales promotion try to access and influence the masses - public relations

focuses on opinion-leaders, decision-makers, first-movers, and tipping points. Public relations is

also concerned with the country's partners, suppliers, and investors. It directly appeals to major

tour operators, foreign legislators, multinationals, and important non-government organizations

(NGOs), as well as regional and international forums.

As the name implies, public relations is about follow-up (monitoring) and relationships. This is

especially true in the country's dealings with the news media and with specialized publications.

Press conferences, presentations, contests, road shows, one-on-one meetings or briefings,

seminars, lobbying, and community events - are all tools of the twin trades of marketing public

relations and image management.

A recent offshoot of the discipline of public relations - which may be of particular relevance and

importance where countries are concerned - is crisis management. Public awareness of crises -

from civil wars to environmental disasters - can be manipulated within limits of propriety and

veracity. Governments would do well to appoint "public policy and image advisors" to tackle the

periodic flare-ups that are an inevitable part of the political and the economic dimensions of an

increasingly complex world.

Yet, even governments are bottom-line orientated nowadays. How should a country translate its

intangible assets into dollars and cents (or Euros)?

VI. The sales force and marketing implementation oversight

How should a country translate its intangible assets into dollars and cents (or euros)?

Enter its Sales force and marketing intermediaries.

Even poor countries should allocate funds to train and maintain a skilled sales force and pay its

wages, expenses, and perks. Salespeople are the human face of the country's promotion efforts.

They tailor to individual listeners (potential customers) the message the country wishes to convey

about itself, its advantages, and its prospects.

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As their title implies, salespersons personalize the sales pitch and enliven the sales process. They

are as indispensable in mass-attendance road shows and in retail marketing (e.g., of tourism

packages) as they are in one-on-one meetings with important decision-makers and investors.

The country's sales force should be trained to make presentations, respond to queries and

objections, close deals, and cope with account growth. Its work should be tightly integrated with

other promotional efforts such as mass mailings, telemarketing, media releases, and direct offers.

Sales personnel should work hand in hand with marketing intermediaries such as travel agents,

financial firms, investment funds, and corporate buyers.

Marketing intermediaries are at least as crucial to the country's success as its sales force. They are

trusted links to investors, tourists, businessmen, and other "clients". They constitute repositories of

expertise as well as venues of communication, both formal and informal. Though usually decried

by populist and ignorant politicians, their role in smoothing the workings of the marketplace is

crucial. Countries should nurture and cultivate brokers and go-betweens.

A marketing expert - preferably a former salesperson with relevant experience in the field - should

head the country's marketing implementation oversight board or committee. The Marketing

Implementation Oversight Board should include representatives of the various state bureaucracies,

the country's branding and advertising consultants and agents, its sales force - and collaborating

marketing intermediaries.

This body's task is to harmonize and coordinate the country's various efforts at branding,

advertising, publicity, and promotion. It is the state's branding headquarters and should enjoy wide

supervisory as well as executive powers.

In other words, marketing implementation is about ensuring that the country's message is both

timely (synergetic) and coherent and, thus, both credible (consistent) and efficient. Scarce

resources are better allocated and deployed if the left hand consults the right one before it moves.

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Country Brand Index

The concept of country branding having recognition through this index is an inspiration from the

same procedure followed to rate consumer and corporate brands. The country brand index has

historically studied the perception of 118 countries across the globe and the ranking is given to the

respective countries according to the strength of perception across association dimensions. Future

brands was among the pioneers for this approach that countries too can be understood fairly as the

sum of their identity and reputation. And just like brands, strengths and weakness of countries can

be inferred and marked for ultimately choosing than particular destination to be a tourist, investor

or reside in it by opting for dual citizenship. Measure of competitive advantage over the peer

country has been the key focus of this rating agency.

Technicality of being a Country Brand:

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1. Not all countries are country brands

The central hypothesis was that not all countries qualify for being officially being termed as a

‘Country Brand’. Out of the 75 countries included in the survey, only 22 qualify to be actually

termed as Nation Brands. The qualified participants are: Japan, Switzerland, Germany,

Sweden, Canada, Norway, United States, Australia, Denmark, Austria, New Zealand, United

Kingdom, Finland, Singapore, Iceland, Netherlands, France, Italy, United Arab Emirates and

South Korea. By this, we mean that people have stronger than average perceptions of the

country across our six dimensions relating to the balance of ‘status’ and ‘experience’. In other

words, they perceive it equally strong in aspects relating to Quality Of Life, Value System and

Business Potential, as they do for its Culture, History, Tourism and ‘Made In’ expertise. Those

countries with a bias in favor of Quality Of Life, Value System and Business Potential are

classified as ‘status countries’, and they include Belgium, Qatar and Bahrain. The brand

development opportunity for these countries lies in perceptions of Culture, Tourism and ‘Made

In’. Those countries with a bias in favour of Culture, History, Tourism and ‘Made In’ are

classified as ‘experience countries’ and include places traditionally strongly associated with

Tourism. The brand development opportunity for these countries lies in perceptions of Quality

Of Life, Value System and being Good for business. The remaining ‘countries’ have weaker

than average perceptions overall against both status and experience dimensions, although

some are stronger than others. For example, Russia and Taiwan sit at the threshold of country

brands in terms of perception strength, whereas Nigeria, Ukraine and Bangladesh have the

weakest perceptions overall.

2. Country brands have a competitive advantage

Strong positive perceptions are always desirable, but we wanted to test if ‘country brands’

actually have an advantage over their peers. Will people choose them when it comes to visiting

and investing? It is perhaps unsurprising that when people rate a country as a brand they have

more confidence in and feel closer to it than the other countries in the study. Most significantly,

however, our research shows that people are also more likely to visit, recommend and do business

with a ‘country brand’. And twice as many people say they would buy products from a country

brand than they would from a ‘country’. Which means that country brands have a tangible

competitive advantage over other countries in the areas that are most likely to drive future

success – from visiting for a holiday to business investment or daily consumption of products and

services ‘made’ there.

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How to read the data

In addition to overall perception rankings, we are able to show the relative regional performance of

each country, including the regional leader and their strengths against the average. For example,

we can compare Japan’s scores against the average for Asia-Pacific. Each regional summary

presents the country ranking, how many ‘country brands’ each region has, the strengths and

weaknesses of the region across the dimensions and attributes, and a visual comparison (radar

map) of the leading country attribute scores with the regional average – e.g. against ‘value for

money’ or ‘food’. The strongest perceptions by attribute in each case are highlighted using a

colored circle. We also show the awareness levels for the top and bottom ranked country by

region.

Country brand drivers

We already know from our ‘Made In’ research that ‘Country of Origin’ is an increasingly

important driver of consumer choice when it comes to goods and services. The evidence from

this report suggests that the reverse is also true – a reputation for high quality products is a main

driver of a ‘country brand’. For example, 70% of our respondents believe this about Germany –

a top three country brand in this year’s rankings – compared to an average of 14% for those

classified as ‘countries’. The two other main drivers are a desire to visit or study in a country and

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perceptions of good infrastructure. These three factors make the most difference between a

country and a country brand, and demonstrate the power of consumer desire in country brand

strength. It is perhaps no coincidence that the top 100 ranking of World Universities is dominated

by most of our ‘country brands’ (source: topuniversities.com). With that in mind, we would expect

countries that prioritize developing and promoting high quality products, making it easy and

attractive for visitors to study and work and investing in their core infrastructure – from

communications to energy and transport links – to have a brand strength advantage over their

peers in the next five years.

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Mumbai is one of the 20 most influential cities on the planet according their findings.

Key findings from the report

Japan tops the ranking for the first time.

Awareness alone does not make a strong country brand.

Country brand strength is connected to how many consumer brands you are known for.

Strong country brands are seen to have expertise across multiple consumer categories.

Country brands have most momentum in technology, innovation and influential to make a

strong country brand

1. Japan tops the ranking for the first time.

Japan tops the ranking for the first time this year and sets a new benchmark for country

brand strength. It enjoys a top five ranking in the Heritage & Culture and Tourism

dimensions and leads perception strength in Business Potential and the newly created

‘Made In’ dimension. More than 65% of our respondents would consider visiting the

country in the next five years and 90% would recommend it to family and friends. Nearly

nine out of ten of those asked think Japan is a good country to do business with and 63%

are prepared to buy its products and services compared to the ‘countries’ average - 20%.

Whilst Japan has always enjoyed strong perceptions in the minds of international travelers,

these results secure its place as the strongest ‘country brand’ by our measures. It is joined

by other strong Asian country brands in the top 20 including South Korea and Singapore,

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each of which show perception strength in the Business Potential dimension, but are given

particular credit against the ‘advanced technology’ attribute. Otherwise, the top twenty is

dominated by European country brands, led by Switzerland and Germany but supported,

as in previous years, by Scandinavia. Whilst we are not able to make direct ranking

comparisons against previous studies, it is interesting to see that the addition of the

‘Made In’ dimension has bolstered the relative performance of countries like Japan within

the top 20 and introduced new middle eastern leaders like UAE, but the members of

that group remain fairly stable year on year even if rank positions change slightly.

2. Awareness alone does not make a strong country brand.

This year’s study reinforces the perennial paradox of awareness: being well known does

not always correlate to strong positive associations. For example, Italy enjoys higher

awareness levels than Japan in our sample (89% compared to 84%) but is seventeen places

lower in the rankings. Similarly, Mexico enjoys 80% awareness but is in the bottom third

of the rankings. Conversely, Finland, Singapore, Iceland, the UAE and South Korea are all

in the top twenty, but have awareness levels below 70%. So if being well known is not

enough to drive positive perceptions, how should we understand the impact that global

events can have on country brand strength? There is no doubt that major international

sporting and cultural events have a positive impact on awareness of the host country. We

saw this with South Africa and Canada in 2010, which enjoyed significant uplift in

awareness following the FIFA World Cup™ and Vancouver 2010 Winter Olympic Games

respectively in our study. Importantly, however, South Africa’s ranking position remained

the same whereas Canada improved. This is particularly important in 2014 in light of the

Sochi Winter Olympic Games and the 2014 FIFA World Cup Brazil™. Both countries

enjoyed a positive increase in their levels of awareness from 2012, with Russia increasing

from 63% to 80% and Brazil leaping 17 points to 83% awareness year on year. This must

correlate to international coverage of their events, both positive and negative. However,

whilst we cannot make absolute ranking comparisons with 2012, Russia’s perception

strength against equivalent dimensions has improved, whereas Brazil now has weaker

perceptions in attributes like Standard of living, Safety and Value for money. And both

countries continue to suffer from relatively weak perceptions in important areas like

Quality Of Life and Value System. We can perhaps understand this in terms of improved

understanding of each country, in which familiarity creates a more realistic image of a

country, and tempers idealized traveler perceptions that might artificially improve scores.

But Canada offers a valuable case study of a country that deliberately used a major event

to shape perceptions against its brand strategy and managed to connect improved

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awareness to the story it was keen to tell – all of which ultimately correlated to improved

brand strength against our dimensions.

3. Country brand strength is connected to how many consumer brands you are

known for.

There is a strong correlation between the ‘country brands’ in our study and spontaneous

awareness of consumer brands associated with them. On average, our respondents

demonstrated awareness of a larger number of brands across more categories for the 22

country brands, and those brands were often more international or global in reach. For

example, Japan elicited associations with Toyota, Nintendo, Honda, Sony, Toshiba and

Panasonic, reflecting perceptions of strong category expertise for the country in

technology, consumer electronics and automotive. Conversely, countries with weaker

perceptions in the ranking also tend to elicit fewer spontaneous consumer brand

associations. Interestingly, flag carrying airlines were very frequently mentioned in

association with countries across the study, and in the case of countries like Indonesia and

Egypt, were the only brands respondents were able to recall, underscoring the important

contribution air travel brands make towards building country brand perceptions.

4. Strong country brands are seen to have expertise across multiple consumer

categories.

We asked respondents to tell us how far each country has ‘expertise’ across fifteen

categories of products and services – from alcohol to transportation. Interestingly, the

average score of ‘country brands’ is higher in all categories than the average score of

‘countries’ with the exceptions of Retail and Food and Beverage where most countries

in the ranking get some degree of credit. The United States leads, enjoying better than

average perceptions across fourteen categories and being strongest in Technology (72%).

Different countries are more strongly associated with different things. For example, France

is most strongly associated with Fashion (65%), Germany with Automotive (77%) and

Japan with Technology (78% - the highest score of a country in a category). The ‘country

brands’ also all benefit from stronger than average perceptions (23%) of creating

‘products of high quality’, with Germany and Japan leading the group. So it would seem

clear that country brand strength strongly correlates to perceptions of expertise in the

categories of goods and services that global consumers purchase every day. One anomaly

in the research is the occasional gap between spontaneous category associations and

brands among our respondents. For example, the word ‘beer’ was most frequently

mentioned in descriptions of Germany, but no respondent offered a German beer brand as

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an example of this. This indicates that sometimes a country is associated with a product or

service generically, without people connecting that place directly to consumption choices.

5. Country brands have most momentum in technology, innovation and sustainability

Perceptions of momentum – how far a country is moving forwards and in what ways – are

an interesting bellwether of future success. Conventional wisdom might suggest the

strongest country brands are those with greatest momentum in political and economic

influence or cultural significance. Interestingly, our study shows that most of the top ten

country brands are seen to have more momentum in technology and innovation or

sustainability and environmental friendliness, or both. In other words, the future drivers of

competition for countries relate more to the contribution they are making to global

progress and better management of the world’s resources, and ‘country brands’ are more

keenly associated with these forces. Conversely, those ranked as ‘countries’ in our study

are most likely to have the strongest momentum in cultural significance.

An influential city is not enough to make a strong country brand ( but it helps)

Commentators sometimes assert that countries like the UK and the United States are

synonymous with their most famous cities in people’s minds. To test this, we asked

respondents to tell us which cities in the world will be the most influential in three years’

time – indicating their current strength and potential. Their answers demonstrated some

interesting differences between country and city perception strength. or example, our list

of the twenty most influential cities does not include any in Norway or Denmark – both

top ten country brands in this year’s study. And seven of the most influential cities are

not even in the top twenty country brands, meaning that some cities rank higher in

influence than their respective country brand position. Rio and São Paolo stand out

against Brazil’s overall ranking of 43rd, New Delhi is the 13th most influential city

compared to a bottom quartile country performance for India, and Beijing is seen as the

world’s third most influential city compared to China’s overall ranking performance at

28th. Overall then, it seems that having an influential city does not guarantee country

brand strength and brand strength does not depend on city perception alone. The UK is

often strongly identified with London, not least in the afterglow of the London 2012

Olympic Games, but London far out-performs the UK overall. However, like London, the

majority (13) of the most influential cities are either the capitals or second major cities of

top ten country brands, which is a strong reminder that country brand strength and city

influence, whilst not the same thing, are often part of the same story in people’s

perceptions.

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Standings of India in the Asia-Pacific region

.

45

Future Focus

China, the United Arab Emirates, South Korea, Israel and Qatar are the countries our

respondents felt were most likely to be ‘moving forwards’ in three years’ time. These

countries have strong perceptions around ‘Business Potential’ and are seen to have

momentum in innovation as well as expertise in energy and technology – all of which

correlate to country brand strength. And more than 50% of our respondents indicate they

would consider visiting these countries in the next five years – with China enjoying the

highest consideration. Of the ‘ones to watch’, South Korea enjoys the highest ‘Made In’

ranking (#8 overall), perhaps not a surprise when we consider the significant growth of

Samsung and other South Korean brands and organizations over the last 10 years.

Samsung enjoys a top 10 position in the FutureBrand Index study and is one of the largest

companies in the world by market capitalization.

Dominant themes

This year’s research has surfaced three dominant themes that we believe will have an

influence on the future of countries as brands:

46

I. Extremism

From the increased electoral significance of populist extremist parties like the National

Front and the Austrian Freedom Party in Europe to Islamic fundamentalism and the rise

of ISIS and Boko Haram in the Middle East and Africa, there is a growing preoccupation

with extremism and polarization around economic, social and religious issues around the

world. In this climate of uncertainty and social anxiety, we would expect to see an

equivalent increase in freedom, stability and security as drivers of country brand strength.

Countries that enjoy the strongest perceptions in the dimension of Political freedom like

Canada #1, Sweden #2 and Denmark #3, and Tolerance, Safety and security

(Switzerland #1) are important benchmarks for country brand managers seeking to

encourage visitor confidence.

II. Migration

The number of people living abroad around the world is increasing every year according to

the UN (232 million in 2013 compared to 154 million in 1990). This rise correlates to

factors like growing global middle class discretionary income and low cost travel and

accommodation, but also country and regional cooperation around trade and migration

across borders, driven by the search for the best work and education opportunities, or

flight from economic or social difficulty. These migrants are naturally drawn to countries

they perceive to be more open and tolerant, whose education and welfare systems are the

most liberal and that enjoy the best infrastructure. With that in mind, the brand building

activities of countries that enjoy the strongest perceptions in Infrastructure (Japan #1,

Germany #2 and Switzerland #3), being Good for business

(USA #1, Germany #2 and Japan #3) and Health and education (Switzerland #1, Sweden

#2 and Germany #3) offer a guide to the levers countries can pull to capitalize on this

trend.

III. Conscious consumption

We are increasingly preoccupied with the impact our consumption has on the world

around us and understand that whilst resources might come from specific countries – like

food or energy or raw materials – their use effects the entire planet, and that some

countries and regions have better access to those resources than others. In that context,

companies are making an increased effort to improve transparency around their global

supply chains, and consumers are taking a more active interest in the provenance and

manufacturing processes behind the products and services they consume. This is a major

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factor in the increasing role of country of origin in consumption decisions as consumers

and organizations seek to reconcile our perceptions of expertise, quality and provenance

with the actual ownership and manufacturing base of the things we consume. In addition

to reinforcing strength of perception around category expertise in this context, countries

will do well to build stronger simultaneous associations in Environmental friendliness

(Switzerland #1, Norway #2 and New Zealand #3) Standard of living (Switzerland #1,

Norway #2 and Germany #3) and making High quality products (Germany #1, Japan #2

and Switzerland #3) in a world where people still want a good quality of life without it

costing the earth.

Country brand drivers

We already know from our ‘Made In’ research that ‘Country of Origin’ is an increasingly

important driver of consumer choice when it comes to goods and services. The evidence

from this report suggests that the reverse is also true – a reputation for high quality

products is a main driver of a ‘country brand’. For example, 70% of our respondents

believe this about Germany – a top three country brand in this year’s rankings – compared

to an average of 14% for those classified as ‘countries’. The two other main drivers are a

desire to visit or study in a country and perceptions of good infrastructure. These three

factors make the most difference between a country and a country brand, and demonstrate

the power of consumer desire in country brand strength. It is perhaps no coincidence that

the top 100 ranking of World Universities is dominated by most of our ‘country brands’

(source: topuniversities.com). With that in mind, we would expect countries that prioritize

developing and promoting high quality products, making it easy and attractive for visitors

to study and work and investing in their core infrastructure – from communications to

energy and transport links – to have a brand strength advantage over their peers in the

next five years.

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CHAPTER 2

Literature Review (Data Analysis)

Competitiveness of India

Make in India

Introduction

Can Make in India make Jobs?

India- The Global Manufacturing Hub

Incredible India

Introduction

Integration with Country Branding

Conclusion

Brief on recent Initiatives

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Competitiveness of India

The Asia Competitiveness Forum was held on April 26 & 27, 2012 in Delhi (National Capital Region), India at Hilton, Janakpuri. The forum was organized in conjunction with The Competitiveness Insti- tute (TCI), OECD LEED, NSDC, GIZ and MSME.

The Forum covered topics related to competitiveness such as

▪ Economic Development: Economic Development: Reconfiguration, World, Asia, Regional Com- petitiveness, Urban Competitiveness, Locations, India

▪ Prosperity: Wealth, Equitable Distribution, Disparity, Wealth Creation, and Clusters

▪ Shared Value Creation: Business, Society, BOP, Cooperatives, and Business Models

▪ Asia as a driver for world economy: Dividend, Aging, Prosperity, Growth Engine, Value, Arbitrage, and Changing Role of Capitalism

▪ Manufacturing Competitiveness: Multiplier effect, next paradigm of growth for India, employment generation.

▪ The Role of Business in Society: Shared Value, Economic Objectives, Social Objectives and Philanthropy

▪ Clusters as a tool for wealth creation: Emergence of clusters in India, Productivity, Diffusion, Innovation, Seeding Clusters, Trade, Cluster Portfolio, Specialization Patterns, Technology Clusters, Cluster Composition, Internationalization

▪ Regional Competitiveness & Process of Economic Development: Provinces, Vision, Value Propo- sition, Competition within States, Business Environment, Strategy, Sustainability, Stages of Competitive Development.

Regional Competitiveness & Process of Economic Development

India’s present competitiveness status

In the Global Competitiveness Index, the overall rank of India slipped from 51st position to 56th position this year. All other Asian countries such as Malaysia, Indonesia Singapore, and Japan etc are ahead of India. Countries like South Africa and Brazil are somewhere near to India and Russia is a little lower. High inefficiency in the areas such as infrastructure, transportation, education, healthcare, power and energy etc, high fiscal deficit, high debt to GDP ratio and problems of corruption are largely responsible for India’s low competitiveness.

Role of government in competitiveness

Role of government is limited to providing macroeco- nomic and political stability. Moreover, Government can act as a facilitator. We also need basic economic framework, consistent

50

economic policies and a stable tax regime. We have to build a microeconomic capacity so that basic inputs for business are efficiently available.

Need to focus on City competitiveness

City competitiveness is also a very important issue for the prosperity and competitiveness of the country. In- dian cities are not competitive and they rank very low even on the scale of Asian cities while other Asian cit- ies such as Hong Kong and Singapore rank very high among the global cities in terms of competitiveness. In the next 20-30 years a huge investment is required in the areas of infrastructure, education, transportation, green energy etc. to make Indian cities competitive

Focus on Research

Research is an integral part of development. India needs to produce more PhDs. The mentality of mov- ing into jobs straight away after graduation and post graduation has to be changed and students should be encouraged to move into the research.

Build infrastructure

Infrastructure is extremely important if viewed from the market and business environment. When you look at the industry structure, it should be very well designed. For example, looking at IT industry, there is only one association in India (NASSCOM) dealing with government regarding policy matters and other issues. Indian IT industry is united and is represented as one industry internationally.

Bring certainty in the system

Telecom sector contributes 3 % to India’s GDP. Government Policies and regulation play a very important role in the decisions of the people who want to make investments in the telecom sector. Certainty and consistency in these policies is required for the people who want to make huge investments. India has huge potential to produce low cost smart phones which would require innovation.

Promote Entrepreneurship

When we look at the economic growth and how countries and regions compete in a global market place, then the biggest thing which impacts the above is entrepreneurship. The overall entrepreneurial spirit of the country, the desires and aspirations of budding entrepreneurs contribute towards an increase in the competitiveness of the country.

Focus on human capital and education

If we look back 20-25 years from now, what we have achieved in IT industry is significant as it is still booming. But other areas such as education sector have not moved at all. In India,

51

skilled people are required in every sector. Hence, as a country, India needs to bring huge reforms in education sector to produce skilled human capital. We need to bring more institutes in India imparting quality education and equally focusing on all the other areas not just IT and medicine. When we look at human capital, quality is more important than quantity.

Focus on sustainability

The question we should be asking ourselves is whether the economic model delivered to us, is able to meet the needs and aspirations of 7 billion people on this planet, in a balanced and a sustainable way? Hence, all the process- es and techniques adopted by us should be sustainable because resources on the planet are limited and they have to satisfy the needs of future generations as well.

Competitiveness in healthcare

US spend almost 17 percent of its GDP on health- care and Kerala spends almost 150th of what USA spends but still results are comparable. In India, cost of availing a good quality treatment is very low. Hence, India has sustainable models of healthcare. India should keep improving its healthcare System so as to retain its competitiveness in healthcare. There should be low dependency on the expensive health institutions like Fortis Healthcare, Max Healthcare etc. and maximum focus should be paid on improving the services of Primary Health Centers because India’s 80 percent population still depends on them. India also needs to increase its spending on health- care. Currently, India is spending only 1.8 percent of its GDP on healthcare.

Identify primary activity for building competitiveness

Whenever we look at a country, city or region, we should first identify its primary economic activities for building the competitiveness of the city or country. For example, Finland’s primary economic activity is telecom; hence Finland is competitive in the Telecom sector. Similarly, Japan’s strength lies in the electronic field, Detroit in the manufacturing, California in wireless etc. Government plays a proactive role in this; because economic activities are always build around a system of incentives.

Focus on manufacturing

India should focus on building manufacturing competitiveness. As mentioned in the previous sections, the manufacturing sector contributes only 15-16 percent to India’s GDP which is significantly low as compared to other economies. More- over, India’s manufacturing sector only employs 58 million people which are 12 percent of the total labor force of India. Hence, India needs to increase its competitiveness in the manufacturing sector.

Focus on water and sanitation

Government needs to focus on providing improved sources of drinking water and sanitation to the peo- ple who are deprived of them, especially rural popu- lation and

52

the urban poor. Almost 70 percent of the India’s healthcare capacity is engaged for the treat- ment of water borne diseases.

Strict Measures to curb corruption

Corruption is the biggest inhibitor to India’s regional competitiveness and economic development. Whatever the budget is allocated to various plans, is never spent in actual because of the existing corruption in the system. Moreover, corruption never lets the policies and plans to happen in the correct way.

53

Make in IndiaIntroduction

The Indian growth bubble has been in a state of constant flux. This great uncertainty led to one of the

most unanimous elections, propelling Narendra Modi to the apex of the Indian political scenario. In

the last two quarters of 2014, the sheer positive expectations of the world combined with the steps

from the new government is pushing the graph in the upwards trajectory. The GDP is forecasted to

grow from 4.6 percent in 2014-15 to 5.7 percent in 2015-16. When BJP launched its ferocious

electoral campaign in 2014, it had promised 20 million jobs in the manufacturing sector. Staying true

to his word, Mr. Modi launched his ambitious ‘Make in India’ campaign, the biggest growth reforms

in recent times, towards the fag end of September 2014. His main aim was to raise the contribution of

the manufacturing sector from 15 percent of the GDP to 25 percent. According to the industry, ‘Make

in India’ will create 9 Crore jobs in the next decade if the campaign works according to the plan.

Why Make in India?

Demographic Dividend: More than 50 percent of our country’s population is below the age

of 25 and more than 65 percent of the population below the age of 35. Despite the presence

of a huge working population, unemployment is a rampant problem in our country.

Purchasing Power Elevation: The gist of the campaign is to welcome people from across

the world to manufacture in India not only to address the social issues but also to get in more

foreign investment into the country, thereby improving the purchasing power of an average

Indian.

Skill Development: As we have the most priceless asset of demographic dividend, this

parameter plays a very crucial role in elevating this dynamic campaign. The youth of the

country can be inculcated with development and polishing of their skills in order to enhance

the productivity which will beget individual development for everyone.

FDI: This acronym is very powerful for emerging economies like India. Luring in the

foreign capital to set up huge investments and infrastructure for the production activities will

strengthen the economy with the availability of ample liquidation within the economy which

is a very good sign of progress. The sectors that are taken into account for the application of

benefits enjoyed by various corporations are as follows:

1. Automobiles

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2. Automobile Components

3. Aviation

4. Biotechnology

5. Chemicals

6. Construction

7. Defense Manufacturing

8. Electrical Machinery

9. Electronic Systems

10. Food Processing

11. IT and BPM

12. Leather

13. Media and Entertainment

14. Mining

15. Oil and Gas

16. Pharmaceuticals

17. Ports

18. Railways

19. Renewable Energy

20. Roads and Highways

21. Space

22. Textile and Garments

23. Thermal Power

24. Tourism and Hospitality

25. Wellness

The summarization of all the above mentioned sectors and the potentials in various streams of

businesses with respect to the sectors has been clearly explained and also on an employment

level, how make in India can tremendously contribute to provide sustainability in the economy

which leads to elevation of the country.

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Can Make in India make Jobs?

The paper was written by a researcher who participated in a Baker Institute Research

p ro jec t . Wherever Feasible, Papers are reviewed by outside experts before they are

released. However, the research expressed in this paper are those of the individual

researcher and do not necessarily represent the views of the James A. Baker III

Institute for Public Policy.

About the Author

Russell A. Green, Ph.D., is the Will Clayton Fellow in International Economics at Rice University’s

Baker Institute for Public Policy. He is also an adjunct professor in the Economics Department,

where he teaches international finance and macroeconomics. Green’s current research focuses on

financial market development in emerging market economies, financial inclusion, and Indian

developmental challenges. His non-academic writing regularly appears in op-ed pages of prominent

American and Indian newspapers.

Prior to joining the Baker Institute, Green spent four years in India as the US Treasury Department’s

first financial attaché to that country. His engagement in India primarily focused on financial market

development, India’s macro economy, and illicit finance, and also included diverse topics such as

cross-border tax evasion and financing global climate change activities. He worked with counterparts in

India’s government to develop the US-India Economic and Financial Partnership, launched in 2009

by Indian Finance Minister Pranab Mukherjee and US Treasury secretary Timothy Geithner.

Abstract

A new “Make in India” campaign to “transform India into a global manufacturing hub” aims to use

manufacturing as a vehicle for job growth. Is this strategy realistic? This paper helps answer the

question by describing the job growth potential of the Indian economy. Formal-sector manufacturing

demonstrates the most potential for job growth under a more supportive policy regime. The paper

models future employment paths for India for the next 20 years. Assuming sufficient reforms to

generate East Asia-style manufacturing growth, the impact on employment and output is substantial,

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even if the campaign target of 100 million new manufacturing jobs remains difficult to achieve. The

paper then describes a set of reforms sufficient to unleash such a manufacturing growth boom. Green

was previously the deputy director of the US Treasury’s Office of International Monetary Policy,

where he led efforts to strengthen International Monetary Fund exchange rate policies and

international reserve management. He started his tenure at Treasury in the Office of Quantitative

Policy Analysis, focusing on emerging market vulnerabilities and debt sustainability analysis. His

economic research has addressed bank regulation, financial liberalization, international reserve

accumulation, bilateral investment treaties, and the economics of international reproductive health.

Green speaks Spanish and Japanese and holds a B.A. from Pomona College and a Ph.D. from the

University of California, Berkeley.

Introduction

India has a jobs problem. The country’s economic growth, even at the impressive rates of the

last decade, has not produced meaningful jobs for its expanding working-age population. Dead-

end rural construction jobs have offered the only area of expansion. Millions too many

families depend on low productivity agriculture for a living as a result. The jobs issue is also

politically salient. The 10 states that elected the most members of parliament for Prime

Minister Narendra Modi’s party, the Bharatiya Janata Party (BJP), have significantly

higher fertility rates—and therefore more new job seekers—than the rest of India.

Modi’s headline-grabbing response has been a “Make in India” campaign to “transform

India into a global manufacturing hub” and thereby use manufacturing as a vehicle for job

growth. The plan includes a variety of measures from easing the regulatory burden to

establishing special economic zones to awaken India’s latent manufacturing power. Yet many

economists consider labor-intensive manufacturing to be a futile goal given India’s internal

hurdles and external competition. They suggest that India stick with its service sector

orientation and focus on improving job creation potential there. Is Modi’s strategy realistic?

This paper helps answer the question by describing the key barriers to job growth and

assessing the job growth potential of the Indian economy.

Developing a strategy for job growth requires careful identification of sectors with true

potential. Of course, examining the economy at the level of manufacturing and services skims

57 | P a g e

over important de ta i l , including many types of firms and industries that bear little potential.

Choosing t he path forward is further complicated by the fact that past performance provides a

poor indicator of true potential. A sector hobbled by an adverse environment could look

completely different with appropriate policy interventions.

Finer distinctions and anticipation of policy impacts will allow policymakers to plot a course for

optimal job growth. This paper finds that the modern service sector and the formal

manufacturing sector (both described in detail below) are the true growth sectors for India. Both

have exhibited moderate job creation on a low base. Formal-sector manufacturing, however, has

the most potential for transformation under a more supportive policy regime.

This paper models future employment paths for India for the next 20 years. The best case

scenario anticipates sufficiently supportive policy changes to generate sustained 14 percent

growth of formal-sector manufacturing. That scenario could create more than 100 million

additional jobs. Of those jobs, almost 70 million would come from high-productivity sectors, or a

shift of 8 percent of the workforce. Although such a change implies missing the Make in India

target of 100 million new manufacturing jobs, it would still put the share of employment and

output of Indian manufacturing in the range of East Asian countries like Indonesia, Malaysia, and

China in the next two decades.

The incremental approach to reform taken thus far by the Modi government has not yet

removed enough barriers to manufacturing growth to initiate such a best case scenario. In

subsequent sections the paper reviews policy measures necessary—labor reforms, general business

climate, provision of public goods, and institutional reforms—to achieve meaningful change. More

ambitious reforms will be needed to overcome the significant barriers to competitive labor- intensive

manufacturing in India.

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One of the highest priorities of the Indian government is economic inclusion —bringing more

citizens into the modern, productive economy. This is critical for meeting poverty alleviation

targets and improving many related health and education indicators. The most effective route to

improving economic outcomes is through formal sector jobs, which pay regular—and generally

higher—wages. They provide economic stability for families, allowing greater predictability and

planning in other aspects of their lives. In India only about 14 percent of the workforce has such a

formal sector job.

Formal sector jobs were the main vehicle by which China lifted 500 million people out of

poverty over the past 25 years. While poverty measurement in India is a controversial topic, India

has likely made half of China’s poverty reduction progress.3 It has at least as far to go to reach

Chinese poverty rates of 6 percent.

Demographic Headwinds

The time is right for an all-out effort to create more high-quality jobs. Current demographic

trends offer India a one-time boost in its economic potential. The country’s young population and

declining fertility levels are causing the workforce to grow faster than the population as a whole.

This is represented in the dependency ratio—the ratio of nonworking-age people to working-age

people— which has been declining for several years (Figure 1).

A declining dependency ratio is often referred to as a “demographic dividend” because a higher

proportion of workers implies higher per capita income, assuming wages at least remain constant.

Rising per capita income creates a virtuous circle with higher disposable incomes, greater

consumption, and therefore faster growth. In addition, domestic savings rise, producing a larger

pool of capital to finance investment and development. The U.S. and Japan experienced a fertility

decline decades ago and have already reaped the benefits. Positive demographic forces also

helped propel the miracle economies of East Asia to sustained high growth rates. India’s

dependency ratio started its decline around the same time as Korea and China, but the decline has

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been much slower. While the extra boost to East Asia has largely ended, India can expect many

more years before the dependency ratio bottoms out.

Figure 1. Population Dependency Ratio

Percent nonworking age/working age, with low point indicated

Source: Population Division of the Department of Economic and Social Affairs of the UN, World Population

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Global Comparisons

For India’s level of development, this economic structure does not fit the usual pattern seen

elsewhere. One of the many contributions of Nobel Prize-winning economist Simon Kuznets was

to document the typical pattern of economic development through the evolution of the

agriculture, industry, and services sectors. Today’s rich economies took a development path that

transitioned from the dominance of agriculture to large-scale manufacturing for both

employment and GDP. Only at higher levels of per-capita income did their service sectors come to

dominate the economy, becoming post-industrial economies. The classic pattern of structural

change continued in the last half of the 20th century among successful developing countries.

Most East Asian and Southeast Asian countries that have achieved sustained high growth rates

experienced industrialization prior to the rise of the service sector. In the new century, the pattern is

beginning to evolve as some of the more advanced developing countries in Asia begin their shift

toward service sector growth.12 Developing countries as a group is looking more post-industrial.

The next set of figures present the new patterns in both employment and GDP.

Looking across all developing countries in recent years, the share of employment in industry

continued to grow while agriculture employed fewer workers (Figure 3). The share of the service

sector grew fastest, however. Developed countries have lost manufacturing jobs overall as their

economies automate further and rely on services for employment.

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Figure 3. Global Change in Share of Employment, 2000–2010

Source: World Development Indicators, World Bank.

Figure 4. Change in Share of GDP, 2000–2010

Source: World Development Indicators, World Bank.

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In terms of GDP, the service sector in developing countries grew fastest, gaining output share,

while agriculture fell behind (Figure 4). Industry hit the middle, maintaining a constant share of

GDP. In developed countries industrial output actually shrank, indicating their post-industrial

status. For India, on the other hand, industry has added jobs faster than even services. A further

distinction for India is that it saw growth in industry’s share of GDP, mostly due to growth in

manufacturing. Yet the service sector share of GDP grew faster, furthering India’s service sector

dominance. So while the service sector has always eclipsed industry in terms of GDP growth,

manufacturing is more robust in India than in most developing countries.

India’s Economic Structure in Detail

Walt Rostow, eminent economist and former national security advisor, stated, “without

appropriate disaggregation the study of growth is … [like] playing piano while wearing

mittens.”14 This is certainly true in India, as Figure 5 demonstrates. There are a few high-

performance pockets of the economy, and large laggards.

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Figure 5. Performance of Sub-sectors, 2005–2012

Bubble size indicates workforce size

Source: 68th Round of the National Sample Survey and National Accounts, Ministry of Statistics.

Services

Since colonial days India’s service sector has defied the classic development pattern, as services

have exceeded industry as a share of GDP since at least 1901. It has historically been a source of

formal jobs, meaning jobs with a work contract, performance-linked incentives, benefits, better

physical working conditions, and training, and it still is today (Figure 6).

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Figure 6. Formal Sector Jobs, 2012

Millions and percent of total employment

Source: 68th Round, National Sample Survey, Ministry of Statistics.

The service sector also defied conventional wisdom by fueling India’s growth from 1994 to

2008. It avoided many of the constraints faced by manufacturing because it does not rely as

heavily on infrastructure and land. Further, regulations on labor and competition largely do not

apply to services, and the tax burden is lighter. So once technology allowed the export of software

and business services efficiently, India’s service sector developed rapidly.

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Inference

India has a dual economy, and when discussing manufacturing, it is absolutely necessary to

distinguish between its formal and informal sectors. The formal manufacturing sector would

appear familiar to a developed country observer. These firms incorporate, pay taxes, have legal

utility hookups, make some effort to comply with the regulatory structure, and theoretically have

access to the formal financial system. Informal firms, on the other hand, are much less integrated

into government-linked activities and tend to be very small. This distinction matters because

employment in informal manufacturing is sizeable, but its contribution to the economy is not

proportional. Formal manufacturing follows the opposite pattern. Figure 8 presents the specific

breakdown between the two segments according to shares of employment and value added. The

share of firms is even more skewed than employment, with 87 percent of manufacturing firms in

the informal sector.

Manufacturing Contribution to the Economy, 2012 (percent)

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India- The Global Manufacturing Hub

The stock market boom at the clear mandate given to BJP in the 2014 Lok Sabha elections and the

current stock market scenario was a clear indicator of investor confidence in the Narendra Modi

Government. Further steps by Mr. Modi like the “Make in India” and “Digital India” campaigns,

invitation to the leaders of all the SAARC countries, US and Japan visit and various business friendly

reforms have significantly created a positive business environment in the country.

However there are certain bottlenecks in the economy which the Government needs to address

towards making India a global manufacturing hub. This research paper aims to identify some of

the key challenges in the path of development and recommend possible solutions to deal with the same.

Through secondary research and data obtained from various authenticated sources like World Bank,

Wasteland Atlas of India, Ministry of Road Transport and Highways website, www.infraline.com

website, reports from Ernst and Young and various news articles from some of the leading newspapers,

this paper has been able to identify the following major challenges in the path of making India a global

manufacturing hub and accordingly make a few suggestions regarding possible solutions to deal with

each of the issues:

Improvin g the ease o f do ing business i n India

Land acquisi ti on chall en ges

Improvin g the empl o ya bi li t y o f gene ral and en gine ering gradu ates

In frastru cture d evelopme nt of major roads and hi ghwa ys in t he countr y

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Capacit y addit ion i n the power se ctor to meet ind ustrial ener g y dem and

S trengthenin g the capabil it ies of the C IS F to me et the gro win g demand fo r industrial securit y

It is to be noted that the above list is not exhaustive and there are lot of other ample

challenges towards making India a global manufacturing hub. However, focussing on these issues and

taking adequate measures to deal with the same will go a long way towards turning the “Make in India”

vision into a dream come true.

The recent launch of the “Make in India” campaign by Prime Minister Mr. Narendra Modi where

leading businessmen and CEOs of about 3000 companies from 30 countries were present is an

impressive effort on the part of the new Government to boost investor confidence in the country.

Moreover, Mr. Modi’s recent US visit and meeting with CEOs of some of the top global firms like

Goldman Sachs, Google, General Electric, Cargill, Boeing and many others definitely set the ground for

investment in India.

But at the ground level, there are a lot of challenges that the government has to overcome in order to

turn the vision of achieving a sustainable 10% growth in the manufacturing sector into reality. This

research paper aims to analyse the key issues facing the “Make in India” vision and recommend

possible strategies to deal with the same.

Below are highlighted some of the issues which the new Government has to take care of for turning the

“Make in India” vision into a reality:

1. Imp rovin g the eas e o f d oin g b usin ess i n In dia:

According to World Bank report, India ranks 142 out of 189 countries in the category for ease of

doing business based on surveys conducted in the two major cities of India, Mumbai and Delhi prior to

the new Government came to power. To increase investor sentiment, it is necessary that the

Government works to improve the various components of Doing Business indicators like starting

a business, dealing with construction permits, getting electricity, registering property, getting

credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and

resolving insolvency because it is these indicators that a firm looks at before going forward with an

investment decision in a country. The Ease of Doing Business score is obtained by conducting surveys

of start ups in the largest business cities of India. While calculating scores for each parameter the

Doing Business (DB) group takes into consideration the time taken and the cost incurred by a

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company to complete the various legal formalities for each parameter. The break-up of the Ease

of Doing Business score parameter wise is given below for Mumbai:

Topics DB 2014 Rank

Starting a Business

Dealing with Construction Permits

Getting ElectricityRegistering Property

Precedential Conditions

Getting Credit

Protecting Minority Investors

Paying Taxes

Trading Across BordersEnforcing Contracts

Source: Doing Business Report, World Bank Group

Thus, as seen from the figures in the red, it is primarily in the areas of starting a business, dealing with

construction permits, paying taxes and enforcing contracts among the other indicators that the

Government needs to focus on. Some of the suggested reforms for the above mentioned areas of

concern are mentioned below:

1.1 S ta r t i ng a B usiness: Rapidly developing economies around the world have taken steps to make it

easier for starting a business, like streamlining procedures by setting up a one-stop shop, making

procedures simpler or faster by introducing information technology and reducing or eliminating

minimum capital requirements. India should therefore implement similar reforms to reap benefits like

greater firm satisfaction and savings and more registered businesses, more financial resources and job

opportunities.

1.2 D ea l i n g with c onstr u c t i on p e rmit s : Regulation of the construction sector is critical to protect the

public. However excessive constraints on the construction sector may compel companies to pay bribes

to pass inspections or simply build illegally to avoid the excessive costs in time and money incurred

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for compliance to regulations leading to hazardous constructions that put public safety at risk.

Therefore, smart regulations ensure that standards are met while making compliance easy and

accessible to all. In an effort to ensure building safety while keeping compliance costs reasonable,

governments around the world have adopted coherent and transparent rules, efficient processes, stricter

deadlines and adequate allocation of resources.

1.3 Pa y i n g ta x e s: Taxes are essential sources of revenue for the Government. However, the

power of taxation should be exercised with extreme caution and judiciousness so that it does not

negatively impact the economy and the investment climate. Policies like retrospective taxation which

negatively impact investor confidence must be done away with. Online tax filing and payment should

be introduced in as many tax parameters as possible. Also, taxes on essential and elastic goods and

services should be kept low so that there is not a heavy tax burden on either the consumer or the

producer. The implementation of the Goods and Services Tax will foster a climate of investment and

growth by bringing about myriad benefits like broadening the tax base, eliminating indirect taxes,

central sales tax, state-level sales tax, entry tax, stamp duty, taxes on transportation of goods and

services ,et cetera. It is expected to help build a transparent and corruption-free tax administration.

GST will be levied only at the destination point and not at various points unlike the current tax

system where a manufacturer needs to pay tax when a finished product moves out from the factory

and it is again taxed at the retail outlet when sold. It is estimated that India will gain $15 billion

a year by implementing GST as it would promote exports, raise employment and boost growth.

1.4 En f o rc i n g Contr ac ts: In India, settling commercial disputes is an extremely costly and time

consuming process. According to data collected by Doing Business, contract enforcement takes on the

average 1420 days, costs 39.6 % of the value of the claim and requires 46 procedures. The Supreme

court should enforce short and strict deadlines for dispute settlement and reduce the number of

unnecessary formalities associated with dispute settlements.

2. Land Acquisition Challenges

One of the very important initial steps for establishment of manufacturing facilities by a firm is

acquiring land. Under the new Land acquisition act, developers would require the consent of up to 80

per cent of people whose land is acquired for private projects and of 70 per cent of land owners in the

case of public-private partnership projects. But the greatest concern in acquiring such land is the proper

rehabilitation and resettlement of affected inhabitants of those lands. The government has to identify

and devise strategies for the rehabilitation and resettlement of the displaced people failing which

the result can be serious conflicts. Moreover, the rehabilitation and resettlement also becomes a costly

venture. Land acquisitions for factories, roads and housing projects in states like Haryana and UP have

sparked clashes between farmers and state authorities, resulting in huge project delays. One alternative

for the government is to acquire only wasteland for industrialisation purposes. This will eliminate the

requirement of the consents and the costs of rehabilitation and resettlement and therefore lead to

speedier execution of projects. The following categories of land have been classified as wasteland as

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per the Wasteland Atlas of India in association with National Remote Sensing Centre, Indian Space

Research Organisation:

Barren

Degraded forest

Gullied land

Ravenous land

Salt affected land

Salt encrustation

Shifting cultivation

Snow covered area

Steep sloping area

Waterlogged area

Upland without scrub

Land with scrub

According to the data available in Wasteland atlas of India as per 2003 figures, a total of 552692.26 square kilometers of wasteland exist in India out of the total geographical area of 3287263 square kilometers. This vast amount of wasteland presents a huge potential for setting up manufacturing facilities after appropriate engineering and geographical assessments of these areas. Moreover, acquisition of these wastelands is unlikely to invite any criticism and hence we can look at speedier execution of development projects.

3. Imp rovin g the e mp lo yab il ity of gen eral and en gin eerin g gradu ates :

The greatest asset of any firm is its human resource. Companies will set up manufacturing facilities in

India only if it is able to find requisite amount of good quality skilled labour in the country. Around

51% of the workforce is employed in the agricultural sector which contributes to only about 17% of the

GDP and around 22% of the workforce is employed in the manufacturing sector which contributes to

around 26% of GDP. However, various surveys conducted on employability reveals a vast skills gap

between graduate skills and market needs. According to Higher Education in India: Vision 2030 , a

report produced by international consultants Ernst and Young for the Federation of Indian Chambers of

Commerce and Industry (FICCI), 75% of IT graduates, 55% of manufacturing, 55% of healthcare and

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50% of Banking and Insurance graduates are deemed unemployable. Moreover, the National

Association of Software and Services Companies (NASSCOM) maintains that of around 3 million

graduates each year, less than a third of graduates of engineering colleges and only 10% to 15% of

regular graduates are employable. It is therefore important to dwell upon the possible reasons which

cause low employability of Indian graduates in general and engineering graduates in particular. In most

of the engineering institutions the course curriculum is by and large, theoretical in nature and students

are not made aware of the applications of the theories in industry. The programmes and their course

content reflect lack of interaction among academic institutions and industries. In the process, the

curriculum quite often fails to meet the needs of the industries. Not many structural changes have taken

place in the curriculum even though rapid developments have been taking place continuously in the

field of science and technology. Moreover, the evaluation system has not been made robust enough to

find out the knowledge level of the students. The philosophy of the semester system and the continuous

evaluation process are not being understood by the students and also by the faculty members. Thus they

are applied in a routine manner and the students concentrate only on the grades and not on learning.

Since there is a lack of interaction between academic learnings and industries, graduates coming out of

technical institutions do not have the adequate knowledge to implement projects or carry out research

independently. This creates a severe mismatch between employer needs and the skills of the

graduates. Since job requirements are continuously changing it is quite difficult to produce tailor made

engineers unless there is regular and structured interaction between academia and industries.

In this regard, to facilitate technical institutions to respond to the need of providing state of art

Telecom equipment based operational skill to engineering graduates to enhance their qualification,

competence and employability by enhanced skill up-gradation, AICTE has signed an MoU with BSNL

to use the training facilities and faculty of BSNL for the benefit of students of AICTE approved

institutions under its Employability Enhancement Training Programme (EETP). Likewise, similar

enhancement programmes can be carried out by MoUs with companies in various other sectors like

automobile, power, consumer electronics, heavy machinery, construction as well as defence. Similar

measures already exist in some of the top of the world universities like MIT, Harvard and Stanford.

Also, since most of the future processes are going to be integrated through Information Technology,

Government should make computer education compulsory starting from the school level itself so that

the country is able to produce enough computer educated labour to cater to the demand in IT and ITES

BPOs. Such measures on the part of the Government will go a long way in bridging the gap between

graduate skills and market needs.

However all above mentioned points sound relevant when we look at higher education in isolation only.

If we see the whole education system starting from the elementary level we find that the problems lie

at every stage of our education system. At the school level we find that the present day syllabus does

not stress simple and subtle concepts, but involves tiresome details. Most entrance tests for admission to

better known institutions emphasise speed and memory and not calm and collected thinking. Thus an all

out effort is needed to produce readily- employable technical man power in the country. The

improvement of infrastructure, redesign of curricula, improvement of teaching-learning methods and

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attracting well qualified teachers, along with the above mentioned measures to bring in industry

interaction along with academices, are only a few steps that could be initiated by individual institutions.

4. Inf rastru cture d evelo p men t of majo r road s an d h ighw ays in th e coun try :

It is needless to say that well developed and well maintained infrastructure, particularly, roads and

highways is vital for an efficient inbound and outbound logistics of a manufacturing firm to ensure

efficient movement of raw materials and finished goods across the country as roads carry 65% of its

freight in the country. India has a total of

48.65 lakh kilometre of road network comprising National Highways (92,851 Km), State

Highways (1,38,489 Km), Major District Roads, Rural roads and Urban roads (All together

46.34 Lakh kilometre) as per figures from website of Ministry of Road Transport and

Highways as on 31st

March, 2014. National Highways comprise 1.7% of India’s total road network but carry 40% of road traffic. Most of these highways are two lane highways. Only

10,000 Km of highways have been widened to four lanes with two lanes in each direction as of

August, 2011. Moreover, as of 2010, 19064 Km of NH were still single-laned roads. With increase in

vehicular traffic and congestion in the major cities of India and for smooth movement of large

container trucks, it is imperative that the Government in association with private parties through

public-private partnerships convert the single-lane or double-lane national and state highways to

four or six lane roads to cater to the growing congestion problem in India. However, most of these

conversion projects are stuck at various stages of bureaucratic delays. With the new government at the

centre, we can hope for faster execution of projects by removal of unnecessary approval stages and

thereby leading faster clearances.

Moreover, to improve the flow of traffic, Government should work to introduce smart traffic control

systems whereby real time data on vehicular traffic flow can be obtained through sources like traffic

cameras and can be used to control the sequence and duration of traffic signals at major junctions

across India. With these initiatives, the manufacturing sector will receive a shot in the arm to tread the

path of development.

5. Capacity add ition in the pow er sector to mee t indu strial en ergy d emand :

Without the power industry, no other industry would survive. India has an installed capacity of

253.389

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GW as of August 2014, the break-up of which is given below:

In a May 2014 report by India’s Central Electricity Authority, India had an energy requirement of 1048672 Million Units (MU) of energy out of which only 995157 MU of energy were available and

out of a peak demand of 147815 MW, 144788 MW was the supply. Also, the 17th

electric power survey of India report claims that over 2010-11, India’s industrial demand accounted for 35% of electrical power requirement which will further grow significantly as more and more manufacturing

facilities come up. As per the 12th

five year plan, the Government had targeted a capacity addition of 88,537

MW out of which only 46,766 MW have been achieved so far as of August,2014. Delay in

environmental clearances and shortage of fuel supply are some of the major challenges faced by the

Indian power sector. The Supreme Court’s decision to deallocate 204 coal mines is further going to

add to the woes of the power sector. To meet the fuel shortage and avoid importing coal in order to

prevent increasing cost of power production, the Government must focus on raising domestic coal

production and improving quality of the existing mines by ensuring efficient and transparent

allocation of coal blocks. Moreover, the Government should also work on scaling up other

renewable sources of power like Hydro by focusing on resource rich states like Arunachal Pradesh,

J&K and Himachal Pradesh after accurate and proper assessment of the environmental impact of

setting up power plants in these states. All environmental and safety factors must be considered in total

before execution of any power project so that the local people and various other stakeholders are

assured of safety and minimal environmental impact due to operation of the proposed power projects in

order to avoid situations similar to those against Kundankulam Nuclear Power Plant of NPCIL and

Lower Subansiri Hydro-electric project of NHPC limited.

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Above all, there must be sufficient cooperation between the Center and the State in this regard so

that the funds allocated by the Center are properly utilized by the State towards planning and

development of power projects.

6. S t r e n g t h e n i n g the c a p a b i l ities of the CISF to m e e t g r o w i n g d em a n d f or i n d u st r ial s ec u r ity:

It is highly probable that most of the future manufacturing facilities will have to be set up in remote

areas of India, some of which are infested with insurgency and terrorism. Major industrial installations

in India like oil refineries, nuclear installations, space installations and other heavy engineering

industries have always been on terror radar. Currently, the Central Industrial Security Force (CISF)

is the elite security force which provides security cover to 300 industrial units and other

establishments located all over India. With rise in establishment of manufacturing facilities and the

growing threat of internal as well as external terrorism, the demand for industrial security cover will

rise manifold. Earlier the CISF used to protect installations set up only by wholly owned subsidiaries

of the Central Government but the CISF Act has been amended after 26/11 Mumbai attacks to provide

dirrect security cover to private installations which will be a great benefit for the private

companies who were earlier employing poorly trained security personnel to guard their

establishments. Further capacity addition of the CISF in terms of personnel, military gear and logistics

needs to be effected to increase the strength from the current strength of 165000 personnel and training

to be provided in line with other elite counter insurgency units like NSG and Marine Commandos so

that they are able to provide the best of security even in the most hostile of terror infected regions.

Conclusion:

Although the ease of doing business score went down to 142 from 134 last year, the World Bank has

taken care to distance this downslide from the NDA government which took charge barely a week

earlier and World Bank has used data till May 2014 whereas most measures to improve doing

business were undertaken subsequent to that. The various measures undertaken by the NDA

Government to address issues related to economic growth, delay in Government decisions and reforms

in the Labour law, Land law and taxation have kick started the manufacturing sector and shot the GDP

growth by 5.7 % in the last quarter. The Modi Government has also signed a staggering USD 35

Billion investment deal with Japan for infrastructure development. If governance continues in the

current manner, we can definitely hope to see significant and sustainable growth in the manufacturing

sector and progress tow ards India becoming a global manufacturing hub.

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Incredible IndiaIntroduction

For more than a decade till 2002, India’s share of world tourist traffic had remained static at

about 0.38%. India had only 18 tourism offices abroad. There was no precise communication

message one foreign office called it ‘Spiritual India’ another termed it ‘Cultural India’ and third

‘unbelievable India’. Other countries were branding themselves like Malaysia – ‘truly Asia’ and

‘amazing Thailand’ etc. In India and the Ministry of Tourism launched a campaign to promote

Incredible India as a tourist destination in 2002. The phrase "Incredible India" was adopted as a slogan by

the ministry. Before 2002, the Indian government regularly formulated policies and prepared pamphlets

and brochures for the promotion of tourism, however, it did not support tourism in a concerted fashion.

However, in 2002, the tourism ministry made a conscious effort to bring in more professionalism in its

attempts to promote tourism. It formulated an integrated communication strategy with the aim of

promoting India as a destination of choice for the discerning traveler. The tourism ministry engaged the

services of advertising and marketing firm Ogilvy & Mather (India) (O&M) to create a new campaign to

increase tourist inflows into the country.

The campaign projected India as an attractive tourist destination by showcasing different aspects of

Indian culture and history like yoga, spirituality, etc. The campaign was conducted globally and received

appreciation from tourism industry observers and travelers alike. However, the campaign also came in for

criticism from some quarters. Some observers felt that it had failed to cover several aspects of India

which would have been attractive to the average tourist.

In 2009, minister of tourism, Kumari Selja unveiled plans to extend the Incredible India campaign to the

domestic tourism sector as well. USD 12 million out of a total budget of USD 200 million was allocated

in 2009 for the purpose of promoting domestic tourism.

In 2008, the Ministry of Tourism launched a campaign targeted at the local population to educate them

regarding good behavior and etiquette when dealing with foreign tourists. Indian actor Aamir Khan was

commissioned to endorse the campaign which was titled 'Atithidevo Bhava', Sanskrit for 'Guests are like

God'. Atithidevo Bhava aimed at creating awareness about the effects of tourism and sensitizing the local

population about preservation of India's heritage, culture, cleanliness and hospitality. It also attempted to

re-instil a sense of responsibility towards tourists and reinforce the confidence of foreign tourists towards

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India as a preferred holiday destination. The concept was designed to complement the ‘Incredible India’

Campaign.

Atithidevo Bhava

It is tagline of India’s ministry of tourism’s campaign to improve the handling of tourists in India

introduced in 2004 – 2005. Target audience is the general public, but focuses on taxi drivers , guides ,

police , retailers who interact directly with tourists .The ministry also came up with the award wherein

people who help the tourists and preserve the monuments would be felicitated .The phrase is from

Upanishad which says ‘ matru devo bhavah , pitru devo bhavah , acharya devo bhavah , athithi devo

bhavah ’ . It means ‘ the mother is god , the father is god , the teacher is god , the guest is god ’.

Atithidevo Bhava was an extension to Incredible India and kind of a reminder promotion of the ongoing

mega campaign. The presentation of information through the promotional activities was executed through

the portrayal of various stakeholders belonging to the tourism sector or is indirectly related to the sector.

Bollywood actor Aamir khan is the brand ambassador of this campaign. He is conducting this

campaign without charging anything which shows his commitment.

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Integration with Country BrandingBrand ‘India’

This section discusses brand ‘India’ and could be perceived as a general indication of what India as a

brand constitutes. The Central Intelligence Agency (CIA) note that the Republic of India is home to

approximately 15 percent of the world’s population. The same source notes that, as of 2013, the number

of inhabitants in India is 1,220,800,359 (Central Intelligence Agency, 2013). In this regard, it can be

stated that only the mainland of China is inhabited by a slightly larger population. Furthermore, the

societal organization of India is divided as follows: Circa 30 percent of the Indian residents are

positioned in more than 200 towns and

cities spread over the country. The remaining 70 percent of the inhabitants are situated in over 550,000

villages across India (Central Intelligence Agency, 2013). For approximately a decade now,

‘FutureBrand’ yearly measure and rank perceptions of citizens in countries around the world - from

their cultures, to their industries, to their economic vitality and public policy initiatives (FutureBrand

2012-13, 2012). The measurement of these global perceptions and the consequent categorization of the

obtained data is ranked and formally presented in the ‘Country Brand Index’. This index is a preeminent

global study of country brands (FutureBrand 2012-13, 2012). In FutureBrand’s annual report of 2012, it

can be detected that India possesses the 42th spot on the ‘Country Brand Index’. In 2011, India

possessed the 29th place. In 2010, India was ranked as the 23rd contender on the same index. In

addition to that, India can also be detected in another ranking list named ‘Tomorrow’s Leading Country

Brands: The Future 15’. On this particular ranking list, India can be found on the 13th position.

In the annual report concerning the latter mentioned ranking list, ‘FutureBrand’ report rather

positive about India’s current condition and performances in areas such as tourism, politics, education

and trade (business). Yet, the organization also places some critical footnotes by pointing at some

obstacles with regards to the same areas. The report describes this as follows: ‘‘That being said,

India’s government often lacks the stability and foresight necessary for sustainable global

prominence. Additionally, an enormous disparity between rich and poor indicates a larger issue of

human rights abuses’’. Since its independence from Great Britain in 1947, India is gradually gaining

strength as a coherent nation as well as a brand. However, although India is experiencing rapid

growth which consequently could result in a position among the strongest economies in the world, the

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country is not fully developed yet. One of the pertinent domains in which the country is not fully

developed yet is the economy. According to Kaur (2012), the late 1980s signified the initiation of

neoliberal economic reforms in India. Many described the country as self- assured. In addition to that,

India was also rapidly flourishing in terms of its economic situation. This consequently resulted in the

obtainment of exceptionally high levels of foreign direct investments and the establishment of an

enormous and affluent middle class. Before continuing with the development of ‘brand India’, it is

interesting to convey the role neoliberal economic restructuring plays in relation to nation branding. It

explains that, over the last several decades, one characteristic of neoliberal economic restructuring

was the reshaping of the ‘nation-form’ into an image that is comparable to that of a corporation. It

refers to this as ‘Nationality, Inc’. This version of an image entails a brand image and its own

trademark. Furthermore, this approach approves of a relocation of ideas and practices which formerly

were utilized in the process of nation building and with this shift are now utilized in the process of

nation branding. According to Kaur (2012) this type of shifts often point at the achievement of an

elevated and more comprehensive form of nationhood that is in line with the current era of

globalization. Nation building initiatives are largely based on discourse about developments,

regardless of the domain. Whether it concerns economic, social, cultural or political developments,

each domain is fundamental to the nation building process. This trend was, in the case of India,

particularly apparent in the post-Independence years. Nation branding, on the other hand, is

inextricably linked to wonderful and appealing images. It also illustrates this statement by conveying

the following: ‘‘One can frequently witness, for example, the national essence of Malaysia, Qatar,

South Africa, Croatia, Brazil and India in ‘an avalanche of images’ circulated on international media

that evokes cultural difference within an aesthetic frame informed by Western sensibilities’’

Returning to the development of ‘brand India’, it notes that the mid-1990s was a period in which state

initiatives resulted in the creation of a viable and global competitive corporate brand for the Indian

nation. Furthermore, the scholar notes in this regard: ‘‘Brand India had a decade later gained world-

wide recognition among multinational corporations as well as the rich industrialised nations as an

attractive destination for investments. The global displays of a re-formed nation at the annual

meetings of the World Economic Forum at Davos and the enticing images of ‘Incredible India’

campaigns had by now successfully iterated and circulated the idea of a market-friendly India’’

Thus, it can be concluded that the ‘Incredible India’ campaign did have a positive impact on the

perception (business) people preserved about India.

Translating this scenario into concrete statistics it can be conveyed that in 2011, India welcomed 6.29

million foreign tourists. Compared to the year 2010, that is a growth of 8.9 percent. In 2010, foreign

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tourist arrivals in India were 5.78 million. In the preceding year, India was visited by 5.17 million

people (Ministry of Tourism, Government of India, n.d.). Thus, when comparing 2009 to 2010, it can

be concluded that India experienced a growth of

11.8%. Regarding the current condition of foreign tourist arrivals in India, the Indian newspaper The

Times of India states: ‘‘Arrival of foreign tourists in India grew by 2.3% in the first three months of

2013 despite the Delhi gang-rape and cases of sexual assaults on foreign tourists’’

(http://timesofindia.indiatimes.com/). This percentage denotes an increase of 46,000 foreign tourists. To

be more specific, in the first three months of 2012, India was visited by

198,1000 people. In the first three months of 2013, this digit was incremented to 202,7000 individuals.

When comparing these two time periods with each other, it can be concluded that India experienced a

surge of 2.3% with regards to foreign tourist arrivals.

The ‘Incredible India’ campaign

In this section information about the ‘Incredible India’ campaign is provided. First of all, the main

challenge which the team behind the ‘Incredible India’ campaign encountered is conveyed.

Subsequently, a contextualization of this particular campaign is relayed. After having finished this

contextualization, the story behind the ‘Incredible India’ campaign is narrated. Consequently, this

section concludes with the distinct branding features that can be detected in the diverse multimedia

content that was created for this campaign. To commence this section and in order to encapsulate the

sophistication of the ‘Incredible India’ campaign, the following quote by Kant (2009) is of main

relevance: ‘‘While it is easy to position and brand single-product destinations like the Maldives and

Mauritius or a wildlife destination like South Africa, it is extremely difficult and complex to establish a

clear, precise identity for a multiproduct like India. India is a land of contrasts, a combination of

tradition and modernity – a land that is at once mystical and mysterious. India is bigger than the twenty-

three countries of Europe put together and every single state of India has its own unique attractions.

‘Incredible India’, therefore, necessarily had to be the mother brand with the states establishing their

own brand entity and emerging as sub-brands’’. This somewhat lengthy quote nicely illustrates the

challenge that the ‘Incredible India’ team faced in order to create a brand that represents this

multifaceted country. Aside from this challenge, the ‘Incredible India’ team encountered numerous

other challenges which are, to a certain degree, still existing in the country. In the subsequent section

more elaboration is provided regarding these challenges.

Contextualization of the ‘Incredible India’ campaign

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This section provides a larger context in which the ‘Incredible India’ campaign is situated. In this regard,

it can be noted that this campaign consists out of a national-international variant and a separate

international variant. The most recent version of the national-international variant is called ‘Go Beyond’.

The Union Tourism Minister, Shri Chiranjeevi, notes the following in relation to this variant: ‘‘The ‘Go

Beyond’ campaign focuses on promoting lesser known destinations to domestic as well as international

tourists’’ (Press Information Bureau, Government of India, 2012).

The separate international variant was launched in December 2012 at the ‘World Travel

Market-2012’, which was held at London (Press Information Bureau, Government of India, 2012).

The name of the separate international variant is called ‘Find What You Seek’. In a press release

published by the Indian government, the following is noted about this particular variant: “Tourists

from the world over can find the destination or product of their desire in India, be it heritage sites,

forts, beaches, backwaters, lakes, mountains, adventure, wildlife, culture, festivals, medical, wellness,

MICE, religion or shopping. India offers something for everyone and that is why we proudly say that

India is an incredible destination with a range of products as found nowhere else. It is truly in India,

you will find what you are seeking” (Press Information Bureau, Government of India, 2012).

When analyzing the structure of the ‘Incredible India’ campaign, it can be concluded that a

phase one and a phase two exist. Phase one was launched in 2002 and was completed in

2009. According to the current Union Tourism Minister, the following can be noted about this first

phase: “Till now, we had been promoting India internationally from the point of view of the

destinations. The Incredible India campaign which we launched in 2002 has been extremely

successful’’ (Press Information Bureau, Government of India, 2012). Concerning the second phase of

the campaign, a paradigm shift can be detected. The same personality points out in this regard: ‘‘In our

‘Take II’ of the Incredible India campaign, we are going to focus on the consumer” (Press Information

Bureau, Government of India, 2012).

Before discussing some detailed information regarding the larger context in which this nation

branding endeavour is situated, it is interesting to present an applicable quote by

Blanke and Chiesa (2007), who both function as editors for the World Economic Forum:

‘‘Travel & tourism have important indirect positive development effects. It encourages infrastructure

improvements, such as better roads, electricity, telephone and public transportation networks, which, as

well as facilitating tourism, improve the economy’s overall development prospects and the quality of

life for its residents’’ In the case of India, it is justified to state that these ‘indirect positive development

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effects’ are highly necessary for the residents of the country as well as for visiting tourists. In his book,

Kant (2009) refers to results of a survey conducted by the Gallup Poll Organization. The outcomes of

the survey approve that in the time period October-November 2006 several crucial market concerns in

relation to travelling to India were identified. In order from most critical to least critical, the five

prominent and pertinent concerns that surfaced were: (1) cleanliness and hygiene, (2) safety and

security, (3) transportation, (4) promotional support and (5) affordability. When evaluating these five

concerns in light of the ‘Incredible India’ campaign, Kant (2009) reacts in retrospect by stating: ‘‘For

essentially, a brand is what a brand does. The ‘Incredible India’ campaign could not be sustained if the

quality of experience offered to tourists did not remain credible. In the long run, a branding campaign

which does not match with the actual experience does damage to the destination rather than promote it.

Infrastructure development and destination management, therefore, hold the key to India’s sustained

growth in the tourism sector. When reasoning that (actual) experiences, to a large extent, are based on

perceptions, it is interesting to introduce a statement made by Turney: ‘‘Insofar as public relations

practitioners can influence people’s perceptions, they can affect how those people will respond to

another person or organization. And, like it or not, our perceptions can be manipulated in countless

ways’’ (Turney, 2000). In a later section of the same article, the following related statement can be

detected: ‘‘Public relations is involved in this [the process of mediating messages] because its

practitioners often create mediated realities to trigger favorable perceptions of their clients’’.

Additionally, Herstein (2012) validly points out: ‘‘Despite these differences, marketing a place

(country, region, or city) depends mostly on understanding how people perceive one another’’. All in

all, it can be concluded that, although people in general have developed a more comprehensive mind-

set about the content they receive, an attentive attitude remains certainly required.

In the case of this particular nation branding endeavour, six key strategic objectives were

established:

1. Position tourism as a major engine of economic growth;

2. Harness the direct and multiplier effects of tourism for employment generation,

economic development and for providing an impetus to rural tourism;

3. Focus on domestic tourism as a major driver of tourism growth;

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4. Position India as a global brand to take advantage of the burgeoning global travel trade

and the vast untapped potential of India as a destination;

5. Acknowledge the critical role of the private sector with the government working as a

pro-active facilitator and catalyst;

6. Create and develop integrated tourism circuits based on India’s unique civilization, heritage and culture in partnership with the states, private sector and other agencies.

Regarding the vision statement for the ‘Incredible India’ campaign, the following two

objectives were identified:

I. Put India on the world tourism map and develop it as a premier holiday destination for

high-yielding tourists;

II. India should be a global brand, with worldwide brand recognition and strong brand

equity, especially in the trade and among the target audience.

o Markets

- Move from a low-volume, low-value marketing strategy to a high-value marketing

strategy;

- Defend and enhance India’s share in traditional long-haul markets;

- Develop strong short-haul markets;

- Penetrate the key source markets in Asia.

o Consumers

- Target the age group of forty to sixty-five years belonging to affluent, well-

educated, married, white-collar segments for a value-based strategy;

- Convert business travel to business-cum-leisure travel;

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- Target Persons of Indian Origin (PIOs) in the US and Canadian markets;

o Position and differentiate strongly vis-à-vis key competitors in the region

- China, Thailand, Singapore and Malaysia.

o Ensure active management of goodwill and the country’s image.

o Build strong sub-brands as key components of a risk minimization strategy.

o Develop spending avenues to capture higher value from each tourist

Nation branding

The concept of nation branding was allegedly coined by Simon Anholt in 1996. From that

moment onwards, Anholt has been perceived by the public as one of the ‘founding fathers’ of

the concept. Departing from this point in time, academia as well as practitioners gradually

involved themselves with nation branding (practices). Continuing with Anholt’s point of

reasoning on ‘nation branding’ it is valuable to repeat the working definition for this research

study: ‘‘Country branding occurs when public speaks to public; when a substantial

proportion of the population of the country – not just civil servants and paid figureheads –

gets behind the strategy and lives it out in their everyday dealings with the outside world’’

While numerous definitions of nation branding are available, this particular definition is

unique in the sense that it recognizes t hree parties that contribute to country branding

endeavors. Indeed, nation branding activities are not constrained to civil servants and paid

figureheads. The residents of the country as well play a prominent role when it comes to

promoting the country’s (unique) characteristics. The significance of the latter group is

reinforced by Olins, who by many also is perceived as a founding father of ‘nation

branding’. Olins (2002) note: ‘‘a major aspect of all brands is the imagery or associations that

people hold about them’’ (p. 246).

This statement by Olins can undoubtedly be related to a country’s historical as well as

contemporary events. O’Shaughnessy and O’ Shaughnessy (2000), for instance, state the

following about the link between country branding on the one hand and events that occurred

either in the past or occur at present: ‘‘Any nation can be viewed as a brand as it can be

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viewed as a compound of contemporary and historical associations that have relevance for

marketing. This is commonly accepted, and the notion of the nation as a brand has an instant

and even populist resonance’’ (O’ Shaughnessy & O’Shaughnessy, 2000, p. 56).

Before continuing on the branding part of ‘nation branding’ it is fundamental to define

the word ‘brand’. According to the official online edition of Oxford Dictionaries, one of the

meanings of ‘brand’ is: ‘a particular identity or image regarded as an asset’. Fan (2008)

elaborates on this definition by stating that whether nation branding practices are being

performed intentionally or unintentionally every country possesses and maintains an image to

their own residents and simultaneously to a global audience. In 2007, Anholt attended an

interview with Teslik and stated that nations have gained an increased awareness of the

pertinence of their brand as being an asset (http://www.cfr.org/). Furthermore, in one of his

preceding works, Anholt (2005) elaborates on the term brand from a commercial point of

view: ‘‘Brand is a critical factor because impeccable quality, performance and reliability are

simply the cost of entry to most modern marketplaces: they are not sufficient to create lasting

competitive advantage or even regular sales. Brand is what drives consumer choice when

products and services are broadly equivalent’’ (Anholt, 2005, p. x). In a subsequent section,

Anholt relates the concept ‘brand’ to organizations and countries by stating the following:

‘‘Brand’ is a useful summation of the intangible competitive assets of an organisation or a

country: its vision, its genius, its distinctive character, its people, its promise to the

marketplace. These are the factors which when aligned around a clear strategy, give it

sustainable competitive advantage, the right and the ability to charge a consistent premium,

and customer ‘permission’ to constantly innovate and extend the range of products and

services on offer. It is not surprising that the market capitalisation of many companies puts a

value on their brands which is many times greater than their tangible assets, and if it were

possible to measure the brand value of countries, it would exceed their physical resources by

an equally large factor’’ (Anholt, 2005, p. x). This rather lengthy quote does approve of the

value of brands whether this is approached from a corporate perspective or a country

perspective. Taking the scope of this study into consideration the question that becomes

interesting is to what degree academia and practitioners nowadays are aware of the value of

country brands.

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In 2011, Kaneva points out in this regard that nation branding practices ‘‘are yet to be fully

understood’’. The scholar notes: ‘‘In short, nation branding seeks to reconstitute nations both at

the levels of ideology, and of praxis, whereby the meaning and experiential reality of

nationhood itself is transformed in ways that are yet to be fully understood’’ (Kaneva, 2011, p.

118). In the statement about the status of nation branding, Kaneva (2011) refers to two

interesting concepts, that of ideology and that of praxis. In case of the latter it can be stated that

various activities can be subsumed under nation branding practices. Kaneva illustrates this as

follows: ‘‘In terms of practical manifestations, nation branding includes a wide variety of

activities, ranging from “cosmetic” operations, such as the creation of national logos and

slogans, to efforts to institutionalize branding within state structures by creating governmental

and quasi-governmental bodies that oversee long-term nation branding efforts.

Anholt also relays his point of view on this matter by referring to so called ‘architects of

nation branding’ and ‘nation branding programs’. The prominent scholar on nation branding

notes: ‘‘The most ambitious architects of nation branding envision it as a component of

national policy, never as a ‘campaign’ that is separate from planning, governance or

economic development” (Anholt, 2008, p. 23, emphasis in original). Once such nation

branding efforts or programs are being considered, a valid question one might ask concerns

which audience is to be targeted. Referring to the working definition for this research study it

is interesting to note that, in actuality, the public at large is integral part of the campaign(!).

As might be recalled: ‘‘Country branding occurs when public speaks to public;

when a substantial proportion of the population of the country – not just civil servants

and paid figureheads – gets behind the strategy and lives it out in their everyday dealings

with the outside world’’ (Anholt, 2003, p. 123). Aside from the actors who establish and

execute a nation branding program, the public at large also significantly partake as active

disseminators of the ideals of the program.

In addition to that, Volcic and Andrejevic (2011), note that the participatory

audience in nation branding campaigns can be widely diverse: ‘‘The target audience for

branding campaigns is both internal and external, including foreign and domestic markets,

tourists, investors, and populations’’. This statement is supported by Fan (2008) who notes that

every country has a particular image which is portrayed to its international audience. Also, Fan

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(2008) reminds the public that the brand of a country always exists regardless of the fact

whether the brand was managed consciously or unconsciously. In this regard it might be

interesting to pose the question what the intentions are for consciously branding a nation.

Papadopoulos (2004) conveys four related objectives: (1) enhance the place’s exports, (2)

protect its domestic businesses from ‘foreign’ competition (for sub-national places this may

include those from other regions in the same country), (3) attract or retain factors of

development and (4) generally position the place for advantage domestically and

internationally in economic, political and social terms. Papadopoulos (2004) assigns these four

objectives to two parties around the world, government officials and trade association

executives. Anholt (2005) supports the fourth objective when he points out:

‘‘A country’s brand impacts virtually every aspect of its international engagement, and thus

plays a critical role in its economic, social, political and cultural progress’’

Kaneva is one of the few scholars who approached the concept of nation branding from a

more theoretical point of view. In 2011, an article which discusses the maturing research

domain on nation branding was published by this scholar. In the article an appeal was made

for an expanded critical research agenda on the topic. Throughout the publication a wide

orientation was maintained by discussing 186 scholarly sources across various disciplines

related to nation branding. Kaneva (2011) classified each selected article in one of the

following categories: technical-economic, political, and cultural approaches. These three

categories largely determined the organization of the article. In this regard it should be

pointed out that these three categories are borrowed from Bell (1976). The ‘technical-

economic’ approach is a first term that was coined by Bell and applied by Kaneva to classify

numerous articles related to nation branding. The articles that can be subsumed under this

particular category are largely composed by practitioners or marketing scholars who engage

themselves with topics related to nation branding. These two groups of people generally

approach the subject from a functionalist perspective. In other terms, nation branding is

perceived and applied as a tool which could be utilized to enhance a country’s competitive

advantage in the worldwide marketplace. The ‘political’ approach which can be valued as

the second perspective was applied by Kaneva to identify publications that are mainly based

on ‘public diplomacy’. Furthermore, writings that fall within this category depart from a

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political ground. Regarding the term ‘public diplomacy’ it can be stated that this concept

was introduced in the 1960s. In general, this concept is perceived as the predecessor of

‘nation branding’. Unfortunately, however, until present day, there is still no uniform

agreement in what manner ‘public diplomacy and ‘nation branding’ are related to each

other. When investigating the domain of strategic mass communication and in particular

‘public diplomacy’ and ‘nation branding’, it can be concluded that two camps exist in this

particular domain. One the one hand there is a group of academia who perceive the two

concepts as separate, yet related to each other. One the other hand, there is a group of

academia who reason that the two concepts are fundamentally indistinct from each other.

This latter group of academia justifies this line of reasoning by noting that elements of the

technical-economic approach have partially fused with the political approach. Before

elaborating on the last approach it should be pointed out that this current publication about

the ‘Incredible India’ campaign can be subsumed under the political approach. The third

perspective that was initiated by Bell (1976) and referred to is named ‘cultural approach’.

The following is noted about the position of this particular perspective within the ‘nation

branding’ domain: ‘‘the cultural realm is one of studies from disciplines that concern

themselves with conditions for economic growth, efficiency, and capital accumulation.

These include marketing, management, and tourism studies’’. The fundamental distinction,

between the cultural approach on the one side and the two aforementioned perspectives on

the other side, is that the former does not aim at establishing theories about nation branding

and the consequent application of those theories to practical circumstances. In fact, the

academia who reason from a cultural perspective are mainly concerned with analysing and

scrutinizing (i.e. critiquing) the various theories that provide a ground for discourses and

activities with regards to the existence of nation branding. These theories, among others,

relate to matters such as culture, governance and national identity.

Conclusion

The campaign proved to be a turnaround for the recovery of the thriving tourism sector of our country.

Since campaign was launched in October 2002, no. of international tourists has been increasing. India

was aiming to have 1 % market share of global tourist traffic by 2016 ( it was 0.64 % in 2012 ).

Maximum tourists would be visiting U.P (Agra), Kerala , Rajasthan , Andhra Pradesh & Tamilnadu.

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The results were seen in the enhancement and elevation of international tourist arrivals year on year. The

projection of flow of traffic from respective countries is also a substantial part of the campaign.

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SR. NO

TOP

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5 UK 9.6

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Year wise International Tourist Arrivals in India

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YEAR TOURISTS IN

LAKHS

2000 26.5

2001 25.4

2002 23.8

2003 27.3

2004 34.6

2005 39.2

2006 44.5

2007 50.2

2008 53.8

2009 51.1 ( Global

economic meltdown

and swine flu scare)

2010 57.7

2011 63.09

2012 66.48

As it is witnessed that right from the launch of the campaign there has been an impressive improvement in

the performance of the tourist sector and Incredible India proved to be the most impactful element under the

banner of country branding. Only the year 2009 was an exception because of Global economic meltdown

and swine flu scare which led to fall of traffic only in that particular year. Overall, the campaign has been a

mega hit across the globe and will remain the finest example for apt initiative by a country for growth of its

tourism sector.

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in various streams that are directly or indirectly resulting in industrial growth and development of trade

and commerce. The current campaigns included in this section are as follows:

1. Digital India

2. Aero India

3. Clean India

1. Digital India:

Digital India is an initiative of Government of India to integrate the government departments and the

people of India. It aims at ensuring the government services are made available to citizens electronically

by reducing paperwork. The initiative also includes plan to connect rural areas with high-speed

internet networks. Digital India has three core components. These include creation of digital

infrastructure, delivering services digitally and digital literacy.  The project is slated for completion by

2019. A two-way platform will be created where both the service providers and the consumers stand to

benefit. The scheme will be monitored and controlled by the Digital India Advisory group which will be

chaired by the Ministry of Communications and IT. It will be an inter-ministerial initiative where all

ministries and departments shall offer their own services to the

public Healthcare, Education, Judicial services etc. The Public-private-partnership model shall be adopted

selectively. In addition, there are plans to restructure the National Informatics Centre. This project is one

among the top priority projects of the Modi Administration.

The initiative is commendable and deserves full support of all stakeholders. However, the initiative also

lacks many crucial components including lack of legal framework, absence of privacy and data protection

laws civil liberties abuse possibilities, lack of parliamentary oversight for e-surveillance in India, lack of

intelligence related reforms in India, insecure Indian cyberspace, etc. These issues have to be managed

first before introducing DI initiative in India. Digital India project is worth exploring and implementation

despite its shortcomings that can be rectified before its implementation.

2. Aero India

Aero India is an extension to the make in India campaign specifically focusing on the manufacturing

related to the defense sector. The tenth edition of Aero India was held from 18th to 22nd February 2015.

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The main attraction of this year was the Make in India campaign by Prime Minister Narendra Modi.

Prime Minister Modi inaugurated the show and mentioned that its easier for Public, private and foreign

investors to manufacture defense equipment in India after the reform of the defense procurement policies

and procedure. He also mentions the simplification of offset procedures and mentioned the need to have

strategic partnerships rather than buyer seller relationships. The Small and Medium scale industries are

also meant to benefit from being part of global supply chain by providing cost effective engineering

solutions to global players. He also stressed the need to export equipment and also to ensure that it dont

fall into the wrong hands. There is a requirement of one million skilled workers in the Aerospace industry

in India in the next 10 years. The aim is to make ensure that 70 percent of the defense equipment are

made within the country in the next five years from the current 40 percent. This can create large number

of jobs. Prime Minister Modi said that "A strong Indian defense industry will not only make India more

secure. It will also make India more prosperous".

Tejas on display

A total of 72 aircraft were part of the air show. The main attraction of the event was the fly past and

demonstration by HAL Tejas, HAL Light Combat Helicopter, Sarang display team and air display teams

from Sweden, UK, Czech Republic and Open sky jump by US Special forces. A total of 11 foreign

military aircraft on display, out of which a majority of them from the United states including two F-15C

Eagles, two F-16C Fighting Falcons, one Boeing KC-135 tanker, one C-17 Globemaster III and a P-8A

Poseidon maritime surveillance aircraft.

3. Clean India

Clean India Mission or also known as Swachh Bharat Abhiyan is a national campaign by

the Government of India, covering 4041 statutory towns, to clean the streets, roads and infrastructure of

the country.

This campaign was officially launched on 2 October 2014 at Rajghat, New Delhi, where Prime

Minister Narendra Modi himself cleaned the road. It is India's biggest ever cleanliness drive and 3 million

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government employees and school and college students of India participated in this event. The mission

was started by Prime Minister Modi, who nominated nine famous personalities for the campaign, and they

took up the challenge and nominated nine more people and so on (like the branching of a tree). It has been

carried forward since then with people from all walks of life joining it.

The components of the program are: a) Construction of individual sanitary latrines for households below

the poverty line with subsidy (80%) where demand exists. b) Conversion of dry latrines into low-cost

sanitary latrines. c) Construction of exclusive village sanitary complexes for women providing facilities

for hand pumping, bathing, sanitation and washing on a selective basis where there is not adequate land or

space within houses and where village panchayats are willing to maintain the facilities. d) Setting up of

sanitary marts. e) Total sanitation of villages through the construction of drains, soakage pits, solid and

liquid waste disposal. f) Intensive campaign for awareness generation and health education to create a felt

need for personal, household and environmental sanitation facilities. With effect from 1 April 1999, the

Government of India restructured the Comprehensive Rural Sanitation Program and launched the Total

Sanitation Campaign (TSC). To give a fillip to the Total Sanitation Campaign, effective June 2003 the

government launched an incentive scheme in the form of an award for total sanitation coverage,

maintenance of a clean environment and open defecation-free panchayat villages, blocks and districts

called Nirmal Gram Puraskar. Effective 1 April 2012, the TSC was renamed to Nirmal Bharat

Abhiyan (SBA). On 2 October 2014 the campaign was relaunched as Swachh Bharat Abhiyan. To give it

a marketing expansion, how giant corporations are leveraging through this campaign to initiate their

marketing communications which also gives exposure to this campaign is also important to understand.

The two best examples are of HUL and Reckitt Benckiser. Their recent Integrated Marketing

Communication campaign is formulated with the background of the Clean India Initiative. HUL is using

it for its brand Lifebuoy whereas Reckitt Benckiser is using for its globally renowned brand Dettol.

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CHAPTER-3 Qualitative Research

o Introductiono In-depth Interviewso Analysis and Findings

Qualitative Research

The mode of qualitative research that was conducted for this project was the direct approach. Under that, in-depth interviews were conducted of executives working at M/S H. Dipak & Co, a diamond processing company holding a world monopoly in manufacturing of Princess cut diamonds.

In-depth Interviews

The following experts holding the respective designations were interviewed as a part of the research.

I. Mr. Dilip M. Patel, Constitute Attorney, M/s H. Dipak & Co.

II. Mr. Minesh P. Kothari, Sales Executive, M/s H. Dipak & Co.

III. Mr. Kalpesh Ashawa, Chief Financial Officer, M/s H. Dipak & Co.

I. Mr. Dilip M. Patel, Constitute Attorney, M/s H. Dipak & Co.

1. Do you think Make in India is required for diamond processing?

No, it is not at all required because out of every 13 rough diamonds in the world, 11 are processed

in India. Even China who is claimed to be a manufacturing hub for established markets has failed

to overpower India as far as Diamonds are concerned.

2. 100% FDI in Quarry mining is allowed through the automatic route, what are your views about

that?

Yes it will be beneficial in toning down the COGS structure of our inventory which will beget

lowering of production of cost of jewelry which will ultimately benefit the customer.

3. What are the universally applicable skill sets in management that can be executed in other

manufacturing businesses as well?

Inculcation of people skills in business management helps in any kind of industry. The skill

development initiative under Make in India can contribute enormously by roping in experts in

their respective domains.

4. What are the challenges faced in portraying India as a brand to the world?

My company holds a world monopoly in princess cut diamonds. Other than that, in order to

provide variety and also to cater to all the segments in the markets, 15 more cuts have been

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offered by us in the overseas markets. India is considered as a premium country and the brand

association of India is quality assurance as far as diamonds are concerned.

5. What are the parameters for eligibility of being a DTC sight holder?

The motive of being a sight holder is minimization of number of intermediaries. Even though

diamond is a luxury product, the customers prefer the company which provides a bit less

expensive.

6. Which are the subsequent industries affected by your industry? How much have they flourished?

The human capital market has developed enormously. Also, the banking sector has grown

because 95 percent of exports of diamonds to the entire world is conducted from India. Most

importantly, the taxation has also increased because of our contribution which has benefited the

government.

7. Summarize the future of the diamond business in India.

The diamond business has been on a constant elevation. As the progress happens of all the

businesses, the number of HNWI increases as well, this is our target market. Nothing can beat the

charm of a diamond and its perceived value

II. Mr. Minesh P. Kothari, Sales Executive, M/S. H. Dipak & Co.

1. Do you think Make in India is required for diamond processing?

No, it is not at all required because out of every 13 rough diamonds in the world, 11 are processed

in India. Even China who is claimed to be a manufacturing hub for established markets has failed

to overpower India as far as Diamonds are concerned.

2. 100% FDI in Quarry mining is allowed through the automatic route, what are your views about

that?

Yes it will be beneficial in toning down the COGS structure of our inventory which will beget

lowering of production of cost of jewelry which will ultimately benefit the customer.

3. What are the universally applicable skill sets in management that can be executed in other

manufacturing businesses as well?

Inculcation of people skills in business management helps in any kind of industry. The skill

development initiative under Make in India can contribute enormously by roping in experts in

their respective domains.

4. What are the challenges faced in portraying India as a brand to the world?

Low cost of production and volumes is our USP. The volume business is provided by India in the

form of cutting and polishing of diamonds and therefore India is very well respected and is

considered as the king of Diamonds.

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5. What are the parameters for eligibility of being a DTC sight holder?

De Beers check the marketing ability of the company first. They see whether the company has the

audacity of sell huge volumes of diamonds in the local as well as international markets. An audit

of books of accounts is a must and also their sight holder ship is classified into two types like for

manufacturer and trader.

6. Which are the subsequent industries affected by your industry? How much have they flourished?

The machinery sector related to diamond processing has grown enormously. 15 years ago that

business was nothing but now it has elevated to the extreme levels. Indian companies like

Sahajanand have developed over the period. The Make in India initiative should be employed for

this particular domain also in order to make India the largest supplier of diamond machineries as

well.

7. Summarize the future of the diamond business in India.

The man made diamonds are the latest thing that has happened in this industry. They are 30

percent less accurate than the natural and authentic ones. How the man made diamonds are

accepted by customers, future of diamond market depends on that. We will have to enter that

segment as well so that we can provide and cater to our customers. Also, keeping both the options

is necessary for growth and stability of the market.

III. Mr. Kalpesh Ashawa, Chief Financial Officer, M/s H. Dipak & Co.

1. Do you think Make in India is required for diamond processing?

It is not required for the diamond market. The reason is completely transparent as the motive of

the campaign is to make India the global manufacturing hub. We are already the global

manufacturing hub for diamonds.

2. 100% FDI in Quarry mining is allowed through the automatic route, what are your views about

that?

It will be fruitful as it will ease down the working capital requirement. Forex loans will come

down taken by manufacturers in regards to the import-export transactions. Also, the cost of

manufacturing may come down further leading to enhancement of volumes.

3. What are the universally applicable skill sets in management that can be executed in other

manufacturing businesses as well?

The diamond business is very peculiar and is different. The entire market is dominated by family

driven businesses. Major Corporates like Tata and Reliance have entered the Jewelry business but

not the diamond processing business. People required are to be very trustworthy and highly

skilled in the cutting and polishing. Hence, this industry has always been family driven which

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makes it unique. Different industries have different requirements. They have to be more versatile

and adapt to the changing markets accordingly.

4. What are the challenges faced in portraying India as a brand to the world?

India is the most respected country as far the wisdom and knowledge related to diamonds is

concerned. We are very proud when we conduct any sort of overseas business when it comes to

representation of our country. We have the best skill labor in the world and are completely

exclusive.

5. What are the parameters for eligibility of being a DTC sight holder?

The conditions that are laid down by De Beers are conventional and are taken to be with the view

of thinking of the future. They firstly check on how creative you are. We provide 15more variants

of diamonds other than our world monopoly in princess cut. Also, creative in the way of

enhancing the market base which will be beneficial for De Beers as well. The usual conditions are

related to the financial capacity of the firm.

6. Which are the subsequent industries affected by your industry? How much have they flourished?

The banking sector has leveraged enormously from the progress of our market. It is very crucial

as it caters to the long and short term strategies of any type of organization. But in reality, they

are taking us in a negative manner. The policies are becoming stringent which may tone down our

performance and may become a threat to the industry as a whole. Private Sector banks are

keeping a condition of compulsorily being a corporate entity to enjoy the benefits of financing.

This is not at all a good sign because as I mentioned before that the entire industry is family

driven which means that the mode of incorporation is proprietary. We are their customers and we

should be treated accordingly. Big manufacturers like us do not have a problem but the MSME

section of the diamond market may face some indiscretion. Also, I see many banks are opting for

downsizing which means they are contributing to the elevation of unemployment levels which is

not at all good and futuristic.

7. Summarize the future of the diamond business in India.

There is tremendous potential. As the younger generation of the family has entered their family

business, they are contributing a lot to enhance the efficiency. IT has played a vital role. Earlier,

the processing was done manually but now modernization of processes has made India as a whole

the global manufacturing hub.

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Analysis and Findings

The inference that can be drawn after conducting in-depth interviews of experts associated to the diamond

business that India as a brand in front of the entire world is treated with reverence and has tremendous

contribution in the uplift of the diamond business of the entire world. The passion towards the concept of

rarity shown by Indian companies has resulted in a proud achievement for the country. The art required to

nurture a diamond is completely present in the labor force associated to this industry and also trust plays

a very important role in achieving and maintaining the world leader position.

The key findings were that the policies of banking are not liberating for small players in the market which

may create a ripple effect on the industry as a whole. If the small players are affected then the industry is

affected as well. The other major finding was existence of artificial diamonds. The perceived value of a

natural diamond and its authenticity cannot be matched up to the artificial one. Although, the mass market

may be catered on a higher scale if the pilot phase of the artificial diamonds is successful. The skill sets of

the natural diamond market of India can be applied in the manmade diamond processing as well and can

be benefitted for the country as a whole.

Nonetheless, the charm of a natural diamond can never be replicated using the manmade technology and

therefore a natural diamond is perceived to be a luxury product and the artificial one would just be

considered as a product because of the absence of the perceived value.

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CHAPTER -4 Conclusion

Bibliography

Annexure

Conclusion

The concept of country branding is very much essential and creates a phenomenal impact in the minds

of the rest of the world. Specifically considering the Brand ‘India’, its products can be considered as

various latest as well as ongoing campaigns which were discussed earlier like

Make in India, Incredible India, etc. Knowing the best and attracting the already existing best proves to

be fruitful for further acceleration. For example, USA was the largest exhibitor in the recent exhibition

initiated under the banner of Aero India. A country’s image results from its geography, history,

proclamations, art and music, famous citizens and other features. The entertainment industry and

the media ply a particularly important role in shaping people’s perceptions of places, especially

those viewed negatively. Our show business of Bollywood has played a very vital role in

representing the country and therefore International celebrities have shown keenness in

associating themselves to Bollywood. From Greek mythology to French panache and Russian

roulette, from German engineering and Japanese technology to British rock and Brazilian soccer,

and from Brussels lace to Hollywood movies, references to countries and places are everywhere

around us in our daily life, social interaction and work. Subconsciously, countries are present in

the offerings of various corporations who have embarked their presence across the globe. The

companies that are representing their countries abroad play an important role in creating an

impactful impression. The examples in the Indian context consist of the following companies to

make it understandable:

a. GCMMF Ltd: Gujarat Cooperative Milk Marketing Federation which owns the brand Amul

is the latest example. India is the largest producer of milk in the world and it contributes 17%

to the total world milk production and Amul is the market leader in the dairy industry of India.

In order to proudly represent the country in being the largest producer, they have set up

operations in New Jersey, USA and are currently processing 2 lakh liters of milk per day. It

can be considered as a reverse strategy of the Make in India initiative. The essentials of Make

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in India are not required to be executed in the dairy industry so therefore in order to expand its

horizons, the presence can be established across the globe.

b. Infosys Ltd: Infosys is a global leader in consulting, technology, and outsourcing

solutions. We enable clients in more than 50 countries to outperform the competition and

stay ahead of the innovation curve. 

c. Rosy Blue: Rosy Blue is into the business of Diamond Processing and trading. Another

industry where India has already mastered. 95 percent of the exports of diamonds across the

globe is executed by India. Also, out of every thirteen rough diamonds in the world, eleven

are processed i.e. cut and polished in India. They have presence in China, Belgium, USA,

Japan, UAE, Israel, Hong Kong and its headquarters in India. Their contribution has been

renowned by big mining houses De Beers and Alarosa. These are the few corporations just as

an example to prove a point that representation of national companies internationally

contributes tremendously to country branding and make the international entities inculcate a

sense of reverence for the country that leads to further exploration of opportunities.

The qualitative research that was conducted was with the motive of evaluating the synergy

between the current initiative of Make in India and the industry which is already the global

manufacturing hub. As far as country branding is concerned, India as a brand is perceived

with high reverence in the diamond processing domain and the motive of the campaign is to

earn the level of respect in all the manufacturing businesses as well.

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BIBLIOGRAPHY

1. http://planner.se/2009/10/how-do-you-build-a-country-brand/

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