Tag Archives: place branding

A Sustainable Competitive Advantage

Imagine that in 30 years, sales of energy will become a small part of the value created by energy and the image created by energy production would create just as much or even more value.

Energy can become a valuable ingredient in nation branding. Nation- or place branding is a difficult task since it is about finding something that is unique for a country and millions of people can align themselves with. This brand essence is something that visitors to the country should experience and products originating from the country can use as a frame of reference in their branding.

CHARGE Energy Branding held an event recently in Reykjavik regarding Iceland as a country brand and a country of origin for brands. The subject of the event was Sustainable energy and Competitive advantage. It was the first of smaller events related to CHARGE Energy Branding. These events are meant for local business communities and energy clusters to discuss specific topics related to their operations. The next event will take place in Copenhagen on the 25th of May. The subject of the event is Creating a shared language for Smart Energy – to accelerate Green Transition. Further information and registration can be found by following this link.

The aim of the event in Reykjavik was to bring together people from different corners of the Icelandic economy to discuss energy branding and how the image of Iceland as a country of clean, renewable energy can increase the value of products and services in Iceland. Could the sustainable image of Iceland be a competitive advantage for Icelandic companies?

What is a Competitive Advantage?

Michael Porter coined the term Competitive Advantage in 1980’s. The term refers to what it is that makes goods or services superior to all other choices customers have. Porter considered there to be three determinants of Competitive Advantage, Benefit, Target Market and Competition. Success is determined by how good you are in articulating the benefit to the target market and convince them that the benefit is better than the competition.

For a company to succeed, it must create clear goals, strategies and operations to build a sustainable competitive advantage. Corporate culture and the values of employees must align with the goals.

For a nation to create a sustainable competitive advantage, it would require a push from every stakeholder and unite them under the same values and goals. To discuss the potential were representatives from the office responsible for the image of Iceland abroad, a branding expert from an advertising agency, aluminium CEO and a seafood CEO.

The event was presented and moderated by Dr. Friðrik Larsen, CEO of LarsEn Energy Branding and the Chairman of CHARGE. He opened up by saying that nation branding is a choice but by choosing not to brand, people are choosing to waste one of the most valuable naturals resources.

First to present was Inga Hlín Pálsdóttir from Visit Iceland. She talked about the strategy of building the country brand Iceland. Visit Iceland was initially focused on building the nation brand in relations to tourism but then started to include Iceland as a country-of-origin-brand in their marketing message. Energy is a large factor in the image of Iceland with 97% of foreign visitors agree that they are positive towards the use of renewables in Iceland.

Viggó Örn Jónsson, creative director of Jónsson & Le’macks looked at the possibilities of leveraging Iceland’s renewables in the nation’s image even further in the story-telling of the nation brand of Iceland. He stated that products that use terms such as Organic, Fair Trade and Sustainable have become the luxury products of the Western World. International household brands are starting to look more closely at every aspect of their value chain to make sure that every link can meet the demands of consumers today. Iceland has a unique opportunity to become a luxury brand through storytelling. “We have this magic island where everything is powered by 100% clean energy people use volcanoes to heat their homes and power their kitchens”. But the challenge is to create a simple, clear story that everyone, cross-sectors, can tell. In Viggó’s opinion, everyone is selling the same product – the image of the country.

Next up was Ragnar Guðmundsson, CEO of Norðurál which is part of Century Aluminium. Ragnar’s company proudly states that they make the World’s Greenest aluminium. Just as Viggó pointed out – big global brands are looking at every way to green their value chain. While he makes the greenest aluminium in the world – it is hard for large global brands to make such claims since there is not yet a branded gold (or aluminium) standard for green aluminium. A green stamp of origin for aluminium is being developed and Ragnar hopes that within two years, aluminium producers will be able to differentiate their product and create a competitive advantage with the source of energy as a branded ingredient.

Guðmundur Kristjánsson gave the last presentation. Guðmundur is the CEO of Brim Seafood, the largest seafood company in Iceland. Guðmundur pointed out that there are many things that other sectors could learn from the Icelandic seafood sector. And indeed, he is correct. Iceland is one of the few countries in the world with sustainable fishing stocks – due to the transferable quota system. As Guðmundur pointed out – 30 years ago the country would fish twice the amount of today. Today, however, the revenue of the fisheries is twice the amount it was 30 years ago when the quota system was implemented. Instead of throwing away by-products and just keeping the fillets, the fishing industry is utilising every part of the fish caught and is not focusing only on fish as a food product. Fishing in Iceland has become an innovative high-tech industry that is not only focusing on the core commodity.

For energy, it might be put this way: Iceland is today throwing away an image that energy production produces just like it did with various parts of the fish 30 years ago.

 

The power of City Branding

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Great cities are charged with energy. New York is so buzzing it never sleeps, Paris is intense yet laid back & cool and charged with romanticism while cities like Austin and Berlin are filled with creative energy. These cities have formed a lasting impression in our minds. We have often caught the vibe of those places without even visiting them. These cities have enjoyed a favourable word of mouth and popular culture has further helped shape them as brands.

The benefits of a strong city brand

There are namely three reasons (or segments) why cities (and countries for that matter) actively try to build a favourable image. They are all about creating an attraction for those segments.

1. Inhabitants

Cities are looking to retain and attract new inhabitants. Just like for companies, inhabitants with a strong sense of the image of the city they live in are happier. A city that has a strong, positive image becomes an attractive place to relocate to. Being a sought out city brand for inhabitants means that the talent pool grows.

A city that has a strong, positive image becomes an attractive place to relocate to

2. Tourists

A strong brand comes first in mind when it comes to deciding on consumption. A city that has a strong image pops ups first when people are thinking of taking a vacation. There are of course many things that exclude a certain city such as the occasion of the vacation or the time of year.

3. Companies

Companies, like most people, seek out to be in the company of their peers. If you are a start-up, your dream is Silicon Valley — If you want to produce a film, you go to Hollywood. It is not just about the hype, if you know that your peers are there, chances are that the infrastructure and knowledge are already there. And along with companies come jobs and jobs attract inhabitants.

Landmarks are like iconic logos

Building a powerful city brand is about being an attractive city in the eyes of the consumer or the stakeholder. It is not about creating an attraction. The Empire State Building and the Eiffel tower are great landmarks or icons for their cities but Paris and New York are about more than that — landmarks are kind of like logos — a logo is a graphical representation of a brand but there is more to it than the logo for great brands. Just like strong product brands — strong city brands appeal to people because of an emotional connection. The strongest city brands in the world are strong because they provide people with an intangible benefit, an experience.

The Empire State building and the Eiffel tower are great landmarks or icons for their cities but Paris and New York are about more than that.

Energy as an ingredient for the city brand

While every city has a certain energy to it or a vibe, not many cities have actively built their brands around energy in the literal sense. There are of course cities like Houston or Aberdeen that have become known for their oil industries but that image often has a hard time to translate outside the energy industry. We can see cities that are building an energy brand on a B2B level. Vasaa in Finland has a strong energy cluster and another example is Berlin. Berlin is not known as a powerhouse of energy sources but rather a powerhouse of creative energy sources. The image of Berlin as an energy brand builds on its image of creative energy and focuses on energy innovation.

We can see cities that are building an energy brand on a B2B level.

Energy imagery as part of the city brand has not yet been fully utilised. There are enormous opportunities for cities around the world to become strong energy brands. It can be based on novel or innovative ways of energy usage or it can use landmarks as icons for their energy brands. The Hoover Dam and the Niagara falls are great examples of iconic landmarks that have attracted millions of people for decades. But there is yet a city to emerge that uses those kinds of landmarks as an active ingredient that adds value to the city brand.

Energy can create even more value

When I set out to research the possibilities of branding energy, I wanted to do more than guide energy retailers into creating new logos and jingles or adopting a new colour. I wanted to see how energy can create more value than it already does by making an emotional connection to the consumer’s minds. This can be done by branding energy as a valuable ingredient for sectors outside the energy space. One of the areas this applies to are cities and countries as brands -as energy brands.

I wanted to see how energy can create more value than it already does.

That is why cities and places as energy brands have been a topic in at the CHARGE Energy Branding Conference agenda. To make energy more valuable we must look at ways to connect energy to other things than devices through a socket in the wall.

The sustainable energy brand

When preparing for his presentation in the track on the branding of sustainable energy, search engines turned Ayoola Brimmo to the CHARGE website. In the introduction of the presentation, he noted that this was the only place to discuss how to successfully brand sustainability.

A brand needs to take a look at the past to be able to build towards the future was the key point to take from Ayoola Brimmo’s lecture at CHARGE 2016. Ayoola works at the Nordic Innovation hub in Abu Dhabi and used the case of Dubai as an example of a city brand that has become more valuable due to a strategic brand building that focuses on the perception of luxury. Another example of a city brand that has been developed in the Emirates is Masdar City. When Dubai is the luxury city brand, Masdar takes footing as a luxury brand but goes further to differentiating itself by focusing on the sustainability of the city. Even though sustainability has become sort of a buzzword in the last decade, Masdar has yet to become a city brand with a worldwide recognition.