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 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.
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.
About the Author
Sam Vaknin ( http://samvak.tripod.com ) is the author of
Malignant Self Love - Narcissism Revisited and After the Rain - How the
West Lost the East. He served as a columnist for Central Europe Review,
PopMatters, and eBookWeb , and Bellaonline, and as a United Press
International (UPI) Senior Business Correspondent. He is the the editor
of mental health and Central East Europe categories in The Open
Directory and Suite101. |
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