A nation in the peak of brand health
Scotland has an exciting time ahead with major sporting events bringing the world’s attention to its shores - and that is a golden opportunity for its national brands.
Scotland’s jobs market is showing ‘continuing improvement’ and salaries are rising at their fastest rate since last May, according to analysis from Bank of Scotland out this week. This sign of economic growth, along with the Commonwealth Games in Glasgow next year, is making the country attractive to brands.
Although sponsors had been difficult to attract to the Games - the theory being that they were distracted until last summer by the Olympics - brands are now beginning to line up.
“We have a good list of brands on board and a number of deals to close in the next few months,” says Ty Speer, Glasgow 2014’s deputy chief executive, who was previously client services director at London 2012.
Last year, domestic visits generated £2.87bn - slightly down on 2011 but not a disaster given a washout summer and the southern draw of the Olympics. But Speer says the effect of London 2012 has been “almost universally positive”.
Law firm Harper Macleod was the first business to sign up as a sponsor of Glasgow 2014. Marketing director Laura Vernett admits it was a “risk”, given that there could be negative fallout from the Olympics, but in the end the opposite happened. “The goodwill [from London] has transferred to Glasgow with barely a pause for breath and already there is a feeling that the build-up has started and people are getting excited.”
One sector expected to do particularly well out of the sporting event next year is food and drink. National body Scotland Food & Drink helped increase the value of the sector to £12.4bn in 2010 - just shy of the £12.5bn target set for 2017. In 2007, the figure was £10bn.
“We’re showing the best growth of any sector in the country,” claims chief executive James Withers. Most notable is the increase in food and drink exports, with revenues up from £3.7bn in 2007 to £5.4bn in 2011.
Scottish global exports of whisky reached £4.2bn in 2012, up from £3.8bn the previous year and second only to oil at £7bn. Some in the whisky sector - and perhaps Sean Connery - would like to have seen Bond change his favourite tipple to scotch whisky rather than Heineken lager, but despite that the sector is doing well.
In a YouGov survey published last December, whisky was named as Scotland’s “most recognised national asset”, ahead of its scenery, tartan and the poet Robert Burns.
As a national brand, Scotland ranks at 15 on the 2012 Anholt-GfK Roper Nation Brands Index. Conducted annually since 2008, the index examines the image of 50 nations by looking at exports, governance, culture, people, tourism, investment and immigration.
The way a country is perceived can make a crucial difference to the success of its business, trade and tourism efforts - and this is where Scottish government and industry efforts to develop consistent messaging are helping brand Scotland punch above its weight.
According to professor Alan Wilson at the University of Strathclyde’s department of marketing, the governing Scottish National Party has placed “a great deal of focus” on raising the country’s profile, particularly in sectors like food and drink where national bodies have been set up to exploit Scotland’s competitive advantage.
This, he says, is more difficult to do south of the border where regional brands are often competing with one another. Helen Campbell, head of UK and Ireland marketing at VisitScotland, agrees: “England and Ireland have strong brands, however Scotland has a united approach to [its national brand] and [whatever the industry] there is a consistent message relating to quality. We also don’t over-promise and, from that perspective, I think we are getting things right.”
Although being Scottish for some brands is important within the country, it can be less so outside. Drinks brand Irn Bru, made by AG Barr, has moved away from marketing its Scottish heritage, says head of marketing Adrian Troy.
“We don’t really use our Scottish heritage to sell the brand outside of Scotland. It’s more about making a connection with the consumer. For some brands Scottishness can work, but not necessarily when you’re targeting a 19-year-old from Leeds.”
Some businesses, however, see heritage as core to their marketing. Highland Spring group marketing director Sally Stanley says: “The foundation of our brand is its provenance as it conveys purity. But we’ve had to add to that. We are competing with soft drinks brands that are dedicated to an emotional bond with their consumers, and that is something the water sector needs to look at too.”
Stanley says some marketers can get “hung up” on Scottishness without really knowing what it means to their brands or consumers. “There is no need to over-egg the pudding,” she explains, especially for a product like Highland Spring, which sells 85 per cent of its volume south of the border.
What will happen to Scottish brands with big markets in the south if Scotland votes to become independent is likely to be a hot topic as campaigning builds towards the autumn 2014 referendum.
Maitland Mackie, chairman of the Mackie’s of Scotland ice cream company has suggested Scottish brands will “experience an increasing backlash to the Scottish independence hype”, while Michelle Mone, co-owner of MJM International and creator of lingerie brand Ultimo, has vowed to move her business to London in the event of a ‘Yes’ vote.
Given the lack of detail available, confusion around issues such as EU membership and fear of alienating customers, few others have nailed their colours to the mast bearing the St Andrew’s cross or the Union flag. But regardless of the result, the vote is just one of a “perfect storm” of events helping Scotland gain coverage and profile, as Harper Macleod’s Vernett concludes.
“Hollywood seems to have set up shop here recently and [the movie] Brave gave us a tourism boon; we’re set to host two of the world’s largest sporting events; and all this is set against the backdrop of a national debate on Scotland’s future, independent or otherwise.
“This perfect storm has created a moment when the world seems to be watching, and this is the kind of opportunity no amount of marketing alone could create. So any brand worth its salt has to capitalise on this.”
In the past 12 months, Brad Pitt, Scarlett Johansson and Halle Berry have all made movies in Glasgow. What’s more, the filming of the final scenes of the latest James Bond movie, Skyfall, in drizzly Glencoe prompted CNN to name Scotland this year’s top travel destination. “Anybody who saw the James Bond thriller walked away wishing they too could race through Scotland’s dramatic countryside and hide out in its misty highlands,” said CNN.
But it’s not just Bond that has, according culture secretary Fiona Hyslop, made Scotland “the country of the moment”. “The CNN [story] was a great lift off this year,” the former brand development manager at Standard Life turned politician tells Marketing Week.
“[But] then there is the Ryder Cup [the third most watched sporting event in the world], the Commonwealth Games and the referendum, which are of interest on a global stage. They’re all helping to raise our profile.”
Case study: beefing up sales
At a time when the quality of meat products has never been higher on the marketing agenda thanks to the horsemeat scandal, Scotch Beef is the biggest selling Scottish food and drink brand in the UK, with sales of £247m, according to Kantar Worldpanel. But while domestic and European markets have historically been important, analysts suggest the future lies in emerging markets.
Food exports from Scotland have rocketed in the past few years making the sector second only to oil in terms of value, but PricewaterhouseCoopers has warned a reliance on the Eurozone could be risky. “We export around 70 per cent of our food to the Eurozone, but this could pose a real threat to the industry,” concludes a report by the consultancy. “With low growth prospects in the UK and Eurozone markets, the most successful firms will be those that develop a business strategy focused on exploiting emerging markets.”
China, Japan, India and Brazil are already exhibiting a huge appetite for the range of high quality products that Scotland’s larder has to offer. “There are 100 cities in China that have bigger populations than Scotland and we just need some tiny crumbs of that,” says Jim McClaren, chairman at Quality Meat Scotland (QMS).
“In China, they are demanding food that isn’t Chinese - and they particularly want European PGI [Protected Geographical Indication] products.”
Scotch Beef and Lamb, which QMS helps to promote, have that status. However, marketing controller Suzie Carlaw says that provenance alone won’t be enough. “It’s a brilliant pillar, but just saying the product is Scottish isn’t enough. You have to back it up.” What it is backed up with depends very much on the consumer - and in the UK their needs are changing.
Mark Thomson, business unit director at Kantar Worldpanel in Scotland, says there is a “buzz” around Scotland at the moment, but that is being tempered by the economic downturn. “Scottish [food and drink] brands have done well getting their act together [but] marketers must understand how shoppers are affected [by the downturn]. They must change to meet their demands.”