Marketing Malta

Addressing a recent breakfast meeting, Chris Hothersall, HSBC Malta chief executive, emphasised that Malta needed to be marketed as a whole. How come?

It can be argued that a nation is not some washing powder. A nation has many facets - political, social, cultural, environmental - which should not be commercialised. Considerations relating to the nation still carry highly emotional overtones.

Nations, or their forebears, have always contended for power, prestige and influence. It was said that trade follows the flag. Nation branding, as an academic sub-discipline of marketing, is still in its infancy; and yet it has been the secret behind the success of the more advanced economies over these last 100 years. Today there are over 190 nation-states.

Competition between them has now overtly shifted onto economics. Practically each nation is competing to attract foreign investment and promote its exports, including tourism. Malta is one small player in this increasingly cluttered arena.

In the effort to ensure that our society prospers, earning important foreign exchange and enjoying rewarding jobs, Malta faces the daunting task of being constantly noticed and remembered. Ask the tourism, enterprise, maritime, freeport and financial authorities, all of which are individually trying to compete with institutions which have significantly higher budgets.

Each of these authorities is trying to depict its own picture of little Malta, with no coherence or convergence at all. How can Malta be perceived as an up-market tourist destination when ships flying our flag continue to cause all sorts of calamities around the world? What should Malta do to preserve the integrity of our financial services in the light of a scandal such as Parmalat?

Past economic success is no guarantee for the future. As nations, regions, cities fail to adjust to changed market conditions, their competitiveness is eroded. Argentina is, of course, the latest glaring casualty.

Up to the early 1990s, Malta had a clear base for its competitiveness. Essentially, we offered a dedicated, English-speaking, relatively cheap labour force as well as proximity to European markets.

Our perceived competitors then were Ireland, Scotland, Spain, Portugal and Southern Italy. Other countries in the Far East, such as Singapore and Hong Kong, were even cheaper but their advantage was partly offset by their remoteness relative to European markets. This applied particularly to smaller run operations.

Today's scenario is completely different. Malta has changed, and our labour costs have risen significantly. The way that international enterprises carry out their business has changed.

Developments in process technology enable a high degree of flexibility even in mass production set-ups. Communications and transport costs are faster and cheaper, reducing spatial and time barriers to the international flow of goods, services, capital and people. Nations which were considered as politically unstable have opened their economies to global capitalism, putting on the market huge and cheap labour resources.

Within this changed scenario Malta is generally no longer able to compete on low cost. Measures such as freezing wages and devaluation would be an admission of the failure of our economic policies. We have to learn to compete in a different way. The dynamics of economics and the management of enterprises are not what they were a couple of decades ago.

The first task for our country is to get its product right. What are we really good at? What is our absorption capacity for higher technology? How can we raise our productivity levels? Productivity is more than cost control and production efficiency. It is also determined by what buyers are willing to pay for a product. Buyers are willing to pay more if the product is of a better quality, has better features, is offered together with better services, or carries a better brand name.

What does it take to produce higher value products? Attaining higher value does not necessarily mean that we produce nothing but semiconductors or helicopters. What matters most is not what industries Malta competes in, but how we compete. It is sufficient to look at our neighbours in Italy to understand that we can prosper by exporting such traditional products as clothing, footwear and furniture.

Then we need to reposition our economy. It is not sufficient to state that Malta has to be competitive. We also have to define who our competitors are. Is it the Germans, the Cypriots or the Vietnamese? This requires that our enterprises, and institutions, in both the private and public sectors, graduate into a marketing frame of mind.

Marketing a nation as a whole is a highly complex and onerous challenge. Every country has some form of national identity, including an image and reputation, entailing both positive and negative associations. As competition intensifies, a nation will increasingly need a clear and a realistic strategy for communicating and promoting its unique selling points.

Foreign policy, sports, cultural events, all assume an importance in delineating and supporting the chosen image and in defining the characteristics of the national character. Creativity, determination, tolerance, fair play. Valid image-building should seek to amplify and co-ordinate what exists, and should not be a fabrication.

Images are to be simple, believable, distinctive and must have appeal. National branding should take a pro-active stance, seeking to identify and manage a country's attributes, values and assets so as to create a coherent and mutually supporting image.

Twenty-five years ago Spain was coming out of a Facist era marked by isolation, poverty and low-cost tourism. Now, successful marketing and branding have enabled Spain to transmit a successful story - a choice destination for party goers and for second and retirement homes within the European Union.

The experience of more advanced societies shows that culture is of critical importance in communicating a country's spirit and essence. This is not a new form of propaganda hailing some culture for its superiority, but merely as the nation's contribution to global humanism. The challenge is to present past cultural achievements alongside modern ones in ways that are fresh, relevant and appealing to the target client base.

Nation brand-building also helps create a reputation for a country's clusters of excellence, which help give an external dimension to enterprise productivity. Hence, the Swiss are renowned for watches and banking, the French for wines and high couture, the Germans for precision engineering and chemicals and so on.

Nation brand-building has to be seen as an integral part of a long-term national strategy. All the other key elements of marketing have to be present. Otherwise, marketing becomes a counter-productive whitewash.

In a small society like ours which lacks the financial resources or critical mass to go for traditional mass marketing techniques, the alignment of images and policies becomes imperative in seeking to outsmart, rather than outspend, our competitors. We are niche players whether we are trying to attract foreign investors, tourists or buyers for our products and services.