20 March 2013

Can “Brand Mongolia” be a reality?

Recently the Mongolian Prime Minister started a conversation about the opportunity to create a new global brand. Let’s call it “Brand Mongolia”. It was reported that the Prime Minister pointed out that some countries represent a brand themselves, such as Scotch whisky, Swiss watches and Japanese cars and that Mongolia has yet to establish its own brand and unique signature in the world market. The first challenge to creating a brand from scratch is agreeing on what unique aspects of the culture or geography should be chosen to form the anchor of a national brand.

Mongolia’s tourism is seen by some economists as the logical inflection point to diversify the heavy reliance on mining exports in the Mongolian economy and there are many interesting plans to increase international tourist arrivals to the country. Besides, if you were looking to build a new and sustainable brand you might be persuaded by the argument that some economic sectors, such as agriculture or mining, only generate short and medium-term gains in an economy, but tourism is the “oil that never runs out”.

Mongolia attracts around 450,000 international inbound tourists each year to enjoy its numerous tourist attractions such as untouched natural wonders and rare paleontological finds with its dinosaur fossils being one of the biggest tourist attractions. Tourism currently accounts for 3% of total employment in the country and contributes 9% of GDP. So perhaps it makes sense to use tourism as the anchor to build a national brand?

With Mongolia myopically focused on internal issues such as its political instability, crumbling infrastructure and a failing education system, it is easy to understand why the outward-focused tourism sector has received so little state support to date. However, the lack of essential ‘hard assets’ such as these in the tourism sector can realistically be resolved with the right political policies and inducements for experienced foreign investors to commit the much needed capital into this quarter of the economy.

What Mongolia would need to bring to the table to make “Brand Mongolia” a reality will be the ‘soft assets’; the human capital that will provide the service components behind the tourism product. A recent publication by the World Economic Forum may provide some insights for the Mongolian policymakers to consider when contemplating how they might deliver of this challenge.

The report entitled The Travel & Tourism Competitiveness Report 2013 ranked Mongolia 99 overall out of 140 economies in a benchmarking study but received some of the lowest global rankings for its service and attitude towards tourists, specifically the degree of customer orientation. As if that is not enough bad news when you’re about to embark on building a globally competitive tourism brand, the report also pointed out that the attitude of the Mongolian population towards foreign visitors was among the worst in the world which, in my view, only exacerbates the problem of a lack of customer orientation.

Clearly there is much to do to bring about a vision of international tourism being the globally recognised brand for Mongolia, but like all leading brands, the quality of service is a major intangible driver of brand value and one which “Brand Mongolia” can’t afford to ignore.

Nigel Finch
Director of Admissions, Associate Professor at the University of Sydney Business School

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