Kerim Kertiyev, PhD in Economics, National Institute of Finance, Turkmenistan, Chary Nurmuhammedov, Head of Office, UN Resident Coordinator’s Office
Nowadays, transition to sustainable development is among important trends fundamentally changing the foundations of the world order. In the modern economy, nations’ welfare is largely formed by the ability of each country to diversify its economy, stimulate economic growth through real measures of support to SME development and export various goods. This is fully aligned with the UN Secretary-General’s call to invest in “economic models and policies to secure sustainability, well-being and the future” (Our Common Agenda, para 77), as well as with Sustainable Development Goal (SDG) 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.
Exported goods often have a brand status. In a situation where real demand exceeds existing supply, there is no need to create brands. However, to be competitive in foreign markets, domestic producers need to be equipped with the most modern knowledge and technologies that will enable them to achieve a highly professional organization of market processes and contribute to the effective promotion of their own products in foreign markets. The focus on exports is an objective prerequisite for the innovative development of any individual country’s industry, realizing its scientific and technical potential, and revamping business activity. Such development aligns with SDG 9: Build resilient infrastructure, promote inclusive and sustainable industrialization, and foster innovation.
The term “brand” comes from the Old Norwegian word “brandr”, a name to a property stamp to brand household items and livestock. The modern meaning of the brand appeared in the 19th century. The reason for its emergence was the growth of production. With increasing competition, producers could not afford remaining nameless. Therefore, they began marking their products with a unique sign. Over time, a corporate combination of colors, shape of packaging, an individual name and other brand attributes were added to it.
In our opinion, the Euro-Asian branding model being formed in the countries of Central Asia, has its own peculiarities, due to both the socio-economic development of their national economies and the specifics of consumer behaviors in this region:
– in the consumer’s mind, the concept of “brand” is evenly distributed between the country of origin, the attractiveness of packaging and the trademark. That is why the name of the brand should be supplemented with information about the country of origin;
– the brand in Central Asia, to a much greater extent than in Europe or America, is perceived as a symbol of “authenticity of the product” (absence of suspicion of counterfeiting the brand);
– The brand name is of particular importance in the formation of a brand image. In fact, it is the strongest and most memorable “identifier” of a particular product;
– it is necessary to take into account the mentality, national traditions and peculiarities of the perception of advertising messages by local consumers.
Although the region has successful experience in applying the concept of branding, it is currently quite modest. At present, only certain industries and companies in these countries are engaged in branding. As a result, these brands are not widely known abroad. Nevertheless, they are an important market asset of modern business.
The most active competition between domestic and international brands can be observed in the market of fast-moving consumer goods (FMCG). This is one of the few segments of the local market where the share of local trademarks is predominant. This is due to the high localization of production of perishable goods and the high speed of consumption. Consequently, the development of this market is very active.
In our opinion, it is worth remembering that an integrated approach is needed here (quality, design, convenience, reasonable price, a clear definition of the target audience and your market). It is necessary to regularly monitor the current trends and competitive environment. There should be a special “zest” of the product that can impress consumers around the world and make them believe in local brands. The UN supports this idea of “promoting entrepreneurship, including through start-up capital and training in business, digital and essential soft entrepreneurship skills” (Our Common Agenda, para 51).
National brands indicate the connection between a product and the manufacturer with a specific country (territory). There are two main reasons for the emergence of national brands. First, in product promotion activities there is often an indication of the country of origin. Second, national brands can be conditioned by the inherent connection of the product with the specific characteristics of the country of origin. Each country is unique in terms of climatic, natural, resource, historical, and cultural factors. They can provide a solid foundation for the specialization of national producers in the global market. For example, the practice of associative assessment of the quality of various food products (jamon (Spanish ham), prosciutto, camembert, basmati, Darjeeling) based on the country of origin is widely spread. In terms of exporting such products, the government can significantly help small businesses, whose products pass the selection and obtain the right to use the national brand. In global practice, the criteria for granting exporters the right to use a brand are objective: compliance with national standards, localization percentage, and membership in business associations.
In addition, it would be appropriate to allow the use of domestic brands for products that have been awarded a national quality mark. The main objectives of such a mark are to help consumers choose good products and promote domestic producers who make quality goods.
There are several similar regulations recognized worldwide on the American continent. Let’s mention some of them. DSA (Direct Selling Association) certificate, which is an American trade association, brings together leading global companies operating in the direct sales industry. This certification is closely related to consumer rights protection and maintaining high ethical business standards. The certification of the Energy Star Joint Program of the US Environmental Protection Agency and the US Department of Energy sets clear boundaries for energy consumption for a wide variety of products. It is also worth mentioning the UL mark of Underwriters Laboratories Company for standardization and certification in the field of safety engineering. Since its establishment in 1894, the company has evolved from its roots in electrical and fire safety to addressing broader safety issues such as hazardous substances, water quality, food product safety, performance testing, and ecological sustainability. Additionally, the API (American Petroleum Institute) mark or API Standard is used by the American Institute of Petroleum and Gas. Products that have been confirmed to comply with this standard are marked with this symbol: directly on the product, packaging, or accompanying documentation. The mark certifies that all necessary tests have been conducted, all production conditions have been met, and the quality meets the established requirements.
For instance, the British Kitemark is considered one of the oldest quality marks on the European continent. The British Standards Institution (BSI) has been awarding it since 1903. Initially, the kitemark was a brand of British standards for tram rails, and then it has spread to other products. In the countries of the European Union, CE mark is used. It is mandatory for all products sold on the European market and means that the product complies with EU regulations and requirements. In Japan, the JIS (Japan Industrial Standards) mark is used. This mark confirms compliance with a set of requirements used in the Japanese industry. Each country has its own national quality standards.
Possession of the quality mark can increase the sales of various products in the domestic and foreign markets. In many countries, this is done by autonomous non-profit organizations that monitor the quality of goods. Such an authorized organization conducts an independent examination of goods throughout the country. During the examination for the quality mark, identical products of different brands are compared with each other according to a variety of criteria. As a result, each manufacturer can evaluate their product compared to the one of competitors’. Products that have successfully passed research and certification are awarded a quality mark. This gives the right to mark products with a quality mark.
In the 21st century, national brands in a rapidly growing global market have great potential. To be successful in a competitive market companies have to innovate, including training and retraining their personnel through specialized professional training programs. This activity is closely aligned with implementation of SDG 4 “Quality Education” – Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all.
The brand is also an instrument for environmental protection. Any production exactly like this should follow “green” principles involving the use of energy-saving technologies that are non-aggressive towards humans and the environment. The UN Secretary-General mentions this on numerous occasions, including in Our Common Agenda, speaking about green economy transition and the need for a change in business models (Our Common Agenda, para 76), “concerted efforts to adopt new technologies and invest in green economies” that contribute to new jobs creation. (para 51). This aspect of the brand as a type of production is consistent with SDG 13: Take urgent action to combat climate change and its impacts.
Today, specialists from Central Asia study the possibilities of accelerated export development. Distant countries currently do not have a full understanding of the significant sectors of the national economies in this region. In the coming years, not only goods but also services in the fields of transportation, education, tourism, and information technology will be attractive. Conditions need to be created and assistance provided for these directions to enter external markets.
The factors we have presented focus on the economic aspects of the issue. They reflect the main directions within which competitive advantages are formed. However, production, demand, related and ancillary industries, structure, and competition among producers are limited to the practical side. These factors are often seen as a driving force behind increasing the competitiveness of national economies. However, the human factor, national culture, and geographical advantages are also fundamental for creating a country’s competitive advantage. The most significant factors in forming such advantages can be identified through an analysis of the functions implemented within the framework of national branding.
Promoting national brands in export markets will be successful under certain conditions. Today, further implementation of various measures in this direction is necessary. One of them is to promote external trade. It plays an important role in ensuring sustainable and inclusive development and in restoring economic cooperation after the pandemic. The products of many manufacturers from the Central Asian countries can be successful for export, which is consistent with the UN Secretary General’s proposal for a “fairer and more resilient multilateral trading system, including a reinvigorated WTO”. ///nCa, 7 March 2024