Small Country, Big Brands

August 24, 2009 issue In a February 2009 ranking of Swiss brands by Interbrand, the top five brands were, in order of brand value, Nescafé, UBS, Nestlé, Credit Suisse and Zurich. Other globally recognized brands in the top 20 included Rolex, Omega, Lindt, Swatch and Longines. How did a tiny country largely known for keeping to itself become such a branding powerhouse? It starts with Switzerland’s view of its own brand. The inherent value of “Swiss made” brands is so In a February 2009 ranking of Swiss brands by Interbrand, the top five brands were, in order of brand value, Nescafé, UBS, Nestlé, Credit Suisse and Zurich. Other globally recognized brands in the top 20 included Rolex, Omega, Lindt, Swatch and Longines. How did a tiny country largely known for keeping to itself become such a branding powerhouse? It starts with Switzerland’s view of its own brand. The inherent value of “Swiss made” brands is so high that the country’s government is currently considering new laws to protect it: “The government wants to replace vague laws with concrete rules to crack down on abuses of ‘made in Switzerland’ and Swiss cross labels” (“Protecting ‘Swiss made’ brand divides opinion,” swissinfo.ch, April 6, 2008). The movement is known in Switzerland as “the legislation project Swissness.” Interestingly, the notion of “Swissness” is a cause for concern among some Swiss brands. New laws being considered would potentially make it legal to use the well-known Swiss cross (white on a red field) as a marketing tool but restrict the Swiss coat of arms to government use only. Victorinox, maker of the Swiss Army Knife, has used both the Swiss cross and the coat of arms for 100 years. Touring Club Switzerland has used the coat of arms since 1896. Their brands would be directly affected if this new rule were to be implemented. The fact that the Swiss government is wrestling with revising its intellectual property laws says something: This is a country that clearly understands the value of branding. In fact, Switzerland’s Federal Department of Foreign Affairs (FDFA) publishes a comprehensive corporate identity manual for Brand Switzerland because “a focused and strong brand definition is necessary for successful positioning in the international market.” The FDFA sees Switzerland’s values and character as moving from the present characteristics, “reliable, precise, exclusive, rich, beautiful, and neutral,” to the future characteristics, “trustworthy, premium quality, and authentic.” Switzerland’s reputation for high quality, precision and design is legendary, so it follows that the perception of Swiss brands and products is strongly positive. The “Swissness Worldwide Report,” presented at the Swiss Brands 08 conference in Zurich, surveyed some 8,000 foreign consumers. According to swissinfo.ch, “Respondents from 66 countries strongly associated Swiss products with high quality, reliability and luxury. An international comparison of goods and services saw Switzerland ranked highest of 12 countries, including Japan, Germany and the United States” (“Swiss brand still stands for quality,” June 19, 2008). However, consumers rated Swiss products poorly when it came to “price competitiveness” and “innovation.” Despite an overall positive brand perception, Switzerland has not been untainted by recent controversy. Perhaps the most damaging blow to Swiss brand credibility of late has been the country’s role in the world’s financial problems. UBS, Switzerland’s largest bank and a prominent global institution, was fined almost US$ 800 million in early 2009, charged with helping wealthy Americans evade income taxes. Credit Suisse, Switzerland’s second-largest bank, narrowly avoided the tax evasion scandal but suffered financially during the banking meltdown. This has not been the only sticky issue swirling around Switzerland: “… Switzerland’s image has been battered abroad with accusations of xenophobia during the general election two years ago…This comes on top of negative press in the past decade over dormant Holocaust-era bank accounts and money laundering” (“‘Made in Switzerland’ brand retains its appeal,” swissinfo.ch, June 12, 2009). It seems, though, that it would take a lot to undermine a Swiss brand. Many are steeped in a tradition that extends for more than a century, and most have represented stability, quality and dependability for decades, recent economic problems notwithstanding. In the financial market, for example, UBS, Credit Suisse and Zurich are legitimate long-standing global brands. UBS originated as Union Bank of Switzerland in 1852. The distinct UBS logo, with three keys and the red letters “UBS,” is recognized in 50 countries. Credit Suisse was born in 1856 as SKA and didn’t become widely known by its current name until the 1970s. The company says it became an “integrated global bank” in 2006.
	Zurich, a diversified insurance company founded in 1872, serves customers in 170 countries. The company recently launched a global brand campaign focused on Zurich HelpPoint, “the collective term for the many guidance, solution and service offerings we deliver that capture our commitment to putting customers at the heart of all we do,” the company says. Print ads and television spots featuring HelpPoint have been prominent in the US and Europe. In consumer goods, Switzerland is home to the Nestlé Company, started by Henri Nestlé, a pharmacist who created an alternative to human breast milk in the 1860s. The product apparently saved the life of a premature infant and was subsequently marketed in Europe. In Henri’s German dialect, Nestlé means “little nest,” so Henri chose a bird’s nest, also his family’s coat of arms, as his trademark. A stylized version of the trademark is still used in the modern-day logo. The Nestlé Company has grown into a global behemoth, with over 280,000 employees worldwide and 2008 sales of close to CHF 110 billion (one CHF—Swiss franc—is worth about US 92 cents). The Nestlé brand family spans the food category—examples include Perrier and Poland Spring in bottled water, Cerelac and Gerber in baby cereal, Cheerios and Estrelitas in cereal, Butterfinger and Kit Kat in chocolate, Edy’s and Häagen-Dazs in ice cream, Stouffer’s and Lean Cuisine in convenience foods, and Alpo and Purina in pet food. The brand name Nescafé is a combination of Nestlé, the brand owner, and the word café, representing coffee. Nescafé is an instant coffee that was introduced in Switzerland in 1938. For most consumers, the two brand categories most associated with Switzerland are probably watches and chocolate—with good reason, since Switzerland excels in both. The Swatch Group (the word “Swatch” was formed from the words “Swiss” and “watch”) is the world’s largest watchmaking group, including not just the Swatch brand, but also the brands Breguet, Hamilton, Longines, Omega and Tissot. Other renowned Swiss watch brands include Breitling, Rolex and TAG Heuer. There are several prominent Swiss chocolate brands, among them the 160-year-old brand Lindt, which is marketed in more than 100 countries. The Ghirardelli chocolate brand is part of the Lindt & Sprüngli Group. One of the more distinctive chocolate brands is Toblerone, a unique blend of Swiss chocolate, honey and almond nougat produced in an unusual triangular shaped bar. It was first created in 1908 by Theodor Tobler and Emil Baumann. While Swiss brands are not recession proof, they have an appeal and a cachet that transcends economic conditions. “Swiss products stand for top quality at higher prices, but not for luxury,” says Dominique von Matt of the Swiss advertising consultancy Jung von Matt/Limmat. “The Swiss reputation for reliability, quality and precision has even more value now than before the recession” (“‘Made in Switzerland’ brand retains its appeal,” swissinfo.ch, June 12, 2009). As a country that has a big stake in big brands, Switzerland will undoubtedly work hard to keep it that way.
	Barry Silverstein is a freelance writer/marketing consultant and co-author of the McGraw-Hill book, The Breakaway Brand