The Italy Brand: Defending and Strengthening Its Value

The recent acquisitions of Bulgari and Loro Piana, both rewarded with record value multiples (in the latter case more than 21 times the gross operating margin), are excellent examples of the made in Italy's extraordinary appeal, as well as of the impelling necessity of strengthening the Italy brand.
The strength of a brand depends on three cognitive components: brand identity, brand awareness and brand image. Brand identity is the set of factors than enable recognition joined by the set of values that determined its birth and have characterized its development. Awareness is linked to the force of the brand in consumers' memories, which is reflected in the ability to identify the brand in various contexts, while image can be defined as the set of cognitive and affective associations evoked by the brand.
The Italy brand must be emboldened by clearly identifying and communicating, both at home and abroad, the values that make up its DNA. These values must be the foundations for the strategic choices to be made with a long-term perspective. Values define the evolution of the brand: they inspire the project that has guided and will orient its development towards objectives of consistency and continuity. The identity of the country brand must be carefully put in relation with the brands of individual companies that belong to that country. Such harmonization must maximize the advantages accruing from their interaction, while respecting the different levels of abstraction. From the perspective of the country-brand, company-brands represent tangible manifestations of the values defining its identity, while from the viewpoint of company-brands, the country-brand constitutes a cognitive association at a higher level of abstraction. Thanks to the values of the country brand, the image of goods and services that a company supplies to the market is enriched by new meaning.
The Italy brand benefits from deep awareness, but is breadth is limited by the existence of a dense layer of stereotypes, unable to highlight and valorize the extraordinary competitive vitality of the numerous firms that are veritable, albeit hidden, national champions, capable of exporting cutting-edge technologies all over the world, as they engage in product and process innovation, and provide quality in products and services. According to a recent study by Fondazione Symbola, made in in collaboration with Fondazione Edison and Unioncamere, world-level Italian products contribute to the national trade balance with a $63.3 billion surplus. Few are aware of the fact that 56.7% of this figure is ascribable to mechanic automation, tires and plastics, glass and chemicals: only 43.3% of the surplus is due to typical Italian lifestyle products (clothing and fashion, food and wines, personal and home care products).
The image of the Italy brand must be strengthened, by taking the perspective of the targets that are to be retained or attracted (firms, students, skilled labor force, tourists, entrepreneurs), by acting decisively on the so-called points of parity and points of difference.
The former represent the necessary, although not sufficient, condition for brand credibility in the various competitive environments. The latter are at the basis of the preference toward the brand itself. Together, they define its positioning, and in the case of the country brand, they are furthermore linked to perceptions of effectiveness and efficiency in the country's political and financial system, its labor market, justice system, education. and infrastructure. Hence the urgency of a strategy to improve Italy's brand positioning.
A major event like Expo 2015 should provide an additional push to the need of strengthening the Italy brand in the three above-mentioned areas. These imply the definition of organizational roles and responsibilities to improve the identity, awareness and image of the country brand, in order to amplify its potential to attract resources and increase the competitiveness of Italian firms in global markets, by adding value to their supply, and thus provide, thanks to the additional value added, an effective barrier to shield what's best in national production, before the country loses other precious brands.