Joseph Nye, Jr. coined the term "soft power". Now, between hard and soft, you have also the choice of a "smart" power.
Foreign Affairs republished recently two essays about the perspectives and tools of this choice, from an American point of view:
2004 Suzanne Nosel's analysis
2007 Hillary Clinton's perspective
In an article published in The ANNALS of the American Academy of Political and Social Science, 6161, March 2008 (:110-126), Ernest J. Wilson, III defined the "smart power" as (:115):
"the capacity of an actor to combine elements of soft power in ways that are mutually reinforcing, such that the actor's purposes are advanced efficiently and effectively"
Smart power, he outlined, needs "a smart campaign" (:120), based on: (:115) knowing the target, self-knowledge of the own community, the broader regional and global context and the tools to be employed.
One of the most quoted example of an efficient public diplomacy strategy is China. A communist country, with a bad human rights record, huge ecological problems and enormous economic disparities, it succeeded to be one of the most envied country brand. Made in China, ofently synonymous for infringements of intellectual property rights, changed into an original example of a brand merchandised worldwide through efficient marketing strategies.
For this kind of "products", the rules of the persuasion don't have any contact with the reality. At this stage of evolution of the idea of brand - in the post-Cold War environment -, you'll buy what it is more attractive, without carefully watching the consuming recommendation as well as the counter-indications. The next step will be to do not accept a product, without careful scrutinizing the core qualities. But for the moment, we are in-between these two stages. Not too soft, not too smart.