DESTINATION MARKETING
To be competitive, destinations engage in "destination marketing" which
aims to attract investments, tourism, and desirable residents through the
provision of a portfolio of benefits and activities. It can offer one single line or a
match of different lines in order to achieve a specialised or general destination
profile. The number of attractions comprised in a line determines the line's depth,
while the broadness of the product-mix is given by the number of products lines
supplied by a destination. A broad gamma of products increases the attracting
power of a destination being able to satisfy more demand needs. The inclusion of
events into this wide portfolio of activities and attractions is an excellent way to
showcase the unique characteristics of the host environment and selling the
image of the event includes the marketing of the properties of the destination.
Event portfolios are often designed and they can play such an important role that
many cities often give an event-related title to their name in order to strengthen
their image in a strategic perspective.
In fact, (on the strategic side), destinations with attractive schedules gain a
competitive advantage over those with no events to display: where there are no
major attractions, events can be critical to create a positive image in a region. A
new event can target a wide and various audience: many people are already in the
location, but it has to deal with other competing events on the area in that period.
The risk is that the supply becomes too rich and every single event may be not
able to get enough audience to sustain themselves. One solution to this problem
may be the differentiation and a strong positioning in the audience perceptions.
Of course, though, as in any case of product or service launch, a careful analysis
of the market, the potential and the trends has to be undertaken before any step is
done.
Pursuing the final aim of promoting destination as a great place to travel,
make business and live in, events achieve many different purposes related to the
many actors they involve. Hence, development policies and marketing strategies
have to take into consideration every category of players, and final events'
evaluation can hardly be assessed on a sure and unique basis: there are many
different criteria and parameters to judge the results and the balance of all costs
and benefits.
All the stakeholders and aimed purposes will be illustrated more deeply in
the case study.
Approaching this study we should start investigating the actions promoted
by Government bodies and delegated agencies, that are usually the major
supporters of destination development in an integrated and comprehensive
perspective. An analysis (Duncan, 19951) suggests that their involvement and
policy-making on the destination have different functions, since public bodies
don't merely "own" the place neither should they arbitrarily make use of it. In this
approach the community has great importance as consensus-giver to the local
government as long as this acts on its behalf and benefit.
Local authorities should be the guardians of the destination image through
marketing actions, and information delivery (i-sites, tourist centres…) both
domestically and internationally. As well, they should act as regulators and set
conditions and guidelines for a balanced development of the territory. They
should invest in public structures, own and manage them directly or contracting
private companies. In the end, but not last, through their specific functions of
policy making, planning and visioning of the place development they should
supply liaison to the different actors involved and give assistance to private
investors.
Another relevant function that the government has to undertake is the
promotion of the destination in a marketing attitude. In fact, as happens with
structure investments, also in the marketing field private interests alone would
not achieve the optimal level of spending due to the same reason, that is the not
inclusion of social surplus in their economic evaluations.
As we have seen, the government has a number of functions with different
levels of commitment, ranging from mere funding, investment in or ownership of
2
structures, to direct management, all through information provision, promotion
and co-ordination as well as planning and policy-making.
Duncan (19952) also suggests that especially in small townships and
communities, the development of infrastructures (in number and quality) is
primarily addressed to residents in order to develop the local network of
facilities. Only in second analysis they are regarded as components that can make
the site more attracting to visitors, increase their numbers and hopefully
economic figures as well.
As the main impact will occur on the local community (investments
remaining on the area and weighing on its balances), tourist participation can
then be regarded as a pretext, but the evaluation process should be mainly
focused on the long-term local impacts. Moreover, investments evaluation should
be undertaken on a long-term horizon, also considering the time after the specific
event or after the tourist allure has faded in a re-conversion approach of
economy, investments and structures. This analysis should touch the
environmental aspect, as well as the human resource and formation issue, or the
risk that both economic and cultural incidence of tourists become too massive
(see §.Project Evaluation).
A careful consideration for community needs is very important and can on
reverse lead to community support generating resource transfer and
These strategies of image building and attractiveness construction are
approached through common guidelines (Latusi, 20023), although they are
addressed to different subjects and therefore they are different in the operational
realisation.
In particular, paramount is the building of strategies that have to be oriented
to a long-term, reciprocally advantageous relationship with the actors.
1
Duncan, I. Tourism development. The role of local government. Wellington: New Zealand Institute of
Economic Research (1995).
2
Cit. Ref.
3
Latusi, S. Marketing territoriale per gli investimenti. Milano: Egea (2002).
3
Secondly, the actors are active subjects and have to be considered as that. It
means that their needs will be analysed in a dynamic perspective, as will their
impacts on the development of the context and business environment.
Furthermore, on the other hand the action of the many local actors involved
should be co-ordinated in order to achieve a strong and rich supply, able to make
use of the many individual inputs to generate an integrated, polyedric network
industry.
Considering the destination marketing itself, we can observe after Varaldo
(20004) basically four different aims that can be included in the following chart.
C H A R T
All the functions and relationships are strictly connected one with the other
and interdependent. Any single function impacts on the others and the mix of
these interactions lead to a specific configuration of the context. University
research, for example, fosters knowledge and competence. This can result in a
greater interest to human resources formation and can more deeply integrate the
production fabric into the site. Moreover we can consider the importance of
creating a network that links internal and external actors in order to broaden
opportunities and knowledge.
Despite the integration of functions we have explained, we can acknowledge
two main roles of the destination marketing action, one related to the insiders and
the other to the outsiders.
One action is addressed to the area itself in order to strengthen any condition
and requirement that could favour the growth of local production fabric and the
competitive advantage of companies based on the area towards outsiders
retaining local businesses.
On the other side destination marketing is aimed to create and improve the
conditions that make one site attractive as a destination to the eyes of outside
4
Varaldo, R. Attualità del marketing territoriale, in Latusi (2002).
4
investors choosing a location for their business attracting foreign businesses to
come.
These two goals are strictly interconnected and originate from the same
idea, because investments improving the conditions for competitive advantage to
locals are likely to attract outsiders as well. This can also be achieved by
heightening life quality, attracting investments and encouraging activities in the
area, promoting it as location of logistic and productive activities.
The cited chart is specifically related to destination marketing with regard to
investments, but, following our path, we can apply it to the other sectors of our
interest as well.
As to the tourist perspective, for sure we can think of ameliorating the
existing tourism for example turning occasional tourists into loyal ones. Supply
can be fostered and local fabric can gain a competitive advantage over other
destinations, through the co-ordination of activities and strategies. On the
innovation side we can think about opening new market niches or generate new
types of products, broadening the appeal of the destination. As to the attraction of
external tourists we can regard it as increasing the umber of tourists and the
market share.
We also talked about the local community and residents as an important
segment to care about. Their investments from the tourism point of view are
almost irrelevant, because the money spent in such activities is basically
subtracted from other sectors of the same economy not having a differential
impact on it (see §.Multipliers). Yet locals should be the ultimate stakeholders of
any activity undertaken in the area in a perspective of higher life-quality
standards, since they deeply and permanently belong to that specific area, they
are the basic fabric of any kind of activity and they know the specific potential of
the area. Furthermore in a destination marketing strategy they are exactly as
important as external investors because they have to be retained in the area as
they contribute as well to its development. The actions capable of attracting
5
investments from outside are basically the same as those aimed to retain the local
ones, since the needs of the two are the same. In fact, if the context where local
enterprise is lively, it is able to attract external investors interested in a strong and
durable boundary with the geographic area. This means that a qualified local
context, which can be interpreted as a place providing developed infrastructure
framework or supply network, can make the area much more appealing to any
kind of investors. An example on this issue may be the supply network or the
transportation infrastructures that serve an area, adding great value to companies
on that territory. Porter (19985) suggests that clusters have an important positive
impact on the design of local framework and that areas with vertically integrated
industries or with a well developed sector can be very attractive.
In order to implement a strategy, communities and policy makers have to
undertake an analysis of the current situation and opportunities related to their
demand potential and the development of goals they want to achieve.
The first step towards valuable strategy and vision setting is the Place
Auditing, a process that is basically the transposition of the SWOT analysis into
the field of place development and management. It allows agencies and public
bodies to understand the strengths and weaknesses that affect an area and the
future potential trends. In particular the Place Audit is based on two analysis
(Latusi, 2000):
-
a global and systematic evaluation of the operational
capabilities existing in the area, of its general characteristics, as to
existing infrastructures and resources (natural, historical, cultural,
productive, financial, informative…); it considers the identity of the
area with its whole context (social, cultural, political, geographical,
institutional…).
-
the study of the external environment in the present and of
the main trends of its future development.
The information provided through this audit is a necessary starting point to
shape a feasible strategy that can lead to a valid goal: if not undertaken with care,
5
Porter, M.E. Clusters and the New Economics of Competition. Harvard Business Review, November-
6
the mission can remain a faraway wish and will never be achieved or will not be
as pretentious as it could. Correct information can lead to plans that are adequate
to the potential of the area development and can correct possible weaknesses.
Starting from the identity of the place and its present conditions, the ending
point is the ambition, the goal of the place, what it would like to be in the future.
This should be the compass throughout the whole process of strategy setting and
implementation: a correctly shaped vision will track a path that will lead to the
desired goal, which has to be reachable, given the present conditions of the area,
its potential and the external, impacting context.
An effective strategy should comprise a good positioning and the present
and potential demand should be analysed: every single destination should analyse
its potential and address a segment that can participate to the both-sided
advantageous relationship. In particular, for the development of local economy,
destinations should focus on pivotal sectors that have to be analysed and decided
after a careful analysis. One of the aims of destination marketing is to target and
attract exactly those portions of demand that hold the resources necessary to
achieve the development in a direction that matches the set goals. On the other
hand the area should develop a supply that is coherent with the needs and
expectations of the demand it wants to directly address. Once a destination has
selected the companies it wants to attract, it should also consider the competitors,
to understand the actions it can undertake in the supply design process. In this
process differentiation is very important, giving the destinations a definite image
and place in the market as well as a track to follow. In fact, a destination with a
clear inclination for certain activities or with great knowledge in a specific field,
should stress them as its points of strength and should easily identify types of
companies it wants to attract, skimming the big potential market it faces. A clear
example may be drawn out of the filmmaking industry in Hollywood: the city has
become to the excellence the fulcrum of a massive productions thanks to its
increasing specialisation and to a development absolutely oriented to cinema,
stars and studios. Every single component is shaped on the image that Hollywood
December. 1998. In Latusi, 2002 Cited Reference.
7
has gained through years, from the life-style to souvenirs, from attractions (stars
boulevard), to entertainment. This phenomenon achieved such a relevance that
these "products" have been exported (Planet Hollywood is an example) and
conquered the whole world becoming Hollywood a myth whose fame and image
often overcame reality.
As events can create for sure a unique atmosphere and can attract and
entertain tourists, they have to be considered when analyses are undertaken in the
strategy setting process.
In this perspective, after all we have said about the destination marketing
approach, we understand that events can be used as instruments against
competitors in the package of services contributing to the supply.
After a more specific analysis though, all events have of course their
particular topic and taste: we have sport, cultural events, active or passive, indoor
or outdoor, water- or land-based, events cities have to bid for or events that
simply happen in a place.
Of course these characteristics impact on the performance of the event and
on the type of audience and partners they attract. A careful study of event's
profile has to be undertaken in order to be able to match the benefits it provides
with the benefits actually sought by the potential market. In fact, the more an
event is well structured and designed, the more it arouses appeal and
expectations, which means it increases its value on the demand and supply side.
As the significance of events has increased in number and relevance, many
communities, cities and Countries have created staff positions or agencies to
promote, develop, or bid on events for strategic. In this context we can find
convention centres and visitors bureaus, sport commissions at municipal level or
major events managers in government agencies, where people are getting more
and more professional and organised in order to make use of this potential.
Usually these positions and goals pertain to public bodies proving that politics is
paramount in hallmark events:
8
[they] alter the time frame in which planning occurs and […]
become opportunities to do something new and better than
before. Events may change or legitimate political priorities in
the short term and political ideologies and socio-cultural
reality in the longer term. (Hall, 19896).
As a comment to this quote we would like to raise the attention the fact that
events can not only be instruments to foster economic development and pursue
socially desirable goals, but governments may use them to arouse enthusiasm,
national pride and ultimately votes. In other words, we can not always
understand whether convenience or sincerity drives people.
In a comprehensive overview though, "the destination vision will define the
nature of long term, major developments such as facilities and events that can
shape it for many years. And although this vision is by nature a process designed
to tap the imagination, it must also bear some relation to the ability of the
destination to realise the vision" (Ritchie, 19947). As to say that vision and
strategies have to be reasonable!
Vehicles for public involvement may be private-public partnership, not for
profit organisations or enterprises, basically depending on the reason why the
event is promoted and the type of management required.
Nonetheless, all events have to be managed as businesses since they involve
third parties economic interests and have social, political, environmental
implications.
From the point of view of facilities development and management, many
solutions have been implemented in order to achieve better quality in the service
as well as greater effectiveness and efficiency of actions.
PPP
6
Hall, C. M. (1989). The Planning and Evaluation of Hallmark Events .Syme, G. J. et Al. Aldershot:
Avebury.
9
(EVENT) TOURISM
Going through the specific tourism perspective, we will here vet the related
issues and goals.
In particular we would like to start with analysing the overall understanding
of tourist service perspective.
In fact, the tourist product, highly heterogeneous and complex, is made of a
number of services and products that generate the tourist experience only when
blended together.
These products and services are related to accommodation, travel,
entertainment, transport, natural and other resources, food and beverage (Reine,
19798).
The tourist destination is a definite geographic area that offers all these
tourist goods and services within one single brand: this is what we call an
integrated experience.
Any destination has a specific configuration of the elements that compose
the supply. In particular, great relevance assume infrastructures as for the
accessibility, housing accommodation and receptive facilities, availability of
packages, entertainment activities and all the auxiliary, not strictly tourist
services.
In other words, every tourist destination has a number of assets that attract
tourists and satisfy their needs, providing benefits that can only be evaluated in
an overall perspective, as part if a more comprehensive and wide supply system.
Being the tourist supply so polyedric and heterogeneous, it can address different
targets and niche markets.
If we consider the entertainment industry, events are often regarded as
tourist attractions and composed with other resources in the strategy design.
7
Ritchie, B. Crafting a destination vision. In B. Ritchie and C. Goeldner (Eds.), Travel, tourism and
hospitality research: a handbook for managers and researchers (2 nd ed., pp. 29-38). New York: Wiley.
8
Cited in Ferrari, 2002.
10
The strategic approach is paramount to integrate all the resources and make
them compatible one with the other, in order to achieve a surplus that exceeds in
value the sum of all the single benefits.
From this point of view, the planning of events should take into
consideration specific features of the tourist sector, both in the development of
new attractions and in the re-interpretation of existing ones in a tourist key
through development and promotion.
For example, most tourist destinations have a periodic appeal, usually due to
weather conditions. Habits also impact on these seasonal structure, but if we
consider new trends and dynamics of the tourist industry (as shown in §) we
understand that events, have the potential of de-structuring the seasonal patterns
of a destination, being tools to attract visitors.
Depending on the time of the year the event is scheduled it can achieve
different goals and reach different targets. As well it can increase tourist flows in
off peak times helping local businesses and enterprises to better manage their
work and service quality. Not last, an interesting portfolio of events can improve
the quality of life in destinations where little entertainment and activities exist off
the main seasons: this is of course provides an extra benefit to local citizens.
Many considerations may be done regarding the trade off between Peak- and
Off- season events: in the former case pros are basically for a simpler
organisation, while in the latter it is pretty much regarding a challenge to
improve destination standards and image.
First of all off-season events can provide tourist demand when spare
capacity is high. This means that tourist businesses that would not be able to
provide services to further tourists in peak-time because they are already full may
increase saturation and revenue in another period.
Considering for example a hotel, the differential revenue that can be earned
with off-time events, comes from the saturation rate. That means that if the event
is held in peak-time and the hotel is full it will not be able to offer
accommodation to any further tourist and has to send them to another hotel.
Doing do, it loses guests at the moment and gives an advantage to a competitor,
11
who can set a relationship for the future. If the event is held off time, any extra
accommodation sold to event tourists is incremental revenue, nothing subtracting
to the peak-time performance. This process can promote a four-season
destination image, opening new market to the destination and to possible
sponsors, which may be more likely to give funds. With regard to residents, an
off-time event provides entertainment when other opportunities are limited,
improving overall life quality with implications on social and cultural sides as
well.
It will be easier for off-season event organisers to attract testimonials and
performers that may be busier in the peak season. Furthermore, it is better to
reduce costs if the have to pay for their stay and accommodation: this is also true
with respect of conventions and meeting.
As to peak-time events, their points of strength are that they can count on a
place that is already set to welcome many people and is usually in its best fit.
Also the weather is usually better and more predictable, and it is very important
for open-air sport events. Sport events are also linked with championships and
prefer to follow seasonal patterns even if off-time scheduling may create better
opportunities. In off-period facilities are ready, promotions are on, and attractions
calendars are thick because they have to attract and satisfy people coming with
expectations. As well, seasonal visitors with a second home in the resorts, may
feel a part of the community and want to take part to the event. In particular we
can see the trend often following the reverse path: in the perspective of a place,
awarded to host a major event, the value of real estate industry massively grows.
We have already cited the example of Sydney's Olympics, and we would like to
go further in depth here. With the award a circular chain takes place, as people
can decide to buy a second home in the place exactly because they know that
place is going to host an interesting event. This can be perceived in two different
ways. From the personal point of view of people who will enjoy the benefit of be
part of the event, staying in their new home to participate to the great happening
from the inside. Otherwise we often find investors that buy houses and venues in
12
order to rent them to the best offering at the time of the economic boom and gain
the surplus not as a personal benefit but as a material, economic income.
Another issue to be linked to the schedule of the event, being peak-season
usually coinciding with holiday time, volunteers can make use of their holidays
to come and work on the event. This is a relevant consideration, particularly
when we consider that volunteers play a major role in the organisation and in the
sustainability of the event in a financial perspective. As they do not get direct
economic revenue for their work, they will not be likely to volunteer during
working days. On the contrary, they will use their holidays, also because they are
so keen in their job that they can switch it with another holiday type. (See
VOLUNTEERS, HR, MOTIVATION §. in depth)
As a quick summary of this paragraph on marketing strategies we will
conclude with an exhibit after
FERRARI PG 109 OR GETZ 103.
13