Destination%20Management

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Destination Management
Lecture 7 University of Applied Sciences
Stralsund Leisure and Tourism Management WS
2009/2010
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Part Three
Considers the challenges involved in managing
attractions such as marketing, financial
management, operations management and human
resource management
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The Marketing Concept
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Growing need for marketing concepts

• Dramatic changes of economic structures-
  industrial societies gt service oriented
  societies- more innovative and marketing
  orientated
• Changing nature of market and customer behaviour
• Recessions, forcing organizations to be more
  critical
• Privatization of previously state owned
  organizations
• Government pressure on local authorities

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Approaches to marketing

• Production approach- concentration on low cost
  production and effective distribution
• Product approach- emphasis on product
  improvement
• Selling approach- carrying out substantial
  promotional and selling activities
• Marketing approach and market-led approach-
  identifying the customer wants and needs and
  deliver the most satisfying product

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Visitor attractions as service products
Part Three \ The marketing concept
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visitor attractions and tourism marketing

• The product is an experience- that begins in
  advance of consumption and continues -
  visitors rarely distinguish between
  responsibilities
• The product offers only shared use rights- try
  to avoid conflicts between different groups
• The product offers only temporary use rights-
  the longer the stay the higher the spending
• The product is rarely being delivered to the
  customer- good signposting, directions and
  brochures are essential
• The demand for the product is highly seasonal

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Key factors in visitor attraction marketing

• The marketing objectives are very varied-
  depending usually on the ownership (sector)
• Attractions are also marketed by other people-
  tour operators, local authorities, tourist boards
  
• The level of competition varies dramatically
• Many key factors in the visitors experience are
  outside the control of attraction operators
• Visitor usage rates vary dramatically
• Attractions tend to have high fixed costs

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Strategic Marketing Planning
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Value of strategic marketing planning

• Forcing to clarify companys mission and look to
  the future
• Making sure attractions consider their
  competitorss
• Pinpointing the organizations strengths and
  weaknesses
• Identifying market threats and opportunities
• The effective allocation of resources
• Allocating responsibilities to individual members
  of staff
• Guiding day-to-day marketing activities
• Ensuring evaluation of performance

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Scope of strategic marketing planning !!!

• Where are we now?- analysing the organizations
  current situation and direction
• Where do we want to be in the future?-
  establishing mission statements, setting goals
  and objectives
• How are we going to get there?- devising
  strategies and tactics helping to achieve these
  goals and objectives, and looking at
  implementation issues
• How will we know when we get there?-
  monitoring and performance evaluation
  strategies, and systems for modifying
  strategies in response to monitoring

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Where are we now?
Part Three \ Strategic marketing planning
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Where are we now?

• A number of techniques are available to help
  identifying the current situation of the
  attraction including
• SWOT analysis,
• Boston Consulting Group matrix,
• Product life cycle,
• Market segmentation and
• Product positioning.

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Case Study
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What is a SWOT analysis?

• Objective
• Identify the gap betweenthe current situation
  of the business and thedirection in which the
  market moves.
• SWOT is a useful framework to assess a
  companys- STRENGHTHS- WEAKNESSES-
  OPPORTUNITIES- THREATS

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Strengths, weaknesses, opportunities and threats

• The strengths and weaknesses within an
  organisation- are usually internal factors-
  that are within the control of the organisation
• - point out the current situation of the
  business
• These are generally internal factors, which are
  responsible for the success of the attraction and
  can relate to the rides provided, the location of
  the attraction and the staff who run and operate
  the attraction

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Strengths, weaknesses, opportunities and threats

• Opportunities and threats are factors- that
  are essentially external environmental factors
  - and exist outside the control of the
  organisation- identify the direction in which
  the market moves
• For example, products offered by competitors or
  market forces such as seasonal fluctuations,
  which affect the demand for a product.

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SWOT analysis
internal factors within control (current
situation)
external factors outside control (market
direction)
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SWOT Exercise
Q4 Assign the following statements for an outline
SWOT analysis of a visitor attraction (e.g.
theme park) to the four sections of the matrix.
(2 statements for each section)
(8pt)
1. Rising amount of income spent on leisure
time 2. Domestic competition with nearby
attractions 3. Decline in profitability 4. Low
turnover of staff 5. Rise in population taking
short breaks 6. Growing participation in thrill
sports 7. Few intermediate rides for parents 8.
Growing corporate hospitality
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Strengths

• Examples for Strengths
• - low turnover of permanent staff- located
  near motorway junction- 3 million people
  within 1-hour drive time- unique collection of
  rides- increased sales
• - creative organisation

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Weaknesses

• Examples for Weaknesses- low sales in November
  March- decline in profitability- growing
  crime figures- training of seasonal staff-
  joint marketing- food outlets

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Opportunities

• Examples for Opportunities- growth of
  population within 1-hour drive time- growth of
  proportion of population taking short breaks-
  new air services from Amsterdam and Madrid bring
  additional overseas visitors to the U.K.-
  major hotel group seeking partnership-
  increasing disposable income spent on
  entertainment- rising internet booking

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Threats

• Examples for Threats- new theme park
  development within 1-hour drive time that is
  to open in 2005- new retail / entertainment
  park nearby- increasing proportion of
  teenagers income spent on mobile phones and
  video games- new low cost air services to
  Paris- recession forecast

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Difficulties when carrying out SWOT analysis

• It is sometimes very difficult to decide whether
  an item is a strength or a weakness.- E.g.
  low turnover of staff" could be a strength but
  also a weakness when masking the fact that the
  staff are inflexible, inwardly focused and not
  creative
• Another example in the analysis, which could be
  viewed as a strength or a weakness, is the
  location of the park near a motorway junction.
  This would make the attraction much easier to
  travel to and therefore is a strength. But it
  could also be a weakness, because it gives
  potential customers a greater choice of
  entertainment destinations.

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What to do with the SWOT?

• Every section holds potential to put forward
  strategies
• For example, weaknesses and threats can be
  converted to strengths and opportunities. Whilst
  strengths can be matched to opportunities.

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Conversion strategy Exercise
Q5 The Tropical Islands Dome, located at the
edge (periphery) of the tourist destination
Spreewald between Berlin (50 km) and Dresden
(100 km), opened on Dec 18, 2004. As the
attraction does not dispose of any on-site
accommodation facilities, only (one) day
visitors can be attracted.
Develop a conversion strategy and name three
possible strengths resulting of your strategy.
(8pt)
- - - - -
- partnership/co-operation with nearby
hotels 2pt - high attractiveness of the product
(by packages) 1pt 1pt - strong marketing
partners (increasing awareness) 1pt 1pt -
diversified distribution channels (hotels as
intermediaries) 1pt 1pt - diversified income
generation (commission for bookings)
conversion strategy
resulting strengths
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Conversion strategy Exercise

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valuable SWOT analysis requires

• be objective in developing strengths and
  weaknesses and realistic in assigning
  opportunities and threats.
• carry out customer focused questionnaires, also
  with internal customers (staff), other
  stakeholders such as suppliers and promotional
  agencies.
• cross-functional team SWOT analysis

Customers
Staff
SWOT Analysis
Agencies
Suppliers
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Boston Consulting Group (BCG) matrix

• Whereas SWOT analysis looks at the organization
  as a wholeBCG matrix focuses on a range of
  product or services portfolio analysis
• Examines productsin terms of- their market
  share- market growth
• Important questionHow to definethe product?

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Boston Consulting Group (BCG) matrix

• Stars- providing stable profits but are
  threatened by competitors- need to focus on
  maintaining competitive advantage!
• Question marks- old, uncompetitive products or
  brand-new ones without awareness- danger to
  become poor dogs and chance to become stars
  resp.
• Cash cows- steady generators of cashflow and
  therefore vital to organizations
• Poor dogs- best option is to stop providing the
  product or to sell it- sometimes kept to put
  pressure on competitors cash cows

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Why to apply BCG matrix?

• Beside helping organizations to assess their
  current position it also supports
• the management of cashflow and the planning of
  investment
• acquisition and diversification policies
• the analysis of the organizations human
  resourcesin terms of their expertise and
  experience so that potential future strengths and
  weaknesses can be identified.

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Problems when applying BCG matrix

• There is often no competitive market- e.g. in
  the case of local authority museums or sports
  centres
• Market share can often not be measured-
  markets are often ill-defined or impossible to
  measure at all
• Model is based on the idea of rational decision
  making- in the public and voluntary sector
  strategy decisions often depend on political
  and social objectives and not on seeking to
  maximize financial performance

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Product life-cycle

• In marketing terms the current stage in product
  life-cycle is important for two main reasons
• The type of customer is different at different
  stages- marketing media and marketing message
  will likewise be different at each stage of
  the PLC
• Need to recognize when to re-launch the
  product- implies significant investments over
  normal costs

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Market segmentation

• The aim is to see- how the market segments
  relate to the current trends- what gaps exist
  between the current situation and the way the
  market is moving
• Devise strategies to bridge or close these gaps
• current major market segment young
  familydemographic trends indicate growth in
  older age groupsdevelop marketing strategies
  attracting elder visitors

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Product positioning

• Where customers perceive you to be in the
  marketplace
• If there are disparities between the customer and
  the managers viewpoint- change the market or
  the product in order to reflect/match the
  views of the customers!

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Research strategies

• Visitor numbers and a profile of existing
  customers,ex-customers, and non-users
• Visitors perceptions and opinions on the
  attraction
• Objective information on the organization and how
  it operates
• Up-to-date information on competitors and their
  performance
• A thorough appreciation of the position of the
  attraction in the market place as a whole
• An understanding of likely macro-environmental
  changes

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Questions to consider when conducting surveys

• As most of the data required for analysing the
  current situation are simply not available,
  surveys can help to gather information
• Who will carry out the surveys
• When and how often they will be carried out
• How many people will be surveyed and how they
  will be chosen to ensure that the sample is
  representative
• What questions to ask
• How to analyse the results of the survey

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Where do we want to be in the future?
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Sequence of steps

• Defining the future business- often means
  continuing within the existing parameters
• Mission statement- what direction to take and
  how to be seen by the market
• Goals and objectives- e.g. for revenues,
  profit, awareness, visitor numbers, quality of
  service, competitive advantage, market share-
  usually concrete targets for evaluating success
  or failure

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Please remember