4A: A Strategic Approach to Destination Marketing

Which comes first – the customer or the product?

It is hardly surprising that destination marketers tend to start with the product rather than the target markets. After all, unlike marketers in other sectors, they do not own or control the product, and it is often difficult – though not impossible – to influence it.

And of course – at the most fundamental level – it is not possible to change whether the destination is urban or rural, historic or modern, or has beautiful rolling countryside, picturesque villages or dramatic coastline.

So the tried and tested approach is:

• start with the product
• get to know it as well as possible
• think about it long and hard, to understand it, its history, character and "soul"
• then understand who is currently visiting – and why
• decide who else it might appeal to and who to attract
• then plan how to reach them.

But, despite being in this unusually product-rooted situation, the destination marketer should aim to be as market-focused as possible.

This means that, as well as – and in parallel with – taking the above steps, destination marketers need to:

• understand market trends
• identify attractive, fruitful markets – potentially new ones
• get under their skin and understand what will appeal to them
• look at the current product from the potential visitors’ perspective – as critically as possible
• then influence product development using the above information
• before packaging and positioning the product to appeal to key target market(s).

Satisfied visitors are the best marketing "tool" a destination can have: not only because of the repeat business it will bring, but also because personal recommendations are extraordinarily powerful for both leisure and business tourism. It therefore makes sense to:

• target people who will most enjoy the experience
• make sure that the visit meets their expectations
• make it easy for them to recommend the destination to others – by contacting them after the visit and providing them with material to forward to friends.

Strategies for growth

There are four broad marketing strategies, as defined by Ansoff’s Matrix. They are highlighted in the table below. The matrix is a tool that assists organisations in deciding their product and market growth strategy by helping identify whether it markets new or existing products in new or existing markets.

Identifying which of these is (or are) most important and appropriate for a destination’s specific circumstances helps the marketer to focus resources and develop the right strategic approach.

Market penetration

Market penetration offers the lowest risks for the quickest returns but this works on the assumption that a destination wants "more of the same" type of visitors – and this is not always the case. For example:

• a party city wanting to move its weekend business from stag and hen nights to cultural breaks
• a very successful seasonal family destination wanting to attract off-peak business and empty nesters
• a destination with an attractive market segment that is "looking after itself", wanting to diversify to spread risk.

It also assumes that the product is more or less satisfactory for current markets, and that there is untapped potential in those markets – both to attract more of the same, and to sell more of the current product to the same people.

Market development

Market development offers moderate risks for medium-term returns. Again, this assumes that the product is satisfactory and that it could appeal to other markets if they only knew about it, or if it was simply positioned differently. Like market penetration, this is a job for marketing communications.

Product development

Product development also offers moderate risks for medium-term returns. This assumes that more people will come from existing markets, visit more often, and spend more – if (and it is often quite a big if) the product can be improved.

Diversification

Diversification presents the highest risk level, and necessitates a long-term perspective – moving into uncharted territory with both product and markets. But sometimes it may be the only option – for example in a faded seaside resort with dying markets and outdated product, or for a post-industrial town with few visitors, but major redevelopment planned.

If a destination is going to diversify it will often do so into one product area or sector, adding to the overall product mix rather than significantly changing the destination’s character overnight. This is often driven by the development of a significant visitor attraction or event.

Working in partnership

Partnership working is developed in 1B: Developing Tourism Partnerships. But there are specific points to make when it comes to marketing partnerships.

Good destination marketers rarely work without partners because partners can provide one or more of the following advantages:

• bring new market intelligence and customer data and insights
• provide new routes to market
• help spread messages further and deeper
• share costs and technology
• bring new skills, expertise and experience
• bring new creative thinking and different perspectives
• help to reposition the destination and/or strengthen the brand, through association.

Marketing partners could be supply-side within the destination – for example:

• a major attraction, museum or gallery
• a festival or other large event
• consortia of venues and hotels
• a business improvement district, cultural quarter, or regeneration area.

Marketing partners could also be other destinations targeting the same target markets – either geographically close (promoted as part of the same visit) or some distance apart (looking to "share" visitors over the years). For example

• partnerships of historic cities that appeal to specific UK segments or international markets
• partnerships of places that share a theme (eg literary, artistic, historic, wildlife)
• partnerships of conference destinations with similar facilities but on different continents targeting world conventions that "rotate" around the globe from one year to the next.

Marketing partners could be outside tourism. If target markets are similar and the product in question has shared elements with the destination then there may be opportunities for joint marketing or PR on either a reciprocal or paid-for basis. Some national and international companies make excellent potential partners for destinations because their product and values are rooted in their location. Examples are Highland Spring water and Scotland, or Berghaus and North East England.

Successful marketing partnerships are crystal-clear about their partnership objectives. If they do marketing communications together, they will have jointly agreed target markets, key messages, words and images. Others do valuable benchmarking and research, and share information and data – learning from each other, without actually "going to market" together.

Using an agency

Destination marketers can call on a wide range of communication agencies if they need external expertise or time. The most usual bought-in expertise is:

• advertising
• design – web and print
• direct marketing
• PR
• enquiry handling and distribution
• Customer Relationship Marketing and database management
• market research.

The decision to use an agency will depend on the skills available in-house and the budgets available. The advantage of using agencies is the breadth of experience they can call on and the professional expertise they offer.

To get the best out of them, agencies need to be well-managed. It makes sense to appoint an agency for at least a year, preferably longer, rather than tender each job individually. That way knowledge and relationships are built with more consistency across different activity or campaigns. Public sector appointments tend to be re-tendered at least every three years.

How to appoint and manage an agency

1. Check the organisation’s Financial Regulations and conform to any standards they set for letting contracts and managing a formal tender process.
2. Produce a short (6-10 pages) brief which outlines the marketing strategy, the specific tasks which are required, the budget, the appointment process and the length of the contract, plus any background information that will be useful to the agency preparing their proposal. Provide details of what the agency is expected to provide in their proposal.
3. Decide on between three and five agencies to send the brief to. Ask peers for recommendations or go to the professional body which will be able to advise. Look at agency websites and work for other clients or even ask for credentials before finalising the invitation list.
4. Give agencies enough time to prepare their proposal – three weeks should be sufficient for all but the most complex projects. And be available to answer questions.
5. Interview at least two if not all bidders depending on the quality of their submission.
6. After appointment hold a detailed briefing session.
7. Require agencies to resubmit ideas if the first ones are inadequate.
8. Make sure all agencies are aware of the branding and implement it consistently – the brand is the responsibility of the destination marketer.
9. Hold regular review sessions with agencies individually and collectively where monitoring and evaluation is reviewed and future plans made.