Category: Strategy planning & execution

Strategy planning and implementation methods

Collaborative cultureIntelligenceIntelligence methodsStrategyStrategy planning & execution

Destination Intelligence 3.0: Benefits of capturing intelligence in the outbound markets

The growth of the tourism business with emerging outbound markets and new destinations is drawing an increasingly competitive scenario with plenty of opportunities. Moreover, the markets are evolving rapidly with new business models, new communication & sales channels and new market segments.

This major dynamism, innovation and market fragmentation requires a systematic analysis to detect new trends, new key success factors, foresee its threats and take advantage of its opportunities. Furthermore, along the last years there has been a significant decrease on the tourism promotion profitability, which suggests the convenience of innovating in more efficient marketing strategies and tactics.

Market intelligence (MI) is a systematic process of search, selection, analysis and distribution of information about the competitive environment, recognized and accepted by all the organization and its stakeholders.

The market intelligence studies are to identify business opportunities and market trends, analyze competitors, their practices and strategies, and all the variables that affect the evolution of the competitive scenario in order to orientate the strategic planning.

The impact of the MI activities consists mainly of the support given to cost reduction decisions -including risk reduction on the decisions to make- and de discovery of opportunities and innovations that produce an increase to the value provided to the client. The knowledge generated by the MI may be summarized in the following points:

  • Detailed company profile of all potential collaborators.
  • Best practices in marketing, management, innovation and new business models.
  • Markets and segments attractiveness. Opportunities, market trends and evolution of all the key factors influencing business development and profitability.
  • Key information for the design, innovation and product development obtained from deep demand analysis.
  • Key information for the optimization of the company’s commercial missions in the outbound markets, as well as for the Tourist Boards.

At the end, this brings the following benefits:

  • Decrease in the risk of failure.
  • Business diversification with the penetration in new markets and segments.
  • Improvement in the competitiveness and the innovation process.
  • A revenue increase from the opportunities of which we take advantage.
  • A major profitability of the marketing investment.

Can you envision any other outputs or benefits of the market intelligence?

Business model innovationCo-creationCollaborative business modelsCollaborative cultureCulture change

Destination Marketing 3.0: Targeting tourists 3.0

Once the Mission, vision and goals are defined, it’s time to think about the necessary strategies to guide our efforts towards the goals. Prior to the mission statement, there has to be a marketing diagnosis to set the starting point from which we intend to achieve all these goals.

Beyond the conventional segmentation criteria according to geographical origin, sociological and motivational profile, the key target group to engage in order to succeed in the marketing 3.0 transformation are the creative activists, also referred to as creative society or tourists 3.0. The challenge is mainly expanding the network of mission driven activists and other like-minded contributors.

These kinds of tourists are more likely to be found in specific communities or social networks, for the conventional marketing channels are not likely to work. They are concerned about the impact of the tourism activity on the environment and the local communities, and are driven by the aim for contribution to make the world a better place, and for spiritual fulfillment above other motivations.

They are activists in the social media either criticizing the brands creating negative impacts on the society and the environment, or promoting brands concerned about positive impacts. Such networks are becoming the main and most trusted source of information for most consumers who increasingly trust other consumers rather than companies. It is through these social networks that consumers share their knowledge and are to share stories about the life-changing experiences offered in the destinations.

Unlike typical passive consumers, tourists 3.0 are willing to take an active role in their relationships with their favorite brands, through co-creation of products and marketing contents. They want to be active players in the brand’s marketing activities, mostly through the social media networks. They are the ones who hold the community’s trust, and so have the power to decide which brands are to be supported.

They are more motivated by self-actualization, which is what unleashes most of their creativity, and by giving them the opportunity to contribute in social and environmental issues the destination is targeting and appealing to their human spirit, their primary motivator. In the destination, they look for authentic experiences through which to develop new skills, learn about new realities, cultures, and ways of life, which open their mindset and ultimately change or influence their life.

Attracting, convincing and engaging them in the mission purpose turns them into brand ambassadors who spread the stories about the destination’s experiences, ultimately expanding the network of brand enthusiasts at no cost to the destination.

Another strategic target is that of the young generations, who may get engaged through special educational programs and game-playing activities. Furthermore, it is interesting to explore the many niches and segments of special interest travelers, characterized by a high educational level, sensitivity towards cultural and environmental issues, and high expenditure in the destination.

What percentage of the desired marketing impacts do you think we can expect from this type of brand ambassadors, compared to the impacts created through conventional marketing in mission driven destinations?

Business model innovationCollaborative business modelsInnovationStrategy planning & execution

Destination Models 3.0: The business model canvas framework

The business model canvas is a strategic management template for depicting the rationale through which a business creates, delivers and captures value. It is a strategy blueprint with elements describing a business’ value proposition, infrastructure, customers, and finances to assist business leaders in aligning their activities by illustrating potential trade-offs.

This business model framework describes the key components that define the business’ DNA:

  • Competitive advantages & value proposition. Core strategic edges that provide advantage over competitors, experiences provided to the tourists and mission based value provided to all stakeholders. This should explain what differentiates the destination’s offer from others, and so the reason why tourists should go and other stakeholders should collaborate with the destination.
  • Customer segments. The target tourist segments that the destination wants to attract, based on criteria such as geographical markets, sociological and motivational profile.
  • Customer relationships. The kind of relationships the business model wants to establish with tourists, how to deliver the experiences and how to engage the tourists with the destination.
  • Marketing channels. The types of channels and marketing partners through which the destination is to deliver the stories and other marketing contents to engage potential tourists and other stakeholders.
  • Key activities & management system. The most important activities to sustain the competitive advantage through continuous improvement and execute the value proposition, as well as the platform’s management system including strategic goals, performance standards and metrics to measure the health of the business model.
  • Key resources and organizational structure. The necessary assets to start operating the platform and attracting stakeholders, which encompasses human, financial, physical and intellectual resources. In the organizational structure, every position is defined by its mission and key competences.
  • Key partners. The network of partners which are necessary to deliver the value proposition, as they bring along know how, resources and other value which are beyond the core capabilities of the business model, but should not be internalized, in order to reduce risk and costs, and to optimize operations.
  • Cost structure. The balance between overheads and variable costs, determining the potential to generate economies of scale or economies of scope.
  • Revenue streams. The way the business model generates income from the delivered services and products to different target clients and partners.
  • Social & environmental costs. The negative impacts that the tourism business development may cause in the natural environment and to the local communities. Hereby we may remark also the negative impacts saved by the tourism 3.0 development approach, in comparison with the usual practices.
  • Social & environmental benefits. The positive impacts that the tourism development is having both on the natural environment and local communities. They are to be measured through a series of metrics to assess the progression on the mission accomplishment.

Would you add or change any business model building block?

Business trendsCollaborative business modelsInnovationIntelligenceIntelligence methods

Destination Intelligence 3.0: Approaching tourism 3.0 from the regional level

Fostering the adoption of the practices and values proposed in the Vision of Tourism 3.0 entails transforming progressively the mindset of the tourism industry leaders towards a culture of collaboration and innovation.

Such efforts may well start in the top levels of the regional tourism boards, governments or industry associations. Either of these may take the lead in promoting the practices of Tourism 3.0 throughout the region down to the local levels, and a possible way to do so is by establishing a Destination Intelligence 3.0 system. This entails three main activities:

  • Capturing intelligence in the outbound markets
  • Monitoring the tourism activity in the destination
  • Leveraging the collective intelligence through an open innovation system

Destination intelligence 3.0 sets the stage for tourism destinations to develop their innovation strategy, providing a series of information flows and tools that facilitate and stimulate destination stakeholders to envision the need for innovation not only on the product development area but also on a more holistic approach encompassing all building blocks of the business model to continually improve the destination’s competitiveness. Further, it envisions how this practice is to become a key discipline in sustaining competitiveness and improving the destination’s marketing efficiency and effectiveness.

Apart from the consultancy reports, do you thing that intelligence reports elaborated by industry associations, governments and tourist boards are satisfactory to guide strategy, marketing and innovation planning in local destinations? If not, what is missing?

Business model innovationCollaborative business modelsCollaborative cultureCulture changeEnvironmental sustainability

Destination Marketing 3.0: Mission, Vision and goals

In Marketing 3.0 the mission is the main purpose of the destination development. This is to be defined by listening to and understanding the needs, concerns and aspirations of all stakeholders, starting with the local community leaders but without disregarding other potential stakeholders such as the communities of creative activists, who are to become the destination’s best brand ambassadors. Creating a mission often starts by thinking about small ideas that can make a big difference, and doing a Marketing Plan 3.0 gives an opportunity for reflection upon the mission definition, to make it more ambitious and attractive to the targeted mission driven stakeholders.

Such concerns and aspirations addressed by the mission are to be closely related to poverty alleviation at the base of the pyramid, protection of the natural environment through sustainable practices, and socio-cultural transformation towards more open and sensitive mindsets, changing the way people do things in their life, unlocking their human potential through skill development, and also fostering discovery of the fulfilling power of contribution to the greater good.

When a good mission is created it introduces a new perspective which ultimately is to transform the stakeholders’ lives, becoming a symbol within the community. Such a mission has to be spread through compelling and real stories that appeal to the targets’ human spirit, also empowering them to contribute in the activities aligned with the mission accomplishment. Their participation is crucial and they should feel responsible for fulfilling the mission.

The vision depicts how the destination and its stakeholders are to be transformed through the accomplishment of the mission, what the destination aspires to become and attain. The vision has to be the guiding force that motivates all stakeholders to contribute to the mission accomplishment and become brand ambassadors for the destination.

Marketing the mission and vision to the stakeholders is to be a critical step in the transformation, in order to engage them in the collaboration and innovation efforts, in view of a better future for the destination’s community. This is to be explained in the section about Internal Marketing.

Once the mission and vision are defined, they have to be turned into goals to better focus the strategies and efforts towards the mission accomplishment. Further, these goals have to be converted into a series of specific, measurable and time-bounded objectives which are to be the reference upon which performance is tracked throughout the implementation of the marketing plan.

Such goals and objectives are to be classified in many different areas of scope:

  • Mission goals and objectives, related to poverty alleviation, environment protection or socio-cultural transformation.
  • Business goals and objectives, related to financial performance and business model development.
  • Marketing goals and objectives, related to brand awareness, storytelling contribution and popularity, content delivery, merchandise sales, etc.

All these goals and objectives are to be used in the definition of the key performance indicators to track the success in the implementation process of the plan.

Which do you think will be the key success factors in defining the adequate Mission, Vision and Goals, beyond stakeholder participation?

Business model innovationCo-creationMarketing 3.0Open innovationStrategy

Transforming mission driven destinations’ marketing system

Destination marketing 3.0 intends to transform the destination’s marketing system towards a more collaborative and innovative approach empowering all stakeholders to become co-creators and brand ambassadors. In the upcoming blog posts the main components of the Marketing Plan are explained according to the new approach, in order to help the reader envision how Marketing 3.0 changes every aspect of the local destination’s marketing system.

This approach is only applicable to mission driven destinations, like those already oriented towards concepts such as responsible tourism or ecotourism, willing to leverage all the potential of their mission driven purpose to gain more marketing awareness through stakeholder collaboration, new product development and storytelling.

The main trait of the new marketing is that it shifts from vertical to horizontal control, which means consumers are empowered to take the role of brand ambassadors and hence become key players in the brands’ marketing system through their participation in the social networks where they tell stories about their experiences.

Furthermore, Marketing 3.0 considers not only consumers’ functional and emotional needs, but also those related to their human spirit, for values are embedded in the core of the value proposition, promising to deliver positive impacts to the community either in the environmental or socio-cultural sphere through their main business activity, not through philanthropy.

Due to its different nature, a different approach is suggested for Destination Management Organizations (DMO) and Destination Management Companies (DMC) in some sections, as it is mentioned when applicable.

Which do you think are the main challenges of developing these Marketing 3.0 strategies in tourism destinations?

Business model innovationCollaborative business modelsMarketing 3.0StrategyStrategy planning & execution

Approaching tourism 3.0: Destination models 3.0

 

The “destination models 3.0 approach” is the one entailing the highest degree of transformation in the destination, not only in its marketing but in its business model and operational rationale. In the Whitepaper “Envisioning destination models 3.0” this concept is explained in full detail, and many case studies are to be explained in separate Whitepapers to better illustrate this vision.

Destination models 3.0 consist of the integration of most tourism businesses within a multi-sided platform which connects local service suppliers with tourists and other stakeholders. This platform is mainly in charge of controlling the service quality of all integrated and associated businesses and managing the marketing activities of the destination. A key element of this platform is the open innovation system, which intends to stimulate the continuous creation of experiences and marketing contents, as well as discussion about innovation in the business model.

They are conceived as collaborative models which intend to leverage the creativity and know-how of all the stakeholder community to gain competitive advantage over their competitors by developing a large network of brand ambassadors who create and deliver stories about the life-transforming experiences that take place in the destination, in order to engage new stakeholders in the pursuit of a mission that addresses the concerns of the stakeholder’s community. They are also triple bottom line models, so long as they account for financial, environmental and social costs and benefits.

The main idea behind this concept is to develop a tourism cluster with a high level of control over the service quality, as well as with urban aesthetic harmony and a spirit of collaboration and innovation among all stakeholders to sustain the destination’s competitiveness and marketing system. This should be applicable to existing clusters, resorts and new developments.

The mission of Envisioning Tourism 3.0 Ltd. is to keep on designing new business model prototypes approaching the Vision of Tourism 3.0 with different levels of complexity.

What kind of destination models do you envision approaching the Vision of Tourism 3.0?