Marketing 3.0StrategyStrategy planning & execution

The Marketing Plan 3.0: Targeting or segmentation strategy

The formulation of the targeting strategy starts by analyzing the profitability of the current targets and the occupancy gaps. First of all, from the results of the Marketing Audit, there should be a table drafted featuring the occupancy rates throughout the year and the percentage of tourists corresponding to each target, indicating for every period the average profitability of every target, as a result of the relation between their expenditure and the associated marketing costs for attracting this target.

With this table or graph, it may be easy to identify the profitability of every season together with the occupancy gaps that could be filled in. Ideally, the diagram should also show when the occupancy gaps correspond to specific weekdays, as in many cases the occupancy is concentrated in the weekends.

The targeting strategy formulation is to be reflected in a diagram showing how the assigned priority level evolves for every target over the period for which the Marketing Plan is elaborated.  The targeting priority roadmap should reflect how the highest priority levels are assigned –and so is the bulk of the marketing budget- to the most profitable targets, as long as there is significant potential for increasing their revenue streams. Secondly, there should be consideration of the most profitable target groups with potential to fill in the occupancy gaps.

Having started by optimizing the combination of the current target groups, destination marketing 3.0 is to increasingly focus its attention on a set of target groups identified under the label of Tourists 3.0 or Creative Society. They are to be the ones who fuel the new marketing system and therefore -regardless of their expenditure- are of capital strategic importance.  They encompass many groups:

  • Special interest travelers: these are motivated for specific types of experiences (sports, nature, hobbies, etc.), have a high education level, search for spiritual comfort, are values-driven and are keen on telling stories about their experiences as long as they feel an emotional connection with the destination they have visited. They also are among the highest spending targets.
  • Concerned travelers: these are the ones usually looking for ecotourism or responsible tourism destinations, as they are concerned about the impacts of the tourism activity in the destination’s environment and local community. They are to become active advocates for mission-driven ventures addressing their concerns and embracing their values and ideals.
  • Millennials: this is the new generation of adults –from 18 to 34 years old- showing significantly different habits and values than their predecessors. They are also concerned about the impact of business activities in the environment and the social communities, and are active advocates in and outside the social media for the brands embracing their values.
  • Teenagers and younger generations: these are the generations to be educated in the values of sustainability, and to whom the destination experience has to convey an educational message to raise awareness and concern about sustainability issues. Furthermore, they may become active contributors in creating contents and storytelling through cooperation programs with schools.

Over time, focusing the marketing efforts on the new targets helps the destination in gaining these new clients, while retaining the most profitable ones, to achieve an optimized balance of target groups. Apart from these, the continuous search of new profitable niches and segments should be encouraged.

Do you think of other interesting segments?

Marketing 3.0StrategyStrategy planning & execution

The Marketing Plan 3.0: Positioning or brand strategy

The positioning or brand strategy defines the identity that the destination intends to project in the outbound markets, as a way to synthetically communicate the destination’s main attributes, create an expectation in the mind of the potential tourists and set itself apart from competitors. When formulating the positioning strategy there are three concepts to be defined:

  • Core identity defines in a sentence the intended image of the destination brand.
  • Broad identity encompasses all attributes that shape the destination’s personality and the values that have to become the institutional standards of behavior.
  • Value proposition describes the functional, emotional and spiritual benefits that the destination is offering to its visitors.

Altogether this provides the destination executives with a structured set of ideas to be used in the communication infrastructure and marketing activities.

In destination marketing 3.0, the positioning strategy has to embed the mission driven purpose at its core, as the success of the destination is to come from the appreciation of the business contribution to the community well-being and the positive cultural transformation it makes on the visitors through the life-changing experiences.

As for the mission definition, the positioning strategy should be defined in the executive board with the participation of the community leaders, main stakeholders and industry influencers, as this is the strategy reflecting the spirit of the mission. Furthermore, as long as the positioning strategy defines the set of values that are to guide the destination’s institutional behavior, this is a key issue in which all leaders have to feel identified and committed.

Since the community leaders are the key decision makers on these issues, it would be convenient to assess the fit of the proposed set of values within the community culture, so as to evaluate the feasibility of the cultural change, as long as this is necessary. In that case, a cultural change strategy also has to be drafted, to be enclosed with the network engagement and development strategy.

In marketing 3.0, only originality, authenticity and honesty are effective, because the reputation of the brand is under control of the creative activists and other like-minded personalities holding the trust of their communities, and they are the first ones to spread the stories throughout the social networks. The brand integrity, determined by the loyalty to the stated values throughout time is an nonnegotiable must in the path to success for destinations embracing marketing 3.0.

Would you consider other methods to define the positioning strategy?

StrategyStrategy planning & execution

The Marketing Plan 3.0: Drafting strategy goals

The mission statement has to be turned into a set of goals to orient the strategy formulation and into a set of specific and measurable objectives to optimize the organizational efforts. This set of strategic goals is directly related to the strategies of the Plan:

  • Targeting or segmentation goals: attracting a set of targets to optimize profitability, balance demand seasonality, foster brand advocacy and contribution to the content system.
  • Positioning goals: developing an identity that conveys the mission pursuit and the value proposition related to the life-changing experiences, along with the destination’s attributes.
  • Communication goals: developing a content marketing system to create and deliver stories adapted to all targets in order to engage them in marketing the destination and the mission driven purpose.
  • Network engagement and development goals: developing a network of partners, followers and brand ambassadors to fuel the content generation and contribute to the mission accomplishment.
  • Product development goals: developing memorable life-changing experiences according to the mission statement to ultimately foster socio-cultural transformation.
  • Business development goals: shifting towards a more cost-effective sales system and expanding revenue streams with new business units

Furthermore, these goals have to be converted into a series of specific, measurable and time-bound objectives which are to be the reference upon which performance is tracked throughout the implementation of the marketing plan. These are to determine the key set of performance indicators that is further explained in the Implementation section. Beyond the marketing goals and objectives there should be consideration of the mission related goals and objectives to orientate efforts and measure their accomplishment.

Would you consider other relevant goals?

Marketing 3.0Strategy planning & executionSustainabilityTourism marketing

The Marketing Plan 3.0: Building the vision and the mission

If the Marketing Audit depicts the portrait of the destination’s present situation, the Vision depicts the portrait of what the destination is to become upon accomplishment of the Mission, and the Mission is the ultimate reason for the destination development. To define the Vision, Mission and goals, it is convenient to engage stakeholders through the following steps:

  • Community leaders’ mobilization. The first step is to create awareness of the need for a new destination marketing model, to boost the tourism business in favor of the community in order to address critical issues and concerns, namely poverty and the environment. Community leaders are the first to participate in the discussion as they should also be the first to be engaged with the new marketing system, though in the following phases other community members should also be consulted. These have to be defined:
  • Current and future challenges affecting the local communities to be addressed
  • Specific constituents of these challenges, namely those at the bottom of the pyramid
  • Other concerns related to environmental and cultural issues
  • Voting proposal and opening participation. Once the community leaders agree upon a mission proposal addressing the critical issues they consider as priorities, this should be voted upon by all interested community members, who could also bring up their ideas.
  • Refining and approving mission. In accordance with the votes and suggestions, the mission proposal may be refined and approved without voting if there is consensus.
  • Tourism experience value proposition. Then, there should be the drafting of the part of the mission statement related to the tourism experience value proposition, which is associated with the socio-cultural transformation connected to the life-changing experiences. This step also requires the participation of industry leaders, influencers and stakeholders in general, who are to become key brand ambassadors for the destination’s development. This part of the mission statement intends only to orientate and inspire the life-changing experiences of the product developers, and so does not need the approval of the whole community, though their contribution should be encouraged.

It is necessary to highlight the importance of engaging as many industry leaders, influencers and creative activists as possible from the outset, as long as the new destination marketing development needs to leverage their influential power, especially at the beginning.

Therefore, by engaging them from the outset and giving them the chance to bring in their ideas, and showing them somehow that their contribution has been incorporated into the mission guidelines, they will feel as if they are co-creators of the new project and will establish an emotional connection with the destination, which in turn encourages them to keep on contributing, so long as they are willing to tell a story of success in which they took part. Such engagement should be maintained by inviting them to participate in regular meetings to track the evolution of the destination development and mission accomplishment.

Would you consider any other step in building the vision and the mission statement?

Marketing 3.0Tourism marketing

The Marketing Plan 3.0: Internal audit

Once the market analysis is carried out, it’s time to assess the marketing system’s performance and its adequacy to the new market reality. Firstly, the current results according to the marketing KPIs have to be analyzed. The following factors should be at least considered:

  • Seasonality of demand (occupancy rates throughout the year)
  • Average expenditure per target/segment
  • Marketing costs associated to every target/segment and profitability
  • Client satisfaction and intention of recommending the destination
  • Market share and growth in every segment, considering also the segment growth
  • Destination positioning for each segment (core value proposition, attributes & values)

Secondly, many internal aspects related to strategy and efficiency need to be assessed. In the case of DMO the key stakeholders should be interviewed:

  • Feasibility assessment of current vision, mission and goals; stakeholder’s support
  • Adequacy of the current positioning, communication, product, sales and targeting strategies
  • Organizational structure efficiency. Identifying possible over-dimensioned or under-dimensioned areas, under-performing functions, or other organizational problems.
  • Operational efficiency related to the cost-effectiveness of the marketing operations and accuracy in the execution of the Marketing Plan.

Finally, there has to be a conclusion summarizing the main strengths and weaknesses:

  • Every strength should be assessed according to the following parameters:
  • Strategic value or importance
  • Percentage of developed potential
  • Cost & likelihood of developing its potential to the fullest
  • Opportunity value
  • Every weakness should be assessed according to the following parameters:
  • Strategic value or importance
  • Associated risk
  • Cost & likelihood of neutralizing the risk
  • Opportunity cost

Would you consider any other aspect to analyze in the Internal Audit?

Marketing 3.0Tourism marketing

The Marketing Plan 3.0: External audit

The External audit entails a sound market research to assess target markets attractiveness and markets trends to identify opportunities and threats. When analyzing the industry and market trends, every trend has to be classified according to its correspondence to one of the 5 competitive forces that shape the destination’s long term profitability: negotiation power of suppliers, negotiation power of buyers, threat of new entrants, threat of substitutes and competitor’s rivalry. This framework is to help the marketer with the strategic reflection on analyzing the effects of the market trend on the destination.

Once classified according to its corresponding force, an assessment has to be made on whether it represents an opportunity, a threat or it doesn’t have an effect at all. Furthermore, a level of priority corresponding to its impact on the destination should be assigned, and the following assessments should be carried out:

For every trend representing an opportunity:

  • Assess the potential market value of the opportunity for the destination
  • Assess the investment needed to take advantage of this opportunity. Consider many options
  • Estimate profitability for many viable options

For every trend representing a threat:

  • Assess the risk of the threat, considering likelihood, market value and strategic importance
  • Assess the investment needed to neutralize that threat -if possible- and its profitability.

When assessing the markets & segments attractiveness, analyze for each of them:

  • Market size, evolution and perspectives
  • Public types and demand characterization: sociological profile, seasonality, length of the trip, demanded services, trip organization, advanced booking, motivations, expenses and price elasticity.
  • Purchasing behavior: information sources, decision key factors, etc.
  • Possibility of fostering customer loyalty, prestige and multiplying effect
  • Quantitative and qualitative trends of both supply and demand.
  • Key players, prescribers, opinion leaders and other trendsetters.
  • Associations, publications, events, fairs, portals, forums, blogs and social networks.
  • Key competitiveness factors and requirements.
  • Best practices benchmarking in improvement of management and destination competitiveness, marketing, products, business models and technologies.
  • Marketing strategies and actions. Minimum investment recommended.
  • Tour operators, travel agents and web portals working with this segment. Positioning and market share of each one, segment concentration, entries and exits. Estimated share of FIT.
  • Segment attractiveness: analysis of the 5 competitive forces and potential.
  • Analysis of competitiveness/price, distribution and offer variety compared between destinations. Positioning of each destination.
  • Knowledge and assessment of the destination by the tour operators and travel agents.

The market information may be obtained through existing market intelligence reports and complemented with ad-hoc research if necessary.

Would you consider any other point to assess the markets’ attractiveness?

Collaborative business modelsCollaborative cultureInnovationInnovative cultureIntelligence

Destination Intelligence 3.0: attracting talent to the open innovation platform

The innovation platform should market its value proposition not only to the whole industry stakeholders throughout the region, but also to all potential contributors in and outside the industry. The process starts by identifying a pool of champions who are willing to showcase the benefits of open innovation for both contributors –solvers- and receivers –seekers-.

By identifying a group of visionaries in both sides of the platform, the conditions are set to face the first challenges, the ones which have to showcase how the open innovation works, and how it may  contribute to improving the competitiveness of the whole industry. As soon as a few of these innovation challenges show successful results and satisfaction in both sides of the innovation process, a greater group of early adopters is likely to become interested and eager to participate to some extent.

As stated before, beyond rewards, the great motivators to take into account are the will for contribution to the community’s progress and well-being, and the will for recognition and prestige among industry peers. Such motivators suggest two main strategies to attract talent:

  • Promote innovation challenges for non-profit purposes. Such challenges may be focused on helping destinations in developing countries or having suffered natural disasters, or mission driven tourism organizations, mostly related to environmental issues, like in ecotourism. Such challenges could be sponsored by private companies to offer some compensation.
  • Organization of events to award best contributors and give them public recognition.

These and other strategies should be supported by marketing the open innovation platform to potential contributors in their communities and favorite media channels, which would entail social media, magazines, journals, public presentations, etc.

A more detailed explanation about the operation of an open innovation system is to be provided in the Whitepaper “Envisioning open innovation in destinations”.

Do you think of other strategies or tactics to attract talent to the open innovation system?

Collaborative business modelsCollaborative cultureInnovationInnovative cultureIntelligence

Destination Intelligence 3.0: fostering contribution and collaboration in the open innovation

It is necessary to develop incentive systems to recognize and reward collaborative partnerships between innovators. Mind that the most powerful motivators that drive contribution are:

Contribution to the greater good. As long as innovations contribute to improve the community’s quality of life to some extent, this is itself highly rewarding. Intrinsic motivation is actually the primary driver, as a satisfactory result is already quite rewarding.

Peer recognition. One of the highest motivators –probably the highest- is the status and recognition attained through contributions. It is therefore crucial to find ways of recognizing contributors, rewarding them with appropriate community prestige.

Compensation. It is necessary to think of a flexible system of compensations, according to the various motivations within the pool of innovators. Beyond money rewards, it is necessary to find out other kinds of compensations that contributors would be willing to strive for.

Fostering collaboration in the innovation efforts poses many challenges, primarily related to the culture of trust, which has to be created over time, starting by the design of an appropriate system of rewards to tackle with critical issues such as intellectual property transfers and confidentiality, among other concerns.

The best way to start with collaborative innovation is in mission driven challenges that appeal to the contributors’ human spirit rather than for its compensation, which is actually likely to be symbolic or insignificant. The collaboration in non-profit challenges is expected to progressively weave interaction and networking among innovators, as well as trust among the frequent contributors. Such practice is also expected to inspire reflection about the design of collaboration systems for compensated challenges.

Can you think of other motivators or strategies to foster contribution in the open innovation system?

InnovationIntelligenceIntelligence methodsOpen innovation

Destination Intelligence 3.0: operation of the open innovation system

In contrast with free ideation where the mass crowd of solvers is empowered to bring in their ideas with little or no direction –as many companies have approached open innovation with rather bad results-, the most effective method to deliver real solutions to the seekers is challenge driven innovation. As aforementioned, this method consists of formulating specific and actionable problems or opportunities, to better focus the innovation efforts of potential solvers to a real solution that can eventually be implemented.

The open innovation platform is to be managed by a pool of Project Managers (PM) in charge of dealing with the Innovation challenges. Every time a public or private stakeholder (seeker) wants to open a challenge, a PM is assigned to the challenge and follows a series of steps:

  • The PM works with the Seeker in the formulation and definition of the challenge.
  • Once the challenge is defined, the Seeker has to set the prize or prizes for the winning solutions. There may be many prizes of different amount to take advantage of many ideas and encourage more participation.
  • The PM has to define with the Seeker the terms of agreement to be offered in the tender.
  • Beyond the registered innovators in the platform, the PM should search for more innovators outside the platform, especially when the challenge requires specific expertise which is rather scarce or nonexistent among the registered innovators.
  • Once all potential innovators have been invited to participate to the challenge, these have to submit their solution by the specified deadline, complying with the stated requirements.
  • When submitting the solutions, the PM screens them all to ensure that they all meet the requirements established by the Seeker, prior to deliver them to the Seeker.
  • Then, the Seeker may decide which solutions are suitable and award as many as he considers, or none at all if any solution is good enough.
  • In the case of discarded solutions, the Seeker has signed an agreement upon which he cannot use the non-awarded ideas without permission of the Solver. To guarantee the accomplishment of this agreement, a pool of Innovation controllers are empowered to carry out Innovation audits on the “Seeker companies” to make sure that such ideas are not used.

Regarding intellectual property (IP) transfer, there are many possible options to regard:

  • IP may be fully transferred to the Seeker, especially when the reward is according to it.
  • IP may be transferred under a non-exclusive license to the Seeker, if the reward is too low.

This issue is to depend also on the nature of the assignment, taking into account that some innovations are only applicable to one case, because of the uniqueness of the Seeker or because the job is tailored for the Seeker, such as a graphic design.

The funding of the platform may come from two complementary sources:

  • Brokering commission for every challenge managed to be paid by the Seeker.
  • Sponsorship by many industry stakeholders, including the government.

The platform should engage a vast range of shareholders within the industry, encompassing private businesses, educational institutions, governments and even non-profit organizations.

How do you thing that this operational system could be improved?

Business model innovationCollaborative business modelsInnovationStrategySustainability

Destination Models 3.0: Comparative performance between different destination models

To better realize how destination models 3.0 outperform other models in creating value, reducing efforts and marketing efficiently, hereby are compared three destination models:

Cultural destinations: based on cultural or natural resources with several business owners operating independently. In some cases these cooperate in partnership with the government for marketing the destination.

Resort destinations: based usually on natural resources with one owner operating or controlling all business units providing service in the destination, being also responsible for the marketing. All business units are therefore integrated within the resort.

Destinations 3.0: based on either cultural or natural resources with business units belonging to many owners, and operators cooperating with different levels of integration on the management and marketing of the destination.

COMPETITIVENESS & MARKETING: KEY DIFFERENCES BETWEEN THE THREE DESTINATION MODELS

  CULTURAL DESTINATIONS RESORT DESTINATIONS DESTINATIONS 3.0
VALUE PROVIDED
Experiences Typically local cultural experiences

Based upon cultural & natural resources, and locals creativity

Standardized experiences

Based on standard products, natural and artificial resources

Life-changing, personalized and imaginative experiences

Based on stakeholders co-creation

Feelings Cultural character and authenticity with heritage protection and hospitality programs Lack of character and authenticity (replicated facility style)

 

Enhanced authenticity through urban aesthetic harmony and locals’ inclusiveness as experience suppliers
Service quality control Some service suppliers have Quality certifications

Ratings for restaurants and accommodations

Comprehensive service quality control

Ratings for accommodation service

Comprehensive and incentivized service quality control
EFFORTS REQUIRED
Discomforts Dependent upon every service supplier and local service standards Fully specified comfort standards, adapted to the needs of tourists Only discomforts associated to cultural environment
Insecurities & risks Dependent upon government regulations and control Full information and safety controls on critical issues Full information.

Safety dependent upon government regulations

MARKETING
Needs satisfied Functional and emotional Mostly functional, but also emotional Functional, emotional and spiritual
Target tourists All kinds of tourists Limited segments All kinds of tourists, but primarily tourists 3.0
Marketing guidelines Differentiation Differentiation or price Mission, vision & values
Tourist relationships Sales transactions and satisfaction monitoring Sales transactions and satisfaction monitoring Experience co-creation, storytelling through communities
Marketing channels TTOO, TTAA and direct sales TTOO, TTAA and direct sales Mission driven agents, communities
COMMUNITY IMPACT Economic prosperity concentrated in local business owners Economic prosperity concentrated in the resort owners Poverty alleviation, socio-cultural change, environment protection
MAIN CHALLENGES Harmonize experience system and quality standards Develop unique experiences to compete upon differentiation Integrate and associate stakeholders

Foster culture change

Would you consider other destination models to compare performance? And other relevant points to be compared?