Destination Marketing Strategy: Patagonia - Essay Example

DESTINATION MARKET IN STRATEGY: PATAGONIA Table of Contents Table of Contents 2 Introduction 3 Destination and Theme: 3 Background Issues: 4 Strategic Discussion 4 Ansoff Strategy 4 Segmentation, Targeting and Positioning 6 Potential Strategic Issues: 7 TWOS Matrix 7 Product development and branding 8 Tactical Marketing Campaign 9 Marketing Mix 9 Communication Mix 11 Implementation and Control 12 Conclusion 13 Reference List 14 Bibliography 16 Appendix: 18 Introduction The travel and tourism segment is one of the most booming sectors in the international market place. Crouch (2010) noted that the development of the travel and tourism marketing process has generated from various factors but the concept of destination marketing is the contemporary emerging trend supporting the growth of the industry. The concept of destination marketing has not only enhanced the scope for the travel and tourism firms, but has also contributed towards enriching the economic and social values of sites (Volgger and Pechlaner, 2014). This report focuses on the destination marketing process of Patagonia, which is a shared region between Argentina and Chile. Destination and Theme: Tourism is the biggest contributor towards the economic growth of Patagonia. Being a shared geographical region, Patagonia is a mix of cultures of both Argentina and Chile. Patagonia is mostly known as one of the famous adventurous spots in the global travel and tourism industry. The region mainly provides three adventurous themes for visitors namely, mountains and valley which includes the Andes range, the Perito Moreno Glacier of Santa Cruz for skiing and other ice rides and finally the Leones Lake and sea kayaking activities (Adventure Travel Trade Association, 2013). With two coasts each lying on the western and eastern directions of Patagonia, both Pacific and Atlantic Oceans can be accessed from the region. The diverse range of attractions of Patagonia makes it the perfect spot for adventure seekers. Also, with over 500 hotels and resorts, the place provides safe and well accommodated features for customer stays (U.S. Commercial Service, 2012). The authorities of Patagonia consider the comfort of the passengers as one of the crucial responsibilities for the region and have well established hospitality standards. Background Issues: The tourism segment of Patagonia provides a diverse range of activities to its customers. The economic implications of the tourism activities are huge for Patagonia. The entire region has near about 47% of its revenues being generated from the tourism activities (Adventure Travel Trade Association, 2013). However, the destination is facing some critical challenges in maintaining its attractiveness. First issue related with the challenges is also an advantage for customer attraction of Patagonia. Hunting is one of the foremost activities which attract tourists and adventurers towards Patagonia. However, increasing environmental laws and the pressure from local and global environmental authorities and animal lovers is increasing which is urging the tourism segment to close down this profitable aspect (U.S. Commercial Service, 2012). On the other hand, the growing number of tourists visiting the location is also contributing towards one of the crucial issues of Patagonia. The wastage and leftovers are increasing in the island and hence the environmental health is getting affected. Controlling the wastage and dumps is one of the most challenging issues faced by tourism department of Patagonia. Also the vast range of vendors and service providers operating in the tourism segment of Patagonia is making it difficult for the authorities to monitor the quality of the business processes. Strategic Discussion Ansoff Strategy The utilization of Ansoff Matrix is mainly performed for evaluating the business decisions of the firms. In the words of Godfrey and Clarke (2000), Ansoff matrix can help a business in understanding the possible actions which can enhance the performance and productivity of the business in relation to their strategic objectives (Pike and Page, 2014). In case of Patagonia, the performance development of the business process will focus on the potential activities required for fulfilling the gaps and issues faced by the region. Figure 1: Ansoff Matrix (Source: Getz, 2008, p.424) Based on the contemproary scenario of Patagonia destination tourism segment, the strategies to be followed can be categroised under two variables of the above models namely product and market developnment process. The product development process for Patagonia can be directed by including new servcies and utlities for the industry such as introduction of the wine in the hotels and resorts will also attract high end customers to visit the region (Pike and Page, 2014). Apart from this, the market development process of Patagonia can be enhanced with the help of enhanced online and offline marketing techniques. The inclusion of social media marketing can be a potential marketing aspect for promoting the brand of the destination in the international travel and tourism sector of the country. However, based on the gaps identified above, the strategy for Patagonia is being considered as product development process (Volgger and Pechlaner, 2014). The product development process will be directed towards establishing alternatives for hunting and also develop the operational fucntions for reducing the impact of wastages on the natural beauty of the region. Segmentation, Targeting and Positioning The segmentation of the customer base for the product and service development systems are mainly trackers and adventure tourists. As hunting services are being considered as a threat to the natural habitat of Patagonia, the customers will be affected by the changes in the service structure (Blain, Levy and Ritchie, 2005). The segmentation has been mainly made in accordance to the nature of services preferred by the tourists while visiting the region. The segmentation will enable the travel and tourism authorities to design appropriate methods for controlling the customer response in context of the changes in the service structure. The segmentation process for the customers will be performed with the help of psychographic analysis and consider the value, behaviour, attitude, interests and activities of the customer group. The most appropriate customers for Patagonia will be adventures and sports loving tourists (Pike and Page, 2014). Patagonia promises a wide range of hardcore adventurous activities which can lure adventure lovers from all over the world. Skiing, hunting, water sports, glacier diving, etc are among the few most sought after activities in Patagonia (Morgan, Pritchard and Pride, 2004). Thus, customers who are young at heart and love nature bound adventures will be the primary targets for Patagonian tourism development process. Relating this aspect with that the multivariable targeting process, it can be said that the age group of the customers will be from 18-35 years when they are most attracted to adventures. The psychographic segmentation of the customers will also allow the Patagonian tourism authority to design relevant promotional process by analysing the behaviour of the target customers. The positioning strategy for Patagonia will be linked with the existing brand image of the destination among the target customers. Patagonia is mostly reflected as a wonder of the nature with both earth and water resources supporting the flora and fauna of the region (Volgger and Pechlaner, 2014). Thus, the existing brand position of Patagonia is mostly based on their natural beauty. However, for implementing the concerned market development techniques, the company should focus on creating the image of a sustainable and customer focused position in order to enhance the attachment of the brand with the emotions of the customer base. Potential Strategic Issues: TWOS Matrix The TWOS analysis has been performed to highlight the existing and potential threats faced by the concerned destination. The TWOS matrix have also reflected the process of converting the challenges for Patagonia into strengths (Please refer to the Appendix). Based on the analysis of TWOS matrix, the core strengths of Patagonia can be identified as their natural attractions of land and water, the cheap pricing process making the services available to a larger consumer group, steady economic growth based on tourism and the specific aspect of wine culture which has been internationally recognized (Blain, Levy and Ritchie, 2005). However, the weaknesses reflected the limited influence of the authorities in maintaining the health and safety standards of the region and the underdeveloped transportation system. Relating these features with the threats and opportunities of Patagonia, it can be noted that the authorities should try to enhance their brand value by reflecting their core strengths such as to develop the wine culture (Crouch, 2010). On the other hand, the competition for Patagonia mainly is the growth and development of other domestic and international tourist attractions. In this regard, Amazon range of Brazil is the foremost competitor for Patagonia. Meanwhile, the opportunities for Patagonia again can be related to their wine culture and service base of the region for the tourists (Morgan, Pritchard and Pride, 2004). For converting the opportunities into strengths, the ruling government must assess the contribution of the region towards the economic development of the country and develop better funding and operational design. The authorities also must implement performance monitoring process for checking the quality of services being provided to the tourists. Recruitment of more labour force for increasing the service efficacy will be another positive step for ensuring long-term sustainability of Patagonia in the international market. Product development and branding The product or service development processes of a business are based on the capability of production and the compatibility of the product or services with the needs and expectations of the customers (Getz, 2008). The service development for inclusion of the wine culture can be promoted with the help of online and offline promotions and events. The product development process however will be based on the legal responsibilities towards the business process. The service of wine culture inclusion in the customer offerings can be designed by organising a fair or any such event on a specific time of the year so that Patagonia can also boost their average sales to exceptional standards during the event (Volgger and Pechlaner, 2014). The authorities can help the concerned hotels and resorts with the financial and operational requirements needed for organising the wine fair of Patagonia. The brand development processes of the business house can be designed with the help of the event management and the online and offline promotional strategies of Patagonia travel and tourism segment. The concerned authorities must identify the appropriate means of communications related to the brand development of Patagonia (Hooley, Saunders and Piercy, 2004). Also as suggested above, that the brand positioning of the region will be based on its natural attraction and the exceptional service structures of the hotels and resorts. The brand development process for online marketing will mainly relate to the video marketing concept where the authorities will have an inopportunity to interact with the customers and also showcase the beauty of Patagonia. Also, Patagonian Government is working towards designing environmental friendly service structure which will promote related concepts such as eco-tourism (Aaker and McLoughlin, 2009). Tactical Marketing Campaign Marketing Mix Product: The product and service structure for Patagonian travel and tourism segment will mainly focus on highlighting the natural beauty of the place. The increasing number of the service providers is also further improving the customer offerings of Patagonian travel and tourism department and reflect its culture to the international market place (Getz, 2008). The changes in the business development process of Patagonia in context of the market development strategy will also focus on assessing the compatibility of the concepts related with the growth of the market (Blain, Levy and Ritchie, 2005). The service base also needs to be competitive in nature for overcoming the challenges of operating in an international market place. Price: The pricing process of the Patagonian market development strategy will not be related to the existing economy pricing of the region. The pricing strategy should be changed to premium pricing process for attracting the high end tourists towards the natural scenario and adventures offered by their service (Hooley, Saunders and Piercy, 2004). Although the increase in price can reduce the overall volume of tourists visiting the region, there will be a long term implications for changing the needs of the business (Getz, 2008). The assessment of the business functions will also help them in targeting the up-end customer groups. Place: Patagonia is considered as one of the most searched and visited place in the international market place. The geographical position of the region has situated it within the borders of both Argentina and Chile. Although Chile is the primary nation for Patagonia, the Government of both the countries are trying to engage themselves with the growth and development of Patagonian business plan (Morgan and Pritchard, 2006). The natural beauty has made Patagonia among the top ranking adventures sites of the international market. However, the basic consideration for reflecting the importance of the place is to ensure that there is a steady communication link between the vendors and the customers (Tussyadiah, Park and Fesenmaier, 2010). Promotion: The promotional method for Patagonia is based on the above consultation of online and offline marketing concepts. The region can utilise both the processes of the marketing so that they can focus on understanding the needs and expectations of the customer (Pike, 2010). The promotional aspect of Patagonia is based on stating their core objectives and values to the customers so that they can understand and support the changes in the service delivery process of Patagonian business. Communication Mix The communication mix designed for the process of enhancing the marketing techniques of the Patagonian region have been evaluated with the help of the below given communication matrix. Advertising: The advertising processes related with the marketing of Patagonia will mainly restrict to the traditional form of marketing within the domestic segment and online marketing for international customers. The traditional marketing process will include advertisements regarding the features of Patagonia and why tourists should visit the place (Chen and Phou, 2013). Apart from this, local tourists will be engaged in the process with the help of leaflets and kiosks (Chaffey, Smith and Smith, 2012). The authorities can further boost advertising by including discounts and offers on the services. The online advertising will mainly relate to video and content marketing. There can be an emotional content based video marketing process which will attach the psychological needs of the customers with the service structure of the tourism marketing process. Personal Selling: The personal selling processes of the business aspects are based on the ability of the workforce to interact with the customers and understand their requirements. The personal selling process of Patagonia will be set up in multiple locations across the major markets of Argentina and Chile. This will allow the company to assess the footfalls in the region for the first year of the marketing campaign (Morgan, Pritchard and Pride, 2004). The challenges of the personal selling process are that, it is cost incurring in comparison to other forms for communication and also includes huge time investment. Public Relations: Public relations process will be handled with the government authorities and other private NGOs related to the nature of service of Patagonia. The public relation processes associated with the communication segment of Patagonia is to help the tourists to understand their own responsibilities for maintaining the beauty of the place and also try to reduce dumping their wastages in appropriate areas (Blain, Levy and Ritchie, 2005). This is a form of operational marketing where the organisations tends to advice their customers for improving their system. Sales Promotion: The sales promotion process of the Patagonia tourism will focus on increasing the engagement of the customers with the product and service purchase systems. The sales promotion process generally includes offers and discounts which attracts the target customers towards the products and services (Enright and Newton, 2004). In case of Patagonia, they can attract the customers by offering them discounts in their stay and other comfort features related to the service structure of tourism department (Morgan, Pritchard and Pride, 2004). Patagonia can also include the tourists in recreational activities which are also a form of customer engagement and hence can develop the opportunities for revenue generation. Direct Marketing: Direct marketing process is used for small scale or start-up business processes where business houses can communicate with individual customers to understand their needs and requirements and their expectations from the brand (Getz, 2008). In case of Patagonia, the changes in the strategic objectives of marketing will not majorly hamper the existing relationship with their customers. Patagonia can however link direct marketing techniques with the process of sales promotion where the target customers can be communicated for gathering information. Implementation and Control The implementation of the destination marketing program for Patagonia will be managed and controlled by the governmental and other associated authorities responsible for handling the tourism process. The first step of implementation of the strategic activities will be to analyse the financial viability of the plan and the potential changes to be made in the service structure. The implementation process of product development strategy will be performed in alignment with the results of TWOS metrics. In relation to the first objective of managing the wastage, the authorities will have to implement monitoring process and also communicate the new rules and regulations to the tourists. On the other hand, the introduction of the wine culture in the Patagonia will also be a major function related to the marketing development process. The implementation of the wine culture will be communicated to the tourists with proper invitation process and the launch of the fair. Conclusion The report is based on the implementation of the new destination marketing strategy for Patagonia. The study was based on the theme related to the mountains and valley of the business process. Patagonia is one of the most visited tourist destinations in Latin America. The Ansoff matrix was used for understanding the need and the direction of the business processes. It was noted that the marketing development process would be most useful for achieving the set objectives in relation to the business. The TWOS metrics have helped in assessing the various strengths, weaknesses, opportunities and threats of the destination and the probable process for converting the threats and opportunities into business benefits and potential process. The marketing mix and communication mix process have been developed on the basis of the theme for mountain and valley for changes and is expected to improve the performance and productivity of Patagonia. Reference List Aaker, D. A. and McLoughlin, D. 2009. Strategic market management: global perspectives. New York: John Wiley & Sons. Blain, C., Levy, S. E. and Ritchie, J. B., 2005. 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Further evoloving the new dominant logic of marketing: from services to the social construction of markets. Marketing Theory, 6(3), pp. 299-316 Reid, R. D. and Bojanic, D. C., 2009. Hospitality Marketing Management. 5th ed. New Jersey: John Wiley & Sons Shove, E. and Pantzar, M., 2008. Consumers, producers, practices: Understanding the Invention and Reinvention of Nordic Walking. Journal of Consumer Culture, 5(1), pp. 43-61. Wahab, S. and Pigram, J., 2008. Tourism, development and growth: the challenge of Sustainability. 3rd ed. London: Sage Publications Wober, K. W., 2002. Benchmarking in Tourism and Hospitality Industries: The Selection of Benchmarking Partners. Wallingford: CABI. Appendix: Internal factors External factors Strengths 1. Natural attractions 2.Cheap for tourists 3. unspoiled nature and wildlife 4.adventure destination 5.Economic growth 6. International recognized wine culture Weakness 1.Health and safety concerns due to poor regulations 2. Lower quality of facilities and transportation in the Patagonia. 3.Language difficult for tourists 4. Insufficient support or tourism hospitality training. Strategic options and direction Threats 1.Environmntal issue 2.Competition from other countries ST: 1. Low consumption has advantage in a competitive market so that attract more tourists. 2. Developing wine tourist market. 3. The growth of Chilean economy can deal with environment issue as soon as possible by government. WT: 1. Target international organizations, national governments and corporate community to contribute to environmental fund. Opportunities 1.Develop ecotourism and wine travel 2.Political and macro-economic stability 3. Improve transportation. 4.Soft and hard adventure travel 5. Increasing number of foreign visitors and growth of business and domestic travel SO: 1. The government focus on tourism development in political and economic stability and making decision for attract tourists in developing countries, such as China and India WO: 1. The establishment of tourism market can improve fundamental facilities, and then increased employment in order to supporting tourist services, such as language services, professional tour guide. Read More