Destination Marketing Strategy - Case Study Example

Destination Marketing Strategy Student’s Name: Instructor’s Name: Course Code: Date of Submission: Table of contents Travel destination 3 Destination marketing organization 3 Marketing strategy 4 Target markets 5 Priority target market for the destination 5 Reasons for selection of target markets 5 Understanding the motivations of the target markets 6 The process of destination choice used by visitors 7 Determining the level of customer satisfaction 7 Internal marketing 8 Competitiveness of the travel destination 8 References 11 1. Travel destination The selected tourism destination for this analysis is Tropical North Queensland (TNQ). TNQ is a tourism destination found in Australia. The purpose of this report is to give a detailed analysis of the destination’s strategic marketing plan which runs for five years starting 2011 to 2015. Tourism Australia (TA) primary objective is to target the new visitors who come to the country for the very first time. TA is convinced that from its past experience in tourism, is able with an appropriate market plan to enhance the customer shopping lists as a result of the appeal created by the Great Barrier Reef. Tourism is one of the most enhanced industries in TNQ and has over years continued to contribute significantly the State’s economic growth. In order to ensure that the tourism industry at TNA has continued to make significant impact to the local economy there is need to ensure consistency with the global markets and competition. This is important in ensuring the sustainability of the industry. For the destination to achieve it strategic plan of 5 years, the plan is being reviewed yearly with specific focus on both international and local customers who come as part of their leisure, business and sport activities. TNQ destination’s mission and vision is to “grow stable tourism in TNQ and to be the world’s most preferred tropical tourist destination” respectively (TNQ, 2011). 2. Destination marketing organization The organization that has been charged with the responsibility of marketing all businesses activities and events at Tropical North Queensland is Business Events Cairns and Great Barrier Reef (BECGBR). The official website for the company is http://ttnq.org.au/BEC/BEC.aspx. The organization‘s role is to market the region and the TNQ destination as a premier business and tourist destination. In the process the company provides opportunity for its members to show case the products and services they have to the market both locally and internationally. The membership in the organization comes with a fee starting from silver upwards. BECGBR encourages all its members to work as a team in order to strategically place TNQ as a natural and comfortable place to be (Steiner and Reisinger 2004). 3. Marketing strategy TTND marketing strategy has been basically founded on the use of another organization and in this case BECGBR to market itself. However, with the emerging market demands both from the internal and external markets, it is becoming increasingly necessary to revise its strategy. Market strategy review is important in ensuring quality in service delivery is enhanced with the view of meeting the unique and distinct demands presented by different market segments (Smith 2005). So far this strategy has helped the destination realize positive returns from its tourist and business activities. Through BECGBR, TTNQ has been show casing its products both to its domestic and international customers. Now it’s becoming clear that marketing is more depended on quality and ability to meet customer expectations rather than presenting an ‘empty service’. In other words providing a service that is provider derived rather than market based (Donthu and Yoo 1998). The latest market strategy is focusing the destination’s efforts towards international and domestic customers who come into the destination as a result of passing their leisure time, business activities and sporting activities. With positive results in terms of performance by the destination in the last ten years, the destination still feels obliged to work towards growing and reaching its full potential. In the last ten years the destination has managed to record increased growth both in revenues as a result increased customer expenditure, numbers and stay in the destination. Visitor expenditure based on the past experience is likely to continue growing as the major contributor the destination success. The current visitor expenditure stands at $2.2billion. In the past 10 years, the expenditure from visitors has continued to grow at about 30% with the intention of increasing this rate to 39% by 2015. The visitor numbers to destination has been varying over years and they range between 650,000 to 820,000 for international ones and between 1, 4 to 1.6 million for the local ones. The visitors are for the destinations are from various diverse backgrounds and regions like Sydney, Europe, America, Asia and Europe. However, the stay of various visitors has continued to vary depending on the agenda of the visit. The visits can run as from one day to a couple of weeks. The stay can also be affected the customer satisfactions by the services provided in the destination (TNQ, 2011). 4. Target markets (i) Priority target markets for the destination There are three main target markets that have been identified by TTNQ and they include leisure, business and sporting events. These three target market provide a growth opportunity for the destination. However, for this markets to be developed a number of strategies are available for use. However, for these target markets to make meaningful contribution to the destination, both domestic and international strategies have to be employed. Some of the domestic strategies that can be used by the destination include growth markets in Sydney, Melbourne and south Eastern Queensland, and enhance market and investment by building partnerships and use of social media to engage the community and other potential customers in business conversations. These target markets at domestic level are likely to increase the destination’s visitor expenditure from $1.44 to $1.85B by 2015 (TNQ 2011). The strategies for guiding international leisure markets, business markets and sport events include maximization of capacities in New Zealand and Japan, development of china and Singapore markets and continue to defend domestic markets as well as maximizing the use of airline agreements to increase the inflow capacity (SVN and the Journey 2007). (ii) Reasons for the selection of the target markets The three target markets which leisure, business and sporting events have been identified by the destination as potentials to enhancing the destination‘s growth objectives. Market segmentation is considered one of the best strategies to devising different ways to serving the customer. This is because different markets are identified and grouped as independents based on the unique and similar characteristics possessed which are different from the rest of the market segments. The identification of these three market segments as been motivated by their lucrative expenditure in the destination and increased trend of the number of related activities that are held within the destination and its environments. It is believed that by reaching these three target markets the destination will be able to offer excellent customer service in order to win their loyalty and motivate their expenditure on the services provided by the destination. The preference of these three by the destination as its target markets has been motivated by three main factors which include their trend in economic spending, the geographical distribution and the frequencies to the destination. For example, the three target markets have one characteristic in common. They all come into destination with a purpose which may be to have some leisure time, participate in business meetings or participate in sport activities and their stay in the destination is relatively longer. Further, these target markets form part of the large spenders from the last reports. About 75% of the total expenditure by visitors comes from these three target markets. The target markets also are known to make very regular visits both into the region and the destination in particular. The target markets therefore provide lucrative business prospects for the destination (SVN and the Journey 2007). (iii) Understanding the motivations of the target markets A customer motivation to a certain product or service may be influenced by a number of factors. The market motivation is defined by the reason behind the demand of a particular service or product. Taking the case of TTNQ and its target markets, no doubt that the customer demands for various services has been core factor for identifying its targets. Social class, pride, culture, experience and economic status are some of the factors that might have informed TTNQ to the choice of its target markets. Socializing, interacting and engaging with potential customers, either through the social media, show casing and even direct conversations will help greatly understand the motivation of the customer to the destination. Satisfaction and superior customer experience are also some of the motivations of the target market according to Uriely (2005). (iv) The processes of destination choice used by visitors While to choose a certain destination as a travel and visit a number of decisions have to be made first. This is in regard to the capacity of a particular destination to meet and even surpass the expectations held by individuals. Before visitor engages in a journey it is almost certain that he has to find out information about various destinations and their competence to match their services with the customer needs and then analyze available information to determine the most appropriate place to go as a destination. Like the case of the Maslow’s Hierarch of needs, the travelers are guided by the value and satisfaction they will get from their experience in a given tourist destination. For example there are those travelers who will be guided by the self-esteem and need for development. In this case, it is emerging that most of the travelers who are looking for self-esteem may be looking places that will match with their pride, development of skills, glamour of travelling and other special interests. On the other hand, the ability of the destination to offer free environment for interacting and creating relationships, showing affection and love is key in choosing a destination by a traveler. Finally, concern for own and others’ safety as well as need for body reconstruction and relaxation are all important process in choosing a certain destination (Stockdale 2007). (v) Determining the level of customer satisfaction Determining the level of customer services is very important not only in the tourism industry almost in every sector. Determining the level of customer is preferred since it greatly helps the business or the destination to rate and benchmark itself against customer demands. Knowing customer level of satisfaction is important in the design process so as to factor in those aspects as quality and customer service in order to meet with the customer expectations. Visitor satisfaction to TTNQ can be determined using different ways. However, the commonly used methods include the change in length of stay by the visitors, the spending and willingness to pay any amount for a product or service, annual spread of visits to the destination and regular visits. In general, customer response to the destination is determined by the perception that it will meet his demands (Uriely 2005). (vi) Internal marketing Internal marketing is the process of informing the company employees of the marketing activities the company is taking and with the intention of promoting the product or service from internally. Internal marketing can also be done among the members of a given association. The importance of doing internal marketing is that the staff or the members of an association to form part of the market alongside aiding the implementation of marketing activities. It can be categorically stated that BECGBR is doing internal marketing. This is because it allows for share of information among the members through show casing thus giving the members the opportunity to trade among themselves (Stockdale 2007). 5. Competitiveness of the travel destination The TNQ’s main competitors include French Polynesia, Dubai and Brisbane Kuala Lumpur. All these world travel destination are subject to stiff competition from the rest of the world and therefore their success depend on the resources capacity, destination management process and in overall the marketing strategy used by each (Tikkanen 2007). Just to mention these travel destinations are competitors to TTQN since they are all world class destinations. In this regard therefore, developing a competitive strategy is the only way to maintain the competitive advantage. Crouch and Ritchie 2003, developed a destination competiveness model which can be used to analyze the internal capabilities of the destination and how it can maintain a competitive edge in the industry as shown in the diagram. This model has been very instrumental in helping TTNQ destination develop a competitive edge over the other destinations. The most important aspect of this model is that it provides strategies on how core destination resources and attractors, supporting processes and resources, destination management, qualifying determinants and destination policy, planning and development processes can be used create a competitive advantage (Azevedo 2009). Figure 5- Model of Destination Competitiveness and Sustainability Source: Ritchie and Crouch (2003:63). In order to make sure that TTNQ travel destination is over the rest in terms of competiveness, the destination must first all make use of the goodwill from the government of Australia which has embarked on a mission to grow the tourist industry. further, management, planning and good leadership that allows for partnering with local businesses, institutions and other travel destinations in the country, could be very useful in rolling out the marketing activities of the destination. In addition, good financial base of the destination provides an opportunity to improve on the quality of its services something that every traveler values. Finally, the management and preservation of natural resources such as Great Barrier Reef that form important part of the travel destination provides a key advantage as a result of sustainability in tourism (Dwyer and Rao 2004). References Tropical North Queensland (TNQ). (2011). Strategic marketing plan 2011-2015: A five Year vision for the region. Queensland, Australia. Azevedo, A. (2009). Designing unique and memorable experiences: co-creation and the surprise factor, III Congresso Internacional de Turismo de Leiria e Oeste – 2009, Instituto Politécnico de Leiria. Donthu, N. and Yoo, B. (1998). Cultural influences on service quality expectations, Journal of service research, Volume 1, No. 2, pp.1998. Dwyer, L. and Rao, P. (2004). Destination Price Competitiveness: Exchange Rate Changes Vs Inflation Rates. Journal of Travel Research, Vol. 40, pp 340-348. Smith, William L. (2005). “Experiential tourism around the world and at home: definitions and standards”, International Journal of Services and Standards, Vol. 2, No. 1, pp. 1-14. Steiner, C.J. and Reisinger, Y. (2004). “Enriching the Tourist and Host Intercultural Experience by Reconceptualising Communication”, Journal of Tourism and Cultural Change, Vol. 2, No. 2, pp.118-137. Stockdale, R. 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