Evaluation and Rebranding of Iceland as a Tourist Destination - Research Paper Example

Evaluation and rebranding destination – Iceland AFFILIATION: Table of Contents Table of Contents 2 Introduction 4 Literature Review 6 Branding and destination branding 7 Competitive Identity/Nation Branding 9 Key components of destination branding 10 Iceland – Branding Destination 10 Methodology 13 Results 14 References 17 In the last few years, the tourism industry has grown by leaps and bounds as there has been robust growth in the number of travellers both for business and leisure purposes. Since the countries have realised that they can enhance their brand image by developing and implementing destination branding concept, it has become imperative for the nations to understand their competitive features. Moreover, there is consistent need of carrying out market studies so that there is access to the most accurate and up-to-date information. It will even permit the country to redesign the strategy to align with the target market needs. In addition to the developed economies, some emerging markets are also enhancing their tourism sector. One of the attractive destinations is Iceland as it has a range of beautiful sceneries, aesthetically designed natural beauty, monuments, entertainment places, landscapes and festivals. However, the main issues are found in the country’s infrastructure, lack of uniformity and synchronisation in the tourism players and improper target audience. Hence, there is need of defining and targeting the appropriate market. As the latest trend is of the social media marketing, it is imperative for the nations to develop tactical and strategic destination branding framework. Iceland has to promote the range of attractions which are found in the region in the form of videos, brochures and advertisements on online mediums such as websites. With the help of these initiatives, Iceland will be able to enhance its brand image and implement the strategic destination branding concept effectively. Introduction Now-a-days, the intensely competitive business world is posing a range of challenges for the tourism destinations. It has become imperative for the destinations to enhance their present attributes, elements and differentiated features so that they are able to get a customer’s attention as final choice (Sahbaz & Ciftci, 2011). In order to understand the process through which an individual goes to make ultimate destination selection is crucial as the person utilises an array of contemporary and traditional mediums for gathering information and designing the trip. Thus, the countries, cities and regions have to consider a wide range of factors when designing the strategy so that all right tools are employed for attracting the visitors (Lopes, 2011). With the advancements of the Information Communication Technologies (ICT), the tourism industry has been transformed globally. One of the major features of ICT such as the Internet development has created a unique and modern framework of web dependent communities called ‘Web 2.0’ (Twitter, Tripadvisor, Instagram, Facebook, YouTube). This innovative technology has revamped the market structures for the tourism agencies along with the entire process of the destination branding (Hassan, Hamid & Al-Bohairy, 2010). According to World Tourism Organization (WTO), tourism is defined as “the set of activities for people who are either travelling to or staying in locations out of their usual and normal environments for certain time period for business, leisure or other varying purposes” (Hankisnson, 2009). From 1950 onwards, the tourism industry has grown by leaps and bounds and presently it is the major contributor to the respective economies. From 1950 to 2010, the number of international tourism arrivals have been expanded as it has increased to 940 million in 2010 from 25 million in 1950 which shows that there is annual growth rate of about 6.2% (Hassan, Hamid & Al-Bohairy, 2010). As Internet has revolutionised the tourism industry, the consumers are using this avenue for collecting information about various destinations. Furthermore, the social media has emerged as the main driving force for changing the tourism plans and strategies (Morgan, Pritchard & Pride, 2012). Some of the online techniques which have been employed by the players in the tourism industry are blogs, wikis, social media networks, virtual communities, tagging on collaborative level and sharing media files such as Flickr and Youtube (Sharma & Dogra, 2012). All of these initiatives allow the visitors to gain online information and get in touch with the tour operators virtually. Moreover, the tourism agencies can use this platform for enhancing the Internet usage by the online travellers (SE1 Media, 2012). Tourism is recognised globally as the accelerating sector of the developing economies and Iceland is among the most attractive tourist destinations. It has been reported by BCG (2013) that the country has become the largest exporter in this year as it had the best fishing season. The country has been successful in attracting huge number of visitors in Iceland in the last ten years. Almost all the tourists have appreciated the distinctive culture, affectionate hospitality and unique nature; all of these factors contribute to the region’s sustained and accelerating growth of tourism sector (BCG, 2013). Additionally, the government of Iceland has designed and developed a strategy for creation of Iceland as the ultimate destination choice by incorporating the destination branding elements (Hjalagar et al., 2011). With the help of this new framework, the country can enter into an integrated and synchronised developmental phase which will emphasise on funding the unique products, programs related to environmental conservation and even complimenting infrastructure. This aspect will create more jobs, increase the tax income and contribute to economic growth. Hence, this region has to undertake an effective destination branding strategy so that the desired targets are successfully attained. Literature Review Generally, it is believed that the tourism destinations have to be involved in the induced set of consumers from which the final decision is reached. In spite of this, every consumer is offered a range of choices for the destinations that are provided consistent features like aesthetically appealing beautiful sceneries, superior quality accommodations and pleasant individuals (Herstein, 2012; SE1 Media, 2012). Hence, the destination has to be different and unique in addition to the induced set of choices so that the final decision can be effectively made. From this viewpoint, the destination branding concept is critical for the destination to gain recognition and create different image in the target market’s minds. The basic principle of the framework is to develop an optimistic image of destination which is done by the identification and differentiation of the destination by selecting an appropriate and consistent mix of brand elements (Qu, Kim & Im, 2011). It is described by Aziz, Keffalonitis and Friedman (2012) that “destination branding should form an image or perception about the place which is reflected by the set of associations embedded in the visitor’s memory”. In order to make sure that destination branding is perfectly done, it is imperative to understand the complete brand image which is a combination of the cognitive and affective evaluations of the place (Lopes, 2011). Simultaneously, the brand associations have to include the affective and cognitive components of the brand image and they are accepted as the principal indicators of the destination image (Kotler & Keller, 2011). Branding and destination branding According to American Marketing Association, a brand is defined as “a name, sign, term, design or symbol or a combination of few elements for the purpose of identification of the offerings of a seller or group of sellers or/and to create a differentiated position from the rivals” (Kotler & Keller, 2011). Similarly, Kotler and Armstrong (2013) has defined the brand to be “a product or service attributes which adds attractive dimensions to the offering for standing out in a unique way from the cluster of similar choices so that an individual’s need can be satisfied”. According to Kotler and Armstrong (2013), the branding process encompasses the conceiving, designing, creating, scheming, implementing and communicating of the name along with its identity for building or managing the brand reputation. The brand reputation is composed of four chief elements: 1. Brand image – A set of beliefs held by the consumers in relation to a specific brand 2. Brand purpose – The ultimate goal of the brand 3. Brand equity – The value or worth of the brand 4. Brand identity – A company’s viewpoint about the brand or the perception it wants to communicate to the target market for conveying its distinctiveness and uniqueness (Hassan, Hamid & Al-Bohairy, 2010). Simultaneously, destination branding is described as “a technique used by a destination for communicating the message about its individuality and distinctiveness so that it can be differentiated from other destinations” (Hjalagar et al., 2011). The destination brands are exerting two vital functions i.e. ‘identification’ and ‘differentiation’. In the literature of branding, identification includes the revelation of the product’s source to the consumers. As the place is a product of a large entity, it incorporates several physical/material and non-material features for representing it. For instance, the place comprises of tangible aspects like historical attractions, beaches, museums, attractive places and monuments and intangible facets like history, culture and customs (Sahbaz & Ciftci, 2011). As the destination branding is a complex concept, the generalisation of place’s identity is inescapable. Additionally, the brand identity is essential for the simplification of the characteristics which are desired by the consumers. This framework highlights the target market’s perception about the brand and this facet is important for developing a positive brand identity. On the basis of expected brand identity, the consumers have to develop an association with the specific brand either by a value proposition which includes benefits or give credibility to the brand (Herstein, 2012). Additionally, with the identification aspect of the destination branding, the differentiation aspect has to be addressed so that a distinctive brand identity is created and it allows the consumers to develop specialised meanings to the brand elements (Lopes, 2011). The destinations usually have some points of parity like superior quality accommodations, outstanding restaurants and aesthetically designed public avenues (Nicolaisen & Blichfeldt, 2012; Schaar, 2013). However, the tourism destination necessitates the need of shedding light on those features which make a place more appealing when compared to other options (Lopes, 2011). Thus, the points of difference allows the consumers to evaluate the brand optimistically and develop attachments with the brand. So, the basic fact is that the destinations have to create images in such a way that the consumers can view the differences among the brands in particular category of product i.e. brand positioning so that it cannot be easily replaced by competing brands (Hjalagar et al., 2011). Competitive Identity/Nation Branding In order to develop a competitive brand image, the country has to identify its nation branding strategy so that it can identify the core representation of its brand or country (Sharma & Dogra, 2012). It has been stated by BCG (2013) that it is the brand essence as it is the heart and soul of a brand which is what it is standing for and what is making it unique. As finding the country’s essence is complex rather than of the product, it is important to understand the nation’s culture i.e. its traditions, history, language, music and customs so that all stakeholders can be effectively involved (Qu, Kim & Im, 2011). Thus, tourism is the major participant in the improvement of the competitive identity’s strategy. Also, the tourism sector is a part of the country’s economy which can enhance its reputation on national level as the industry stakeholders can brand the country candidly (Schaar, 2013). In this way, the consumers which is the target audience is exposed to contemporary information regarding the history, culture, development and people of the particular country (Aziz, Keffalonitis & Friedman, 2012). According to Nicolaisen and Blichfeldt (2012), the nation’s requirements of standing out among the competitors is maximised by “declining international travelling cost, increasing spending power of the international middle class and ongoing search for exciting new and innovative tourism experiences which induces the countries to develop different and attractive place for marketing as a tourist destination.” Hence, every country has to conduct its self-assessment so that it can identify those areas on which it can capitalise and create a positive brand image. Moreover, the competitive identity or nation branding will encourage the nation to enhance its brand reputation and allow it to compete effectively on international level. Thus, this concept has to be made an integral part of the destination branding so that the tourists are willing to visit the place frequently for enhancing their experience at the place. Key components of destination branding The most concise definition of destination branding as given by Schaar (2013) is “a set of marketing activities that (i) support the development of a symbol, name, logo or other visual representations for identification and differentiation of a destination, (ii) continuously conveys and remains consistent in meeting the expectations of the tourists who are seeking a memorising travelling experience distinctively associated with a particular destination, (iii) serves for consolidation and reinforcement of the emotional bonding between the destination and the visitor, and (iv) reduces the consumer’s costs of search and apparent risk”. Iceland – Branding Destination According to BCG (2013), Iceland has grown to become an attractive destination places for a range of visitors across the globe as the country has undergone a vast array of transformations. In the last ten years, the number of tourists visiting the country has doubled as the region has about four international level airports, cruises and Smyrill Line sea route. In 2002, the number of international visitors was 249,000 which increased to a level above 649,000 in 2012. Majority of the travellers came from Keflavik so that there was maximum number of arrivals in the region (BCG, 2013). It has been mentioned by Tourism authority of Iceland that it is expected that there will be an annual growth of 10-30% yearly even on monthly basis. The foremost driving forces of the robust progression are evolution of the tourism on global level, eruption of the Eyjafjallajokull volcano (it drove awareness about Iceland as tourist destination), development of the airline routes, aggressive promotion of the country as the attractive destination place and devaluation of Icelandic Krona in year 2008 (BCG, 2013). As working on the branding of destination is a challenging endeavour because it requires immense range of efforts, Iceland has undertaken few initiatives to incorporate the key elements of destination branding i.e. brand identity, brand image, brand positioning and brand association. An analysis of these principles with reference to Iceland reveal that the chief authorities have employed the most feasible tools for strengthening its image globally. According to Kotler and Armstrong (2013), the brand identity is the fundamental attribute which has to be designed with caution so that the desired outcomes are attained. Furthermore, this feature has to be unique so that the country can stand out among other destinations being considered by the tourists (Nicolaisen & Blichfeldt, 2012). Iceland has natural richness which means that there is a lot of greenery which is further refined by the authorities to enhance the beauty of the nature. In addition to the captivating sceneries, there is a range of entertainment activities such as festivals, parks, theatres, amusement avenues and shopping malls with well-built cinemas. Even the private sector of Iceland is supporting the government in revamping its hospitality sector such as hotels and restaurants so that the tourists have an exceptional trip in the region. Hence, a holistically sensational travelling experience is provided to the travellers so that they are contended with their travelling choice in Iceland. Other element which is addressed by Iceland Tourism authorities is the brand image. In order to make Iceland an attractive destination for travellers, the governments has allocated sufficient funds for developing an interactive and appealing website. Also, the modern advertising mediums such as social networking sites and blogs are being used but to a limited extent. However, it is promoting the attractions of the nation through the travel agencies in the form of brochures and pamphlets. Iceland is now publishing reports about the attractiveness of the place so that it can represent itself as the environmental loving and hospitable country. Even the government has started the employee training project so that it has the competent workforce in the tourism sector so that the visitors don’t have to face any hurdles during their visit in the region. Moreover, it has entered into collaborations with the private level firms so that they can work as teams for attaining the common goal of making Iceland the best destination for visitors. Furthermore, the brand positioning has to be undertaken with attention because there needs to be clarity about the vision which the brand wants to attain in future (Nicolaisen & Blichfeldt, 2012). One of the brand positioning initiative implemented by Iceland is to create an image that it is the ultimate destination for the adventurous people as they can get engaged in range of activities from skiing to boat riding. It has even appealed to those visitors who are looking for peaceful places where they can have a relaxing and calm time. All of these assessments about Iceland are done from its tourism website and the images published in the country’s reports. Finally, Iceland is viewed as the best choice for those people who want to have the sensational phase of their lives as the place is equipped with a range of options for the visitors. Even the travellers have published their viewpoints in the form of testimonials on social networking sites. Moreover, the surveys also reveal that visitors are looking forward for new attractions during their visit but there is dearth of such projects and they prefer to go to other places. Hence, Iceland has to focus on creating differentiated and value added offerings for the tourists so that they are willing to visit the place on repeated basis. Basically, there are five important phases for creating a positive destination brand image. These steps are investigations, detailed analysis and recommendations on strategic level for the target market; developing the brand identity; communicating the vision by launching and introducing the destination; implementation of brand; and frequent monitor, evaluation and review of the brand success (Nicolaisen & Blichfeldt, 2012). In order to create a unique and distinctive brand image, the country has promoted the region by implementing promotional campaigns such as ‘Island allt ario’ and ‘Inspired by Island’. Moreover, it has developed an attractive and highly integrated website so that the tourists can get all valuable information with ease and make their final choice effectively. Additionally, the country has been aggressively promoting the destination on various social networking sites such as blogs, social networking sites and media file sharing. However, there is lack of synchronizations in the efforts of all the players of tourism industry because there is scarcity of resources. Methodology In order to evaluate the destination branding employed by Iceland, the secondary research is performed. It is defined by Kotler and Armstrong (2013) that when already published sources are used for retrieving the information related to the topic of study then it is known as secondary form of research. The sources utilised for this form of analysis are papers, research journals, books, research papers, case studies, published reports, government documents and others (). For this study, the descriptive form of methodology is employed as it will permit that actual and factual information is extracted. Moreover, the data is collected from the BCG (2013) report and the website of Iceland Tourism Organisation so that the branding concept is properly evaluated. In order to make sure that all components of branding are effectively assessed, the information from the paper of Hjalager et al. (2011) about Iceland is also included. Results As of 2013, the total contribution of the tourism industry in Iceland is about ISK 17 billion in the form of direct taxes which is equivalent to ISK 120,000 contribution of every household in the region. Due to this initiative, the government of Iceland is able to generate huge amount of funds for investing in the destination branding initiatives. This aspect shows the public support in developing the destination for attracting the number of tourists in the country. Moreover, the enhancement of this sector has created a range of jobs for the local people and more than 7,000 people have gained employment in the last five years. Additionally, the actual value of the exports of the country in terms of tourism has risen to 136% which is about ISK 78 billion (BCG, 2013). It is expected that the tourism in the region will continue to grow as the government has defined a strategic framework for boosting the sector tactically in the next ten years. According to BCG (2013), the number of tourists will rise to 1.5 million in 2013 from 700,000 in 2012. A detailed analysis of the promotional activities of the country reveal that it has developed an interactive website for the tourists, created attractive brochures, shared an array of aesthetically appealing videos demonstrating the attractive and unique landscapes and places in the country and strong presence on social media venues (Hjalager et al., 2011). Despite such robust and accelerating performance of the country, there are certain challenges which are faced by the respective tourism players i.e. conservation of nature (eco-friendly initiatives), inducing visitors to get engaged in a diverse range of activities during the stay, controlling and reducing the tourism seasonality and disseminating the visitors in other regions of the country (Hjalager et al., 2011). It is even found that there is dearth of festival in the country which can promote its culture or attract the visitors from the world. For instance, there are no shopping or food festivals which are organised in Dubai. There is even requirement of creating a sustainable approach as there is lack of clarity about the target market (BCG, 2013). Hence, it is recommended that Iceland breaks the target market on the basis of various segments so that the destination branding can be effectively performed. This approach will permit the country to design the marketing activities in accordance to the size and spending pattern of the customers, seasons in which they travel, places most frequently visited by them and people having strong appeal on intrinsic level. In order to develop proper market segments, the most realistic groups can be classified as Old Relaxers, Affluent & Adventurous, City Breakers, Pleasure Seekers, Explorers of emerging markets, business travellers, workshop organisers and Calm environment lovers. Since there is disorganisation among various players of the tourism industry, it is vital for the government bodies to design an effective and integrated tourism framework. With the help of an innovative and modern structure, there will be a well-thought strategy and specific goals which will allow the authorities to exploit the opportunities available in the market. As there is increasing usage of Internet, the tourists are utilising these online venues for getting data from reliable sources. Moreover, the social media tools are used effectively for making sure that the people who have visited the place already can give their true opinions. Even the private sector should consider developing an association or organisation with all the players so that there is uniformity in the offerings. Additionally, Iceland should promote its attractions which comprise of the Volcanoes, Golden Circle, Northern lights, Valleys, Horseback riding, Gullfoss Waterfall and Snowmobiling found in Iceland. In order to highlight these aspects of the region, the authorities should develop videos and share them on online platforms so that it can give a visual representation of the destination. In order to make sure that the desired brand image is created about Iceland, BCG (2013) has recommended a framework which is shown below: It is apparent from the aforementioned model that the structural reforms have to be undertaken so that there is clarity about destination branding concept. Furthermore, it will allow the country to promote the competitive attributes of the country so that the number of tourists increase in the upcoming years. Hence, with effective destination branding which is aligned with uniform, strategic, well-thought and synchronised resources, there is high probability that Iceland is able to enhance its tourism industry. References Aziz, N., Keffalonitis, E. and Friedman, B.A., 2012. Turkey as a destination brand: Perceptions of United States Visitors. American International Journal of Contemporary Research, 2(9), pp. 211-221. BCG, 2013. Northern Insights: The future of tourism in Iceland. [Online] Available at: [Accessed 17 April 2014] Hankisnson, G., 2009. Managing destination brands: Establishing a theoretical foundation. Journal of Marketing Management, 25(1), pp. 97-115. Hassan, S.B., Hamid, S.M.A. and Al-Bohairy, H., 2010. Perception of destination branding measures: A case study of Alexandria Destination marketing organizations. International Journal of Euro-Mediterranean Sciences, 3(2), pp. 269-288. Herstein, R., 2012. Thin line between country, city and region branding. Journal of Vacation Marketing, 18, pp. 147-155. Hjalager, Anne-Mette, Konu, H., Huijbens, E.H., Bjork, P., Flagestad, A., Nordin, S. and Tuohino, A., 2011. Innovating and rebranding Nordic wellbeing tourism. [Online] Available at: [Accessed 17 April 2014] Kotler, P. and Armstrong, G., 2013. Principles of Marketing. 15th ed. USA: Prentice Hall. Kotler, P. and Keller, K., 2011. Marketing Management. 14th ed. USA: Prentice Hall. Lopes, F.D.S., 2011. Destination image: Origins, developments and implications. PASOS, 9(2), pp. 305-315. Morgan, N., Pritchard, A. and Pride, R., 2012. Destination Branding. London: Taylor & Francis. Nicolaisen, J. and Blichfeldt, B.S., 2012. Destination Branding: Mission Impossible? Denmark: Tourism Research Unit, Aalborg University. Sahbaz, R.P. and Ciftci, G., 2011. The effects of brand image on consumers’ choice. International Journal of Business and Social Science, 2(20), pp. 227-238. Schaar, R., 2013. Destination Branding: A snapshot. Journal of Undergraduate Research, XVI, pp. 1-10. SE1 Media, 2012. New Trends and strategies: Destination Branding. [Online] Available at: [Accessed 17 April 2014] Sharma, V. and Dogra, J., 2011. Synergism between online branding and promotion of Tourism Destination: Review in the context of Destination Management Organizations (DMO). Zenith International Journal of Multidisciplinary Research, 1(6), pp. 287-299. Qu, H., Kim, L.H. and Im, H.H., 2011. A model of destination branding: Integrating the concepts of the branding and destination images. 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