Slide Nr. 1 Destination Management Lecture 7 University of Applied Sciences Stralsund Leisure and...

Slide Nr. 1

Destination Management

Lecture 7

University of Applied Sciences Stralsund

Leisure and Tourism Management

WS 2009/2010

Slide Nr. 2

Part Three

Considers the challenges involved in managing attractions such as marketing, financial management, operations

management and human resource management

Slide Nr. 3

The Marketing Concept

Slide Nr. 4

Growing need for marketing concepts

• Dramatic changes of economic structures- industrial societies => service oriented societies- more innovative and marketing orientated

• Changing nature of market and customer behaviour

• Recessions, forcing organizations to be more critical

• Privatization of previously state owned organizations

• Government pressure on local authorities

Part Three \ The marketing concept

Slide Nr. 5

Approaches to marketing

• Production approach- concentration on low cost production and effective distribution

• Product approach- emphasis on product improvement

• Selling approach- carrying out substantial promotional and selling activities

• Marketing approach and market-led approach- identifying the customer wants and needs and deliver the most satisfying product


Slide Nr. 6

Visitor attractions as service products


1. Staff is part of the product itself- attitudes and behaviour affect enjoyment

2. Intangible elements dominate the attraction product- encourage to buy on basis of an imagination

3. The product is perishable- ensure consumption/income before product perishes

4. Customers are part of the production process- affects on experience are largely outside control

5. Service products are never really standardized- quality control difficult; guarantees??

1.

2.

3.

4.

5.

Slide Nr. 7

visitor attractions and tourism marketing

• The product is an experience- that begins in advance of consumption and continues …- visitors rarely distinguish between responsibilities

• The product offers only shared use rights- try to avoid conflicts between different groups

• The product offers only temporary use rights- “the longer the stay the higher the spending”

• The product is rarely being delivered to the customer- good signposting, directions and brochures are essential

• The demand for the product is highly seasonal


Slide Nr. 8

Key factors in visitor attraction marketing

• The marketing objectives are very varied- depending usually on the ownership (sector)

• Attractions are also marketed by other people- tour operators, local authorities, tourist boards …

• The level of competition varies dramatically

• Many key factors in the visitors experience are outside the control of attraction operators

• Visitor usage rates vary dramatically

• Attractions tend to have high fixed costs


Slide Nr. 9

Strategic Marketing Planning

Slide Nr. 10

Value of strategic marketing planning

• Forcing to clarify company‘s mission and look to the future

• Making sure attractions consider their competitorss

• Pinpointing the organization‘s strengths and weaknesses

• Identifying market threats and opportunities

• The effective allocation of resources

• Allocating responsibilities to individual members of staff

• Guiding day-to-day marketing activities

• Ensuring evaluation of performance

Part Three \ Strategic marketing planning

Slide Nr. 11

Scope of strategic marketing planning !!!

• Where are we now?

- analysing the organizations current situation and direction

• Where do we want to be in the future?

- establishing mission statements, setting goals and objectives

• How are we going to get there?

- devising strategies and tactics helping to achieve these goals and objectives, and looking at implementation issues

• How will we know when we get there?

- monitoring and performance evaluation strategies, and systems for modifying strategies in response to monitoring


Slide Nr. 12

Where are we now?


Slide Nr. 13

Where are we now?

• A number of techniques are available to help identifying the current situation of the attraction including

• SWOT analysis,

• Boston Consulting Group matrix,

• Product life cycle,

• Market segmentation and

• Product positioning.

Part Three \ Strategic marketing planning \ Where are we now?

Slide Nr. 14

Case Study

Slide Nr. 15

What is a SWOT analysis?

Objective:

Identify the gap betweenthe current situation of the business and thedirection in which the market moves.

• SWOT is a useful framework to assess a company’s:

- STRENGHTHS

- WEAKNESSES

- OPPORTUNITIES

- THREATS


Slide Nr. 16

Strengths, weaknesses, opportunities and threats

• The strengths and weaknesses within an organisation

- are usually internal factors

- that are within the control of the organisation

- point out the current situation of the business

• … These are generally internal factors, which are responsible for the success of the attraction and can relate to the rides provided, the location of the attraction and the staff who run and operate the attraction


Slide Nr. 17

Strengths, weaknesses, opportunities and threats

• Opportunities and threats are factors

- that are essentially external environmental factors

- and exist outside the control of the organisation

- identify the direction in which the market moves

• For example, products offered by competitors or market forces such as seasonal fluctuations, which affect the demand for a product.


Slide Nr. 18

SWOT analysis


Strengths Weaknesses

Opportunities Threats

internal factors

within control

(current situation)

external factors

outside control

(market direction)

Slide Nr. 19

1. Rising amount of income spent on leisure time

2. Domestic competition with nearby attractions

3. Decline in profitability

4. Low turnover of staff

5. Rise in population taking short breaks

6. Growing participation in thrill sports

7. Few intermediate rides for parents

8. Growing corporate hospitality

SWOT Exercise


Q4 Assign the following statements for an outline SWOT analysis of a visitor attraction

(e.g. theme park) to the four sections of the matrix. (2 statements for each section)

(8pt)

Strengths Weaknesses

Opportunities Threats

48

37

15

26

Slide Nr. 20

Strengths

• Examples for Strengths

- low turnover of permanent staff

- located near motorway junction

- 3 million people within 1-hour drive time

- unique collection of rides

- increased sales

- creative organisation


Slide Nr. 21

Weaknesses

• Examples for Weaknesses

- low sales in November – March

- decline in profitability

- growing crime figures

- training of seasonal staff

- joint marketing

- food outlets


Slide Nr. 22

Opportunities

• Examples for Opportunities

- growth of population within 1-hour drive time

- growth of proportion of population taking short breaks

- new air services from Amsterdam and Madrid bring additional overseas visitors to the U.K.

- major hotel group seeking partnership

- increasing disposable income spent on entertainment

- rising internet booking


Slide Nr. 23

Threats

• Examples for Threats

- new theme park development within 1-hour drive time that is to open in 2005

- new retail / entertainment park nearby

- increasing proportion of teenagers’ income spent on mobile phones and video games

- new low cost air services to Paris

- recession forecast


Slide Nr. 24

Difficulties when carrying out SWOT analysis

• It is sometimes very difficult to decide whether an item is a strength or a weakness.- E.g. “low turnover of staff" could be a strength but also a weakness when masking the fact that the staff are inflexible, inwardly focused and not creative

• Another example in the analysis, which could be viewed as a strength or a weakness, is the location of the park near a motorway junction. This would make the attraction much easier to travel to and therefore is a strength. But it could also be a weakness, because it gives potential customers a greater choice of entertainment destinations.


Slide Nr. 25

What to do with the SWOT?

• Every section holds potential to put forward strategies

• For example, weaknesses and threats can be converted to strengths and opportunities. Whilst strengths can be matched to opportunities.


Weakness:

few visitors inoff-peak season Conversion Strategy:

attract school-group visits at low fares in off-peak season Strengths:

- balanced cash flow

- loyal visitors (return visits)

- grater awareness (parents, relatives)

- sanitised public image

- ….

Slide Nr. 26

-

-

-

-

-

Conversion strategy Exercise


Q5 The “Tropical Islands Dome”, located at the edge (periphery) of the tourist destination

“Spreewald” between Berlin (50 km) and Dresden (100 km), opened on Dec 18, 2004. As the attraction does not dispose of any on-site accommodation facilities, only (one) day visitors can be attracted.

Develop a conversion strategy and name three possible strengths resulting of your strategy.

(8pt)

- partnership/co-operation with nearby hotels 2pt

- high attractiveness of the product (by packages) 1pt + 1pt

- strong marketing partners (increasing awareness) 1pt + 1pt

- diversified distribution channels (hotels as intermediaries) 1pt + 1pt

- diversified income generation (commission for bookings) …

conversion strategy:

resulting strengths:

Slide Nr. 27

Conversion strategy Exercise


…

Slide Nr. 28

valuable SWOT analysis requires

Customers

Agencies

Staff

Suppliers

SWOT

Analysis

• be objective in developing strengths and weaknesses and realistic in assigning opportunities and threats.

• carry out customer focused questionnaires, also with internal customers (staff), other stakeholders such as suppliers and promotional agencies.

• cross-functional team SWOT analysis


Slide Nr. 29

Boston Consulting Group (BCG) matrix

• Whereas SWOT analysis looks at the organization as a wholeBCG matrix focuses on a range of product or services= portfolio analysis

• Examines productsin terms of:- their market share- market growth

• Important question:How to definethe product?


max minRelative market share

Ma

rke

t g

row

thL

ow

Hig

h

QuestionmarksStars

Cashcows

Poordogs

Slide Nr. 30

Boston Consulting Group (BCG) matrix

• Stars- providing stable profits but are threatened by competitors- need to focus on maintaining competitive advantage!

• Question marks- old, uncompetitive products or brand-new ones without awareness- danger to become ‚poor dogs‘ and chance to become ‚stars‘ resp.

• Cash cows- steady generators of cashflow and therefore vital to organizations

• Poor dogs- best option is to stop providing the product or to sell it- sometimes kept to put pressure on competitors ‚cash cows‘


Slide Nr. 31

Why to apply BCG matrix?

• Beside helping organizations to assess their current position it also supports:

• the management of cashflow and the planning of investment;

• acquisition and diversification policies;

• the analysis of the organization‘s human resourcesin terms of their expertise and experience so that potential future strengths and weaknesses can be identified.


Slide Nr. 32

Problems when applying BCG matrix

• There is often no competitive market

- e.g. in the case of local authority museums or sports centres

• Market share can often not be measured

- markets are often ill-defined or impossible to measure at all

• Model is based on the idea of rational decision making

- in the public and voluntary sector strategy decisions often depend on political and social objectives and not on seeking to maximize financial performance


Slide Nr. 33

Product life-cycle

In marketing terms the current stage in product life-cycle is important for two main reasons:

• The type of customer is different at different stages

- marketing media and marketing message will likewise be different at each stage of the PLC

• Need to recognize when to ‚re-launch‘ the product

- implies significant investments over normal costs


Slide Nr. 34

Market segmentation

• The aim is to see:

- how the market segments relate to the current trends

- what gaps exist between the current situation and the way the market is moving

• Devise strategies to bridge or close these gaps

• current major market segment: young familydemographic trends indicate growth in older age groupsdevelop marketing strategies attracting elder visitors


Slide Nr. 35

• Where customers perceive you to be in the marketplace

• If there are disparities between the customer and the manager‘s viewpoint:

- change the market or the product in order to reflect/match the views of the customers!

Product positioning


Exciting

Boring

Exp

en

sive

Ine

xpe

nsi

ve

Exciting

Boring

Exp

en

sive

Ine

xpe

nsi

ve

Theme Park

( )

Competitor analysisPositioning disparity

Slide Nr. 36

Research strategies

• Visitor numbers and a profile of existing customers,ex-customers, and non-users

• Visitor‘s perceptions and opinions on the attraction

• Objective information on the organization and how it operates

• Up-to-date information on competitors and their performance

• A thorough appreciation of the position of the attraction in the market place as a whole

• An understanding of likely macro-environmental changes


Slide Nr. 37

Questions to consider when conducting surveys

As most of the data required for analysing the current situation are simply not available, surveys can help to gather information

• Who will carry out the surveys

• When and how often they will be carried out

• How many people will be surveyed and how they will be chosen to ensure that the sample is representative

• What questions to ask

• How to analyse the results of the survey


Slide Nr. 38

Where do we want to be in the future?


Slide Nr. 39

Sequence of steps

• Defining the future business

- often means continuing within the existing parameters

• Mission statement

- what direction to take and how to be seen by the market

• Goals and objectives

- e.g. for revenues, profit, awareness, visitor numbers, quality of service, competitive advantage, market share- usually concrete targets for evaluating success or failure

Part Three \ Strategic marketing planning \ Where do we want to be in the future?

Slide Nr. 40

Please remember:

Slide Nr. 1 Destination Management Lecture 7 University of Applied Sciences Stralsund Leisure and...

Documents

Transcript of Slide Nr. 1 Destination Management Lecture 7 University of Applied Sciences Stralsund Leisure and...