Recommendations for a Destination Management Organisation - Report Example

Recommendations for a Destination Management Organisation (DMO) Executive summary South West of England (SWE) as a destination management organisation (DMO) delivers tourism related services ranging from transportation to helping people in overcoming language barriers. This DMO is comprised of 9 Destination Management Organisations that are responsible for marketing South West of England’s all important destinations. South West of England is a hot spot in the global tourism map, and it is one of the nine official regions of England. Therefore South West England, namely Somerset, is chosen as the tourist destination for this report. Nearly five million people reside in South West England, and many major cities like Bristol are located in this region. A number of factors such as ineffective co-ordination of local government activities, unscientific treatment of environment and its resources, and rapid growth of major destinations in Asian countries (mainly India and China) raise many potential threats to the DMO’s future operations in the region. The organisation can address all such issues to a great extent if it pays specific attention to its branding and positioning activities. However, the organisation must be up-to-date with the recent trends in technology while dealing with digital and direct marketing. Furthermore, the DMO must prioritise environmental sustainability and social welfare activities while promoting its operations in Somerset. Table of Contents 1. Introduction 2. Recommendations 2.1. Segmentation, Targeting and Positioning (STP) 2.2. Branding and digital and direct marketing 2.3. Suggestions for medium and long term strategies 2.4. Implications of the solutions 3. Conclusion 4. References 1. Introduction In order to clearly understand the consultancy role to a Destination Management Organisation (DMO), it is important to know the concept of DMO and its operations. A DMO can be simply referred to a professional services organisation with comprehensive local knowledge, resources and great expertise, and that focuses specifically on the development and execution of events, tours, transportation, and other related activities. The major services delivered by a DMO may include “transportation, hotel accommodation, restaurants, activities, excursions, conference venues, themed events, gala dinners and logistics, meetings, incentive schemes as well as helping with overcoming language barriers” (Davidson, 2012, p.na). The DMO chosen for this paper is the South West of England, which is one of England’s nine official regions. The South West England is the largest official region of England by area, covering 9,200 square miles and the home to five million people (Church Planting Initiative, n.d.). The South West England is comprised of 9 Destination Management Organisations (DMOs) that are responsible for marketing the region’s destinations including Bath, Bournemouth & Poole, Cotswolds and the Forest of Dean, Bristol, Dorset, Somerset, Cornwall (includes Isles of Scilly), Devon, and Wiltshire. The destination chosen for promotion is Somerset. When it comes to the micro/macro forces affecting the region, it seems that a few industries including defence industry, agriculture and food industry, and textile industry contribute notably to the economy of Somerset. Tourism is another major factor impacting the economy of the region with tens of thousands of foreign people visiting the county for leisure purposes and cultural studies. It is noted that technology and infrastructure have been well developed in this region. The major stakeholders of the DMO include local residents, tourists, partnerships such as National Trust and Cotswold District Council, region’s councils, attractions and heritage sites, local tourism businesses, Visit England, and Visit Britain. Evidently tourists (both domestic and foreign) constitute the major stakeholder group because they significantly contribute to the economic growth of the region. Heritage sites and other attractions greatly assist the region to attract more number of tourists. The region’s Councils and other organizations like Visit England are responsible for co-originating tourism related activities in the area. Finally, local tourism businesses help the region to improve its tourist services while local residents assist the region to fill many tourism related job vacancies. Although Somerset performs relatively well in terms of economic growth, there are many factors challenging the future development of this region. First, intense competition with other regions is a major issue challenging the future scope of Somerset. Second, thoughtless treatment of environment and unscientific production sector operations raise potential challenges to the long term environmental sustainability of Somerset in the industry. Third, underdeveloped infrastructure and transportation sector also seem to be serious challenges to the region. Finally, shortage of skilled staff is a major impediment to the promotion of Somerset. This report will develop a new approach to Segmentation, Targeting and Positioning (STP), branding, and digital and direct marketing to improve the profile of a destination management organization and to gain a competitive advantage for the DMO with regard to its operations in the destination of Somerset. The report will also critically evaluate the position of this destination and put forward appropriate operational and strategic management and marketing solutions to add value to gain a superior position. 2. Recommendations 2.1 Branding and digital and direct marketing Branding and digital and direct marketing have a crucial role to play in the modern business environment as these factors are unavoidable to enhance the operational efficiency and competitiveness of a modern business organisation. Branding can be simply referred to the process of creating a unique image of the product/service in the minds of consumers and thereby making the particular product/service well recognizable in the market (Sharma & Singh, 2006, p.150). While analysing the current branding strategies of SWE, it seems that this DMO would not be able to vie with its competitors successfully because its branding approach is not clear enough. Hence, the DMO has to develop new branding approaches to create a clear image of the Somerset in the minds of consumers. Undoubtedly, innovative and effective branding strategies may assist the DMO to deliver the marketing message clearly, to enhance credibility, to influence the buyer behaviour, and to promote customer loyalty. While examining the official website of SWE, it is identified that this website is not sufficient to meet user needs because it is only a simple webpage than a website. The website does not provide any specific information about the DMO or the products and services it delivers. In this internet era, it is essential for the DMO to maintain a well designed and comprehensive website to provide a great shopping experience to visitors. Similarly, the DMO does not have a clear logo, which is essential for every firm to create identity in the market place. Therefore, it is advisable for the SWE to design a clear logo that can communicate the organisation’s marketing message effectively. The image given below is the screenshot of the corporate website of Hospitality Line, a major DMO in the United Kingdom. This DMO has a clear logo, and it provides many useful links to visitors. Referring to some branding ideas, appointing widely recognized celebrities like film actors/actresses or soccer players as the brand ambassador of the chosen destination is a potential branding strategy to improve the popularity of the destination (Shay, 2008, p.435). In addition, social awareness campaigns like blood or eye donation or helmet awareness can be suggested as a better strategy to augment the brand awareness of Somerset. In the current context of growing environmental issues like global warming and global climate change, modern people increasingly emphasise the need of protecting and preserving environment and resources. Therefore it is recommendable for the DMO to launch some well planned environmental initiatives to promote the environmental sustainability of the chosen destination and thereby influence the buying behaviour of consumers. “Being green’ is also a fruitful branding strategy for the DMO to influence consumers by contributing significantly to preservation of non-renewable energy sources and comprehensive waste treatment (McCartney, 2011,p.71). Similarly, digital and direct marketing are two inevitable aspects of modern marketing philosophy. Digital marketing is defined as the use of digital distribution channels such as computers, smartphones, cell phones, and tablets to reach consumers in a timely, relevant, and cost effective manner (Koli & Koli, 2010, p.140). With regard to digital marketing, creating a marketing funnel is an advisable strategy for DMO to gain a superior position in the chosen destination market. “A marketing funnel is when you map out a customers journey from when a customer is a complete stranger to when they become a lead, and then put certain strategies in place that will encourage them to move through this funnel” (Bryan, 21 April 2014). In addition, developing a call-to-action can be a better technique for the DMO to market the destination electronically. A call-to-action (CTA) is an image or text that influences site visitors to initiate action, “such as subscribe to a newsletter, view a webinar or request a product demo” (Ibid). The author adds that CTAs will direct people to landing pages where the marketer can collect visitors’ contact details in exchange for an appealing marketing offer (Ibid). In this sense, an effective CTA can benefit the DMO to achieve more leads and conversations for its website that promotes that destination. Direct marketing is a marketing practice where organizations directly market a product/service to the customer using advertising techniques such as cell phone text messaging, interactive consumer websites, catalogue distribution, and promotional letters. Interactive consumer websites are really beneficial for the DMO to market its destination directly to customers, because today many people spend a considerable amount of their time on internet. In addition, it is advisable for the DMO to use response-generating newspaper advertisements to enhance the brand awareness of the destination and to strengthen the firm’s corporate profile. 2.2 Segmentation, Targeting and Positioning (STP) Segmentation, Targeting and Positioning (STP) is widely applied strategic approach in modern marketing, and hence it is very familiar to modern business world. This marketing approach is particularly relevant to the current market context where marketing approaches are based on customers rather than products. According to Hanlon (Dec 17, 2013), “the STP model is useful when creating marketing communication plans since it helps marketers to prioritise propositions and then develop and deliver personalised and relevant messages to engage with different audiences”. The author adds that it is an audience focused approach to communication that passes relevant messages to commercially appealing audiences. The following diagram is a simple illustration of the STP model. The diagram makes it clear that the STP model starts with identifying bases for segmentation and ends with developing a proper marketing mix for each segment selected. (Source: Hanlon, 2013). There are several approaches to segmentation, targeting, and positioning. The DMO must be really selective while developing approaches to STP so as to improve the profile of Somerset and to improve its competitive advantages. Primarily, the DMO must segment its audience in the region and determine the important characteristics of each market segment. Referring to Peter and Oslan (2007, p. 354), it is possible for the DMO to segment the destination Somerset on the basis of age, gender, income, education, marital status, professional occupation or ethnicity. While considering the type of services delivered by the DMO, it is recommendable to segment the destination based on income or professional occupation of people. Psychographical segmentation is also a great approach to segment the destination: and this segmentation strategy gives specific focus to individuals’ personality and emotions that affect their purchased choices (Gitman & McDaniel, 2008, p.301). The DMO should also take into account lifestyle, belief and values of people while segmenting the Somerset market (Michman et al, 2003, p.18). It is obvious that factors linked to an individual’s lifestyle such as hobbies, other non-work time pursuits, vacations, entertainment, and recreational pursuits can greatly affect the competitive capabilities of a DMO. Similarly, a person’s religious, political, nationalistic and cultural beliefs and values can notably influence the way of his/her living, and hence those elements are extremely relevant to the market operations of a destination management firm. To illustrate, Islamic community strictly limits women’s interactions with the mainstream society, and hence Muslim women are less likely to accept most of the common services offered by the DMO. Hence, the organisation must pay particular attention to those communities’ beliefs and values and restructure its services to make them appealing to all segments. It is essential to consider the life stages of people while segmenting the destination because tastes and interests of people may vary depending on their life stages (Panda, 2007, p.240). Geography is also a major factor when it comes to segmenting a huge market like Somerset as the purchasing behaviour and lifestyle of people living in urban and rural areas would not be the same (Weinstein, 2013, p.62). Finally, people’s behavioural traits linked to marketing such as nature and frequency of purchase, brand loyalty, utilisation of distribution channels, and usage level should be an important point of concern while planning segmentation. Brand position of the DMO is a major factor influencing its market share. It is identified that South East of England and other DMOs can raise serious competition threats to SWE. In order to address this challenge, the SWE must offer improved products and services to tourists. It is recommendable for the DMO to offer a tour package (including countryside travel and hotel facilities) to gain wider market coverage. Similarly, the DMO must adopt modern approaches to targeting in order to gain competitive advantages over the Somerset market. Effective targeting strategies would assist the organization to improve the commercial attractiveness of each segment. Since there are measurable differences between market segments, the targeting strategies must be potential enough to meet the interests of particular segments. The DMO must ensure that anticipated profits from a market segment exceed the cost of additional marketing programmes or other unforeseen changes. Undifferentiated marketing, differentiated marketing, and concentrated marketing are the three common approaches used for market targeting (Kumar, et al. 2010-11, p.108). Undifferentiated marketing, sometimes referred to as mass marketing, is the practice of adopting a single marketing strategy for all segments instead of targeting a particular segment of the market. According to another view, if the DMO needs to target several segments of the market, it should consider a differentiated marketing strategy where products and services with distinct marketing mix policies are developed for each of the segments chosen by the organisation (Havaldar, 2010, p.153). Finally, the DMO may adopt the concentrated marketing strategy if the firm wants to concentrate its marketing efforts on a particular segment of the market. It would be beneficial for the DMO to focus more on Asians than Americans, because statistical data indicate that today more Asians engage in tourist activities than Americans. Positioning, the final stage of the STP model, is really crucial to ensure that the firm’s products and services are well recognisable in the market. As the first step, the DMO must develop an appropriate positioning strategy that can operate in line with the characteristics of the different market segments. The marketing mix elements such as product, price, place, and promotion can have a great influence on the positioning strategy of the organisation (Kazmi & Batra, 2009, p.478). It is particularly recommendable for the organisation to give great focus to pricing approaches because modern customers are increasingly price sensitive. In addition, the DMO should make better use of advanced technologies to promote its destination because conventional promotional techniques are expensive and ineffective as compared to modern marketing tools. 2.3 Suggestions for medium and long term strategies All the strategies recommended above cannot be used in the long term because some of them are based on the contemporary marketing practices, and hence those strategies should be used in the medium term and amended thereafter. The proposed segmentation and targeting strategies are recommendable for the DMO in the long term because the fundamental structure of the market is not likely to change over a few years. To illustrate, if the DMO segments the Somerset market on the basis of income or professional occupation, this segmentation strategy can serve the organisation in the long term because there would not be a fast growth in the average income of a large region. In addition, the region’s professional occupation structure would remain almost same for a long period of time. Similarly ethnic or demographic distribution in a large destination like Somerset would not show a significant change in short time. At the same time, the positioning, branding, and digital and marketing strategies are recommendable for the DMO in the medium term because they are greatly dependent on the current structure of the market environment. As discussed already, the positioning strategy gives particular focus to marketing mix elements such as product, price, place and promotion, and the treatment of these elements are greatly linked to recent developments in the business/market environment. In addition, the DMO cannot use its branding strategies in the long term because branding would not be effective unless innovative branding techniques are introduced from time to time. It is clear that information technology is on its growth, and modern organisations are eager to adapt to newer advancements in the field of IT. Since digital marketing is greatly linked to IT sector, the DMO should make timely changes to its digital marketing policy so as to take advantages of the recent advancements in the IT sector. Therefore it is advisable for the organization to use digital and direct marketing strategies in the medium term. 2.4 Implications of the solutions The operational, strategic management, and marketing solutions based on environmental safety and social welfare can greatly benefit the DMO to gain competitive advantages over its rivals like South East of England because the modern customers give increased emphasis to corporate social responsibility (CSR). The DMO’s operational plans to initiate environmental campaigns and reduce greenhouse gas emissions would greatly support the efforts taken by the government and environmentalists in preserving the nature and its invaluable resources. Likewise, operational strategies based on social programmes like blood and eye donation can contribute notably to the corporate stature and public acceptance of the DMO. Such programmes can also assist the company to keep customers loyal to its brand. However, the application of the STP model in this scenario may lead to some negative implications. To make it clear, segmentation and targeting activities based on any of the combination of age, gender, income, education, marital status, professional occupation or ethnicity may not be effective in case of a destination management organisation because a DMO offers a wide variety of services to clients. Therefore the DMO must conduct a comprehensive study of the Somerset market before making a final decision regarding segmentation and targeting. Finally, increased reliance on information technology and other internet-based technology to deal with promotion and branding can offer the DMO some competitive capabilities. Today a notable percent of people across the globe uses social networking sites like Twitter and Facebook to connect with their friends and relatives, and to share their thoughts and opinions. In this context, branding and promotion through social media can benefit the DMO to cover a wide market effectively at cheap costs. Since social media are interactive platforms in digital marketing, the DMO can collect customer feedbacks and opinions timely, and make necessary changes to its operational style if necessary. 3. Conclusion This report was trying to develop a new approach to Segmentation, Targeting and Positioning (STP), branding, and digital and direct marketing to improve the operations of a destination management organisation in Somerset. Also, this report intended to evaluate the position of Somerset and to suggest effective operational, strategic management, and marketing solutions for DMO to gain a superior position in the destination. It was identified that segmentation based on individual income and professional occupation is a good strategy for DMO to achieve operational success in its chosen destination. A differentiated marketing strategy is advisable for the DMO with regard to targeting. When it comes to positioning, the DMO must greatly emphasise the treatment of marketing mix elements, particularly price and promotion. In terms of branding and digital and direct marketing, the organisation must focus specifically on modern internet marketing techniques like marketing funnel and CTAs. Moreover, SWE must develop a professional website with a clear logo so as to meet customer needs in a more convenient way. The segmentation and targeting strategies may be used in the long term whereas branding and digital marketing strategies are recommended for the medium term. The operational strategies based on CSR may benefit the DMO in the long run whereas proposed segmentation policies may not deliver the intended outcomes because of the specific nature of the organisation. References Bryan, R. 21 April 2014. “5 Simple Digital Marketing Strategies That Can Help Your Business Grow”. 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