TOURISM DESTINATION MARKETING MANAGEMENT

Abstract

The paper presents the key aspects of marketing a tourist destination. Special attention is given to planning the development of tourist destinations as a critical stage of the process of marketing management. Starting from the key elements of the market offers a tourist destination, the paper briefly described the basic variables of marketing management of tourist destinations in the function of achieving the strategic goals of a tourist destination. Starting point in the work are visitor tourist destination, their characteristics, needs, preferences, requirements and wishes. [PUBLICATION ABSTRACT]

Headnote

The paper presents the key aspects of marketing a tourist destination. Special attention is given to planning the development of tourist destinations as a critical stage of the process of marketing management. Starting from the key elements of the market offers a tourist destination, the paper briefly described the basic variables of marketing management of tourist destinations in the function of achieving the strategic goals of a tourist destination. Starting point in the work are visitor tourist destination, their characteristics, needs, preferences, requirements and wishes.

Keywords: tourist destination, marketing management, market offer, visitor tourist destination

INTRODUCTION

A tourist destination is a geographical location which possesses an attractive, communicative and receptive tourist supply that satisifies the tourist needs of its consumers. In order for a geographical location to have the status of a tourist destination, the decisive factor is not its size or geographical boundaries, but the ability to attract tourists and meet their needs.

A tourist destination consists of number of components, such as:

* Attractiveness - ensures the tourist motivation for visiting the given tourist destination

* Specific service - accommodation, food, entertainment, amusement, recreation and other services at the given destination

* Access - development and maintenance of transport infrastructure providing access to the tourist destination as well as visiting particular tourist attractions at the given destination

* Availability - advance-created package arrangements by the travel sales intermediaries and their agents

* Activities - all the available activities at a given tourist destination which will be at consumers' disposal during their stay

* Support services - marketing development activities carried out by destination organizations so as to meet the tourists' needs.

By combining the mentioned components of the tourist destination one or more tourist products is formed.

Specific features of marketing in tourism come from specific characteristics of tourist supply and demand, as well as the process of buying and usage of tourist products and services. Specific presentation of marketing activities on tourist market, as opposed to other markets, is also contributed by:

* The pluralism of decision making centers inside marketing activities;

* The complexity of tourist product;

* Continuous effect of uncontrollable, as well as controllable factors of marketing environment, which effect initiated marketing activities and put upon the need to search for alternative solutions for emerged marketing problems.

Conceptual framework for management of tourist destination marketing includes:

* Analysis of changes in marketing environment

* Mission formulation

* Defining marketing goals of tourist destination

* Product portfolio management of tourist destination

* Formulation of strategy to segment the market of the tourist destination

* Selection of target market for products of tourist destination

* Positioning of products of tourist destination

* Creation of marketing programme

* Marketing plan formulation

* Performance control of tourist destination and marketing control.

1. CHANGE ANALYSIS IN THE MARKETING ENVIRONMENT OF TOURIST DESTINATION

Changes in the marketing environment are numerous, frequent, very dynamic and often very complex. The changes in the marketing environment represent significant competitive threats to the tourist destination, but at the same time, can provide new opportunities in the tourist destination market. Faced with this kind of changes in the marketing environment, tourist destinations need to adopt the plannedmarket approach which will enable a careful consideration of the tourist supply intended for the specific market segments, as well as the means for efficient and effective resource allocation in order to realize their specific goals. The planning stimulates the tourist destination to think about its future and to adopt the strategic commitments which will enable it to respond more easily to the newly arisen changes in the marketing environment.

In order to be successful, the tourist destination must use its resources, abilities and favourable opportunities from the environment to create the maximum value. The analyses of the marketing environment enables the tourist destination to meet the tourists' needs better than its competition.

The marketing information system provides the information used in the analyses of the marketing environment. These information can be collected in many formal or informal ways, including tourist polls, use of commercial data bases, the Internet search etc.

The overall evaluation of strengths and weaknesses, opportunities and threats of the tourist destination represents a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats Analysis). The main goal of monitoring the environment is discovering of opportunities. A well done SWOT analysis prevents the overlooking of the potentially good opportunities and also enables making decisions that will strengthen the tourist destination. A marketing opportunity is the area of tourists' needs and interests in which there is a great probability that the tourist destination can satisfy something there isn't enough of.

In order to evaluate the opportunities, the tourist destinations can use the Marketing Opportunity Analysis (MOA) with the aim of establishing the attractiveness of the opportunities and the probability of success1:

1. Can the advantages supplied by the opportunity be articulated in a persuasive way in defined target market?

2. Can the target markets be located and reached through cost-effective media and sales channels?

3. Does the tourist destination possess or has access to the critical abilities and resources necessary for providing the benefits to tourists?

4. Is the tourist destination capable of providing the benefits better than any other existing or potential competitor?

5. Will the financial rate of return satisfy or exceed the expected limit of investments of the tourist destination?

The threats in the environment arise due to unfavourable trend or development, that may lead to fall in sales or profit, in the absence of defensive marketing activity. The threats may be classified according to seriousness and probability of occurrence.

The quality of SWOT analysis is the function of a "situation overview" quality. A superficial and inadequately conducted "situation overview" has as a consequence an insignificant SWOT analysis.

When the strength of a tourist destination is being observed, its relative competitive strengths must be analyzed as well, that is, the means and sources referring to these strengths and not only the activities that tourist destination is good at. Also, when the weaknesses of the tourist destination are being observed, the relative competitive weaknesses should be taken into consideration, that is, the degree of vulnerability of the tourist destination compared to its competitors.

2. STRATEGIC PLANNING OF THE DESTINATION

Planning is the essential element of the tourism marketing. Planning enables a systematic analysis of the marketing activities. Planning helps provide consistency of marketing activities of a tourist destination with its goals and the abilities and needs of its market. The process of efficient planning includes: the determination of goals, the identification of time period and a way in which these goals are to be achieved as well as the appointment of the persons responsible for the realization of the relevant marketing tasks.

The adoption and implementation of the strategic marketing approach will have a positive result on the business of the tourist destination. Understanding the needs of clients and the actions of the competitors contributes to the increased value of tourism products and services. This approach enables the tourist destination to keep the existing clients and obtain the new ones, which will certainly have the effect on the increase in business profitability of tourist destination.

Investing in the strategic marketing is a far better way of increasing the total value of the tourist destination than reducing the selling price. The possible degree to which the prices can be reduced is limited, so that the best opportunities to improve the financial performance arise from the increase in quantity and value of sales. Therefore, the strategic approach to marketing is basically the idea of improving the performance of the tourist destination which is market-oriented and understands the fluctuating marketing environment and which can also provide tourists with a certain degree of value and is more superior to its competitors.

2.1. Formulating a Mission of the Tourist Destination

A mission of the tourist destination is in fact the purpose of the tourist destination, that is the goal which should be achieved by tourism development in the specific location. The mission of a tourist destination should be: realistic, specific, based on the particular abilities as well as motivating2.

The nature of a business mission depends on a number of different factors. However, when defining a mission, it is necessary to consider the following factors: a business history of a tourist destination, distinctive competencies as well as marketing environment. When defining a mission, naming of products and services should be avoided.

2.2. Defining marketing targets of the tourist destination

When the tourist destination carries out the SWOT analysis, it can continue with development of the appropriate marketing targets/goals for the plan period. These goals arise from the business goals of the tourist destination and contribute to their realization. For example, if the business goal is the expansion of the tourist destination, the marketing targets should refer to the increase in the market share or the quantity and value of sales.

Marketing goals should be clear, measurable, realistic, and time bounded. Special problem regarding the definition of these goals is a possibility of confusion between planned goals an means of their fulfillment.

Strategic goals of tourist destination marketing are:

* Obtaining an optimal benefit from tourism and recreation, and achieving economic prosperity, full employment, and regional economic development

* Enabling a long-term development for the local community, from this tourist development

* Maximizing the satisfaction of the tourists

* Building and enhancing the awareness and knowledge of tourist and locals about the geography, history, demographics, and natural potential of tourist destination

* Protection and preservation of cultural and historical heritage and environment

* Enabling the compatibility of tourism, recreation and other activities with the rest of national development goals

* Stimulation of other sectors to develop interest in tourism.

For something to qualify as valid marketing goal, the following conditions must be satisfied:

* A preferred outcome must be defined (eg. elevation of sales levels, boosting marketing share, tourist satisfaction level)

* The outcome must be clearly defined, so any ambiguity could be avoided, and credible measurability is enabled

* A certain percentage of outcome must be proposed

* A time frame should be defined for fulfilling preferred outcome.

Without well defined goals, it is impossible to estimate the outcomes adequately.

The goals of tourist destination are the ultimate results that need to be reached in the future. They are the guidelines for all active or passive participants in the activities of a tourist destination.

The goals of tourist destination must be compatible, with national goals of tourist development, as well as with goals on other levels (local, regional) of tourist development, and also with the goals of overall economic development of the country.

2.3. Formulating a marketing strategy

When the marketing environment analysis and establishing of marketing goals are completed, the next step is choosing a right marketing strategy. Naturally, the whole tourist destination business strategy is affecting the choice of marketing strategy. Marketing strategy of tourist destination focuses on market selection, creating the value on that market, and also competition rivalry.

Marketing strategy must be efficient and effective. Efficient marketing strategy implies doing certain things the right way.

Effective marketing strategy implies doing the right things. A good marketing strategy should:

* Identify specific goals that a touristic destination wants to reach

* Point to the resources (money, time, people), which will help achieving the goals of a tourist destination

* Include detailed assessment of marketing environment

* Harmonize environment conditions with the resources of the tourist destination

* Focus on delivering a superior value.

Growth strategies

Growth strategies are based on creating new products or penetrating new markets. These strategies define the future course of financial organization operations, and their basic forms can be presented through growth matrix, defined by Ansoff. They are:

* Placement of existing tourist products on the existing market (market penetration)

* Placement of existing tourist products on new markets (market development)

* Placement of new tourist products on the existing market (product development)

* Placement of new tourist products on new markets (diversification)

Market penetration

This strategy implies that a tourist destination bases its growth on selling a greater volume of existing products on the existing market. To achieve this, a tourist destination needs to increase the sales to the existing (loyal) tourists, or to attract new tourists, who have never used that tourist product or service before, or were loyal to competing tourist destinations. This strategy would be acceptable if there is enough space for expanding on the market. Market penetration is usually obtained through effective usage of promotion and distribution activities, or by lowering the prices.

Market development

This strategy is used in cases when a tourist destination sells existing tourist products on new markets. That means entering new markets, or new market segments.

Product development

This strategy is carried out in cases when a tourist destination tries to increase its sales by improving the existing tourist products and services or by developing new products for the existing markets. The essence of this strategy is in good dervice design, promotion, improving the style and comfort of purchase, and often it lyes in overall image of a tourist destination, which in turn ensures increased sales and increased market share on the existing market.

Diversification

This growth strategy refers to the sales of new tourist products and services on the new markets, and therefore is the riskiest growth strategy.

Tourist destinations offer at least one product on the tourist market, but in most cases they offer several tourist products or packages. The collection of tourist destination's products forms a product portfolio that is governed by that tourist destination. Knowing that not all of the products in a tourist destination's portfolio are of equal importance, and not all of the products equally contribute to achieving its goals, there is a need of occasional reviews of tourist destination's portfolio, so its resources are properly distributed. In practice, several models are implemented for the assessment of business portfolio, and three most used are BCG matrix, SWOT analysis and GAP analysis.

Every marketing strategy starts with an assortment of products and services, and implies decisions about introducing, development or eliminating products from that assortment. Common used techniques and concepts for portfolio analysis are: BCG (Boston Consulting Group) matrix, GE (General Electric Business Screen) matrix, and the concept of product life cycle.

BCG and GE matrices require classification of prouducts accoriding to the attractiveness of certain market and the strength of the organization on that market. BCG matrix (the growth and share matrix) is based on marketing information about market share and growth rate of individual products and the GE matrix relies on different market attractiveness measurements and business strength measurements. In both cases, the choice of appropriate strategy depends on the position of products in the matrix.

Boston Consulting Group created the BCG matrix starting with the assumption that the market growth rate of a product and its market share represent two key guidelines for establishing an appropriate strategy for a product in question. Combination of these information gives us appropriate framework for sorting the products into four groups: market leaders, well formed products, perspective products and worthless products.

Products isude BCG matrix are positioned in form of cyrcles whose diameter is proportional with their sales revenue. BCG matrix is based on the assumption that bigger market share implies lower costs and greater margin values.

The term "Stars" or "market leaders" refers to the products of a tourist destination that dominate on the market and have high demand growth. Basicly, the stars have the potential to bring about considerable profits, now and in the future.

On the other hand, well formed products ("milking cows") have great market share but with low market growth rate. These products are dominant in actual tourist destination. The development costs of well formed products are low, so these products give more cash then their market share maintenance requires.

Perspective products or "problematic children", as they are called, have low market share and high rate of market growth. These products demand great investments, so there is always a dilemma whether to continue with their development of or to eliminate them.

Worthless products or "dogs" have low market share and extremely slow market growth. These products often bring about very low revenue, or even create loses. Usual strategy regarding these products is to eliminate them, but sometimes the decision is to keep them, when there is a turn in market growth expected.

The BCG matrix is a potentially useful technique, but its recommendations must be carefully interpreted, because it only focuses onto market share and sales growth.

The GE matrix is based on similar principles as the BCG matrix, but it focuses more onto measuring market activities and competitiveness of a tourist destination. Unlike the BCG matrix, the GE matrix gives a broader image of strengths and weaknesses of product portfolios. Upon these information, a tourist destination then decides which is the best way for competing on the market. These strategic options a tourist destination decides about are divided into offensive and defensive strategies.

Offensive strategies include: growth investments, market position improvment, and entering a new market. These strategies are a lot like Ansoff's growth strategy. Growth investments involve investing into the growth of market share or the growth of overall market. This strategy is very similar to market penetration strategy. Market position improvement implies investments of resources with the aim to improve the value supplied to the tourists as opposed to the value supplied by the competition. This strategy is similar to Ansoff's product development strategy. The strategy of entering a new market is similar to market development and diversification strategies.

Defensive strategies imply maintaining and the improvement of existing market position. The strategy of maintaining existing market position is usually applied when a tourist destination currently possesses a strong market position and tries to discourage any new entrance on the market by competition, and limit its potential to spread. Marketing position improvement strategy is based on focusing at profitable consumers and on marketing costs control.

Product life cycle is a useful analytic means (concept) for market planning and choosing of marketing strategies. Product life cycle concept implies: that a product has a limited life span and that investments should return during a certain period of time; that product sales have different dynamics during individual phases of product's life cycle; that the profitability of a product also differs across different life cycle phases; that overall product life span, duration of individual phases and dynamics of sales, ie. of the profits, in particular phases of product life cycle depend on the nature of the product, general business climate, and also on marketing activities initiated during some phases of product's life cycle3.

The life cycle of a product consists of four phases: introduction, growth, matureness, and decline. The role of marketing implies prolonging the phases of growth and matureness, usually by applying the strategies of product modification, which are perceived less risky as opposed to strategies of development of new products. Every phase of product's life cycle implies implementation of certain marketing strategies.

Main component of marketing strategies is often referred to as STP process (segmentation, targeting and positioning):

* Segmentation includes identifying different groups (segments) of tourists at the tourist destination and understanding of their needs and desires.

* Targeting implies assessment of attractiveness of different segments, ie. choosing the segments that the tourist destination will offer its products and services to.

* Positioning includes identification of competeng advantages of the tourist destination, and the way to create value for the tourists, and also introduction of destination's offer to the tourists. Positioning aims to achieve a positive perception and favouring the offer of the tourist destination on target markets, as opposed to the competition. Tourist destination is to decide which competing advantages should be used for creating awareness of its products and emphasizing their advantages over the competition. The criteria that guideline this process are: importance, particularity, differentiating value, communicativeness, availability, profitability.

3. PROGRAM FORMULATION AND IMPLEMENTATION

When a tourist destination develops appropriate marketing strategies, detailed programs of implementation of marketing plan must be devised. Well formulated marketing strategy can be "sabotaged" by poor implementation. The implementation must take into account the budget, responsabilities and assessment. Also, the implementation must be time limited. However well devised marketing plan is, the market of a tourist destination is exposed to constant changes, so it is possible that some of planned activities turn out to be inappropriate or ineffective at that moment. Tourist destinations should be enabled to respond to changes in marketing environment, ie. to change their marketing strategies according to new information about those changes.

Every tourist destination has its own approach to devising a marketing plan and there is no uniform approach to it. However, a good marketing plan must include following4:

* Logical structure

* Explicitly defined goals which are linked to corporative goals

* Analysis of (micro and macro) environment and of current position of tourist destination

* Defined combinations of products and markets in "product-market" matrix

* Certain decisions, regarding key marketing variables, such as prices, promotion, and positioning of products

* A draft (a short description) of appropriate methods for implementing of chosen strategy, including its allocation onto different elements of marketing programme.

As every product of tourist destination requires separate definition of goals and target markets, it is also necessary for every one of them, if there are more than one, to create a marketing programme which includes marketing mix, activities and responsibilities calendar, as well as expense plan. Marketing plan of a tourist destination presents a programme of marketing activities aimed at achieving of preset goals.

Marketing plan of a tourist destination should ensure efficient allocation of destination's resources, to focus the activities of a tourist destination, and to serve as means to control the results and the resource management. The implementation of a marketing plan is an operative activity that includes human resources and corporate processes management aimed to fulfill planed marketing activities.

Although a marketing plan should give clear guidelines to how to manage marketing activities, it should also be very flexible, so a tourist destination can quickly adapt and respond to unexpected changes in its marketing environment. Marketing plan includes following key elements: defining a mission of a financial organization, formulation of marketing strategies, programme formulation and implementation.

Effective financial control is of crucial importance for the credibility of a marketing plan, ie. it has a key role in functioning of marketing as a whole. Budgets must be created on exact and sustainable basis. A sufficient level of detail is required for achieving an efficient control and continuation of profitable operation. Insufficient details can impose serious problems. For example, costs of a campain implemented by direct mail can be easily assessed, but if costs of individual contacts are disregarded, significant problems regarding resource allocation emerge.

Internal marketing represents a very important aspect of implementation. Internal marketing refers to the way a tourist destination manages the relationships between employees at all levels. It plays a significant role in creation and maintaining market oriented business culture. Internal marketing helps the employees understand products and services of a tourist destination, and to believe in what the destination tries to achieve. If employees do not support business and marketing strategies, or market orientation of the tourist destination, the chances of successful implementation of the marketing plan are minimized.

Tourist supply is heterogeneous, as it is formed by large number of stakeholders offering their own tourist products and/or services. The stakeholders of tourist supply are most commonly classified into four groups: individual enterprises, non-profit organizations, tourist destinations and countries.

Marketing management of a tourist destination should contribute to the optimizing of tourism performance and fulfillment of strategic goals, aimed at satisfying the needs and desires of all consumers at a given tourist destination.

At marketing management of a tourist destination the realization of planned goals is controlled, as well as marketing programs and performance resulted from tourist activities at the destination. The control needs to be enforced so the process of marketing management of a tourist destination is indeed in function of its long term sustainable development. The control process is based on creation of control standards, assessment of the results achieved, comparation of achieved results with control standards, defining the allowed deviation interval of achieved vs planned results (tolerance interval), initiation of corrective actions in case the results are out of the tolerance interval. For this process to be efficient, a double control system needs to be created, which includes the system of tourism performance control and the system of marketing control.

CONCLUSION

To respond successfully to the challenges imposed by global tourist environment, tourist destinations need to adopt marketing concepts in their busineses. The implementation of marketing concept requires:

* Continuous tracking of changes in marketing environment of tourist destination

* Mission, goals and guidelines formulation

* Pproduct portfolio management of tourist destination

* Segmentation of tourist market

* Target market selection for tourist destination products

* Positioning of tourist destination products

* Marketing programme creation

* Marketing plan formulation

* Control of tourist destination performance and marketing control.

The success of tourist destination's marketing management process is influenced by following factors:

* Increasing usage of marketing information systems that enable implementation of tourist intelligence and initiating market researcha as basis for creation and implementation of strategies;

* Increasing tourists involvement in creation of tourist destination's marketing strategies;

* Satisfying sophisticated needs and desires of tourists;

* Implementation of differentiated marketing strategy;

* Development of branding strategy for tourist destination;

* Development of competitive positioning strategy for tourist products and services of a tourist destination;

* Direct marketing activities;

* Implementation of contemporary information and communication technologies for communication with the market and promotion of tourist products and services;

* Strategic linking of all sectors at the tourist destination level.

The benefits of marketing management of a tourist destination are reflected through following:

* Better understanding of needs, requirements and desires of visitors to a tourist destination

* Achieving a better competitive position of a given tourist destination

* More adequate analysis of competitiveness on the tourist market

* More efficient resource allocation and achieving scale economy

* Creating a sophisticated tourist product portfolio

* Strenghtening of tourist destination's image

* Improved tourist awareness of tourist destination's offer

* More efficient delivery of tourist destination's products

* Increasing level of knowledge of supplier as well as of consumer of tourist products and services.

Marketing management process of a tourist destination is limited by following situations:

* Difficult control over creation, price defining, as well as delivery of tourist products and services of a supply stakeholder

* Diferrent interests of supply stakeholders on the tourist market, which can transform even into conflicting interests

* Knowledge level differences between participants on tourist market, on supply side, as well as on demand side

* Insufficient financial resources

* Political factors.

Footnote

1 Kotler,Ph. and K. L. Keller (2006), Marketing menadzment, Data status, Belgrade, p. 53.

2 Kotler, Ph. et al. (2006), Osnove marketinga, Mate, Zagreb, p. 53.

3 Hani?, H. (2008), Upravljanje marketingom, Beogradska bankarska akademija, Beograd, p. 81-82.

4 Ibid, p. 94.

References

REFERENCES

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