DESTINATION MARKETING

LEARNING OBJECTIVES
ƒ To understand the concept of destination marketing

ƒ To understand the significance of branding and positioning a destination

ƒ To understand the various levels and roles of destination marketing organizations

ƒ To understand the importance of the relationship between marketing and product planning and
development

KEY TERMS AND CONCEPTS

ƒ Brand awareness

ƒ Branding

ƒ Competitive analysis

ƒ Competitive products

ƒ Consumer behavior

ƒ Differentiating

ƒ Image

ƒ Marketing mix

ƒ Marketing plan

ƒ Marketing segmentation

ƒ NTA

ƒ NTO

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 ƒ Performance indicators

ƒ Positioning

ƒ Strategic plan

ƒ Tourism product development

ƒ Visitor expectations

ƒ Visitor satisfaction

INTRODUCTION
This session discusses destination marketing and its role in the visitor decision-making process. A
destination can be a specific country, state or province, city, or a resort area. The visitor may apply various
terms to define a destination whether it refers to one geographic area or a combination of several geographic
areas. Regardless of how the term is applied, it is the consumer or visitor who defines a destination. From the
perspective of the visitor or consumer, a destination is perceived as having appealing attributes, features,
attractions, and services that would encourage the potential visitor to choose a destination for a leisure or
vacation trip or other travel purposes. The development of a destination marketing plan is usually the
responsibility of a government tourism marketing and promotion organization and is based on a careful analysis
of competition and market trends.

MARKET DEVELOPMENT
The process of destination marketing development involves a number of important steps which include
the following:

ƒ Identifying target markets

ƒ Analyzing motivational factors of target visitor markets

ƒ Developing a marketing plan with promotional goals

ƒ Developing an advertising campaign with a well-focused theme aimed at target markets

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 ƒ Developing a media and public relations strategy

ƒ Funding a marketing plan adequately

ƒ Evaluating the effectiveness of a marketing plan

Identifying Target Markets

In identifying the target markets one of the key tasks is to conduct a competitive analysis that examines
the destination with other competing destinations. The analysis includes a comparison of all of the factors and
attributes which attract or appeal to visitors that would motivate them to choose the destination. These could
include climate, natural scenery, and other elements that are part of a destination’s tourism products such as
hotel accommodations, restaurants, historic sites, and other physical attractions. Other factors which affect
visitors’ satisfaction and influence their decisions and choices include services, cleanliness, safety, and culture.

Market trends are also examined in a competitive analysis using information sources such as market
trends research and current visitor data. Typically, these trends examine:

ƒ Visitor trends including origin markets, length of stay, expenditure patterns, mode of transportation,
and demographic profiles

ƒ Major competitors, services and products offered by competitors, the competitive pricing structure,
and the assessment of the success of competitors

ƒ Industry trends such as transportation or new technologies

Motivational Factors and Market Segmentation

Another key component in the competitive analysis is market segmentation analysis. The segments of
selected target markets need to be identified in order to focus the marketing efforts in the marketing plan.
Market segmentation is used to group people into categories based on demographic, geographic,
psychographic, and behavioral characteristics. These characteristics are used as a basis for tourism
destination marketing and influence the type of tourism products which are developed and promoted by the
destination. The destination must have a clear understanding of existing and potential market segments, as well
as a clear understanding of the destination’s tourism product to ensure that the visitors’ expectations are being
met. The development of new products and services to attract visitors is a complex process because consumer

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needs and desires constantly change and competitors continually offer new or improved products. In order for
destinations to successfully develop their tourism products, many other aspects must also be considered in the
development process, including branding, positioning, consumer perceptions, marketing mix, visitor
expectations, and image.

Consumer Perceptions, Attitudes, and Behavior

It is commonly accepted that people change their minds and that, as a result, their tastes also change.
As tastes change, travel patterns will also change. In order for the marketer to succeed, there are five main
categories of consumer behavior which should be understood:

ƒ Need recognition – the recognition that a need or want on the part of the visitor or consumer to
purchase the product exists. In the case of the visitor, it is the strong desire to visit a particular
destination

ƒ Information search – the way in which the consumer obtains information about the destination
choices

ƒ Evaluation of alternatives – a group of destinations the consumer considers acceptable options in

the decision- making process

ƒ Purchase and consumption – the mood of the consumer during product purchase and
consumption, for example, the vacation package to a particular destination

ƒ Post-purchase evaluation – comparison of the consumer’s expectations to the actual product after
the purchase is made or the travel is completed

Marketing Mix
Another basic concept in marketing is the marketing mix. The marketing mix is a combination of four
basic elements an organization controls in order to satisfy or communicate with consumers. The concept of a
marketing mix involves a number of variables which are interrelated and depend on each other to some extent.
For any market segment at a given point in time, the marketing mix usually involves at least four elements,
sometimes called the four Ps:

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 ƒ Product - The unique combination of products and services

ƒ Place - The manner in which the products and services are sold, including channels of distribution

ƒ Promotion - The methods used to communicate with the markets

ƒ Price - A pricing policy that satisfies not only the customers but meets profit objectives

Positioning
Positioning the product-service mix is a highly valuable tool for destinations, however this can be a
difficult task to accomplish. Positioning involves careful consideration of the tourism product and the visitors’
experience and expectations. It is important that that the marketing organization positions the destination in the
consumer’s mind, so that the visitor’s experience meets their expectations. In order to position a destination’s
service mix successfully, a clearly perceived image must be established in the consumer’s mind regarding the
benefits offered by the destination and how the destination’s product-service mix can be differentiated from
other destinations. The objective is to give the consumer a positive image of the destination and is linked with
branding.

Branding
Branding is perhaps the most powerful marketing tool available to destination marketers confronted by
product similarity where tourism products appear equal or lack differentiation to the consumer and to the
competition. For many destinations, there are few differentiating factors for the facilities and services which are
offered. Today many destinations can offer five-star resorts, hotels and attractions, claim a unique culture and
heritage, and describe themselves as having the friendliest people and the most customer-focused tourism
industry and service. Therefore, there is a critical need for destinations to create a unique identity and to
differentiate themselves from their competitors.

Branding or establishing a brand identity attempts to promote a unique combination of the tourism
product characteristics to appeal to the consumer. These characteristics are linked to the brand in the
consumer’s mind and results from positioning. By creating a strong image for the consumer, the destination
gains an advantage which is referred to as a brand advantage. Brand advantage is secured through
communication that highlights the specific benefits of a product, creating an overall impression of a superior

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brand. The image the product creates in the consumer’s mind and how it is positioned are more important to the
ultimate success of the product than its actual characteristics.

Developing the Marketing Plan

Before any specific marketing activities are undertaken, it is crucial to complete a marketing plan. With
increasing competition in the tourism industry as more destinations are developed, destinations with marketing
plans will outperform those without plans. The marketing plans for tourism destinations are usually formulated
by organizations such as a national tourism administration (NTA), national tourism office (NTO) or other
government body, and sometimes by a cooperative public/private association or private sector firm. No matter
what organization does the marketing plan, they all face challenges. Most tourism organizations, for example,
have limited budgets, and they have to market globally, competing with other destinations.

All marketing plans focus efforts on achieving the goals and objectives of the destination over the short
and long-term and ensure that all key aspects of the marketing effort are included in formulating specific
activities. Marketing plans may be strategic, operational, or include both components. Strategic plans are
concerned primarily with long-term issues (three to five years), overall mission, goals and objectives.
Operational plans focus on specific steps to be taken to reach the strategic targets within the short-term (usually
one year). The marketing plan must support the destination’s overall strategic plan.

The following outlines the essential parts of a marketing plan.

ƒ Mission - the guiding framework within which all decisions should be made. Typically, mission
statements are brief and define the scope of business for the destination

ƒ Strategy - a plan that integrates a destination’s major goals, policies, and action plan

ƒ Goals - broad statements of what the destination seeks to accomplish

ƒ Objectives - refinement of the broad goals statement, stating; what will be accomplished, what is
the timeframe, who is responsible for achieving the objective, and how the results will be evaluated

ƒ Policies - the formal rules and guidelines that direct all of the actions a destination takes

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ROLE OF TOURISM MARKETING AND PROMOTION ORGANIZATIONS
Tourism marketing and promotion organizations are established for the specific purpose of marketing
destinations. In most cases they are governmental or nonprofit private organizations which bring together local
political, civic, business, and visitor industry representatives with the knowledge, skills and leadership abilities.
The National Tourism Administration (NTA), National Tourism Office (NTO), other governmental bodies at
different political or administrative levels, and other public/private organizations are responsible for developing
an image that will position their destination in the marketplace as an attractive site for vacation, recreation, and
business. They must coordinate these different elements, in order to attain a desired single image, to be
presented to the prospective visitors.

Tourism organizations usually work within a political structure. It is important that the organization
develop a leadership role within the community in order to be effective in the coordination and execution of its
programs. Tourism organizations should be visible entities within a destination, drawing attention to what they
are doing so that the community understands the significance of the visitor industry.

Tourism organizations have other important responsibilities including working with meeting and group
planners and providing key resources, information and assistance to planners. The tourism organization can
provide vital contact names and local information, locate necessary facilities, and act as a convention
management consultant to planners. The tourism organization also recommends reliable sources for services
and supplies, information on facilities and prices, assist planners with the securing of meeting rooms and hotel
room commitments, and serves as the broker or liaison between the planner and the host destination and its
resources.

Tourism organizations also help visitors to their destinations through information centers and by
responding to visitor inquiries. Tourism organizations can provide visitors with an array of information regarding
hotels, restaurants, attractions, shopping, recreation, and entertainment opportunities, and essentially serves as
a visitor’s one-stop shopping center for ideas and information.

TOURISM MARKETING ORGANIZATIONS IN HAWAII

Hawaii Visitors and Convention Bureau
The oldest marketing organization in Hawaii is the Hawaii Visitors and Convention Bureau (HVCB),
initially formed as a tourism promotion committee and evolving into the Hawaii Visitors Bureau in the 1950’s. In

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1996, the name of the organization was officially changed to the Hawaii Visitors and Convention Bureau,
reflecting an emphasis on business and meeting travel and responsibility for marketing the Hawaii Convention
Center. Until 1998, the HVCB marketed Hawaii’s tourism worldwide under contract with the state government,
which funded most of its operation. Since 1998 the responsibility for marketing has shifted to the Hawaii Tourism
Authority (HTA) which contracts marketing activities to different organizations.

Currently, HVCB is contracted on a three-year basis by the Hawaii Tourism Authority to market the
islands to North America, Hawaii’s largest visitor market. The HVCB’s Board of Directors is designed for a
balanced, statewide representation of companies, individuals, and associations from the tourism industry,
general businesses, and the community. A 10-member Executive Committee, with mandated membership and
balance from each county, acts as a steering group for the board.

Hawaii Tourism Authority

In 1998, the Hawaii State government established the Hawaii Tourism Authority (HTA), as a special
state government agency with its own source of funding. The HTA’s purpose is to create a strategic vision and
direction for tourism in Hawaii and to administer the development, marketing, and promotion of Hawaii’s tourism
industry. The HTA is solely supported from income derived from Hawaii’s hotel room tax which is 7.25%. This
tax generates approximately U.S. $60 million to fund the activities of the HTA.

A portion of the tax is used as an additional source of funding for tourism-related activities. This fund is
called the Dedicated Source of Funding for Tourism Activities, 37.9% of the total revenue from the tax is for the
purpose of creating a Tourism Special Fund for tourism-related activities including product development as well
as marketing and promotion. HTA has several different marketing contracts with organizations which are
responsible for marketing Hawaii to different regions of the globe, each market is given a separate budget. The
following identifies the marketing organizations responsible for each region as well as the corresponding budget
for the contract:

ƒ HVCB- North America & Corporate Meetings and Incentives (CMI) – $23,245,300

ƒ Dentsu Inc – Japan – $8,412,500

ƒ The Mangum Group – Europe - $959,000

ƒ Marketing Garden Inc – Other Asia - $1,073,200

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 ƒ The Walsh Group – Oceania - $817,000

ƒ HTA - $155,000

MARKETING STRATEGIES
A major purpose for contracting out the marketing responsibilities of each geographic area is that each
region has a different marketing strategy and is marketing to a different market segment. The marketing
strategies for Hawaii’s two most important markets, North America and Japan, are described as follows:

HVCB – North America

Target Market Segments

ƒ Avid Traveler

ƒ Outdoor Recreation

ƒ Culture & Arts

ƒ Romance

ƒ Golf

Strategies

ƒ Develop marketing programs that target a select group of market segments

ƒ Targeting marketing programs towards higher-spending, longer staying, high-experiential travelers

ƒ Leverage programs toward filling-in the spring and fall shoulder seasons

ƒ Maintain a consistent brand position across all touch points throughout North America

Hawaii Tourism Japan (HTJ)

Target Market Segments

ƒ All audience groups – however, enhance public relations and magazine advertisements for the
following targets as quality markets:

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 ƒ Active senior

ƒ Family

ƒ Wedding

Promotional campaign - Discover Aloha: 6 Islands, 6 Surprises

In 2005, Hawaii Tourism Japan will communicate Hawaii’s unique tradition and historical facts to convey
in-depth charm and the aloha spirit of Hawaii.

Strategies
ƒ To increase the quality of tourist in terms of length of stay and amount spent

ƒ To enhance the Hawaii’s image as unique, based on its original culture and history

Communication Strategy

ƒ Increase contact points with Hawaii – As in 2004, expose Hawaii in an impressive manner from
various angles and through numerous contact points, not only through advertising but also by
combining various vehicles, such as public relations, the Web site, and events

ƒ Increase opportunities to cooperate with various industries

ƒ Communicate the charms of Hawaii extensively in an impressive manner, reinforcing the

publicity of HTJ’s presence and activities and by increasing opportunities to tie-up not only with
the tourism industry and the media but also with various businesses in Japan as well as in
Hawaii

SUMMARY
Destination marketing is a highly complex topic integrating several aspects many of which are
interdependent. As consumer needs and wants change, the role of destination marketers becomes even
greater, to ensure the destination is attracting the “right” consumer.

Destinations are competing in a very crowded marketplace where few tourists have any particular
loyalty to the destination they chose to visit. This makes it important to try to develop distinctive brands and to

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position them competitively but also emphasizes the need to go beyond destination promotion and to address
issues of tourism service quality within the destination.

DISCUSSION QUESTIONS
1. What are the major market areas (MMAs) for Okinawa’s tourism industry?

2. Describe the organizational structure of Okinawa’s tourism marketing and promotional organizations.

3. What organization(s) is primarily responsible for marketing Okinawa as a destination?

4. What “type” of tourists does Okinawa attract?

5. What is Okinawa’s “brand” image as a tourism destination?

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