Developing marketing strategies for tourism destinations in peripheral areas of Europe: the case of Bornholm by Ann Hartl



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Developing marketing strategies


for tourism destinations

in peripheral areas of Europe:

the case of Bornholm

by

Ann Hartl

A thesis submitted in partial fulfilment of the requirements of

Bournemouth University for the degree of Doctor of Philosophy

December 2002



Bournemouth University

in collaboration with

Centre for Regional and Tourism Research, Bornholm, Denmark

Abstract

This thesis concentrates on the subject of destination marketing with a specific fo­cus on the process of developing strategies through a Destination Marketing Organi­sation (DMO) for a peripheral area, illustrated by a case study from the Danish island of Bornholm. It investigates the theoretical foundations for destination marketing, concluding that there should be a shift in focus from general marketing theory to a broader application of organisational theories and associated fields, enabling the DMO to improve performance. The specific conditions for and structures of periph­eral areas indicate that the process in these areas should be adapted to the circum­stances generally experienced there. Specifically the predominant occurrence of life­style businesses in peripheral areas, either as micro-businesses or SMEs, which plan on a short-term basis, needs to be included in the strategic planning process by viewing them as cooperative customers. Thus the DMO needs to apply the principles of marketing to the development process of the strategy itself, and therefore to view the strategic plan as a product of the DMO, which needs to be marketed. The theo­retical analysis shows that DMOs cannot control all of the components of the market­ing mix, but they can cooperate with the providers of the destination mix and incite coopetition for the benefit of visitors. The case study portrays the DMO at a mature cold-water resort in a European peripheral area; it also illustrates the general devel­opment of tourism to the island and the impact of this development on the organisa­tional structure of the tourism industry. It is assumed that the findings are transfer­able to other destinations that operate under similar conditions.


Grey are all theories And green alone Life’s golden tree.

Johann Wolfgang von Goethe, Faust I, iv.


List of contents

1 Introduction 13



  1. Aim and objectives of the investigation 13

  2. Presentation of the problem 15

  3. Research questions 17

  4. Thesis structure and limitations 17

2 Methodology 19

  1. Methodological approaches 19

  2. A case study 20




  1. Designing the case study 21

  2. Data collection for the case study 25

  3. Conducting the case study 28

  4. Analytical approach to case study evidence 33

  5. Composing the case study report 34

  6. Further use of the case study report 34

2.3 Summing up thesis methodology 36

3 Marketing a tourism destination – definitions, differences from


marketing in general, challenges 39

3.1 The role of the DMO 39



  1. Defining a tourism destination 40

  2. Tasks associated with DMOs in general 42

3.2 DMO as a marketing body 45

  1. Customer focus for destination marketing 46
  2. Marketing and SMTEs 47


  3. Marketing parameters 48

  4. Marketing research and marketing intelligence 50

  5. Market segment 51

  6. Product mix 53

  7. Pricing policy 54

  8. Distribution policy 55

  9. Sales policy 55

  10. Promotion policy 55

3.3 Destination branding 58

  1. What is branding? 59

  2. Destination branding 60

3.4 The DMO in a context of regional development 63

  1. Peripheral areas - definitions 64

  2. Peripheral areas in a tourism context 65

3.5 Strategy development through a DMO in peripheral areas 70

  1. Definitions of strategy 70

  2. Formulating a strategy 72

  3. Strategy development 72

  4. The concept of strategising 73

  5. Other tendencies in strategy theory 74

  6. Marketing strategy development 75

  7. Development strategies for peripheral areas 82

  8. Tourism related development strategies 82

3.6 Summing up the theoretical basis 85

4 Developing marketing strategies for Bornholm - the case study 87


  1. Bornholm in brief 87

  2. Tourism in Bornholm 90




  1. Historic tourism development 90

  2. Tourism today 94

4.3 Destination Bornholm 123

  1. Historic development and background 124

  2. Organisational structure 126

  3. Financing DB 129

4.4 Developing the marketing strategy 132

4.4.2 Outside influences 143

4.5 Putting the strategy to work 144

4.5.1 DB’s marketing activities 144



  1. Visitor versus destination profile 146

  2. Industry involvement 148

  3. Challenge for improved performance 149

5 Theoretical impacts on destination marketing planning 151

  1. Difficulties in developing a destination marketing strategy 152

  2. Analysis of the wider context of DMOs 158




  1. Lessons from other destinations 159

  2. The influence of peripherality 161

5.3 Sub-conclusion 164

  1. Conclusion 167

  2. List of references 169
  3. Select bibliography 183

List of figures

Figure 2-1 Detailed case study sequence 24

Figure 2-2 Framework for the other trade interviews 27

Figure 2-3 Case study structure 36

Figure 2-4 Case study foundation and application 37

Figure 3-1 The Marketing system 51

Figure 3-2 Destination/visitor profile fit table 53

Figure 3-3 Illustration of various destination management elements 62

Figure 3-4 Simple model of a strategy 71

Figure 3-5 The strategic planning process 73

Figure 3-6 Shift in strategy focus 75

Figure 3-7 Relations between the factors of competition in old and new tourism 77

Figure 3-8 Framework for a promotional plan 79

Figure 4-1 Map of the Baltic Sea Area 88

Figure 4-2 Map of Bornholm 89

Figure 4-3 Passengers to and from Bornholm 1948-1995 91

Figure 4-4 Total number of overnights 1970-1995 93

Figure 4-5 Seasonal distribution of overnight stays and visitors, 1996 98

Figure 4-6 Seasonal distribution of overnight stays and visitors, 2002 98

Figure 4-7 Distribution of nationality in 1996 and 2002 100

Figure 4-8 Party composition in selected years 102

Figure 4-9 Map of ferry connections to Bornholm 113

Figure 4-10 Players in the tourism strategy planning process 119

Figure 4-11 Intended structure for tourist bureaux at a destination 124

Figure 4-12 County (Amt) map of Denmark 125

Figure 5-1 Theoretical impacts on a DMO 152

Figure 5-2 Stakeholders’ role in destination marketing strategy development ... 153

Figure 5-3 The marketing process for a destination 155

Figure 5-4 The dual strategic planning process 156

Figure 5-5 Revised framework for the development of a promotional

strategy and plan 157

List of tables

Table 2-1 Application of a case study for research purposes 21

Table 2-2 Choice of types of case studies 22

Table 2-3 Construct validity requirements and their application to the thesis.... 22

Table 2-4 Data collection for different aspects of the thesis 25

Table 2-5 Application of data sources 30

Table 3-1 Rating of four partnership models 44

Table 3-2 The business-to-customer interface 47

Table 3-3 Style groups in the leisure market 52

Table 3-4 The five As 54

Table 3-5 Breakdown of marketing budgets by main areas of activity for

selected NTOs in percentages, 1995 56

Table 3-6 Brand recognition in tourism 60

Table 3-7 Regional restrictions and market challenges for tourism

destination branding 61

Table 3-8 Examples of selling themes for destinations 63

Table 3-9 Aspects of core and periphery 65

Table 3-10 Issues for peripheral areas 68

Table 3-11 Competitive factors in old and new tourism 78

Table 3-12 Common barriers to tourism development for SMEs 85

Table 4-1 Development in number of visitors 1996-2002 96

Table 4-2 Development in overnight stays 1996-2002 97

Table 4-3 Average length of visit in days 1996-2002 97

Table 4-4 Visitors by type of visit 1996-2002 (Percentages) 101

Table 4-5 Average party size 1996-2001 102

Table 4-6 Average expenditure per person per day 103

Table 4-7 Direct tourist expenditure 103

Table 4-8 Expenditure by nationality 104

Table 4-9 Evaluation of Bornholm in general terms, 1996-2002 109

Table 4-10 Likelihood of returning, 1996-2000 (Percentages) 110

Table 4-11 The spatial planning system in Denmark 115

Table 4-12 Relation between key stakeholders in the strategy formulation

process 117

Table 4-13 National strategy for tourism - main focus areas 118

Table 4-14 Visitors’ characteristics (TAs’ view) 123

Table 4-15 Facts about DB 126

Table 4-16 Shareholders in DB in 2001 128

Table 4-17 DB annual turnover and public subsidies in 2000-prices 130

Table 4-18 Breakdown of DB’s marketing expenditure 130

Table 4-19 Contributors to DB in 2001 132

Table 4-20 DB's mission statement 133

Table 4-21 Bornholm profile 147

Table 5-1 Issues for tourism businesses in peripheral areas 163

Table 5-2 Indicators for medium-term strategy development 164

Table A-1 Overview of interviews 188


List of Appendices

Appendix A. The interviews 187

Appendix B. The Bornholm Visitor Survey 193

Appendix C. Bornholms Erhvervsknudepunkt 205

Appendix D. Glossary of terms 207

Preface to the revised edition

This edition is a slightly revised edition of the originally presented thesis. The reason for choosing to revise the thesis was partly because time has passed quickly and it is now over a year since the data collection for the thesis was finalised. Within this year some important events have taken place in Bornholm tourism, which should be in­corporated in an update. Also, a necessity for slight changes was felt, and these have found their way, hopefully to improve the quality of the thesis even further.

At this point I would like to express my thanks, additionally to those acknowledged in the original version, to Prof. Adele Ladkin and Prof. William Gartner, who acted as examiners for the thesis and provided relevant and interesting input to the thesis. Also, I am grateful to Frances Brown, for giving the thesis a final linguistic check-up.

Ann Hartl, October 2003


Preface

In spring 1995, I was appointed to the Research Centre of Bornholm (RCB), in order to take care of the administration of a five-year tourism research programme entitled Tourism in the peripheral areas of Europe. Inspired by the work of my colleagues and encouraged by Professor Stephen Wanhill, I set off on my own research project. When I first embarked on this study, very little could be found specifically on the marketing of destinations. Having worked as a practitioner in the field of destination marketing for some years, I was curious to investigate the matter further. This thesis is the result of work carried out over a period of almost seven years, commencing with part-time registration in early 1996 and transfer from MPhil to PhD in June 1999, followed by full-time engagement in the research until May 2000. Subse­quently, there was a period of three months in the summer of 2002 where I could fully concentrate on the research, finally completing the thesis in my spare time in the latter part of 2002.


Acknowledgments

Holding this thesis in my hands, ready for submission, is one of my greatest personal victories. There was a time when I feared that I would never overcome the obstacles that came in my way during the past six years. Therefore, I would like to express my gratitude to all those persons who have contributed to the process of writing the thesis. First and foremost, it would not have been possible to undertake this study without the encouragement and support of my supervisor Professor Stephen Wanhill and the former Chief of Research at the RCB, Svend Lundtorp, agreeing to finance travel related expenses in the first place and subsequently supporting my application for a scholarship funded through the Danish Social Science Foundation (SSF) that

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provided a grant portion for a period of 15 months for me to undertake full-time research. Additionally, I would like to thank the various later managers of the RCB (now Centre for Regional and Tourism Research (CRT)) for their continued financial support. I also would like to thank Stephen Wanhill specifically for his friendship throughout the last seven years, never ceasing to believe that I was able to accom­plish this investigation.


During the course of the study, I spent two months with the British Tourist Authority (BTA) on placement in the research department, which I am most grateful for, in particular to the then head of research, Martin Sandbach, for enabling this stay and providing insight into the functions of a national tourism authority.

Since this thesis has been underway for a long time, the list of other people who have been involved and whom I am indebted to is equally long. I would like to thank Henrik Christoffersen, AKF and Nils Finn Munch-Petersen for their involvement with the visitor survey design. I am appreciative to Wolfgang Framke for sharing his inter­view transcripts with me. I show appreciation to both Szilvia Gyimóthy and Jørn Kris-tiansen for their friendship and great effort in reading and extensively commenting on the first drafts. I am also grateful to Niels Feerup for kind assistance on matters regarding Destination Bornholm and reading and commenting upon the case study. Further, I thank all my colleagues (former as well as current) at the RCB/CRT for their inspiration and support. A specific thank you goes to Adrienne Sweeney for her good spirits and for pestering me to carry on, when things appeared rather hopeless. Last but not least, a great thanks to my family for letting me set off on this major project. In particular my dear father, who would support me with his good humour (entitling my work: how to lure people into travelling to the anus mundi) and also his financial support. Finally, I am grateful to my daughter Elisabeth for enduring the immense workload and for giving me every reason to carry on, when I most doubted I could. She has – unknowingly – been the greatest inspiration of all.


Author’s declaration

Throughout the course of this research, preliminary results have been presented at various conferences. Where it was relevant, references to the conference papers (some published in proceedings, some unpublished) have been made accordingly and can be found in the list of references. The results from the Bornholm Visitor Survey have been published in annual reports; however, the figures and tables pre­sented in this thesis have been specifically produced for the thesis. Please note that references to both Hartl and Hartl-Nielsen relate to the author of this thesis.

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List of abbreviations

Note: Where an established Danish acronym existed this was used throughout the thesis. For those abbreviations, the Danish long version of the acronym alongside an English translation is given below.

ASTE Allinge-Gudhjem Kommunes Sammenslutning af Turist- og Er-

hvervsvirksomheder (the association that runs NBT)

BER Bornholms Erhvervsråd (Bornholm Industry and Business Develop-

ment Council, a partly publicly funded, but otherwise an independ­ent body)

BTB Bornholm Tourism Board (Bornholms Turistråd)

BToC Bornholm Tourism Committee (Bornholms Turistudvalg)

BVS Bornholm Visitor Survey

BWC Bornholm Welcome Centre (Bornholms Velkomstcentre)

CRT Centre for Regional and Tourism Research

DB Destination Bornholm

DS Danish Statistics Office (Danmarks Statistik)

DT Danish Tourist Board (Danmarks Turistråd)

DMO(s) Destination Marketing/Management Organization(s)

EU European Union

HORESTA Hotel, Restaurant og Turismeerhvervets Arbejdsgiverorgansation

(Danish Association of Hotel, Restaurant and Tourism Employers)

MICE Meetings, Incentives, Congresses and Events

NALAD National Association of Local Authorities, Denmark (Kommunernes

Landsforening)

NBT Nordbornholms Turistbureau (North Bornholm TIC)

NTO National Tourism Organisation

RCB Research Centre of Bornholm

RTB Regional Tourist Board (of the UK)

RTDC Regional Tourism Development Company

RTO Regional Tourism Organisation

SMEs Small and Medium-sized Enterprises

SMTEs Small and Medium-sized Tourism Enterprises

SRT Sammenslutning af Regionale Turismeudviklingsselskaber (Associa-

tion of RTDCs in Denmark)

SYTE Sydbornholms Turist- og Erhvervssammenslutning (Tourist and

Business Association in Åkirkeby kommune)

TA Tourism Association

TDC Tourism Development Company, mainly referred to as RTDC

TF Turismens Fællesråd (Joint Council of Danish Tourist Trade)

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TIC Tourism Information Centre, in Denmark these are either termed


Turistbureau or Turistinformation, the English abbreviation is used

for both types in the text


TUC Turismens UdviklingsCenter (Tourism Development Centre, a Danish

institution financed by the Danish Government)


TØBBE Turismens Økonomiske og Beskæftigelsesmæssige Betydning, a

large-scale analysis of tourism’s economic and employment impact

in Denmark administered by the DT
USP Unique Selling Proposition

WoCo Wonderful Copenhagen, the DMO of Copenhagen

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1 Introduction

This thesis is part of a large research programme initiated by the Danish Research Council for the Social Sciences in 1995 entitled Tourism in the peripheral areas of Europe. The programme aimed at enhancing academic research into tourism in Denmark. This study in particular took its point of departure in 1996 in order to investigate the role of tourism destinations and their efforts at marketing destina­tions as such: later it was narrowed down into investigating the development process for marketing strategies at destination level. Since the research programme focused on peripheral areas, this aspect’s influence on the development process had to be explored. It also had a connotation of improving performance of small and medium-sized tourism enterprises (SMTEs). At an early stage of this investigation, it was realised that the small and micro businesses at a destination rely on the expertise of the DMO. Therefore, it is the mission of this study to investigate the role of the DMO and its relation to the small and medium-sized enterprises (SMEs) at the destina­tion. It also aims at contributing to a better understanding and, possibly a revision of theory application in practice.

The structure of the thesis is:

F

• • • •

irst to identify the problem and research questions; Secondly to choose the relevant methodology;

Thirdly to present the current theoretical basis for destination marketing; Then through the presentation of a case study to introduce destination marketing in practice; and

Finally to demonstrate a possible gap between theory and practice, with sugges­tions of how to bridge any discrepancies.

Each of these areas will be presented in its own chapter, with an additional conclud­ing chapter at the end. This introductory chapter, apart from presenting the problem and research questions, will also give a short introduction to the thesis as such.


1.1 Aim and objectives of the investigation

As described in the short introduction above, it is the overall aim to analyse the role of a DMO in relation to the tourism industry at a given destination in a given context of a peripheral area. It is evident that marketing of tourism destinations is a difficult task. Although tourism is in its nature closely related to its customers, modern mar­keting approaches are less developed in tourism marketing than within the field of fast moving consumer goods. Additionally, tourism destinations experience problems as conflicts arise between the DMO and the individual service providers. Some of these may be explained by general changes in demand trends and also by the stage of maturity the destination has reached (cf. the framework provided by Butler (1980)

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of the Tourist Area Life Cycle), i.e. that a mature destination may have experienced growth over a period of time, without any distinctive marketing effort, but now ex­periences a decline. Single businesses - typically SMEs or even micro businesses (with less than 10 employees) - may feel that it is the responsibility of the DMO, whereas it typically is the SMEs that lack expertise and knowledge of how to rejuve­nate their product. Others are problems that arise when applying general marketing theories, which do not necessarily pertain in destination marketing. Therefore, the investigation aims to illuminate these problems and also to add to the body of knowledge by developing destination marketing theory further.


Apart from focusing on tourism destinations, this investigation will also look, as indi­cated above, at peripheral areas, both in relation to the influence on the strategic planning process, but also in relation to peripheral destinations, increased vulner­ability to the impacts of tourism and the resulting need for focusing on a sustainable tourism development through detailed plans and management.

Thus, it is the overall aim of this investigation to analyse the problems encountered by DMOs in their planning for marketing strategies in the light of the more specific problems of peripherality. By integrating the aspects of peripherality into strategic marketing, it is further the intention to contribute to the knowledge base on dealing with the special tourism problems of these areas, such as the base of a large number of life-style businesses with little interest in strategic planning alongside the chal­lenges of seasonality and accessibility, just to name a few (this will be further elabo­rated in Chapter 3). As also mentioned above, the study focuses on destination mar­keting, an emerging discipline (e.g. Goodall and Ashworth, 1988), which has to distinguish itself from marketing of services, such as tourism, and product market­ing. Altogether, the original theoretical basis was rooted in the following theoretical approaches:

1. Marketing:

a. Place marketing (e.g. Kotler et al., 1993; Ashworth and Goodall, 1990).

b. Strategy development (Porter, 1983; Keegan, 1989) at destination level (e.g.

Weiermair, 2001; Poon, 1993).

2. Development

a. Destination development (e.g. Pearce, 1989; Inskeep, 1991).

b. Peripheral area tourism (e.g. Wanhill, 1996).

3. Network

a. Organisational patterns (e.g. Handy, 1980; Nygaard, 2001).

b. Coopetition (Hamel et al., 1989; Brandenburger and Nalebuff, 1996).

These three areas need then to be linked to peripheral areas. The investigation also focuses on destination marketing as compared with destination development, which need to be linked to each other in terms of their differences.

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