Place Branding: A Competitive Advantage in a Time of Crisis
By Philia Tounta General Manager, Apokoros Club Hotel & Villas | June 14, 2020
Tourism has grown into one of the world's largest industries. In total, Travel & Tourism generated US$7.6 trillion (10.2% of global GDP) and 292 million jobs in 2016, equivalent to 1 in 10 jobs in the global economy. The sector accounted for 6.6% of total global exports and almost 30% of total global service exports (destinationsinternational.org).
Established destinations worldwide that may have initially experienced a heavy growth in tourism may now be facing the prospect of decline. Reasons for decline are plenty from economic crisis to natural catastrophes and pandemics. Empirical evidence showed that at the time of the crisis, a nation's emphasis on a large service sector became a disadvantage (Shostya 2014).
Countries that derived a considerable portion of their GDP from tourism (like Bulgaria, Czech Republic, and the Baltic Countries) were affected by a decrease in both domestic and foreign demand (Steiner et al. 2012). In addition, some studies indicated those countries that had more developed financial sectors were affected by the financial crisis via traditional transmission mechanisms.
There has been an increase in the application of branding theories to the branding of tourism places. An increasing number of cities, countries, and regions have adopted marketing and branding practices during the past few decades (Gertner, 2011). Place branding is so important obviously. It is not a short and easy journey to get a place branded. After a long journey with quality practice a place, region, city or country becomes sensation in its line of products in the world market or specific area. Place branding is vital in the tourism sector for a place; in terms of generating attraction in the tourists' as the place is fit for them (target groups) for their entertainment or recreation as well.
More than ever, nowadays the progress of people, capital and ideas are more fluid. Ultimately, a well-built and innovative place brand is more important than any other time. Tourism is highly vulnerable to internal and external shocks as diverse as economic downturns, natural disasters, epidemic diseases, terror attacks and political conflicts. Such negative developments often interrupt tourism industry operations resulting in a drop in tourist arrivals.
A tourism crisis occurs when circumstances in a destination pose a change which is potentially destructive to the destination and to the tourism industry's viability. Destination branding is a recent trend in place marketing and a very powerful tool. Unfortunately, the use of branding in tourism is still in its infancy. A destination brand is used in destination marketing primarily to project a positive image of tourism at a destination. Also, destination branding plays a significant role in positioning a destination.
Considerable growth in investment in place branding is also observed in competition for resources, investors and visitors in locations of varying scale and complexity. In reality, place branding should be anchored in corporate brand strategies.
But What is Destination Branding?
Destination brand is the first mental picture that comes to mind when you hear the name of a tourist destination. Countries aspire to have one or numerous (for instance, regional) destination brands, because they are attractive, become popular over time and bring a confidence that unbranded destinations do not. The characteristics of a destination brand are the attributes and the feelings that you have towards a destination.
Through branding, a destination can earn a brand, which will function as a shortcut for several exciting sensations and comfortable ideas to the "tourist's mind". If the branding is very powerful, these sensations are the same for a great number of people in all continents. Countries, regions and cities can be branding entities if their attributes can distinguish themselves from others.
Even when a place does not consciously manage its brand, people will always keep an image that comes from various characteristics. According to reports on world destinations, visitors who want to know more about the destination (apart from the information provided by the media) can educate themselves and discover some aspects of the destinations that are generally hidden by the media.
In order for a country, region or city to establish competitiveness in the global market and ensure strong presence; public managers should reinforce the competitive attributes of place identity. They should be able to position the place within a long term planning, leveraging its reputation as places of various opportunities.
Moreover, destination branding should be used as an image-modification. If a destination has a powerful brand, it translates into a better image of the country. The improved image could in turn show the way to a rise of foreign investors, enhanced tourism, etc. Clearly in a period of crisis a specific framework must be formed to enhance destination branding; a destination branding model.
Destination Branding Model
- Brand awareness and public diplomacy (strategies made for educational campaigns that aim to create awareness and to change negative perceptions about the destination)
- Brand identity and image (promote identification and involvement with audience. At the same time distinguish it from competitive locations. Enhance image because it reflects the way it is perceived by public)
- Strategic brand analysis (implementation of micro & macro analysis of environments of destination)
- Brand Management (create an environment that is suitable for the achievement of goals in a strategic manner)
A successful brand building strategy is that of New Zealand. The brand of 100% Pure New Zealand is calculated to be worth 13.6 billion (US dollars); it acquired the 21st brand position in the world (Morgan et al., 2011). Vital in the reconstruction of the New Zealand brand was the completion of their first global marketing campaign in July 1999. The message of 100% Pure New Zealand was distinctive, straightforward and convincing. Their aim was to build up and communicate a brief brand attractive to all markets. The "message needed to be consistent, clear and particular as to what is unique to New Zealand." Also, it "conveyed the emotional benefits associated with the destination" (Morgan, Pritchard & Piggott, 2002).
Destination branding and positioning is attached on the target audience's existing knowledge about the destination and the image of the destination whether it is positive or negative. Also, the involvement of stakeholders in the branding process is very important for a successful branding. Destination stakeholders should focus their efforts on developing strategies to manage the destination international image and reputation. Such strategies must be capable to leave a clear and distinctive image in the visitors and tourists mind.
Consequently, implementing an internal and external analysis provides a basis for identifying the values, personality and essence of the destination. Place branding has become a strategic marketing component with huge importance in promoting the (re)discovery of tourism destinations rigorously impacted by global crises. It is a vital tool in restoring international travel to countries that:
- Seek social security
- Desire economic recovery through tourism
- Wish to rely upon a uniquely identifiable brand attraction
- Want to focus to targeted visitor niche in the initial stages of market development and recovery.
A well-spoken place branding strategy should help a country, city or community better understand what industries and types of investment it's trying to attract, and what kinds of people and markets it should be looking for, whether for tourism or immigration. Above all, it helps destinations plan not only who they are but who they want to become. That's part of its power.
A place brand reveals what a place currently is and instigates what it can be in the future. The successful rebirth of a destination's tourism industry depends largely on its ability to reshape the beliefs of international visitors. Therefore, destination managers should focus on positive aspects of a crisis by taking outing the positive aspects, focusing on the difference the crisis has caused and any special conditions.
Hence, branding or re-branding a destination during a crisis will not yield any dividends since destinations cannot be re-named like commodities but Destination Marketing managers need to re-learn the crisis situation and rethink on how they can use it as an opportunity. Countries must be managed and operated as products in order to meet any upcoming challenges. In an increasingly globalized world with fierce competition, it is clear how much of a challenge it is for a nation / country to differentiate and stand out in order to attract domestic and foreign consumers, investors, tourists, etc.
For that reason, it is necessary to create a strong and differentiated nation brand. In reality, Mearns (2007) supports that branding has become a business discipline by itself due to the complex processes and theories associated to it. The complications of developing a destination brand are concerned with the development of the empirical element and understanding of the tourist decision process. Tourism branding requires special attention, given the hints associated to this activity. The comprehension of such characteristics allows destination marketers to build up a point of differentiation that would give their products sustainable competitive advantage.
Destination branding is and will remain an important marketing tool that can provide a core set of values for the destination(s) whilst highlighting the need for market orientation.
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