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The Evolution of a Tourism Delivery System: Marketing Garden Clusters on Vancouver Island

The Evolution of a Tourism Delivery System: Marketing Garden Clusters on Vancouver Island



This paper proposes to support the development of an effective tourism delivery system with a focus on a marketing strategy, which leverages, enhances and delivers the identity of Hatley Park National ...

This paper proposes to support the development of an effective tourism delivery system with a focus on a marketing strategy, which leverages, enhances and delivers the identity of Hatley Park National Historic Site (HP NHS, n.d.a.) to desired tourism market niche consumers. Through collaboration of competitive and complementary businesses and organizations including Hatley Park, the Vancouver Island regional cluster of gardens and supporting businesses form a single tourism product, “The Garden Trail” to market globally. Using cluster theory as a framework (Porter, 1998), this paper examines the collaborative structure, processes and success factors of garden clusters on Vancouver Island conducive to globally marketing competitive tourism products.



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    The Evolution of a Tourism Delivery System: Marketing Garden Clusters on Vancouver Island The Evolution of a Tourism Delivery System: Marketing Garden Clusters on Vancouver Island Document Transcript

    • Tourism Delivery System Marketing Cluster The Evolution of a Tourism Delivery System: Marketing Garden Clusters on Vancouver Island Royal Roads University Dustin Bodnaryk, Ray Freeman, Barbara E. Smith July 14, 2010 1
    • Tourism Delivery System Marketing Cluster Table of Contents Introduction………………………….……………………………………………...................3 Cluster Constructs and Collaborative Marketing…....................................................................4 Stakeholder Partnerships….........................................................................................................6 Structure of Clusters…………………………………………………………...........................10 Collaboration…………………………………………………………......................................11 Regional Development Challenges…………….………………………………………………14 Product Differentiation…...........................................................................................................17 Market Segmentation…………………………….….………………………………………....18 Understanding the Market…………………….….…………………………………………....20 The Internet and Technology…..................................................................................................21 Innovation……………….…………………………………………………………………......22 Destination Management Systems…………………………………………………………......25 Media Relations………………………………………………..................................................27 Leadership and Clusters………………………………………………......................................27 Hatley Park Marketing Strategy……………………………………….....................................28 Recommendations......................................................................................................................30 Limitations and Considerations..................................................................................................32 Conclusion………………………….…………………………………………….....................32 References………………………….…………………………………………….....................33 2
    • Tourism Delivery System Marketing Cluster Introduction This paper proposes to support the development of an effective tourism delivery system with a focus on a marketing strategy, which leverages, enhances and delivers the identity of Hatley Park National Historic Site (HP NHS, n.d.a.) to desired tourism market niche consumers. Through collaboration of competitive and complementary businesses and organizations including Hatley Park, the Vancouver Island regional cluster of gardens and supporting businesses form a single tourism product, “The Garden Trail” to market globally. Using cluster theory as a framework (Porter, 1998), this paper examines the collaborative structure, processes and success factors of garden clusters on Vancouver Island conducive to globally marketing competitive tourism products. The Hatley Park identity has been created through collaboration with stakeholder partners, including: Royal Roads University (RRU), Tourism Association of Vancouver Island (TAVI), the British Columbia Ministry of Tourism, Culture and the Arts (MTCA), the Canadian Tourism Commission (CTC), Parks Canada, and other supply chain intermediaries and partners. The primary basis for a marketing strategy is to identify and highlight the unique array of destination amenities offered in alignment with evolving trends towards supporting positive experiential tourism opportunities (Arsenault, 2005, p. 2; Oh et al., 2007, p. 119). Utilizing a disciplined marketing process, Hatley Park National Historic Site in conjunction with stakeholder partners may cost-effectively enhance the reach of their marketing matrix strategy by leveraging emerging technology trends and resources (Harris, 1995, p. 613; Ritchie & Crouch, 2003, p. 173). While striving to effectively identify, target, and reach appropriate and desirable prospective consumer market segments through a disciplined and dynamic marketing strategy, 3
    • Tourism Delivery System Marketing Cluster this approach presents the opportunity for successful outcomes if the customer experience is incorporated into the plan (Hanlan, Fuller, and Wilde, 2006, p. 7). This paper asks: What is the most appropriate and effective tourism delivery system for Hatley Park National Historic Site, in order to identify, target, and reach appropriate and desirable prospective consumer market segments (Hanlan, Fuller, & Wilde, 2006, p. 7). In efforts to further investigate and understand the concept of a tourism delivery system in the area of marketing a cluster product to an international market, this paper examines the evolution of a proposed tourism delivery system through a cluster framework. “A tourism delivery system can be thought as a collection of components that work together to produce an outcome that is economically worthwhile from the perspective of the component stakeholders” (M. Conlin, personal communication, April/May, 2010). Various existing models were considered and are included as the authors' endeavor to conceptually create a model representing the evolution of the tourism delivery system. The complexity of the model is revealed in the following discussions on product development, stakeholder partnerships, cluster concepts, regional development challenges, technology, innovation, the internet, destination management systems, media relations, development and structure of clusters, collaboration and leadership. Concluding comments highlight recommendations to Hatley Castle National Historic Site in light of the research observations. Cluster Constructs and Collaborative Marketing With increasing interest in experiential tourism opportunities (Arsenault, 2005, p. 2; Oh, Fiore, and Jeoung, 2007, p. 119) Hatley Park National Historic Site is well positioned to develop and present this tourism operation as a distinctive tourism destination in an increasingly 4
    • Tourism Delivery System Marketing Cluster competitive global marketplace (Ritchie & Crouch, 2003, p. 11). Through a well-designed tourism delivery system plan (Scott, Baggio, & Cooper, 2008, pp. 72-73) in collaboration with strategic stakeholder partnerships (Tourism Vancouver Island, 2009); supported by a disciplined strategic marketing process (Harris, 1995, p. 613), Hatley Park stakeholder partners can take steps to ensure that they may more effectively meet target tourism visitors’ expectations and needs while fulfilling collaborative strategic interests. Hawkins’ asserted (2002, p. 7), it may be considered suitable to apply a structured market analysis framework towards developing a marketing strategy. This approach draws upon Porter’s (1998) description of the availability of local factor conditions (in this case, the amenities presented at Hatley Park) and reinforces the need to effectively address consumer demand conditions; those being, the encouragement of local competitive innovation derived from high consumer expectations. In order to take advantage of competitive innovation, Hawkins (2002, p. 4) suggests that planners consider the nature of applicable consumer demand factors, specifically: volume and growth of demand, source and caliber of markets, as well as tourist behaviour and levels of sophistication. Porter (1998) described clustering as, “geographic concentrations of interconnected companies and institutions in a particular field” (p. 78) and as “an alternative way of organizing the value chain” (p. 80). Porter argued that clusters have a major impact on competition by encouraging further innovation, growth, and productivity of the collective group of companies, “a cluster allows each member to benefit as if it had great scale or as if it had joined with others formally – without requiring it to sacrifice its flexibility” (p. 80). Hawkins (2002) defined a competitive cluster as an organized set of strategic “activities and services” delivered through a 5
    • Tourism Delivery System Marketing Cluster supply chain of participating stakeholders; including, the communities, government, destination marketing/management organizations (DMO’s), intermediaries, and other associated strategic partners (p. 1). This competitive cluster framework and strategy creates a comparative advantage through promotion of the destination’s amenities (Hawkins 2002, p.1). The development of a marketing strategy, delivered through a structured tourism delivery system model, based upon a competitive cluster framework as suggested by Hawkins’ model and Porters’ theory, may be effective if created in alignment with the vision statement and key objectives designed to build tourism capacity through collaboration with strategic partners at the destination, in the region and along the tourism delivery system value chain. Subsequently, a marketing strategy may be developed with a view towards considering a concise set of technical components focusing on attracting the interests of tourists through market analysis, competitive analysis, market segmentation, and positioning strategy (Harris, 1995, p. 607). Stakeholder Partnerships Many tourism operators do not clearly understand the benefits of cooperative marketing efforts with local “competitors” or “conglomerate allies” within their own region towards building capacity and enhancing the competitiveness within a region against other destinations on a more global scale. Destination planners, DMOs, and stakeholders need to encourage a process, which facilitates the balanced requirements of all parties in order to achieve collective success (Buhalis & Spada, 2000, pp. 42, 52-54, 56). According to Lovecock & Boyd (2006, p. 144), Timothy (2001, p. 158) argued a collaborative approach for multiple stakeholder and multijurisdictional destination planning encourages sustainable efficiency, integration and stability 6
    • Tourism Delivery System Marketing Cluster through concerted promotional and marketing efforts. Furthermore, Lovecock & Boyd (2006, p. 146) cited Oliver (1990) who identifies a number of ‘critical contingencies’ for interorganizational relationship formation: Figure 1. Incentives for Relationship Formation for Inter-Organization Relationships      Reciprocity: Organizations seek to facilitate exchange of resources; Efficiency: Organizations seek to reduce the cost of service delivery; Stability: Organizations seek to reduce uncertainty and share risks; Necessity: Where the relationship is mandated by external force; Legitimacy: Where the organizations concerned seek to demonstrate the norms of cooperation. Source: Oliver (1990, p. 146). 7
    • Tourism Delivery System Marketing Cluster The evolution of cluster and stakeholder constructs applicable to “The Garden Trail” on Vancouver Island may be described as follows: Tourism Delivery System Evolution for Marketing Garden Clusters on Vancouver Island Figure 2. Localization of Vancouver Island tourism suppliers Source: Bodnaryk, D., Freeman, R., Smith, B.E. (2010). This figure depicts cluster stakeholders prior to the development of “The Garden Trail” cluster as each independently markets to a broad base of international markets. The inner circle and outer circle represents the competitive space within which stakeholders operate and the various sizes represent the degree of commitment to and involvement with international marketing efforts. 8
    • Tourism Delivery System Marketing Cluster Figure 3. Cluster development of Vancouver Island tourism suppliers. Source: Bodnaryk, D., Freeman, R., Smith, B.E. (2010). This figure highlights the developing cluster of stakeholders creating a single tourism product, “The Garden Trail”, targeting desirable niche consumers within the United Kingdom (U.K.) market. A central leadership role for marketing strategy development and delivery to the supply chain is undertaken by the Tourism Association of Vancouver Island. The overlapping stakeholders and size differences reflect a “learning community” interconnecting and committing collective resources towards developing a shared a common vision (Morrison, Lynch & Johns, 2004, p. 203). 9
    • Tourism Delivery System Marketing Cluster Figure 4. Tourism Delivery System for International Marketing of Clustered Product Source: Bodnaryk, D., Freeman, R., Smith, B.E. (2010). This figure showcases the interconnectedness of horizontal, vertical and diagonal cluster stakeholders focused on key distribution channels and more specific U.K. market channels within the desired international target marketplace. Structure of Clusters Michael (2003) described the “forms of clustering” as “horizontal clustering, diagonal clustering and vertical clustering” all supporting the optimal cluster of firms (p. 137). Accordingly, the horizontal clusters are like-minded businesses and competitors conducting 10
    • Tourism Delivery System Marketing Cluster business in the same geographic location seeking a shared customer. The vertical clusters are the traditional value chain businesses which provide goods and services to the optimal cluster of firms. And finally, the diagonal clustering refers to complementary or symbiotic firms which are distinctive businesses that provide additional value and support to the main cluster (pp. 138-139). It was suggested by Bradenburger and Nalebuff (1997, as cited by Michael, 2003) that diagonal clustering firms add value to the tourism visitor and therefore can positively impact their decision to purchase the tourism product. The salient points made by Michael (2003) clearly indicate that tourism growth is more about forming strategic alliances and clusters with likeminded businesses in the same geographic area than it is about competition (p. 138). Findings from case studies conducted by Morrison, Lynch and Johns (2004) indicated there is a significant role undertaken by a “hub organization” in the initiation and organizational structuring of the network (p. 202). In the case of “The Garden Trail”, it is the Tourism Association of Vancouver Island that is taking the lead role in leadership and organization specific to cluster marketing initiatives. Morrison et al. confirmed that the core of the network is the knowledge and information exchange amongst members and the “glue” is the common vision and purpose of the group. Morrison et al. further advocated a “sense of community” which can result from fully functioning networks leading to a concept of “learning communities”: “A learning community is concerned with the concept of networks of networks, meshing and interconnecting diagonal, horizontal and vertical organizational types and configurations as appropriate” (p. 203) to build and enhance collective capacity. Collaboration Strategic alliances are purposeful arrangements between two or more independent 11
    • Tourism Delivery System Marketing Cluster organizations that form part of, or are consistent with the overall strategy, and contribute to the achievement of the objectives that are mutually beneficial to the parties involved. Organizations and businesses enter into collaborative relationship with different motivations ranging from social to economic to strategic (Youcheng & Zheng, 2007, p.78). In the example of Hatley Park National Historic Site, participating in a strategic alliance within a cluster and bundling services together to form a single product such as the “The Garden Trail” product allows smaller firms to tap economics of scale and scope. “Firms add value to the cluster’s activities by integrating or bundling complementary services into a single product for sale – in effect, allowing firms to diversity their activities to meet the needs of a target group of consumers” (Poon, 1994, p. 224, as cited by Michael, 2003, p. 139). As the product cluster grows, each member of the vertical, diagonal and horizontal segments of the cluster benefits from their involvement through accessing specialized market information, specialized labour, infrastructure, lower costs, greater capacity and the opportunity to increase visitations. The benefits of collaboration may be significant and far-reaching to the growth of business and the development of a community (Michael, 2003, p. 140). As an example, Fyall, Leask and Garrod (2001) informed that Scottish tourism attractions welcomed the opportunity to collaborate jointly. Not only were collective branding, theming and packaging seen as benefits to interorganizational collaboration but also necessary for survival in a highly competitive environment (p. 212). Fyall et al. advocated that collaboration amongst Scottish attractions has many advantages including sharing of resources, attainment of common strategic goals and “maximizing the appeal of the generic product” (p. 217). Other benefits of collaboration as noted by Fyall et al. included the mutual benefit of pooling resources (staff, time, finance, training and expertise), reduced individual risks, increased business profile, and 12
    • Tourism Delivery System Marketing Cluster increase product exposure through joint-marketing activities accessing many different distribution channels (p. 217). A study by Kanter (1994, as cited by Fyall, Leask & Garrod, 2001, pp. 224-226) highlighted 37 companies and their partners from 11 regions of the world confirmed five underlying principles for successful collaboration: Figure 5. Principles for successful collaboration o partners’ strategic goals should converge while their competitive goals diverge o the relative size and market power of partners should be modest compared with industry leaders o each partner should believe that it can learn from the others and at the same time limit access to proprietary skills; o the collaborative alliance should be regarded as a relationship rather than a mere exchange o there should be an overall consensus as to the general ‘mission’ of the collaborative alliance Source: Fyall, Leask & Garrod (2001, pp. 224-226). According to Kanter (1994, as cited by Fyall, Leask & Garrod, 2001, p 223) “successful collaboration is by no means a matter of chance; it tends to be associated with a number of features specific to the partners and the market environment in which they operate.” Moreso, Kanter (1994) proposed individual partners in the group need to adopt a holistic attitude toward achieving the group’s shared vision (p. 223). Similarly, five success factors of tourism networks are defined by Morrison, Lynch and Johns (2004) as: having clearly identified collective objectives and goals incorporating the regional and national priorities; having key leaders who recognize the benefits of exchanging knowledge and information across all levels; having an organizational structure that includes all stakeholders and public sector organizations; having adequate financial, human and physical 13
    • Tourism Delivery System Marketing Cluster resources; motivating members with economic, social and psychological benefits and supporting interorganizational learning through exchange of ideas and knowledge (p. 201). Regional Development Challenges Hawkins (2002, p. 4) suggested that undertaking a marketplace analysis with a focus on regional collective factor and demand conditions can build the capacity of the competitive cluster, resulting in lower operating costs and improved product offerings as well as facilitating a quality experience for tourists and competitive advantage for the cluster. This approach reveals the following primary issues and challenges for the Vancouver Island Region namely: Figure 6. Primary issues and challenges for the Vancouver Island Region 1. Challenges to access, including, for example, immigration control requirement for US travelers to carry passports. 2. Uncertainty of fuel prices, and the US economy. 3. Limited new product development within the Region may be limiting yield. 4. Fragmentation of Vancouver Island’s tourism industry and instability in some community DMOs. 5. Transportation costs and access constraints limit market growth. 6. Labour market challenges limit industry growth. 7. Limited awareness of the value and importance of tourism in some Vancouver Island communities. Source: Tourism Vancouver Island (2009, pp. 9-11). Furthermore, using the Vancouver Island Visitor Exit Survey (Tourism Vancouver Island, 2008), data was acquired from intercept interviews querying visitors on: their geographic origin, demographics, primary travel motivators, and subsequent trip satisfaction. Overlaying survey 14
    • Tourism Delivery System Marketing Cluster results with the community tourism plan issues and challenges allows planners to confirm target group definition, identify gaps in the plan, reveal market trends/opportunities, and adjust strategic components validated by stakeholder consultation (Harris, 1995, p. 605). To subsequently ensure effectiveness of the marketing strategy, Tourism Vancouver Island “(created) a research program in cooperation with the private sector to measure growth and the effectiveness of marketing initiatives” (Tourism Vancouver Island, 2009, p. 13). In the following figure, Key Factors in Collaborative Regional Tourism Destination, (Naipaul, Youcheng, & Okumus, 2009) outlined the areas of; (1) facilitating factors, (2) potential outcomes, (3) motivations for collaboration, and finally (4) inhibitors for collaboration, (p. 469): 15
    • Tourism Delivery System Marketing Cluster Figure 7: Key Factors in Collaborative Regional Tourism Destination Facilitating Factors -Independent communities with common operating philosphy Geographic Structure;good personal relationship and constant communication;Complimentary Products;Fair Share of Benefits and responsibiities Outcomes of Collaboration -A formal single marketing program;wider market reach Cost efficiency;Shared economic impact to regions Collaborative Regional Tourism Destinations Inhibiting Factors (1) From Individual Communities/DMO's Motives for Collaboration -Enhancing tourism product; leveraging on each others unique tourism products; cost reduction and efficiency. -Different priorities; different marketing directions; lack of actions and focus; constraints of human and financial resources (2) From Stakeholders -Perceived risk; additional labour and resource requirment Source: Naipaul, Youcheng, & Okumus (2009, p. 469). Supporting these key factors, Wilson, Fesenmaier, Fesenmaier, and van Es (2001, p. 151) argued that “although the community and partnership approach may be an effective way to develop and promote tourism, creating the necessary inter-community cooperation and collaboration is a complex and difficult process.” Previous academics provide literature on the challenges of implementation of collaborative alliances stemming from; (1) the fragmented nature of individual interests of tourism stakeholders within a region; (2) the fact that no single agency can control and deliver a rich combination of tourism product; and (3) and that a collaborative strategy at a regional, provincial, national, or international level requires a great deal of coordination, communication, and building consensus, (Jamal & Getz, 1995, p.186). 16
    • Tourism Delivery System Marketing Cluster Product Differentiation Hatley Park National Historic Site offers a “Superb Canadian example of an Edwardian park that remains practically intact” (Parks Canada, 2009, p. 110); however, undertaking a competitive analysis is necessary to identify competitive product offerings, reveal opportunities for innovation, and support creation of an inimitable market niche for the destination (Gu, 2006, p. 382). Highlighting the uniqueness of a tourism destination is a strategy that is critical to the destination’s ability to build community capacity, to the benefit of stakeholder partners (p. 383). Analysis of competitive destinations may identify best-practices and highlight opportunities to showcase unique characteristics of destinations enabling a destination to develop a more effective target market strategy (Ritchie & Crouch, 2003, p. 27). Vancouver Island, as a whole, provides travelers with many of the attributes desired by major demographic markets (Ritchie & Crouch, 2003, p. 20). For a number of years running, Vancouver Island has been chosen by Condé Nast Traveler readers as one of the top Islands in North America, often topping the list (Concierge.com, 2009). Putting competitive advantage into perspective for Hatley Park National Historic Site, Ritchie and Crouch (2003, p. 67) referred to Porter (1980, 1990) informing that destinations which compete in localized markets may also cooperate when promoting the greater region as a combined destination when attracting visitors from outside the region. In this case, Hatley Park National Historic Site is well positioned to collaborate with the local and regional DMO’s, competitors, adjacent communities as well as the BC Ministry of Tourism, Culture and the Arts, and the Canadian Tourism Commission to participate in the combined cumulative and collaborative promotion of all destinations, communities and regions on Vancouver Island. As a combined region, long-haul market tourists may view Vancouver Island as one destination 17
    • Tourism Delivery System Marketing Cluster (Ritchie & Crouch, 2003, pp. 67, 108), therefore, it would appear logical for local competitors to combine efforts to promote the entire region as one destination. Market Segmentation Kotler, Brown, Adam and Armstrong (Hanlan et al., 2006, p. 7), suggested that the effectiveness of using a market segmentation approach to determine appropriate and desirable niche target market consumers may be enhanced using methodologies which are measurable, are accessible, are actionable, and differentiable. Despite the availability of a number of market segmentation approaches, Hanlan et al., (2006, p. 24) stated that benefit segmentation is the preferred approach due to travelers desire to derive positive benefits sought (Hanlan et al., 2006, p. 12) from experiential travel (Arsenault, 2005, p. 2; Oh et al., 2007, p. 119). Furthermore, this approach may provide greater insights into traveler motivations when combined with the more common market segmentation methodologies, such as, demographic and geographic profiling, especially when applied to a marketing matrix designed to effectively connect with identified market segments. Execution of a marketing strategy first requires an understanding of market analysis, competitive analysis, market segmentation, and product positioning strategy factors. In addition, Snepenger, Snepenger, Uysal, and Fesenmaier (1993, p. 23) suggested that destinations consider selected target segments in relation to the resources available to develop a successful marketing program. Ritchie and Crouch (2003, p. 173) further advised that the selection and delivery of the marketing mix should consider temporal aspects to determine when best to engage in select advertising tactics, such as including consideration for seasonal travel influences. Reinforcing this, Harris (2009) demonstrated that temporal aspects are highly dependent upon the level of 18
    • Tourism Delivery System Marketing Cluster awareness of the destination and recommended developing a purchase cycle map to support planning for delivery of marketing and promotional tactics. Figure 8. Consumer Purchase Cycle Consumer Purchase Cycle Source: R. Harris (personal communications, September/October, 2009). In the case of Hatley Park National Historic Site, a primary tactic would be to focus on creating initial awareness of the destination and the region for specific identified target niche consumers, rather than placing more emphasis on branding with an increased depth of information until the consumer has advanced further in the consumer purchase cycle (Harris, 2009). In order to gain the best market penetration of marketing efforts cost-effectively, Ritchie and Crouch (2003, p. 173) suggested that marketing efforts could be further enhanced by 19
    • Tourism Delivery System Marketing Cluster considering the influence of technology on traditional tourism distribution channels as well as technological influences on consumer decision-making processes. Keeping in mind the consumers’ desire to engage in a positive and beneficial travel experience, destination marketing planners need to be cognizant of both technology and customer experience outcomes (Ritchie & Crouch, 2003, p. 173). Understanding the Market For Hatley Park National Historic Site and the overall Vancouver Island “Garden Trail” program (Tourism Vancouver Island, 2010a), the process of staying in tune with consumers, and gaining insights into why they purchase the product, and how they purchase the product will assist in future decision making and enables more effective marketing outcomes for the Destination Marketing Organization (DMO) and the stakeholder, (Pike, 2008, p.134). According to the Vancouver Island 2010 marketing plan, (Tourism Vancouver Island, 2010b) the organization commits 82% or 1.47 million dollars towards the touring market which includes garden tours, historic sites, and museum visitors. In a recent exit survey by Tourism Victoria in partnership with the University of Victoria (Tourism Victoria, 2010), the average expenditure per party per day on Vancouver Island was $247 in 2009, (p.4). In terms of trip planning information it was shown that many visitors, approximately 30%, relied on friends and family for trip planning information. A majority used the Internet in some way, while newsprint advertising was the least used source of information, (p.10). In relation to the specific segment of visitors to paid attractions and the touring market, it showed that 37.3 percent of the surveyors toured historical sites with 30.6 percent visiting Butchart Gardens, the premier garden attraction in Victoria and on Vancouver Island. Analysis of market research assists in identifying consumer preferences and behaviours, therefore assisting planners in determining appropriate 20
    • Tourism Delivery System Marketing Cluster target niche market consumers and their preferences. Target niche market consumers from the United Kingdom which the Canadian Tourism Commission has identified as most desirable for Canadian Tourism Operators, fall within the categories depicted in the following figure. Analysis of the characteristics and preferences described in the CTC “Explorer Quotient” system appears to align well with local factor conditions available at Hatley Park National Historic Site. HP NHS may find additional research resources available from the CTC, MTCA, and TAVI available to further analyze potential niche target market data. Figure 9. Key U.K. Consumer Groups based on CTC’s Explorer Quotient  Free Spirit travelers in the UK are predominantly over 50 and come to Canada to see all the main attractions with a group while staying at the most luxurious accommodations.  Cultural Explorers in the UK are over 50; their primary interest is to have authentic experiences, which include exploring the ancient history and modern cultures of the places they visit.  Authentic Experiencers in the UK are also over 50 and are driven by vast natural settings and wonders; they also like to integrate the local culture, authentic food and spots off the beaten track into their travels. Source: Canadian Tourism Commission (2010) The Internet and Technology With the advent of rapidly advancing Internet communications technologies, consumers are becoming increasingly knowledgeable, capable, and sophisticated in their expectations of tourism operators, hoteliers, and attractions, even from the most developed of countries and destinations (Pike, 2008, p. 263; Buhalis & Law, 2000, p. 617). Deloitte (2008) informed that tourism operators who utilize innovative technologies and leading-edge electronic marketing 21
    • Tourism Delivery System Marketing Cluster resources may be better positioned to address increasing international competition (pp. 11, 13, 18). Deloitte emphasized that the use of emerging technologies in alignment with consumer use of technologies is imperative towards tourism operators benefiting from the use of technology as a differentiator in the increasingly competitive global marketplace (pp. 5, 18, 20). Ritchie and Crouch (2003, pp. 5-6) stated that the influences, challenges, impacts and opportunities of technology on tourism product development and marketing strategies are a relatively recent phenomenon in the tourism industry. The equalizing affect of the Internet now allows smaller destinations to compete more effectively and affordably with more powerful destinations on a global scale. Furthermore destinations and tour operators are now more capable of enhancing their information and promotional activities to more effectively and realistically influence visitors expectations prior to travel, while improving the quality of the visitor experience when visitors are at and traveling through a destination. Innovation Pike (2008) referred to Kincaid (2003, pp. 58-59) and advised that the Internet has enhanced interactions with consumers through increased “access, control, speed, globalization, and automation”. With the rapid build-out of Internet infrastructure in most parts of the developed world and many parts of the developing world, consumers may more readily access detailed information about potential tourism destinations, accommodations and attractions, therefore gaining more control over purchase decisions. Demand side pressures are increasing from consumers who have rapidly evolving access to knowledge, Internet capabilities, and sophisticated expectations of destinations (Pike, 2008, p. 263; Buhalis & Law, 2000, p. 617). The affects of globalization on the tourism industry have resulted in the commoditization of many similar tourism products and services, therefore driving down prices and challenging 22
    • Tourism Delivery System Marketing Cluster tourism destinations, operators, hoteliers, and attractions to strive for differentiation through cohesive branding strategies and value-added offerings (Pike, 2008, pp. 263, 266-268). With the emergence of e-commerce and subsequently, e-tourism initiatives; many participants in the tourism industry are more able to engage in communications with select target market segments while striving to craft marketing messages conducive to tourism consumer interests. Palmer (2004, p. 128) indicated that the Internet provides new marketing channels for tourism operators and DMOs in concert with and beyond traditional marketing strategies. More specifically, individual tour operations may take the initiative to build a direct-to-consumer engagement strategy, while simultaneously participating in leveraged collaborative marketing opportunities through local, regional and national DMO’s to further their market reach (Palmer, 2004, p. 129). These dual strategies allow the tourism operator to customize and personalize their communications with the end consumer once direct contact has been established. However, participating in a ‘virtual co-operation’ initiative facilitated by DMOs allows the operator to participate in marketing activities which may have significantly expanded marketplace reach. Furthermore, as a part of their mandate, DMOs also strive to build regional capacity and coordinate stakeholders to ensure that a unified brand or destination ‘image’ is presented to assist the destination region in providing a cohesive theme or personality, thereby facilitating a unique selling proposition in comparison to other destinations (p. 128). While a consumer decides between making a purchase through traditional or e-commerce channels, operators who package elements of a vacation experience may ultimately be more efficient and effective utilizing electronic channels. Palmer (2004) illustrated the complexity (and communications opportunities) within an electronic environment for a tourist destination’s 23
    • Tourism Delivery System Marketing Cluster ‘routes to market’: Figure 10. ‘Routes to market’ for a tourism destination Source: Palmer (2004, p. 131). Ultimately, electronic packaging and channel communications can efficiently and effectively assist to guide the consumer though the purchase cycle by directing them through intermediaries, utilizing trusted brand names and/or established business relationships, therefore reducing potential perceived security risks of a purchase decision through an e-tourism channel. The combined strategies of accessing customers through direct communications and electronic 24
    • Tourism Delivery System Marketing Cluster channels can provide innovative, leading-edge, cost-effective access to appropriately identified target tourism consumer market niches. Destination Management Systems Buhalis & Spada (2000) informed that in an increasingly competitive global marketplace, those destinations and organizations that are able to gain stakeholder participation in developing a cohesive tourism destination strategy through an effective Destination Management System (DMS) will be competitively positioned to enhance ‘their collective competitiveness and longterm sustainability (p. 57). Example of a typical DMS: Figure 11. Structure of a typical destination management system (DMS) Source: BVG Internet (Palmer, 2004, p. 133). Note: TIS = Tourist Information System; CRM = Customer Relationship Management. More succinctly, a comprehensive Destination Management System is the accumulation of realtime information resources for tourists organized from a cluster of tourism industry stakeholder assets within a destination region and presented in a cohesive fashion to provide a comprehensive and coordinated delivery of queried results. Buhalis & Spada (2002, p. 42), who referred to Archdale (1994) suggested that DMSs ‘are often limited in their scope and ambition by their organizational structure or by their technology’. As examples, Ireland, Tyrol, Austria, and Singapore have presented themselves as ‘active IT leaders’ by successfully gaining support 25
    • Tourism Delivery System Marketing Cluster for the development and delivery of their DMSs through collaboration between the public sector and their respective National Tourism Organizations (p. 52). Essentially, a successful DMS framework can enhance tourism consumers’ choice, convenience, and confidence, while ensuring consistency of information and competitive pricing (pp. 54-55). Strong support from the public sector, combined with investment and expertise from the private sector may position a destination to execute a successful DMS. Emerging factors indicative of an idealized DMS include: Figure 12. Successful destination management systems of the future Source: Buhalis & Deimezi (2003, p. 126). Buhalis & Deimezi (2003, p. 288) stated that in order to facilitate the successful development of a DMS, a (regional or national) Tourist Organization must ‘attract the support and commitment required from both the private and public sectors’. An understanding of 26
    • Tourism Delivery System Marketing Cluster emerging trends and benefits through the provision of a DMS, as identified by the benefits of Buhalis & Deimezi’s ‘Successful destination management systems of the future’ (Figure 12) would assist a regional or national Tourist Organization such as the Tourism Association of Vancouver Island or the Canadian Tourism Commission to influence stakeholders to participate in a collaborative engagement process in the development of an effective DMS. Media Relations B. Nelson (personal communication, July, 2010) advised that a significant focus for HP NHS marketing and promotional efforts is directed towards relationship marketing with stakeholder partners. Buhalis (2003, pp. 68-69) informed that relationship marketing initiatives may be further leveraged through the use of information and communication technologies to take advantage of the accessibility and efficiencies available through related media vehicles. Reciprocal relationship marketing may be utilized to leverage the media relations efforts of strategic stakeholder partners. For example, HP NHS may receive and redirect or distribute media releases, stories of interest, and social media communications with Royal Roads University, effectively expanding the target market audience while enhancing the range of communications. In this way, HP NHS and Royal Roads University create their own learning community to build collective media relations capacity (Morrison et al, 2004, p. 203; Pike, 2008, p. 294). “This expansion of the role of media management is consistent with the increased pervasiveness of communications in business, driven …in large part by technological development” (M. Conlin, personal communication, April/July, 2010). Leadership and Clusters In investigating clusters, the role of leadership and how a leader manages the cluster is just as important for the individual business operator, territory and region in which the cluster is 27
    • Tourism Delivery System Marketing Cluster established, in this case Vancouver Island. Leadership cluster theory, much like clusters themselves are based in a socio-economic and cultural context (Jackson & Perry, 2008, p.84). Organizational clusters such as the Vancouver Island “Garden Trail” are dependent upon individuals working together and depending upon one another to accomplish personal and organizational goals. It is important that industry leaders build relationships based on trust within the organization and the staff, but also externally through stakeholder relations, with tourism operators, municipal governments, and regional tourism organizations. Weick (2001, p.381) stated that leaders therefore need a consistent vision and defined set of goals applied within a strategic framework. In order to facilitate a successful cluster implementation it is important to consider the management of the many stakeholders so that each are properly engaged (MacNeil & Steiner, 2010, p.441). This is important as not all stakeholders will contribute equal leadership or value to the overall cause, such as the quintessential role Butchart Gardens has in the overall Garden Trail product. As an example, the leadership group at Butchart Gardens may act as a supporter, or mentor for smaller organizations along the way, just as TAVI may take on leadership role. Hatley Park Marketing Strategy B. Nelson (personal communication, July, 2010), the Director of Visitor Services at Hatley Park National Historic Site advised that the current configuration of the attraction was established in partnership with Parks Canada in 2004. At that time, HP NHS inherited significant maintenance debt at the time of establishment of Hatley Park as a National Historic Site. During this transition, the management team shifted the visitor orientation from a primary focus as a historic site towards becoming a multi-faceted tourism destination. In addition to the financial burden imposed at the initiation of Hatley Park as a National Historic Site, Nelson 28
    • Tourism Delivery System Marketing Cluster advised that Hatley Park continues to face challenges and opportunities posed by being positioned within a university environment. Furthermore, other significant stakeholder partnership relationships introduce complexity to the development of a destination management strategy; including partnerships with local, regional, provincial and federal government agencies, such as Parks Canada, for example. In addition, HP NHS, like most organizations has been affected by the global economic downturn over the last two years. As a result of resource constraints, partnership mandates and/or influences, Nelson informed that a decision was made to limit marketing and promotional activities and maintain annual visitor numbers to approximately 10,000 – 12,000. In 2007 academic programming was introduced into HP NHS as a compliment to existing tourism and historical programming. Nelson (2010) stated that the introduction of the academic programming component provides benefit and diversity to the Hatley Park programming portfolio. Despite the great potential for tourism development at HP NHS, there is currently no formal marketing plan or program in place due to infrastructure constraints, including a lack of available parking or washroom facilities necessary to support tourism growth at the site, such as bus tours from cruise ship traffic. These physical and fiscal constraints influence the organizational mandate and decision to limit growth and expansion until appropriate resources are available. However; the future is bright for HP NHS, as plans remain intact to develop the Robert Bateman Art and Environmental Centre at Royal Roads University, effectively enhancing the academic programming component of HP NHS. The diversity and uniqueness of HP NHS positions the destination to showcase the myriad attributes available at the site, including; First Nations community and culture, the historical castle development by the Dunsmuir’s, the influence of the Royal Canadian Navy and 29
    • Tourism Delivery System Marketing Cluster the site as Royal Roads Military Academy, and more recently, the establishment of Royal Roads University. So, while HP NHS may be in a holding pattern regarding the current state of its marketing programming, Nelson (2010) informs that the management team remains highly engaged in relationship marketing to fortify significant stakeholder partnerships along the tourism delivery system value chain in anticipation of a brighter future (Buhalis, 2003, pp. 6869). Some of these significant partners include: Royal Roads University, Tourism Victoria, Tourism Association of Vancouver Island, BC Ministry of Tourism, Culture and the Arts, the Canadian Tourism Commission, and Parks Canada. Recommendations for HP NHS: In consideration of Nelson’s depiction of the state of available resources and local factor conditions, we make the following recommendations: - Due to limited physical infrastructure and fiscal resources, HP NHS is advised to stay the course in maintaining current visitor numbers in order to sustain the quality of the current visitor experience and minimize negative social, cultural, and environmental impacts on the site. - HP NHS is advised to continue to focus efforts on relationship marketing with significant stakeholder partners. This strategy will assist to keep HP NHS top of mind with stakeholders, while facilitating increased awareness and knowledge transfer to support development of a “learning community” of stakeholders. Ultimately, stakeholders may become more involved in strategic problem solving, such as sourcing new or innovative resources to support HP NHS. - Even though HP NHS may not be ready to expand visitor numbers, it remains important 30
    • Tourism Delivery System Marketing Cluster to develop and maintain a marketing strategy plan designed to clearly identify key target market niche’s while remaining vigilant of emerging macro-environmental trends and evolving visitor preferences. - The development of a corporate marketing plan should be applied in consideration of a planning framework which incorporates stakeholder integration and cluster theories. Furthermore, this should include consideration of the tourism delivery system along the value chain. - Despite some of the challenges inherent in maintaining stakeholder partnerships with organizations like Royal Roads University and Parks Canada, these partners may also be potential sources for additional support and resources. For example, many of the students in graduate studies programs can offer their assistance for HP NHS in order to meet their course requirements. MBA and MA Tourism Management students may be available to assist with strategic marketing initiatives, especially in the case of emerging electronic marketing strategies and web site development. - Internet and communication technologies continue to increase their influence on tourism industry operators and destinations. HP NHS should analyze market research resources from stakeholder partners such as Tourism Victoria, the Tourism Association of Vancouver Island, the BC Ministry of Tourism, Culture and the Arts, and the Canadian Tourism Commission. Research analysts from these organizations are available to assist in sourcing relevant market research data and providing interpretive advice. - Analysis of competitive destinations may identify best-practices and highlight opportunities to showcase unique characteristics of destinations enabling a destination to develop a more effective target market strategy (Ritchie & Crouch, 2003, p. 27). 31
    • Tourism Delivery System Marketing Cluster Limitations and Considerations Opportunities exist for further research into the area of study considering the development of a structured marketing strategy integral to the tourism delivery system. In the case of the production of this paper, time limitations effectively constrained the authors’ ability to provide a more detailed analysis of the strategic stakeholder partnerships inherent or available along the value chain. More specifically, detailed information related to the U.K. end of the tourism delivery system was sparse at best. HP NHS may find more detailed target market niche information available through stakeholder partners, including: Tourism Victoria, the Tourism Association of Vancouver Island, BC Ministry of Tourism, Culture and the Arts, and the Canadian Tourism Commission. Conclusion In light of a highly competitive and rapidly changing tourism environment, sustainability for small and medium tourism operators such as Hatley Park National Historic Site may enhance their market position through the harnessed power of a clustered tourism delivery system. As tourism stakeholders (private and public, competitive and non-competitive), sharing resources, knowledge, and a common vision, the greater group may effectively become a more competitive collective entity better able to rapidly respond to emerging trends and markets. Planners may be able to execute a more effective marketing plan if built upon a collaborative cluster framework focused on well-defined target market niche consumers. As evidenced in this report, collaboration does not come without challenges; however, the resulting gains through interorganizational collaboration and a strong tourism delivery system are transforming traditional strategies. 32
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