Tourism and Distribution - New Paradigm: ATEC, Sydney, 2007


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  • Because there is still one trusted medium left in the world … and that medium … is ME
  • In communication terms, this trust in fellow humans leads us to word of mouth, which is still the major form of communication. For half a century we have recognised WOM as an important marketing vehicle, yet have never really needed to focus on it as traditional advertising means tended to work.
  • Now you don’t want to go off and finance to than take the money you saved and say thank you. The whole point of the exercise is re-allocation to where things make more money for the brand.
  • Now you don’t want to go off and finance to than take the money you saved and say thank you. The whole point of the exercise is re-allocation to where things make more money for the brand.
  • Tourism and Distribution - New Paradigm: ATEC, Sydney, 2007

    1. 1. Anna Pollock, DestiCorp Keynote Presentation, Sydney, October 17 th , 2007
    2. 2. What do these men have in common?
    3. 3. An Age of Uncertainty ‘ Italy relies on external resources and the life of the Roman people is tossed daily on the uncertainties of sea and storm’ TACITUS
    4. 4. Predicting the Future “ There are many methods for predicting the future. For example, you can read horoscopes, tea leaves, tarot cards, or crystal balls. Collectively, these methods are known as “nutty methods”. Or you can put well-researched facts into sophisticated computer models, morecommonly referred to as “a complete waste of time”.
    5. 5. The Challenges of Forecasting
    6. 6. Today’s Focus <ul><li>The difference between: </li></ul><ul><ul><li>Trends </li></ul></ul><ul><ul><li>Drivers </li></ul></ul><ul><ul><li>Paradigms </li></ul></ul><ul><li>Key Tourism trends, drivers and paradigms </li></ul><ul><li>Recommended responses for Australia Tourism </li></ul>
    7. 7. The Earth at Night
    8. 8. Internet Connections
    9. 9. Flight Connections
    10. 10. Economic Growth a function of Communication Economic Growth a function of Connectivity & Travel
    11. 11. It’s Not Size but Connections That Matter!
    12. 12. CONNECTIVITY INFORMATION and COMPLEXITY 1.5 billion Mobile phones 1.2 billion web users 108 million web sites 100 million blogs 6 billion people 9 billion people More Connectivity = More Complexity
    13. 14. More Complexity = More Uncertainty
    15. 16. TRENDS DRIVERS PARADIGMS Or, Looked at Another Way
    16. 17. TRENDS DRIVERS PARADIGMS Most damage comes from from what you can’t see coming at you on the surface
    17. 18. Distinguishing Trends, Drivers and Paradigms
    18. 19. Distinguishing Trends, Drivers and Paradigms
    19. 20. Even the “Big Guys” can get It Wrong – for a while
    20. 21. Trends!
    21. 22. “ It was the Best of Times and the Worst of Times” Charles Dickens, A Tale of Two Cities
    22. 23. 1947-2007: Sixty years of MORE
    23. 24. More GDP US Data
    24. 25. More Tourists
    25. 26. More Product, More Choice, More Competition <ul><li>TNS Media Intelligence has 2 million brands in its database, growing at over 10% per year </li></ul><ul><li>Personal branding and self-employment potentially put that number in the billions </li></ul><ul><li>Add in the impact of eBay and Craigslist </li></ul><ul><li>Add in Virtual Worlds – Second Life </li></ul><ul><li>What do you get? Saturation and Numbness! </li></ul>
    26. 27. More Access
    27. 28. More Media, More Traditional Channels * Before digital radio and podcasting, Not counting blogs, face book and myspace pages 1960 2003 * Radio Stations 4400 13,500 Magazine Titles 8,400 17,300 Channels per home 5.7 82.4
    28. 29. New Channels
    29. 30. 200,000,000 blogs 1.5 million residents >100,000,000 videos (65,000/day) 21 Nov 2006 14,463,346 auctions Almost 4,000,000 articles (10 languages) 33,347,000 profiles 60 million members More New Channels
    30. 31. Having to Be Everywhere
    31. 32. 1947-2007: Sixty years of LESS
    32. 34. Less Comfort
    33. 36. Less Peace
    34. 37. Less Peace, Less ease 50% of UK buyers find holiday bookings stressful!
    35. 38. Everyone has Less Time
    36. 39. More Importantly, We have less Trust 76% of consumers don’t trust brands (Yankelovich) 80% of US shoppers place more trust in brands that offer ratings and reviews than those that don’t 75% of shoppers stated that it was extremely or very important to read customer reviews. Peer reviews are preferred over expert reviews by a 6 to 1 margin. Source: FutureLab
    37. 40. Less Attention <ul><li>In 1965, 80% of 18-49 year-olds in the US could be reached with three 60-second TV spots. In 2002, it required 117 prime-time commercials to do the same.” (Jim Stengel, Global Marketing Officer, P&G) </li></ul><ul><li>Big Six study (US): People with PVR’s watch 12% more TV, yet 90% of them adskip (Germany : 88.2%) </li></ul><ul><li>78.2% of Germans are irritated by advertising, only 24% actually still watches it ( GfK Marktforschung) </li></ul><ul><li>54% of US consumers avoids products & services which “overwhelm” with advertising (Yankelovich Partners) </li></ul><ul><li>85% of Chinese stop watching TV during commercial breaks. More than half change the channel, while the rest do housework, eat, chat or use the bathroom. (McKinsey & Co.) </li></ul>Source: FutureLab
    38. 41. Blind Faith Collectivism Command Reasoned Faith Elective Collectivism Contract People are saying: “I can no longer rely on a single source of information. The omniscient, all-powerfull source – whether a news anchor, doctor, CEO or government official – is gone. Edelman Trust Barometer, 2006 While institutional trust is eroding Source: FutureLab
    40. 43. A person like yourself or a peer Edelman Trust Barometer 2006 When forming an opinion of a company, how credible would the information be from … People Trust People Source: FutureLab % Academic 62 Doctor or similar 62 Person like yourself/peer 61 Financial Analyst 58 NGO Rep 58 Accountant 53 Lawyer 36 Regular employee 33 CEO 29 Union 19 Entertainer 17 PR person 16 Blogger 15
    41. 44. This is not a “new hype” just an ignored reality Source: FutureLab 1955 Word-of-Mouth (WOM) is 7x more effective than newspaper advertising, 5x stronger than a personal sales pitch and 2x as effective as radio advertising 1967 36% of surveyed consumers reported learning of an innovation through word-of-mouth, while 48% reported being influenced by WOM when making a purchase decision 2001 Diffusion studies found that WOM is 10x more effective than media advertising 2006 61% trust other people like themselves (as media) - Edelman Trust Barometer, 2006
    42. 45. Good Experience I tell 4 people Anonymous Case: UK Consumer Electronics Bad Experience I tell 18 people Average Sale £ 230 WOM - It Works! Source: FutureLab Top 3 Purchase Influencers % In-store Sales Associate 49 In-store demonstration 36 Word-of-mouth from family & friends 33 Newspaper Coupons 25 Internet 21 Product/Company Information 16 Retailer information 14 Other 14 Magazines 4 TV 4 Radio 3
    43. 46. WOM Works! Source: Yahoo!
    44. 47. Based on: Edelman Trust Barometer, 2006 – attributes for building trust The key drivers for trust & closeness are “quality & service” Source: FutureLab UK FRA DEU ITA ESP Quality of products & services 2 1 1 1 1 Attentiveness to customer needs 1 1 2 2 2 Fair pricing for products & services 3 4 7 3 3 Good employee and labour relations 5 3 3 4 4 Strong financial performance 6 7 9 5 6 Socially responsible activities 7 5 5 5 6 Well-known corporate brand 4 6 8 7 5 Dialogue with all stakeholders 8 8 6 8 9 A visible CEO 9 8 4 9 8 Employee or CEO blogs 10 10 10 10 10
    45. 48. Drivers
    46. 49. 1. Open Source Technology Interoperability – software that talked Mix ‘n Match software From “web services” to widgets DestiCorp Paper – “Why web services will turn the industry on its head and why that’s a good thing!” 2002 Everyone can become an Intermediary
    47. 50. Boom Bust Echo 2. Generational Influences
    48. 51. Generational Influencers <ul><li>Boom – the Baby Boomers </li></ul><ul><ul><li>Born 1945 – 1963 </li></ul></ul><ul><ul><li>Born into an analogue world; adjusting to a digital world </li></ul></ul><ul><li>Bust – Generation X </li></ul><ul><ul><li>Born 1963 – 1975 </li></ul></ul><ul><ul><li>Grew up with TV, mass media. PC’s </li></ul></ul><ul><ul><li>The new “sandwich” generation </li></ul></ul><ul><li>Echo – Generation Y, Net Gen </li></ul><ul><ul><li>Grew up with computers; Net arrived in their teens </li></ul></ul><ul><ul><li>Mobile phone an essential </li></ul></ul><ul><ul><li>Think & Act completely differently to parents </li></ul></ul>
    49. 52. Know them Not as “Y” but “C” generation <ul><li>Connected </li></ul><ul><li>Creative </li></ul><ul><li>Customise </li></ul><ul><li>Community </li></ul><ul><li>Collaborative </li></ul><ul><li>Concerned </li></ul><ul><li>Content </li></ul>
    50. 53. Tribal and Communities
    51. 54. The Connected Individual Sits at the Centre of their Universe and Pulls!
    52. 56. Semi-amateurs start to “play for real” NEWS MEDIA BBC Newlsline Ticker 19,550 /million CNN 18,600 New York Times 8,740 Drudge Report 4,210 Washington Post 3,755 Reuters Online 3,680 Guardian Unlimited 2,985 Al Jazeera 2,925 Wall Street Journal 1,995 Le Monde 990 The Huffington Post 959 The Economist 740 Daily Kos (State of theNation) 722 Crooks&Liars (John Amato) 525 Xu Jing Lei 56,750/million 1,000-4,000 comments per article Blogs vs. Mainstream News Media : Early days, yet traffic is growing Every Citizen is a Reporter
    53. 57. 3. Power Shift We’ve talked about this for years Not done much to truly treat customer as king Technology now enables a change in approach
    54. 58. 2. Power Shift Intermediary Host Guest
    55. 59. 2. Power Shift Reviews Ratings Videos Blogs Syndication Blogs
    56. 60. Travel an Early Adopter of Social media
    57. 61. 3. Traditional Marketing is Dead <ul><li>Mass Marketing is dead - long live the customer </li></ul><ul><li>CRM is dead – long live customer-managed relationship building </li></ul><ul><li>Where is Value Created and By Whom? </li></ul><ul><li>PUSH is giving way to PULL </li></ul><ul><li>SELLING is being replaced with SUPPORTING </li></ul><ul><li>DOING will be secondary to ENABLING </li></ul><ul><li>Build the ECOSYTEM, creation the CONDITIONS for Emergence to happen… </li></ul><ul><li>SEGMENTS shrinking to segments of one </li></ul>
    58. 62. 4. Changing Demand Drivers & The Role of Brands
    59. 63. 5. Other Key Drivers to Worry About <ul><li>Environment </li></ul><ul><li>Energy </li></ul><ul><li>Water </li></ul><ul><li>Security </li></ul><ul><li>Consumer Values </li></ul><ul><li>Government responses </li></ul>
    60. 64. Paradigm
    61. 65. Old New
    62. 66. Old New
    63. 67. Recomm end ations
    64. 68. <ul><li>Destroy and rebuild your marketing model </li></ul><ul><ul><li>Think like a colonizing organism not a machine </li></ul></ul><ul><ul><li>Break down boundaries, engage all aspects of Australia </li></ul></ul><ul><ul><li>Enable More, DO less! </li></ul></ul><ul><ul><li>Put Customers as the Sun in your universe </li></ul></ul>
    65. 69. BEFORE DURING AFTER Virtual Virtual Real 2. Show Your CARE. Full Circle Marketing FANTASY EXPERIENCE MEMORY RETURN RECOMMEND
    66. 70. Full Circle Marketing, Dancing with the Customer!
    67. 71. <ul><li>3. Learn to Let GO! </li></ul><ul><ul><li>Turn your business over to your customers </li></ul></ul><ul><ul><li>Engage residents – personal and business </li></ul></ul><ul><ul><li>Create the conditions for creativity to emerge </li></ul></ul>
    68. 72. <ul><li>3. Invest in Your People & Infrastructure! </li></ul><ul><ul><li>How aware, alert, adaptable and nimble are your suppliers? </li></ul></ul><ul><ul><li>Do they understand the changes occurring </li></ul></ul><ul><ul><li>Do they know their roles (ants…) </li></ul></ul><ul><ul><li>Can they WOO, WOW and WOM? </li></ul></ul>