Download Bottlenecks in place marketing and their effects on attracting target

Bottlenecks in place marketing and their effects on attracting target groups
Jasper Eshuis, Erik Braun, Erik-Hans Klijn
Paper for the Annual EGPA Conference, 7-10 September 2011, Bucharest, Romania
Jasper Eshuis is senior researcher at the Department of Public Administration, Erasmus
University Rotterdam, The Netherlands
Contact: [email protected]
Erik Braun is senior researcher at the Erasmus School of Economics, Erasmus University
Rotterdam
Erik-Hans Klijn is Professor of Public Administration at Department of Public
Administration, Erasmus University Rotterdam
Abstract
Place marketing is increasingly used as a governance strategy for managing perceptions about
regions, cities and towns. Both public and private parties engage in place marketing activities
to create positive images, and attract residents, investors and tourists. However, only little
empirical research has been done on the working and the results of place marketing. This
paper contributes to filling that knowledge gap on the basis of a survey among 200
professionals and politicians involved in place marketing in the Netherlands. The paper
examines the bottlenecks in place marketing. Also we research the effects of the bottlenecks
on outcomes of place marketing in terms of attracting target groups.
A factor analysis of a variety of bottlenecks investigated in the survey shows three clearly
demarcated bottlenecks: administrative bottlenecks within the municipalities, bottlenecks in
developing the substance of marketing campaigns, and political bottlenecks. The survey also
shows that the bottlenecks in the developing the substance of the marketing campaigns have
significant effects on the effects of place marketing in terms of attracting stakeholders while
the two other bottlenecks have no significant influence.
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1. Introduction
Place marketing has become part of the array of strategies used in the public sector to increase
the competiveness of places and attract target groups such as tourists, new residents and
investors (see e.g. Bennett and Savani 2003; Braun 2008; Hospers 2006). Place marketing
may include promotion and creating a positive image, but also product development in the
sense of developing the city in a way that responds to the demands of target groups (see e.g.
Kotler and Gertner 2002; Greenberg 2008; Kavaratzis 2004). Municipalities in smaller cities,
such as Hasselt in Belgium or Dundee in Scotland, have followed the lead of major cities,
such as London (‘We are Londoners’), Pittsburgh (‘P!ttsburgh: imagine what you do here’)
and Seoul (‘Soul of Asia’). In the Netherlands for example, 75% of the cities mention
elements of citymarketing in their coalition agreements for 2010-2014 (NIPO, see
www.placemarketing.nl).
Notwithstanding the upsurge of place marketing, it is not always easy to book results with
citymarketing. Place marketers face multiple difficulties and bottlenecks when trying to apply
marketing strategies in a public sector context. The development and implementation of place
marketing is often complex due to characteristics of governance processes and public
organizations, but also due to the complex nature of marketing itself. Governance processes
are characterized by multiple actors with varying or even conflicting perceptions (Koppenjan
and Klijn 2004; Teisman et al. 2009; Gerrits 2008). Thus actors may have different
perceptions about what marketing campaign to develop. They may disagree about the
marketing instruments, or about the brand that best captures the aspired identity of the city.
Another difficulty in place marketing is that a place is a complex object or ‘product’, which
may be difficult to market. Although the literature mentions several difficulties that actors
encounter in place marketing, no comprehensive research has been done on the bottlenecks
that public managers encounter in place marketing.
In this article we aim to address this knowledge gap. The goal of this article is to empirically
determine the most important bottlenecks in place marketing according to city marketeers,
and what are their effects on the outcome of place marketing in terms of attracting target
groups.
We address two main research questions:
1. What are the main bottlenecks in place marketing?
2. What is the relationship between bottlenecks and outcomes of place marketing in
terms of attracting target groups?
This article is structured as follows. In the next section we lay a theoretical basis by defining
what city marketing is. We then discuss the literature on risks, limits and bottlenecks of place
marketing. In third section we discuss the research design and methodology. Subsequently we
present the empirical findings. The last section includes the discussion and conclusions.
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2. Place marketing, what is it?
Place marketing involves the application of marketing instruments to geographical locations,
such as nations, cities, regions and communities. The city marketing literature mentions a
multiplicity of activities, instruments, and strategies under the heading of the ‘marketing mix’
that can be applied to places. Thereby most scholars take that marketing is broader than
promotion only (see e.g. Braun 2008; Hospers 2006; Eshuis and Edelenbos 2009). Kotler et al
(1999b) include activities aimed to improve design and service delivery, as well as developing
attractions. Ashworth and Voogd (1990) develop a geographical marketing mix that includes
not only promotional measures, but also spatial-functional measures, organizational measures
and financial measures which are meant to improve the city itself and its management. The
emphasis on multiple activities and strategies in place marketing reflects the idea that merely
promotion, without changing elements of the product and the management, is not very useful
if one wants to attract actors to the city and increase competitiveness.
Place marketing; more than communicating favorable images
Place marketing is thus more than only developing favorable images and communicating
those to the different target groups; it is not only about ‘selling’ an image. Kotler emphases
time and again that marketing is about fulfilling consumer needs (cf. Kotler et al., 1999).
Place marketing is about developing a place that fits the needs and wants of citizens, visitors
and investors. The image has to be accompanied by a product that matches the image.
Marketing is about responsiveness more than persuasion, although persuasion is an important
part of city marketing. The idea behind the broader marketing approach is that marketing is
much more effective if it is targeted at what stakeholders want. Here, marketing is not only
about sending messages but also about receiving messages. Marketing then becomes a matter
of developing the city that people want. This is the logic behind introducing elements of
policy making, urban planning and place-development (product development in marketing
terms).
In line with this view Van den Berg and Braun (1999: 993) state that “urban place marketing
can be seen as a managerial principle in which thinking in terms of customers and the market
is central as well as a toolbox with applicable insights and techniques”. Here place marketing
is more of a way of thinking and doing that emphasizes a consumer orientation, or to put it
slightly differently, a demand driven orientation. In this paper we follow this line, and we use
Braun’s definition of citymarketing to arrive at a definition of place marketing. Place
marketing is “the coordinated use of marketing tools supported by a shared customer-oriented
philosophy, for creating, communicating, delivering, and exchanging urban offerings that
have value for the city’s customers and the city’s community at large” (Braun 2008: 43).
Taking this definition into account, place development is a crucial element of marketing.
However, in a public sector context it is very much the question whether municipal
departments will allow marketers to influence the policies for city development.
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Exploring bottlenecks in place marketing
The literature on place marketing and city marketing mentions a long list of obstacles and
bottlenecks for doing place marketing and achieving good outcomes of it. But we can also
find contributions in the governance literature that gives us insights in obstacle for place
branding. In this section we briefly discus the most mentioned obstacles for place branding.
The first thing that is stressed by both literature on governance and literature on place
branding is that place marketing takes place in a governance context involving multiple public
and private parties, for example municipalities, tourist bureaus, housing associations, the main
companies in a city, stakeholders from the facility industry, and citizens. For example, when a
city is marketed to attract tourists, the tourist board, hotels, museums, and the municipality are
commonly involved. Characteristic for governance processes is that actors may have different
or even conflicting preferences (Klijn and Koppenjan 2004, Pierre 2000). Different actors
may have different perceptions about aims, strategies and target groups of place marketing
campaigns. Here we see not only differences between public and private actors, but also
various public actors often have different interests and they prefer different solutions. For
example the department of housing may prefer a campaign which positions the city as a nice
and peaceful residence, while the economic department may want to stress investment
opportunities for industries.
Braun (2008) brings forward that city marketing is part the governance of a city. This
connects place branding also to the political process in the city. His work shows that lack of
clarity about political responsibility may form a bottleneck in citymarketing. Due to a lack of
political leadership multiple departments in the administration may claim a role in
citymarketing, and the tasks and responsibilities may become very fragmented. This is
especially the case if the position of citymarketing in relation to other policy areas is unclear.
Summarizing, an unclear positioning of responsibilities and fragmentation of citymarketing
activities may hinder swift and coherent implementation of citymarketing, and form a
bottleneck in place marketing.
Braun (2008) further argues that a lack of political priority for citymarketing may hinder the
proper embedding of citymarketing in wider urban governance. A lack of political priority
may also lead to a lack of financial resources for place marketing.
Other scholars have emphasized the difficulties of place branding in relation to the particular
nature of places and the ‘users’ of places. As Ward and Gold (1994: 9) argue “it is not readily
apparent what the product actually is, nor how the consumption of place occurs. Though
marketing practices make places into commodities, they are in reality complex packages of
goods, services and experiences that are consumed in many different ways”. For example a
city may be seen as a tourist destination, but at the same time it is the residence of many
people or for example only the location that they need to travel through when going
elsewhere. In short, one of the challenges in place marketing is that a place is a complex
‘product’ with multiple identities (Karavatzis and Ashworth 2005). The identities of a city
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may involve for example the cities’ history and its historic centre, but also its ICT and gaming
industry. Thus the city may have different identities for different target groups, for example
tourists may value the historic centre while private companies may value the gaming industry.
The multiple identities that a city has at the same time, complicates the development of the
content of a marketing campaign.
Local governments and other stakeholders may use brands to appeal to different groups and
evoke different associations with them, but this is not easy. A brand that is suitable for one
group (e.g. tourists) may not suit other groups (e.g. residents) (Bennett and Savani, 2003). In a
commercial setting marketers can choose target groups and neglect other groups, but in a
public context it may be inappropriate or impossible to neglect groups of residents, voters or
businesses. It often proves difficult to create a brand that fits the preferences of all groups that
have an interest. Stigel and Frimann (2006) encounter this limitation of branding in their study
of the branding of two Danish towns. They conclude that the wish or need to arrive at
consensus about brand identities easily leads to brands with only very general and nondescript
values. This inhibits the effectiveness of the brand in terms of creating a distinguishable
identity and making the place stand out among its competitors.
So in the literature many bottlenecks regarding place marketing are discussed. However all
the literature cited above is based upon case study research, so it remains unclear what are the
most significant bottlenecks, and how are different bottlenecks interrelated. In this paper we
address this issue through quantitative survey research. We have translated the bottlenecks
that are mentioned in the literature into survey items. We elaborate these in the next section
which deals with the research design
3. Research design: methodology and methods
This research is based on data that we collected for the first National City marketing Monitor
in The Netherlands 2010 (see also Braun et al, 2010, Klijn et al. forthcoming). This was a
web-based survey sent to professionals and city administrators involved in the marketing of
cities, towns and villages. To acquire a reliable set of respondents who are actually involved
in Dutch city marketing we worked closely together with three organizations who provided us
with e-mail addresses of (potential) respondents:
Organization of the survey
- The main Dutch network for city marketing in the Netherlands (Netwerk City marketing
Nederland). This is a non-profit association of professionals working in city marketing. Many
consultants on this field are member of this organization as are city marketers employed by
municipalities. Also the network regularly organizes seminars and conferences on city
marketing. We received the e-mail addresses from people who had participated in these
events. This provides us with a large set of respondents;
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- The Dutch organization for local and regional tourist offices (VVV Nederland). This is the
peak organization of the tourist bureaus in the municipalities. They provided us with
respondents within the local tourist bureaus who were involved in city marketing
- The Dutch association for local governments (Vereniging Nederlandse Gemeenten VNG).
This is a peak organization of municipalities in The Netherlands. They provided additional
addresses of municipalities and contact persons. This facilitated our further research into
people involved in city marketing.
By drawing on three different lists of respondents, and complementing this with some
additional search for respondents in municipalities by ourselves (using our own network of
people working in city marketing), we obtained a reasonable complete data set of 600 people
involved in city marketing in the Netherlands. To be sure, it is hard to assess whether our list
is complete because there is a lack of official registration of people working in city marketing.
However given our extensive search for respondents we are reasonably confident that we
included at least a very large share of this group.
During the first round of the survey we have sent the survey to the 600 respondents that were
on our compiled list. We reached 541 respondents who are actually a member of the target
population. 274 respondents filled out (part of) the survey so the response was 51%. The high
level of response can be contributed at least partly to the involvement of our partners in the
project we just mentioned and supported our survey.
We must acknowledge the fact though that the response to a few of the questions which some
respondents found difficult to answer, was significantly lower (for instance the questions on
the effects of city marketing).
Respondents of the survey
Out of the 274 respondents 171 worked for a municipality, 68 worked for a tourist office and
35 for an organization 'at arm's length', which was mostly a foundation involved in city
marketing (often the tourist bureau participates in that organization). The respondents have a
variety of functions, differing from communication advisors till neighbourhood managers,
policy advisors and city alderman. Over 53% of the respondents had more than 2 years of
experience with city marketing. The larger cities are overrepresented in the survey. The
number of municipalities in The Netherlands with less than 50.000 inhabitants is almost 60%
but the number of respondents from this group is only 37%.The largest cities in the
Netherlands (over 250.000 inhabitants) only are 1,5% of all municipalities while almost 13%
of our respondents comes from this group. This however may not come as a surprise since
large municipalities tend to employ more people, also in city marketing, than small
municipalities. Although our sample may not be representative of all the municipalities we are
confident that it is representative of the people involved in city marketing thanks to our broad
coverage of professionals (through the Network of City marketing, the Dutch Tourism
Bureaus and the Dutch Association of Local Governments) and the good response (51%).
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Measuring bottlenecks in place marketing
On the basis of literature on Public Administration as well as citymarketing we developed a
list of eleven potential bottlenecks in place marketing:
1. The budget for city marketing is too low
2. It is difficult to reach consensus with the municipality about content and strategy of
city marketing
3. There insufficient expertise within the municipality
4. policy departments view city marketing as a threat, they do not want influence of city
marketing on their policy
5. various departments of the municipality don't take city marketing much in
consideration in their communication
6. city marketing has insufficient impact on product development
7. There is not enough political support
8. City marketing does not really strike a chord with the citizen
9. The campaign does not fit the identity of the municipality
10. The campaign does not provide the municipality a clear profile
11. The intended target groups are not reached sufficiently
The perceptions of the bottlenecks were measured through Likert scales (completely agree,
agree, neither agree nor disagree, to disagree and completely disagree).
Measuring the attraction of target groups (dependent variable)
We measured dependent variable of attracting target groups through three questions in the
survey:
1. City marketing has contributed positively to attracting visitors;
2. City marketing has contributed positively to attracting new residents;
3. City marketing has contributed positively to attracting companies/firms.
Every question was measured through a Likert scale ranging from completely agree to
completely disagree. We created our dependent variable ‘attracting target groups’ by
summing the three items. The Cronbach alpha of the newly created variable was 0.787.
Factoranalysis
We performed a factor analysis in order to find the latent variables behind the eleven
bottlenecks that we distinguished. To be more specific, we applied Principal Component
Analysis with a Varimax Rotation.
We saved the factorscores of the 3 factors that we found and used them in a regression
analysis in order to research which factor actually influenced the results of place marketing
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Regression analysis
We employed a multivariate regression analysis (Anova) with the dependent variable ‘results
of place marketing in terms of attracting groups’.
P.M. explanation and warrants regarding our regression analysis
4. Some main bottlenecks in place marketing
In order to analyse the bottlenecks in place marketing we first explored what the most
important bottlenecks are according to respondents. Table 1 presents the bottlenecks in order:
the higher a bottleneck is positioned in the table, the stronger respondents perceive that this is
indeed a bottleneck in their municipality. A score of 4 indicates that respondents on average
agree with the proposition that this is a bottleneck, a score of 3 indicates that they do not agree
nor disagree. If the score is 2 respondents disagree.
Table 1. Bottlenecks in order of perceived importance
Std.
N
- The budget for citymarketing is too low
Mean
Deviation
190
3,69
,987
189
3,44
,846
- There insufficient expertise within the municipality
191
3,41
,963
- Policy departments view city marketing as a threat, they do not want influence of
189
3,40
,849
187
3,38
,836
- City marketing has insufficient impact on product development
191
3,21
,950
- There is not enough political support
185
2,85
,824
- City marketing does not really strike a chord with the citizen
190
2,78
,915
- The campaign does not fit the identity of the municipality
189
2,72
,916
- The campaign does not provide the municipality a clear profile
188
2,46
,933
- The intended target groups are not reached sufficiently
188
2,24
,847
- It is difficult to reach consensus with the municipality about content and strategy of
city marketing
city marketing on their policy,
- Various departments of the municipality don't take city marketing much in
consideration in their communication
Table 1 shows that according to respondents the most important bottleneck is that the budget
for citymarketing is too low. On the one hand this may come as no surprise, because our
respondents are involved in citymarketing and they may be inclined to want more money for
their own activities. On the other hand this answer should not be discarded to easily, because
8
it also indicate that respondents bring forward that the budget is limiting at the moment; they
could do better work with a higher budget. Another point is the high scores of a number of
bottlenecks that are related to coordination of policies within the municipal organization, for
example reaching consensus about city marketing, and the idea that policy departments view
citymarketing as a threat. The bottleneck of insufficient impact on product development
points to a similar issue in the sense that it appears difficult to make citymarketing get through
in product development (spatial plans, services, development of rules and regulations, et
cetera). Also striking is that respondent do not consider political support as a big bottleneck.
Apparently they consider the support by the municipal executives big enough not be a
bottleneck. Two other bottlenecks that are related to the content of place marketing campaigns
are not considered very important bottlenecks in comparison with the other bottlenecks.
The list of bottlenecks shows that the coordination of citymarketing activities within the
municipality, and the embedding of citymarketing in place development, is considered a
larger problem than the development of content of citymarketing policies.
So far we have discussed quite a number of perceived bottlenecks. To further our analysis we
will analyze the underlying structure of the bottlenecks in place marketing. Employing a
factor analysis we will show what dimensions or latent variables underlie the bottlenecks in
place marketing. The Principal Component Analysis we applied extracted three main factors
with an Eigenvalue higher than 1. These factors explain 60.7 % of the variance (see table 2).
Table 2. Results of factor analysis: variance explained
Total Variance Explained
Compon
Initial Eigenvalues
ent
Total
dimension0
Extraction Sums of Squared Loadings
% of
Cumulative
Variance
%
Rotation Sums of Squared Loadings
% of
Total
Variance
Cumulative %
Total
% of Variance
Cumulative %
1
3,921
35,647
35,647
3,921
35,647
35,647
2,624
23,858
23,858
2
1,700
15,453
51,100
1,700
15,453
51,100
2,378
21,619
45,477
3
1,054
9,578
60,678
1,054
9,578
60,678
1,672
15,201
60,678
4
,963
8,757
69,435
5
,709
6,447
75,882
6
,614
5,582
81,464
7
,522
4,744
86,208
8
,497
4,522
90,730
9
,413
3,757
94,487
10
,362
3,294
97,781
11
,244
2,219
100,000
Extraction Method: Principal Component Analysis.
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As Table 3 shows the first factor mainly loads on bottlenecks within the administration,
within the administrative organization. This factor relates to governance problems (municipal
departments do not take city marketing much in consideration, insufficient experience within
municipality etc). The second factor loads on bottlenecks that are connected to the marketing
campaign itself. It includes bottlenecks that have to do with the content of the campaign and
reaching target groups. This factor is indicative of a latent variable we may call ‘classical
marketing problems’. The third factor show high loadings on problems that have to do with
politics, for example a lack of political support, a lack of budget and not striking a chord with
citizens (voters). This factor indicates political bottlenecks.
Table 3. Factor scores of Principal Component Analysis (Rotated Component Matrix,
Rotation converged in 4 iterations)
Component
1
2
3
,226
-,265
,665
,659
,228
,299
- There insufficient expertise within the municipality
,623
,123
,194
- Policy departments view city marketing as a threat, they do not want influence
,740
,036
,000
,799
,114
,061
- city marketing has insufficient impact on product development
,567
,193
,374
- There is not enough political support
,351
,173
,649
-,052
,384
,703
- the campaign does not fit the identity of the municipality
,129
,871
-,013
- the campaign does not provide the municipality a clear profile
,110
,877
,082
- the intended target groups are not reached sufficiently
,298
,696
,191
- The budget for citymarketing is too low
- It is difficult to reach consensus with the municipality about content and
strategy of city marketing
of city marketing on their policy,
- various departments of the municipality don't take city marketing much in
consideration in their communication
- city marketing does not really strike a chord with the citizen
Note: Rotation Method: Varimax with Kaiser Normalization
So far we have explored and described what respondents consider the most important
bottlenecks in place marketing, and how the different bottlenecks can be structured in terms of
three main underlying dimensions (administrative, political, and classical marketing
bottlenecks). The question we will answer next, is to what extent bottlenecks in place
marketing actually influence the outcomes of place marketing. To analyse how particular
bottlenecks influence the attraction of target groups to the city we performed a regression
analysis with the factorscores of the Principal Component Analysis. We can thus research the
influence of ‘administrative bottlenecks’, ‘classical marketing bottlenecks’, and ‘political
bottlenecks’.
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We will test 3 hypotheses:
Hypothesis 1: Bottlenecks within the administration significantly influence (perceived)
outcomes of place marketing in terms of attracting target groups
Hypothesis 2: Bottlenecks related to political issues will significantly influence (perceived)
outcomes of place marketing in terms of attracting target groups
Hypothesis 3: Bottlenecks related to the content of marketing campaigns significantly
influence (perceived) outcomes of place marketing in terms of attracting target groups
5. The relationship between bottlenecks and attracting target groups
To test our hypotheses we used a multivariate regression analysis. The results are presented in
tables 4 and 5.
Table 4. Results of multivariate regression analysis (Anova) with dependent variable results
of place marketing (in terms of attracting groups)
Model
1
Sum of Squares
df
Mean Square
Regression
178,178
3
59,393
Residual
595,822
140
4,256
Total
774,000
143
F
Sig.
13,955
,000a
Note: Predictors used are (Constant), Factorscore Administrative bottlenecks, Factor score Classical Marketing Bottlenecks,
Factorscore Political bottlenecks.
Our analysis shows in table 4 that the bottlenecks together do have a significant influence on
results of place marketing in terms of attracting target groups. This model explains a
reasonable deal of the variance in the level of attracting target groups (the adjusted R2 =
0.214).
Table 5. Results of the Regression Analysis with Results in attracting target groups as
dependent variable (n = .....)
B
Beta
(Constant)
9,875
Factorscore Political bottlenecks
-,286
Factorscore Classical Marketing bottlenecks
Factorscore Administrative bottlenecks
t
p
57,396
,000
-,118
-1,585
,115
-1,080
-,451
-6,065
,000
-,141
-,061
-,817
,415
Note: Dependent Variable: Results of place marketing in terms of attracting target groups
11
The analysis in table 5 highlights that especially the classical marketing bottlenecks have a
strong effect on attracting target groups (Beta = 451). This is interesting since the marketeers
themselves think the budget is the most problematic bottleneck as we saw earlier in this paper.
Thus we accept hypothesis 3.
On the other hand there is no significant influence of administrative bottlenecks on attracting
target groups. Hypothesis 1 is refuted. Also hypothesis 2 is refuted because there is no
significant influence of political issues on attracting target groups.
Conclusion and discussion
Professionals and politicians involved in place marketing experience a multitude of
bottlenecks. Our findings show that the bottlenecks are characterized by three main
underlying dimensions: (1) the political bottlenecks related to political citizen’s support; (2)
classical marketing bottlenecks related to the content of marketing campaigns and reaching
target audiences, and (3) administrative bottlenecks with large loadings on difficulties in the
municipal organization.
From our survey we can conclude that the classical marketing bottlenecks have a significant
negative effect on results of place branding in terms of attracting target groups. The other two
bottlenecks (political and administrative) do not have significant effects on the results of place
marketing.
It is striking however, that respondents did perceive some of the items that are related to the
political and the administrative as important bottlenecks. In other words, although the people
involved in citymarketing perceive administrative bottlenecks as important bottlenecks in
their municipalities, these are not the bottlenecks that significantly influence outcomes of
citymarketing in terms of attracting target groups. An explanation for this finding is that the
actors have the feeling that they are hindered seriously by administrative bottlenecks, but that
in practice they seem to be able to deal with those bottlenecks in such a way that it does not
influence how the marketing campaigns reach the target groups and help to attract target
groups. To a lesser extent this also accounts for the political dimension of the bottlenecks.
These do not influence the attraction of target groups either, so apparently the actors deal with
them in a way that does not influence the target groups.
Notes
This definition builds on the definition developed in the 1960s already by the American Marketing Association
(AMA). It has become a standard for numerous scholars and practitioners (see e.g. Kotler et al. 1999).
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