Brief introduction to Destination Marketing

fig 1: tourism campaign of the  Israeli government (source: nigelparry.com)                                          

In the past few months the author has written extensively on “Business tourism”. Today he will attempt to write on another important part of tourism sector namely “Destination Marketing”, considered as the essence of any form of tourism industry. Destination Marketing is all about enhancing the image of a tourist destination which will result into increase in number of visitors and revenue. In today’s world tourism is one of the biggest industries all across the globe, both in terms of employment generation as well as output. Hence almost all the 250 nations across the globe are fighting strong with each other for getting the higher share of the pie. Hence in order to be successful it is essential that the destination must be having a strong as well unique positioning. Destination marketing is an integrated and long term approach dealing with the marketing and brand building of an individual tourist destination. There are various kinds of tourism such as, leisure, sports, life style, cultural, business etc and a wide range of products offered under any kind, but in order to make them successful it is very essential that the destination itself should be holding a strong brand perception among the various tourist communities. The brand image of the destination is the focal point of the “tourism industry”. In the recent time places like, Shanghai, Dubai, Barcelona, Auckland etc are considered as Destination Marketing success stories. (Julie Vardhan, 2008)

There are five main reference points in destination marketing (Julie Vardhan, 2008)

• Tourists: - tourists are the fundamental element of any destination marketing plan. The tourist factor basically includes the desires of tourists such as fun, excitement, comfort, safety, self actualization etc and needs such as safety , comfort etc.

• Tourist destination: - includes all the, excitements, events, avenues and places a tourist destination offers. Consists of both unique as well as complementary services offered by a destination.

• Tourism service providers- There is a wide range of organizations working across the industry that provide various products and services to the tourists. These include hotels, resorts, airline companies, logistic companies, public and private transport, tour planners etc.

• Citizen: - Ultimately one very important stakeholder of the overall tourist industry is the citizens. Citizens are the ultimate beneficiary of the economic gains made; similarly they are also the ones which are mostly affected by the side effects of tourism such as ecological imbalance. More over they provide the social factor such as warmth and friendliness  needed for the success of the industry. Tourism programs cannot be made successful until unless the citizens do not work as self appointed champions of the cause.

• Public private interest coordinator- There is various kinds of public and private stakeholders involved in the tourism industry. For the success of the overall industry it’s essential that there should be proper coordination between all the stakeholders and at the same time their individual interests should be taken care of. Public private interest coordinators take care of this.

Positioning of a tourist destination

Positioning plays a very important role in Destination Marketing. It attempts to provide a unique image for a tourist destination and helps it differentiate from the rest. Often done after customer segmentation and targeting it is based on a unique brand communication strategy. For exp Dubai is positioned as a destination with grandiose and splendor where as Spain as destination full of fun and excitement. A destination positioning strategy has both tangibles as well intangibles. The wide range of products which a place offers such as, hotels, beaches, mountains, safaris, spas etc are tangibles and are needed to sell a destination, but based on them a destination cannot be marketed. Marketing can be done with the help of the uniqueness of experience which these places can offer, the fun and excitement which is associated with them. These are basically intangibles. (Harsha E. Chacko)

Development of an effective Destination Marketing plan: -

A successful destination marketing plan consists of following four steps: situational analysis, development of strategies, implementation of strategies and finally evaluation of strategies. (Vicki L Olton)

• Situational analysis: - is the  understanding of the overall situation of the destination with the help of various strategic frameworks. This step basically includes a wide range of research activities consisting of product, position and prospect analysis. Product analysis includes studying all the offerings which a destination has to offer and what all strengths and weakness are associated with them? It includes analyzing of the overall environment in a destination including, infrastructure, socio-political factors and places to visit. This is followed by positional analysis which includes analyzing the present position of the destination with respect to the competition as well as the way it’s being perceived by the various tourist communities. The next stage is the prospect analysis which includes studying the behavior of various customer segments and based on the situation, selecting the primary target segment. Finally based on the given three analyses, SWOT (strength, weakness, opportunities and threats) analysis for the destination is done. To have a better overall analysis of the tourist destination, other strategic frame works such as PESTEL (political, economical, social, technological, environmental and legal) can be used.

• Strategy development: - once the target customer is decided, based on its profile a new positioning strategy can be worked out or some modifications can be made in the existing one. This is followed by developing strategies for, right products to satisfy the needs of the target market, right distribution channel such as travel agents, tour operators, web portals, meeting planners etc, and the desired positioning and communication strategy

• Implementation of the strategy: Once the strategies have been developed it has to be implemented with efficiency and within the time bounds.

• Evaluation: after implementation the final stage is the proper evaluation of the plan, and based on the evaluation making changes, if required.

References:-

1> Julie V, 2008, Conference on tourism in India: challenge ahead,p-247, available at < http://dspace.iimk.ac.in/bitstream/2259/563/1/247-251+Julie+Vardhan.pdf >

2> Julie V, 2008, Conference on tourism in India: challenge ahead, p-249, available at < http://dspace.iimk.ac.in/bitstream/2259/563/1/247-251+Julie+Vardhan.pdf >

3> Harsha E, positioning a tourism destination to gain competitive edge, hotel-online.com, available at <  http://www.hotel-online.com/Trends/AsiaPacificJournal/PositionDestination.html >

4> Vicki L, How to develop an effective destination marketing plan, Kopphra.com, available at < http://www.kropphra.com/article/how-to-develop-an-effective-destination-marketing-plan >

Qatar: past, present and future strategy

fig 1 : 2022 world cup logo (source: 2022qatarworldcup.info)                                        

In the midst of the global economic slowdown when most of the developing nations in the world recorded slow to substandard growth rate, there was one country that stood out from the rest  and this was Qatar , a tiny state in the Persian gulf. Blessed with huge amounts of oil and gas reserves , Qatar’s GDP is continuously growing with a double digit growth rate. With a GDP growth rate of 12% ,this 132 Billion US Dollar economy is the second fastest growing economy in the world after Ghana (Karvy private wealth, 2011). After analyzing the growth story of Dubai in the previous blog, the author will now attempt to analyze the same for this another success saga from the gulf.

The growth story so far

•  Petroleum and oil reserves:- So far the Qatar’s success story had been driven by its oil and natural gas reserves. Petroleum products contribute half of the Qatar’s GDP, 70% of its govt. revenue and 85% of its export (Jarred Cummans, 2010). According to Oil and Gas journal ,Qatar has a proven oil reserve of some 25.4 Billion barrels. It’s the sixteenth largest crude oil exporter in the world.,also an active member of international organizations like OPEC and GCC. It started exporting natural gas in 1997 only, natural gas today plays much more important role in Qatar’s economy than petroleum. Qatar is the third largest exporter of natural gas next to Russia and Iran. With an estimated reserve of 896 Trillion cubic feet it has 14% of the world’s natural gas reserves. A large chunk of oil export goes to Asian economies, Japan followed by South Korea are the largest importers. (eia.doe.gov, 2011) Most of the oil and natural gas reserves are operated by Qatar Petroleum, the national oil company of Qatar, established in 1974 controlling all the aspects of oil industry in the state. Some of the offshore fields are also operated by foreign countries under PSA (profit sharing screen). Oil was discovered for the first time in 1940, at that time the average production  was 5000 barrels a day (today it  is almost a Million barrel a day) . Qatar started exporting oil in 1952. After getting independence in 1971 the entire oil reserves came under the control of the local governing authorities and in the same year North fields, single largest field for non associated gas was discovered which marked a new beginning for oil and gas industry in Qatar. Subsequently factories were established to produce liquefied natural gas (LNG); Qatar Gas Company was established in 84 to export 6 million tons of LNG to Japan, followed by Ras Laffan with an annual capacity of 10 Million tons In 93. Pipelines were established to pump gas to Turkey, Pakistan etc. (Qatarembassy.net)

• Al Jazeera:- Though petroleum had played a very important role in shaping up the success story of Qatar, there had been many other considerable achievements in the past few decades. One of them had been the establishment of “Al Jazeera” which was established in 1996 with the help of a financial aid of 137 Million US dollars from the Emir of Qatar, Sheikh Hamad Bin Khalifa Al Thani. The media agency owned by Qatar Media Corporation, had been started as an Arabic news channel for the Middle East region but later on  expanded into various, regions and languages. The news channel had been lauded for its media activism, high degree of transparency and independence. The news channel had played a very important role in promoting and reflecting the Arab viewpoints on major international issues, and influencing other media channels in the region for adopting transparency and freedom.

• Marketing itself as a brand-  it is another area where Qatar had got some considerable success. Like Dubai, Doha had been marketed as a great place to do business. Doha had hosted some major sports events like Asian games 2006 and every year since 1993 is hosting Qatar Open/ Qatar ExxonMobil Open which had been attended by top notch players like Rafael Nadal, Roger Fedrer, Andy Murray and Boris Becker etc. Doha had unsuccessfully bid for Summer Olympics 2016 and had won the bid for conducting football world cup 2022. In November 2001 it hosted the ministerial level meeting between WTO members regarding trade negotiations. The meeting is famously known as Doha Development round. Other important events that showcase the passion and zest of residents of Doha along with its splendour  are Qatar Masters golf, Doha cultural festival and Qatar masters golf etc.

Social and political Reform

The govt. apparatus at Qatar is comparatively liberal and forward looking. The current ruler Sheikh Hamad had taken some steps for political reform after coming to power in 1995. These reform majors can be considered as a step forward for a region where the institutions of democracy and civil liberty are still in its inception phase. Other social reforms include granting permission to religious minorities such as Christians, Buddhists and Hindus for public worship. Similarly some concrete reforms have been made in the economic sphere as well. One of such reform is opening up the mobile telecommunication market. In March 2009 Vodafone was allowed entering the lucrative market which had so far been the monopoly of the state run QTel. Though 100% ownership is not allowed for foreign investors but sectors like education, tourism and agriculture had been exempted from the clause. (Bertelsmann Stiftung, 2009)

The way ahead

Qatar seems to have a very strong way ahead. Abundant gas reserves, efficient and visionary government and a strong social infrastructure will design the further growth trajectory for Qatar.

• Social infrastructure: - thanks to the efficient usage of the oil revenue for various welfare and development schemes, Qatar had got a very strong social infrastructure that will provide supporting pillars to the country’s future ambitions. It has a, literacy rate of 89% which is one of the highest in the region, high life expectancy of 76 and ranks 33 out of 182 nations in the Human Development Index. The govt. wants to transform Qatar from a petroleum based economy to a knowledge based economy. It had formed the education city outside Doha which is home to six leading US universities. Another remarkable fact is that 70% of the students in these universities are female. (Bertelsmann Stiftung, 2009)

• Qatar has huge gas reserves which will ensure uninterrupted supply of capital for various developmental activities in the coming years.

• Tourism industry in Qatar is growing at an annual rate of 6%. A large part of the tourism revenue comes from the business tourism segment. In 2010 some 180 MICE (meetings, incentive travel, conferences and exhibitions) events were scheduled in Doha. (Technicalreviewmiddleeast.com, 2010) New 4 star and 5-star hotels are expanding their operations in Doha. Qatar has presently 66 hotels where as by 2011, 45 new hotels and hotel apartments are expected to be built. (DininginDoha.com, 2011) Other than business tourism Doha also has some great avenues for sports, leisure and lifestyle tourism. Opening up of the Doha international airport, completion of metro lines in the next five years and inauguration of Doha international convention bureau in 2012 will give further boost to the tourism industry in Qatar.

• Qatar is emerging as a new destination for intercontinental travel, thanks to the geographical location which is strategically placed between East and the West and North and the South, coupled with a very efficient state run airline, Qatar airways.

• Qatar has won the bid for conducting 2022 Football World cup. As a part of its preparation it is investing hugely in infrastructure as well as other tourism facilities. It had accelerated its 100 Billion US dollar infrastructure expansion plan. It is going to construct 12 new state of the art football stadiums, along with 80,000 new hotel rooms. It is also going to invest 20 billion US Dollars in road improvement program where as 25 Billion US Dollars in a railway project. Organizing the most famous sporting event will not only boost “Brand Qatar” / “Brand Doha” but will also be beneficial for the real estate and tourism sector of the whole Middle East region. Before Qatar winning the bid, it was predicted that by 2020 the total number of tourist visiting Middle East will increase to 67 Million from 36 Million at present. But after Qatar winning the bid this number will surely rise up further. (worldfootballinsider.com, 2011)

Qatar which has the second highest per capita income and is one of the fastest growing economies in the world seems to have a bright future ahead. Huge amount of petroleum and natural gas reserves along with the diversification of the economy into various sectors such as education, tourism and real estate will give a huge boost to the overall economy. But there are still few areas of concern that might be  detrimental to an emerging Middle Eastern economy like Qatar in achieving its full potential.

Qatar has following areas of concern that has to be contained. These are:-

• Qatar is still very slow in implementing economic reforms. It needs to speed up the process its process of economic liberalization.

• Qatar is still far away from the modern principals of democracy and social activism. Thanks to its high per capita income, today there hardly seems any concern for such things among the Qatari population. But in the light of the latest uprisings in neighboring countries like Tunisia, Egypt and Bahrain such state of political turmoil cannot be discounted.

• Gender inequality is still very high in Qatar. Out of 130 countries it holds 119th rank in terms of gender equality. (Bertelsmann Stiftung, 2009)

• Like Dubai, Doha also markets itself as a great place to do business. Though at paper it appears to be as exciting as Dubai, it surely lacks the cultural platform which Dubai has. Dubai is the most cosmopolitan and liberal place in the Middle East where business men, professionals and tourists from all around the world  visit , mingle and grow. This kind of charm is missing in Doha which is at many times, deterrent for many young talents. “Brand Doha” still needs a long way to go in order to catch up with “Brand Dubai”.

• Due to ongoing infrastructure projects and economic expansion plans Qatar is witnessing constant inflow of expatriates. This is increasing the cost of living at Qatar. Today Doha, 49th costliest city in the world according to one report, can be considered as the second most costly city in Middle East after Abu Dhabi. (Xpatulater.com, 2011)

• Even though the governing authorities at Qatar are trying to showcase political acumen and challenging the traditional thinking by, building ties with various nations such as Israel and USA etc, showing some degree of secular credentials and bringing some degree of liberty such as allowing liquor in some of the selected restaurants, nonetheless there are religious cum cultural circles which are not open to such changes and are opposing it.

• Besides one car bomb attack in 2005 there had hardly been any case of terrorist attack on the western populace leaving in Doha, nonetheless Qatar is rated high on the transnational terrorism ( on a scale ranging from low to critical ) due to general nature of the region. (Consider Qatar)

Reference-

1> Karvy private wealth, 2011, the world’s fastest growing economies, available at < http://karvywealth.blogspot.com/2011/01/worlds-fastest-growing-economies.html 

2> Jarred C, 2010, ETFs to Invest in the World’s Fastest Growing Economy, Qatar, available at < http://seekingalpha.com/article/216178-etfs-to-invest-in-the-worlds-fastest-growing-economy-qatar >

3> Eia.doe.gov, 2011, country analysis briefs: Qatar, available at <  ttp://www.eia.doe.gov/cabs/Qatar/pdf.  >

4> Qatarembassy.net, History of oil discovery, available at < http://www.qatarembassy.net/oil_history.asp >

5> Bertelsmann S., 2009, BTI 2010- Qatar country report, p-2 to 4, available at < http://www.bertelsmann-transformation-index.de/fileadmin/pdf/Gutachten_BTI2010/MENA/Qatar.pdf >

6> Bertelsmann S., 2009, BTI 2010- Qatar country report, p-2 to 4, available at < http://www.bertelsmann-transformation-index.de/fileadmin/pdf/Gutachten_BTI2010/MENA/Qatar.pdf >

7> Technicalreviewmiddleeast.com, 2010, Qatar’s tourism sector set for main revenue growth, available at < http://www.technicalreviewmiddleeast.com/news-a-development/business-a-management/160-qatars-tourism-sector-set-for-main-revenue-growth.html >

8> DininginDoha.com, 2011, investment pouring in Qatar’s hotel industry: QTA chief, available at < http://www.diningindoha.com/news-view.php?id=73 >

9> Worldfootballinsider.com, 2011, Qatar 2022 world cup to boost tourism sector, available at < http://www.worldfootballinsider.com/Story.aspx?id=34141 >

10> Bertelsmann S., 2009, BTI 2010- Qatar country report, p-14, available at < http://www.bertelsmann-transformation-index.de/fileadmin/pdf/Gutachten_BTI2010/MENA/Qatar.pdf >

11 > Xpatulater.com ,2011, International cost of living ranking, available at < http://www.xpatulator.com/outside.cfm?aid=240 >

12 > Consider Qatar, Business conditions in Qatar, p-3, available at < http://www.export.gov/middleeast/country_information/qatar/ConsiderQatarGuide.pdf >

Analysis of MICE Industry in Abu Dhabi

                                                Source: Manchester City webpage                                       

In the past few blogs the author has analyzed the rapid emergence of Middle East  as a favorable destination for MICE (meetings, incentive travel, conferences, exhibitions) related activities. One of the state that is making huge strides in developing itself as a word class destination for business tourism is Abu Dhabi. In the past few years it had conducted some world class events like World green tourism congress, World health care congress Middle East, Formula 1 grand prix, Red bull race, Rally Abu Dhabi to name a few and is considered as second best MICE destination in Middle East next to Dubai(HotelierMidddleEast.com, 2010) . Travel websites like lonely planets and Frommers have voted Abu Dhabi among top 10 business destinations in the world (HotelierMidddleEast.com, 2010). In the following blog the author will attempt to do a detailed SWOT (strength, weakness, opportunity and weakness) analysis for the MICE industry of Abu Dhabi.

Strengths:-

• Infrastructure:- Abu Dhabi has got a very strong infrastructure to support its blooming MICE industry. It has got state of the art convention centers, hotels, airlines and logistic facilities. At the fore front of conducting business events in Abu Dhabi is the ADNEC (Abu Dhabi national exhibition center). Established in 2007 it has a total area of 73000 SQ Meter with sitting capacity of 6000 and additional standing capacity of 8000, it is the biggest convention center in UAE. In 2008 in conducted 73 (with 1.5 million visitors) events where as in 2009 it conducted 119 events (ADNEC website, 2010). Other than ADNEC hotels like Emirate palace and YAS hotel have built their own facilities to conduct business events. Emirates palace have auditorium and a ball room with a capacity of 1100 and 2400 respectively. (Rebecca B, 2009)

• Govt. authorities: - none of the business can take off in a nation until unless the govt. authorities are not serious enough. Fortunately one of the biggest strength of the MICE industry of Abu Dhabi is the extremely pro active govt. authorities. MICE activities are at the top of the Socio-Economic agenda of the govt. of UAE/ Abu Dhabi. Abu Dhabi tourism authority (ADTA) is investing hugely both in infrastructure as well as marketing to project Abu Dhabi as a world class tourist destination. Some of the major steps taken by ADTA are as follows: -

a) It came up with “ Advantage Abu Dhabi” campaign which is basically a venture capitalist kind of apparatus that provides financial as well as non financial support to various meeting planners and professional conference organizers( PCOs) in organizing meetings and business events in Abu Dhabi across 12 strategic sectors which include petrochemicals, aviation, education, transportation, logistic, media , financial services etc. (abudhabitourism website, 2009)

b) In 2007 in order to boost MICE business ADTA formed a MICE advisory committee which consisted of players from various related industries such as convention centers, hotels, tourism development and aviation etc. This industry advisory committee will provide a common platform for various players to communicate with each other and work for better infrastructure development, product development, bid opportunities etc. (ameinfo.com, 2009)

c) ADTA is taking strong initiatives to market Abu Dhabi across the world. Deals are signed with various countries, offices are opened across the globe and marketing campaigns are conducted at various parts of the world.

• Abu Dhabi is among the major petroleum producers of the world. This gives it a natural advantage in conducting meetings and events related to the petroleum industry. On the fore front of  oil and gas exhibitions is Abu Dhabi international petroleum exhibition center (ADIPEC).

• Other than convention centers and hotels Abu Dhabi has a wide ranges of places to visit which includes state of the art malls, shopping centers of leading international fashion brands, golf courses, clubs, spas, restaurants, mosques etc.

• Clean environment, crime free society and a stable political system.

Weakness

• Like its cousin state Dubai, Abu Dhabi is also very expensive. In the latest “Mercers costliest cities of the world list” it holds 50th position where as previous year it was having 26th position.

• Abu Dhabi lacks moderately priced economical accommodations. It has some of the best luxury hotels in the world but lacks  3star/ 4 star hotels often preferred by many business travelers. Though recently it is coming up with such decently priced accommodations such as the Aloft hotel at ADNEC, Holiday Inn, and other 3star/4star hotels on YAS islands. (Rebecca B, 2009)

Opportunities:-

• GIBTM: - GIBTM or Gulf incentive business travel and meeting exhibition is the part of five 5-star exhibitions conducted for the meeting industry across the globe by “Reed International Exhibition”. Conducted every year at ADNEC Abu Dhabi it provides a strong platform for the various buyers and sellers of MICE industry to interact with each other and discuss business. It helps in showcasing the strength of Abu Dhabi’s MICE industry to the whole world. Such events are bringing as well as will be bringing much more businesses in the nearby future.

• Abu Dhabi has made as well as making huge investments in various sorts of tourism such as sports tourism, leisure tourism and cultural tourism. It is building a cultural district with in the Sadiyat Island, which once completed will be the biggest cultural center in the world. Very recently it had successfully conducted the formula one grand prix. [According to one of the govt. official it had a plan to invest 230 Billion US dollars in tourism sector in the next five years. (guide2dubai.com, 2011) ]Hence it seems various alternate forms of tourism at Abu Dhabi have a very bright future. This will surely have a positive impact on the business tourism as well since various forms of tourism are interdependent on each other.

• Geo graphical location of Abu Dhabi that puts it at the cross road of various business centers of Europe, Asia and North Africa can be an advantage for the Emirate.

• It is assumed that oil reserves at Abu Dhabi will last for another 150 years ensuring free flow of capital needed for the industry.

Threats:-

• The MICE industry at Abu Dhabi will have to fight against stronger and well established players like London, Singapore etc.

• In Middle East region Abu Dhabi is still far behind of Dubai in attracting business travelers. Lot of new places in the region like Doha, Bahrain and Muscat etc are catching up very fast in developing their business tourism facility. These places can put some real challenge to Abu Dhabi.

• Since business tourism is a very lucrative business and it has got huge strategic significance ,many places across the globe are keeping it high on their socio-economic agendas. Places like Cape Town, Sanghai, Taipei, Beijing etc are emerging as strong destinations for business tourism.

• So far most of the talent required for the industry comes from the vast pools of expats. There is always a threat of these populations getting relocated to some other part of the globe. Though the chances are low but this might create some scarcity of talent. (Though recently Abu Dhabi has started taking this seriously and Emiratization of the work force is one of its prime agendums.)

References:-

1> HotelierMidddleEast.com, 2010, Gulf MICE industry has bright future, available at < http://www.hoteliermiddleeast.com/7655-gulf-mice-industry-has-bright-future/ >

2> HotelierMidddleEast.com, 2010, Gulf MICE industry has bright future, available at < http://www.hoteliermiddleeast.com/7655-gulf-mice-industry-has-bright-future/ >

3> ADNEC website, 2010, ADNEC to advance Abu Dhabi’s MICE development agenda at GIBTM 2010, available at < http://www.adnec.ae/press/viewPress.php?id=1269516895 >

4> Rebecca B, 2009, MICE industry takes off in Abu Dhabi, eTurboNews, available at < http://www.eturbonews.com/12842/mice-industry-takes-abu-dhabi >

5> Abu Dhabi tourism website, 2009, ADTA is to assume lead arranger role in an ambitious tourism initiative, available at < http://www.abudhabitourism.ae/en/news/advantage.abudhabi.to.super.mice.segment.aspx >

6> Ameinfo.com, 2009, ADTA forms MICE advisory panel, available at < http://www.ameinfo.com/126173.html >

7> Rebecca B, 2009, MICE industry takes off in Abu Dhabi, eTurboNews, available at < http://www.eturbonews.com/12842/mice-industry-takes-abu-dhabi >

8> Guide2dubai.com, 2011, Abu Dhabi plans a 230 Billion US dollar investment in tourism sector, available at < http://www.guide2dubai.com/808-Abu-Dhabi-plans-$230bn-investment-in-tourism-sector.html >

    

PEST Analysis of MICE industry in Middle East

                                fig: Abu Dhabi Ferrari theme park( source: http://www.coated.com/)                                                                  
In the past two decades one of the regions in the world that had witnessed phenomenal growth is Middle East. It had shown excellent growth not only in the traditional oil and gas sector in which it has abundant resources but also in other sectors like services, retail, tourism and hospitality. Having some of the fastest growing cities with state of the art infrastructure carved in the midst of the dessert Middle East attracts a large chunk of tourist from all around the globe. Along with the leisure tourism the segment which is growing by leaps and bound is the “Business tourism” or the MICE segment. In the following blog the author will attempt to do a comprehensive PEST analysis of the MICE industry in Middle East. ( #)


PEST Analysis: -

Political factors: -

• The political factors in Middle East have both pros as well as cons.

• It has real sincere govt. machineries which want to put the region on the forefront of the tourism as well as business tourism market.

• Strong initiatives are taken, delegates are sent to different parts of the world, programs and promotional campaigns are conducted and meetings and conferences are high on the government agendas.

• The region has huge geo- political significance which attracts the attention of policy makers, corporate, officials, diplomats etc towards it.

• The down side is that many parts of the Middle East are politically volatile and disturbed which can create apprehensions about it.

Economic factor: -

• Middle East had been among the fastest growing regions in the world.

• In the past two decades the region had witnessed phenomenal growth.

• After the dip in the oil prices its growth rate went down and it witnessed a modest growth rate of 2.9% in 2009. ( Business intelligence middle east.com, 2010)

• Though yet to catch with the other developed markets the economy is poised for a strong growth in 2011. Govt. expenditure and rising oil price will facilitate stronger GDP growth in the region. ( arabnews.com, 2011)

• Middle East has cities like Dubai, Abu Dhabi, Kuwait, with state of the art infrastructure. There are also cities like Doha, Muscat etc which are growing very fast and investing hugely on infrastructure.

• The region can boast of some exquisite hotels, resorts, spas, leisure park and super market stores such as Burj al Arab, Emirates palace, Marina Mall tower, Abu Dhabi ice rink, Abu dhabi Ferrari theme park, Palm islands, etc.

• States run efficient and effective airlines such as Emirate airways, Etihad airways, Qatar airways etc that connects the region smoothly and frequently with the rest of whole world.

• Many parts of the region are going to invest heavily on infrastructure. Qatar which is hosting 2022 football world cup is going to invest 250 Billion US dollars in infrastructure, housing, roads, stadiums etc. Oman is going to invest 80 Billion in the next five years where as Kuwait 104 Billion us dollars in the next four years. Abu Dhabi will be investing 27 Billion US dollars in establishing world class museums and attraction centers. ( arabnews.com, 2011)

• It can be assumed that since Middle East is an emerging market it puts the meetings and conferences high on the govt. agendas compare to other matured markets. The basic region is that not only MICE is a growing and lucrative industry in itself but it also helps in driving investment and overall branding of the place .

• Middle East is comparatively economical and cost efficient in providing various goods and services in comparison to its more developed Western counter parts. But over the period of time it had been seen that cities like Dubai has become very expensive.

• A matter of concern could be the current Economic condition of Dubai, the city state considered as the epicenter of business and tourism activities in the Middle Eastern region has a debt of around 110 Billion US dollars and in 2010 it recorded a sub standard GDP growth of 3.2%. ( arabnews.com, 2011)

Social factors: -

• Islam plays a very important role in Middle Eastern culture.

• The primary inhabitants of Middle East are Arabs which are known for their warmth and hospitality.

• Many of the leading cities in the region such as Dubai, Muscat, Abu Dhabi and Kuwait etc are very cosmopolitan in nature with more than 50% of population comprising of expat population.

• The downside can again be the political turmoil and fundamental forces existing in the society.

Technological: -

• Middle East has some state of the art convention centers like the ADNEC (Abu Dhabi national exhibition center), DWTC (Dubai world trade center), QNCC (Qatar national convention center), Bahrain international convention center etc with excellent technical facilities to conduct meetings and conferences of international standard.

• Telecommunication facility varies in the Middle East from being very advanced to very rudimentary. Most of the nations have their own national operator though of late many of them are introducing foreign players as well. (budde.com, 2008)

Note: -

# (A point to be noted over here is that Middle East has a wide range of diversity within itself, there are places, which are growing very fast where as those just trying to catch up, which have huge oil and gas deposits as well those with almost no oil, which are very cosmopolitan and open in nature where as those which are comparatively less open. Hence the given analysis is just a generalized analysis and tries to look at Middle East as a single entity. Individual analysis of individual places and states will follow in subsequent blogs. )



Reference: -

1> Business intelligence middle east.com, 2010, Middle East economic growth to rebound to 3.7% in 2010, says World Bank, available at <  http://www.bi-me.com/main.php?id=43642&t=1&c=34&cg=4&mset=1011  >

2> Arabnews.com. , 2011, Faster growth in Middle East economies expected in 2011, available at <  http://arabnews.com/economy/article232333.ece?service=print  >

3> Arabnews.com. , 2011, Faster growth in Middle East economies expected in 2011, available at <  http://arabnews.com/economy/article232333.ece?service=print  >

4> Arabnews.com. , 2011, Faster growth in Middle East economies expected in 2011, available at <  http://arabnews.com/economy/article232333.ece?service=print  >

5> Budde.com, 2008, Executive summary: Middle Eastern Fixed Voice and Telecommunications Infrastructure Market, available at <  http://www.budde.com.au/Research/2009-Middle-Eastern-Fixed-Voice-and-Telecommunications-Infrastructure-Market.html  >

The Rocket Science of understanding “consumer INDIA”

                                             

 Science of shopping: The Indian context

Real innovations are usually hard to find. There are plenty of tomes that have been written about innovation. It means two simple things: Sharp consumer insights backed by courage of conviction. Of these, the latter is usually just as important in India. Would you agree?



Way back in 2001, Kishore Biyani tried his hand at big-box retailing. Till then, most retailers had stuck to the department store format — or opened supermarkets, particularly down South. In Kolkata, Biyani opened his first Big Bazaar, a soups-to-nuts hypermarket. Within the first week, Biyani knew that he had found the Holy Grail. In the very first week, the store pulled in one lakh customers generating a daily turnover of Rs. 1 crore on some days. “I’ve found the pan Indian model of retail,”. He was right.


An Irishman when asked to define trousers gave the following reply, “'trousers' was singular at the top and plural at the bottom!”. It also holds true for consumer India. From the top we are a one billion capacity consumer base, but when seen through multiple lenses we do find a great deal of diversification. There are many aspects like the demographic, cultural and the social trends and identifies the strategic themes and approaches that businesses must think about when addressing Consumer India.


Let us consider two identities, Balwinder Singh; a farmer who has devoted his life in agriculture to feed his family and himself. The second one would be Sumit Arora; an investment banker and an alumni of ivory league B-school. Now how important is the word SENSEX in Balwinder’s life, the answer is very simple… “zero”. Whereas for Sumit it’s a part of his bread & butter. Sumit again is least bothered if the monsoon delayed by a month or so, but ask Balwinder, his whole livelihood may change if there is a delay in monsoon. I quoted this example to brief you about how diversified India is as a country.


Keeping all the above aspects into consideration, imagine the amount of pressure various companies would be in, in order to make the consumer feel the tempt to buy its product. The bargaining power of consumer India is so high, that a small mistake could prove fatal. But still the companies fight & fight with one another and leaves no stone unturned in gaining consumers attention.


“Retailing” is the word which caught up pace in last three to four years. The events of the last 15-18 months have provided a steep learning for the retail and consumer product industry. While the last decade (2000-2009) has seen significant addition to consumption and retail market, it is expected that consumption is likely to double in India over the next 5 years, (nominal growth of Rs 33.75 lakh crore). There is going to be significant changes in the overall consumption basket hence brands in low involvement categories would be under the increasing threat of commoditization. Profitable growth would be the emphasis for retailers and investors in the time to come. We expect that in the next 5-10 years, the scale of business opportunity and pace of change would be fundamentally different from what it has been in the past. This calls for almost every company to go back to the strategy drawing board and develop a vision for the next decade in order to emerge as a successful player in the consumer and retail sector. Companies have switched gears and are targeting on this sector to maximize the sales & to brand them to the core. Important thing to consider here is that, out of all the footfalls generated how a company maximizes on its objective.There is a science involved in this. Now the brand manager of the company needs to understand this science to help the sales figure grow at a brisk pace. This science is well explained by Paca Underhill in this book “The Science of Shopping”. The book is divided into three parts: the mechanics of shopping – these involve how customers react to the physical layout and the staff activities in the store, etc; the demographics of purchasing – this part deals with different behaviors of segmented market based on sexes and ages; and the final part engages in the dynamics of shopping – how shoppers respond psychologically to the placement of merchandise, the packaging, and other product features

According to Paco;

1. The retail environment must tailor fit to the physical and anatomical abilities and other needs that are common to all people. Where shoppers go, what they see and how they respond determine the very nature of their shopping experience. In other words, build and operate the retail environment that fits the highly particular needs of shoppers and you’ve created a successful store

2. Underhill went all the trouble of getting his facts right through practical research studies such as observing actual shoppers’ behaviors and talking to the CEOs and retail managers. The result? Consumer behavior + economics = profitability.

3. Shoppers and potential customers have certain ways of walking through stores and how they look at the visual signs. They use the five senses and they want verification with their whole body before buying a product. If you understand such behaviors, you acquire huge competitive advantage.

4. Women and men shop differently. As quoted from the book, “men are from Sears’s hardware, women are from Bloomingdales’”. Men are likely to go into a store, look at a large shelf of items, pick one, and quickly leave. Women on the other hand are actually more information-intensive, reading the label before making a purchase

If we juxtapose the concept given by Rama Bijapurkar in her book “We are like that only” to that of Paco Underhill’s “ Why we buy”; we can say that things in India can be summon up if the companies have a thorough understanding of what exactly a customer wants and what factors influence him to take a decision. Easier said than done, companies are still finding it hard to understand this.



A consumer doesn't take anything away: he doesn't actually consume anything. Giving the same thing to a thousand consumers is not really any more expensive than giving it to just one.



……. “Linus Torvalds”

Blog written by "Anurag Chatterjee"
MBA Student
Mumbai Business School

PEST & Trend analysis of tourism in India

Country Selected: - INDIA

Aim: - Given blog aims to do a PEST analysis and a trend analysis tourism in India. It will include a brief introduction followed by key trends in the Indian tourism market, their respective implications and major take away.

Introduction: - India as a country provides a huge potential for tourism to flourish. One of the oldest cultures of the world and a vibrant economy it has potential for various different kinds of tourism such as heritage cum cultural tourism, medical tourism, business tourism , eco cum adventure tourism, spiritual tourism, etc. The huge potential of India as a tourist hub can be derived the fact that it has a much diversified culture, different kinds of geographical terrains and a very rich cultural heritage. The potential gets an additional boost due to phenomenal growth of Indian economy in the recent years coupled by rise in average household income and investments in infrastructure. Right now also tourism plays a very important role in Indian economy. In the year 2009 valued at 41.73 billion English Pounds it constituted 6% of the Indian gross domestic product. It constitutes 5.8% of the total employment in India and employs 17.4 million individuals. But still the figures are very dismal given the kind of potential Indian tourism has. Though the market penetration of Indian tourism is still very low but can grow by leaps and bounds provided proper strategy is built into operation.

Indian Tourism: Trend Analysis

• In 2007 five million international tourists visited India; this figure is expected to touch ten million in 2010.

• Indian economy very fast in between 2002 and 2007. The average household income grew by 14% there by giving a boost to domestic tourism.

• Total tourist movement had doubled in the last seven years.

• In 2009 the total revenue earned from foreign tourist was approximately 10.5 billion British pounds (6.0 % of total exports). According to travel and tourism competitiveness review this figure is expected to grow to 31.5 billion English pounds in the next ten years.

• According to travel and satellite research (part of World travel & tourism council) the demand of travel and tourism with in India is going to increase by 8.2%. This growth rate is 3rd highest in the whole world.

• Indian hotel industry is adding 90,000 rooms per year.

• Capital Investment in the Indian tourism sector will increase by 8.8% per year. With this rate it can be expected that total investment will be around 59 billion English pounds in the given sector.

• Medical tourism is growing very fast in India. Growing at a Compound annual growth rate (hence forth will be referred as CAGR) of 19% it is expected that by 2012, 1.1 million medical tourists will be visiting India. Growing at a CAGR of 27% the net value of medical tourism will be approximately 1.5 billion English pounds.

• The present value of Indian tourism which is 41.73 billion English pounds is expected to increase by 200% in the next 10 years.

• It is expected that by 2019 there will be 40 million individuals in India employed in the tourism sector. (An increase of approximately 133% )



Internal and External audit of Indian tourism

External audit (uncontrollable factors):-

Macro Factors

• Political factors:-

1. India has a stable democratic government. This ensures stability for the tourism industry.

2. The centre has a specific ministry of tourism whose prime purpose is to device plans and strategies for the welfare of Indian tourism industry.

3. India as a nation is divided into various smaller state and every state has its own tourism department. These departments often fight with each other in ensuring higher tourist inflow into their respective states. Though this competitiveness ensures efficiency in the individual states but is detrimental for overall tourism as a whole. Since India is a diverse nation with every state having something to offer along with competition what is really essential is proper coordination between various states.

• Economic Factors:-

1. India is among the fastest growing economies of the world. In the last decade its GDP has grown with almost 7% per annum. A higher economic growth ensures rise in annual income hence increase in domestic tourism.

2. A higher economic growth also ensures increase, in investments in the infrastructure, promotional expenditures, construction of newer tourist avenues, beautification of cities and towns etc. These ensure a boost to the tourism industry.

3. High growth results in higher number of business visits.

• Socio –Cultural :-

1. India a diverse nation with end numbers of different languages, cultures, traditions, cuisines; make it an ideal destination of cultural tourism. The depth of diversity can be concluded from the fact that India has more than 22 constitutional languages and 1600 dialects.

2. Indian culture has always emphasized on respecting and entertaining their guests very well. The Sanskrit Shloka “ATHITHI DEVO BAHVAH” (guest is god) is the essence of Indian tradition. This warmth and love for their guests has always been appreciated by tourists in general and foreign ones in particular.

3. India has a vibrant and rich history of cultures that can also attract many culture lovers and scholars for further studies and exploration.

4. Due to 200 years of British rule English is an integral part of Indian education system. Most of the people at India can communicate and understand in English. This gives an added advantage to India in comparison to its neighboring counterparts in attracting foreign tourist.



• Technological:-

1. At present Information Technology plays a very important role in tour planning and its implementation. Starting from searching the tourists spots to booking hotels and transportation to transferring money every where web based platforms are used. In the Indian context there are plenty of such web based portals such as makemytrip.com, yatra.com etc. India being an IT superpower is capable enough for future development of such avenues in a very cost efficient and technologically superior way.

2. In spite of India being an It superpower the overall home pc penetration is still low at just 26%. This disassociates a very large chunk of domestic users from using such web based portals.

3. For the success of tourism it is essential that a country must be equipped with state of the art transportation facilities. It must have very efficient transportation system that can help in transporting both large volume of people and goods in a very cost effective, fast and comfortable fashion. Thanks to its huge population and late opening up of economy its transportation system still not of international standard.

Analysis of MICE business in China

                                                                         
In the last three blogs the author attempted to give a brief introduction to business tourism & MICE industry. Now he will like to take this further and will like to delve deeper into it. In the next stage he will attempt writing on the trend of MICE industry in various individual regions. Along with the traditional hot destinations such as Europe and USA there are lots of new places such as Middle East, China, Singapore are emerging as favorable destination for business tourism and MICE activities. The next few blogs will like take a deeper look at these individual places along with the socio economic conditions and developing industry trends in the background. The very 1st one will be dealing with the neighboring China.


Ever since the Chinese economy was opened in the year 1978 China has shown phenomenal growth in the past three decades. Known as the factory of the world it holds a very strong influence in both world geo-politics as well as world economy. Al most all the major companies in the world has their manufacturing unit in China. Because of its investor friendly government policies, low cost of labor and strongly developing human resource it is considered as one of the most favored location for investment. Under such circumstances the importance of MICE industry increases many folds because of following reasons:-

• It is a lucrative business in itself that is a source of an end number of high end employments.

• Business tourism can stimulate leisure tourism as well.

• Since it brings in investors and business houses from all over the world it can stimulate investments in other sectors.

• It can play a very important role in local as well as regional developments. Since primarily it does not brand a whole country but a particular region or a city to the investor & business communities.

• Can stimulate govt. initiatives in building state of the art infrastructure.

The current status of Chinese MICE industry:-

• The Chinese MICE industry has grown rapidly in last 10 years. Most of the 1tier and 2 tier cities have state of the art exhibition halls of international standards. ( Michael Dreyer, 2010)

• The various kind of MICE activities include: Local events where local products are displayed to local buyers, Import events where foreign products (both capital goods as well as luxury products) are displayed to local consumers and buyers and sourcing events where Chinese exporters show their goods to sold to the international buyers. (Michael Dreyer, 2010)

• Important venues for MICE activities in China are Sanghai, Beijing, Hong Kong, Dongugan, Guangzhou etc.

• Business tourism plays an important role in inbound tourism in China.

• According to international Congress and convention association ( ICCA) by 2020 with 137 million business travelers China will account 8.6% of Chinese business tourism market.( Dongugan news, 2006)

• China is the third largest business travel market. ( BEDOUK.COM, 2010)

• Chinese government taking strong proactive steps to boost MICE industry in China. Recently in august the govt. had established two organizations, ICCA China committee & MICE advisory committee for covering eastern half of Chinese capital. (Travel weekly.com, 2010)

• China national convention center was opened in October 2009. With a gross floor area of 270,000 square meters its main purpose is to provide international standards for conducting exhibitions, conventions and meetings. It is expected that in the 1st five years of its operation it will be conducting some 173 events with almost 3, 20,000 attendees. Out of this 66 will be of international or regional association congresses and 56 will be national level meetings. (Rob Davidson, 2009).

• Since travel and tourism industry as well as MICE industry are growing very fast in China hence it complements each other.

SWOT Analysis:-

Strength:-

• China has invested hugely in the infrastructure recently. They have got state of the art infrastructure which includes top quality hotels, transportation, telecommunication, well equipped convention centers etc.

• China has a cost advantage since it is comparatively much economical than its western counterparts.

• China today stands in the centre of world economics and politics. Hence this is an added advantage for its prospect as a venue for meetings, events etc.

• China , a vast nation can provide a wide range of delight to its visitors ranging from its magnificent monuments, aesthetic oriental culture, exotic food, landscapes to state of the art modern amenities such museums, theme parks, sports complex etc.

• China is also a hot destination for travel and tourism business. This is an added advantage for its MICE industry.

• Traditionally most of the events have taken place in the same old European cities such as London, Dublin, and Paris etc. In contrast to them China can provide an all together new experiences to the business travelers. (Essaysforstudent.com, 2009)

• World class events like Beijing Olympics 2008 & world expo 2010 have been conducted in China. This had reaffirmed Chinese strength in handling big events successfully and also recognizes the fact that it had travelled a long way as a nation.

Weakness:-

• Language is still a major concern in China. Most of the Chinese still don’t speak or even understand English.

• For China MICE is still a new idea. In Europe and USA, MICE activities are happening since hundred years where as in China it had started in the last ten years only. Hence China is still undergoing through its learning curve and it has got many things to learn. It even does not have too many organizations to take care of these things in contrast to USA or Europe. ( Essaysforstudent.com, 2009)

Opportunities:-

• Most of the transnational organizations such as Honeywell, GM, and Kodak etc have their regional head quarter at China. Hence it can be added advantage since they will prefer conducting annual meetings at Chinese locations. ( Essaysforstudent.com, 2009)

• The China considered as the next super power, had got strong hold in the world geo-politics as well as geo-strategy. China has a very prominent role to play in the new world order that will be multi polar in nature. Hence this wide spread craze for China can act as a latent force in promoting China as a destination for MICE activities.

• East Asia and South East Asia themselves are under growing strong economic growth. There are lot of exciting business events happening in these areas. Being the strongest regional force China as a venue for MICE activities will always attract attention of regional industry players towards itself.

Threat

• So far in Asia Singapore is considered as the strongest MICE destination. Beating Singapore will always be a tough for the Chinese players.

• Lot of new players such as Dubai, Abu Dhabi, South Africa, India, Vietnam etc are joining the MICE bandwagon and can provide stiff competition to China.

• Players like India and Vietnam can be good alternative to China both in terms of cost efficiency as well as in terms of services.

• Though there is a China fever all across the world but at the same time there is a lot of reservations for China also because of its non democratic government, restrictions imposed on press etc. This kind of resentful thinking in some quarters of the world might deter some companies and associations from conducting events in China.

Reference:-

1. Michael D, 2010, The rapid growth of China’s MICE industry, CEI, available at < http://www.cei.asia/Weekly-highlightsarticle/2010_02/The-rapid-growth-of-Chinas-MICE-industry/38867>


2. Michael D, 2010, The rapid growth of China’s MICE industry, CEI, available at < http://www.cei.asia/Weekly-highlightsarticle/2010_02/The-rapid-growth-of-Chinas-MICE-industry/38867>


3. Dongugan news, 2006, South China’s MICE boosts business tourism, available at< http://www.newsgd.com/citiesandtowns/dongguan/news/200612140080.htm> < accessed on Jan, 2011>


4. Travelweekly.com, 2010, China develops MICE industry, available at < http://www.travelweekly.com.vn/regional-news/other/1753-china-develops-mice-industry>


5. Rob D., 2009, EIBTM trend analysis and market share report, p-20.


6. Essaysforstudent.com, 2009, Chinese Mice analysis, available at < http://essaysforstudent.com/print.html?essay=19072>


7. Essaysforstudent.com, 2009, Chinese Mice analysis, available at < http://essaysforstudent.com/print.html?essay=19072>


8. Essaysforstudent.com, 2009, Chinese Mice analysis, available at < http://essaysforstudent.com/print.html?essay=19072>

Business tourism: Current trend analysis

               
Business tourism is also known as "MICE" industry which stands for meetings, incentive travels, conference and exhibitions industry. Over the period of time "MICE" is becoming larger and larger as an industry, not only is it a lucrative business in itself but it has got great strategic implications since it influences investment and other businesses as well. It had been calculated that a one dollar investment in business tourism can bring revenue of 8-10 dollars in other industries. The following blog will take a look at the current trends in the business tourism:-



• MICE activities in a particular industry type are directly linked to the performance of that sector. If a particular sector shows boom then it can be concluded that there will be more number of activities in that sector.

• The present economic downturn had badly hit the MICE industry. It had resulted in cutting down of budgets for tours and travels hence reducing such events all together.

• Since the supply is more than the demand it is more of a buyers’ market. Buyers don’t prefer directly signing deals; rather they prefer matching various prices. More over in order to get economy of scale they prefer dealing with lesser number of suppliers.

• The customer base of “MICE” industry does not only consist of corporate sectors but also various kinds of national, international and government associations which keeps on meeting regularly. These associations consist of professionals from particular industry type such as Medical Science, Law, IT. In spite of economic downturn faced by corporate sector these associations have witnessed a decent growth which is a good signal for the “MICE” industry.

• Another segment that can provide a potent business for the “MICE” industry is the so far neglected “SMREF” segment. ( it stands for the Social, military, religious, educational and fraternal segments which is generally unaffected from the economic conditions)

• These days rather than conducting meeting at exotic resorts and city centers companies prefer dedicated conference centers which have all the dedicated services available at economic prices.

• Newer destinations like China and Middle East are becoming more and more popular for meetings and conferences.

Refernce:-
1> EIBTM 2009 industry trends and market analysis, 2009 , available at < http://www.iccaworld.com/dbs/eibtm/files/3464_eibtm_industry_report_print_2009_v6_notrim.pdf>

2> KPMG business outlook report, 2009

Crisis in Mass marketing and the advent of Interactive Branding

                                                                                                                                                                                                                                                                                                     
 The term “Marketing” might be coined in the dawn of 20th century but the idea was prevalent since thousands of years. Similarly customers are also not a recent phenomenon; they would have been active since the first transaction was made. In the past century the realm of marketing had undergone constant evolution as a discipline. In the initial days marketing was a push concept where there was a constant tendency on the parts of the firms to push their products/services to the customers. In 1953 with “Neil Borden” coining the term “Marketing Mix” (4ps of marketing that is product, price, people & promotion) marketing took a leap as a discipline. In 60’s Theodore Levitt came up with the theory of “Marketing Myopia” that for the first time attempted to consider seriously the customer factor in marketing. In the coming years the significance of customers kept on increasing in formulation of marketing strategy by individual firms, 4Ps of marketing got transformed to the 4Cs (Consumer, Cost, Convenience, Communication).In the 21st century with computers and internets penetrating to individual households coupled with a plethora of popular Websites, Social networking sites, E-portals, Online communities etc the realm of marketing is undergoing a new paradigm shift. Now the customer is not only the central focus of the marketing strategy but is also the most active player of the branding exercise conducted by individual firms.


The new age customer

The new age customer is very different from his/her previous counterparts. He is much more intelligent, confident and has much more understanding of various kinds of products & brands. A stereotypical new age customer 1can be assumed to be exposed to end number of media channels, is much more tech savvy and internet friendly. It can be assumed that the new age customer has a high sense of individuality and in this age consumerism buying for him/her is a very high involvement, fun driven process. There are across 1.96 Billion internet users 2 across the world. 90% of the internet users know at least one social media and every social media user is connected to 195 friends on an average.There are 133 million blogs enlisted in the blog directory “Techorati”.These facts explain the power and influence of the new age consumers. The probabilities are always high that a new age consumer is also an author with his own blog he uses to reflect his view points. He might also be a thought leader with his own friend circle in the social media sphere he can influence, a critic using these media platforms to criticize a product he doesn’t like and a brand ambassador using positive word of mouth in such social media platforms for something he likes. The strengths and skills that have been acquired by the new age customers cannot be discounted by marketers. These customers need to be involved actively in the branding processes.

Interactive Branding

American Marketing association(AMA) defines a brand as a "name, term, sign, symbol or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of other sellers. In reality brand is much beyond that, brand resides within the hearts and minds of customers, clients, and prospects. It is the sum total of their experiences and perceptions, some of which you can influence, and some that you cannot. These days with the help of Websites, E-manuals, E-brochures, Multimedia presentations, Clickable add banners interactivity between the customers and the firm increases many fold. While the customer gets a better brand experience the firm understands the behavior, interest and tastes of the customer in a better way. These interactive tools can also provide a good insight into the customer’s geographic location as well as demographic profiles.



Crisis in Mass Marketing

Given below are some of the statistics that describes the crisis in mass marketing:-

• Only 18% of TV advertisements create positive ROI.

• Average return on every one dollar spent advertising on mass media.

• TV advertising cost has increased by 256% in the past one decade.

• 90% of people who can skip TV ads do skip it.

• 65% of people believe that they are constantly bombarded by TV ads

• Only 14% of people trust TV advertisements.

• 56% of people avoid buying products from company who they think

Advantages of Interactive branding


With the help of better music, videos, texts and pictures it engages the customers more effectively.

• With the help of web2.0 platform there can be a direct communication between the firm and its customers. Customers can communicate their requirements, expectations, responses and of course judgment to firms.

• Web 2.0 platforms provide effective platforms for the customers & consumers all around the world to come together and collaborate.

• Clicks on web pages can be traced back to get insights about the profile, location, choices and behavior of customers.

• With the help of tools like “Google Analytics” large amount of data collected over a period of time can be analyzed and processed to derive consumer behavior pattern.

• These tools help in figuring out the degree of involvement of individual customers. Stuffs like time spent on web pages, comments posted, the no. of revisits made give a very clear cut understanding of individual customer’s involvement with a brand. This can help firms in profiling their customers.

• In comparison to regular mass media channels such as news papers, magazine, television commercials these web based applications and platforms are much more economical.

• In the time of economic downturns when the regular advertisement budget gets cut down, Interactive branding can provide economical and effective alternative.

Social Media

                                                                 
Social media websites like Facebook, Orkut, BlogSpot, LinkedIn, play a very important role in Interactive branding. Social media is cost effective, has a wide range and reach and can boost immediate sales by engaging the customers. Social media provides platforms for likeminded people to interact with each other irrespective of the geographical boundaries. One of the biggest advantages of social media is that it helps in communicating the right message to the right audience. Given here is a table that describes the influence some of the most popular social media websites with the help of latest statistics.

Facebook:-

• The average Facebook user has 130 friends.
• More than 25 billion pieces of content (web links, news stories, blog posts, notes, photo albums, etc.) is shared each month.
• People spend over 500 billion minutes per month on Facebook.
• The average Facebook user is connected to 60 pages, groups and events.
• There are more than 1 million entrepreneurs and developers from 180 countries on Facebook

Twitter

• There are currently 110 million users of Twitter’s services.
•  Twitter receives 180 million unique visits each month.
•  There are more than 600 million searches on Twitter every day.
• Twitter gets more than 300,000 new users every day.

Over 60% of Twitter use is outside the U.S.

Linkedin

• There are more than 70 million users worldwide
• Members of LinkedIn come from more than 200 countries from every continent.
• 80% of companies use LinkedIn as a recruitment tool.
• LinkedIn receives almost 12 million unique visitors per day.
• A new member joins LinkedIn every second.

You Tube

• The first video was uploaded in you Tube on 23rd April,2005.By 2006 more than 65000 videos were uploaded every day.
• . YouTube receives more than 2 billion viewers per day.
• Every minute, 24 hours of video is uploaded to YouTube.
• Music videos account for 20% of uploads.

Implementation of Interactive branding

Interactive branding is relatively new concept and there is dearth of strategic models to implement it. One of the models that explain it is the “COCHA” model.

                                                             

• Concept: Any online material needs to have an appropriate concept. A concept that communicates the brand essence, tells the brand story well.
• Content: It should have a very engaging content with a right mix of text, images, videos, music, software, etc that can help users interact with it.
• Chanel: Rather than being a monologue medium (click ads) it should facilitate communication between the website and the users. This can be implemented with the help of social media, chat gadgets, e mail etc.
• Context: Should target the right customer at the right time and right place. Should fit their interest and use their language.
• Consumer: It should facilitate firms to extend and tighten the communication link with the target consumer base. Consumer bases can be defined with the help of profiles, communities, tastes, needs, motivations etc.

Conclusion

The new century heralds a new paradigm shift in branding. In the current economic crisis where advertising budgets are getting cut down drastically and mass media channels are losing its effectiveness day by day firms need innovative ways to promote its brand. Innovative ways that can engage and capture target customers in cost effective ways. Another important benefit of “Interactive Branding” is that it helps the new age customer to interact directly and collectively with the firms. The new age customers who are equipped with the best of media tools and gadgets and have much more knowledge in contrast to their previous counterparts just don’t want to have a passive role. They want active involvement in the brand building process. This further signifies the importance of “Interactive Branding”. Having said this it does not mean that regular mass media channels are not important, they are surely going to exist but the time has come where firms need to have a right mix of regular branding tools as well as innovative tools like “Interactive branding”

(Reference :-
1. Online media gazette.


2. WWW.slideshare.com

3. http://www.internetstats.com/

4. State of the Blogosphere 2009.

5. )

http://www.internetworldstats.com/