Network Influences on Cooperation Levels in Destination Marketing: the case of www.purenz.com Sushma

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Network Influences on Cooperation Levels in
Destination Marketing the case of
www.purenz.comSushma Seth Bhat
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Introduction

• Literature reviewed tourism/strategic
  alliances/networks
• Research aims / case study methodology
• Discussion findings www.purenz.com
• Research contribution
• provides support for the view that the social
  networks in which firms are embedded have a
  considerable influence on inter-organisational
  alliance formation and
• identifies five levels of cooperation in
  destination marketing passive acceptance,
  support, alignment, contribution and pooling.
• Future research direction

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Literature reviewed - tourism

• Destinations are some of the most difficult
  entities to manage and market, due to the
  complexity of the relationships of local
  stakeholders (Sautter Leisen, 1999)
• Interdependency discussed extensively in the
  tourism literature (Fyall Garrod, 2005
  Buhalis, 2000 Palmer and McCole, 2000 Sautter
  Leisen, 1999).
• Perhaps the most important challenge for
  destination marketing therefore is to bring all
  individual partners together to cooperate rather
  than compete and to pool resources towards
  developing an integrated marketing mix and
  delivery system (Buhalis, 2000, p.104).

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Literature reviewed - tourism

• Considerable research on social partnerships in
  tourism (Waddock 1989 Waddock Bannister ,
  1991 Ritchie, 1993Taylor ,1995 Tosun, 2000
  Augustyn Knowles, 2000 Yuksel and Yuksel,
  2004 Jamal Getz, 1995 Palmer Bejou, 1995
  Selin Chavez,1995 Fyall (2003)
• A number of tourism researchers have used case
  study methodology to study collaboration (Dredge,
  2006 Jamal Getz, 2000 Lawrence, 2007 Mutch,
  1996 Roberts Simpson, 2000).
• Generally, the case studies selected have had a
  sustainability and destination development focus
• Few studies on cooperation in destination
  marketing have taken a strategic marketing
  management perspective.

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Literature reviewed - Strategic Alliances

• "inter firm collaboration over a given economic
  space and time for the attainment of mutually
  defined goals." Buckley Dunning (1994, 12)
• the pooling of specific resources and skills by
  the cooperating organisations in order to achieve
  common goals, as well as goals specific to the
  individual partners. (Vardarajan and Cunnigham
  1995, p282)
• Generic for any form of organisations working
  together to achieve something

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Literature reviewed - Strategic Alliances

• Attempted typologies (Kanter ,1994 Child
  Faulkner, 1998 Terpstra Simonin ,1993 Palmer
  Bejou ,1995 Selin, 1999)
• Variety of dimensions in alliances
• Equity / non equity
• Legal form
• Scope
• of participants
• Motive
• Geographical scale
• Initiated by - legal or grassroots
• Locus of control - agency vs stakeholders
• Organisational diversity
• Time frame

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Strategic Alliances previous research

• focussed on international joint ventures
  involving equity (Lorange Roos, 1992 Beamish,
  1998)
• on manufacturing and technology intensive
  industries e.g. biotechnology, information
  technology, automobile, telecommunication
  (Beamish, 1998 Lorange Roos, 1992).
• Strategic alliances have become quite common in
  services area e.g. advertising, financial
  services, airlines)
• minimal academic research of this sector and
  more specifically in tourism (OFarrell and
  Wood, 1999)

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Strategic Alliances in Tourism?

• Likely to involve multiple organisations
• Nature of the participating organisations will
  vary
• from profit oriented, partially commercial to
  state organisations
• members specialise in tourism or tourism may only
  be one of their market segments.
• Likely not to involve equity participation
• Possibly no written agreement and no clear
  boundaries to the scope of the alliance.
• May be no clear or separate management structure
  for the alliance.

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Literature reviewed - networks

• A network is a set of interconnected
  nodes(Castells, 2000)
• Focus not on a single person or organisation
• Focus not on dyadic relationships
• Overall pattern of relationships which form the
  context in which all organisations function
• One has to rise above the individual firm and
  analyse the system as a whole. (Barley, Freeman
  and Hybels)

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Three Key Concepts relevant to tourism

• Embeddedness - long term relationships
• lead to less formality, more trust and sharing,
  and less focus on immediate gain
• Density the number of ties that link network
  members
• The more dense the ties the greater the level of
  embeddedness and shared values in the network
• Centrality network position of an individual
  organisation
• Greater the centrality, more the power/prominence
• Greater access to information

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Main research aims

• To examine the role, form and process of
  inter-organisational cooperation in destination
  marketing.
• To find out if the network nature of the industry
  has an impact on how strategic alliances are
  formed and managed?
• To contribute to the development of theoretical
  framework for researching and analysing
  cooperation in destination marketing.

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Case study methodology

• A number of authors suggest that case studies are
  a useful method (Laws and Buhalis, 2001 Riege,
  1998 Yin, 1994 Parkhe, 1993 Eisenhardt, 1989)
• where exploratory research is still needed to for
  theory-building
• for the investigation of contemporary phenomenon
  within its real-life context.
• www.purenz.com - an in depth case study
• Strategic importance
• Excellent example of collaboration affecting all
  stakeholders World Tourism Organisation (1999).
  Marketing Tourism Destinations Online Strategies
  for the Information Age.
• Recent

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Data Collection

• Data collection - official documentation, press
  coverage, website analysis, 35 stakeholder
  interviews
• Covered the period 1999 - 2006

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Destination marketing in the NZ tourism network

• Marketing of New Zealand as a tourist destination
  overseas - responsibility of TNZ
• so that is totally focusing on bringing in
  international visitors to New Zealand and
  creating an awareness campaign out there globally
  thats going to sell New Zealand as an attractive
  destination.

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Changing role of NZ NTOSources Belich, 2001
McClure, 2004 NZTPD, 1976 Pearce, 1992
Stafford, 1986 Watkins, 1987
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Centrality of NTO (TNZ)

• Late 1990s, focus of NTOs marketing strategy
  shifted to developing a global brand for New
  Zealand (Tourism New Zealand 15, n.d.).
• Purenz.com one component of the overall 100 pure
  branding strategy.
• Site to reflect the imagery of the overall
  campaign
• Traditional media advertising would promote the
  site for further information.

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Stage 1 - www.purenz.com

• The initial site (Stage 1) was developed in 1999
• Basically as an electronic brochure
• Included a database
• Registration on the site is free.
• Links from the purenz site take potential
  tourists to the suppliers site for more
  information and / or bookings.

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Stage 2 www.purenz.com

• Major redevelopment of the purenz site in 2002
  (Stage 2)
• a more complete look
• all the content was re-written with the new
  target market (interactive traveller) in mind.
• Bought domain name newzealand.com with NZTE
• Continuous development since
• . Foreign language versions began being
  introduced in 2000.
• More interactivity built in

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Centrality of NTO (TNZ)

• TNZ did not seek industry input for this
  development. In the words of one NTO manager,
• I mean, there had to be co-operation
  internally, within the organization, so
  co-operation to ensure that the site was, had
  carried the branding and the campaign etcetera,
  etcetera and things like that but I dont knowI
  wouldnt know who they would co-operate with
  elsewhere, sorry.
• Technical development of the site outsourced to
  professional web design firm, Shift Ltd.

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Is the www.purenz.com site a success?

• Yes according to most research participants
• how do you measure the success of destination
  marketing? thats a massive challengeWell, I
  think ultimately you have to use the weight of
  evidence approach where you take a whole lot of
  things .everything from awards that the campaign
  has won to growth in arrivals, to success stories
  in the tourism industry to anecdotal visitor
  feedback, to the research that we do in changing
  awareness preference and attention for New
  Zealand. All of those things I think end up
  building to a weight of evidence that says this
  isthis is working.

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Level of cooperation in development

• Some brief examples of the type of comments made
  include
• Well it cooperation wasnt used,.
•   It was quite disastrous
• Most of the interviewees who thought the level of
  cooperation achieved was high were NTO employees.
  
• Raised questions
• Cooperation was important
• This case little evidence of cooperation
• Why did TNZ not seek more industry input?

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Why was the cooperation limited, informal,
unstructured?

• Objective tactical - electronic brochure
• Sufficient budget from government
• Costs of cooperation
• Time constraints
• Complexity of dealing with a large number of
  stakeholders
• Results less effective (more compromises)
• 1999 NZ tourism network .new TNZ leaders
• TNZ and TIA relationship fractious
• Lack of clarity of roles
• TNZ attitude (arrogance)

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Industry response to limited participation

• The view of most of the industry members
  interviewed was unilateral approach was probably
  the only way of getting results in a highly
  fragmented industry
• .I dont know whether theres any strengths of
  the process used to develop purenz but then
  these things are sometimes like that, you know,
  if you go out and you ask a committee of people
  whats the best idea, youll never get anywhere.
  So you do need someone to come up with an idea,
  then you sell the idea and get people to believe
  in it and away you go.you know, its probably
  the way it has to be done. (Tour operator)
•  
• This industry talks around in circles and never
  actually gets anywhere, so you do have to put a
  stake in the ground and say, yeah it might not be
  the best way of doing it, but the industry
  seems to believe in a diplomatic process and yet
  it ties itself up in knots because it becomes
  decision by committee and they would never of got
  anything done.(Entertainment sector)

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Conclusion Network characteristics impact

• On need and importance given to
  inter-organisational cooperation in destination
  marketing
• TNZs choice of a unilateral and prescriptive
  development process was affected by network
  characteristics such as
• the number and diversity of its members
• the centrality of certain organisations
• the climate of embedded relationships
• the traditional funding structure
• the established network channels of communication
  and interaction

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Conclusion Cooperation is a strategic choice

• In each particular network context
• Can be different levels of cooperation in terms
  of input required by NTO
• Choice of cooperation level to be made by
  management based on
• assessment of the existing network climate
• organisational constraints, and
• a cost-benefit analysis of the value of
  cooperation

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Different understandings / expectations of
cooperation

• Broadly fell into 3 groups
• NTO alignment
• a passive stakeholder being kept informed
• proactive stakeholder interactive process
• Suggests that there are different levels of
  cooperation in destination marketing
• Research suggests the different levels require
  different types of investment on the part of the
  NTO

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Research contribution

• Cooperation in destination marketing is not an
  ideology but a strategic choice
• Cooperation is not uniform there can be
  variations in terms of different levels of
  cooperation
• The choice of what level of cooperation is needed
  for a particular objective will be affected by
  the current network characteristics
• Different levels of cooperation require different
  levels of investment on the part of the NTO

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Future Research Direction

• explore further /confirm
• Which are the network dimensions affecting
  cooperation in destination marketing
• The five levels of cooperation and
• The investment required to achieve each level of
  cooperation.

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Many thanks ... your comments/ questions are
very welcome...

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www.purenz.com home page as on Nov 27, 1999
(Retrieved from http//www.archive.org on 07 Apr
04)
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http//www.newzealand.com/
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Research participants
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Interdependent nature of destination marketing

• Interdependency discussed extensively in the
  tourism literature (Fyall Garrod, 2005
  Buhalis, 2000 Palmer and McCole, 2000 Sautter
  Leisen, 1999).
• Product -
• Entertainment / leisure / activities providers -
  product
• Transport companies
• Accommodation providers
• RTOs
• Sales /distribution
• Tour operators / agents
• International airlines
• NTOs

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Embedded relationships

• Small group of senior people who consult each
  other regularly
• Ive been in this industry for more than ten
  years and I see the same people everywhere
  probably only a couple of hundred of them.there
  is a nucleus of people in that industry and those
  people are very consultative
• Perceived positive and negative aspects of
  embedded relationships

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Emerging themes from interview participants
perceptions of the NZ tourism network (2004/2006)
and the network prior to 1999

• Prior to 1999
• Tourism New Zealand and Tourism Industry
  Association relationship fractious
• Lack of fairness
• Incestuous
• Resistance towards new entrants
• Lack of clarity of roles
• TNZ attitude (arrogance?)

• Current (2004/2006)
• Relationships with industry people established
  comfortable
• Communication informal, fast, constructive
• Commonality of interest
• Similar philosophy
• Respect for people
• TNZ responsible for destination marketing
  leadership
• Clarity of roles responsibilities of other
  industry organisations