A TCI Book Review

Marketing Places Attracting Investment, Industry and Tourism to Cities, States and Nations

Philip Kotler, Donald H. Haider and Irving Rein
The Free Press, New York, 1993, ISBN 0-02-917596-8

In this book Philip Kotler, marketing genius and professor of business at Northwestern University, turns his spotlight on the marketing of places towns, cities, regions and nations. He is ably assisted in the enterprise by Donald Haider, Director of the Public/Non-profit Management Program, and Irving Rein, Professor of Communication Studies, both of whom are also at Northwestern.

Place Marketing provides a comprehensive framework within which communities can market themselves in a global economy:

"A central proposition of this book is that marketplace shifts and changes occur far faster than a community's capacity to react and respond. Buyers of the goods and services that a place can offer (i.e. businesses, firms, tourists, investors, among others) have a decided advantage over place sellers (i.e. local communities, regions, and other places that seek economic growth). The challenge of place marketing is to strengthen the capacity of communities and regions to adapt to the changing marketplace, seize opportunities, and sustain their vitality.

This book presents a fresh approach called strategic place marketing for the revitalization of towns, cities, regions, and nations. Strategic marketing calls for designing a community to satisfy the needs of its key constituencies. Place marketing succeeds when stakeholders such as citizens, workers and business firms derive satisfaction from their community, and when visitors, new businesses and investors find their expectations met. Place marketing, at its core, embraces four activities:

designing the right mix of community features and services
setting attractive incentives for the current and potential buyers and users of its goods and services
delivering a place's products and services in an efficient, accessible way
promoting the place's values and image so that potential users are fully aware of the place's distinctive advantages"

Place marketing comprises six generic strategies that communities and regions can use to improve their competitive positions:

attracting tourist and business visitors
attracting businesses from elsewhere
retaining and expanding existing businesses
promoting small business expansion and fostering new business start-ups
expanding exports and outside investments
expanding the population or changing the mix of residents

But before a community can embrace some or all of these strategies, it must 'do its homework' in terms of understanding its own competitive advantages and disadvantages; identifying who its target markets are; improving the products and services that it can offer to these target markets; and determining how it can communicate its message to them. The book follows the general flow of this logic.

The first chapter outlines how places get into trouble. It discusses city growth and decay dynamics, and the kinds of external and internal forces that may operate to erode a place's traditional markets and competitiveness. External factors, about which a place can do very little, include technological change, intergovernmental power shifts and global economic restructuring. Internal factors include major companies leaving (often as a result of these external factors) and economic recession. This negatively affects businesses in the community, leading to unemployment. As a result the tax base of the community is stagnant or declines, which in turn creates the conditions for infrastructure breakdown and reductions in services. This makes the place even more unattractive and additional businesses leave as a result. As well the place loses its ability to attract new businesses, residents and tourists. This downward spiral only leads to further erosion of the tax base, and exacerbation of the problem.

The conclusion of this chapter is that in order to help themselves, places in trouble need to carry out six fundamental tasks:

interpreting what is happening in the broad environment
understanding the needs, wants, and behavior choices of specific internal and external constituencies
building a realistic vision of what the place can be
creating an actionable plan to complement the vision
building internal consensus and effective organization
evaluating at each stage the progress being achieved with the action plan

This process is the essence of strategic place marketing.

The second chapter discusses how places market themselves. The authors present the four main target markets for place marketing, which are 1) visitors (business and pleasure); 2) residents and workers; 3) business and industry; and 4) export markets (i.e. consumers of the goods and services produced by the place or region). In this chapter they also discuss who undertakes place marketing activities i.e. the public and private sector actors involved.

The third chapter presents a model of how these target markets make their choices. Grounded in a well-documented model of buyer behavior, it discusses how the various stages of problem recognition, information search, evaluation of alternatives, purchase decision and post-purchase behavior function within the target markets being pursued by places. It contains a very interesting section of the usefulness of the various 'places rated' services available, and how such ratings are compiled.

Chapter 4 presents a discussion of the various activities that a community should undertake in the development of a plan for strategic place marketing. This essentially is a detailed articulation of the six steps to strategic place marketing earlier outlined. The authors place particular emphasis upon the undertaking of a SWOT analysis as assessment of strengths, weaknesses, opportunities and threats facing the community or region.

Chapter 5 discusses strategies for place improvement. Here the authors stress that strategic place marketing is more than simply promoting the image of a place real work has to be done in the area of 'product improvement' as well. They suggest that a strategic place marketing plan should consider improvements that should take place in five areas: 1) urban design; 2) infrastructure; 3) basic services such as fire, police and education; 4) attractions; and 5) people. They discuss this last category primarily in terms of the kinds of stereotypes that may apply to the inhabitants of an area (i.e. residents of Sicily are criminals, those living in the deep south are friendly but slow-moving), and discuss ways in which negative stereotypes may be overcome and positive images capitalized upon.

Chapter 6 is devoted to discussing a place's image, and strategies that places can use to build on a positive image, or correct a negative one. The authors mention five factors that are critical to the development of an appropriate and useful image:

it must be valid
it must be believable
it must be simple
it must have appeal
it must be distinctive

They assess the advantages and disadvantages of the various tools that are available for communicating an image: slogans, themes and positions; visual symbols; and events and deeds.

Once the product has been improved and the image has been developed, the next step is promotion to the various target markets identified (i.e. visitors, businesses, etc.). Chapter 7 addresses this topic, and discusses the use of:

advertising
direct marketing
sales promotions
public relations
personal selling
television images (e.g. the image of Miami created by the show "Miami Vice", which became something of a negative image that the community had to overcome)
songs (e.g. 'I left My Heart in San Francisco')
sports teams
sites (e.g. the town of Dyersville, Iowa, which became a tourist Mecca after the movie Field of Dreams)

They discuss in further detail the use of advertising media, including television, radio, magazines, newspapers, billboards, direct mail, telephone campaigns and brochures. (As this book was published in 1993, there is no mention of the Internet, but clearly that would be another major promotional and advertising devices nowadays.) This chapter concludes with a section on how to evaluate the results of a promotional campaign.

With this background in place, the book then turns to a discussion of each of the six generic strategies mentioned earlier. Chapter 8 discusses attracting the tourism and hospitality business markets (e.g. business conventions). Chapter 9 deals with the base of business and industry in the community, and discusses attracting new businesses from elsewhere, retaining and expanding existing businesses, and encouraging new business start ups. Chapter 10 addresses the strategy of helping local businesses expand exports (which will help to make the business more stable and will likely increase investment and job creation in the community), and Chapter 11 deals with attracting residents. Each of these chapters contains many examples of communities that have successfully adopted each particular strategy.

The final chapter of the book addresses the issue of organizing for change. Here the authors discuss the challenges that community leaders will increasingly face in future, and that responses that strategic place marketing must consider:

Challenges

Responses

places are increasingly at risk as a result of the accelerating pace of change in the global, political and technological environment.
places are increasingly at risk as a result of normal processes of urban evolution and decay
places are facing a growing number of competitors in their efforts to attract scarce resources
places have to rely increasingly on their own local resources to face the growing competition
places need to establish a strategic vision to face these challenges
places need to establish a market-oriented strategic planning process to face these challenges
places must adopt a genuine market perspective toward their product and consumers
places have to build quality into their programs and services to compete with other places
places need skill to effectively communicate ate and promote their competitive advantages
places need to diversify their economic base and develop mechanisms for flexibly adapting to changing conditions
places must develop and nurture entrepreneurial characteristics
places must rely more on the private sector to accomplish their tasks
each place needs to develop its own unique change process as a result of differences in the place's culture, politics and leadership processes
places must develop organizational and procedural mechanisms to sustain place development and maintain momentum once it has begun

While somewhat dated (1993) now, Marketing Places provides an excellent framework for communities, cities or regions to follow in improving their infrastructure and services, and promoting themselves to the outside world. With hundreds of examples of communities that have followed all or parts of the strategic place marketing process that they outline, the book contains a wealth of real-world success stories. It is highly recommended reading for any who are in the business of improving or promoting their communities.

"All places are in trouble now, or will be in the near future. The globalization of the world's economy and the accelerating pace of technological changes are two forces that require all places to learn how to compete. Places must learn how to think more like businesses, developing products, markets and customers...The collaborative benefits of business and government working together, shaped by different cultures, traditions and institutions, are compelling leaders at all place levels and sizes to rethink their responses. If the trends toward collapsing economic borders among nations accelerates as we think they will, economic regions and places will transcend political boundaries. In a borderless economy, they will emerge as the new actors on the world scene.

The central tenet of Marketing Places is that in spite of the powerful internal and external forces that buffet them, places have within their collective resources and people the capacity to improve their relative competitive positions. Their responses to the new, bottom up economic order should be placed on an equal footing with national responses to the competitiveness challenge. A strategic market planning perspective provides places with the marketing tools and opportunities to rise to that challenge." (p. 346)

THE TCI MANAGEMENT CONSULTANTS RATING:

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Marketing Places ­ Attracting Investment, Industry and Tourism to Cities, States and Nations

Marketing Places Attracting Investment, Industry and Tourism to Cities, States and Nations