Place Branding as a Competitive Tool

Theory

Place branding is the process of image communication to a target market. All places compete with other places for people (visitors, residents), resources, and business.

The global competition of cities is estimated to host 2,7 million towns, 3 thousand large cities and 455 large metropolitan areas with a population over one million.

All of them compete in the struggle for attention and this is not limited to the contest between countries and cities. Even within cities there is a fierce competition between city centers versus neighborhoods, shopping malls vs. traditional down towns, design hotels versus mainstream hotel chains, Starbucks versus Kosta Coffee and so on.

This competitive environment makes it important for places, no matter their size or composition, to clearly differentiate themselves and to convey why they are relevant and valued options.

Places have always competed with each other, but today the competitive environment is increasingly fierce, because of economic and cultural globalization and the increasing mobility of talents and capital.

In Place Branding, there is always a risk of simplification. All too often place brand development results in slogans, but such results are failures.

As Christer Asplund and Philip Kotler wrote about in Marketing Places Europe, place branding is not about logo or slogan development, but instead a commitment to a community-wide strategy on what distinguishes the place from other places, as well as a community-wide effort to effectively communicate and create that unique destination experience to the customer.
Rather than being advertising-based, efficient place branding is about delivering an exceptional experience that is memorable and emotional. In this sense, place branding is actually a bridge building activity between stakeholders and several target markets. The integration between the main target markets is therefore an important issue for place success.

The three main target markets in the world of place management are illustrated above.

A practical approach

Always start by understanding the dominating trends in the three main target markets. For some places with a strong demand for talents, residents are most important. For other places with unemployment and economic stagnation, investors and companies are the top priority, and available talents and labor are an attraction factor. For other places, historical or cultural attractions are the assets and tourists are the prime target market.

The next step is to ask: what can we develop and offer in the future? When working through this question, keep in mind the strategic importance to fulfill expectations among visitors (in red above). What is delivered to this target market effects all the other main markets and submarkets.

Keep in mind that destination-brand building is an exercise in communication, destination branding is, in reality, an exercise of identification, organisation and coordination of all the variables that have an impact on the destination image.

Place branding creates a single brand for the city, town or region and extends it to all its offerings and interactions. From a customer point of view this creates a unique picture of the place at every level of interaction. This also helps in removing the need to present a case by case picture of the place for each of its offering to the customers.

While going through the exercise place branding is a process made up of several sub-processes. Unlike the branding of simpler entities like a product, service, company or individual person, place branding, and in particular nation, region and city branding, is a complex process. The complexity comes from the great diversity of stakeholders in the process.

In general, a place brand is derived from existing assets of the place such as its history, its value offering and current public perception. Key components are also existing assets, such as events, policies, culture, unique know-how, current strong industries and clusters, and so on.

The developed place brand is then communicated through communication channels. These channels vary and range from sales offices, brochures, books and television advertisements to Internet marketing efforts. These communications are aimed at a specific target market and the internet has become the most important channel.

The place brand message can be deemed to be successful, if it fulfills the place objective of achieving results in the set of goals it aims to accomplish. These include:

Application

During the 1990s, competition between European places and regions increased dramatically. The main driver was the integration of the inner market within the European Union, with removal of trade barriers and the introduction of the single currency, the euro.

Every large and small European city and town tries to find the system to compete among the others in an increasingly competitive framework at two levels: in a world market of cities and in a European market of cities.

In Europe, the importance of place as a source of innovation and employment creation, has replaced the national and regional stereotyped policies of the 1960s and 1970s.

During this time we have also seen a graduation of society and culture from focusing on hard tangible attraction factors to soft intangible attraction factors, where the brand has become increasingly important. During the recent 20 years this process has become even more accentuated.

New benchmarking approach in recent study

“Regardless of how far away you are, how big the place is – on the Internet it is just one second away and fits on your screen.”

As the internet has become the primary communication channel of place brands, countries, regions, cities and towns are more or less successful in using the internet as a communication tool.

A city may have a very well thought through place brand, but the clarity and relevance of the brand has to be communicated on the internet in an efficient and skillful way, and this creates even higher demands on the place managers as communicators.

We in Bearing have for years contemplated this dilemma, and last year we decided to coach the development of a practical study on the topic of how successfully places are communicating on the Internet.

The result is a bachelor thesis written  at the Södertörn University, by Konstantin Krook and Victor C. Rodriguez and titled “Comparative Analysis of Place Brands – A study on how places are communicating on the internet”.

in the thesis, the authors argue that internet has become a valuable and efficient platform for places to communicate their place brand. However, just being online and having a webpage is not enough. It is equally important to communicate in an effective way.

The thesis consists of a survey of qualitative and quantitative factors for 24 cities, which are then benchmarked and where the similarities and dissimilarities are analyzed, compared and ranked.

The survey is focused on Europe and the 24 cities are sorted into Northern, Western, Eastern, Southern and Central European regions. For each part of Europe, the authors have chosen several cities of varying sizes in order to secure a representative sample from the respective regions.  Then a group of cities external to Europe is included as a benchmark.

For each of these cities, the authors have selected data, primarily from public internet sources, on a set of factors, split into descriptive facts, general questions and specific questions relevant for the place brand target groups of business investors, visitors and residents.

The results of the thesis will be presented by the authors on a separate homepage, but as a teaser we can tell you they are somewhat surprising and quite conclusive in showing the failure of many places to communicate their place brand on the internet. Some places do it with excellence, but the broad majority show clear signs of failure.

It seems that  even if the place brand itself has been well developed and is clear, internet communication is very demanding and may require development of new strategies and tools for efficient place marketing. Such tools should include the modern use of social media.

Bearing has agreed with the authors of the thesis to take this study several steps further, and we will develop a white paper on the subject, which will be published later this year.

Literature on place branding

When embarking on a place branding exercise, it is always a good idea to read up methodology and seek advice from experts. Bearing Consulting published a book on Place Management in 2011, which can be a good starting point.