10 March 2010

The crisis and media strategies for marketing place

http://www.brainforum.org/, March 2010

The current literature, like Avraham & Ketter (2008) and White (2006), offers an extensive discourse in the field of crisis in general and the role of the media during crisis in particular. This contribution, to the “crisis demands” discussion, explores the various dimensions of a place image crisis, such as countries, regions and cities and different strategies to overcome it, from the place marketing perspective. Following the discussion of place marketing, place image and consumer behaviour, different aspects of crises and ways of handling will be considered.

The growing competition between countries and cities over attracting investment, tourists, capital and national and international status means that, today, a negative image is more harmful than ever. Countries, regions and cities intensified the competition for attention, influence, markets, investments, businesses, high-class residents, tourists, conventions, sporting events and entrepreneurs. But, this global competition is no longer limited to the leading countries, or big cities. With technological advances and market deregulations, even small places can compete in the world wide arena. The competitors are now global. For example, today, we assist the rising of the Asiatic Continent, especially East Asia, as the most dynamic geographic area of the planet. As we have seen as some players fall, other economic and social actors’ emerge. The economic and financial crisis had a drastic impact on the reduction of trade flows. However, it is also expected to have a medium-term impact in the flows of people. Such aspect is a challenge to countries, regions and cities. They compete globally all the time to attract investment, new economies, companies and human capital. We observe a new balance of powers in the world economy, and this will affect migration patterns, the world tourism and the place image. Consequently, place competition asks for long-term strategies in organizations’, decision making, marketing and media strategies.

In the United States (US) the place marketing model was developed during the 70s crisis. In that period, places, such as the major cities, like New York, experienced the migration of industries to cheaper markets. The same problem occurs today in many countries, such as Portugal. In that context, the first measure of places was to launch tax incentives to attract investments. Today, the places use a variety of other strategies. This is similar to the development in the US and Europe.
The media information indicates that many destructive events occur every day; homicide, robbery, natural disasters, corruption and other afflictions. These kinds of «possible crisis in places», as the economic and financial situation, have a very high space in the broadcasting, newspapers, Internet websites and the social network, and an impact on the places image.

According to Glaesser (2006: 12) a crisis is “a critical change in an important variable that endangers or destroys either parts of or the entire system”.  In the line of the Avraham & Ketter (2008: 79) theory, “the systemic approaches offer a general definition, emphasizing the occurrence of a change in institutions, companies, groups or places that threatens to break the current equilibrium or routine”. Mansfeld & Pizam (2006) suggests a list of five possible crises in the places:

i)       “Crime-related events;
ii)     Terror-related events;
iii)   Political unrest events;
iv)   Natural disaster events;
v)     Epidemic-related events.”

Local decision makers should be prepared for all these descriptions and should accumulate knowledge for managing them, with a necessary perception of the Coombs (1999) dichotomies“whether the crisis is internal or external and whether the crisis is intentional or unintentional”. If one or more events occurs, and if the consist in a crisis, many spokespeople try to decide how their place or organization should react. Decision makers, place marketers, political, citizens send their suggestions to change a place image after the crisis. But, the choice of the most suitable communication response strategy depends on the type of crisis, the place’s characteristics, the target audience and other circumstances.
Glaesser (2006: 14) suggests a comprehensive definition for crisis:

“A crisis is an undesired, extraordinary, often unexpected and timely limited process with ambivalent development possibilities. It demands immediate decisions and countermeasures in order to influence the further development again positively for the organization/destination and to limit the negative consequences as much as possible. A crisis situation is determined by evaluating the seriousness of the occurring negative events, which threaten, weaken or destroy competitive advantages or important goals of the organization/ destination.”

Glaesser combines different variables relevant to crises in a country, city or tourist destination: i) unexpectedness; ii) time limits; iii) unpredictable future, and the iv) risk of losing the place’s competitive position and cause a negative impact in place image.
What are the contemporary examples of a crisis in the places? To take some recent examples, Hong Kong suffered a crisis caused by epidemics; New York suffered a crisis as a result of terrorism; Croatia due to war; Nepal because of political unrest and New Orleans through natural disaster. Recently, the earthquake in Haiti, is another good example.

The main problem is the continual broadcast of the catastrophes, and the possible impact in the place image. With this, what is the core-question to place marketers? What do they need to do in order to manage the crisis and how can they prevent potential damage?
Marketing is a universal process that can be applied to developing and promoting many entities, including products, services, experiences, places, persons, properties, ideas, causes, and information.

Since the early 90’s there has been increasing interest in place marketing, place image and place branding. The number of countries taking part in the global economy and global tourism is increasing, accompanied by a parallel process whereby worldwide transportation and communication have grown. They are speedier, easier and the barriers between East and West are fading and getting cheaper (low cost carriers e.g.). However, if some place grows, another decreases in the attraction cycle. For example, today Paris does not compete just with other cities in Europe, but with other global cities, trying to win international tourism and important conferences. Global competition for tourism and investment has always existed, but today visiting foreign parts or investing abroad is much simpler, cheaper and safer, thanks to the communication progress. Avraham & Ketter (2008) and White (2006), indicate the best strategies, in particular communication and promotion strategies, to improve the place´s image in the crisis´ context. To help the place’s image and the place’s attraction in the decrease of the attention context, the decision makers have to choose a suitable “package” for marketing the place competitively.

Avraham & Ketter (2008: 4), according to Felsenstein (1994) identifies four economic strategies that can be used by governments to improve their image:

i)       “Developing local economy by attracting large-scale industries;
ii)     Attracting small-scale businesses in the fields of private or public services;
iii)   Political participation in the line for national budgets, and
iv)   Encouraging local businesses to expand their activities, essentially try increase your external products flows.”

The literature extensively refers to crises in general and, in particular, the role of the media in such context. White (2006) states that the, “media effect on crisis situations is so marked that it has been claimed that the crisis was actually created by the media”, the media amplifies the perception of the crisis emerge. In related literature (Avraham & Ketter, 2008) we will find two concepts:

i)       “Crisis management;
ii)     Crisis communication.”

The contribution of Avraham & Ketter (2008), help us to gain a better understanding of what is the best media strategies for territories, such as, countries, regions, cities and other destinations in a crisis context to prepare in advance for a crisis situation.

Coombs (1999: 92) identifies seven communication strategies for the place in crisis:
i)       “Attacking the accuser;
ii)     Denial;
iii)    Excuse;
iv)    Justification;
v)     Ingratiation;
vi)    Corrective action;
vii)   Full apology.”

Coombs (1999: 92) suggests that effective use of crisis communication should include two key elements: i) information and ii) compassion.
According to Glaesser (2006), crisis management is the constant practice of avoiding and containing crisis. In terms of consumer behaviour and perceptions – crisis management – is a means to control, run and operate a sudden extraordinary event.

The challenge to the place marketer, place marketing researchers, decision makers and other important stakeholders, are pro-active management approaches, in an ethically and environmentally sustainable perspective with creative media strategies. All place stakeholders need to find the best strategies to minimize the consequence caused by an unstable financial system, the economic instability and the natural events in the place´s image and in the decrease in the flow of people and capital.

In the end, I want to share my inspiration for this post and other interesting reads on the place marketing and place branding topic with all readers:

- Avraham, Eli & Ketter, Eran (2008), Media Strategies for Marketing Places in Crisis. Improving the Image of Cities, Countries and Tourist Destinations. Great Britain, Elsevier Inc.
- Coombs, W. T. (1999), Ongoing crisis communication: planning, managing and responding. California, Sage.
- Moilanen, Teemu & Rainisto, Seppo (2009), How to Brand Nations, Cities and Destinations. Great Britain, Palgrave Macmillan.
van Gelder, Sicco & Allan, Malcolm (2006), City Branding – How cities compete in the 21st century. URL: http://www.placebrands.net/reading/citybranding.html
- White, C. M. (2006), “When the media are used to create a crisis: lessons in what not to do”. Paper presented in ICA, Dresden, Germany.
Note: This post was written by Eduardo Oliveira, one of the participants of the 13th World Business Dialogue. He has a degree in Geography, a post-graduation in Tourism from the Portuguese Catholic University and is a Marketing Master Student at the University of Minho, Portugal. He has been working as a research assistant in the School of Economics and Management of University of Minho.  He develops a blog about marketing research and networks which you can find under New World Research.