SUCCESS FACTORS OF PLACE MARKETING: A STUDY OF …

[Pages:114]Helsinki University of Technology, Institute of Strategy and International Business Doctoral Dissertations 2003/4 Espoo 2003

SUCCESS FACTORS OF PLACE MARKETING: A STUDY OF PLACE MARKETING PRACTICES IN NORTHERN EUROPE AND THE UNITED STATES

Seppo K Rainisto

TEKNILLINEN KORKEAKOULU TEKNISKA H?GSKOLAN

HELSINKI UNIVERSITY OF TECHNOLOGY TECHNISCHE UNIVERSIT?T HELSINKI

UNIVERSITE DE TECHNOLOGIE D?HELSINKI

Helsinki University of Technology, Institute of Strategy and International Business Doctoral Dissertations 2003/4 Espoo 2003

SUCCESS FACTORS OF PLACE MARKETING: A STUDY OF PLACE MARKETING PRACTICES IN NORTHERN EUROPE AND THE UNITED STATES

Seppo K Rainisto

Dissertation for the degree of Doctor of Science in Technology to be presented with due permission of the Department of Industrial Engineering and Management, for public examination and debate in Auditorium Luna, Spektri Duo Building, Mets?nneidonkuja 6, at the Helsinki University of Technology on the 19th of September, 2003, at 13 o?clock.

Helsinki University of Technology Department of Industrial Engineering and Management Institute of Strategy and International Business Teknillinen korkeakoulu Tuotantotalouden osasto Yritysstrategian ja kansainv?lisen liiketoiminnan laboratorio

Helsinki University of Technology Department of Industrial Engineering and Management P.O.Box 9500 FIN-02015 HUT Finland Phone: +358 9 451 3651 Fax: +358 9 451 3665 Internet

ISSN 1457-6929 ISBN 951-22-6685-7

Monikko Oy 2003

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ABSTRACT

The aim of the present study is to evaluate which are the most critical success factors in place marketing, and how these factors could be utilised in place development. The study builds a framework and analyses place marketing practices from the perspectives of the process, assessment criteria and success factors. The main research focus is on marketing management aspects in place marketing.

The primary theoretical background and concepts in place marketing for this study consist of marketing theory, branding, assessment criteria, process, place development, local economic development and non-profit organisations. This study uses a theory building, qualitative case research agenda, with an embedded, longitudinal and multiple case design. The study applies the theoretical framework of successful place marketing in an empirical research with the case locations of the Helsinki, Stockholm, Copenhagen and Chicago regions. The field research was carried out between April 2002 and March 2003. This study investigates also how Northern European versus U.S. place marketers differ in their practices and comes to the conclusion that both regions can benefit from a study of each other's practices.

This study contributes to the literature by "translating" the key concepts of corporate marketing theory for places, forms a conceptual framework and makes 35 propositions about general place marketing practices and its specific success factors. The study makes a managerial contribution by giving recommendations for place marketing practices, and by offering a new and holistic framework to help places move to a more systematic and effective marketing approach.

Strategic marketing can be also applied to places, and the tools of corporate marketing can be transferred to place marketing. Places can also be branded, through creating and communicating a place identity, which increases a place's attraction.

Key words: place development, place marketing, place customer, place branding, success factors.

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ACKNOWLEDGEMENTS

Completion of the demanding dissertation somewhat resembled a complex business project like those during my corporate years, or running a marathon with all the tears and joy. My transition from business to academic research, at my age, has received support and encouragement from many individuals and organisations for which I express my gratitude.

Foremost, I would like to express my warmest thanks to my supervisor and instructor, Henrikki Tikkanen, Professor of Marketing at Helsinki University of Technology, for his care and commitment. His professional support and clear horizons have guided and motivated me through the job. Henrikki was able to instruct in a very inspiring and motivating manner, maintaining a good balance between criticism and encouragement, with an eye on the big pattern as well as the small details. I am grateful to Henrikki for giving me an unforgettable experience of academic research.

I thank my external examiners, Professor Philip Kotler from the Northwestern University's Kellogg Graduate School of Management, and Professor Karin Holstius, D.Sc. (Econ.) from the Turku School of Economics and Business Administration. My special thanks go to Rami Olkkonen, D.Sc. (Econ.), from the Turku School of Economics and Business Administration for agreeing to act as my public examiner. Their comments were very valuable.

I am very thankful to Professors Don Haider and Irvin Rein, of the Northwestern University in Evanston, Illinois, for their comments and insight during the study. I would also like to thank Professor Ilkka Kauranen, of Helsinki University of Technology for teaching my major subject and instructing me during the licentiate study. I thank Petri Parvinen, PhD, from Helsinki University of Technology (MBA-Program) who supported me in a special search for articles. Thanks also go to my former colleagues for support at HUT and its Lahti Center.

I am very grateful to all my interviewees who have devoted their time and effort for this research. I hope that the results of the study will be useful for their place marketing practices. Of these, I would especially like to name Christer Asplund, Managing Director of the Business Arena Stockholm, Pentti Pitk?nen, Managing Director of Helsinki Region Marketing, Rolf Larssen, Managing Director of Copenhagen Capacity, Tom Bartkoski,

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Director of International Business Development from the World Business Chicago and Bill Testa, Vice President and Director of Regional Programs from the Federal Reserve Bank Chicago.

Many thanks to Roderick Dixon for checking the language, and to Maija Romo, Malgorzata Juvonen and Niina J?rvinen from the Lahti Polytechnics Business Faculty for helping with the regional statistics.

I am very grateful to the professional staff of the University Library of the City of Lahti for their excellent, individual services. Warm thanks go to Roope Rainisto who got the manuscript ready for printing, and finalised the graphics. I am also grateful to Pirjo Ruuskanen, secretary, for guiding me through the administrative process at Helsinki University of Technology.

Carrying out this research would not have been possible without financial support. I gratefully acknowledge the financial support from Kunnallisalan kehitt?miss??ti?, Suomen kulttuurirahasto/P?ij?t-H?meen rahasto, Dr.H.C. Marcus Wallenberg Foundation, Foundation for Economic Education, and the City of Helsinki. I devote this study to my family; to my wife Sirpa and our sons Ville, Jonni, Sami and Roope. I thank Sirpa for her patience over the years, when my thoughts were occupied with the study, and for having assisted me in many practical issues.

I hope that my study will bring new perspectives to the development of sophisticated place marketing.

Espoo, 21 August 2003

Seppo Rainisto

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TABLE OF CONTENTS

1. INTRODUCTION ............................................................................................... 10 1.1 Place Marketing Phenomenon...................................................................................... 10 1.2 Current Place Marketing Research............................................................................... 17 1.3 Purpose of the Study .................................................................................................... 19 1.4 Research Focus............................................................................................................. 22 1.5 Structure of the Study................................................................................................... 23

2. A LITERATURE REVIEW AND THE THEORETICAL FRAMEWORK OF THE FOCAL STUDY ........................................................................................................ 26 2.1 Place Development....................................................................................................... 26 2.2 Place Marketing ........................................................................................................... 33

2.2.1 Place Marketing Process ...................................................................................... 36 2.2.2 Place Branding ..................................................................................................... 43 2.2.3 Success ................................................................................................................. 54 2.3 Building the Theoretical Framework of the Focal Study............................................. 58 2.3.1 Development of Place Marketing Discourse........................................................ 58 2.3.2 General Framework of the Study ......................................................................... 64 2.3.3 Place Marketing Practices .................................................................................... 68 2.3.4 Success Factors .................................................................................................... 69

2.3.4.1 Planning Group ................................................................................................ 69 2.3.4.2 Vision and Strategic Analysis .......................................................................... 70 2.3.4.3 Place Identity and Place Image ........................................................................ 73 2.3.4.4 Public-Private Partnerships .............................................................................. 77 2.3.4.5 Political Unity .................................................................................................. 79 2.3.4.6 Global Marketplace and Local Development .................................................. 80 2.3.4.7 Process Coincidences ....................................................................................... 82 2.3.4.8 Leadership ........................................................................................................ 84 2.3.5 Summary .............................................................................................................. 86

3. ON RESEARCH METHODS ............................................................................. 89

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3.1 Scientific Orientation of the Study............................................................................... 89 3.2 Qualitative Case Study Research ................................................................................. 90

3.2.1 Qualitative Methods ............................................................................................. 90 3.2.2 Case Study Approach ........................................................................................... 92 3.2.3 Building Theory ................................................................................................... 94 3.3 Research Process of the Focal Study ........................................................................... 97 3.3.1 Selection of Cases and Informants ..................................................................... 103 3.3.2 Collection of the Empirical Data........................................................................ 106 3.3.3 Analysis and Interpretation of the Data ............................................................. 108 3.3.4 Quality of the Data and Validity of the Study.................................................... 109

4. FOUR CASE DESCRIPTIONS AND ANALYSES ...........................................112 4.1 General Background Information of the Locations Studied ...................................... 112

4.1.1 Joint Data of the Case Locations........................................................................ 112 4.1.2 Location Survey Findings .................................................................................. 114 4.1.3 Overview of the Place Marketing Practices in the Case Locations ................... 117 4.2 Helsinki Case.............................................................................................................. 119 4.2.1 Introduction ........................................................................................................ 119 4.2.2 Place Marketing Practices .................................................................................. 121 4.2.3 Analysis of Success Factors ............................................................................... 130

4.2.3.1 Planning Group .............................................................................................. 131 4.2.3.2 Vision and Strategic Analysis ........................................................................ 132 4.2.3.3 Place Identity and Place Image ...................................................................... 134 4.2.3.4 Public-Private Partnerships ............................................................................ 135 4.2.3.5 Political Unity ................................................................................................ 136 4.2.3.6 Global Marketplace and Local Development ................................................ 137 4.2.3.7 Process Coincidences ..................................................................................... 138 4.2.3.8 Leadership ...................................................................................................... 139 4.3 Stockholm Case.......................................................................................................... 141 4.3.1 Introduction ........................................................................................................ 141 4.3.2 Place Marketing Practices .................................................................................. 144 4.3.3 Analysis of Success Factors ............................................................................... 149

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