Strategic Territorial Marketing

1. Strategic Territorial Marketing Francesco Fusco UNIBO - Introduction to territorial marketing -UNIT 2 - F. Fusco

2. Introduction • Regional development and strategic territorial marketing are becoming major topics in the economic and academic environments to guide public governance in improving overall quality, keeping investments low. •  In the new economy age enterprises competitiveness is highly related to local social systems where they actually operate. •  They mutually influence eachother and constitute a critical factor of success for the counterpart • This unit will introduce to the knowledge based territorial marketing UNIBO - Introduction to territorial marketing -UNIT 2 - F. Fusco

3. The vision • The New Public Management represents the change from the classic bureaucratic model to the new profit-based business model of public sector • In thenext future new skills will be required to support local authorities in the New course of Public Governance • Global economy requires new ways of interaction among the social actors • Site location managers and general regional promoters will be key professionals within public organisations UNIBO - Introduction to territorial marketing -UNIT 2 - F. Fusco

4. Definition A region is a territorial area ( i.e. connected geographical closed area) where some representative features has a constant value. No restrictions hold for the features under consideration. A region can have a topological decision function, defined on its domain, to judge if a given item is inside or outside the region. In the following region, territorial area, local system are synonyms. UNIBO - Introduction to territorial marketing -UNIT 2 - F. Fusco

5. The equivalence laws • In the new economy age,a region must be organised and managed like an enterprise,in order to reach leadership and to create value • A region must implement a permanent knowledge trade with its customers to save competitive advantage over time UNIBO - Introduction to territorial marketing -UNIT 2 - F. Fusco

6. Region: a product on sale • As a commercial item,the region product can be regarded from two different points of view: • Riduzionistican area is the precise set of its heterogeneous components • Holistican area is the resulting combination of all its interrelating parts, including intangible relationships The latter helps to find out the added value of a region UNIBO - Introduction to territorial marketing -UNIT 2 - F. Fusco

7. Three main conditions A successful must • be complementary to user needs • be focused on vertical sectors • have a good territorial marketing plan UNIBO - Introduction to territorial marketing -UNIT 2 - F. Fusco

8. What the territorial marketing is … The continuous cooperativeprocess to activate and maintain the virtuous circle Satisfaction – reliance – attractiveness – value starting from the analysis of the needs of stakeholders and customers to develop internal demand, based on reliance, and attract external investors to increase overall value … UNIBO - Introduction to territorial marketing -UNIT 2 - F. Fusco

9. What the territorial marketing is not It is not a simple promotion of regional assets It is not just advertisement or media broadcasting It is not static tourist information UNIBO - Introduction to territorial marketing -UNIT 2 - F. Fusco

10. The territorial marketing plan To trigger and regulate a territorial marketing we need an operational management tool The strategic territorial marketing plan Actors Analysis Clustering Offer Kick off UNIBO - Introduction to territorial marketing -UNIT 2 - F. Fusco

11. How to design a valid marketing plan No single general rule does exist to guarantee a good strategicterritorial marketing planning It depends on specific opportunities and conditions The key idea is to put in the pot the most stuff you can and organise it in the best way UNIBO - Introduction to territorial marketing -UNIT 2 - F. Fusco

12. Basic rules • A few rules are mandatory for good territorial marketing: • To select the best mix of goods and services for an interesting offer to stakeholders • To facilitate the access to the area resources • To advertise the offer to a broader audience of investors • To financially support users to adopt the offer • To feedback the implementation of the plan UNIBO - Introduction to territorial marketing -UNIT 2 - F. Fusco

13. Not product based The dynamics of new economy and the public budgetconstraints imply A strategic territorial marketing cannot be only product based but resource and knowledge based, that is stakeholders and investors must rely on resource availability, infrastructure quality, competence skill, laws and regulations, social attitude UNIBO - Introduction to territorial marketing -UNIT 2 - F. Fusco

14. but resource and knowledge based Technological skills Financial services Infrastructures Knowledge services Social resources UNIBO - Introduction to territorial marketing -UNIT 2 - F. Fusco

15. The networked model The hypercompetitive dynamics of our days requires to evaluate a territorial area not just as a single isolated entity but as a node of a more complex network. The overall value V of a region R can be therefore calculated as VR = i r i + Mσ Mkr k Internal resources external resources UNIBO - Introduction to territorial marketing -UNIT 2 - F. Fusco

16. The networked model (cont.) VR = i r i + Mσ Mkr k Where r i is the i-th inner coproducer of value in our region R r k is the k-th outer producer of value of region M σ m is the transfer value factor from region M to our region R UNIBO - Introduction to territorial marketing -UNIT 2 - F. Fusco

17. Dynamic economic model • ITC technology shrinks common time and space thus changing the consolidated economic models and generating global interaction • New factors play a key role in new digital economy; turmoil is sometime generated by non homogeneity of different local systems • Strong dependency of global economy from information is now due to digital technologies • Local economy vs global economy is a major issue to improve regional wealth • Only innovative flexible systems are expected to survive UNIBO - Introduction to territorial marketing -UNIT 2 - F. Fusco

18. Global economy vs digital economy Product chain is now totally broken down Fragmented sub-chains are spatially distributed, putting new actors in the field able to offer costs reduction and add value Space Time pace is also altered Time-to-market from idea to sale Throughput time from design to production Subprocess time from start to end of a subprocess Delivery time from order to delivery Time UNIBO - Introduction to territorial marketing -UNIT 2 - F. Fusco

19. Long term production slopes UNIBO - Introduction to territorial marketing -UNIT 2 - F. Fusco

20. Knowledge based territorial marketing • Knowledge is the main resource to improve economy • Knowledge is the power for long run development • Knowledge adds value to product chain • Knowledge can be transmitted at very low cost • Knowledge is the key to join global economy E = K UNIBO - Introduction to territorial marketing -UNIT 2 - F. Fusco

21. The new economy spinning circle data information economy innovation knowledge flexibility competence creativity UNIBO - Introduction to territorial marketing -UNIT 2 - F. Fusco

22. How knowledge produce wealthy economy? Business Government Learning organisation Finance Education UNIBO - Introduction to territorial marketing -UNIT 2 - F. Fusco

23. Public Governance evolution time Internetworked government The open government The integrated government The team The individual UNIBO - Introduction to territorial marketing -UNIT 2 - F. Fusco

24. New paradigm of public organisation Bureaucracy Administrative functions Closed systems Slow decisional processes Formal approvals Strict financial rules Technology islands Occasional democracy Simplifying (Electronic) Services Open systems Fast decisional processes Informal approvals Flexible financial rules Internetworked Technology Real time democracy UNIBO - Introduction to territorial marketing -UNIT 2 - F. Fusco

25. Virtual innovative system • Digital information age claims for total independence of economy from time and space • An innovative system is a node of a global network • Any local system must be based on a learning model The border of the innovative system is thus fuzzy and the territorial system becomes virtual, this allows to improve knowledge without proximity constraint Local system Virtual system Global system UNIBO - Introduction to territorial marketing -UNIT 2 - F. Fusco

26. Performance indicators of local systems • Technological productivity level • Intermodal infrastructure quality • Profit based social attitude • Broad (worldwide) scope of business • Availability and mobility of managerial skills • Efficiency of public institutions • Political stability • Supplementary financing system • Integration degree of education and research • Relations network development UNIBO - Introduction to territorial marketing -UNIT 2 - F. Fusco

27. Location marketing Site auditing can use S.W.O.T. analysis to trace the vision of a local system and form the framework for a strategic territorial plan. An intelligent territorial agency (representing policy makers and stakeholders) could play the role to implement the operational plan Site location managers and general regional promoters will be the professionals, charged to steerthe overall process UNIBO - Introduction to territorial marketing -UNIT 2 - F. Fusco

28. Conclusions • To improve wealth in the new economy age territorial areas must be must be organised and managed like an enterprise • To implement a valid territorial marketing a cooperative vision of strategic plan must be shared by local actors. • The plan must be resource and knowledge based and the local system must be a virtual (networked) innovative flexible system • New public governance can steer the process , using new professional profiles UNIBO - Introduction to territorial marketing -UNIT 2 - F. Fusco

29. Test Exercise Design a local authority organisation to increase (>20%) the value of a small region (<100K inhabitants, <100sme’s) in five years, having a budget of 100M Euros. Hint: Make any assumption you need to sustain your model UNIBO - Introduction to territorial marketing -UNIT 2 - F. Fusco