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 HÖGSKOLAN HELSINKI UNIVERSITY OF TECHNOLOGY TECHNISCHE UNIVERSITÄT 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, Metsänneidonkuja 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 kansainvälisen 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 http://www.tuta.hut.fi/ ISSN 1457-6929 ISBN 951-22-6685-7 Monikko Oy 2003 1 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. 2 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 Pitkänen, Managing Director of Helsinki Region Marketing, Rolf Larssen, Managing Director of Copenhagen Capacity, Tom Bartkoski, 3 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 Järvinen 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 kehittämissäätiö, Suomen kulttuurirahasto/Päijät-Hämeen 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 4 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 5 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 6 4.3.3.1 Planning Group 151 4.3.3.2 Vision and Strategic Analysis 151 4.3.3.3 Place Identity and Place Image 152 4.3.3.4 Public-Private Partnerships 154 4.3.3.5 Political Unity 156 4.3.3.6 Global Marketplace and Local Development 156 4.3.3.7 Process Coincidences 158 4.3.3.8 Leadership 159 4.4 Copenhagen Case 160 4.4.1 Introduction 160 4.4.2 Place Marketing Practices 164 4.4.3 Analysis of Success Factors 171 4.4.3.1 Planning Group 172 4.4.3.2 Vision and Strategic Analysis 173 4.4.3.3 Place Identity and Place Image 175 4.4.3.4 Public-Private Partnerships 177 4.4.3.5 Political Unity 179 4.4.3.6 Global Marketplace and Local Development 179 4.4.3.7 Process Coincidences 181 4.4.3.8 Leadership 182 4.5 Chicago Case 183 4.5.1 Introduction 183 4.5.2 Place Marketing Practices 186 4.5.3 Analysis of Success Factors 197 4.5.3.1 Planning Group 199 4.5.3.2 Vision and Strategic Analysis 199 4.5.3.3 Place Identity and Place Image 200 4.5.3.4 Public-Private Partnerships 202 4.5.3.5 Political Unity 204 4.5.3.6 Global Marketplace and Local Development 204 4.5.3.7 Process Coincidences 206 4.5.3.8 Leadership 207 7 4.6 Comparison between the U.S. and Northern European Place Marketing 209 5. PROPOSITIONS BASED ON THE CASE ANALYSES 213 5.1 Propositions Linked to General Place Marketing Practices 213 5.2 Propositions Linked to Specific Success Factors 216 5.2.1 Planning Group 216 5.2.2 Vision and Strategic Analysis 217 5.2.3 Place Identity and Place Image 217 5.2.4 Public-Private Partnerships 219 5.2.5 Political Unity 220 5.2.6 Global Marketplace and Local Development 221 5.2.7 Process Coincidences 222 5.2.8 Leadership 223 6. CONCLUSIONS 226 6.1 Effects on the Framework 226 6.2 Summary of the Results 229 6.3 Contribution to Place Marketing Theories 232 6.4 Managerial Implications, Practical Significance and Recommendations 233 6.5 Limitations and Directions for Future Research 236 7. LIST OF REFERENCES 239 8. APPENDICES 257 8.1 Interview Guide 257 8.2 Case Study Data Sources 260 8.3 Place Marketing Trends and Challenges. A Summary Article 266 8.4 Regional Terms 270 [...]... complexity of the place product 1.3 Purpose of the Study This study argues that successful place marketing practices increase the attractiveness and value of a place The theoretical framework of the study makes an effort to integrate various success factors into one strategy in the context of place marketing and place development No general definition for success in place marketing can be made, and there... According to the literature, what is place marketing, how can place marketing be managed and what are the central success factors in place marketing? Research question 2 How do the city-regions studied conduct place marketing, and which factors explain the success or failure of place marketing? Research question 3 What are the major differences between the place marketing management practices in Northern. .. search for differences in place marketing management practices in Northern Europe and the U.S., the third question is formulated: 3 What are the major differences between the place marketing management practices in Northern Europe and the U.S.? The empirical study has three case locations in Northern Europe and one in the Midwest in the U.S., and aims at finding essential differences in their place marketing. .. place marketing practices, using international sources of literature and research evidence By answering the above research questions, the present study contributes to the new understanding of place marketing and place branding as strategic tools in place marketing, and to strategic management literature by translating marketing concepts to match “business” surroundings of places The study also analyses... by the literature review This study analyses place marketing practices in city-regions, and first develops an overview of the place marketing phenomenon, and then develops a theoretical framework for the central success factors of place marketing practices The study investigates which of the factors are such on which a place can have a direct influence, and which occur during the process, as a part of. .. which a place chooses to send marketing messages Marketing factors are the attractions and infrastructure of the place, its people and image and quality of life The planning group is responsible for the planning and control process of place marketing 16 Target markets Exporters Marketing factors Tourists and conventioneers Investors Infrastructure Planning group Citizens Attractions Place marketing plan:... functional and strategic differences of private firms and places related to the marketing practices This study gives understanding to the issue how place marketing can create attraction and promote economic development at locations The role of the management and leaderships as a success factor in place marketing is actively present when discussing findings of the study, as marketing requires professional... also leading places, due to a lack of skilled marketing abilities, can lose their vitality to survive in the place competition, when the practices of place marketing are not mastered There is the necessity of place excellence” among places (Kotler & Asplund & Rein & Haider 1999) 3 Management in place marketing means effective use and coordination of place marketing resources of a place to achieve the. .. emphasis is on Northern European place marketing practices To look for differences in place marketing practices, the Chicago Region was chosen as the case location from the U.S The main target group of the study is firms, and the focus is on business marketing of places, in this study on the foreign inward investment agency activity, in particular The issues related to tourism, labour, landscape and architecture,... Treaty 1997 (Source: Dammeyer 2002) The CoR has developed into a parliamentary gathering of political players representing regions all over in Europe 14 comparing practices The results of the Northern European cases are also compared jointly to the ones of Chicago, comparing the Northern European and U.S practices This focal study argues that places can be seen in many aspects as businesses, and strategic . in the analyses of success factors in place marketing practices. This study is theoretically positioned in the theory of place marketing 1 A place. OF PLACE MARKETING: A STUDY OF PLACE MARKETING PRACTICES IN NORTHERN EUROPE AND THE UNITED STATES Seppo K Rainisto TEKNILLINEN