1 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco Francesco Fusco
Dec 23, 2015
1 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco
Francesco Fusco
2 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco
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 each other and constitute a critical factor of success for the counterpart
•This unit will introduce to the knowledge based territorial marketing
3 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco
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 the next 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
4 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco
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.
5 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco
The equivalence laws
1. In the new economy age, a region must be organised and managed like an enterprise, in order to reach leadership and to create value
2. A region must implement a permanent knowledge trade with its customers to save competitive advantage over time
6 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco
Region: a product on sale
As a commercial item, the region product can be regarded from two different points of view:
1. Riduzionistican area is the precise set of its heterogeneous components
2. 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
7 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco
Three main conditions
1. be complementary to user needs
2. be focused on vertical sectors
3. have a good territorial marketing plan
mustA successful
8 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco
What the territorial marketing is
…
The continuous cooperative process 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
…
9 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco
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
10 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco
The territorial marketing plan
To trigger and regulate a territorial marketing we need an operational management tool
The strategic territorial marketing planThe strategic territorial marketing plan
Kick off
Actors
Analysis
Offer
Clustering
11 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco
How to design a valid marketing plan
No single general rule does exist to guarantee a good strategic territorial 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
12 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco
Basic rules
A few rules are mandatory for good territorial marketing:
1. To select the best mix of goods and services for an interesting offer to stakeholders
2. To facilitate the access to the area resources
3. To advertise the offer to a broader audience of investors
4. To financially support users to adopt the offer
5. To feedback the implementation of the plan
13 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco
Not product based
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
The dynamics of new economy and the public budget constraints imply
14 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco
but resource and knowledge based
Infrastructures
Financial services
Knowledge services
Social resources
Technological skills
15 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco
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
Internal
resources
external
resources
VR = i r i + Mσ M kr k
16 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco
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
17 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco
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
18 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco
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
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
19 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco
Long term production slopes
Production factors change
0,010,020,030,040,050,060,070,0
Year
Weig
ht
Work/Product
Energy/Product
Knowledge/Product
20 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco
•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
Knowledge based territorial marketing
21 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco
The new economy spinning circle
data
information
knowledge
competence
creativity
flexibility
innovation
economy
22 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco
How knowledge produce wealthy economy?
Learning organisation
Business Government
Finance Education
23 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco
Public Governance evolution
The individual
The team
The integrated government
The open government
Internetworked government
time
24 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco
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
25 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco
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
Global systemLocal system Virtual system
26 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco
Performance indicators of local systems
1. Technological productivity level
2. Intermodal infrastructure quality
3. Profit based social attitude
4. Broad (worldwide) scope of business
5. Availability and mobility of managerial skills
6. Efficiency of public institutions
7. Political stability
8. Supplementary financing system
9. Integration degree of education and research
10. Relations network development
27 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco
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 steer the overall process
28 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco
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
29 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco
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