Does Hawke’s Bay Deliver?
By Tom Belford

“Marketing Hawke’s Bay” means many things to many people. And therein lies one of the key challenges in selling our region as a place to visit, live or invest.

Our various Councils in Hawke’s Bay spend in the neighborhood of $3-5 million marketing the region, its attractions and events. At the Regional Council, $1.2 million is centered in Venture Hawke’s Bay (VHB), the region’s tourism and economic development agency. At the Hastings Council, nearly $500,000 is spent on tourism, branding, and event support, in addition to monies spent marketing facilities like Splash Planet, the Opera House, Hastings City Art Gallery and the Holiday Park. Similar amounts would apply to the Napier Council.

And in the case of Hastings and Napier, additional amounts are spent on “economic development” activities … essentially marketing the Bay to potential relocating businesses, trade partners and investors outside the region.

This represents the public investment in marketing the Bay. It supplements the private sector marketing monies spent by individual businesses, event and attraction promoters.

“Marketing” has a negative connotation to many people. It conjures up “selling stuff” to unwitting customers who don’t really need the products or services on offer, and are being “manipulated” to buy … maybe even through misleading promotions and advertising.

So when we hear talk about “marketing Hawke’s Bay,” some might be put off. And when we realise that our local Councils spend a significant amount of ratepayer dollars on such marketing, some might be appalled.

Why should ratepayer funds be used at all to aid the marketing of private profit-making enterprises?

Listen to Mayor Yule: “Hawke’s Bay needs to be marketed, marketed and marketed. Our ratepayers may be worried about the money involved in marketing the region. But we have little choice, our competitors are in our face.”

The reality is that our region’s businesses – the businesses that provide our livelihoods – operate in an intensely competitive environment that extends far beyond the geographic and economic boundaries of Hawke’s Bay. If they don’t present their case aggressively and well – i.e., market themselves – they won’t prosper, or even survive.

Beyond what individual businesses and sectors do to market themselves in their own self-interest, is the issue of the community’s self-interest in helping its private enterprises succeed.

For example, few would dispute the community’s broad interest in providing or subsidizing the first-class infrastructure to support commerce, such as a port, airport, major roads and, lately, broadband service. While these are not marketing investments per se, such expenditures establish the principle that public monies can support private enterprise.

From there, it’s not such a big leap to public expenditures that support tourism, exporting, or technology innovation. Once that leap is taken, debate shifts to which parts or sectors of the regional economy – because of their dominant importance – should receive the most ratepayer largesse.

Of course, there’s a direct return to local governments from their marketing investments in the form of a larger rating base, which can generate more revenue to finance the projects of politicians and bureaucrats.

So, how, and how well, do our local bodies spend their marketing dollars? We’ll talk first about tourism, and then economic development.

Tourism

Who is the Hawke’s Bay tourist?

The fundamental question of marketing is: Who is our target customer? And from that, what does he/she want, and what economic potential does he/she represent?

Unfortunately, on this elemental question, Hawke’s Bay is still largely flying blind. While local experts confidently state that 10% of the Bay’s economy is tourism-related, there is a surprising lack of data on the Bay’s actual visitors/customers. Says VHB Chair Neil Kirton: “Most people in the industry see an urgent need for information on who our visitors are, why they are coming, and what gives them the most satisfaction when they are here.”

Clearly this is a prime responsibility of Venture Hawke’s Bay. But only now is VHB getting underway the development of a “visitor barometer” to understand who is visiting the Bay and what their level of satisfaction is.

Until more progress is made on measurement, our various players will dispute even the most basic facts of the Bay’s visitor status. For example, while “guest nights” is an important measure to the accommodation industry (HB had 1,037,000 in 2009), since an estimated 40% of HB visitors stay with friends and family, “guest nights” grossly understates the potential economic dynamics of our visitor situation. Even the term “visitor” raises “who are we counting” issues versus the narrower “tourist.”

Beyond its utility for understanding HB’s visitor/customer base, data on individual visitors opens the potential for very effective direct marketing approaches to promoting return visits and generating word-of-mouth promotion of the region.

Who does what?

Virtually every observer of HB marketing notes the overlap and duplication of efforts  –and outright competition – amongst the various local government bodies. Says Mayor Yule: “We have not yet achieved a fully united front in our efforts. Each of the players is still concerned to some degree about patch protection … To some degree all the players are competing with each other.”

Of course, competition amongst various hospitality businesses for the tourist dollar is the essence of private enterprise. But competition and back-biting amongst local bodies is wasteful and intolerable. For example, Hastings, Napier and VHB are each earnestly beavering away on their own “events strategies.” One can’t help concluding that the Bay would be better off if its collective $3-5 million marketing budget were in one set of hands. As event impresario Peter Mooney observes: “With so many organizations involved, roles blur, and when that happens, responsibilities and accountability blur.”

On the other hand, Peter continues: “We shouldn’t blame people for being proud and passionate about where they are. Good marketing requires passion. But too much process, process, process drives the passion away.” He adds: “Napier is a different beast from Hastings. Both should promote what they are and have.”

What are we anyway?

Leading marketers in the region all agree … know what you are, and stick to marketing that essence. And hopefully, that essence is unique and differentiating.

Comments Andy Walker at AdPlus Communications: “There’s something very relevant and unique about every region. Not enough is done to ‘mine’ what that truly is.” His client Mayor Barbara Arnott says simply: “Know your product.” In a similar vein, GROW’s Shaun Lines comments: “Promote what we are, not what we want to be. It seems we promote something we would like Hawke’s Bay to be rather than the actual experience on offer here at present.”

Should be easy, huh? However, as Mission Estate’s Peter Holley notes: “Hawke’s Bay is outstanding in every respect, but has no single unique tourism proposition, like Rotorua’s Thermal Explorer Highway.”

Peter would probably be disputed by architects of the reigning Hawke’s Bay Wine Country brand like Kim Thorp and Graeme Avery, who believe they’ve captured HB’s essence in a singular but vivid image. As HB Wine Country Tourism Association teases: “Close your eyes for a moment and imagine you are going to spend some time in a region called Wine Country. Imagine the climate. Imagine the places you would stay …”

To which Art Deco champion Neville Smith responds: “Speaking of wine country, well I thought that was Gisborne? Or should that be Martinborough? Oh no, I mean Marlborough. When will someone realise we are about Architecture!!”

Not prepared to choose between wine, architecture, Maori culture, Hastings, Napier, Wairoa and gannets, Venture Hawke’s Bay tags its promotional campaigns with the slogan “Hawke’s Bay … Everything Under the Sun!”

Are you beginning to see the difficulty here?!

How good is our product?

When antagonisms were rather high between VHB and its critics not long ago, the marketers defended their own efforts by counter-attacking tourism sector critics, saying in effect, don’t expect us to sell third-rate attractions and accommodations. Ouch!

But even in calmer moments (currently there’s a mutual commitment to “play nice”), a variety of observers note that the tourism sector needs to lift the bar in terms of the quality of experience it offers HB visitors. Says Peter Holley: “Product development needs to be executed in conjunction with service delivery criteria – world-class products with internationally-accepted service levels.” More bluntly, Shaun Lines comments: “Focus on quality experiences and training those in the industry to actually be friendly – it’s a crazy thing but many in the so-called hospitality sector just are not very hospitable!” He adds: “Quality should not be interpreted as ‘high cost’ but instead as positive memorable experiences that will encourage visitors to come again and tell their friends about one of the country’s forgotten treasures.”

Much of the “product development” focus in Hawke’s Bay at this time centers on signature events and a coordinated events strategy. As Neville Smith comments: “Hawke’s Bay is about events. BNZ Horse of the Year. Kelt Capital Stakes, GEON Art Deco Weekend, Deco Decantered. Mission Concert. Church Road Concert, Harvest Hawke’s Bay. Rugby. Basketball. Golf Masters. Plus business conferences. These events and conferences are what showcase the region. That’s the easiest way to get people here.”

Says marketing guru Kim Thorp: “We need a strategy to make Hawke’s Bay much more newsworthy and much more sexy and exciting as a destination. This should done through a combination of new events that have the potential to attract global attention and a vibrant PR strategy.”

Michael Wan, marketing manager at VHB, also emphasizes events: “Event sector development is a fundamental contributor to continued visitor growth. Currently the events sector is fragmented with many stakeholders working to their own agenda. If we want to be a serious player in this space then it requires a united regional strategy supported by regional funding.”

As noted earlier, Hastings, Napier and VHB are each developing “event strategies.” Perhaps one day they will be coordinated! But events maven Peter Mooney notes that formulating a comprehensive event strategy for the region is difficult because individual event organizers have “sovereign rights over their events” and often cannot be sure very far in advance that all the pieces (especially funding) will fall into place.

If Hawke’s Bay over time delivers a higher quality visitor experience, yes, the payoff will be increased visitor numbers. But more importantly, the benefit will be what Michael Wan calls “increased yield” – more share of the visitor’s wallet, a higher margin for the sector, and more word-of-mouth recommendation.

Or as Mayor Yule puts it: “…we have to deliver on the promises we make when we advertise ourselves, and this involves working with accommodation providers, event organisers and visitor attractions to present an all-round quality visitor experience which makes people want to come back, and to recommend Hastings to their friends and family.”

Friends and Family

Recall the estimate that 40% of HB visitors stay with friends and family. While that reality is often noted, the region’s marketers have yet to take full advantage of it. Presently these visitors are “off the radar” when it comes to both statistics and promotional programs designed to identify them and tap their (hopefully) enthusiasm for Hawke’s Bay. Around the world, marketers are recognizing that personal referral (or word of mouth) is today’s most effective marketing channel.

And with the advent of online social networking tools, identifying and empowering Hawke’s Bay “ambassadors” has never been easier or more cost-effective. VHB is reaching out to overseas ambassadors for the Bay through its partnership with Sir Stephen Tindall’s KEA organization (Kiwi Expat Assn). And VHB’s recent and current visitor promotion campaigns include online features which will build a visitor database and enable VHB to tap the Bay’s goodwill ambassadors. But much could be done to accelerate this process with cooperation from the hospitality businesses, key venues and attractions, and Hastings and Napier I-sites.

The potential marketing benefits of HB “ambassadors” is not limited to tourism. As the Chamber’s CEO Murray Douglas points out in the context of economic development, Hawke’s Bay is full of successful people. “Sure a bit of money would help in the promotion,” he says, “but let’s not stray too much from what makes our story strong … our people promoting our region.”

Economic Development

Compared to high profile and controversial tourism marketing, promoting the region’s economic growth seems pretty tame.

In some key respects Hawke’s Bay’s economic development marketing challenge is one of “product,” not stimulating demand. In interviews for this article, the impression BayBuzz gained is that HB hardly needs to market at all for quality employee prospects or interested investors.

Local headhunters like Red Consulting and RIOT have more out-of region people eager to move into Hawke’s Bay than they can possibly handle. And out-of-region investors report having difficulty finding suitable business investment opportunities.

Both of those situations point to job creation and new business development, not marketing, as the challenge. Indeed, Ron Massey, Napier’s economic development manager, contends that there’s plenty of opportunity (in the sense of promoting economic growth) if relevant players simply did a better job of helping existing HB businesses achieve their full potential.

Murray Douglas talks of attending a jobs expo where “…everyone wanted to come to the Bay. These attendees had a strong view that we in Hawke’s Bay had a great climate, great schools, comparatively good house prices and an enviable way of life compared to the Auckland ‘rat race’”. He adds: “…we might not need to market ourselves; rather we perhaps need to spend more effort on creating the employment markets which will in turn attract and hold new migrants.”

To that end, Hastings Councillor Wayne Bradshaw proposes that economic development resources be used to target just a few areas of economic priority – e.g., food processing, tourism, technology – and focus on nurturing those. Both he and Mayor Yule note that Councils can help by ensuring that sufficient industrial land and infrastructure is available. And Mayor Yule touts HDC’s “key account” management services to help key businesses navigate Council plan requirements and by-laws.

The bottomline appears to be that, beyond providing suitable infrastructure and a bit of “key account” hand-holding, there’s little Councils can do to influence business re-location or outside investor decisions. Indeed, Neville Smith would go further, saying: “I question whether local government agencies like Venture Hawke’s Bay have the right skills … Tell me a business that has come to Hawke’s Bay to set up with guidance from VHB. We should let Ray McKimm from the Ahuriri Business Park manage this money as he has done a great job in investing his money to regenerate Hawke’s Bay. I believe he will have 1100 people working from that site in about 12 months.” Neville is not alone in  that view.

Venture Hawke’s Bay role

Nevertheless, VHB is chartered as the region’s economic development agency. And VHB appears to devote the preponderance of its resources to fostering overall economic development as opposed to tourism. And if tourism indeed accounts for “only” 10% of our region’s economy, it would seem that some proportionate level of effort and resource is justified.

Arguably, attracting a business that employs a dozen or so professionals to Hawke’s Bay is worth far more to the Bay’s economy than a slight uptick in cruise ship passengers or visiting caravans.

Still, VHB cops plenty of criticism …

  • Too little priority to tourism (Sileni’s Graeme Avery argues tourism promotion should have its own organization outside VHB);
  • Too much “studying” and not enough “doing” (Out of $1.2 million, how much actually hits the pavement, to paraphrase a number of critics);
  • Too much use of “experts” from outside the region as opposed to locally-savvy talent (Clearly there are pluses and minuses to outside consultants);
  • An non-consultative, even adversarial relationship with what should be its core constituencies (Everyone says the situation is improving).

Adding to its predicament, the task of marketing HB – both its products and as a land of economic opportunity – involves for VHB a variety of, truth be known, inglorious “nuts & bolts” projects … orchestrating regional business and VHB participation in trade shows (e.g., Expo Shanghai, Wellington and Auckland food shows), sector-specific promotional initiatives (e.g., Apple Futures), seeking Government funding for regional projects (e.g., NZ Cycle Trail, business R&D grants), providing business investment training, developing HB-specific economic performance data, developing case studies of successful HB businesses.

My assessment is that some of the VHB criticism is deserved; some stems from old baggage that should be discarded; some reflects misunderstanding of what the organization should be expected to do (VHB should devise programs that lift all boats, not provide micro-assistance to individual businesses); and some reflects ignorance of marketing and/or what the organization is actually doing.

In any event, the present team at VHB has had ample time to get grounded, map its strategy and plan its programs. Going forward, the agency should be judged on execution.

My Recommendations

So what would I do as “Czar of Marketing” for Hawke’s Bay?

1. Get and use the right data – know our customers
2. Create one “premium event” calendar, with funding support
3. Leverage our HB “friends & family” and overseas ambassadors
4. Implement a serious, world-standard PR campaign
5. Make memorable service and experiences a marketing advantage
6. Improve quality of local business mentoring – to grow HB from within
7. Upgrade and master online/web-based marketing
8. Adopt the marketing execution focus & discipline recommended here by Kim Thorp
9. Produce a consolidated budget showing all local body marketing spends & KPIs – so best bang for the buck can be identified
10. Form a “Regional Marketing Council” like Wellington to strategize, coordinate and knock heads

And bring competitive air fares to Hawke’s Bay!

More Views?

Have no doubt, as Mayor Yule says, Hawke’s Bay will be marketed, marketed, marketed! Smartly or not, for better or worse, several million ratepayer dollars per year will be expended. A wide range of informed perspectives on marketing Hawke’s Bay are offered in the May Baybuzz Digest. I hope you’ll take a look at those.

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