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

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

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Page 1: 1 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco Francesco Fusco

1 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco

Francesco Fusco

Page 2: 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

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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

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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.

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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

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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

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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

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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

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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

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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

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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

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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

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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

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14 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco

but resource and knowledge based

Infrastructures

Financial services

Knowledge services

Social resources

Technological skills

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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

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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

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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

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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

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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

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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

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21 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco

The new economy spinning circle

data

information

knowledge

competence

creativity

flexibility

innovation

economy

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22 UNIBO - Introduction to territorial marketing - UNIT 2 - F. Fusco

How knowledge produce wealthy economy?

Learning organisation

Business Government

Finance Education

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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

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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

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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

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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

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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

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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

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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