After a Slow Start the Tourist Industry in Ireland Has Grown
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DUBLIN BUSINESS SCHOOL MBA Programme Research Question : Marketing Rural Tourism – An analysis of the development and adoption of marketing strategies by small, family owned, peripheral, rural-tourism businesses Darragh O’Grady – 1768019 Word count: 20,332 Submitted: 22.08.2014 TABLE OF CONTENTS Abstract 6 Chapter One: Introduction to the research 1.0 Overview of the tourism industry in Ireland 7-8 1.1 Emerging rural tourism sector 8-10 1.2 Benefits of rural tourism 11 1.3 Aim of the research 11-12 1.4 Personal interest in the topic 12-14 Chapter two: Literary review 2.0 Introduction 15 2.1 The application of marketing philosophy by small rural tourism businesses 15-17 2.1.1 The marketing mix 18 2.1.2 Barriers to the adoption of marketing philosophies 18-19 2.1.3 Benefits of adopting marketing philosophies 19 2.1.4 Market research 19-20 2.1.5 Barriers to carrying out market research 20-21 2.1.6 Implications of lack of market research 21 2.1.7 Market segmentation and targeted marketing 21-22 2.1.8 Digital media capabilities 22-23 2.1.9 Benefits of Digital Media 23 2.1.10 Barriers to the use of digital media 24-25 2.2 Rural tourism as a focus of government policy 25 2.2.1 Rationale for investment of public funds 25-26 2.2.2 Policy development 26 2.2.3 Roles of the various institutions/ bodies 26 2.2.4 Trends in policy development 27 2 2.2.5 Policy initiatives in Ireland 28-29 2.3 Owner/ manager motivations 29-30 2.3.1 Lifestyle motivations 30-31 2.3.2 Operational focus and lack of relevant training/ experience 31 2.3.3 Entrepreneurialism in rural tourism 31 2.3.4 Market orientation 31-32 2.3.5 Owner/ manager motivations in Ireland 32 2.4 Cooperative networks 32-33 2.4.1 Benefits of cooperative network development 33-34 2.4.2 Barriers to cooperative network development 34-35 2.4.3 Antecedents of successful collaboration 35-36 2.4.4 Inefficiency of independent focus 36-37 2.4.5 Benefits of collaboration to the wider community 37-38 2.4.6 Cooperative network development in the study area 38 2.5 Gap in the research 39-40 Chapter three: Research Methodology 3.0 Introduction 41 3.1 A brief recap of the research question 41-42 3.2 Scope of the research 42-43 3.2.1 The selection of the study area 43-47 3.3 The research onion 48 3.4 Positivism, Interpretivism and Pragmatism 48-49 3.5 Research Approach 49-50 3.6 Research strategies 50 3.6.1 Secondary data analysis 51 3.6.2 Interviews with key sources 51-53 3.7 Analysis and interpretation of data 53-54 3 3.8 Research ethics 54-55 Chapter 4: Analysis 4.1 Analysis 56 4.1.1 Business no.1 56-57 4.1.2 Business no.2 57-58 4.1.3 Business no.3 58 4.1.4 Business no.4 59-60 4.1.5 Business no.5 60-61 4.1.6 Business no.6 61-62 Chapter 5: Discussion and conclusions 5.1 Introduction 63 5.2 Owner/ manager motivations 63-65 5.3 Market research 65-67 5.4 Marketing activities 67-68 5.5 Supporting policy 68-70 5.6 Cooperative networks 70-72 5.7 Limitations of the research 72-73 5.8 Final remarks 73-74 6.0 Bibliography 75-84 7.0 Appendices 85 7.1 Appendix 1: Western region boundaries 85 7.2 Appendix 2: The research onion 85 7.3 Appendix 3: Original interview structure 86-94 7.4 Appendix 4: Trial run interview transcript 95-121 7.5 Appendix 5: Louisburgh HQ interview transcript 122-133 7.6 Appendix 6: LEADER interview transcript 134-139 7.7 Appendix 7: Failté Ireland interview transcript 140-156 7.8 Appendix 8: Business no.1 interview transcript 157-165 7.9 Appendix 9: Business no.2 interview transcript 166-190 4 7.10 Appendix 10: Business no.3 interview transcript 191-204 7.11 Appendix 11: Business no.4 interview transcript 205-230 7.12 Appendix 12: Business no.5 interview transcript 231-249 7.13 Appendix 13: Business no.6 interview transcript 250-279 7.14 Appendix 14: Self reflections on learning 280-286 List of Figures: Figure 1.1: Regional industrial zoning 13 Figure 1.2: Regional industrial strengths 13 Figure 2.1: Marketing planning process 17 Figure 2.2: The marketing mix 18 Figure 3.1: Map showing researched business locations 44 Figure 3.2: Map of the Wild Atlantic Way 47 5 Abstract: This thesis investigates the place-based adoption of marketing philosophies by small, family owned rural tourism business in South West Mayo. It provides insights into the motivations of the owner/ managers, their understanding and application of accepted marketing conventions and their decision making process. The external business environment is also analysed to determine the level of inter-firm collaboration and the impact this is having on business outcomes. The available organisational supports are also analysed to determine the extent of their activities, the underlying rationale and the level of engagement. The research draws from the existing tourism literature to present the accepted academic theory, which is presented for scrutiny against the primary information gathered in the in-depth interviews with the businesses and other stakeholders. The research adopts a qualitative framework, focusing on the tacit knowledge afforded by unstructured, in-depth interviews. The research provides for a comprehensive understanding of the subscription to a market orientated philosophy and the impact of neglecting to develop marketing capabilities. It is hoped that the research furthers the academic literature on small rural tourism businesses in the West of Ireland, the challenges they face and the areas of weakness that require improvement. The transferability of the key insights are uncertain and this may form the focus of a future study. 6 Chapter One: Introduction to the research 1.0 Overview of the tourism industry in Ireland: The United Nations World Tourism Organisation defines tourism as the " the activities of persons travelling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes” (Tugberkugurlu, 2010) In Ireland, tourism accounts for approximately 60% of the country’s export’s of services and approximately 5% of GDP (Wright, A. & Linehan, M, 2004, page 1). The industry has a long and interesting history in this country. As far back as 1795 the Ennis Chronicle, as it was then called, ran advertisements for the rental of houses for what it referred to as the ‘saltwater season’, and the English author Emily Bronte spent part of her honeymoon in Kilkee on the West Coast of Clare in 1854. Numerous important developments have been charted over the years that have impacted on the development of the industry in Ireland, one of the most important of which is improved access. From the establishment of a network of Horse drawn Cars by Italian born Charles Biancioni in 1802 linking hotels and offering packaged tours, the opening of the railways serving the regions in the late 19th and early 20th centuries, the development of the road network, the increased ownership of family cars right through to the access to cheap national and international flights. Geography helps to determine the relative importance of the different transport networks and for an island economy such as Ireland air travel has been particularly important in connecting geographically remote areas. Air travel is the preferred form of transport particularly for those coming from long-haul destinations (WDC, 2011, p 2). This improved access coupled with the increases in leisure time and disposable income are some of the social changes that have facilitated the ongoing development of the industry. (Wright, A. & Linehan M, 2004, p.2-3). After a slow start the tourist industry in Ireland has grown apace, aided in no small way in recent years by the access to the European funding and resources afforded, having joined the European Economic Community. Ireland joined the EU, as it is now 7 called, in 1973 as a poor peripheral country with a GDP at 62% of the EU average. As a consequence it was recognised as an ‘Objective 1’, disadvantaged area and received significant development funding (Hegarty, C. & Przezborska, L., 2005, p. 65). Overseas visitors have increased from 1.9m in 1986 to 6.3m in 2012, with associated revenues of €5.4bn, €4bn of which was from foreign exchange earnings (Failte Ireland, 2012, p.7). In 2013 total tourism revenue stood at €5.7bn of which €1.4bn directly benefitted the exchequer through taxation. Three years ago the sector was in survival mode. Having apparently weathered the darkest days of the recession, the industry is moving from survival mode to a more positive outlook of consolidation and growth. The current rhetoric being espoused by government is that, because of its regionally dispersed nature and the diverse skills base, tourism has been placed at the centre of the economic recovery plan to reverse the increasing unemployment figures of recent years. Industry support measures such as the special 9% VAT rate, the ‘Gathering’, the 0% air travel tax and Visa waiver have been introduced. Since 2010 inbound visitor numbers have increased by 950,000 and resultant revenue has increased by 10% with an extra 15,000 employed in the sector (Department of Transport, Tourism and Sport, 2014).