Place Marketing and the Antecedents of Sustainable Competitive Places Chapter 1 INTRODUCTION 1.1 Research Phenomenon Globalization intensifies world connections through increased networks, flows, transactions, images, and the transcendence of ideas that connect states and societies (Giddens, 1990). As the world is interlinked, places such as cities link their national economies globally through cross-border transactions. Sassen (2002) adds that globalization results in places at both global and national levels competing with one another. More specifically, globalization brings increased competition among places to remain attractive to place customers. As Burghardt (1971:284) emphasizes ―just as there is a hierarchy of central places, so one may speak of corresponding hierarchy of gateways. Such hierarchy will occur in sequence with distance, in zones of declining productivity‖. Burghardt is portraying a reality of interconnections amongst places. More specifically, some gateway cities gain competitive advantage over other sub- gateway cities in intercity competition. This issue leaves the latter to struggle for strategic attractiveness. Sassen (2003) argues that state boundaries‘ institutional order is a crucial regulatory means for aiding the implementation of cross-border operations for national as well as foreign firms, investors, and markets. These conditions require an urban economy such as cities to possess specific and adaptive modes of assimilating change and for them to be able to relate to competitive global environments which Judd and Fainstein (1999) assert shape cities to become alike. More specifically, cities become homogenized to 1 Place Marketing and the Antecedents of Sustainable Competitive Places ―theme cities‖ (Sorkin 1992; Paradis 2004), urban waterfronts (Goss, 1996), and public entertainment spaces (Cybriwsky, 1999). Cities are struggling for competitive advantage, to be attractive to their potential customers such as tourists, factories, companies and talented people. However, new approaches to handling the issue are being considered to face global competition. One of these recent approaches is to solidify competitiveness, as many researchers look to include sustainability in gaining competitiveness. Increasing awareness among people of the importance of sustainability (UNDESA, 2007) is an opportunity for places to compete for place customers. For Dwyer and Kim (2003), competitiveness is a national concern for cities and their economic, social, and cultural welfare with the ultimate aim of improved income to society. Newall (1992) gives meaning to competitiveness that focuses on human development, growth, and improved quality of life. Similarly, Murphy et al. (2000) claim that a destination is a set of crucial benefits directly managed and delivered by tourism infrastructure; and public policy driven environmental factors. Still covering destination, Hassan (2000:239) sees competitiveness as a ―destination‘s ability to create and integrate value-added products that sustain its resources while maintaining market position relative to competitor‖. Competitiveness according to Crouch and Ritchie (2000) brings significant success to residents‘ well-being with regards to the sustainability of economic, culture, social, ecological, and political considerations. However, the researchers stated above do not relate to place attachment, which this thesis maintains is an important mediator for understanding sustainable competitive places. 2 Place Marketing and the Antecedents of Sustainable Competitive Places Place attachment is an important issue that relates to competitiveness (Turok, 2004) and sustainability (Vaske and Kobrin, 2001; Kyle, Graefe, Manning, Bacon, 2004). The concept of place attachment is incorporated into place marketing through studies of place satisfaction (Wickham, 2000; Stedman, 2002, Brocato, 2006; Halpenny, 2006) and place loyalty (Lee, 2003; George and George, 2004; Brocato, 2006). With this understanding, this thesis argues that place attachment is a mediator worth examining in explaining sustainable competitive places. The term ―sustainable competitive place‖ in this thesis refers to a place‘s ability to successfully develop, plan, manage, and sustain resources while satisfying customers‘ needs and wants, and generations in the future relative to its competitors. Place marketers examining the place marketing phenomenon, require information and knowledge in managing the global competition between locations. Information supported by empirical evidence is necessary to enhance place marketers‘ knowledge in explaining sustainable competitive places, and in particular place marketing. Crouch and Ritchie (2003) claim that competitiveness without sustainability is illusory. This thesis maintains that an understanding of competitiveness and sustainability is incomplete without a consideration of attachment, satisfaction, and loyalty. Noting the crucial importance of these components to the field of place marketing, this thesis is focused on examining the roles and the relationships of sustainability, competitiveness, attachment, satisfaction, and loyalty in explaining sustainable competitive places. This knowledge informs a strategic approach for place marketing, particularly with regard to cities. 3 Place Marketing and the Antecedents of Sustainable Competitive Places What is place marketing? Before going further, this thesis refers to ―place‖ meaning all kinds of places such as cities, municipals, regions, communities, districts, states and nations. The term follows a definition from (Kotler, Hamlin, Rein, Haider 2002:4) who view place as ―a nation-state, a geopolitical physical space; a region or state; a cultural, historical or ethic bounded location; a central city and its surrounding populations; a market with various definable attributes; an industry‘s home base and a clustering of like-industries and their supplier; a psychological attribute of relations between people‖. As the scope of this thesis is related to the concept of place marketing, the ideal definition from Kotler et al. (2002:183) is referred to which describes place marketing as ―designing a place to satisfy the needs of its target markets. It succeeds when citizens and businesses are pleased with their community, and the expectations of visitors and investors are met.‖ This thesis regards place customers or place target markets as inclusive of residents, visitors, and businesses. It is believed that potential place customers can be understood through a better understanding of existing place customers. This thesis argues that a customer oriented approach is essential in place marketing as it matches marketing theory which emphasizes the importance of customers. With place development, an economic development strategy is explored as an important aspect for sustainable competitive places due to its close relationship to place marketing. Asplund (1993) suggests soft attraction factors as features important in place marketing, with increasingly complex and sophisticated place-products to meet the needs of ―knowledgeable‖ place customers. Kotler et al. (2002:163) define soft attraction factors as ―niche development, quality of life, professional and workforce competencies, culture, personnel, management, flexibility and dynamism, professionalism in market 4 Place Marketing and the Antecedents of Sustainable Competitive Places contacts, entrepreneurship‖, and hard attraction factors such as ―economic stability, productivity, costs, property concept, local support services and networks, communication infrastructure, strategic location and incentive scheme‖. In this respect, places compete to promote their local economy as a location for economic development with other places (Cheshire and Gordon, 1999). According to Budd (1998) local economic development imposed through place marketing programs are responsive to the global competitive environment. Furthermore, formulation of place competitiveness indicators and assessment is linked to a place‘s economic development (Webster and Muller, 2001; IMD, 2009; World Economic Forum, 2009). Place development in this study context refers to the explanation by Kotler et al. (2002:57) i.e. ―to develop for a place a systematic and long-term marketing strategy directed towards nurturing and developing the natural and potential attributes of an area or region‖. According to Holcomb (1994), place marketing transforms places as products that are attractive to place customers. As such, place identity is a way of communicating place substance to targeted customers (Asplund, 1993; Hankinson, 2001). Places should be marketed as similar to the marketing of products or services (Berg, Klaasen, and Meer, 1990; Holcomb, 1993; Kearns and Philo, 1993; Braun, 1994; Ward, 1998). Accordingly, this study maintains that places are similar in many aspects to products or services which are linked to strategic marketing (Asplund, 1993; Ashworth and Voogd, 1994; Braun, 1994; Gold and Ward, 1994; Rainisto 2001; Hankinson, 2001; Berg et al., 2002). 5 Place Marketing and the Antecedents of Sustainable Competitive Places Researchers are becoming interested in linking place marketing with place competitiveness (Berg and Braun, 1999; Metaxas, 2009). This thesis maintains that through the investigation of the roles of sustainability, competitiveness, attachment, satisfaction, and loyalty to sustainable competitive places, an insight into the arena of place identity can be understood. Further, research in place marketing