Strategic brand management in function of improving the competitive position of tourist destinations

Blazheska, Daliborka; Ristovska, Natasha; Nakovski, Dejan Article Strategic brand management in function of improving the competitive position of tourist destinations UTMS Journal of Economics Provided in Cooperation with: University of Tourism and Management, Skopje Suggested Citation: Blazheska, Daliborka; Ristovska, Natasha; Nakovski, Dejan (2023) : Strategic brand management in function of improving the competitive position of tourist destinations, UTMS Journal of Economics, ISSN 1857-6982, University of Tourism and Management, Skopje, Vol. 14, Iss. 1, pp. 52-62 This Version is available at: https://hdl.handle.net/10419/281931 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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UTMS Journal of Economics 1 4 ( 1 ): 52 – 62 . 52 Preliminary communication STRATEGIC BRAND MANAGEMENT IN FUNCTION OF IMPROVING THE COMPETITIVE POSITION OF TOURIST DESTINATIONS Daliborka Blazheska1 Natasha Ristovska Dejan Nakovski Abstract Creating websites and social media marketing is an integral part of business activities in companies. The Building and managing the brand is the most complex task in the contemporary market and tourism business. Strategic brand management focuses on a brand program that contains a plan for marketing activities for building the tourism brand and its management over time, based on information that will be obtained through constant monitoring and value measurement - the success of the brand in relation to the strategic goals of the tourist destination. This paper emphasizes the Republic of Macedonia as a tourist destination, which as a country should first create prerequisites for its identity and value that will enable a quality performance on the international tourist market. From the research can be concluded that the success of the Republic of Macedonia as an attractive tourist destination is based on the symbiosis of the tourist product and the implementation of appropriate brand strategies that will enable successful positioning in the tourist market. Keywords: strategic brand management, competitive advantage, tourism destinations, tourism product. JEL classification: M30; M13; L26; L83 INTRODUCTION The new rules in the tourist economy impose the introduction of a new concept in the development of tourism, which is a powerful tool for retaining and attracting tourists, and that is the brand that determines the success and the profitability of the destination. The brand combines the value, recognition and quality guarantee of the tourist destination which, like the product, should add new value and above all shorten the time spent on making a purchase decision. The success in adding a new, recognizable value to the tourist destination, i.e. the creation of a "strong" tourist brand must be the result of a process of strategic management of the tourism brand, with the aim of building a longterm and sustainable competitive advantage of the tourist destination from the others in the region. On the global tourism market, where the destinations are in a "war" for tourists, the brand increases the recognition of the destination, attracts a larger number of tourists, especially from the new markets, and is a quality guarantee for the products and services offered in the tourist destination. The brand is the best and least expensive 1Daliborka Blazheska, Ph.D., Full Professor; Natasha Ristovska, Ph.D., Full Professor; Dejan Nakovski, Ph.D., Associate Professor, University of Skopje, Republic of North Macedonia. Daliborka Blazheska, Natasha Ristovska and Dejan Nakovski. 2023. Strategic Brand Management in Function of Improving the Competitive Position of Tourist Destination. UTMS Journal of Economics 1 4 ( 1 ): 52 – 62 . 53 way of achieving a positive image. Brand destination is a name, symbol, logo or other graphic representation that identifies and distinguishes the destination; in addition, the brand promises a travel experience that is unforgettable and unique, associated only with that specific destination; the brand also reinforces and brings together all the pleasant memories of visiting that destination. The branding of tourist destinations in the region must be done in accordance with the stages of strategic brand management, first of all through planning the identity of the destination and its positioning by implementing an adequate brand strategy. Marketing managers in tourism must take the leading role and responsibility in designing the tourist product, affirming its most powerful instrument - the brand, as a key factor of identification and differentiation in relation to competing tourist destinations. . 1. THE STATE OF THE TOURIST MARKET Tourism as a phenomenon experienced a huge number of changes caused by the emergence of the "mass tourism" concept, which led to new and different trends on the side of tourist supply, but also on the side of tourist demand.Tourists have become more and more demanding - they want the maximum level of commitment, as well as a unique and individual offer. New requests from tourists for more "unseen" destinations are emerging, readiness for specific trips reaches large proportions, which is supported by the fact that tourists have breakfast in one tourist destination, lunch in another and dinner in a third destination. Namely, the world is becoming a "global village" (Andzulis, Panagopoulos, and Rapp 2012) . The potential tourist can choose between several destinations, whereby traditional destinations can no longer be considered as drivers of tourist movements and they have to fight in the competition against the new destinations that have series of advantages. The tourism of the new age requires a unique and recognizable tourist product, constant improvement of the tourist offer and at the same time preservation of its indigenous elements (Susskind et al. 2000). Due to these factors, there is increasingly a tightening of relations between competing countries for winning dominant positions in the market, so it is necessary to approach strategic management of the brand and securing a competitive position in the tourist market (Hewett et al. 2016). 2. RESONS FOR BRANDING IN TOURISM The destination brand is a quality guarantee for the products and services offered and and contribute to creating a positive image of the destination. On the other hand, if some of the services or products are of insufficient or below expected quality, the negative effect reflects on the overall experience of the tourist, so he transfers his negative associations and experiences further, building a negative attitude towards the destination (Gruca, and Rego 2005). The management of the tourist destination has to decide on which aspect of the destination experience the trademark and branding in general will be based, conventionally building it on the basis of the most significant features and advantages of the destination in contrast to the competition (John et al. 2017). The brand must be truthful and of good quality so that tourists can experience it according to their expectations or even better. In such case, branding helps to remember the destination in Daliborka Blazheska, Natasha Ristovska and Dejan Nakovski. 2023. Strategic Brand Management in Function of Improving the Competitive Position of Tourist Destination. UTMS Journal of Economics 1 4 ( 1 ): 52 – 62 . 54 a positive sense and influences the return of tourists to the destination (Ingram et al. 2019). The offered brand of the tourist destination is a reason for choosing and buying tourist services and is a major factor of building the impression that there is no product or service on the market, such as the one offered by that particular destination. All this leads to an improvement of the position of that destinatiot on the market. By emphasizing the peculiarities of a brand, we can affirm its power in influencing the customers and their decisions (Sarang, Kumar, and Zhao 2016). Branded destinations are differentiators that promise a memorable and unique travel experience. Reasons for branding in tourism are (Khan 2019):  a growing and strongly expressed attitude about the value of the brand as part of the company's assets,  change in the communication with the customers and the cost increase of the propaganda,  increasing in the impact of retail and own brand on the market, and  knowledge about the impact of global competition. The success in planning and adding new, recognizable value to the destination is a result of the process of strategic brand management in tourism. 3. PROCESS OF STRATEGIC BRAND MANAGEMENT IN TOURISM In order to be able to approach building a brand and managing it, a basic assumption is that there is a quality product. When creating a tourism product at the macro level, the following factors have a key influence (Baidya, and Basu 2008): 1. quality of space (comparative advantages of the destination: natural beauty, climate, preservation of environmental conditions), 2. accessibility (infrastructure: condition of roads, transport costs, customs and other restrictions), 3. generic conditions for stay (accommodation, food, entertainment, sports, types of shopping), and 4. otential conditions of stay (potential level of the tourist product that generates additional value and creates a tourist brand: additional services, health care, security, associations and experiences related to the destination). The harmony and integration of the mentioned elements of the tourism product are a prerequisite for quality which is the basis for the process of strategic management (Meyer, Gremler, and Hogreve 2014) . The process of creating a destination brand or the strategic management process is the creation or change of all brand elements in the minds of consumers that distinguish the destination, its tourism products, services, people, sites, places and visitor events from the competitors, and is the result of organized effort and marketing decisions (Wübben, and Wangenheim 2008). Brand management strategy focuses on the brand program, which consists of a plan of marketing activities for building a tourism brand and its management over time, based on information obtained through continuous monitoring and measurement of the value or performance of the brand, considering the strategic goals of the tourist destination. The strategic brand management process incorporates (De Vries, Gensler, and Leeflang 2012): Daliborka Blazheska, Natasha Ristovska and Dejan Nakovski. 2023. Strategic Brand Management in Function of Improving the Competitive Position of Tourist Destination. UTMS Journal of Economics 1 4 ( 1 ): 52 – 62 . 55  Brand planning – in order to be able to approach brand planning, it is necessary to respect the principles of consistency, clarity, continuity, visibility and authenticity. In order for a destination to become a brand, the most important thing is that it has integrity, some special quality that makes it stand out.  Brand analysis – which includes analysis of the environment and analysis of the internal resources as well as defining the mission and goals of the branded destination. When defining the mission and vision, it is crucial to pay attention to what is important to potential consumers, what differentiates the destination from other competing destinations.  Brand Strategies - Brand strategy is based on the essence of the brand, its values and associations. Brand positioning means finding a suitable place in the consumer's mind in order to create the desired associations.  Building the brand – it is necessary to create likeability of the brand, emotions towards the brand and sonority of the brand.  Control and audit of the brand - analysis or audit of the brand aims to assess the pros and cons of a particular brand. The analysis usually includes an internal description of the brand and external examination of a specific focus groups, questionnaires and other methods in order to study the consumers and determine what the brand represents to them. 4. MAINTAINING BRAND VALUE IN TOURISM BY MANAGING SERVICE QUALITY Service quality management integrates the advantages of the tourist destination brand resulting from the application of the concept of quality (Dew, and Ansari 2018):  Consumer Retention - persuading the consumer to change their mind regarding their choice of accommodation capacity will most likely not be successful based on price change alone, in other words, a price reduction, whereas it may bear fruit with an investment in high-quality, which is the foundation in regards to building loyalty, while simultaneously improving brand value.  Avoiding price wars – By utilizing high-quality services, the possibility of avoiding a price war and maximizing potential profit opens up. The higher the brand value of the service based on a reputation for quality, the better the competitive position, and the likelihood of repeated purchases grows.  Retention of service staff – the consequence of a dissatisfied employee is inferior service provided, so staff retention directly correlates with the quality achieved by the organization.  Cost reduction – while internal costs refer to the proactive removal of defects in the destination (for example, buying a new TV in a hotel room that is not available for rent until its renovation), external costs focus on the removal of defects and errors that the consumer has already experienced their priority is always higher than the internal ones. Defining the fundamental quality aspects that influence the maintenance of the touristry brand value is the basis of brand management. It includes a quality evaluation done by the tourists, indicating that they should be viewed as the determining factor regarding service quality (Neslin et al. 2013). Daliborka Blazheska, Natasha Ristovska and Dejan Nakovski. 2023. Strategic Brand Management in Function of Improving the Competitive Position of Tourist Destination. UTMS Journal of Economics 1 4 ( 1 ): 52 – 62 . 56 The importance of brand management in tourism is integrated with the concept of TQM (Total Quality Management), which multidimensionally and comprehensively approaches quality, emphasizing the importance of quality, time, and costs, as well as the human factor, all with the goal is to maintain and increase the satisfaction of tourists for the destination (Platzer, and Reutterer 2016). 5. CONSUMER SATISFACTION AS A PREREQUISITE FOR BUILDING A BRAND IN TOURISM The goal of every marketing effort and brand is consumer satisfaction and the ability to meet expectations with the quality of the product itself. The specifics that characterize the touristry product are numerous independent elements, separated from the product itself so that the satisfaction of tourists will be influenced by other elements of the environment in which numerous interactions with the staff, communication, and impressions take place when receiving the services as well as visitors' sentiments during their stay (Lopes, Dens, and De Pelsmacker 2022). With consumer satisfaction as the pillar for building a brand, destination management develops close, personalized relationships with tourists. In addition to the classic motivational model (the more the visitor uses the services, the greater the benefit he expects), relational marketing invests in the knowledge and awareness of consumers that the next vacation in the same destination will bring even better benefits than in the first iteration. Consumer satisfaction is a prerequisite for building a brand in tourism, as it is a crucial element in the decision-making process of tourists, especially during their return to the destination, and its incorporation is necessary for the stage of using tourism services, as well as their subsequent evaluation (Mikolon et al. 2015). If the tourism product has met or exceeded the guest's expectations, we consider them delighted with the value of the destination brand and that their admiration will potentially bring them back to the same destination (Back et al. 2015). Consumer Satisfaction as the main prerequisite for loyalty to a specific brand destination is the main reason for visitor loyalty however, it only represents the current state that needs improvement by creating and delivering additional value that needs to be transferred in the long term, taking the principle of competitiveness into account and avoiding Fredkin's paradox in which destinations and products can become so similar that potential tourists cannot easily decide where to stay. 6. MANAGING THE BRAND IN ORDER TO IMPROVE THE COMPETITIVE POSITION OF THE REPUBLIC OF MACEDONIA AS A TOURIS DESTINATION The purpose of the analysis is to perceive the importance of strategic brand management in order to improve the competitive position of the Republic of Macedonia as a tourist destination. Does the Republic of Macedonia as a tourist destination manage the brand, what are the shortcomings and recommendations for a successful performance on the global market as a brand destination. A basic prerequisite for the appearance of the Republic of Macedonia on the international tourist market is the creation of brand identity and value. The Republic of Macedonia as a tourist destination has already started with certain activities related to building the visual identity and better market positioning. The Daliborka Blazheska, Natasha Ristovska and Dejan Nakovski. 2023. Strategic Brand Management in Function of Improving the Competitive Position of Tourist Destination. UTMS Journal of Economics 1 4 ( 1 ): 52 – 62 . 57 analysis covers the process of strategic management with all the advantages and disadvantages, and creation of appropriate strategies for achieving a competitive advantage in the tourist market. Planning, as the first stage of brand management, is a prerequisite for adding additional brand value, which is given to products and services, organizations and the tourist destination as a whole. The way tourists in the destination and potential visitors think about the brand, the emotions and associations that the tourism brand evokes in them and the way they treat it, all maintain the brand’s value even more than pricing policy, market share and profitability. The brand identity consist of five elements: the name, the logo, the design, the slogan and the personality. The identity of the Republic of Macedonia as a tourist destination is shown by the trademark representing an eight ray sun or the "new sun of Liberty" referred to in the national anthem of North Macedonia. That is why the colors that are represented in the logo are yellow, which symbolizes the sun, and red, which is a traditional color, both reminding of the colors of the national emblem of the Republic of Macedonia. The slogan as an integral part of the brand identity is "Macedonia timeless". Figure 1. Logo and slogan of the Republic of Macedonia as a tourist destination Source: https://www.macedonia - timeless.com/eng From the analyzes made, it was concluded that the logo of the tourist destination should correspond to the modern visual presentations while taking into account the new political changes that lead to the rebranding of the identity of the Republic of Macedonia as a tourist destination. The new identity of the brand that is planned to be built in near future is the slogan "I need North Macedonia". The logo of the tourist destination should embody: a) differentiation - the trademark should be different from competing destinations and stand out from the mass of similar logos while being accepted by consumers, b) relevance - the characteristics of the trademark are of particular importance for the consumer so that he can consciously accept them c) reputation - through continuous communication over time the trademark acquires reputation d) trust - by re-purchasing, i.e. returning to the destination, the brand builds long-term trust. In addition to the positive effects of the trademark on the market, it is also necessary to work on building domestic awareness in order to create an adequate attitude towards the trademark among the population of the countries in the region, i.e. awareness of the Daliborka Blazheska, Natasha Ristovska and Dejan Nakovski. 2023. Strategic Brand Management in Function of Improving the Competitive Position of Tourist Destination. UTMS Journal of Economics 1 4 ( 1 ): 52 – 62 . 58 quality of the products and services, care for the environment, hospitality and the right balance between the price and the offered service. The identity of the brand on the global market is promoted by brand personalities and events, because of which the Republic of Macedonia as a tourist destination should pay more attention to their affirmation. One of the most powerful techniques for analyzing the current popularity of a destination is the SWOT analysis, which is a structured approach to evaluating the strategic position of the destination based on identifying its strengths, weaknesses, opportunities and threats. The next step in the strategic management of the brand, as mentioned, is the situational analysis or the so-called SWOT analysis, which should give an answer about where the Republic of Macedonia is positioned as a tourist destination in terms of its advantages and disadvantages, and the opportunities and dangers arising from the external environment. Table 1. SWOT analysis of the Republic of Macedonia as a tourist destination Strenghts Weaknesses - A valuable natural resource - Variety of natural tourism values concentrated in a small geographical area - Preserved environment - Rich cultural and historical heritage - Spatial specificities of the tourist product - Healthy food and traditional cuisine - Hospitality - Geostrategic position - Lack of awareness of the importance and the possibilities of tourism - Weak personnel base and low level service quality - Disintegrated offer - An insufficiently recognizable tourist product - Gray economy and bad image of the state - Insufficient institutional organization - Low level infrastructure, especially the traffic infrastracure - A small number of charter flights that would be used for the development of tourism - Weak connection and coordination of different types of traffic - Lack of high class hotels with more accommodation facilities, insufficient tourism infrastructure spa, wellness - The season frame is reduced to a few months in the summer - Weak offer in the winter - The price level is far below the average in other countries or above the level above quality - Dirt, trash, noise - Unplanned constructions - Business barriers Possibilities Dangers - A rich offer in the field of tourism oriented towards natural resources (mountain, eco, adventure, hunting tourism) - Valuing the cultural-historical values and organizing an offer in the sphere of religious tourism - Development of rural tourism - Promotion of the tourist product in the sphere of transit tourism - Cooperation with institutions - Access to EU funds - Private - public partnership - Tourist competition - Great interest in famous tourist destinations - Unpredictable internal processes, especially political ones - Low GDP per capita - Slow adoption of plans, without which a planned approach to the development of tourism is impossible - Insufficient knowledge of the role of tourism in economic and social development Daliborka Blazheska, Natasha Ristovska and Dejan Nakovski. 2023. Strategic Brand Management in Function of Improving the Competitive Position of Tourist Destination. UTMS Journal of Economics 1 4 ( 1 ): 52 – 62 . 59 On the basis of the SWOT analysis it is recommended to approach targeting to an appropriate target group instead of mass targeting. There is insufficient diversification of tourist products and a low level of general informations about tourist attractions. There is a lack of adequate propaganda material and quality presentation on the Internet. The network of business and tourist agencies is poorly developed, and there is an insufficient budget that makes it impossible to hire specialized PR agencies that will help to achieve market success. In terms of prices, they often do not correspond to the quality of services, and on the other hand, they are poorly differentiated in terms of demand segments. The brand of the tourist destination is insufficiently built and without distinct features. In terms of sales channels, there is a small number of travel agencies (tour operators). According to the SWOT matrix, it is necessary to use the strengths of the brand, and only then try to overcome the weaknesses. The most significant advantages that can be used for the promotion of the future brand of the tourist destination and serve as a base for shaping a recognizable tourist product is the set of comparative advantages: natural treasures, cultural and historical heritage, proximity to the European market and other national traditions. Based on an ideal combination of maximizing opportunities and advantages we can define strategies to create a strong destination brand. It is necessary to implement the following brand strategies: 1. A strategy of continuous improvement of the quality of the tourism product, which improves the value of the brand, provides a new and desirable set of services and keeps the destination in the stage of development and at a level of profit maximization. It is possible to "keep" the tourism product in the growth phase by achieving competitiveness, investing in human resources, state policy measures and preserving the comparative advantages of the destination. By diversifying the tourist product, it is possible to continuously improve the quality of the tourist offer, especially the less popular types of tourism (ecological, mountain, nautical) of which individual expansion keeps the destination in the growth phase. 2. A strategy for conquering new market segments, which should create new elements of associativity for the destination brand and lead to the desired image. 3. A strategy for integration of the distribution channels should not only open up space for new market niches, but also redefine the existing legal status of travel agencies only as travel organizers and intermediaries, towards a unified offer and sale of service packages, through direct channels (especially electronically) through the agency's own networks and indirectly through intermediaries. 4. A strategy for creating awareness of the destination among the domestic population with a strong desire for development and a positive attitude towards tourism. By increasing the entertainment and recreational infrastructure content, the brand value of the destination will directly be increased. 5. Brand Positioning Pricing Strategy: Elite Versus Mass Tourism. The countries from the Balkans, including Macedonia as a tourist destination, can apply price strategies in the positioning of brands, and based on the price calculation and sales goals, there are: (1) high prices characteristic of elite tourism, so-called "collecting the cream") or (2) low prices characteristic of mass tourism and "market penetration" of less saturated clusters. The strategy of "discriminatory" prices can be connected with both aspects of the price positioning of the brand, and its implementation depends on the time of purchase of the tourist arrangement, the diversity of marketing and sales channels, as