Travel Reference
In-Depth Information
At the macro level, the most pressing environmental condition that marketers are facing is the
'new economy', which is commonly labelled as the 'service economy', the 'knowledge society', and
the 'information era' (Gummersson 2002: 587). Day and Montgomery (1999: 6) suggested that fi ve
emerging themes in the 'new economy' are shaping the future direction of marketing, including:
•
the connected knowledge economy;
•
globalizing, converging, and consolidating industries;
•
fragmenting and frictionless markets;
•
demanding customers and consumers and their empowered behaviour; and
•
adaptive organizations.
The connected knowledge economy
In the connected knowledge economy, intellectual capabilities, or 'operant resources' (Constantin
and Lusch 1994), become the key resource for wealth creating (Achrol 1991; Achrol and Kotler
1999) and productivity improvement (Powell and Snellman 2004). People are increasingly
connected through networks, in which information and knowledge fl ow in a more free (low
cost) and frequent (low barrier) manner - clearly, in recent years the ubiquity of social media has
further reinforced this trend. For the knowledge-based industries - those focusing on 'the
development, application, and diffusion of new knowledge' (Day and Montgomery 1999: 7) -
the traditional assumption of diminishing returns (scale economy is eventually constrained
by the upward marginal cost curve) may no longer hold true (Arthur 1996; Berthon and Hulbert
2003). Customers may be locked into the system, procedure, or protocol they are familiar with,
due to the complexity of those information-intensive products, which makes the market
a 'winner-take-all' (Frank and Cook 1995) or 'tippy' (Varadarajan and Yadav 2002) one. For
destination marketing, travel today is less about location and more about experiences, and natural
resource endowment alone can hardly make a place attractive any more. Experience providers'
intellectual capital embedded in product offering is making a big difference.
Globalizing, converging and consolidating industries
The worldwide globalization process was caused by and has caused 'the homogenization of
customer needs, gradual liberalization of trade, and the recognition of the competitive advantages
of a global presence' (Day and Montgomery 1999: 7). International organizations and treaties such
as WTO, NAFTA, and the EU, help extend market areas beyond national boundaries (Berthon
and Hulbert 2003). Technology advancement has to a great extent eliminated the conventional
spatial and temporal constraints and barriers of marketing. Market structures and boundaries,
classifi cation of industry and product, role of competitors and partners are increasingly blurring
and undetermined. In the tourism context, globalization has created unprecedented convenience
for destinations to access their target market, but this very accessibility could very well dilute a
destination's novelty/exoticness, which is one fundamental driver of travel (Lee and Crompton
1992). Further, globalization has also presented major challenges to small, local tourism business
when competing with multinational corporations.
Fragmenting and frictionless markets
As indicated, globalization, industrialization, and modernity have on the one hand led to a homo-
genized world (Franklin 2003), which features the confl uence of demographic characteristics
