Saturday, 7 February 2009

Financial Management Methods – Essay by Bogdan Craciun


About Bogdan Craciun

Evaluating the performance of “VisitBritain” overseas marketing activity


Nowadays the tourism’s importance is greater than ever. According to the World Tourism Organization (2006), tourism affects the enterprises, development, trade, communities, and lives – to name only a few. Tourism is one of the largest industry and the largest service industry – in the “global village”. Tourism activity creates millions of jobs, improves lives of visitors and hosts and is an important connecting factor between traders, contributing to local economies wealth. There are countries where tourism is the main source of income.

Not many countries afford to create and support a governmental organization that promotes overseas by marketing its tourism industry.

“VisitBritain” is the National Tourism Organization for Great Britain sponsored by the Department of Culture, Media and Sport, and by private tourism businesses. Its main goal is to increase inbound visitors to Britain and to sustain tourism industry by promoting Britain overseas and England as a tourist destination within Britain.

Tourism is not isolated and is deeply influenced not only by country’s climate, natural beauties and cultural opportunities, but as well by the policy of the country. Britain’s tourism industry is influenced by its capricious weather and by the fact that its policy in Afghanistan and Iraq made of it a highly potential target for terrorist attacks. Another influence of politics on tourism comes from the tourist visas required from many virtual visitors of Britain. The hassle of getting a simple tourist visa, the cost of it and sometimes its refuse, makes any potential visitor give up even before wishing to visit a certain location in Britain. Schengen countries that removed tourist visas for large categories of foreign citizens scored, as result of this policy, an important boost of their tourism industry.

All the above problems that affect British tourism industry, put VisitBritain, on one hand, in a very delicate and ingrate posture, and, on the other hand, in a very important one for British economy.

On 12 November 2004, The UK’s National Audit Office concluded an external audit report concerning VisitBritain’s overseas marketing performance (a hard copy attached).

As VisitBritain is publicly and non-government funded, in this report might be interested all stakeholders (the Department of Culture, Media and Sport and all the associations and private sector businesses partners). Mass Media could also show concern in the report as a good subject for news. The citizens of Great Britain who wish to understand how the public money was spent could be potentially interested in these report findings. The VisitBritain’s internal audit could be interested as well in this report, in order to improve its own analyze in the future. The competitors on the international tourism market should show themselves preoccupied with VisitBritain’s strategies and results, as a powerful competitor should always be kept under close and careful supervision, even to adopt any of the strategies that proved to be profitable.


What reveals the report about the performance in the organization?

The report reveals that the performance of the Organization is hampered by weaknesses found in marketing process (pointed out in my further analysis). The great transition proposed to be done at the core part of VisitBritain’s activity (the country-branding), could have a desired impact on the present performance.

The key issues raised by report are: results measured by return on investment, communication channels with its partners and marketing methods to reach its customers and potential customers.

Communication with industry is considered a weak link for VisitBritain. “Half of the partner organizations” declare that “are dissatisfied with their input into VisitBritain’s strategic direction” (p. 17), which I interpret as a lack of understanding and common vision. More, some of the respondents “feel that input to VisitBritain’s strategic direction is limited to those making a financial contribution” (p. 18). As VisitBritain has as one of its goals “to help the United Kingdom tourism industry to address international and domestic markets more effectively” (p. 9), the above situation sends a powerful alarm signal that there is not a proper communication between industry and VisitBritain.

The report shows the contradiction between the short-term objectives – sustained by the “big players” and the “longer term marketing objectives that draw out the distinctiveness of Britain” (p. 26) – required by country’s long-term touristy objectives. In order to sustain the second vision, the country-branding is proposed to be used actively as marketing tool. This could ensure the competitiveness on global touristy market. A greater emphasis is put on seeking of innovative products and experiences that British tourism market could focus to attract visitors and especially to make visitors come back again.

The report shows that the auditor was able to collect some data that allowed the performance assessment of VisitBritain’s activity. The report concentrates on past results and shows the future development lines.

In my opinion this report reveals the transition from an organization “serving” private purposes – confronted with conflict of interests – to an organization leading its industry, an organization that identifies the opportunity’s stream for its partners.

It seems that VisitBritain treats the medium and small enterprises as customers and not as partners. I want to explain this statement: in private businesses’ marketing is sometimes used the “20/80 Pareto” rule: when 20% of the customers bring 80% of sales, these 20% customers should receive a better treatment than the others. This is private business marketing. VisitBritain seems to connect the timing of campaigns’ announcement with the amount of money partners are able to provide for certain campaigns. The fact that the participants “learn about the campaigns too late to be part of them” it shows that VisitBritain might treat them as customers (differently and with favors) and not as partners with equal rights at timely information. The report avoids telling us if in authors’ opinion VisitBritain is favoring only the financial powerful enterprises.

Regarding the communication with visitors I consider that the way VisitBritain approaches the new markets shows lack of concern for potential visitors, people that have never visited Britain. The rush after return on investment, that the report reveals, keeps the organization reluctant to developing new markets – a process which involves costs in present and revenues only in future. Besides the costs, VisitBritain should concentrate its efforts to understand at least the perception about Britain of the new markets citizens. I can take as example some of European citizens, who generally are not attracted by Britain as a holiday destination, but more by countries as Spain, Italy, France or Greece. VisitBritain should know why this is happening and should try to alter these citizens’ present perception about Britain.

The report proves the VisitBritain’s interest in finding out about their visitors experience and how their satisfaction affects their likelihood of return. VisitBritain should show interest as well in the potential visitors prejudice, expectations and stereotypical thinking towards Britain as a travel destination, and after understanding them to try to build a better image.

The statement “VisitBritain staff are encouraged never to let a data capture opportunity go and customer details are constantly added to their customer database” (p.19) is at least awkward. It is well known that this manner of data collection is disturbing: the customer usually avoids this type of questioning and even if s/he cannot refuse the conversation, is possible that the answer is not accurately true. VisitBritain could make better use of the information that could be easily collected directly (with better connection) from the service providers. Generally the questionnaires are perceived as annoying and somehow intrusive. But the service provider can take the information needed from the customer without giving him the impression s/he’s questioned, in a pleasant manner. This information is indeed of high value as the answers are obtained very close to the moment the tourist had the experience. The answers might have a greater value of truth as between the service provider and tourist there is a direct communication.

More, the data collected direct from business can give other important relevant information for instance regarding the customer’s loyalty and real profile. As is well known, the real profits of the marketing activity are obtained not when there is the first selling, but mostly when the second, third selling is done. That is why the VisitBritain’s marketing should focus as well on collecting customer data via its partners.

One key question that report tries to answer is: how much does the marketing contribute to the tourism industry’s profit?

How much of the spending with marketing is investment and how much is just dead cost? Because in marketing there is always one question: "Half the money I spend on advertising is wasted; the trouble is I don't know which half" (John Wanamaker, 1838-1922).


How appropriate the analysis, recommendations and the presentation are?

Generally the evaluation of marketing performance is considered a difficult task. Evaluating the performance of marketing is nearly impossible if is not designed from the beginning to be measured. VisitBritain’s performance evaluation is not using own database and the figures they present as performance – return on investment – have a great uncertainty degree. I consider that VisitBritain’s performance measurement methodology is not professionally designed (from the beginning). A marketing effort who’s effect are assessed as overstated (probably) by some consultants (commissioned by National Audit Office), while other, contrary, view the figures underestimated (University of Luton), creates confusion and generates distrust. The presently used method of evaluating the performance is made up bits and pieces and does not bear the sign of own criteria and proper organizing for capturing results.

As reader of this report I would like to have a comparison evaluation of the VisitBritain’s annual return on investment with the same indicator that belong to other foreign organizations, competitors, with the same marketing activity. I could understand by comparison if this return on investment (29:1) (that the report seems to be proud of) is indeed a figure that shows profitability.

No matter how big or small is this return on investment (29:1), in comparison with other countries’ equivalent return on investment, I consider that it is sufficiently big to allow VisitBritain to implement long-term strategies.

In report there is no clear reference which type of tourist activities brings the best return on investment. I do not know if the mix of marketing, as conceived by VisitBritain, is competitive as there is no reference level (tests and controls). I do not know if the 2003-2004 return on investment of 30:1 means that VisitBritain achieved its target. The goals are stated but no measurements methods included.

I understand that VisitBritain makes efforts to change its marketing channels of communication to customers by using the new technologies, as Internet, call centers and direct marketing methods. Still the report does not give any clear performance evaluation divided on these methods. Using the results of a research on tourism marketing (DeHaan, 2005), we can see that the channel of direct marketing plus the leaflets (that generally are considered to be part of direct marketing) have the biggest percentage for obtaining customers’ awareness (37.7%). It is obvious that the costs for overseas offices rental are in fact lost money. More, using the e-mail and Internet communication in a creative way, the customers could find out about VisitBritain's activity in a less expensive manner. According to the report, the website was rated by the Financial Times as “the best overall” national tourism organization website in 2002. Potential visitors around the world are provided with information regarding cities, accommodation and events, with a total of 35 markets websites in local language. VisitBritain closely follows the “a click away” trend, which is an excellent way to inform the customers 24/7 quick and comprehensive.

We are not told if the assumption used for segmentation (p.15, figures 12 and 13) are checked and confirmed by actual surveys and what the return on investment provided by each segment is.

It is stated that the communication with the industry is done mainly through the partner professional associations. The channel they use for data collection is mainly the newly acquired “customer relationship management system”.

Analyzing the way VisitBritain cooperates with its partners, I do not have enough data to understand how and to what degree VisitBritain is “controlled” by the powerful partners. But taking into account the fact that 53% respondents consider that VisitBritain did not help them to market their products overseas (p. 18, figure 17), this makes me wonder if this is not a case of influence and spending public money on private interests.

The report does not reveal anything about the risk/sensitivity factors that could be considered as weak points for Britain’s tourism.

One of these sensitive factors I am thinking about is the insularity. It impedes on visitor’s transport. Getting to Britain is done mainly by using the plane. And the hassle of a plane departure could keep a lot of people away of visiting Britain. There are not taken into account the opportunities of low-fare plane travels and no reference to them and the number of customers they could involve.

Another sensitive factor is the fickle weather. As Britain cannot compete for leisure holidays with the sunny Spain, Italy, France or Greece – to name just a few of the European competitors – it is possible to have indoor-spa tourism and shopping/cultural tours as important tourism activities.

The report does not show the return on investment breakdown on additional events that are related to tourism and promote it. I do not know if were analyzed the ever-increasing tourism opportunities brought by sportive events (World or European Championships for various sports) or the massive promotion that the community of international students could spread all around the world. Again no information if VisitBritain programmes took into consideration the very important academically and scientifically tradition of the country. This could be splendid exploited for any sort of international scientific and professional reunions or congresses.

The report should reveal the influence of the above factors on return on investment and if VisitBritain has any intention to make use of the advantages they confer for improving the performance.

The orientation towards country-branding is the action that shows that indeed VisitBritain is committed to changes. Essential changes.

The marketing technical improvements would be useless without this new strategically vision. Even if VisitBritain seems to adopt a little later the country-branding concept (Spain, for instance did it soon after 1975), this decision that is revealed towards the end of the report shows a quantum leap of vision and approach. Kyriacou and Cromwell (East West Coms) consider that UK, with a rich cultural background and tourist offers, have a developed image and brand value. But with the aggressive country-branding that other countries have, the traditional image of UK presented by VisitBritain is – maybe – obsolete and dusty. This lack of initiative and commitment towards country-branding caused the results presented on the first two parts of the report. With the decision to engage VisitBritain in an active country-branding everything changes. This decision could be a turning point for VisitBritain’s marketing activity. The campaigns do not speak any longer about specific offers, but about values and about what makes Britain a tourist destination. The emphasis shifts from “who you are” – the customer segmentation, to “what we offer” – “depth, heart, vitality”. This I consider to be the key issue that the report should emphasize more. VisitBritain adopted a new vision (country-branding) that puts all the traditional tourist activities into a modern light, with a real 21st century approach. What are the benefits of country-branding initiated by VisitBritain? If we listen to Kyriacou and Cromwell, we can find out the benefits of the country branding: “How a country is perceived, both domestically and from abroad, from the quality of its goods and services, to the attractiveness of its culture and its tourism and investment opportunities, to its politics, economic policies and foreign policy, can be shaped under a brand. The branding process strengthens democracy and helps both internal development and successful integration into the world community, on all levels.” (Kyriacou and Cromwell, East West Coms)

What the report considers “tensions” between short term and long term objectives are in fact the symptoms of transformation from an atomized vision (as the individual campaigns guided by a bigger return on investment are) to a holistic one (as the country-branding is). This proves that VisitBritain decides not to be influenced by “big players”, but to lead all industry towards its own vision. VisitBritain is no longer a manager but a leader. And I think this is exactly the purpose of a national tourist agency that promotes overseas the country.

I consider as well that the author of the report is quite generous and do not bring to the public awareness the difficult issues from VisitBritain’s activity.

Overall the auditor’s recommendations approach is a good one, having a technical character, on one hand, and a strategically one, on the other hand.

Still, I believe that the auditor should have recommended VisitBritain to become more conscious of its importance for British economy and to have a stronger position in its relation with the political institutions, regarding the tourist visas policy (for instance).

The report recommendations about the return on investment are well structured and reach all the necessary technical aspects for VisitBritain to achieve its return on investment target.

The recommendations regarding the relationship with the tourism industry are appropriate, but, from my point of view, the auditor should have advised VisitBritain to provide as soon as possible the tourism industry with the results of the research about the perception of Britain abroad as a tourist destination. It is well known the fact that in accordance with this perception, the tourism industry can offer proper product and services.



DeHaan Tourism and Travel Research Institute, 2006, [WWW], “Tourism Marketing Evaluation Peak District Visitor Guide 2005 Evaluation Conversion Research” , 2006, (15th January 2007)

Kyriacou, S. and Cromwell T., 2006, [WWW] “The Concept and Benefits of Nation Branding”,, 2006, (15tyh January 2007)

Wanamaker, J, cited from [WWW], (16th January 2007)

World Tourism organization, 2006, “Tourism enriches” [WWW],, 2006, (16th January 2007)

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Financial Management Methods de Bogdan Craciun este licenţiat printr-o Licenţă Creative Commons Atribuire-Necomercial-Fără Opere Derivate 3.0 România.

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