Place marketing as Governance Strategy: An Assessment of Bottlenecks in Place Marketing and Their Effects on Attracting Target Groups

Place Marketing as Governance Strategy: An Assessment of Obstacles in Place Marketing and Their Effects on Attracting Target Groups

Jasper Eshuis, Erik Braun and Erik-Hans Klijn

This is a concept version of the article that has been published as: Eshuis, J., E. Braun and E.-H. Klijn (2013) Place Marketing as Governance Strategy: An Assessment of Obstacles in Place Marketing and Their Effects on Attracting Target Groups. Public Administration Review 73 (3): 507-516

AbstractPlace marketing is increasingly being used as a governance strategy for managing perceptions about regions, cities, and towns. What are the most important obstacles to implementing place marketing? Based on a survey among 274 public managers involved in place marketing in the Netherlands, this article analyzes the main obstacles as perceived by public managers. It also analyzes the effects of obstacles on perceived results of place marketing in terms of attracting target groups. A factor analysis of a variety of obstacles investigated in the survey shows three clearly demarcated obstacles: administrative obstacles within municipalities, obstacles in developing the substance of marketing campaigns, and political obstacles. The obstacles in developing the substance of the marketing campaigns have significant effects on the results of place marketing in terms of attracting stakeholders, whereas the two other obstacles have no significant influence.

1. IntroductionPlace marketing has become a strategy widely deployed by municipalities and regional authorities in the governance of cities, towns, and regions. It is used to increase the competitiveness of places and attract target groups such as tourists, new residents, and investors (see e.g. Bennett and Savani 2003; Braun 2008; Hospers 2006). It may include promotion and creating a positive image, but also product development in the sense of developing the place in a way that responds to the demands of target groups (Kotler and Gertner 2002; Greenberg 2008; Kavaratzis 2004). Although place marketing has been common in the US for over three decades (Gold and Ward 1994), it is a relatively new and growing phenomenon in Europe and other parts of the world. Municipalities in smaller cities, such as Hasselt in Belgium or Randers in Denmark, have followed the lead of major cities such as London (We are Londoners) or Montevideo (Montevideo for All) (see Dinnie 2011).

Place Marketing as Upcoming Governance StrategyThe upsurge of place marketing can be understood in the context of the wider governance trend of introducing commercial practices and private sector management styles (cf. Pierre and Peters 2000). Market-based reforms have taken place under the heading of new public management (NPM) (see e.g. Barzelay 2001; Pollitt, Van Thiel, and Homburg 2007). NPM stresses the importance of increasing efficiency in the public sector by introducing competition and approaching citizens more like customers. Customer-consciousness and customer-care training have become common in public services, as well as strategic marketing approaches, including business plans, market segmentation, and branding (Eshuis and Klijn 2012; Walsh 1994). In line with these governance trends, municipalities have introduced more marketing-led urban governance strategies (Greenberg 2008). This has led not only to marketing plans but also to the restructuring of spatial, economic, and fiscal policies. Greenberg (2008) describes how the branding of New York was entwined with pro-business restructuring of (fiscal) policies. Place marketing has evolved from applying particular promotional techniques for purposes such as increasing tourism, to marketing as an integral part of urban governance.

However, the application of place marketing has not always been smooth or successful. Place marketers face multiple constraints or obstacles when trying to apply marketing strategies in a public sector context. Like other forms of governance, place marketing involves many different actors who may disagree about, for example, marketing instruments, or about the brand that best captures the aspired identity of the city. Another issue in place marketing is that a place is a complex product, which may be difficult to market. Although the literature mentions quite a few difficulties in place marketing, no comprehensive research has been undertaken on the obstacles that public managers encounter in place marketing.

This Article: Obstacles in Place Marketing and Their Effects on OutcomesThis article aims to address this knowledge gap. The goal is to empirically determine the most important obstacles in place marketing, according to professionals and politicians involved in place marketing, and their effects on the outcome of place marketing in terms of attracting target groups. Two main research questions are addressed: 1. What are the main obstacles in place marketing? 2. What is the relationship between obstacles and outcomes of place marketing in terms of attracting target groups?The article is structured as follows. The next section lays a theoretical basis by defining what place marketing is. The literature on risks, limits, and obstacles to place marketing is then discussed. The third section describes the research design and methodology. This is followed by the empirical findings. The article ends with the discussion and conclusions.

2. Place Marketing, What Is It?Place marketing involves the application of marketing instruments to geographical locations, such as nations, cities, regions, and communities. The place marketing literature mentions a multiplicity of activities, instruments, and strategies under the heading of the marketing mix that can be applied to places. Most scholars therefore consider that marketing is broader than promotion only (see Braun 2008; Hospers 2006; Eshuis and Edelenbos 2008). Ashworth and Voogd (1990) develop a geographical marketing mix that includes not only promotional measures, but also spatialfunctional measures, organizational measures, and financial measures intended to improve the place itself and its management. Kotler, Haider, and Rein (1993) include activities aimed at improving design and service delivery, as well as developing attractions. The emphasis on multiple activities and strategies in place marketing reflects the idea that mere promotion, without developing the product and the management, is not very useful if one wants to attract people or organizations to a place and increase competitiveness.

Place Marketing: More Than Communicating Favorable ImagesPlace marketing is thus more than just developing favorable images and communicating them to the different target groups; it is not only about selling an image. Kotler emphasizes time and again that marketing is about fulfilling consumer needs (e.g. Kotler et al. 1999). Thus place marketing is about developing a place that fits the needs and wants of citizens, visitors, and investors. Marketing is about responsiveness more than persuasion, although persuasion is an important part of place marketing. The idea behind the broader marketing approach is that marketing is much more effective if it is targeted at what stakeholders want. Here, marketing is not only about sending messages but also about receiving messages. Marketing then becomes a matter of developing the place that people want, and applying elements of policymaking, urban planning, and place development (product development in marketing terms). This makes place marketing a special governance strategy that explicitly includes the management of wider processes of urban development.This view is shared by scholars like Van den Berg and Braun (1999, 993), who state that urban place marketing can be seen as a managerial principle in which thinking in terms of customers and the market is central as well as a toolbox with applicable insights and techniques. Here, place marketing is a way of thinking and doing that emphasizes a consumer orientation, or to put it slightly differently, a demand-driven orientation. This article follows this line. In the words of Braun (2008, 4), place/city marketing is defined as the coordinated use of marketing tools supported by a shared customer-oriented philosophy, for creating, communicating, delivering, and exchanging urban offerings that have value for the citys customers and the citys community at large. However, place marketing as governance strategy also faces constraints and obstacles, summarized as obstacles in the next section.

Exploring Obstacles in Place MarketingObstacles in place marketing arise from the governance environment in which place marketing is employed, and from obstacles in place marketing strategies themselves. The literature on place marketing and branding mentions a long list of obstacles to undertaking place marketing and achieving good outcomes from it. The governance literature provides insight into obstacles relating to the working of public organizations and political processes in the public sector. In this section, the main obstacles to place marketing are briefly discussed. The first thing stressed in the literature both on governance (Pierre 2000) and on place marketing (Klijn et al. 2012) is that, in a governance context, multiple public and private parties are involved: for example, the tourist board, hotels, museums, some major companies, and the municipality. A characteristic of governance processes is that actors may have different or even conflicting preferences (Koppenjan and Klijn 2004; McGuire and Agranoff 2011; Pierre 2000). Different actors may have different perceptions about the aims, strategies, and target groups of place marketing campaigns. There may be differences between public and private actors, but various public departments also often have different interests and favor different solutions. Government institutions are themselves fragmented, as much of the literature on governance emphasizes (e.g. Atkinson and Coleman 1992). This may create obstacles. McGuire and Agranoff (2011) state that departmental separation is a barrier to becoming a conductive organization that is capable of calibrating to the needs of its customers and the marketplace. For example, decision making can be hampered if the department of housing favors a campaign that positions the city as a nice and peaceful residential area, whereas the economics department wants to stress industrial investment opportunities. Another major barrier to inter-organizational collaboration in governance is what Bardach (1996) has called turf problems, where turf refers to the domain over which an agency is responsible and exercises legitimate authority. When municipal departments such as planning departments are confronted with new place marketing agencies that want to make city development more market oriented, they may be inclined to protect their turf and resist collaboration. This problem is more pressing when a governance strategy, as is the case with place marketing, requires coordination and an integrated approach to be (more) successful (Braun 2008). Place branding is a relatively new policy field and thus probably suffers from fragmentation and a lack of coordination with other policy activities. This fragmentation may hinder effective place marketing strategies and implementation (Kavaratzis 2009), as is also known from public administration implementation studies (Pressman and Wildavsky 1973). Thus it is expected that one of the obstacles will relate to this fragmentation and lack of coordination within governmental institutions.Governance is not only about administrators and administrative bodies, but as much about politicians and the public. Although scholars have posited shifts of power from representative political bodies to governance networks (Hanf and Scharpf 1978; Pierre 2000; Koppenjan and Klijn 2004), political bodies still exercise a degree of control. In governance, politicians are not political executives at the apex of a governmental hierarchy, but they do play a role in steering policy development, determining budgets, and overseeing implementation (Scharpf 1997). Policy development in governance, including place marketing policies, requires political support and sufficient approval by the citizenry. A lack of support among political representatives is an important barrier to good results in governance networks (Klijn and Koppenjan 2000; McGuire and Agranoff 2011). The issue of lack of political support has been recognized as a problem in the literature on place marketing. Braun (2008) has found, in a study comparing four European cities, that lack of political priority for place marketing can hinder its proper embedding in wider urban governance. Lack of political priority may also lead to a lack of financial resources for place marketing. Apart from obstacles stemming from the governance context of place marketing, there are also constraints rooted in the nature of place marketing itself. The literature on place marketing highlights difficulties in relation to the particular nature of places and the users of places. As Ward and Gold (1994, 9) argue, it is not readily apparent what the product actually is, nor how the consumption of place occurs. Though marketing practices make places into commodities, they are in reality complex packages of goods, services and experiences that are consumed in many different ways. For example, a city may be seen as a tourist destination, but at the same time it is the place of residence for many people or the location through which they need to travel when going elsewhere. In short, a place is a complex product with multiple identities (Kavaratzis and Ashworth 2005). The identities of a city involve for example the citys history and its historic center, but also its ICT and gaming industry. Thus the city can have different identities for different target groups. Tourists, for example, value the historic center, whereas private companies may value the ICT industry. A citys multiple co-existing identities make it difficult to develop appropriate place marketing campaigns.Other obstacles arise from the multiplicity of uses of places and the public character of places. Local governments and other stakeholders may use brands to appeal to different groups and evoke different associations with them, but this is not easy. A brand that is suitable for one group (e.g. tourists) may not suit other groups (e.g. residents) (Bennett and Savani 2003). In a commercial setting, marketers can choose target groups and ignore others, but in a public context it may be illegitimate or impossible to ignore groups of residents, voters, or businesses (see also Eshuis and Edwards 2013). It often proves difficult to create marketing plans that fit the preferences of all stakeholders. Stigel and Frimann (2006) find this limitation of place marketing in their study of the branding of two Danish towns. They conclude that the wish to arrive at consensus about brand identities can easily lead to brands with only very general and nondescript values. This inhibits the effectiveness of place marketing in terms of creating a distinguishable identity and a clear profile that makes the place stand out among its competitors. So, in the literature, many obstacles regarding place marketing are discussed. However, almost all the literature cited above is based upon case study research, so it remains unclear what the most significant obstacles are, and how different obstacles are interrelated. This article addresses this issue through quantitative survey research. The obstacles mentioned in the literature have been translated into survey items in order to identify the obstacles considered most important by practitioners, the underlying factors in the obstacles, and how they relate to outcomes of place marketing.

3. Research Design: Methodology and MethodsOrganization of the SurveyThis research is based on data collected for the first National City Marketing Monitor in the Netherlands 2010 (see also Braun et al. 2010; Klijn et al. 2012). This was a web-based survey sent to professionals and city administrators involved in the marketing of cities, towns, and villages. To acquire a reliable set of respondents actually involved in Dutch place marketing, the research was carried out in close collaboration with three organizations that provided e-mail addresses of (potential) respondents:- The main Dutch network for place marketing in the Netherlands (Netwerk City Marketing Nederland). This non-profit association for professionals working in place marketing was established in 2009. The association has no paid employees (except for support occasionally hired for secretarial work and accounting). The five board members are professional marketers who do this work on a voluntary basis. The association facilitates the development of a network of professionals working in place marketing by maintaining a website and a LinkedIn group (2300 members), and by regularly organizing seminars and conferences on place marketing. Those meetings attracted about 1400 attendants over the last three years. For this research the network provided the e-mail addresses of people who had participated in these events. This provided a large set of respondents.- The Dutch organization for local and regional tourism offices (VVV Nederland), the umbrella organization for municipal tourism offices. VVV aims to further tourism and recreation in the Netherlands since it was founded in 1885. The national organization has about 40 employees, but more than 1000 employees work in approximately 200 local offices (http://www.nuzakelijk.nl/werk/2298066/medewerkers-vvv-hebben-125-jaar-cao.html). The local offices engage in destination marketing, and provide tourists with information about the place, especially regarding recreational possibilities. The VVVs are often largely subsidized by municipalities. For this research the VVV provided details of respondents within local tourism offices who were involved in place marketing.- The Dutch association for local governments (Vereniging Nederlandse Gemeenten VNG). This is an umbrella organization for municipalities in the Netherlands which exists since 1912 and has about 270 employees. They advocate the interests of municipalities, and they are a platform for consultation and knowledge exchange among municipalities. All 408 Dutch municipalities are voluntary members of the VNG. For this research the VNG provided additional addresses of municipalities and contact persons. This facilitated further research into people involved in place marketing.Drawing on the three different lists of respondents, and complementing this with an additional search for respondents in municipalities (using an existing network of people working in place marketing), resulted in a reasonably complete data set of 600 people involved in place marketing in the Netherlands. To be sure, it is hard to assess whether the list is complete because of the lack of official registration of people working in place marketing. However, this extensive search for respondents gives reasonable confidence that at least a very large proportion of this group is included. During the first round, the survey was sent to the 600 names on the list. Of these, 541 were reached. Two hundred and seventy-four answered at least part of the survey, giving a response rate of 51 percent. The high level of response can be attributed at least partly to the involvement of the abovementioned three organizations and their support for the survey.

Survey RespondentsOf the 274 respondents, 168 worked for a municipality, 68 worked for a tourism office, and 38 for an organization at arm's length usually a foundation involved in place marketing (tourism offices often participate in such organizations). The respondents have a variety of functions, varying from communication advisor to neighborhood manager, policy advisor, and city alderman. Over 53 percent of the respondents had more than two years experience with place marketing. The larger cities are overrepresented in the survey. The proportion of municipalities in the Netherlands with less than 50,000 inhabitants is almost 60 percent, but the number of respondents from this group is only 37 percent. The largest cities in the Netherlands (over 250,000 inhabitants) represent only 1.5 percent of all municipalities, whereas almost 13 percent of our respondents come from this group. This may not come as a surprise however, since large municipalities tend to employ more people, including in place marketing, than small municipalities. Although the sample may not be representative of all municipalities, it can be confidently claimed to represent the people involved in place marketing thanks to the broad coverage of professionals through their representative organizations and the good response rate (51 percent).

Measuring Obstacles in Place Marketing Through a combination of inductive and deductive steps, 11 survey items were developed to measure obstacles in place marketing. First, the literature on governance and place marketing was explored to find obstacles rooted in the governance context, as well as obstacles stemming from difficulties in the marketing of places. These obstacles were then organized in categories (interdepartmental issues, impact on product development, political support, budget, reaching and influencing citizens, fit with place identity, and clarity of the brand), and translated into measurable items. The list was shown to a place marketer and another professional from the public sector (policy advisor) to see whether the most important obstacles (as perceived by practitioners/marketers) had been included. The items are presented in Table 1.

[Table 1 here]

Perceptions of the obstacles were measured on a Likert scale (completely agree, agree, neither agree nor disagree, disagree, and completely disagree).

Measuring the Attraction of Target Groups (Dependent Variable)Our dependent variable aims to measure the overall performance of place marketing in terms of attracting target groups. The overall performance is determined by the degree to which multiple target groups are attracted. We therefore created a composite dependent variable, attracting target groups, which was measured using three items for the three most important target groups in place marketing: 1. Place marketing has contributed positively to attracting visitors; 2. Place marketing has contributed positively to attracting new residents; 3. Place marketing has contributed positively to attracting companies/firms.

Each question was measured on a Likert scale, ranging from completely agree to completely disagree.

Factor Analysis A factor analysis was performed to find the latent variables behind the 11 identified obstacles. In addition, a factor analysis was conducted on the three items listed above to derive the dependent variable, attracting target groups. As already mentioned, all 11 items for the obstacles and the three items for the dependent variable were measured on Likert scales. Both factor analyses used the polychoric correlation matrix rather than the standard Pearson correlation matrix to respect the ordinal character of the data as suggested by Kolenikov and Angeles (2004). The literature has for some time been suggesting that it is incorrect to treat ordinal data as interval or ratio variables (Muthen 1984; Babakus, Ferguson, and Joereskog 1987). After estimation of the polychoric correlation matrix1, a principal component analysis with a varimax rotation was applied to ascertain the factors. Before applying the Varimax rotation, an oblique rotation (Oblimin) was performed showing that the factors were not substantially correlated2. Varimax rotation was chosen because it produces well interpretable results.

This procedure was first followed to derive the dependent variable, attracting target groups, using the three items listed above. To create this variable, the factor scores of the single factor emanating from this analysis were saved (with an Eigenvalue of 2.19930). Bartletts test of sphericity, with a p-value of 0.000, indicated no problem of inter-correlation between the items. A Kaiser-Meyer-Olkin Measure of Sampling Adequacy test was used to assess whether the factor analysis was good enough to proceed. The result of the KMO test was 0.608, which is above the frequently used critical threshold of 0.5 (Field 2009). The procedure and results of the factor analysis of the obstacles are discussed in section 4.

Common-Source BiasBecause all measures in this paper are based on respondents self-reports, there is a potential problem of common-source bias. To check for common-source bias, Harmans single-factor test (see e.g. Podsakoff and Organ 1986; Andersson and Bateman 1997) a factor analysis with all items underlying the independent and dependent variables was conducted. This analysis resulted in four different factors with an Eigenvalue above 1 (the factor with the highest Eigenvalue explained 36 percent of the variance). This indicates that common-source bias is not likely to explain the research findings (cf. Andersson and Bateman 1997).

Regression AnalysisA multivariate hierarchical regression analysis was conducted with the dependent variable, results of place marketing in terms of attracting groups. Regression analysis was chosen because of its capacity to examine the relationships between multiple variables, and the possibility to control for confounding influences on the relationship between obstacles and results of place marketing (cf. Graddy 1998). Three variables (the size of the municipality, the experience of the respondent, and the position of the respondent) were controlled for by using hierarchical regression analyses: the first model included only the set of three control variables, and subsequently the set of independent variables was added.

The first control variable included was the size of the municipality, in order to control for the possibility that city marketers in larger cities may have to cope with more complex administrative conditions, for example they have to deal with more departments within the municipality. Another possibility is that larger cities tend to be more active in place marketing than smaller ones, and this may also influence perceptions of obstacles or outcomes. The second control variable, the respondents experience in place marketing, was included to control for the possibility that the variance in outcomes is not explained by the obstacles but by incorrect estimations due to limited experience among our respondents. One could expect experience to have an effect on the evaluation of the outcomes by the respondents; respondents with more experience might evaluate the outcomes more correctly than those with less experience. The third control variable relates to the respondents different positions. They work in different organizations, and it was necessary to control for the possibility of their organizational affiliation influencing their perception of obstacles or results. For example, respondents from tourism offices may have a different outlook on administrative or political bottlenecks because they work in a different organization than those from municipalities. Three different positions match with the main categories of survey respondents: (a) public managers in municipalities (61.3 percent), (b) public managers in tourism offices (24.8 percent); (c) public managers in other organization (13.9 percent). The last group consisted largely of people working in independent associations responsible for place marketing. Dummies were created to measure this variable. The respondents working in municipalities were the reference group.

4. Some Main Obstacles in Place Marketing The obstacles in place marketing were analyzed by first exploring the most important obstacles according to practitioners in place marketing, the survey respondents. The underlying dimensions of obstacles were analyzed by performing factor analysis. This section ends by stating three hypotheses on the relation between obstacles and outcomes, and this relation is explored in section 5.

What Obstacles Do Practitioners Find Most Important?Presenting the median and the mode of each obstacle, Table 2 summarizes how respondents perceive the obstacles. The median separates the population of respondents into two groups with an equal number of respondents: one group that leans more towards agreeing and one group that leans more towards disagreeing that this is an obstacle. A median of 4 indicates that half of the respondents strongly agree with the proposition that this is an obstacle in their municipality, whereas the rest of the respondents do not agree that this is an obstacle (choosing a value of 3, 2, or 1). The higher the value of the median, the more people lean towards (strongly) agreeing that this is an obstacle. The mode shows the most commonly chosen value.

[Table 2 here]

Table 2 shows that respondents (strongly) agree most often with three propositions: the budget for place marketing is too low, it is difficult to reach consensus within the municipality, and place marketing has insufficient impact on product development. The high score for limited budget may come as no surprise, because our respondents are involved in place marketing and they may be inclined to want more money for their own activities. On the other hand, this answer should not be discarded too easily, because it indicates that respondents see the budget as limiting; they could do better work with a higher budget. In general, Table 2 shows high frequencies of respondents agreeing with obstacles that are related to coordination of policies within the municipal organization, for example reaching consensus about place marketing, and the idea that policy departments view place marketing as a threat. The obstacle of insufficient impact of place marketing on product development points to a similar issue in the sense that it appears difficult to achieve the translation of place marketing into product development (spatial plans, services, development of rules and regulations, and so forth). This is indicative of turf wars between governmental departments; non-marketing departments often resist the influence of marketers on their policies. It is also striking that respondents do not often consider political support as a big obstacle. Apparently, they consider the support from municipal executives sufficient not be an obstacle. Two other obstacles relating to the content of place marketing campaigns are not often considered as very important obstacles in comparison with the other obstacles. The low score for the obstacle regarding how the marketing fits the citys identity indicates that place marketers seem confident of having a marketing strategy, including for example brand values and brand signatures, that matches the identity of their place. Giving the city a clear profile with marketing activities is not considered an important obstacle either. City marketers trust that their marketing strategy communicates a clear message which portrays the place in a sufficiently outspoken way. Thus, the list of obstacles shows that public managers in place marketing consider the constraints of coordinating place marketing activities within the municipality, and the embedding of place marketing in place development, as more important than obstacles relating to the content of the place marketing campaign.

Analyzing Obstacles: Three Main CategoriesQuite a number of perceived obstacles have so far been discussed. In the following, the underlying structure of the obstacles in place marketing is analyzed to ascertain whether there are latent variables. A polychoric correlation matrix was computed as the basis of principal component analysis with a varimax rotation. The analysis resulted in three main factors with an Eigenvalue higher than 1. These factors explain 65.4 percent of the variance (see Table 3).

[Table 3 here]

[Table 4 here]

Table 4 shows that the first factor loads mainly on obstacles within the administrative organization. This factor relates to governance problems (municipal departments do not give much consideration to place marketing, insufficient experience within the municipality, and so on). The second factor loads on obstacles connected with implementing place marketing itself. It includes obstacles regarding the content of campaigns and reaching target groups. Two items that load particularly highly on this factor are the fit between campaign and place identity and the profile that campaigns provide. This involves the classic marketing issue of the relationship between the marketing message and the product. The third item with high loading is about reaching target groups, and a fourth item with lower but still noteworthy loading pertains to striking a chord with citizens. Those two items reflect the classical marketing issue of the ability to reach and affect the consumer. Thus, this factor is indicative of a latent variable called classical marketing problems in this research. The third factor shows high loadings on problems that have to do with politics, for example a lack of political support, a lack of budget, and not striking a chord with citizens (voters). This factor indicates political obstacles. The p-value for Bartletts test of sphericity was 0.000 and the KMO score was good: 0.794. The factor scores of the three factors found were saved and used in the regression analysis in order to examine which factor actually influenced the perceived results of place marketing.

Three Hypotheses About the Impact of ObstaclesSo far, this article has explored and described what respondents consider the most important obstacles in place marketing, and how the different obstacles can be structured in terms of three main underlying dimensions (administrative, political, and classical marketing obstacles). The next question to answer is the extent to which obstacles in place marketing actually influence the outcomes of place marketing. A regression analysis with the factor scores of the principal component analysis was performed to analyze how the obstacles influence the attraction of target groups to the city, thus researching the influence of the underlying dimensions: administrative obstacles, classical marketing obstacles, and political obstacles. Three hypotheses were tested:Hypothesis 1: Obstacles within the administration significantly influence (perceived) outcomes of place marketing in terms of attracting target groupsHypothesis 2: Obstacles relating to political issues significantly influence (perceived) outcomes of place marketing in terms of attracting target groupsHypothesis 3: Obstacles relating to the content of marketing campaigns significantly influence (perceived) outcomes of place marketing in terms of attracting target groups

5. The Relationship between Obstacles and Attracting Target Groups A multivariate regression analysis was performed to test these hypotheses, with three control variables to control for the possibility of the size of the municipality, the respondents experience, or the respondents position influencing the analysis. The variables are presented in Table 5.

[Table 5 here]

Results of the Regression AnalysisThe estimated regression model with the control variables only had an adjusted R-square of 0.1081. The full model with the three obstacles included produced an adjusted R-square of 0.2812 (a significant improvement) with low VIF-scores (between 1.02 and 1.24). The full regression model was run with robust standard errors.3 The results are presented in Table 6.

[Table 6 here]

Table 6 highlights the fact that the classical marketing obstacles in particular have a strong effect on attracting target groups (Beta = -.423), even after controlling for variables such as city size, experience in city marketing, and respondents position. Thus, hypothesis 3 is accepted. This is interesting, since the marketers themselves mostly indicate that the budget is a problematic obstacle, as well as reaching consensus within the municipality, and the insufficient impact of place marketing on product development, as noted earlier (Table 1). Marketers themselves think that aspects of administrative and political obstacles are most important, but this analysis shows that classical marketing obstacles influence results. On the other hand, the item, administrative obstacles, has no significant influence on attracting target groups. Hypothesis 1 is therefore refuted. Hypothesis 2 is also refuted because the item, political issues, has no significant influence on attracting target groups.4

6. Conclusion and DiscussionProfessionals and politicians involved in place marketing experience a multitude of obstacles. The findings show that the obstacles are characterized by three main underlying dimensions: (1) the political obstacles relating to citizen support; (2) classical marketing obstacles relating to the content of marketing campaigns and reaching target audiences; and (3) administrative obstacles with large loadings on difficulties in the municipal organization. From the survey, it can be concluded that the classical marketing obstacles have a significant negative effect on perceived results of place branding in terms of attracting target groups, whereas the other two obstacles (political and administrative) do not have significant effects.

It is striking, however, that respondents did perceive some of the items relating to the political and the administrative as important obstacles. In other words, although the people involved in place marketing perceive administrative obstacles as important in their municipalities, these are not the obstacles that significantly influence their perceptions of outcomes of place marketing in terms of attracting target groups. One explanation for this finding is that the actors feel that they are hindered seriously by administrative obstacles, but that in practice they seem able to deal with those obstacles in such a way that those obstacles do not influence how the marketing campaigns reach the target groups and help to attract target groups. To a lesser extent, this also accounts for the political dimension of the obstacles. These do not influence the perceived attraction of target groups either, so apparently the actors deal with them in a way that does not influence the target groups.

This research contributes to a better understanding of place marketing in that it is one of the first pieces of quantitative place marketing research on a nationwide scale. So far, research on place marketing (including place branding) has been mainly case based, and often descriptive rather than analytical. More specifically, this research is the first to arrive at a comprehensive analysis of the obstacles that influence the perceived results of place marketing. In contrast to existing research, it analyzes not only marketing aspects but also aspects of governance and public administration.

Of course this study has limitations in terms of measuring results of place marketing and the geographical extension of the research, and this may give direction to future research. To start with the latter, this research is limited to the Netherlands. It would be valuable to widen the research agenda towards international comparison of place marketing, to look at country differences. This is something on which the authors are now working.

Regarding the measurement of results of place marketing, it must be stressed that this survey measures effects of place marketing in terms of attracting target groups as perceived by public managers involved in place marketing. This provides a proxy for the results of city marketing on the basis of expert knowledge, which is especially valuable given the lack of hard data on results of city marketing. However, it does not measure hard numbers of people attracted to a place. Measuring numbers of attracted targets groups would have the added value of not depending on perceptions of professionals, but it has the drawback that it is very difficult to correlate the number of people attracted with marketing activities. To what extent is there a causal relation between, on the one hand, place marketing activities and, on the other hand, people being attracted to a place? Numerous factors other than place marketing may have attracted the target group.

To determine the relationship between place marketing and the attraction of target groups, one would need to carry out research among the target groups about whether they were influenced by, for example, associations triggered by the brand of a specific city. Future research could address this through detailed analysis of individuals perceptions and motivations regarding a limited number of marketing campaigns and cities.

Another critical point is whether place marketing professionals are at all able to estimate the effects of their activities on target groups. Effects of place marketing on target groups decisions may involve complex webs of associations, as well as complex relationships between influencing perceptions and the action of target groups. Indeed, these are difficult to estimate. However, one may expect professionals to have the ability to make estimations on the basis of their expert knowledge of marketing, measurements of perceptions, and behaviors of target groups, and on the basis of heuristics such as narratives of diverse actors and peoples reactions to campaigns.

It should be stressed that survey respondents who thought that they could not answer these questions had the option of ticking a box, I dont know, or skipping the questions entirely. A large majority, however, chose to answer the questions about effects of marketing activities. One could then argue that less experienced professionals cannot properly judge a complex issue such as the effect of place marketing on target groups. To check this, the answers of less experienced respondents were compared with the answers of more experienced respondents, and there was no significant difference. Respondents from different kinds of organizations (municipality, tourism office, organization at arms length) did not answer the questions differently either. There are no signs of systematic distortion in the dependent variable.

Another limitation concerns the dependent variable, attracting target groups. Although it gives a good indication of an elementary goal of place marketing, it neglects two important aspects: existing residents and the satisfaction of target groups. It would be valuable to add those indicators in future research because, even when place marketing does not increase the attraction of target groups, it may have effects in terms of satisfaction among target groups or residents perception of places.

Finally, there is a limitation in the sense that it is not entirely clear whether the respondents completed the items on obstacles for the same time period as the items on results. The results of place marketing logically depend on activities and obstacles in the past, whereas respondents may report about current obstacles instead of obstacles in the past. Thus the data are flawed in cases where two conditions are met at the same time: the current obstacles are very different from past obstacles, and the respondent answers the questions about obstacles with only a very short time span in mind. Nonetheless, it is likely that, if obstacles in the (recent) past were really important, respondents would take them into account when completing the survey.

Notes1. The Stata-module developed by Kolenikov and Angeles (2004) was used for the polychoric correlation analysis.2 The Oblimin rotation resulted in the same factors with very similar factor loadings. Following Field (2009), the cut-off point for factor loadings to be substantive is 0,4. All items had substantive loadings on just one factor with one exception. Item 7 had a substantive loading (0,46) for a second factor in the structure matrix. The statistical analysis in this paper has been repeated with oblique factors which produced the same results.3. The full model including the three obstacles for heteroskedasticity was tested using the Breusch-Pagan/Cook-Weisberg test and Whites test. The first test indicated a problem with heteroskedasticity (p= 0.0043), the latter did not show correlation between the errors and the fitted values of the dependent variable (p= 0.1476). Next, the model specification was tested with a specification link test for single-equation models, and the Ramsey RESET test was used to examine whether the model suffers from misspecification. Both tests showed that misspecification is not an issue. Although the evidence of heteroskedasticity is inconclusive, the regression of the full model with heteroskedasticity-robust standard errors was run to make sure that the OLS estimators remain BLUE (see Woolridge 2009).4. It was checked whether political and administrative obstacles indirectly influence outcomes (via marketing obstacles). Put differently, interaction effects of the independent variables were analyzed by adding the interaction variables POLITICAL*MARKETING and ADMINISTRATIVE*MARKETING to the regression analysis. The interaction variables had no significant effect on outcomes, and the model as a whole did not improve, therefore the interaction effects were not included in the final analysis.

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Table 1 Items for Measuring ObstaclesItem

1The budget for place marketing is too low

2It is difficult to reach consensus within the municipality about the place marketing content and strategy

3There is insufficient expertise within the municipality

4Policy departments view place marketing as a threat, they do not want place marketing to influence their policy

5Various municipal departments do not give marketing much consideration in their communication

6Place marketing has insufficient impact on product development

7There is not enough political support

8Place marketing does not really strike a chord with the citizen

9The campaign does not fit the identity of the municipality

10The campaign does not provide a clear profile for the municipality

11The intended target groups are not reached sufficiently

Note: This article uses the term place marketing. The Dutch survey actually used the term city marketing because in the Netherlands this is the most commonly used term to denote the marketing of places (be it cities, towns, villages, or districts).

Table 2 Median and Mode of Obstacles in Order of Perceived ImportanceObstacleNMedianMode

The budget for place marketing is too low19044

It is difficult to reach consensus with the municipality about the place marketing content and strategy19144

Place marketing has insufficient impact on product development18944

There is insufficient expertise within the municipality19134

Various municipal departments do not give marketing much consideration in their communication18934

The intended target groups are not reached sufficiently18533

Policy departments view place marketing as a threat, they do not want place marketing to influence their policy19032

There is not enough political support18932

The campaign does not fit the identity of the municipality18822

The campaign does not provide a clear profile for the municipality18822

Table 3 Results of Factor Analysis: Variance ExplainedFactorEigenvalue% of VarianceCumulative

Factor 14.35024 39.55 0.3955

Factor 21.79965 16.36 0.5591

Factor 31.04626 9.51 0.6542

Factor 40.94170 8.56 0.7398

Factor 50.68101 6.19 0.8017

Factor 60.54803 4.98 0.8515

Factor 70.44497 4.05 0.8920

Factor 80.40684 3.700.9290

Factor 90.33436 3.04 0.9594

Factor 100.29554 2.69 0.9862

Factor 110.15141 1.38 1.0000

Note: Extraction method: principal component analysis (unrotated)

Table 4 Factor Scores of Principal Component Analysis (Rotated Component Matrix)VariableFactor 1Factor 2Factor 3Uniqueness

The budget for place marketing is too low0.2861-0.28660.65900.4017

It is difficult to reach consensus with the municipality about the place marketing content and strategy0.69980.22420.29880.3708

Place marketing has insufficient impact on product development0.5878

0.19160.40820.4512

There is insufficient expertise within the municipality0.65270.12000.18900.5238

Various municipal departments do not give marketing much consideration in their communication0.81230.12680.09020.3159

Policy departments view place marketing as a threat, they do not want place marketing to influence their policy0.75340.06670.01350.4277

There is not enough political support0.38330.20850.66420.3685

Place marketing does not really strike a chord with the citizen -0.04190.39150.74040.2968

The campaign does not fit the identity of the municipality0.14290.90510.00490.1604

The campaign does not provide a clear profile for the municipality0.12150.89870.11040.1653

The intended target groups are not reached sufficiently0.32620.72920.20010.3218

Note: Rotation method: orthogonal varimax with Kaiser normalization

Table 5 The Main Variables in the AnalysisVariableMeasurementNature

Experience in place marketingYears of experience in place marketing (five categories: no experience; 01 year; 12 years; 25 years; > 5 years)Control variable

Position: tourism officeDummyControl variable

Position: other organizationDummy Control variable

Political obstaclesFactor score Independent variable

Classical marketing obstaclesFactor scoreIndependent variable

Administrative obstaclesFactor scoreIndependent variable

Outcomes of place marketingFactor score based on three items (contribution place marketing to attracting: visitors, new residents, companies)Dependent variable

Table 6 Results of the Regression Analysis with Results in Attracting Target Groups as Dependent Variable (n=144)Results Coef. Robust Std. Err. t Sig [95% Conf. Interval]

Administrative obstacle -.1087522

.0707777-1.540.127-.2487193 .031215

Marketing obstacle -.4231187.0950692-4.450.000-.6111237 -.2351136

Political obstacle -.140734.0916106-1.540.127-.3218995 .0404315

City size .1158399.03389093.420.001.0488187 .1828611

Working experience.0707171.0619341.140.256-.0517612 .1931954

Dummy tourism office .0103029.17947420.060.954-.3446182 .365224

Dummy other position.1116235.15761160.710.480-.2000631 .4233101

Constant4.745543.49908949.510.0003.758563 5.732522

Notes: Dependent variable: Results of place marketing in terms of attracting target groups; R Square = 0.2812; F = 7.10 (df 1 = 7, df 2 = 136), Sig. F Change = .000

2