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Marketing & communications strategy of srilanka

Evaluation of Marketing Strategy & Communications Strategy of Srilanka Tourism Promotion Bureau

INTRODUCTION

Sri Lanka tourism was institutionally setup in 1966. In 2005, new tourism act was passed taking into account new desires, ambitions and future directions of tourism that resulted in division of Srilanka. Tourism into four independent entities funded by by Tourism Development Fund:

  • The Sri Lanka Tourism Development Authority
  • The Sri Lanka Tourism Promotions Bureau
  • Sri Lanka Institute of Turism and Hotel Management
  • Sri Lanka Convention Bureau

The Sri Lanka Tourism Promotions Bureau (SLTPB) is responsible for all marketing and promotional functions. Due to communal crisis in Sri Lanka, Sri Lanka tourism had a rough, roller coaster ride in the past 25 years. During this period tourism in Malaysia, Thailand and Singapore have dramatically increased while Srilanka tourism has lagged far behind.
Sri Lanka Tourism Promotions Bureau recently changed its official logo from ‘Sri Lanka, Land Like No Other' to its new logo ‘Sri Lanka Small Miracle' guiding its tourism in a new era. The report evaluates Sri Lanka Tourism Promotions Bureau's marketing strategy and communications strategy & the message it is conveying to its audience.

SCANNING SLTPB's EXTERNAL MACRO-ENVIRONMENT

Tourism industry operates in a global environment and hence are very sensitive to external environment (such as safety, political stability, exchange rates, etc). PEST analysis stands for ‘Political, Economic, Social and Technological analysis' and is used for scanning the external environment to identify the key macro-environmental factors and trends affecting the company. A systematic external environment scanning is important to keep up-to-date with changes in the market environment.

Political Factors

  • Sri Lanka has a multi-party democracy which is quite stable.
  • Uncertainity due to the Sri Lankan government's war against LTTE has effected the tourism industry. Though the government has delclared victory against LTTE, there are still many LTTE remnants in parts of northern and western region and thus there is a potential of instability in those region.
  • Srilankan Tourism Promotion Bureau is funded by a separate entity - ‘Tourism Development Fund' that is under the government's control.
  • Srilanka has had good relations with its only neighbouring country (India) which is an advantage over other south asian tourist destinations like India, Pakistan, etc. They do have their own internal problems (communal crisis) but it is decline now after the victory of government.

Economic Factors

  • Cost of living in Srilanka is low which helps in attracting tourists who look for cheap alternatives to spend holidays.
  • A loan of $2.5 billion has been approved by International Monetary Fund to undertake economic reforms and to rebuild areas damaged due to the internal conflict between the government and the LTTE
  • Due to the Tsunami in 2004 and the hostilities between the government and LTTE, the economic situation has been hampered. But, they are slowly and steadily rebuilding.
  • Roads are the main mode of transportation in Srilanka but condition of roads are poor and inadequate and are mostly congested. Condition of railways is bad with poor tracks and bridges causing derailments and significant delays.
  • Decrease in strength of pound against Euro is changing the notion of Britishers going for a ‘cheap holiday in Europe', making them choose alternate options which Sri Lanka can benefit from.
  • Inflation in Sri Lanka is around 9%
  • The exchange rate of Sri Lankan rupee quite low (186 LKR = 1 GBP)

Social Factors

  • Due to instability in northern and western areas of Srilanka (the war zone), tourists are still reluctant to visit.
  • Crime rate in Srilanka is high which is also another factor affecting the number of tourists vising Srilanka.
  • Asian Tsunami in 2004 in which Srilanka was one of the worst hit, is also another factor affecting decision to travel as people fear if something similar could happen again.
  • English language ability has been in decline due to which some tourists might face difficulties in communicating
  • Several mosquito-borne diseases are present in the country. Also, medical facilities and emergency help is severely limited or unavailable in many areas of Srilanka.

Technological Factors

  • Secure booking system for taxis to prevent crime
  • Medical facilities are not advanced in many parts of Srilanka. Hospitals are not adequatly equipped with latest technology equipments so for any major problem, tourists need to be flown to neighbouring countries for treatment.
  • Many tourist attractions in Srilanka do not have mobile networks and some of them have very minimal landline phones ceasing the mode of communication.
  • Srilankan Tourism Promotion Bureau have started taking advantage of the internet by re-launching their web site with a new look. In addition, they have also planned a competition for the blogging community for marketing tourism in Srilanka. There are many videos available online showcasing the beauty of srilanka which will help them attract many visitors.
  • Access to travel maps, road maps and tour maps are readily available on the internet.
  • Roads and railway lines in Srilanka have been in poor causing severe disruption in transport which is a disadvantage.

With the above analysis it can be seen that there are various powerful forces affecting Sri Lankan tourism industry at the macro level which needs to be taken care of through its marketing strategy.

Market Analysis of Sri Lanka Tourism

SWOT Analysis

SWOT analysis helps in matching a firm's resources and capabilities to the competitive environment in which it operates. Using the method we weigh up Sri Lanka Tourism's internal strengths and weaknesses against external opportunities and threats.

STRENGTHS

* Assortment of attractions in Srilanka (palm fringed beaches, warm waters, diverse landscapes, ancient culture, arts, world heritage sites) and its friendly people make Srilanka an worthwhile tourism spot.
* Pleasant weather with ethinically, linguistically and religiously diverse country
* Good blend of Board of Directors comprising representatives from Tourists Hotels Association of Srilanka, Srilanka association of inbound tour operators, Association of small and medium enterprises in tourism.
* In-house PR department with agencies operating in 6 different destinations (UK, France, Germany, Russia, Middle east and India) have been started to target high yield markets (particularly the youth markets in the regions)
* The government recognises that tourism makes a significant contribution to social and economical development of Sri Lanka

WEEKNESSES

* Inadequate information channel - Many tourist places don't have cell phone network accessibility and some have limited landline telephone access.
* Destruction due to natural calamity - Asian Tsunami caused severe damage to several coastal areas. Most areas have recovered but some are still in the process of recovering.
* Safety & security - Though the country has declared victory over LTTE, there is still unrest in northern and eastern province of Srilanka where most Tamils are based
* Inadequate transport - Roads are the backbone for transport sector in Srilanka but conditions and standards of roads are inadequate and are mostly congested. Condition of railways is bad with poor tracks and bridges causing derailments and significant delays.
* Medical facilities and emergency help is severely limited or unavailable in some areas
* Crime rate across the country is high with north and the western region being the most effected.
* Decline in english language speaking ability in rural areas.
* Image of Srilanka has been hampered due to the internal struggle since the past 25 years.

OPPORTUNITIES

* Victory over Liberation Tigers of Tamil Eelam (LTTE) in 2009 after more than 25 years of civil conflict.
* Decrease in strength of pound against Euro is changing the notion of ‘going for a cheap holiday in Europe', making them choose alternate options (like Srilanka)
* Increased hotels facilities at tourist destinations
* Government playing an active role in development of tourism in the country.
* An advertising agency has been hired to build brand image and increase market reach
* Eco-tourism is now gaining popularity
* Many regions in Srilanka are yet to be explored

THREATS

* Other asian countries having similar tourist attractions could divert the tourists.
* As people are getting more aware of climate change, they may try to decrease the effect on it by taking fewer flights.
* Evolution of consumer attitutes and expectations (consumers expect more now)
* The continuing credit crunch is effecting the tourism industry negatively
* Fluctuating oil prices have resulted in increased air ticket prices thus making prospective customers reluctant to go for tours
* Better prices and facilities provided by other countries

With the above analysis it can be seen that Sri Lanka tourism is facing a lot of threats and internally they have quite a number of weaknesses which they need to overcome.

Marketing objectives and goals of SLTPB for re-branding

Objectives

  • Create a single core idea that can change people's perception of the country
  • Marketing and promoting Sri Lanka directly or indirectly as a tourist or travel destination of quality in accordance with the Tourism Development Plan.
  • Promoting Sri Lanka as a gateway to South Asian region
  • Making Sri Lanka known as centre of excellence in tourism management and development in the region.

Goals

  • Become Asia's most preferred destination by 2010
  • Become the 4th highest income-earner in Sri Lanka by 2010
  • Focus on marketing and reach high yield markets
  • Pursue a major public relations drive

Competitive Advantage of SLTPB

Michael Porter's Generic Strategies

Michael Porter suggested that for an organisation to achieve a sustainable competitive advantage, they should follow either one of three generic strategies:

  • Cost Leadership - Organisation aiming to be lowest cost producer in the industry
  • Differentiation - Organisation strive to be different
  • Niche Strategies - Organisation focuses all effort on one particular segment

Some organisation try to do all three and are left stuck in the middle. Such organisation don't have a clear strategy causing sales to fall resulting a fall in market share.

Analysing

PORTER's Five Forces

Barriers to entry

Tourism industry in almost all the countries are positioning themselves uniquely (diffrentiation) to gain a competitive advantage. Barries to entry for tourism industry includes:

  • Infrastructural costs - Beautiful landscapes, varied culture, costs to connect different tourists spots, good railways, decent roadways
  • Ease of access - Easily accessible destinations
  • Language - Locals speaking english language
  • Safety and Security - Enough security for tourists should be in place to attract them.

Bargaining power of suppliers

  • Attraction Sector (Beaches, parks, etc)
  • Accomodation Sector (Hotel Industry, B&B, apartments, etc)
  • Transport Sector (Airlines industry, Railways, Roadways, etc)
  • Travel Organisers (Travel agents, tour operators, etc)
  • Locals

Bargaining power of customers

  • Evolved tourists (more expectations)
  • Infrastructural factors
  • Service and safety factors
  • Necessites
  • Cost related factors
  • Natural or unique factors

Threat of substitutes products/services

  • Internet
  • Games
  • Home recreation (theme parks, shopping malls)

Competitive Rivalry

  • Malaysia
  • Thailand
  • Singapore
  • Indonesia

References

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