Unique Selling Propositions in the Caribbean TourismA Longitudinal Analysis with Special Reference to the Role of Attraction Diversity

Babu P GeorgeDBA CandidateSwiss Management Center UniversityOctober 2016

Brief Background

• The Sun-Sea-Sand-Sex model of tourism in the Caribbean has begun to face significant challenges (Weiler & Dehoorne, 2014).• Since the early 2000’s, the island nations began to realize that the generic sun-sea-sand-sex

formula doesn’t offer them any more competitive advantage (Henthorne, George, & Smith, 2013)

• Henthorne & Miller (2003) pioneered the scholarly investigations on how the Caribbean nations have evolved their uniqueness based marketing campaigns • The present researcher joined their research team in 2007. • Our Caribbean focused research resulted in multiple peer reviewed publications and a few

additional grant funded projects.

• During 2014, when the present researcher decided to pursue a second doctoral degree, it was felt appropriate to expand upon the existing research. The following topics were identified for this doctoral study: • A longitudinal examination of Unique Selling Proposition usage over 2004 – 2014.• The specific role of destination attraction diversity in the USP adoption. • How the marketing effectiveness of a USP is moderated by attraction diversity.• The nuanced political process that results in the choice of USPs and business responses.

Literature Overview

• Since early 2000’s, the Caribbean Tourism Organization (CTO) has been encouraging member nations to identify elements that make each of them unique so that marketing dollars are not wasted in competing against one another (Hill, & Lewis, 2015).

• Authors like Poon (1998) and Henthorne & Miller (2003) urged that the only way the Caribbean can sustain its tourism in the 21st century is by means of unique innovations in products and processes. • It was hard to identify island specific uniqueness in the Caribbean and the marketing

response was to construct it (Mosedale, 2006).• Interpret and reinterpret the value of tourism resources until that process resulted in the

identification of something unique (Chambers & McIntosh, 2008). • Based on sought and found ideas, these destinations unleashed various promotional

campaigns (Croes, 2006).• Over time, these campaign focus areas emerged into unique selling propositions (Henthorne

& Miller, 2003; Miller & Henthorne, 2006).

The Unique Selling Proposition• Identifying some kinds of uniqueness is a crucial element of the marketing process;

especially, it is essential for successful positioning with a meaningful difference (Frazer, 1983; Kippenberger, 2000; Laskey, Fox & Crask, 1995; Schlegelmilch, 2016).

• Unique selling ideas over periods of refinement could transform into the core competency of a business (Knox & Bickerton, 2003).

• The concept of the unique selling proposition and its application to advertising is generally credited to Reeves (1961).

• Richardson and Cohen developed a hierarchical scale for analyzing marketing slogans, which ranged from “Level 0: No proposition” through “Level 4b: Unique selling proposition”.

• However, success stories of the USP approach in tourism are not many (Deslandes & Goldsmith, 2015). • Tourism is a highly subjective, interpretative, and experiential product; it does not have an obvious

core, to which the experiences of all customers could be anchored (George & George, 2004). • Many tourism destinations are diverse in attractions, have diverse interest groups, and

overstressing a single USP will obviously create losers (Daye, 2010). It may turn out to be a myopic strategy, too (Henthorne, George, & Miller, 2016).

A Sample of USP Informed Tourism Promotional Slogans in the Caribbean• Dominica: “The nature island of the Caribbean”

• Suriname: “The Beating Heart of the Amazon”

• Jamaica: “Get All Right”

• Anguilla: “Tranquility wrapped in blue”

• Antigua: “The beach is just the beginning”

• Aruba: “One happy island”

• Barbados: "Long live life”

• British Virgin Islands: “nature's little secrets”

• Cayman Islands: “Wherever you find your smile, you’ll find ours”

• Curacao: “Unique Caribbean island paradise"

• Dominican Island: "Has it all!”

• Grenada: “The spice of the Caribbean”

• Haiti: "experience it”

• Martinique: “The flower of the Caribbean“

Research Questions

• RQ1. As the Caribbean country destinations continue to evolve and mature, is there still a continuing trend toward the increasing use of the USP approach?

• RQ2. What is the relationship between the attraction diversity of a destination management area and the level of USP usage in that destination area’s promotional campaigns?

• RQ3. Does a destination’s attraction diversity significantly moderate the relationship between the USP usage and tourist arrivals?

• RQ4. How do businesses differentiate themselves within the homogeneity implied by their destination’s USP statement?

Hypotheses

• Null hypothesis H1.0: There is no significant difference in the levels of unique selling propositions used by the Caribbean nations in their marketing programs, across the period of study i.e., 2004-2014.

• Alternate Hypothesis H1.1: There has been a significant increase in the levels of unique selling propositions used by the Caribbean nations in their marketing programs, across the period of study i.e., 2004-2014.

• Null hypothesis H2.0: There is no significant relationship between the attraction diversity of a destination area and the level of USP usage in that destination area’s promotional campaigns.

• Alternate Hypothesis H2.1: There is a significant inverse relationship between the attraction diversity of a destination area and the level of USP usage in that destination area’s promotional campaigns.

• Null hypothesis H3.0: Attraction diversity of a destination area does not significantly moderate the relationship between the level of unique selling proposition used and tourist arrivals.

• Alternate Hypothesis H3.1: The relationship between the level of unique selling proposition used and tourist arrivals is significantly moderated by the attraction diversity of a destination area.

NOTE: Research Question 4 was addressed exploratatively and qualitatively.

The Idea of ‘Attraction Diversity’

• Investigation of RQ2 & RQ3 demands that attraction diversity be conceived and a valid measurement scheme of the same be developed• In this research, attraction diversity is constructually defined

• Also, an index to quantify the diversity of attraction types in a destination area -Attraction Diversity Index - is operationalized.

Measuring Attraction Diversity

• Common approaches to measure business diversity include:• Categorical approach (Wrigley, 1970). • Count approach (Jacquemin & Berry 1979; Varadarajan & Ramanujam 1987).

• The categorical approach subjectively classifies businesses into the categories such as single business, dominant business, related business, and unrelated business (Rumelt, 1974). • Two ratios were calculated:

• Specialization ratio (Rs = revenue attributable to the largest single business / total revenue), • Related ratio (Rr = revenue attributable to the largest group of related single businesses / total revenue). • The values of these ratios were then used to determine the category of diversification.

• The count approach, on the other hand, ‘counts’ diversity.• In its simplest form, diversity can be modeled as D = N −1, where D is a measure of diversity

and N represents the number of distinguishable products. • Thus, in the special case of a tourism destination with only one attraction, D = 0.

Modelling Attraction Diversity after the Herfindahl-Hirschman Index (HHI)• The HHI is a time tested and well respected operationalization of the

count approach (Hirschman, 1964; Matsumoto, Merlone, & Szidarovszky, 2012).• Used by courts and international arbiters in multiple anti-trust litigations• Extensively used in the scholarly literature, too.

• The HHI measures the size of firms in relation to the industry and is an indicator of the amount of competition among them. • In this research, a single type of attraction in a country is proposed to be

equivalent to a single firm in an industry• the size of that attraction type in a country is equivalent to the size of a firm in an

industry.

…Contd.

• H = ∑Si2

• S is the market share of firm ‘i’ in the industry. • Typically, an H below 0.01 indicates a highly competitive, no concentration index.• An H below 0.15 indicates a largely un-concentrated index.• An H between 0.15 to 0.25 indicates moderate concentration.• An H above 0.25 indicates high concentration.

• The inverse of concentration could be a valid measure of diversity• Thus, Attraction Diversity Index (ADI) could be operationalized as the inverse of a

tourism industry adapted form of HHI.• ADI = 1/∑ (MSi)

2

• For example, MS1 represents the market share of attraction cluster 1. • Market share for a cluster = Revenue generated by the cluster / total tourism industry

revenue for the country.

The Research Method

• Mixed method study

• Key data sources • Tourism statistics data drawn from CTO

• Jamaican cruise tourist arrival data

• Archived data on web based tourism promotional campaigns • Especially, taglines used by national tourism websites during 2004, 2009, and 2014.

• Qualitative, open-ended, interviews with select Caribbean tourism industry practitioners• Interviews carried out during the CTO annual conference 2014

• User review data on Caribbean attractions, accessibilities, and amenities• TripAdvisor reviews, tweets, etc.

• Software Used: SPSS / PASW, IBM ManyEye, IBM Watson, MS Excel

Data Analysis

• Word Cloud Analysis• The word ‘Caribbean’ appeared highly prominent across all slogans, across

the entire, study period.

• Most destination countries in their official campaigns recognize that this word is the truest representatives of the spirit of the Caribbean.

• Mood analysis on user reviews using IBM Many Eyes™ indicate the word Caribbean generated the greatest positive mood, across the years. • Countries may be at a loss, if them stressing their uniqueness means abandoning the

shared spirit of the Caribbean!

• Heightened stress on ‘Nature’ is evident, since 2009.

Contd.

TripAdvisor™ User Review** Vs Official USPs

** Data accessed using IBM Watson Analytics software’s social media module

Most Common Words across Official Tourism Slogans

Keyword

Frequency/Year

2004 2009 2014

Caribbean

Island

Experience

Secret

Little

Explore

Paradise

French

Nature

Treasure

Beautiful

12

6

2

2

2

2

2

2

2

6

3

5

2

2

5

4

3

2

Note: These numbers represent the number of slogans in which each of these keywords occur.

Overall Changes in the Levels of USP Used

Level 0: No proposition

Level 1: Proposition equivalent to “Buy our product"

Level 2: Proposition equivalent to “Our product is good"

Level 3a: Proposition gives a product attribute, but virtually any [tourism destination]

could claim the same attribute

Level 3b: Proposition gives a product attribute, but many tourism destinations claim

the same attribute

Level 4a: Proposition gives a unique product attribute which is not a product benefit

(i.e., does not “sell”)

Level 4b: Unique selling proposition

Source: Richardson and Cohen (1993)

Range of USP Values in 2004, 2009, and 2014

USP Level 2004 2009 2014

Highest 4.50 4.50 4.50

Lowest 0.00 0.00 0.00

Mean 2.50 3.21 2.29

Standard Deviation 1.28 0.91 1.51

USP Level as a Function of Attraction Diversity

2004

y = 0.117128x + 1.972817

2009

y = 0.161789x + 2.477685

2014

y = -0.126659x + 2.864197

Attraction Diversity, USP, and Tourist Choice: A Combined Model

Model R R

Squa

re

Adjusted

R2

Standard Error of Estimate

1* .369 .13

6

.135 .92138

2** .476 .22

7

.225 .78127

3*** .589 .34

7

.346 .71934

Note. * = ADI predicting arrivals; ** = USP predicting arrivals; *** = ADI x USP predicting arrivals

Hidden Undercurrents in the Determination of the USP• Theme 1: The Power of Networks

• Networks of small businesses to gain power• Also, sustainable, responsible business practices

• Theme 2: Media Relations• Better media management to manufacture consent

• Theme 3: Politics of Populism and Nepotism• Political decision making according to the popularity (a.k.a. vote winning

potential) of an idea

• Theme 4: Survival of the Fittest • Align with the national USP campaign, unless you are strong!

Recapping the Findings

• RQ1: As the Caribbean country destinations continue to evolve and mature, whether there is still a continuing trend toward the increasing use of the USP approach?• Answer: Initially YES. 2009 data shows significant increase in the number and

level of USP slogan used; Yet, 2014 data shows decline in both.

• RQ2: What is the relation between the attraction diversity of a destination management area and the level of USP usage in that destination area’s promotional campaigns? • Based on 2014 data, higher attraction diversity of a destination country

generally meant using only lower levels of USP in its promotional slogans.

• RQ3: In the context of cruise tourism in the Caribbean, does the choice of USP used in the destination marketing campaign or a destination’s attraction diversity impact tourist choice? • Both impacted. However, the interaction effect of these two produced a significantly

larger effect.

• RQ4: How do businesses differentiate themselves within the homogeneity implied by their destination’s USP statement?• Businesses whose products and services align with the USP slogans were the gainers• Align with the national tourism promotional thrust, unless you are strong – or,

extremely unique to be able to attract a significant niche. • Lobbying and politicking was common• Cooperative formation of small businesses helped them to withstand the powers

that be.

Implications for Theory• This research made a unique contribution to understanding how the

choice of USP slogans is influenced by the diversity of attractions in a destination area. • The moderating role of attraction diversity in the effectiveness of USP was

established. • To this extent, it introduced the construct of attraction diversity into the

nomological network constituting tourism knowledge.• Also developed a valid methodology to measure attraction diversity in tourism

destination areas.

• This research helps in clarifying our understanding about the nuanced political process involved in the USP choice in tourism destinations• The pressure to align with national tourism promotional focus • Network formation for lobbying, for community based tourism development• Role of mass media

Implications for Practice• Government support for a particular USP is a key determinant of the

direction in which tourism growth happens• Aligning with the official USP helps businesses leverage the benefit of national

tourism marketing

• It could be myopic to stress any single USP in diverse destinations• Unless the inherent contradictions among the stakeholders in a diverse destination

can be resolved with a higher order harmonization

• USP use in the promotion of attraction diverse destinations might lead to disconfirmation of tourist expectations• This could lead to dissatisfaction, complaining behavior, and behavioral disloyalty.

• A notable gap exists between what destination marketers consider as USPs and what tourists consider are the key values of destinations• Governmental determination of USP statements could do better by drawing from

tourist expectations and experiences.

Limitations of the Study• Reliance on secondary and tertiary data

• Primary qualitative data only minimally used for triangulation• RQ 4 was examined using qualitative data, but theoretical saturation was not

reached.

• Data gathered at just three snapshot points (2004, 2009, 2014) were used to derive generalized conclusions about events on a continuous scale.

• Use of non-experimental data to test hypotheses that propose causal relations.

• Significant subjective judgements in the classification of USP slogans on a hierarchy

• Issues in translation from Spanish to English

The Next Phase

• What are some of the other alternatives, now that the USP use is declining?

• Advances in information and communication technologies have led to firms finding ways to reach different customer segments with different USPs (Ashley & Tuten, 2015).

• Indications from the qualitative interviews are that private tourism business in the Caribbean are moving to Individualized Selling Propositions (ISPs). • Web usage data and social media analytics aid them in this effort• A natural progression of this research would be to understand how these ISPs

interact with various government sponsored USP campaigns

Thank you!