and Place Marketing - The Place
By Sam Vaknin
IV. The Place
Some countries are geographically disadvantaged.
Recent studies have demonstrated how being landlocked
or having a tropical climate carry a hefty price
tag in terms of reduced economic growth. These
unfavorable circumstances can be described as
'natural discounts' to a country's price.
What can be done to overcome such negative factor
In classical microeconomics, the element of 'place'
in the marketing plan used to refer to the locus
of delivery of the product or service. Well into
the 19th century, the 'place' was identical to
the region where the product was manufactured
or the service rendered. In other words, textiles
weaved in India were rarely sold in Britain. American
accountants were unlikely to practice in Russia.
Distribution was a local affair and networks of
dissemination and marketing were geographically
A host of historical and technological developments
drastically altered the scene and frayed the straitjacket
The violent disintegration of the old system
of geopolitical alliances led to the formation
of massive, multiplayer trading blocs within which
and among which the movement of goods and, increasingly,
services is friction-free.
The vast increase in the world's population -
matched by the exponential rise in purchasing
power - created a global marketplace of unprecedented
wealth and a corresponding hunger for goods and
services. The triumph of liberal capitalism compounded
this beneficial effect.
The advent of mass media, mass transport, and
mass communications reduced transaction costs
and barriers to entry. The world shrank to become
a veritable 'global village'.
The value of knowledge (processed information)
has fast risen to surpass that of classical (physical)
goods and services. Information has some of the
properties of a public good (for instance, nonrivalry)
- coupled with all the incentives of a private
good (e.g., profit-making).
Thus, the very nature of distribution had been
irrevocably changed. The distribution channel,
the path from producer to consumer (in our case,
from country to foreign investor or tourist, for
example) is less encumbered by topography than
it used to be.
Even the poorest, most remote, landlocked, arid,
and disadvantaged country can nowadays leverage
air flight, the Internet, television, cell phones,
and other miracles of technology to promote itself
and its unique offerings (knowledge, plant and
animal species, scenery, history, minerals, cheap
and educated manpower, cuisine, textiles, software,
and so on).
The key to success is in a mix of both direct
and indirect marketing. Nowadays, countries can
(and do) appeal directly to consumers (ads targeted
at tourists or road shows aimed at investors).
They present themselves and what they have to
offer, circumventing brokers and agents of all
kinds (disintermediation). Still, they should
not fail to cultivate more traditional marketing
channels such as investment banks, travel agents,
multilateral organizations, or trade associations.
With many of the physical obstacles to marketing
removed in the last few decades, with the very
concept of 'place' rendered obsolete, promotion
emerged as the most critical facet of nation branding
and place marketing.
Sam Vaknin is the author of Malignant Self
Love - Narcissism Revisited and After the Rain
- How the West Lost the East. He served as a columnist
for Central Europe Review, PopMatters, Bellaonline,
and eBookWeb, a United Press International (UPI)
Senior Business Correspondent, and the editor
of mental health and Central East Europe categories
in The Open Directory and Suite101. Until recently,
he served as the Economic Advisor to the Government
of Macedonia. Visit Sam's Web site at http://samvak.tripod.com