northern territory tourist commission marketing plan 2003 - 2005

The Strategic Plan provides a framework and clear direction for a sustainable tourism industry in the Northern Territory for future generations of visitors and residents.. The Northern T

Northern Territory Tourist Commission

MARKETING PLAN

2003 - 2005

2

4

THE PLAN

This Marketing Plan is based on the Northern Territory

launched in November 2003, following extensive

consultation with industry The Strategic Plan provides a

framework and clear direction for a sustainable tourism

industry in the Northern Territory for future generations of

visitors and residents

The Northern Territory Tourist Commission (NTTC)

facilitated the process of developing the Strategic Plan The

NTTC has an ongoing commitment to implement the

strategies in the Strategic Plan over a period of five-years,

in partnership with industry and government

Like its industry partners, the NTTC continually reviews

and, if necessary, adapts to the political, economic, social

and technological changes in the marketplace One of the

most recent changes includes the substantial increase in

Northern Territory (NT) Government funding made

available to the NTTC An additional $27.5 million was

allocated, to be expended in 2003/04 to 2005/06 This

Plan includes details of activity resulting from the additional

funding, particularly relating to destination and

sector-specific marketing

The development of a Marketing Plan reflects the annual

review of market conditions, and enables the local industry,

Regional Tourism Associations (RTAs) in the NT and allied

industry partners to better understand and associate with

the marketing activities of the NTTC This promotes

increased alignment of their activities with those of the

NTTC for maximum benefit and return on investment

The Plan should be read in conjunction with the 2003-04

detail about the full range of cooperative engagement

opportunities that exist between tourism operators, the

NTTC and other agencies of government

The 2003-04 Marketing Plan will greatly improve

communication and cooperation between the NTTC and

industry partners It provides an overview of the market,

identifies the challenges and marketing priorities and sets

out the marketing direction of the NTTC during the next

12 months

MARKET OVERVIEW

A SNAPSHOT

In 2002/03, the estimated direct expenditure of visitors to and within the

NT was $1.07 billion This expenditure provides 14,200 jobs for people inthe NT Tourism is the second largest industry in the Territory, directlyaccounting for 4.9% of the NT’s overall Gross State Product and

employing more people than any other industry

Total visitor numbers to the NT have remained relatively static between1995/96 and the present, with 1.699 million in 2002/03 Holiday visitorsaccounted for 61% of all visitors, followed by visiting friends and relatives(VFR) at 16% and business related travel at 14%

Traditionally, destinations have measured success using total visitor

numbers This measurement is unlikely to be sustainable in the long term.This is because it will place increasing pressure on the natural and culturalassets of the NT, and because it fails to address important issues of regionaland seasonal dispersal These, and other issues, will underpin the long-term sustainability and profitability of the tourist industry in the NT

As indicated in the Northern Territory Tourism Strategic Plan 2003-2007,

as the chief NT tourism marketing agency, the NTTC will focus on

attracting tourists who stay longer, spend more, travel more widely andhave a propensity to travel outside traditional peak periods

The NTTC’s primary focus will therefore be on attracting holiday andbusiness tourism (convention, meeting, incentives and event) visitors, whotogether represent the largest proportion of visitors to the NT Thesevisitors are people the NTTC, together with the tourism industry, can mostreadily influence

Purpose of visit to the NT

Source: NT Travel Monitor, 2002/03

Not stated 1%

Other 8%

Business 14%

Intra-territory

256,000 25%

Interstate 360,000 35%

International

416,000

40%

Interstate 2,435,000 52%

International 1,481,000 32%

Intra-territory

$39.7M 6%

Interstate 48%

International

$305.8M 46%

Intra-territory 737,000 16%

The NT Holiday Market 2002/03

Source: NT Travel Monitor, 2002/03

In 2002/03 the international market accounted for 40% of holiday visitors

to the NT This figure declined from 44% in 2001/02 The interstate

market accounted for 35% of holiday visitors to the NT in 02/03 but

accounted for 52% of nights stayed by visitors and 48% of visitor

expenditure

Prior to and following the events of September 11 2001, there have been

many other impacts, on consumer confidence and the tourism industry in

the NT, particularly on international visitation These impacts include the

East Timor crisis in 1999/2000, the demise of Ansett Airlines, the Bali

bombing in 2002, the outbreak of SARS with the resulting cancellation of

the 2003 Arafura Games, the Iraq war and the decline in international

airline access and connectivity

In spite of these events, there have been some positive developments in

the NT to provide cause for a cautiously optimistic outlook These include

the opening of the Alice Springs Convention Centre in 2002, the entry and

expansion of Virgin Blue services into the NT, the commencement of the

extended Ghan passenger rail service to Darwin in February 2004 and the

introduction of an Australian Airlines service from Singapore to Darwin

Additionally, the NT Government has recently announced the $600m

development of the Darwin Waterfront Precinct, featuring a purpose-built

convention centre, due to open in 2006 There is also pleasing evidence of

the resilience and growth of the domestic drive-market during the past

CHALLENGES AND OPPORTUNITES

Many of the marketing and communications challenges facing the NTtourism industry in general and the NTTC in particular are not necessarilynew, but have been amplified of late because of external influences

discussed on the previous page These challenges include: overcoming thelimitations of international airline access and connectivity, especially fromEurope and the UK; building shoulder season demand; increasing therange and diversity of distributed NT product; and competing in a highlycompetitive domestic market

In identifying the NT’s building blocks and opportunities for the future, theNTTC has singled out nature-based and cultural tourism experiences.Research has shown these are primary motivators to visit the NT, and havethe greatest long-term potential for growth It is therefore crucial torecognise the positive influence of tourism in conserving and interpretingthe unique cultural and natural values of the NT

NTTC marketing activity will support the ‘destination’ approach to tourismdevelopment as an alternative to the ‘regional’ approach which, in thepast, has based consumer communications upon artificial regional

boundaries The destination marketing approach will seek to develop newdestinations in line with consumer demand and travel behaviour, therebyadding depth and diversity to the attraction of established NT iconicregions

This will not be pursued at the exclusion or diminution of the profile of NTicons from NTTC marketing communications

Nature-based Tourism

Nature-based experiences are strongly associated with the NT and are thebackbone of tourism in the region In order for nature-based tourism toremain viable, marketing strategies of the NTTC, along with plans of otherparties including Traditional Owners, land users and conservation groups,must be compatible and guided by three key principles:

• Development must be sustainable

• Experiences must be interpretive

• The integrity of the destination must be maintained

Cultural Tourism

The NT is strongly associated with indigenous tourism experiences

Continuing to develop and promote the number and quality of experiencesand interpretation is crucial to the continued growth and long-term

sustainability of tourism in the Territory These experiences and the way inwhich they are marketed must be sensitive to indigenous culture

Participation by indigenous communities is essential to the success of theseproducts

The Marketing Plan also recognises the potential to improve the

interpretation and communication of the heritage and historical values ofthe NT These range from the indigenous culture to the pioneering historyand incorporate WWII sites and the bombing of Darwin

DESTINATION MARKETING

As a direct result of the additional funding allocation, the NTTC will

establish a Destination Marketing Unit The unit will work with the RTAs

and local industry representatives on the development of regional

campaigns that link with and support the domestic marketing direction of

the NTTC

Initially, regional marketing communication activities will be developed for

Katherine, Alice Springs and Darwin The NTTC has already commenced

working in partnership with other agencies and organisations (including

the Office of Territory Development, the Darwin City Council, Tourism Top

End and Charles Darwin University) in repositioning Darwin as a significant

growth centre and capital city with outstanding employment, education

and investment opportunities

The NTTC will incorporate unique, regularly-occuring Territory festivals

and events in its marketing communications These include the Camel Cup,

the Finke Desert Race, Masters Games, Henley-on-Todd Regatta, the

Garma Festival, Darwin Cup and the Aboriginal and Torres Strait Islander

Art Awards Together with other high-profile sporting fixtures, including

V8 Super Car Championship series, test match and one-day international

cricket, AFL pre-season and home-and-away matches and NBL basketball

contests, events will be used in direct and relationship marketing activity to

give people more reasons to visit the NT

SEGMENT MARKETING

In addition to specific domestic and international marketing activities

described in the following pages, the NTTC has strategies in place to

address the business tourism, drive, fishing and unstructured backpacker

market sectors These strategies apply to both the domestic and

international markets

Another marketing initiative is designed to draw attention to some of the

more up-market, unique, remote, distinctively NT and indigenous tourism

experiences that uphold the brand promise of “it’ll never never leave you”,

is also planned It is anticipated that this “five-star experiences” concept

will appeal to the Affluent Adventure domestic target market segment (see

page 13)

Many of the strategies to target these market sectors will be of a direct

marketing nature and/or involve forms of non-traditional distribution The

NTTC is therefore placing a high importance on the development of its

customer relationship marketing (CRM) capability This will enable the

NTTC to capture and use prospect data in campaign activity with

measurable conversion outcomes

STATE/TERRITORY/ORGN Top of Mind Images ADVERTISING PROMISE

Australian Capital Territory Parliament House, Another face of our

National Galleries and national capital Museums, War

Memorial, Floriade New South Wales Sydney Opera House, Feel Free New South

The Bridge, The Rocks, Wales shopping, Blue

Mountains Northern Territory Ayers Rock, Alice Springs, It’ll never never leave

the Outback, wildlife, you Aboriginal art and culture, Kakadu, The Ghan Queensland Barrier Reef, Gold Coast, Where else but

Theme Parks, Islands, Queensland Tropical rainforest

See Australia Outback, Big Cities, Go on Get out there.

Wineries, water-based activities

South Australia Adelaide, wineries, food, Discover the Secrets of

Kangaroo Island, heritage South Australia and the Arts, Flinders

Ranges, events Tasmania Heritage, Port Arthur, Rejuvenating Journey

Franklin River, nature, accessibility

Victoria Melbourne, football, You’ll love every piece of

Grampians, food and Victoria wine, shopping, arts and

heritage, Grand Prix, sophistication Western Australia Perth, Swan River, Be touched by nature

Kimberley and The Outback, Fremantle, Broome, dolphins, Kalgoorlie, nature

This “sea of sameness” demands a different approach to both the waythat the NT is positioned and the method of communicating to existingand potential consumers Our competitors have also had larger marketingbudgets (see media expenditure comparison - opposite page), a greatercritical mass of well-established tourism businesses and are closer to themajor source markets

The NT has a perceived competitive advantage in terms of “big nature”,featuring the iconic national parks of Uluru-Kata Tjuta, Watarrka (KingsCanyon), Kakadu and Nitmiluk (Katherine Gorge), plus the emergence ofLitchfield, in close proximity to Darwin Indigenous art and culture,together with the quintessential Australian outback are also synonymouswith the NT, particularly in the international markets

The diagram below compares the level and nature of STO domestic market

advertising expenditure during the 2002/03 financial year period

The table does not include NTTC online (interactive) expenditure,

cooperative and sales promotion, including the Arafura Games recovery

campaign and / or direct mail marketing communications activity

Please also note that the NTTC expenditure does not include the additional

$1.0 million funding allocated by the NT Government in May 2003 for

broadcast (TV) media that was held over and expended in July, August and

September 2003

In 2003/04, and as a direct result of the additional funding allocation of

the NT Government, it is envisaged that the NTTC domestic market

advertising expenditure will increase to an amount of approximately

$4.0 million, thereby placing the NT in a strong competitive position

Commission

WA Tourism Commission

State Tourism Organisations

Expenditure by organisation and by media 2002/03

Source: ADEX, July 2003

TARGET MARKETS

THE DOMESTIC MARKET

The NTTC will concentrate its efforts on and devote resources to activities

in markets where it believes it will make the greatest difference ThisMarketing Plan therefore focuses on those markets and segments thatoffer the greatest prospect of visits to the NT in the near future

The markets of New South Wales/ACT and Victoria/Tasmania, in particularmetropolitan Sydney and Melbourne, continue to represent not only themore important domestic markets in terms of the actual total number ofholiday visitors, nights and expenditure, but also the markets with thegreatest growth potential for travel to the NT

Campaign activity will be largely targeted in those markets, but not at theexclusion of the secondary markets of Queensland, South Australia andWestern Australia, and key regional centres in all mainland states ofAustralia

Visitors Nights Expenditure

Source: NT Travel Monitor, 12 Months to June 2003

Holiday Market by State of Origin

MARKET SEGMENTATION

Ten distinctive domestic travel segments have been identified and

differentiated on the basis of the type of activities undertaken, regional

dispersal and expenditure in the NT

A key initiative of this Marketing Plan will be to undertake additional

profiling work on these segments to improve the understanding of their

characteristics It will also be important to gain an indication of the market

size of each segment and better understand the potential of people within

each segment, who have not visited the NT

The following is a summary of the key attributes of each of the ten

segments

Name Spending Off-Peak Regional Influenced Influenced

Travel Dispersal by Media by Travel trade

Rugged Outdoors Average Average Average Low Low

Caravaners

Active Explorers Average Average High High Low

Outback Escape Average Average High Average Low

average Highway Highlights Average Average Lowest High Average

Affluent Adventure Highest Highest Above- Average High

average

average

Five of the target segments form the priority segments that will be used to

underpin all domestic market marketing communications campaign

decisions during 2003/04 These are Affluent Adventure, Package Culture,

five target segments represent 60.8% of all current domestic market

visitors to the NT, with Affluent Adventurers (21.1%) the largest

represented segment

For more information, view the domestic marketing segment fact sheets,

Strategic Research section of www.nttc.com.au

Additional work to ensure the validity and robustness of the segmentation

study is scheduled to be undertaken during the coming year (refer to NT

brand position marketing strategies on page 22)