AS has been observed in various tourism destinations across the globe, brand value is critical in determining promotional progress and revenue generation.
This is mainly through establishing a fruitful nexus in terms of experience between tourism suppliers and tourists.
This makes it crucial for tourism operators to continuously evaluate their brands in relation to their overall performance.
This goes a long way in brand economics, where brand visibility alone is not sufficient for growth and visibility, but an equally balanced assessment of related financial matters, marketing configurations and overall strategic management is required to determine a brand's success or failure.
Even with some difficulties in quantifying the overall brand value, as the adage goes that the value of a brand lies in the eyes of the beholder, some mechanisms for measurement can be put in place for easy assessment. It is through this edition that we discuss some critical matters for consideration in tourism brand valuation.
Those in the field of financial engineering can assert the monetary value of a tourism destination brand, which has led them to include a space in their books to recognise a brand as an intangible asset representing business worth.
Our potential entrepreneurs are usually brand-shy, and they also often doubt whether designs and elements used by big businesses can be applied in the same way at their level of operation.
To encourage them, it is never too late to refocus and engage in branding for real equity.
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There is a symbiotic relationship between a brand for your entrepreneurial business and its sales revenue, operational costs (specific marketing-related costs), pricing strategy and overall business competitiveness.
To start, at the inception of your brand as your attraction ambassador, it is imperative to align it with the current sales revenue the business is receiving.
This starts the process of brand performance measurement, specifically regarding sales revenue.
As the brand is launched into the market, market responsiveness is then measured by growing sales revenues, other things remaining constant. Most popular global brands like Apple and Google have become almost perfectly inelastic with respect to their demand, as reflected in sales revenue.
You can achieve the same through a well-informed brand launch and market assessment based on sales data.
Most of our potential tourists are not giving their brands such a measurement.
Branding is being done in a fashionable way rather than as a strategic tool to talk to the world about its offerings.
If the brand is given a space to represent itself through a logo, tagline, URL, colour, or any other element, it will be easy to evaluate it based on the revenues it generates. Give a brand its space and let it lead the way.
A brand can have both direct and indirect implications for the overall costs of running a business. To be precise, when an entrepreneurial business is associated with a highly valued, progressive brand, marketing costs will gradually or suddenly decrease.
Our modern entrepreneurs can reduce their variable and fixed costs through a high-performing brand in various ways.
Variable costs can include marketing and publicity, which increase as more effort is invested through various forms to convince potential tourism customers to book and enjoy our offerings.
We run promotions through various channels and direct visits, which come at a price, especially when people travel long distances to convince and lure.
Through contemporary brand management strategies, these costs can be eliminated gradually, especially when we apply the cheapest digital media to showcase and convince purchases from the global markets. These marketing variable costs will be reduced, if not eliminated.
Conversely, a brand can reduce fixed costs by eliminating a physical structure for showcasing, such as offices, which are now being replaced by digital brand channels that are less costly yet offer wide brand conveyance.
This has even promoted brand showcasing from home, enabling our entrepreneurs to make corporate profits while promoting work-life balance.
Lastly, when an economic valuation of a brand is done properly, the equity of the entrepreneurial business will be easy to evaluate, especially for venture capitalists and potential shareholders who want to invest capital in the business.
This is because the business will now be recognised as a vibrant brand rather than through people's attitudes and overlapping bureaucratic structures.
That is when your tourism business will receive high coverage, build better awareness, maintain a positive image, and be perceived as high quality. This is the same reason why most successful global brands have a lasting association with loyal customers.
Therefore, as we embark on this massive journey towards brand economics, we should revisit the characteristics of a successful brand, which are mainly anchored in simplicity in its design and pitching.
A brand should also be unique to stand out among the rest and be remembered. Our tourism brands are usually accompanied by taglines like ZimBhoo; these should be consistent in order to last in the hearts and minds of potential tourists.
At the same time, a promising brand should have real meaning in its target markets.
- Dr Farai Chigora is a businessman and academic. He is the head of business science at Africa University’s College of Business, Peace, Leadership, and Governance. His doctoral research focused on Business Administration (Destination Marketing and Branding Major, UKZN, SA). He can be contacted for feedback at [email protected] or via WhatsApp mobile: +263772886871.
- *Dr Tabani Moyo is an extra-ordinary researcher with the University of North West, South Africa’s Social Transformation School. He holds a Doctorate in Business Administration (Research focus on new media and corporate reputation management, UKZN), chartered marketer, fellow CIM, communications and reputation management expert based in Harare. He can be contacted at [email protected] @TabaniMoyo (X)
