Developing Russian Far
The Russian Far East has abundant natural resources. Economic development has focused on mining them. Fishing, mining, oil and gas developments and lumbering are sector examples. However, there is a new natural resource sector emerging. This is the Eco-tourist sector. This sector seeks to protect nature resources, local cultures and wilderness beauty. Advocates promise not only economic development, new jobs and foreign investment but also a sustainable future without natural resource loss.
Eco-tourism does hold promise. The global market has a high growth rate. This rate will continue into the 21st century. Ecologically influenced purchasing decisions are expanding. North American and Western European tourists have grown tired of traditional tourism venues. In fact, expanding numbers are moving towards or have values associated with Eco-tourists.
However, Eco-tourism also has numerous challenges. First, it is a globally competitive industry. Regions and nations, not just firms, are competing for Eco-tourists. Investments are also globally competitive. Other existing and emerging trends require massive investments not just to develop Eco-tourism but also the subsystems to support it. Talent competition is global. Eco-tourist firms will require talent in numerous knowledges ranging from experience venue design to e-commerce. This will require them and their regional locations to provide certain organizational culture conditions, benefits and quality of life magnets.
Second, e-commerce and business to business electronic commerce is transforming Eco-tourism. U.S. consumers will spend close to $100 billion dollars on e-commerce in 2001. In other words, close to one third of purchases will require an on-line business model. These consumers, who will likely be Eco-tourists, will be lost to firms possessing only "brochureware" sites. Their tax revenues and job creation generated through sales and the multiplier effect will be lost to regions lacking a sophisticated and cutting edge Internet infrastructure.
Third, Eco-tourism will be impacted by business model changes and marketing strategies being developed and created to address new customer and marketplace requirements. Pointcasting marketing, for example, can have a better than a 50% hit rate as compared to narrowcasting where the rate for targeted advertising and direct mail is 2 to 3 percent. Traditional marketing has lost its effectiveness. The average consumer sees about one million marketing messages a year or 3,000 a day. One supermarket trip, for example, can expose people to more than 10,000 marketing messages. A television hour can deliver 40 or more. A single newspaper might have as many as 100. Customer are turned off and tuning out.
Customers also want offerings their way. Mass production is being displaced by mass customization and lean production. They don't want functional and hierarchical generated experience hassles. Mass customization supports developing an intimate customer relationship. This would allow for a better designed offering and effective marketing.
The old "go it alone" business model is being displaced by alliances. High technology and airlines are industry examples. However, this business model is also being adapted to market and brand regions and the offerings of Eco-tourist firms. Examples are found in Estonia, Australia, Canada and the United States.
Finally, knowledge and experiences are core economic offerings. Services are becoming like commodities. Service firms are increasingly price competitors. Long distance service firms compete based on single and bundle service cost. Digital entertainment firms are another example. Knowledge, creating and transformating it into action, is transforming whole industries. British Petroleum and Amoco are not in the oil business. They are in the learning business. Intellectual capital accounting is beginning to displace traditional accounting because it measures the wealth, knowledge and structures supporting its application.
These challenges also face the emerging Russian Far East Eco-tourist sector. In fact, they are more profound and challenging. First, the region has a poor e-commerce infrastructure.
Second, the "friends and family" cultural Soviet legacy has created an additional alliance forming barrier. People outside these groups tend not to be trusted. Supporting and employing friends and family are considered more important than competency. Social capital is as lacking as is investment capital.
Third, Russians lack new marketing, business model, mass customization and experience economy offering knowledge and experience. They also lack economic development knowledge and experience. An association tradition was inhibited.
Fourth, government, business, nongovernmental organizations and foreign investors, government agencies and businesses tend not to cooperate. They are, often, at cross purposes. Eco-tourism is, for example, being pushed by certain American foundations and agencies while American timber firms are encouraging timber mining. Japanese visit regional Eco-tourist places because of their lack domestically. However, they are also supporting over-fishing and US timber exports which are, in turn, transformed into value added products and shipped to Japan.
Fifth, Soviet economic planning and policy legacy did not support core competency development. In fact, it created an artificial economy that crashed with the USSR break-up. Market subsystems such as distribution were not developed. The region was developed as a commodity extraction source. New economy industries were not developed even though certain cities and areas were producing highly educated professionals and were engaged in research and development. Vladivostok's potential trading competency, for example, was not allowed to develop. It was a closed city.
Finally, poor salaries, inadequate educational and professional development funding, business and e-commerce disciplines experience deficiencies in universities and high customs are crippling the development of local talent and intellectual capital. Poor opportunities, a culture that does not support youthful enterprise development and an increasingly substandard quality of life is supporting a knowledge and intellectual outflow.
What follows is a change and transformation Eco-tourist development agenda. The agenda suggests the need for a shared vision and strategies for its enactment, regional branding, developing a seamless Eco-tourism experience economy web, mass customization use and the embracing and use of customer sacrifice. Eco-touirsm experience economy nature and ideas for developing globally competitive experiences are also discussed.
Creating Shared Regional and Subregional Visions
Eco-tourism firms, associated groups and governmental officials need to understand the importance of being proactive and that they can enact and influence their future and environment. Local firms, for example, have good ideas. They have good strategies. Government officials indicate support. Good ideas are critical to global competitiveness. An Eco-tourism shared vision, a set of strategies, action plans and teams to enact it are the first requirement.
This could take any number of forms. They could be created by regional leaders. However, top-down leader directed change has a poor track record. Leaders ranging from Peter the Great to Stalin to Yeltsin have failed to create revolutionary change that not only destroys the existing system but replaces it with a more effective one. Moreover, Russians have little trust and faith in their leaders, An alternative is a "grassroots leadership" approach. This involves using strategic change methodologies to engage local people in creating shared visions, strategies, action plans and teams to enact them.
Search conferences might be conducted. A search conference is a simple and yet highly effective and detailed planning methodology. It is a sixteen hour conference involving critical community and/or regional groups. The process creates a common vision, shared strategic agenda, action plans and teams for enacting them.
The following is a proposed Search conference agenda.
Search Conference Agenda: Eco-Tourism
Resistance ought to be expected. However, Eco-tourist firms and organizations need to "stay the course." They need to focus their energies on enacting until it happens. However, when enacted, they need to realize plans and strategies can and ought to be changed as necessary and as conditions change.
The Eco-Tourism Experience Economy
The Russian Far East Eco-tourist industry, government and associated groups need to recognize that Eco-tourism is an aspect of the Experience Economy. This had profound implications. First, the experience industry provides a distinctly different economic offering from those of the service industry. Services can be characterized as a set of intangible and tangible activities performed for an individual. Air travel is an example. Customers do not perform any activities. The pilot and crew fly the plane. Stewards and stewardesses serve food and dinners. A movie is provided.
Experiences are different. Customers pay for a series of memorable events. They are staged by a firm or an alliance as in a theater production. They engage customers in a personal way.
Eco-tourism's definition indicates it as an experience economy offering. "Eco-tourism is an enlightening nature travel experience that contributes to the conservation of the Eco-system while respecting the integrity of host communities." The key is, "enlightening nature travel experience." Eco-tourism involve products and services. However, it is an experience offering. In fact, the word "enlightening" may suggest that Eco-tourism may be of the transformation economy. This is a stage beyond the experience. The transformation economy customer is seeking an offering that changes him or her. The customer is the product. Eco-tourists may, for example, go to Nepal to discover spiritual enlightenment. Wilderness tour customers, an Eco-tourism segment, by definition, are seeking to be transformed through direct contact with a wilderness experience.
Second, experiences are radically different from other economic offerings. Poor experiences can not be refunded. The experience is produced, delivered and consumed simultaneously. The customer is an active participant in the enactment of his or her and others' experiences. Employees are actors and performers. Work is theater. This is not a metaphor. It is a business model and way of doing business.
This difference needs to be recognized. Services are becoming commodities. Air travel is an illustration. Air flights are like cattle cars. Numerous occupants fly on frequent flier miles. Cost is the deciding factor. Increasingly, goods are being given away to induce customer service use. Cellular phones are given away when people sign-up for service as are computers by certain US Internet providers.
Eco-tourism as a service could become a commodity. Hiking, camping and fishing can be seen as products with little difference. This begs the question, for example, how is a hiking or camping experience in Sakhalin different from that in the Grand Canyon or in the continental Russian Far East? This question needs to be addressed and presented or the Russian Far East will be unable to attract many global scouting Eco-tourists.
Finally, the best experiences are based on the best commodities, products and services. They are customized to reduce customer sacrifice. They eliminate the difference between what the customer wants and desires and what is provided.
What can Eco-tourist firms, government and community groups do? First, Eco-tourism firms and associations need to ensure they provide experience offerings rather than commodity like services. In fact, they need to focus on transforming the industry from service to experience and transformation.
Eco-tourism firms may begin providing services free as an inducement to consuming experiences. This is already being done in certain service industries. Casinos and Las Vegas entertainment experiences provide free hotel and travel services. Customers are charged for the gambling experience or the Paramount Star Trek: The Experience venue in Las Vegas. Eco-tourism firms may find that they too may have to provide free hotel services and charge for the experience to be more competitive.
This needs to be taken into consideration in marketing and promotion. Web sites, for example, might use video clips to show the experiences people will have. Brochures and promotional materials need to be pleasing to the eye. They need to provide images that reflect the experience Eco-tourists want to experience.
Second, they need to engage in thoughtful venue design. This can provide local firms and the Russian Far East as a whole with a competitive advantage. The airline industry illustrates how providing experiences can be competitive. Virgin Airlines and Southwest Airlines provide conventional service. However, both also provide customers with experiences. Virgin provides massages. Crews of both entertain customers. Southwest pilots tell jokes. Stewardesses and stewards sing songs. Both focus on providing a fun flying experience. Both are extremely profitable. Both have cut into competitor market share. Both have transformed their industries.
Thoughtful venue design begins with a carefully researched and detailed theme. The core research question is not, "What do we find beautiful?" It is "What will Eco-tourists find an enlightening travel experience?" Local tourist firms and associations need to recognize that their perceptions of a quality and fascinating experience is very different from that of North Americans and Western Europeans. While local firms may, for example, find local native people fascinating, this may not be the case with Western European and North Americans. In fact, a review of selected local brochures offering such tours with local Americans were found to be disappointing. In other words, local Americans, not typical of the Eco-tourist profile, found the materials and offerings not engaging or exciting. Brochures didn't make the case for why experiencing these natives would be more enriching than visiting African, South American and Nepalese native peoples.
A good place to start such research is conducting qualitative interviews with local Americans, Australians, Japanese, Britons and Northern Europeans. The interviews might focus on "What would an exceptional wildness or adventure experience mean to you?" These individuals might also be requested to discuss this with friends, former business associates and family members at home. Exit interviews focusing on customer sacrifice would also be useful.
Themes ought to organize encountered customer impressions. Positive clues harmonize with themes. An example might be "Sakhalin - The Island of Undiscovered Beauty, Culture and Enchantment." Transforming the airport into a space where people experience the island's native culture and beauty to developing a train travel experience whereby people not only experience the island's nature beauty but also sample local foods and encounter train employees educated in the island's ecology and culture to thoughtfully scripted and performed Eco-tourist experiences are illustrations.
Another theme is accommodations. Eco-tourists tend to enjoy rustic, intimate and local accommodations, allowing them to experience native culture. This is also the trend with increasing numbers of North American tourists. High end and more conventional hotels are less popular.
Eco-Tourist Favored Accommodations
Accommodations need to reflect the Eco-tourist's desires. However, they also need to be harmonized with experience's theme. A theme emphasizing experiencing local culture would involve inns, lodges and bed and breakfast establishments decorated in comfortable furnishings. They ought to reflect local culture. They ought to be crafted by local people when possible.
They also expect North American food, sanitation, comfort and high quality and customer service standards. Experiencing local accommodations doesn't mean purchasing bottled water, not having electricity and hot water when they result from poor infrastructure quality or management and poor tasting food experienced in many local eating places. It does mean Eco-tourists and North American tourists would love to experience home cooked dishes, meals and barbecues that don't harm the Eco-system, native "going to nature" experiences and native parties, local events and native festivals and experiencing the hospitality that is often found when foreigners visit Russian friends' homes.
Accommodation furnishing will also vary depending upon the individual and market segment. High income and corporate executive Eco-tourists, while desiring a rustic and intimate setting, may also require access to certain telecommunication, computing and Internet technologies because of their need to maintain contact with their businesses and offices. This may not be the case with retired and younger experienced Eco-tourists. A thoughtful and well-designed theme can transform an otherwise negative into a positive. The Krill Islands are often flogged. This could reduce the customer experience. However, the theme of "The Misty Krill Islands Places of Mystery and Adventure," may transform this negative into a positive if scribed correctly.
The second experience economy offering principle is providing customers with the full experience realm aspects. There are four realms: (1) education, (2) escapist, (3) entertainment and (4) esthetic. This relates not only to Eco-tourism but also to the region as a whole. An Eco-tourism firm, for example, offering an education experience of native culture might work with them to stage traditional rituals; thereby, expanding the entertainment realm. If already provided, guides explaining the history and significance of ritual would expand the educational realm. Traditional health drinks might be labelled, providing educational and historical information in English, Korean and Japanese. Local eating-places might be designed and furnished to allow Eco-tourists to experience the wilderness beauty of the region and/or traditional culture; thereby, expanding the escapist realm.
Third, the Southwest and Virgin examples illustrate business models and cultural importance in supporting work as theater and employees as actors. Both have a relational business model. They are seeking to develop a relationship with the customer rather than a one-time transaction. Each have Chief Executive Officers who role model having fun and work as theater and employees as actors. Both have fun as corporate values. Both have strong employees as the key profitability culture. Both reward employees through profit sharing and celebrations for providing customers with exceptional experiences and high performance. Both educate and train employees to "wow" customers. Both take work as theater seriously.
Eco-tourism firms need to take these examples to heart. They need to support a performance culture. This is counter to the typical culture of poor performance experienced in most shops, eating places and governmental offices. In fact, the fastest and easiest way to become a part of the experience economy is to provide poor performance. Clerks ignoring customers while they restock shelves is an example. An interpreter lacking ecological and local historical knowledge is another. Experiencing an unfriendly passport officer or waiting in a long custom line are governmental examples.
Community and Eco-tourism firms' values and norms need to support employees as performers. The person meeting an Eco-tourist at the airport with a genuine smile and a friendly attitude is a good performance. Transforming customs and passport control from a miserable and time-consuming experience to one that is enjoyable, is another. Providing comfortable seating, a pleasing physical environment, drinks, local foods and a local art displays would go a long way in supporting a memorable experience.
They also need to support ecological values and norms. Purchasing ecologically sound products is an example. Using recycled paper for brochures and educational materials is another. Contributing to improving the Eco-system through financially supporting conservation and cultural preservation programs are yet other opportunities. Lobbying local and Oblast government officials to enact ecologically supportive laws and funding environmental improvements and clean-up projects are final illustrations.
Work as theater also suggests creating characters, employees, who are engaging to customers. Local businesses and Eco-tourist firms can take a lesson from Disney. Characters - employees, are thoughtfully developed. Employees are extensively trained. Practice and role-play exercises are common learning methods. Employees never go out of character. They are always performing. Local waitresses dressed in more appealing and pleasing and yet, traditional Russian dress, is an example.
Eco-tourists expect certain employee attributes. These are presented below. However, the experience offering suggests going beyond them. Native people and cultural experiences might be guided by employees dressed in traditional clothing and acting as a nativse without offending the Eco-tourist values.
Employee Performance Attributes Valued by Eco-Tourist
Conducting and/or sponsoring in conjunction with government agencies and other NGOs. community ecological and Eco-tourism programs would be productive. In fact, this might be an experience offering. Volunteer experiences are provided whereby customers pay to perform socially beneficial projects. Sponsoring and conducting experience economy awareness and educational programs would also be beneficial.
Finally, the key experience economy questions are "What are we charging customers for?" and "What do customers want to be charged for?" Eco-tourists want to be charged for an "enlightening travel experience." Firms ought to charge not just for services but for experiences staged.
These questions need to be extended to the region as a whole and to governmental units responsible for resource management. When asking these questions, taxi drivers may recognize that they are not just charging for a ride. They are charging for the experience of traveling through a beautiful environment. Drivers may begin to find the most beautiful routes. This is what the Eco-tourist cherishes.
Government agencies may realize the need to reduce paperwork and such duplicative events as passport controls. Passports maybe be viewed as a charge for experiencing a country's wonders. They may realize that ending these events may support "positive buzz," customer word of mouth marketing. This will, in turn, cause increased Eco-tourist traffic. The result will be higher Eco-tourist expenditures . Tax revenues from the purchase of goods and services will also increase.
Eco-resource management agencies need to reconsider what they are offering. Eco-tourists, for example, are supportive of paying fees for experiencing natural settings when the revenues support maintaining the local Eco-system and culture. However, this needs to be directly experienced by these individuals when hiking, camping and experiencing the local culture.
Russian Far East Branding and/or Rebranding
The Russian Far East and Russia either possesses an inadequate brand reputation or a poor one. Russia is not viewed as an Eco-tourist paradise. Suggesteded Eco-tourist destinations such as Sakhalin are not widely known, even in Russia. Global and US media, for example, present ecological disaster stories. CNN has done a special on the ecological threat presented by degrading decommissioned Russian nuclear submarines in the Baltic. They have also shown biological warfare center ecological problems. A story of a killer whale attacking a sea lion off Sakhalin appearing on a local Internet provider's front page indicated the reason was a degrading of the fish population. These stories suggest poor ecological management. This conflicts with Eco-tourist values. They also present an unattractive regional Eco-tourist picture.
Russia and the Russian Far East also lack the indirect promotion experienced by other regions and countries. Examples include such movies as "Out of Africa," "Seven Years in Tibet" and National Geographic specials on the Amazon and rain forests. Such films have expanded, for example, Eco-tourism and tourism in general, in Nepal. Another is Sting's Rainforest Foundation. Sting's founding and financial support provided direct and indirect regional promotion.
The brand issue is also supported by stagnant tourist growth. Sakhalin tourist numbers, for example, have not grown beyond 2,000 per year over the past ten years. While poor infrastructure and accommodations may be causes, it is also highly likely that Eco-tourists don't visit Sakhalin because of a lack of brand awareness and reputation.
These considerations suggest the Russian Far East requires brand developing or revisioning. What is branding? First, it is the process of developing and communicating a realistic community and/or regional image. Second, it requires the recognition that communities and/or regions have a brand image. They can be positive, negative and/or a mix. Third, communities, regions and/or nations are competing for the share of global mind. In other words, they are competing for global Eco-tourist dollars. Developing a great image is, therefore, critical for Eco-tourism and a region and/or community's competitiveness as a place for attracting investments.
A community can begin to assess its brand image on the basis of four qualities.
Brand Awareness: Nepal and Australia, for example, have high brand awareness as good tourist nations in the United States.
Brand Reputation: The confidence talent and enterprises have that a particular community and/or region will live up to its claims.
Brand Affinity: It refers to strength of the emotional ties that people have for a community and/or region. Americans have a strong brand affinity for Nepal when seeking spiritual transformation Affinity is lessening with globalization and e-commerce. Key questions are: Is the community and/or region an evoker of good thoughts? and Does it in some way relate to people's aspirations and visions?
Brand Domain: Domain is the breadth of the community and/or region's potential catchment area in terms of potential Eco-tourism scope. Domain maybe limited or expansive. Sakhalin may have an expansive domain. There is the potential for a variety of Eco-tourism venues.
Finally, the reality of the brand may not be reflective of what community and/or regional people think. This may require rebranding - the process of revisioning a community and/or region's brand image, and communicating it in such a way that those outside change their perceptions to reflect the new image.
Branding and/or rebranding involves the following process.
Branding and Rebranding Process
The branding process ought to involve Eco-tourist firms, community groups and government officials. The first step would to be a qualitative assessment of regional and Eco-tourist areas images. This should involve interviews with tourists, Eco-tourism infrastructure members, foreign government officials and business people. Assessment results need to be compared to current reality and the desired future state. Brand development sessions ought to be the next step. These sessions would revision the overall brand image and those for specific niches. Branding session participants should also work with the Eco-tourism infrastructure in strategy development. Next, strategies need to be implemented. This should be followed by an effectiveness assessment. Recycling needs to take place based on assessment results.
Developing a Seamless Eco-Tourism Chain and Experiences Web
Eco-tourism needs to be viewed as a "seamless" chain and experience web. The Eco-tourist experience begins when a potential customer first encounters regional information. This might, for example, take the form of a web site review. It ends with leaving the region.
Activities and events from start to finish need to be carefully designed and staged. Web sites, for example, need to be educational. They need to be engaging and pleasing to the eye. They need to be entertaining. Video clips, tour experiences and regional beauty video clips might be used to educate, entertain and engage Eco-tourists.
The first contact with tourist firm personnel also needs to be an enriching experience. They need to educate and inform. Eco-tourists tend to be highly educated and knowledgeable customers. They will have a low tolerance for uninformed employees. The travel to and from region and to Eco-tour experience destinations also needs to be carefully designed. Transportation to and from lodgings and to and from the airport needs to be memorable.
Creating memorable experiences points to select problems. The route from and to Sakhalin's airport, for example, is problematic. Routes do not provide a pleasing experience from start to finish. They do not provide the natural setting valued by Eco-tourists. In fact, certain areas are an ecological mess. There are open landfills and areas of stripped and abandoned cars. Such areas represent an affront to Eco-tourist values and are an experience economy poor service form. They need to be cleaned up.
Water quality is another issue. Drinking bottle water, local resident comments about bad water and the unhealthy effects of its consumption, suggests a degraded and poor quality eco-system. This conflicts with Eco-tourists' values.
Eco-tourists also indicate a desire to experience local history and culture. This is best experienced not in a museum but through walking and exploring local communities. The cities have some rather nice buildings and parks, however, they are in disrepair. They need to be renovated. Renovation ought not to be "patch work" or poor quality. Buildings and parks need to be brought back to their original condition. The guiding theme ought to be "creating a beautiful living and working museum as community." The inclusion of "green spaces" and plants and gardens within the communities would be positive action. Much could be done also through simple paint and fix up programs for poor quality local housing.
Global Alliances and Partnerships
The Eco-tourist industry needs to develop alliances and partnerships with global and national ecological, wilderness, conservation associations and organizations and travel agencies. They also need to do this amongst themselves with related firms and government agencies.
The old business model was "go it alone." The new and emerging one is based on alliances, relationships and networks. Partnerships and alliances have a number of advantages. First, they can provide credibility through inference. An alliance with the Wilderness Society, for example, communicates a firm or association is truly ecological sensitive and region has wilderness worth venturing too.
Second, Eco-tourists express a strong desire for environmental and ecologically sound firms. Such alliances address this desire through inference. Well-known and credible environmental, wild life, ecological and wilderness organizational logos on a site provides an Eco-tourist type quality standard certification.
Third, they can be a vehicle for regional promotion. Most have web sites and publications. Alliances and partnerships may result in stories about the region. Such stories will educate potential customers. They are also more effective than advertising.
Fourth, they can provide Eco-tourist firms with intelligence for designing and developing experiences. Staff can be tapped for gaining ideas of where the market is going and what member interests and values are.
Finally, they are a critical infrastructure Eco-tourism member. They can be used to test new ideas for refreshing experiences. Refreshing and revisioning venues and offerings are critical in the experience economy. Experiences need to be continuously and discontinuously improved. Lack thereof will result in a lack of customer retention. Why should an Eco-tourist return to the island if the experiences are the same? It doesn't address the Eco-tourist desire for new learning, virgin wilderness and cultural experiences.
Regional Eco-tourist promotional organizations are increasingly using strategic alliances from their founding to go "Global." Local communities and their economic development organizations, Eco-tourist associations and tourist promotion departments realize they are all part of a regional economy. They need to brand and market the region. They also realize that Eco-tourism is a global game. They are competing against other regions throughout the globe for Eco-tourist business. There are also cost sharing strategies such as regional marketing for smaller cities and firms through alliance formation and development.
They are coming together to form "relationship organizations." A relationship organization is a network of organizations that comes together as a single entity in a select key area. They have four key characteristics:
Global Reach. They have the ability to market on a global basis.
Network of Independent Organizations. They are composed of independent organizations.
Common Mission. They have a shared strategic agenda and a realization that they are more effective and successful working jointly than as single organizations.
Act As a Single Organization. They act as a single organization and form and implement a common strategy on issues related to their shared mission.
Search and Open Space conferences have been used to create shared strategic agenda, goals, and values. Participatory Work Design Conferences have been used to align systems and develop structures and processes.
Eco-tourism Mass Customization
North Americans, Japanese and Western Europeans are used to a vast number of choices. Experienced Eco-tourists indicate they also seek choices and variety. In fact, they want their choices, not those provided by a firm for them. Mass customization can meet this desire.
Eco-tourists tend to be high income, well-educated and large city dwellers. This suggests a higher likelihood that they have experienced mass customization. Internet sites are increasingly based on mass customization as are computers, clothing, bikes and even housing. Mass customization isn't limited to North America. Nation Bicycle Industrial, Japan, offers more than ten million bike variations. The bike is designed to fit the customer's height, weight and cycling needs. It is shipped in two weeks.
What is mass customization? Mass customization involves the customer receiving what he or she wants and at a price he or she is willing to pay. This reduces customer sacrifice. The customer purchases a standard offering, platform that is, in turn, customized to his or her specifications.
Eco-tourism involves a variety of platforms. They are presented below. These platforms could be customized. Hiking could be customized, for example, by finding out the type of terrain and nature setting the customer desires. It could be further customized by asking the customer the types of food he or she would like and the accommodations desired.
Mass customization need not be limited to these platforms. Eco-tourist profiles suggest they are alternative medical customers. Russian doctors engage in acupuncture and massage. Both tend to be high quality. Both tend to be extremely low cost and high quality as compared with US peers. They might also become platform offerings.
Eco-tourists indicate a desire for variety. This is also a mass customization source. Eco-tourist firms could work with customers to design a customized experience mix based on provided platforms. This could also include accommodations and transportation. An Eco-tourist, for example, may desire a tent when camping, a cabin when hiking and a moderately priced and yet, comfortable hotel before leaving.
Mass customization requires mindset and organization changes. Research, design and sales prior to the actual experience need to be integrated. Customers interact with a design system. This system could take a number of forms. One alternative is a question and answer phone dialogue. Salespersons may need to be transformed from order takers to design consultants. They may have to be educated in the various platforms, cultural awareness and educated in interpersonal skills.
Another change could be a web site. The site would provide an in depth experience design form. The form would provide a detailed experience design. E-mail could be used to confirm the experience. It could also be used to clarify unclear issues.
Eco-tourist firm owners, managers and employees would have to change their mindset from mass production and broadcasting to one-to-one marketing and pointcasting. The former involves a firm developing a product or offering and then developing a slogan. Advertising and promotion methods are used to broadcast their standardized, mass-produced, tour. The latter involves developing a series of platforms with infrastructure and potential or past customer input and working with customers to design their own customized experience.
Mass customization requires a different business model. There are three types: (1) transactions, (2) contractual and (3) Partnership. Each is characterized below.
Transaction: Simple exchange of services and/or benefits during a specific time period. There is limited information sharing and interaction.
Contractual: The services and/or benefits are based on a contractual relationship. The relationship is extremely detailed and legal. Relationship is for a specific period of time. Contract defines the exchange and sharing of information.
Partnership: Exchange of services and/or benefits are ongoing and the situation is complex, uncertain and critical to the firm's competitiveness. All parties have to shared goals, complimentary expertise and skills and integration of the process across organizations.
Mass customization would require a shift from transaction to partnership and contractual business models. It requires a partnership with customers. It may also require a partnering with other organizations to expand the variety and platforms offered. The offering of massages and acupuncture is an illustration.
Mass customization may also require partnering with other Eco-tourist firms. Firms might partner to expand their experience offerings and variety. One firm might, for example, offer one experience offering desired by a customer but not others. This firm would design the Eco-tour experience process and in turn, work with partners in the presentations of the full Eco-tourist experience.
This would require not only firms to partner in developing shared design, service and experience delivery systems but also to engage in shared market positioning. In other words, they would have to develop a shared marketing positioning strategy for their various experiences by market segments and action plans for their enactment. This might take the form of a common web site and promotion materials. Or, it might take the form of a marketing partnership based on Eco-tourist experiences offered by each firm.
Embracing the Idea of and Ending Customer Sacrifice
Eco-tourist firms, local business and governmental agencies need to recognize and embrace the idea of customer sacrifice. A review of tourist web sites and brochures, discussions with operators, touring local businesses and experiencing local government agencies suggests a high level of customer sacrifice. Most seem to be still operating as organizations did during the command economy days. Retailers and service providers provide few choices.
They seem unconcerned about customer wants and desires. This is extremely important should local firms target North Americans and Western Europeans. Experiencing the Russian Far East and Russia, in general, is an exercise in customer sacrifice. Coffee is an example. Americans don't care for instant. They want brewed. They are also used to "a coffee drinking experience" as a result of such firms as Starbucks. It is almost impossible to get a good cup of coffee in eating places and cafes. This is a customer sacrifice.
Purchasing bottled water is another. Russians do this as a necessity. Americans do it as taste experience. Purchasing bottled water is a customer sacrifice for Americans who expect free drinking water and public water drinking fountains.
Passport control is yet another government example. Does anyone want to have his or her passport rechecked when it has already been checked? Do Eco-tourist firms want this to be the first experience experienced by their customers when they arrive in, for example, Sakhalin - should they have traveled through Vladivostok?
Customer sacrifice has approximately 55 dimensions. They include questions concerning physical processes of good and services, financing, information, interactions, and exchanges. They also include personal and social flows. Standing in line waiting to be helped while other customers are being served is an example. Unnecessary trade offs caused by an organization's past expectations and experience is another. Do Eco-tourist firms cause customers to think that they have to eat the food provided? Or, do they have a choice? Do they cause customers to think that they can't co-design a tour?
Another sacrifice arises from form. Customers may want a picture painted by a local painter. However, they may like to select another frame. Do they think they are limited to just purchasing the frame and picture? Or, do they realize that they can purchase a customized one?
A third is repeating the same task. Passport checking is an example. Do customers want to continually drop off film? Or, might the firm do this for them and pick it up before they leave? Do they want to continually call and wait for a taxi?
A final dimension example involves experiences when the customer must sort through alternatives to find his or her desired product. Experiencing the Russian small business outside market may be a fun experience once or twice, however, it isn't continuously. The major customer sacrifice source is averaging the customer experience rather than customizing it. Standard products, services and processes tend to create customer sacrifice. The Soviet Taylorism legacy has caused this to infect almost all Russian firms. In fact, Russian management and organizational design practices, culture and mindsets automatically create customer sacrifice. Standard products, services and processes need to be designed so that they can meet the customer's individual needs. But more importantly, Russian business owners, executives and government officials must engage in transforming offerings that will revision their mindsets. This will require changes in Russian education practices and methods from passive and lecture to transformational and experiential.
Following these recommendations will produce a number of benefits for business, community and government. First, a shared vision will result in all regional parties engaging in strategies required for them to attract global Eco-tourists. It will also allow them to be globally competitive. Investors look for a good business plan. They also look for competent and committed management and leadership. They seek people who are deeply focused on enacting their ideas and plans. A Search conference would indicate managerial competency. It would provide a tangible regional development plan and model. It would also indicate a group of people who are disciplined, capable of working together and can implement even in the face of constraints, challenges and problems.
Second, branding would provide a cost effective strategy when compared to that of single firm marketing. It will also change the present image that may discourage affluent and experienced Eco-tourists.
Third, mass customization will present a regional competitive advantage. Finding out and providing what the customer wants reduces waste. Eco-tourist firms would not waste time and resources offering what customers don't want.
Fourth reducing customer sacrifice and mass customization are critical to customer retention. The cost of securing a new customer is much higher than retaining an existing one. Eliminating customer sacrifice creates positive customer buzz about the firm. Word-of-mouth selling is critical to marketing experiences. Internet technologies accelerate either positive or negative word-of-mouth advertising. The "net effect" can cause good or bad experiences to be communicated at the speed of light and to thousands in days. People can also post their experiences on billboards and express them in travel and ecological chat rooms.
Finally, they will expand government revenues through expanded Eco-tourism. This will allow for improved service provision and infrastructure maintenance and development.
Fredhelm, C. (January-March, 1999). "The Trillion Dollar Enterprise." Business and Strategy, McLean, VA: Boozi, Allen and Hamilton.
Hamel, G. and C.K. Prahalad. (1994). Competing for the Future. Boston, Mass: Havard Business School Press.
Kelly, K. (September, 1997). "New Rules for the New Economy." Wired. http://www.wired.com/wired/archive/5.09/newrules_pr.html.
Lindberg, K. (1996). "The Economic Impacts of Ecotourism." Estonian Ecotourism Association. http://www.ecotourism.ee/kreg.html.
McKenna, R. (1984) . The Regis Touch--New Marketing Strategies for Uncertain Times. Reading, Mass: Addison-Wesley.
Pine, J. (1993). Mass Customization. Boston, Mass: Havard Business School Press.
Pine, B . and J. Gilmore. (1997). Customer Satifscation Is No Longer Good Enough. Context. http://www. contextmag.com.
Pine, B . and J. Gilmore. (1999). The Experience Economy--Work Is Theatre and Every Company a Stage. Boston, Mass: Havard Business School Press.
Rothberg, R. (January-March, 2000." Thought Leader--Interview with Lynda Appleton."Business and Strategy, McLean, VA: Boozi, Allen and Hamilton.
Warnick.R. (1995). "UNITED STATES TRAVEL ABROAD 1979 TO 1991:GENERATIONAL TRENDS IMPACTING THE SUSTAINABILITY OF THE UNITED STATES TRAVEL MARKET." In McCool, S. and Watson, A. Linking tourism, the environment, and sustainability-topical volume of compiled papers from a special session of the annual meeting of the National Recreation and Park Association; 1994 October 12-14; Minneapolis, MN. Gen. Tech. Rep. INT-GTR-323. Ogden, UT: U.S. Department of Agriculture, Forest Service, Intermountain Research Station.
Wright, P. (1997). Sustainability, Profitability and Ecotourism Markets: What Are They and How Do They Relate?." Ecotourism - Balancing Sustainability and Profitability. PŠrnu, Estonia: International Conference on Central and Eastern Europe and Baltic Sea Region Proceeding.
Bob Holder is a development consultant. His St. Louis area based consulting firm works with profit and non-profit organizations and small enterprises. He was a contributor to the book, After Atlantis: Working, Managing and Leading in Turbulent Times. His, Requisite for Future Success ... Discontinuous Improvement in the Journal for Quality and Participation with Ned Hamson was the lead article in the launching of Emerald Management, the trade name for MCB Publishing in the United Kingdom. His articles have appeared in ODJ, ODP, Quality Digest, CI Magazine, Journal for Quality and Participation and Quality Journal. Bob has been devoting the last two years to teaching and doing paid and volunteer consulting in Russia. He consults, speaks and writes about innovation, strategic visioning and human systems design.
Contact Bob J. Holder at: