HELSINKI SCHOOL OF ECONOMICS (HSE) Mikkeli Business Campus Bachelor of Science in Business Administration

Transcription

1 HELSINKI SCHOOL OF ECONOMICS (HSE) Mikkeli Business Campus Bachelor of Science in Business Administration FINLAND AS A DESTINATION FOR FRENCH AND GERMAN INCENTIVE TRAVEL Anna Kilpeläinen International Business Bachelor s thesis Supervisor: Simo Riihonen Date of approval: 19 th of February, 2004

2 HELSINKI SCHOOL OF ECONOMICS Mikkeli Business Campus ABSTRACT OF BACHELOR S THESIS Author: Anna Kilpeläinen Title of thesis: Finland as a Destination for French and German Incentive Travel Date: 23 January, 2004 Degree: Bachelor of Science degree program in Business Administration Supervisor: Simo Riihonen Objectives The main objectives of this study were to examine incentive travel to Finland in general and conduct an empirical study of Finland as a destination for incentive travel from France and Germany. Summary The research contained two phases; a secondary data research and a questionnaire that was sent to 15 incentive houses in both France and Germany. First, incentive travel was defined and characteristics of it were looked at. Second, Finland as a destination and the features that it can offer to foreign incentive travellers were studied more thoroughly. Third, the French and German markets were examined, and in the final part of the research 31 answers to the questionnaire were analyzed, in which incentive houses described their businesses and their customers feelings towards Finland as an incentive travel destination. Conclusions Finland was found to have potential in becoming a leading country in incentive travel due to the exoticness and high quality services that it can provide to the travellers. Finland is still a quite unknown destination to Central Europeans, thus emphasis should be put on making Finland more known to them and encourage them to visit Finland. Although the winter brand may have been well established already, summer should be promoted as well, because of the fact that incentive travel goes on throughout the year in both France and Germany. It is important to have cooperation between the Finnish Tourist Board, Finnish travel arrangers and the foreign incentive houses in order for the activities to be designed to the customers exact needs and wants. Keywords: Incentive Travel, France, Germany Language: English 2

3 TABLE OF CONTENTS INTRODUCTION... 3 Purpose and Objectives of the Research... 4 Methods Used... 5 Literature Review... 5 INCENTIVE TRAVEL... 9 Incentive Travel Defined... 9 Current Trends in Incentive Travel FINLAND AS A DESTINATION FOR INCENTIVE TRAVEL Background Competitors of Finland as a Destination for Incentive Travel SWOT-Analysis of Finland as a Destination FRENCH INCENTIVE TRAVEL French Market Current Trends in French Incentive Travel Image of Finland in France GERMAN INCENTIVE TRAVEL German Market Current trends in German Incentive Travel Image of Finland in Germany THE SURVEY Background Results from France Results from Germany DISCUSSION CONCLUSION REFERENCES APPENDIX: THE QUESTIONNAIRE

4 INTRODUCTION Purpose and Objectives of the Research Skilled and motivated employees and work teams are some of the greatest assets of a company. In addition to cash, there are various effective ways to reward and motivate employees. Travel is a good incentive, because unlike cash, the incentive trip is not quickly spent and forgotten. When properly planned and customized, group incentive travel creates memories that last for a lifetime and most importantly it creates goodwill and loyalty to the company. Finland has potential in becoming one of the leading countries in incentive travel. The exotic location, security and functioning infrastructure makes Finland a unique destination for incentive travel. Finland offers various kinds of activity possibilities, and quality meeting and congress facilities. Incentive travel has not been studied extensively, thus it is an interesting area of which to conduct research. The purpose of this research is to study these two issues, incentive travel and Finland as a destination for it, putting special emphasis on France and Germany as the target markets. By studying the purchasing behaviour of German and French incentive travellers, the position that Finland has as an incentive travel destination can be strengthened. The research questions are: What is incentive travel and what opportunities does it bring to the Finnish travel organizers? What are the strengths and weaknesses of Finland as a destination for incentive travel and what opportunities and threats does incentive travel bring to Finland? What is the common incentive travel like in France and Germany? How do French and German travellers see Finland as a destination? How do French and German incentive houses evaluate Finland as a destination for incentive travel? The objectives of this research are to get answers to the research questions presented above and to get the correct understanding of French and German consumer behaviour in incentive travel. 4

5 Methods Used This research will have two phases and is conducted in cooperation with the Finnish Tourist Board. First, secondary research is conducted from literature that is relevant to the subject. The Literature Review that can be found later in this introductory chapter presents the most important secondary resources that have been used in the research. Second, incentive travel houses that operate in France and Germany are interviewed on their experiences on promoting Finland as a destination for incentive travel. The Finnish Tourist Board has a long history in conducting similar research. Prior to this research Petra Naavalinna from Turku School of Economics and Business Administration has been studying Finland as a destination for Spanish, Dutch and British incentive travel in her Master s thesis Empiirinen tutkimus: Ulkomailta suomeen suuntautuva kannustematka: lähtömaina Iso-Britannia, Espanja ja Hollanti, in which the same questionnaire with slight adjustments was used. Literature Review Matkailun Edistämiskeskus (MEK): MEKin mukana markkinoilla KANNUSTEMATKAILU MICE MEETINGS AND INCENTIVES is a Finnish Tourist Board publication that introduces the basic facts about meetings, incentives, conferences and events travel in Finland. The publication includes the current trends in incentive travel in Europe, Finland as a destination for incentive travel and information about the countries from which the customers come from, in this case the relevant countries are Germany and France. Incentive Travel: Motivation Made in Finland is the incentive travel section on the Finnish Tourist Board website. This site provides information about Finland as a destination for incentive travel and what the Finnish Tourist Board does to strengthen Finland s position as a destination. MEK: Talvimatkailustrategia is a Finnish Tourist Board publication about its Winter Travel Strategy. This publication is important to the research because about 75% of incentive travel done in Finland is to Lapland and in the winter. The publication focuses on the competitive advantage that 5

6 Finland has as a winter travel destination, the winter Finland- brand, and the competition that Finland faces. Lapin matkailustrategia , Travel Strategy of Lapland , is a publication by the Association for Regional Development of Lapland. Chapters that are of great interest to this research include two and four. This publication, such as the previous one, is important to this research because it provides relevant information about tourism in Lapland mainly in the wintertime and also gives some recommendations how travelers could also be attracted to Lapland in the summer time. The chapters mentioned above focus particularly on the development and the current situation of tourism in Lapland and the strategy towards the year Survey on International Convention, Incentive Travel and International Exhibitions in Thailand 2000 conducted by Information Provider and Consultants Co., Ltd (IP&C) for the Tourism Authority of Thailand gives information about the European market for incentive travel in general. MICE ja MEK is an article in Yritysmatka magazine 2001:3, p written by Eeva-Liisa Hannukainen. In the article the writer interviews two incentive travel professionals in Finland Riitta Tammisto and Timo Heinaro. The topics that they discuss in the article are the role of the Finnish Tourist Board in promoting Finland as a destination for incentive travel and the ways in which an incentive house designs incentive programs for companies. Kannustematkailu on vieläkin käyttämättömien mahdollisuuksien aarreaitta is an article in Yritysmatka magazine 2000:1 p written by Maija-Liisa Ihanus. The focus of the article is on the opportunities that incentive travel provides for travel organizers and thus travel organizers should learn the new aspects that incentive travel brings to the tourism industry and take advantage of the facts that are possible for the company to provide. Kannustematkailu kasvun tiellä is an article in Yritysmatka magazine 2000:4 p written by Maija-Liisa Ihanus. The writer discusses the impact and the enormous growth of incentive travel in the last few years and describes how this has not been realized enough before. The writer also discusses the effect that incentive travel has on other industries. In addition, there is information 6

7 about Finland as a destination and strengths and weaknesses that the customers find in Finnish incentive travel. Matkailun rakenteelliset ongelmat is a Finnish Tourist Board publication about the problems that exist in Finland as a tourism destination and the reasons why these problems exist. When looking at the reasons it is also easier to find ways to eliminate these problems. Issues such as the insufficient number of customers, the number of foreign customers compared to the effort made and the use of services were mentioned and studied more thoroughly. The section Incentive Background in The Demand for Incentive Travel: Empirical Study in the Journal of Travel Research written by Pauline J. Sheldon in 1995 defines incentive travel, discusses the reasons for it and what is gained by using it. It also gives basic facts about the growth of incentive travel. Kimmo Kallama discusses incentive travel in his Helsinki School of Economics Master s Thesis Kannustematkailu kansainvälisenä ilmiönä ja suomalaisten yritysten henkilöstön motivointikeinona in Useful for this research are topics such as the development of incentive travel, the reasons for incentive travel and destination characteristics in incentive travel. Sesonkivaihtelut 1992 is a Matkailun koulutus- ja tutkimuskeskus (Center for tourism research and training) publication A:56 in Savonlinna in It focuses on different travel products; in this case the focus is on the incentive travel product. The publication describes the different elements that the product can have and how to take advantage of the product in different places and during different seasons in Finland. MEK Rajahaastattelu tukimukset, The Border Survey provides information about tourists that cross the Finnish border; in this case the most interesting ones have been the French and German travelers. This document provides useful information about French and German travel in general, not particularly incentive travel. Thus the information has to be looked at carefully because incentive travel differs from traditional travel. However, useful information can be found about the features that the French value in the destination and how they evaluate the efficiency of different communication chains on the French market. 7

8 MEK: Spontaani Suomi-kuva haastattelututkimus is a research conducted by Saila Saraniemi and Raija Komppula for the Finnish Tourist Board in The research is based on a survey, in which the question: What is your image of Finland? was asked from different nationalities. The important parts of this document are the ones, which discuss the answers from the French and Germans. MEK :Markkinatieto provides useful background information about the French and German economic indicators and the travel market situation. Also, some recent incentive travel trends in France and Germany are discussed. Maaraportti Ranska and Maaraportti Saksa, the country reports of France and Germany provided by Finpro discuss all the relevant information about different markets for small and medium sized Finnish firms who want to engage in international business. There is information about the economy of the country, consumers, and major export and import partner countries. The German MICE market Tip Sheets presents some information of the German MICE market provided by the Travel Marketing Factory GmbH in Germany. The tip sheet provides information about the past trends in the MICE-market in the recent times and discusses the importance of taking German culture into consideration when selling to the German travelers. 8

9 INCENTIVE TRAVEL Incentive Travel Defined The Society of Incentive Travel Executives defines incentive travel as a modern management tool used to accomplish uncommon business goals by awarding participants an extraordinary travel experience upon attainment of their share of uncommon goals (Sheldon, 1995:23). Incentive travel is part of MICE-travel, which stands for meetings, incentives, conferences and events-travel (European Market, 2000:57-58). A trip that a company arranges in order to motivate, encourage and reward its employees is called incentive travel. Travel agencies and incentive houses arrange tailor-made trips to companies exactly the way the company wants. The objective of incentive travel is to increase sales, improve profitability and productivity, develop a corporate culture, increase morale and loyalty, and decrease absenteeism by providing employees with a unique experience that will motivate them to perform more efficiently at work (Kallama, 1996:37). Incentive travel creates a sense of achievement for the employees, a sense of pride, reward for efforts, and recognition among colleagues. (Sheldon, 1995:23) In addition to the trip itself, incentive travel can also include various kinds of adventure programs. Furthermore, meetings and seminars are done in cooperation with incentive travel. (MEK:in mukana markkinoilla, 2003) Every fourth large international company uses incentive travel as a motivation tool (Incentive-matkailu, 2003) According to the survey on International Convention, Incentive Travel, and International Exhibitions, approximately 2.5% of the gross domestic product of each European country is spent on business travels, 1-5% of which is used for meetings, incentives, conferences and events-travel. The biggest buyers and spenders for MICE travels are Germany, France and the United Kingdom. Because of the fact that incentives are included in personal incomes and are subject to taxes in Europe, companies rather organize incentive travel as corporate meetings, which make it difficult to predict the right amount of incentive travellers. (European Market, 2000:57-58) 9

10 Current Trends in Incentive Travel Incentive travel represents one of the most quickly growing segments of tourism industry and the growth has been stable for many years. A German study indicates that incentive travel will recover from the recession faster than other segments of the tourism industry. Society of Incentive Travel Executives predicts that incentive travel will grow by 10 % in 2004 as it has been doing in the recent years. (Incentive-matkailu, 2003) According to a recent American research, money and bonuses are losing their meaning as an incentive to employees, because 71% of respondent companies use travel or a good as an incentive. Travel or a good is considered an achievement and more valuable than money. Money bonuses are thought to be just a part of the salary. (Hannukainen, 2001:50-51) Continuous search for new destinations is typical for incentive travel, because travel organizers need to keep the customers happy. Destination segmentation is growing and travellers are looking for new exotic destinations that are pure and original. It is important that the incentive travel has its own theme that increases the want to succeed and reach the objective that is set. If there is a good theme associated with the travel, the destination and price of the travel are not so important anymore; instead, people are looking for a memorable experience. Finland has a great potential in becoming a leader as an incentive travel destination in the world, because of the fact that it provides quality accommodation, unique culture, and fascinating nature. (Sesonkivaihtelut, 1994:17-18) In addition, facts such as accessibility and infrastructure of the destination have increased their importance in incentive travel (Hannukainen, 2001:50-51). Travellers have become more environmentally conscious and in the future large deserts and peaceful landscapes are alternatives for those who do not want to travel to mass tourism destinations. Europe has strengthened its position as a popular destination, not only because of its proximity, but also because people have been looking for more secure travel destinations. After the terrorist attacks in the United States in 2001, the role of a secure destination has increased its importance. Finland is internationally known as a safe country, therefore it can benefit significantly of this trend. (Lapin matkailustrategia ) 10

11 One of the current trends in incentive travel is the shortened duration of travel, which is also the case in domestic incentive travel (Lapin matkailustrategia ). People are busier than ever and they do not have time to be absent from work, because they think that they are irreplaceable to the company. Still more meetings and conferences are included in the shortened incentive travel. The customers prefer flexible activities and they are more eager to have activities, which increase the group spirit, such as snowmobile and reindeer rides (Incentive-matkailu, 2003). The global trend of internationalisation has brought new challenges for incentive travel, because often the participants represent several nationalities. Furthermore, even inside one country and one organisation there are different kind of people working at different kinds of jobs. The activities should be arranged in a way that it is possible to get to know everybody informally, even the highest managers of the firm. (Ihanus, 2001:15) Although the traditional incentive activities are the core competence of the travel organizer, new activities have also become more common, such as cooking classes and wine tasting parties (Hannukainen, 2001:50-51). It is worth to remember also that an unforgettable experience may not necessarily be a trip to an exotic destination, but more specifically an activity or action that has sustainable value. This is what Finland should consider when planning trips for foreigners; although Finland is a unique and exotic place that might not be enough. The travellers want activities that they can enjoy and remember for a long time. The travelers are getting more price-conscious and they know how to increase competition among organizers. Although the companies might have a small budget for the travel, they still expect quality and good service. (Hannukainen, 2001:50-51) Both the organizers and the consumers of the trips are highly sophisticated in what comes to incentive travel in foreign countries and they know what they want, because they have been traveling before. This is why new and original ideas are wanted, while taking into account the lifestyle and motivation attributes that the consumers have. The trips have to be tailored to each consumer groups wishes in order for the trip to satisfy their needs. (The German MICE market, 2003) The changing form of media is relatively a major trend. Internet has become one of the leading communication and marketing channels, as well as a distribution channel. Through the Internet it is possible to get in touch with various travel organizers and get more information on different travel possibilities. In order for the travel organizer to perform in the best possible way, technology has to be taken into account. In addition, the travellers expect the accommodation to have Internet connections as well as modern congress facilities. It should be kept in mind, though, that everybody is not used to 11

12 using new technology and some people still want to have paper brochures and travel guides. (Lapin matkailustrategia ) 12

13 FINLAND AS A DESTINATION FOR INCENTIVE TRAVEL Background According to a survey done in 2001 by the Finnish Tourist Board, the number of people travelling to Finland as an incentive has tripled from 1995 to The financial contribution is 500 million former Finnish marks, approximately 83 million euros. Incentive travel unites the tourism industry to other industries and thus brings travellers to Finland that probably would have never been introduced to Finland otherwise. This way the interest towards Finland increases enormously. (Ihanus, 2000:12-13) 75% of incentive travels are done in the wintertime to Lapland and to other destinations in Northern Finland. In the summer time the travels are primarily done in Helsinki metropolitan region, Turku Archipelago, and the Lakeland. (MEK:in mukana markkinoilla, 2003) Incentive travellers come to Finland normally between January and April (Sesonkivaihtelut, 1994). The main markets for Finnish incentive travel organizers are western and southern Europe, especially Germany, France, United Kingdom, The Netherlands, Spain, and Italy (Incentive-matkailu, 2003). In the future the significance of potential markets cannot be overlooked and in China, for example, the marketing of Finland as an incentive travel destination should be started from the beginning. (Lapin matkailustrategia ) Travellers that come from the United States and Canada tend to also visit Russia or Estonia (Incentive-matkailu, 2003). Competitors of Finland as a Destination for Incentive Travel The reasons why incentive travelers want to come to Finland can be divided into three segments: the adventure segment, which relates to Finland s exotic location; the segment that wants to visit Scandinavia and other northern countries; the winter sports segment. Competition that Finland faces comes from the countries that can offer similar services in similar segments. (Talvimatkailustrategia ) In the first segment the customers want to see an exotic location. This means unique culture, nature and beautiful landscapes. The competing countries in this segment are countries such as Kenya or 13

14 New-Zealand, which are not mass tourism destinations. In Europe, Finland, due to its proximity, has a competitive advantage compared to the countries mentioned above. (Talvimatkailustrategia ) There are incentive travelers that come to Finland because they want to get to know Scandinavia and other northern countries. Norway and Sweden are better known than Finland throughout the world and have an advantage compared to Finland because of that. Finland faces a challenge of promoting the best sides of the country to make it better known to people. Another important competitor of Finland in this segment is Canada, and especially Quebec, due to the similar nature and activities, but geographic proximity serves as an advantage to Finland compared to Canada. (Talvimatkailustrategia ) Finland s competitors in the winter sport segment are Canada, Scandinavia, countries in the Alps and in the future also the Eastern European countries. The proximity of Finland to Central Europe compared to Canada gives Finland a competitive advantage. Compared to the Eastern European countries the prices are higher and the distance is longer, but Finland has better quality accommodation and activities, and on-going product development. Finland can also offer a snow guarantee for every winter for the major part of the country. (Talvimatkailustrategia ) On the other hand, Finland and Lapland cannot compete with the countries in the Alps and their popular ski resorts. That is why the image of the exotic north and nature, Santa Claus or culture characteristics are included in the trip to make it unique and different from the trips made to the Alps. (Lapin matkailustrategia ) SWOT-Analysis of Finland as a Destination The greatest strength of Finland as a destination is the nature with white exoticness of the Nordic winters with various kinds of activities, such as snowmobile-, dog- and reindeer sleighs. (Hannukainen, 2001:50-51) Finland can offer good quality accommodation and different kind of services. Finland can take advantage of its nature and variable seasons and contrasts such as winter-summer, cold-warm, light-dark, and water-desert. (Ihanus, 2001:15) The Winter Finland is a well-recognized brand already in Europe and it includes characteristics such as cleanliness, exoticness, peacefulness, originality, and uniqueness. (Talvimatkailustrategia ) Finnish 14

15 people have relatively good language skills among the travel organizers, most of them speaking more than one foreign language. The major weaknesses that Finland has as a destination are accessibility from Central Europe and the fact that Finland is quite an expensive country. Moreover, central Europeans do not know a lot about Finland and thus Finland should be made more familiar to them through marketing. In the past, people have had negative associations to Finland because of, for example, coldness and flies. Although Finland s winter brand is rather well known, there is an over supply of accommodations and activities during the summer time. In addition, the travel arrangers are not open minded enough to see all the potential for the activities in Finland. (Ihanus, 2001:15) The most important opportunities for Finnish travel arrangers have to do with increasing the demand for summer incentive trips. Also the evolving markets of Russia and China bring some opportunities that Finland should take advantage of early on. In addition, the euro currency brings some advantage to Finland because it is easier for Europeans to travel around. (Lapin matkailustrategia ) Finnish companies should also realize the opportunities that cooperation between the travel organizers would bring, in for example developing new activities and lowering costs. Furthermore, it is important that Finnish travel organizers would see the potential in foreign partners. (Matkailun rakenteelliset ongelmat, 2002) Threats of incentive travel in Finland include the net emigration of the tourist places. If local people move away from the tourism resorts and areas, such as Northern Finland, there is not anybody to arrange the services. It is not profitable for the travel arrangers to keep the tourist centers open in the summer time, thus the people may begin to seek new opportunities in other parts of Finland. (Lapin matkailustrategia ) 15

16 FRENCH INCENTIVE TRAVEL French Market France is the fourth largest economy in the world and the second largest in Europe, and there are approximately 60 million consumers (Salmi, 2003). The real GDP of France has been growing for the past few years, in 2003 it had increased by 1,9%. Inflation in France has been stable in the recent years, at approximately 1,6%. (Background Information France, 2003) The industries in Finland that sell to France include high technology, ship building, forestry and defence material industries. France still possesses quite a bureaucratic administration so it is a difficult market for Finnish companies to enter. This is why Finland has not taken enough advantage of the enormous market before. A new trend can be seen in the consumer behaviour of the French, in which they tend to value nature and cleanliness more than before. This is a good chance for Finnish consumer goods companies and travel service providers to promote their goods and services. (Salmi, 2003) According to a research done by the French incentive travel magazine Voyages & Stratégie over 30% of French companies think that incentive travel is extremely important. French companies traditionally arrange the trips themselves and 44% do not even contact an incentive house. The companies feel that the incentive houses do not understand the exact needs of the employees of the company. The most important objective of incentive trips for the French is to increase employee loyalty, to increase employee expertise and to increase image and familiarity. The trip is considered successful if good atmosphere is reached and the results show. (Hannukainen, 2001:50-51) Current Trends in French Incentive Travel As mentioned before, the consumer behaviour of the French is changing, which reflects to incentive travel as well. In addition to the fact they value more nature and cleanliness, the demanding and wealthy clients are looking for personalized service and high quality offers as well. This can be seen from the increased demand for individually tailor made trips instead of traditional trips that could be purchased as a package. Consumers are guided in their choice by the type of destination and not by the destination itself. The French are finding the Internet to be more useful as a marketing and 16

17 communication channel. Safety and security issues have been gaining more importance than ever after the terrorist attacks in USA in (Outbound Travel France, 2003) Image of Finland in France 4% of French travellers have been to Finland. Generally speaking Finland is quite a known country, especially after joining the EU in According to IPK International research, although Finland used to be often associated with negative things for example flies and coldness in minds of the French, this is hardly the case nowadays. Nature is a big part of the Finland image for the French. The summer was thought to be quite simple, only forests and lakes with no activities or sun. People are considered to be warm, open and full of hospitality. The French know the equality between genders and the President Tarja Halonen. In general, they have quite a negative rather than positive image of Finland, because they feel that there is not a lot to do in Finland. Recommendations from friends and family were the major factor that affected the choice of the French in coming to Finland. (Saraniemi and Komppula, 2003) Because the French like small and cosy hotels, cottages, and small holiday resorts, Finnish people should concentrate on offering them to the French. There should be more winter activities near to the accommodation. The French were satisfied with the quality of services, but the price level in Finland was found to be too high. Nowadays, there are airplane connections straight from Paris to Rovaniemi, so that helps to keep the package prices stable and increase the number of three to four day travels. (Rajahaastattelututkimuksen keskeiset tulokset :36) 17

18 GERMAN INCENTIVE TRAVEL German Market The population of Germany is 82,5 million people. The growth of the real GDP had grown by 1.5% in Inflation in Germany was 1.4% in (Background Information Germany, 2003) Germany is the largest economy in Europe and the third largest in the world. It is politically and economically a stable country. Germany is the most important export and import country partner of Finland and popular Finnish products in Germany are high technology, pharmaceuticals, wood processing technology, leisure time products and tourism. Germany is a very competitive and saturated market, in which a new company needs to replace others in order to survive. The consumers are demanding and they want high quality. Environmental questions are important to the consumers. (Wilen, 2004) There are corporate buyers of meetings and incentives in Germany. 89% of all MICE operating agents are doing incentives. Most of the travel organizers work in all business travel areas and do not specifically concentrate on any given segment. Normally the size of the incentive travel groups is 20 to 100 people. Incentive groups are sent to worldwide destinations. The most popular seasons for international incentives are April-May and September-October, but there is still incentive travel arranged throughout the year in Germany. Budgets are tight so special offers are commonly sought. Familiarization trips of convention bureaus and tourist boards are important, because the Germans want to know well the destination where they are going. (The German MICE market, 2003) Current trends in German Incentive Travel The new popular destinations in 2001 were Italy, Turkey, Croatia, and Slovenia. Budgets for incentive trips are smaller and trips are shorter than before (Outbound Travel Germany, 2003). In addition, the market has been reacting to the unfavourable economic situations and the irritation from the terrorist attacks in the United States in September In 2002, favourite destinations were domestic and neighbouring countries, European destinations being more popular than overseas destinations due to the political and economical situations in some countries. The destinations depend a lot on individual company policies and in most cases the corporate client is the one who decides the destination after hearing the suggestions from an incentive house. Certain destinations maintain their popularity as a 18

19 destination, although the general trend of finding new destinations is also visible in Germany. It is important for the German consumers that their ideas are listened to and that their mentality is considered when planning the trips. (The German MICE-market) Image of Finland in Germany 9.8% of Germans have been to Finland. The first things that come to their minds when asking questions about Finland are lakes, coldness, snow, sauna, reindeers, Scandinavia, Helsinki, water and nature. Generally speaking German images of Finland are stereotypical, and the facts that are promoted by advertising, for example lakes and nature, are well known to the people. (Saraniemi and Komppula, 2003) The Germans consider the quietness and peace of Finland to be a positive aspect of Finland, because it is the opposite of busy and densely populated Germany. Germans tend to travel in Finland in the summer time and hiking is a popular activity for them. The problems that Germans mention include the coldness of the winters and the distance from Central Europe. (Rajahaastattelututkimuksen keskeiset tulokset ) 19

20 THE SURVEY Background The survey was conducted in cooperation with the Finnish Tourist Board. The objective of the survey was to find out more precise information from the people who are professionals in the area of incentive travel and who know the market and the relative strengths and weaknesses that Finland possesses in the eyes of the market. Thus, questionnaires were sent to incentive houses that arrange the trips for companies in Germany and France in the summer and fall of The same questionnaire, with slight adjustments, was used for the two countries that was already used the year before to get information about British, Dutch and Spanish travelers. Altogether, 31 results were received, 12 from France, 16 from Germany, and three in which the incentive house in question was doing business in both of the two countries. The questionnaire first included questions about the company s general incentive travel activities. Second, questions were asked about Finland as a destination and in the end there were questions about how the companies evaluate some given factors to have importance in the eyes of the customers and how they evaluate Finland s chance for success in the given factors. The results of the survey are presented below with graphs. The y-axis on the graphs indicates the number of respondents. The questionnaire can be found in the Appendix. Results from France As mentioned before, 15 French incentive travel companies answered the questionnaire in France. 65% of them engage in all business travel, including incentive travel and 28,5% were concentrating only on incentive travel. Incentive travel represents over 80% of the total turnover in 40% of the cases. In France the most popular destination area for incentive travel has been outside of Europe, following homeland and elsewhere in Europe. The neighboring countries have been the least attractive areas excluding Spain. The most popular destination countries have been Brazil, Spain, Finland, Morocco and USA. (See graph 1) Graph 1 The Most Popular Incentive Travel Destinations, France

21 Although the clients are normally the ones who make the final decision for the destination, they are open to suggestions in 71% of the cases. In France the timing of incentive trips is spread throughout the year, the peak existing in the spring in March and April (See Graph 2). Similar to the destination, timing is normally decided by the client itself and set to a date, which is the most convenient to the participating group. French people tend to stay on the trips approximately three to six nights, depending naturally on the proximity of the destination to the home country. The groups are normally between 11 and 50 people in size. The most enthusiastic incentive travelers are in the pharmaceutical, finance and banking, insurance, and the car industries. Meetings and training is often included in incentive trips and the average amount of it is four hours per day. The average budget is 250 euros per person, not including flights. Normally incentive trips are group based, but half of the companies sell individual incentives occasionally as well. Spouses follow on the trips quite often and there is always special program arranged for them. The companies predict the demand for individual incentive trips to be stable in the future but they expect incentive travel in general to become more popular. Graph 2 The Most Popular Season for Incentive Travel, France Jan-Feb Mar-Apr May-Jun Jul-Aug Sep-Oct Nov-Dec Six of the French companies interviewed had organized incentive trips to Finland already, but Finland s share in their total turnover was relatively small, approximately 10%. Like in incentive travel in general, the peak months, in which most of incentive travel from France to Finland is done, are March and April. Travelers stay in Finland for about three nights and they come in groups of 11 to 50 21

22 people. Because of the spring timing, the primary destination of the trips is Lapland, Helsinki and its surroundings being the next most popular destinations. Almost everyone who responded to the questionnaire had own personal experiences of traveling in Finland. 70% of them have offered Finland as a destination for travelers. The companies predict that the demand for incentive trips to Finland will increase in the near future. The main competitors of Finland in the incentive travel market according to the French include Quebec in Canada, Iceland, Norway and Sweden. (See Graph 3) The fact that makes Canada and Quebec especially a big competitor to Finland in the French market is the language. It is easier for the French go to a place where they can speak their own language but which still offers the same kind of nature and activities. The advantage of Finland is the geographical proximity, though. All the other severe competitors are Nordic countries in Europe. Graph 3 Biggest Competitors of Finland in Incentive Travel, France Canada (Quebec) Iceland Norway Sweden The Finnish Tourist Board is the major source for information for the French companies who arrange incentive trips. They think that the most useful kinds of information is received and contacts are made on familiarization trips and workshops with the help of CD-ROMs, DVDs, videos, and brochures. When asking about the purchase criteria of incentive trips by the French people and how the incentive houses evaluate Finland s popularity, it is found that the French value price, climate, exotic destination, winter with snow, accessibility and the services the most when choosing a destination for an incentive trip. The French see the climate, winter with snow, the program, nature, exotic destination and safety to be the best aspects of Finland as a destination. They also consider the availability of good information to be positive in Finland as well as the word of mouth communication. 22

23 This is extremely important to the French because of their culture; they would rather believe their friends and family about good experiences than marketing and advertisements. These facts serve as the major advantages of Finland when choosing a destination. On the other hand, some of the factors that the French consider really important are the least attractive features of Finland, for example the prices and accessibility to the country. This can also be seen in the reasons why Finland was rejected when the incentive travel offered it as destination. Results from Germany 19 incentive houses responded to the survey in Germany. The core business service of 42% of the interviewed was incentive travel and 47% engage in all kinds of business travel. 2% of the companies do both business travel and leisure travel. The degree of turnover that incentive travel represents in the company depends naturally on what kind of other travel they organize, but on average incentive travel represented 30-50% of the company s turnover in The most desired destination according to these companies was either at the home country or then elsewhere in Europe, excluding the neighboring countries. Countries outside of Europe were rarely demanded due to the short duration of incentive travel. The most popular foreign destination in Germany was Spain and the islands. All in all, the Mediterranean region was very popular, for example countries such as Italy, Greece, France and Turkey all scored high. Individual countries that were really popular include Dubai, South Africa, Austria and Finland. (See graph 4) In 72% of the cases the customer had not decided the destination by themselves; instead they have been open to suggestions made by the incentive travel company. This is why it is important to focus the marketing efforts on the companies arranging the trips, while not ignoring the customers, though. Graph 4 The Most Popular Foreign Incentive Destination, Germany Spain Italy Dubai Austria South Africa Finland

24 The most popular season for incentive travel from Germany is the spring, from March to June, another peak existing in the fall, in September-October. (See graph 5) The client itself decides the timing for the trip in most cases. Reasons that might have minor effect on the decision are the weather and good seasonal prices. The normal duration of incentive travel is between two and four nights and the average size of the group is 11 to 50 people. Graph 5 The Most Popular Seasons for Incentive Travel in General, Germany Jan-Feb Mar-Apr May-Jun Jul-Aug Sep-Oct Nov-Dec Meetings and training are often part of the incentive trip and on average lasts for three to five hours every day during the trip. The average budget per person is around 350 Euros. Spouses follow on the incentive trip on less than 50% of the time, and when they do, there is normally some kind of activities arranged for them. The destination choice is influenced by the spouses in a little more than half of the time. Most of the companies interviewed expect the demand for incentive trips to increase in the coming years. Only four of the German companies that were interviewed had arranged incentive trips to Finland already. They had spent three to four nights in Finland and it was done primarily in the beginning of the year in January April. Similar to the other countries in which Germans do incentive travel, there are 11 to 50 people in the group. Due to the season in which the incentive trips are done, they are done primarily in Lapland. All of the people interviewed have been satisfied with Finland. The future 24

25 of incentive travel in Finland also seems quite good, and the people interviewed predict the demand to increase. The biggest competitors of Finland as a destination for German incentive travel are Sweden, the Eastern countries including Russia and Estonia, Iceland, and Norway. (See Graph 6) Graph 6 The Biggest Competitors of Finland in Incentive Travel, Germany Sweden Eastern Countries Iceland Norway Scotland The most popular information sources seem to be the Finnish Tourist Board and word of mouth. The most useful information is gotten mainly on familiarization trips. (See graph 7) Graph The Most Useful Information Sources about Finland, Germany FAM trip Travel Fairs Internet Specs DMC CD-roms Itinerary examples Workshops Grapewine Phone Contact Media Sales Visits 25

26 The most important purchase criteria for Germans are, for example, the price, climate, winter with snow, accessibility, restaurants and food, services, nature, safety, availability of good information, and uniqueness. Finland does quite well in these criteria except for the price, which also was an issue in France. Thus the best sides of Finland in the eyes of Germans are winter with snow, accessibility, restaurants and food, services, destination management companies, programs, events, nature and uniqueness, and safety. In addition to prices, the least attractive features of Finland as a destination was found to be the lack of cities and the attractiveness of introducing Finland as a new destination. The reason that Finland was rejected as a destination the most often was prices followed by the fact that Finland was unknown to the travelers. Also weather was mentioned as a reason for not choosing Finland. 26

27 DISCUSSION It should be kept in mind that in a research like this and in overall marketing, countries such as France and Germany should be kept apart and not to look at these markets as one because of the differing cultures. There are different aspects of, for example, incentive travel that both cultures value. Thus, it is necessary to develop different kind of incentive travel products for different markets and naturally different marketing strategies. This research was really interesting; however, there were a few limitations to the research. First, companies responded to the survey, not the consumers themselves. This can be seen as a negative aspect, but in the other hand the companies are the best people to tell about the trends and the consumers feelings about certain markets. They are able to answer quite truthfully because they are the ones who get feedback directly from the consumers. Personal experiences or attitudes may influence the answers that respondents give, though, and thus the real picture of the market may be influenced by an outside factor. Second, the way people have answered these questions without thinking much can be seen from questions such as which are the most popular incentive destinations and how many days have they spent there. For example in one case from France the most popular destination was Brazil but at the same time the same person wanted to spend only two to three days there, which is not a realistic answer due to the long distance between France and Brazil. Third, most of the answers indicated that the consumers naturally want low prices and good quality. Finland is considered to be an expensive country, which is one of the major disadvantages that Finland has as a travel destination. On the other hand, Finland provides quality accommodation and activities, which always cost more than on average. Traveling to a cheaper country can mean poorer quality. Incentive travelers value quality a lot and the fact that Finland has really good quality accommodation, infrastructure, and activities should stand as a unique selling point to the customers. These factors should be emphasized in marketing. Apart from these limitations, the research gives quite a realistic picture of the French and German incentive travel markets. The strengths and weaknesses of Finland according to both France and Germany are introduced in the preceding chapter in the survey results. When looking at the survey 27

28 results more thoroughly, one can see some potential opportunities that should be taken into consideration. According to the results gotten from the survey, Finland is seen as quite a popular incentive destination in France as it ranked third on the list. This means that there is interest for Finland in France, but the negative aspects, such as the unfamiliarity of Finland, should be eliminated in order to get more travelers into Finland. Also French travelers want to stay on their trip for three to six nights, which is a common duration of incentive trips in Finland. As can be seen from graph 2, incentive travel in France is done throughout the year, the peak months being March and April. Finland has a problem of oversupply of accommodation and activity arrangers in the summer time, because 75% of all incentive travel to Finland is done in the wintertime. The problem is not that there are not any customers during non-winter months; instead the problem is that the Finnish travel arrangers do not know how to take advantage of the other seasons. Finland has a well-known winter brand already, and in order to take the travel industry a step forward and ensure the growth of the industry, a summer brand should be established. The aspects of the winter brand of Finland mentioned before could be associated to summer as well, because the Finnish summer is unique and exotic in the same way as the winter is. Thus Finland should take advantage of the three other seasons and develop activities that the French market would value for those seasons. Making Finland a year around destination would make it even stronger in the French market. The midnight sun activities and summer cottages near a lake are unique to them as well and this side of Finland should be familiarized to the travel arrangers so they can convince the client to come to Finland during the other seasons. Finnish Tourist Board is doing a good job promoting Finland, because it has been seen as the best way to get information. Also familiarization trips and workshops are thought to be useful for getting to know a country. Emphasis should be put on these kinds of things because they appeal to the incentive houses and also to the consumers. When the consumers have gotten to know Finland, word of mouth communication is helping significantly in France because of the culture. Expanding the season of incentive travel is not only an opportunity for French incentive travel: also the Germans tend to come to Finland only in the beginning of the year, mainly in between January 28