Networking Tourism SMEs: E-commerce and E-marketing issues in regional

marketing

The article is eliciting a new economy i.e. a knowledge economy (an economy in
which economic growth is dependent on the information available). This economy is
challenging the traditional marketing disciplines, traditional business practices and
well established government framework. In fact, it provides a platform of
communication zone that facilitates an action to the dynamic market place loaded
with technological shifts. So to be successful in such techno economic environment
a new way of thinking is required. Since it has challenged the existing economy in
various ways however there is one consistent pattern in this new economy that is
the network of interactions which involves the collaboration of different firms to
develop a new model of innovation. The new thinking/ new model of innovation are
acquired through network building. Research indicates that network building is not
the source of competitive advantage but also a crucial asset for business survival.

Once a new thinking is introduced it needs to be diffused in larger geographic area

which is called regional innovation. Over the last decades the regional development
of literature has been lifted up because of networking and learning. Even the
research has suggested that those regions which have demonstrated learning and
knowledge transfer through network is dynamic regions and can maximize their
regional assets. However to sustain those asset innovation program need to be
implemented. So from this it is seen that regional development which was once
viewed as internal is now dependent on the external network.

Talking about networking there are various form of network but no matter what type
of network there is the ultimate aim is to develop effective and prosperous business
sector through interfirm cooperation and resource sharing. The regional
development is no longer now dependent on the physical attributes it is also
dependent on the social capital (networking/ relationship). So in order to foster the
regional development and to recognize an economic growth, initiatives of learning
should be taken i.e. by entering into an interactive learning process a region can
gain a competitive advantage. Although region can gain competitive advantage
through development of infrastructure and sharing of technology this is limited by
the lack of enough empirical evidences.

The entertainment and tourism sector of Australia in peaking 5% higher than other
sector and reason for this is due to adaption of information and communication
technology (ICT). For instance the Australian airlines Qantas 70% airline ticket is
booked online. It provides a sense that this sector has even more potentiality to
move ahead than any other sector if ICT is included and the article mentions that to
move from the local level to global level various forms of external externalities is
required such as internet portals and new e-commerce technologies. So to tap the
SME into this network is one of the issues. The technology providers are becoming
flexible to support the SMEs into network business solution however it is difficult
because the technology providers focus on the needs of the larger enterprise
ignoring the trading community (specific markets). So SMEs networks may find it
difficult in the position compared to larger ones in the e-commerce marketplace.
The adoption of network technology by SME is related to their size and nature and
depends on the opportunity and affordability of the business. Even the research has
suggested that SME will hesitate to invest time and money in rapidly changing
economy (knowledge economy). The reasons are fear of isolation, competitor use of
internet, alienating intermediaries, lack of technology skills. The cost of
telecommunication is another reason. Hence, these barriers are creating inertia not
to adapt the technological solutions in SMEs. In contrast to larger organizations they
are adopting the internet technologies whereas only 4% SMTEs is using such
technology. Hence, it is important for SMET to put focus on such technologies and
exploit benefits to prevent loss of competitive advantage. By adopting such
technologies the Australian SMTEs can develop new service industry enterprises
that can create a regional employment. And it is seen that connectivity is lacking in
various regional and remote areas of Australia which is the driver of the new
economy. So to create value in SMTE awareness of e business in required among the
individual SMTEs so that they do not become isolated within itself and lose a market
in rapid changing economy.

Networking is likely to be future of the Australian SMEs and involves two types of
network i.e. formal and informal networks. Partnership building is not only
dependent on the technological partners or source funding but also on social
context (trust). One of the key variables that hinder the cooperation is lack of trust.
SMEs fear of the opportunistic behavior from the partners but at same time with
increase in networking opportunity exists to cultivate new ethos (ethics) of
connectivity, socialization and trust between Australian SMEs which can be done by
informal seminars, meetings and online chat with other firms manager.

Now the cooperation is created with the rise of network and with the use of
technology promotion of products and services is done. The marketing also needs to
be done in new ways. Since SMTEs are new in this virtual world they have neither
experience of brand building nor resources to draw a complete picture of customer
tastes and circumstances so they are in danger of being isolated in this dynamic
market. Tourism Victoria the states peak body in tourism has developed an
integrated marketing campaign for its entire product region to gain competitive
advantage through regional cooperation. Traditional cooperative marketing like print
and other media was used and to increase the market visibility cross media
marketing was used but it turned out be costly. So as a part of their campaign
offering, product regions are actively persuaded to involve in new communication
channels so that necessary funds can be generated to provide such services using
new technologies. i.e. including web services in campaign.

With the new internet based marketing the product regions can now reach to the
high end consumers as well through cooperative marketing campaign. The focus is
on the relationship marketing and by joining on network portals various resources
can be pooled to conduct market research which allows extending the market reach
yet effectively competing with rival SMTEs. As mentioned earlier the SMTEs are ill
suited to network solution because of lack of training programs.

Cooperative is association of individuals and small business Australian cooperatives

have been weak due to deregulation and lack of support. Restructuring these
cooperatives will allow outside investment and the new cooperatives are committed
to resource sharing and knowledge innovation in unpredictable economy. So how
does this virtual cooperative tourism capture value for regionally dispersed tourism
operators with different income potential? One way is to link investment and return
with participation and ownership. Another way is to base subscription on the
number of hospitality services the participating SMTEs runs. A cooperative portal
has all the benefits of a traditional cooperative and achieve competitive advantage
through niche marketing, e commerce procurement, SMTE information exchange
and knowledge management.

ISSUES

SMEs are not adapting the internet technology to prevent the loss of competitive
advantage.

Connectivity is not prevalent in regional and remote Australia which is key driver of
knowledge economy.

Trust is a critical issue to consider in partnership building where partners may take
an opportunistic advantage of knowledge exchange.