Marketing New York City

MARKETING NEW YORK CITY

November 13, 2006

1.0 PROBLEM STATEMENT AND OBJECTIVES

Now that the newly formed New York City Marketing Development Corporation (NYC Marketing) has been able to generate positive revenues by marketing New York City (NYC) as a brand, the organization is concerned with how the funds can be best used to "do what is right" for the City. In addition, several growth opportunities have been presented and management is faced with determining how the firm should proceed to meet end objectives.

The goals of NYC Marketing are to:

* Generate alternative means of revenue for New York City;

* Support City agencies and important City initiatives; and

* Promote New York City around the world to grow jobs and tourism.

By achieving the above listed goals, life in the City will be enhanced at no cost to the taxpayers.

2.0 SITUATION ANALYSIS

The following sections summarize the current situational analysis for NYC Marketing focusing on the environment in which the organization is operating, the industry in which it operates, an organizational analysis, and a market strategy analysis.

2.1 The Environment

NYC is one of the best-known cities in the world and offers opportunity and diversity to all whom choose to visit or reside. NYC is comprised of five boroughs (Brooklyn, the Bronx, Manhattan, Queens, and Staten Island), any of which would be considered a small city based on density and population. Because of this population density, advertisers are keen to spend money to gain so much potential exposure. There is also a wide range of ethnicities and cultures represented by the people of the City; therefore, there is "something for everybody." The city itself is the seventh largest economy in the world and in a survey of 2,400 global brands, NYC ranked 13th. After the events of 9/11, the City became a very patriotic symbol for all Americans. In addition, various City agencies such as the New York Police Department (NYPD) and Fire Department (FDNY) gained brand recognition after 9/11 due to the feelings of support and pride these agencies evoked.

However, not all perceptions of NYC are positive. Many view the city as being expensive, not only as a tourist location, but also to due business in (although there are more Fortune 500 companies in New York than in any other city). Another negative perception is that New York is rampant with crime and the city is not safe for those who visit or live there.

2.2 The Industry

In order to analyze the industry in which NYC Marketing operates, a look at existing competitors, potential new competitors, threats of substitute products, buyers, and suppliers is required.

2.2.1. Competitors

The city marketing industry is limited; however, research pointed to several cities that have set up marketing departments similar to NYC. The following cities have marketing campaigns that could be considered competition for NYC.

Basel, Switzerland

In 2000, Basel set up a City Marketing department. The marketing department's goal is an integrated approach in thought and action based consistently on the needs of the city's main groups. The City Marketing focuses on the three areas of communication/PR, residential promotion and event services. The department has initiated an image and marketing campaign by creating brand Basel.

2.3 The Organization

NYC Marketing was created by Mayor Bloomberg to use NYC's brand to generate revenue. The support the Mayor offers the organization comes from the highest levels and aids building brand equity. In addition to NYC Marketing, the NYC government is made up of several departments devoted to marketing and tourism including:

* NYC & Company - NYC's official tourism marketing organization dedicated to building NYC's economy and positive image through tourism and convention development, major events, and the marketing of the city on a worldwide basis;

* NYC Big Events - NYC's official organization dedicated to bringing large scale, high profile events to the City with the goal of generating a positive economic impact for the City

2.3.1. Financial Analysis

NYC Marketing is a private non-profit corporation within the NYC government structure charged with raising revenue from licensing and sponsorship fees. Because the organization is private, annual financial reports are not available. However, a financial summary was provided in the case and the most recent NYC Marketing progress report.

According to an audit report on the financial practices of NYC Marketing in April 2006, the organization was able to start operations with a $1.2 million loan from the NYC Economic Development Corporation (EDC). In the first year of operations from July 2003 to June 30, 2004, NYC Marketing realized negative operating income due to operating expenses that were greater than operating revenue. This negative revenue is to be expected for a non-profit in its first year of operations. In the second year of operations from July 2004 to June 30, 2005, NYC Marketing realized positive operating income with even greater projected operating income in 2006. Profit margins from 2003 to 2006 steadily increased concurrent with decreased expense ratios. Because the organization is non-profit, positive incomes are expected to be returned to the City.

The financial audit from the City's comptroller indicated that revenues (approximately $1.6 million) generated by NYC Marketing as of June 30, 2005, had yet to be paid to the City. In addition, the audit report charges that NYC Marketing did not pay the City its full share of commission payments from the sale of Snapple on City property totaling $235,834. The report recommended that NYC Marketing pay the City its Snapple commissions and develop written financial procedures and benchmarks to ensure that funds are remitted to the City. Although NYC Marketing "respectfully disagrees" the audit's findings, the office should be aware that City Comptroller's office is paying close attention to the financials, and could be a threat to NYC Marketing future operations. If