The importance and role of destination marketing in attracting foreign direct investments

Abstract

The authors have identified the scope and purpose of this paper by the formulation of the title. The paper points to interdependence between the development and use of destination marketing, on the one hand, and investment attractiveness of certain location entities for international investors, on the other hand. The most important characteristics of destination marketing are emphasized. Unlike most products moving to customers, destinations are fixed and therefore interested market participants, including investors, are moving towards them. The paper also points out to the most important activities of destination marketing. It supports the thesis that potential of a destination does not depend so much on its position, climate and natural resources, as it depends on the will, skill, energy, values and organization of its people. Foreign direct investments are observed through four types of fnancial operations: mergers and acquisitions, new (greenfeld) investments, recapitalization (additional new investments) and fnancial restructuring. The main motives of foreign direct investors are viewed in the context of their aspirations for increasing the e?ectiveness and efciency of business, and maximizing profts, which can be viewed through four dominant investment preoccupations: to get to natural resources, to get to the market, to get to strategic assets, to improve production efciency. Based on such set conceptual platform, the authors empirically focused on the comparative analysis of investment attractiveness of the Western Balkans countries, particularly emphasizing the relative position of Bosnia and Herzegovina. It is stated in the conclusion that, in addition to environmental, infrastructure, regulatory and institutional conditions of easier and non-risky investments, the two most reliable marketing parameters showing that there has been an increase in the investment attractiveness of a country or any other destination entity (region, city, municipality) are – good positioning and dignity of the middle class population, as well as a growing level of discretionary income.