THE TOURISM AND HOSPITALITY PRODUCT 5 THE TOURISM AND HOSPITALITY PRODUCT Prepared by Simon Hudson, Haskayne School of Business University of Calgary and Marion Joppe, University of Guelph 5-1 Copyright © 2009 by Nelson Education Limited.

5 Topics Components of the tourism and hospitality product Various levels of products or services Tools used in product planning Packaging and branding New product development in the tourism and hospitality sector 5-2 Copyright © 2009 by Nelson Education Limited.

Tourism and hospitality products 5 The Tourism and Hospitality Product Tourism and hospitality products selected components or elements of the hotel, restaurant, entertainment, and resort industries bundled together to satisfy needs and wants 5-3 Copyright © 2009 by Nelson Education Limited.

Three Levels of Product: Core 5 The Tourism and Hospitality Product Three Levels of Product: Core Core product the basic need function served by the generic product. Examples airline or train = transportation hotel = shelter and rest 5-4 Copyright © 2009 by Nelson Education Limited.

Three Levels of Product: Tangible 5 The Tourism and Hospitality Product Three Levels of Product: Tangible Tangible product specific features and benefits residing in the product itself Examples: styling, quality, brand name, design, etc. 5-5 Copyright © 2009 by Nelson Education Limited.

Three Levels of Product: Augmented 5 The Tourism and Hospitality Product Three Levels of Product: Augmented Augmented product the add-ons that are extrinsic to the product itself but which may influence the decision to purchase features may include credit terms, after-sales guarantees, car parking etc 5-6 Copyright © 2009 by Nelson Education Limited.

Three Levels of Product: Theme Park 5 The Tourism and Hospitality Product Three Levels of Product: Theme Park 5-7 Copyright © 2009 by Nelson Education Limited.

Physical Evidence and the Servicescape 5 The Tourism and Hospitality Product Physical Evidence and the Servicescape Servicescape the environment in which the service is delivered and in which the firm and customer interact, and any tangible components that facilitate performance or communication of the service 5-8 Copyright © 2009 by Nelson Education Limited.

Elements of Physical Evidence 5 The Tourism and Hospitality Product Elements of Physical Evidence Table 5.1 5-9 Copyright © 2009 by Nelson Education Limited.

Response to Servicescapes 5 The Tourism and Hospitality Product Response to Servicescapes Employees and customers in service firms respond to dimensions of their physical surrounding in three ways: cognitively emotionally physiologically Those responses influence their behaviours in the environment 5-10 Copyright © 2009 by Nelson Education Limited.

5 Product Planning Product mix The Tourism and Hospitality Product Product Planning Product mix portfolio of products that an organization offers to one market or several five basic market/product options exist 5-11 Copyright © 2009 by Nelson Education Limited.

5 Five Product Options 1) Several markets/multi-product mixes for each The Tourism and Hospitality Product Five Product Options 1) Several markets/multi-product mixes for each Example: mass tour operators that offer a wide range of multi-destination packages to a variety of market segments 2) Several markets/single product for each airlines with a product for business and economy class travellers continued... 5-12 Copyright © 2009 by Nelson Education Limited.

5 Five Product Options 3) Several markets/single product for all The Tourism and Hospitality Product Five Product Options 3) Several markets/single product for all Example: national tourist organization promoting a country 4) Single market/multi-product mix specialist tour operator with a range of cultural tours aimed at a wealthy, educated market 5) Single market/single product a heliskiing operator targeting the very rich 5-13 Copyright © 2009 by Nelson Education Limited.

Feature and Benefits Analysis 5 The Tourism and Hospitality Product Feature and Benefits Analysis Table 5.2 5-14 Copyright © 2009 by Nelson Education Limited.

Product Life Cycle (PLC) 5 The Tourism and Hospitality Product Product Life Cycle (PLC) Product life cycle analysis a way to identify the life-cycle stage of a product or service, review its past and current position, and predict its future 5-15 Copyright © 2009 by Nelson Education Limited.

5 Product Life Cycle The Tourism and Hospitality Product 5-16 Copyright © 2009 by Nelson Education Limited.

5 The Tourism and Hospitality Product Positioning The objective is to create a distinctive place in the minds of potential customers Four key positioning strategies 5-17 Copyright © 2009 by Nelson Education Limited.

Four Key Positioning Strategies 5 The Tourism and Hospitality Product Four Key Positioning Strategies Relative to target market business travellers, families with children under ten, etc. By price and quality a premium product such as a room at the Four Seasons Hotel Relative to a product class winter sports tourism category Relative to competitors Hertz Rental Car campaign “We try harder” 5-18 Copyright © 2009 by Nelson Education Limited.

5 The Tourism and Hospitality Product Branding A brand offers the consumer relevant added value, a superior proposition that is distinctive from competitors and imparts meaning above and beyond the functional aspects Snapshot: Chefs as Brands: The Case of Jamie Oliver 5-19 Copyright © 2009 by Nelson Education Limited.

Advantages of Branding 5 The Tourism and Hospitality Product Advantages of Branding helps reduce medium and long-term vulnerability to the unforeseen external events reduces risk for the consumer at the point of purchase facilitates accurate marketing segmentation by attracting some and repelling other consumer segments provides the focus for the integration of stakeholder effort strategic weapon for long-range planning in tourism 5-20 Copyright © 2009 by Nelson Education Limited.

5 The Tourism and Hospitality Product Brandicide It has been suggested that companies can commit ‘brandicide’ by stretching a well-known brand too far Think of a brand that has done this. What was it that killed it off? Take a tourism brand you are familiar with and keep stretching it. How far can you go? 5-21 Copyright © 2009 by Nelson Education Limited.

5 The Tourism and Hospitality Product Packaging Packaging the process of combining two or more related and complementary offerings into a single-price offering customer benefits include: ability to budget for trips increased convenience greater economy opportunity to experience previously unfamiliar activities and attractions opportunity to design components of a package for specialized interests. 5-22 Copyright © 2009 by Nelson Education Limited.

5 The Tourism and Hospitality Product Packaging and Tourism For tourism operations, packages are attractive for the following reasons: improve profitability smooth business patterns allow joint marketing opportunities effective tool to tailor tourism products for specific target markets 5-23 Copyright © 2009 by Nelson Education Limited.

Product Options in New and Existing Markets 5 The Tourism and Hospitality Product Product Options in New and Existing Markets 5-24 Copyright © 2009 by Nelson Education Limited.

New Service Development (NSD) Model 5 The Tourism and Hospitality Product New Service Development (NSD) Model 5.5 5-25 Copyright © 2009 by Nelson Education Limited.

Examples of New Products 5 The Tourism and Hospitality Product Examples of New Products Gourmet holidays Mobile check in Smart glasses Flying casinos Branded hotel floors Iceberg tourism 5-26 Copyright © 2009 by Nelson Education Limited.