Designing and Managing Tourism Products

Key Terms Customization Augmented products Decline Aural Detachment phase Drop Facilitating products Augmented products Aural Brand Consumption phase Core product

Key Terms Phase-out Growth Product concept Introduction Product development Product idea Product image Supporting products Tactile (tangible) Visual  Growth Introduction Joining Maturity Olfactory (smell) Run-out Standardization

“Profit is payment you get when you take advantage of change “Profit is payment you get when you take advantage of change.” -Joseph Schumpeter   “Being fed a good meal in a casual environment is a commodity in far more supply than demand.” -Barry M. Cohen

Chapter Objectives Define the term product, including the core, facilitating, supporting, and augmented product Explain the elements with which one needs to be concerned when designing a product

Chapter Objectives Understand branding and the conditions that support branding Explain the new product development process Understand how the product life cycle can be applied to the hospitality industry

What is a Product? A product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need Includes physical objects, services, places, organizations, and ideas

Product Levels Core Product Facilitating Products Supporting Products Core Competency

Facilitating Products Core Product What the buyer is really buying Every product is a package of problem- solving services Facilitating Products Goods or services that must be present for the guest to use the core product , For ex. Accessibility is facilitating product for tourism, bank card is also a facilitating product. Facilitating product is mandatory in most cases

Supporting Products Extra products offered to add value to the core product and help to differentiate it from the competition . Supporting products increases the value of core products. For ex. İn-flight meal services are supporting prodducts.

Supporting Products Supporting products offer a competitive advantage only if they are properly planned and implemented They must meet or exceed customer expectations to have a positive effect In some cases physical things that can be considered supporting goods are used to enhance the service offering. Shampoo and shoeshiner in hotel rooms are such goods.

Augmented Product The augmented product includes accessibility, atmosphere, customer interaction with the service organization, customer participation, and customers’ interaction with each other.

Product levels

Atmosphere: The Physical Environment Can be the customer’s reason for choosing, or not choosing, to do business with an establishment Multidimensional Visual (seen), aural (hear), olfactory(smell), tactile (touch)

Customer Interaction with the Service Delivery System Joining stage is when the customer makes the initial inquiry contact Consumption phase takes place when the service is consumed Detachment phase is when the customer is through using a product and departs

Customer Interaction with Other Customers Hospitality & tourism organizations must manage the interaction of customers to ensure that some do not negatively affect the experience of others

Customer Co-production Increase capacity Improve customer satisfaction Reduce costs Examples; salat bar, self check-in, ticketing or booking online etc.

Positioning Creating a distinct image in the mind of the consumer Who the firm is How the firm is different from the competition How the firm can satisfy their wants and needs Positioning is the perception the customer has of the product offering

Positioning Pitfalls Forced into a position by a strong competitor Firm’s position is unclear to the customer The firm has no position

Objective Positioning Creating an image of the product that reflects physical characteristics and functional features Very important and often used in hospitality Can create a unique image and differentiate the firm But can not be effective when the feature is not unique

Subjective Positioning Creating a unique product image in the mind of the customer based on subjective attributes Attributes are not physical attributes of the product, but the customer’s mental perception of the product Can occur automatically in the consumer Marketer hopes to control the positioning Marketer hope to create an image that will be shared by consumers

Tangible Positioning Creating an intangible, subjective image of a product based on a tangible feature of the product Used in the hospitality industry as products reach commodity status

Intangible Positioning Consumers purchase tangibles (meals, hotel rooms) but we market intangibles Service offerings The end benefits Atmosphere Positioning is not brand perception alone, but how the image stands in relation to competing images

Effective Positioning The need to make the brand different from other similar brands Positioning must promise the benefit that the customer will receive Good positioning creates an image, differentiates itself and promotes a benefit Should clearly distinguishes from the competition on factors important to the target market

Examples of Effective Positioning U.S. Army: An Army of One U.S. Air Force: Aim high Marines: The Few, The Proud, The Marines Toyota Today: Moving Forward Toyota Old: Get the feeling McDonald’s Today: I’m Loving It. McDonald’s Old: You Deserve a Break Today. Burger King: Have it your way. General Electric Today: Imagination at Work. General Electric Old: We bring good things to life. Microsoft Today: Your passion, our commitment. Microsoft Old: Where do you want to go today? Holiday Inn Express: Stay Smart. Nike: Just do it.

Positioning’s Vital Role Positioning goes beyond advertising Positioning is about creating a marketing niche (very small, but specific and profitable market)

Repositioning Changing the position or image in the marketplace Reasons to reposition Unsuccessful position Tried and failed to achieve a desired position Competitors have overcrowded the position Appeal to a new segment Add a new segment Increase the size of a segment Merging of properties

Positioning Strategies Products can be positioned on specific attributes or against another product class

Choosing and Implementing a Positioning Strategy Identifying a set of possible competitive advantages upon which to build a position Selecting the right competitive advantages Effectively communicating and delivering the chosen position to a carefully selected target market

Product Differentiation Physical Attribute Differentiation Service Differentiation Personnel Differentiation Location Differentiation Image Differentiation

Selecting the Right Competitive Advantages Avoid: Underpositioning - failing ever to position the company at all Overpositioning - giving buyers too narrow a picture of the company Confused positioning - leaving buyers with a confused image of a company

Selecting the Right Competitive Advantages Brand differences should meet the following criteria prior to marketing: Important Distinctive Superior Communicable Preemptive (priority) Affordable Profitable

Positioning Measurement Perceptual mapping is a research tool used to measure a brand’s position

Positioning map of service level versus price. Perceptual Map Positioning map of service level versus price.

New Product Development Product life cycle Product is born Passes through several phases Eventually dies as younger products come along that better serve consumer needs (Nokia – İ-Phone – Samsung mobiles)

Product Life-Cycle Strategies Product development Introduction Growth Maturity Decline

Product Development Product development begins when the company finds and develops a new product idea During development, sales are zero and the company’s investment costs add up

Sales and Profits Over the Product’s Life From Inception to Demise Product Life Cycle Sales and Profits Over the Product’s Life From Inception to Demise Time Product Develop- ment Introduction Profits Sales Growth Maturity Decline Losses/ Investments ($) Sales and Profits ($)

Introduction Introduction is a period of slow sales growth as the product is being introduced into the market Profits are nonexistent at this stage due to high product introduction expenses

Growth Growth is a period of rapid market acceptance and increasing profits Maturity Maturity is a period of slowdown in sales growth because the product has achieved acceptance by most of its potential buyers Profits level off or decline due to increased marketing outlays to defend the product against competition Decline Decline is the period when sales fall off quickly and profits drop

Product Deletion Process

Discussion Questions Go to the internet site of a hospitality or travel company. Think about the company’s target market and the brand image they should portray. Does the company’s web site reinforce this brand image? Why or why not? What suggestions do you have for enhancing the image that the site portrays?

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