Designing and Designing and Managing Managing Tourism Tourism ProductsProducts

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Key Terms

• Augmented products• Aural• Brand• Consumption phase• Core product

• Customization• Decline• Detachment phase• Drop• Facilitating products

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Key TermsKey Terms

• Growth• Introduction• Joining• Maturity• Olfactory (smell)

• Run-out• Standardization

• Phase-out• Product concept• Product development• Product idea• Product image• Supporting products• Tactile (tangible)• Visual

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“Profit is payment you get when you take advantage Profit is payment you get when you take advantage of change.”of change.”

-Joseph Schumpeter

“Being fed a Being fed a good good meal in a casual environment is a meal in a casual environment is a commodity in far more supply than demandcommodity in far more supply than demand.”

-Barry M. Cohen

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Chapter ObjectivesChapter Objectives

• Define the term productproduct, including the core, facilitating, supporting, and augmentedaugmented product

• Explain the elements with which one needs to be concerned when designing a product

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Chapter Objectives

• Understand brandingbranding and the conditions that support branding

• Explain the new product new product development process

• Understand how the product life cycle life cycle can be applied to the hospitality industry

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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, physical objects, services, places, organizations, organizations, and ideas ideas

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Product LevelsProduct Levels

• CoreCore Product• FacilitatingFacilitating Products• SupportingSupporting Products• CoreCore Competency

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Core ProductCore Product

• What the buyer is really buyingreally buying• Every product is a packagepackage of problem-

solving services

Facilitating ProductsFacilitating Products• Goods or services that must be present for the

guest to use the core product core product , , For ex. Accessibility is facilitating product for tourism, bank card is also a facilitating product.

• Facilitating product is mandatory in most cases9

Supporting ProductsSupporting Products

• Extra products offered to add value to the core product and help to differentiatedifferentiate it from the competition .

• Supporting products increases the value of core products. For ex. İn-flight meal services are supporting prodducts.

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• Supporting products offer a competitive advantagecompetitive advantage only if they are properly planned and implemented

• They must meet or exceed customer expectationsexpectations to have a positive effect

• In some cases physical things that can be considered supporting goods supporting goods are used to enhance the service offering.

• Shampoo and shoeshiner in hotel rooms are such goods.

Supporting ProductsSupporting Products

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Augmented ProductAugmented Product

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

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Product levels

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Atmosphere: The Physical EnvironmentAtmosphere: The Physical Environment

• Can be the customer’s reasonreason for choosing, or not choosing, to do business with an establishment

• MultidimensionalMultidimensional– VisualVisual (seen), auralaural (hear), olfactoryolfactory(smell),

tactiletactile (touch)

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Customer Interaction with the Service Customer Interaction with the Service Delivery SystemDelivery 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 departsdeparts

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Customer Interaction with Other CustomersCustomer Interaction with Other Customers

• Hospitality & tourism organizations must manage the interaction of interaction of customers customers to ensure that some do not negatively affect the experience of others

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Customer CoCustomer Co--productionproduction

• IncreaseIncrease capacity• Improve customer satisfactionsatisfaction• Reduce costscosts • Examples; Examples; salat bar, self check-in,

ticketing or booking online etc.

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PositioningPositioning• Creating a distinct image in the mind in the mind

of the consumerof the consumer– WhoWho the firm is– HowHow the firm is differentdifferent from the

competition– How the firm can satisfysatisfy their wants and

needs• Positioning is the perceptionperception the

customer has of the product offering

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PositioningPositioning

• PitfallsPitfalls– Forced into a position by a strongstrong

competitor– Firm’s position is unclearunclear to the

customer– The firm has no positionposition

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Objective PositioningObjective Positioning

• Creating an imageimage of the product that reflects physical characteristics and functional features

• Very important and often used in hospitality

– Can create a unique image unique image and differentiatedifferentiate the firm

– But can not be effectiveeffective when the feature feature is is notnot unique unique

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Subjective PositioningSubjective Positioning

• Creating a unique product image in the mind of the customer mind of the customer based on subjective attributes

– Attributes are not physical attributes of the product, but the customer’s mental perception mental perception of the product

• Can occur automaticallyautomatically in the consumer• Marketer hopes to controlcontrol the positioning• Marketer hope to create an image create an image that will

be shared by consumers

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Tangible PositioningTangible Positioning

• Creating an intangibleintangible, subjective image of a product based on a tangibletangible featurefeature of the product

• Used in the hospitality industry as products reach commodity status

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Intangible PositioningIntangible Positioning

• Consumers purchase tangiblestangibles (meals, hotel rooms) but we market intangiblesintangibles

– Service offeringsService offerings– The The end benefitsend benefits– AtmosphereAtmosphere

• Positioning is not brand perception alone, but how the image stands in relation to competing imagescompeting images

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Effective PositioningEffective Positioning

• The need to make the brand different from other similar brandssimilar brands

• Positioning must promisepromise the benefit that the customer will receive

• Good positioningpositioning creates an image, differentiates itself and promotes a benefit

• Should clearly distinguishesdistinguishes from the competition on factors important to the target market

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EExamples of Examples of Effective Positioningffective 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.

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Positioning’s Vital RolePositioning’s Vital Role

• Positioning goes beyond advertisingadvertising

• Positioning is about creating a marketing nicheniche (very small, but specific and profitable market)

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RepositioningRepositioning• Changing the positionposition or imageimage in the

marketplace• Reasons to repositionReasons 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

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Positioning StrategiesPositioning Strategies

• Products can be positioned on specific Products can be positioned on specific attributes or against another product classattributes or against another product class

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Choosing and Implementing a Positioning Choosing and Implementing a Positioning StrategyStrategy

1.1. Identifying a set of possible Identifying a set of possible competitive competitive advantagesadvantages upon which to build a position upon which to build a position

2.2. Selecting the right competitive advantagesSelecting the right competitive advantages 3.3. Effectively communicating and delivering Effectively communicating and delivering

the chosen position to a carefully selected the chosen position to a carefully selected target markettarget market

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Product DifferentiationProduct Differentiation

• Physical Attribute Differentiation

• Service Differentiation

• Personnel Differentiation

• Location Differentiation

• Image Differentiation

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Selecting the Right Competitive AdvantagesSelecting the Right Competitive Advantages

• AvoidAvoid:– UnderpositioningUnderpositioning - failing ever to position

the company at all – OverpositioningOverpositioning - giving buyers too

narrow a picture of the company– Confused positioningConfused positioning - - leaving buyers with

a confused image of a company

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Selecting the Right Competitive AdvantagesSelecting the Right Competitive Advantages

• BrandBrand differencesdifferences should meet the following criteria prior to marketing:– Important – Distinctive – Superior – Communicable – Preemptive (priority)

– Affordable – Profitable

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Positioning MeasurementPositioning Measurement

• PerceptualPerceptual mappingmapping is a research tool used to measure a brand’s position

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Positioning map of service level versus pricePositioning map of service level versus price.

Perceptual MapPerceptual Map

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New Product DevelopmentNew Product Development

• Product life cycleProduct life cycle–Product is born–Passes through several phasesseveral phases–Eventually dies as younger products younger products

come along come along that better serve consumer needs (Nokia – İ-Phone – Samsung mobiles)

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Product Life-Cycle StrategiesProduct Life-Cycle Strategies

• Product development• Introduction• Growth• Maturity• Decline

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Product DevelopmentProduct Development

• Product development begins when the company finds and develops a new product idea

• During development, sales are zero sales are zero and the company’s investment costs add up

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TimeTime

ProductProductDevelop-

ment

IntroductionIntroduction

ProfitsProfits

SalesSales

GrowthGrowth MaturityMaturity DeclineDecline

Losses/InvestmentsInvestments ($)

Sales andSales andProfits ($)Profits ($)

Sales and Profits Over the Product’s Life From Inception to Demise

Product Life CycleProduct Life Cycle

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IntroductionIntroduction

• Introduction is a period of slow sales low sales growthgrowth as the product is being introduced into the market

• Profits are nonexistentnonexistent at this stage due to high product introduction expenses

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GrowthGrowth•GrowthGrowth is a period of rapid market acceptance and increasing profitsMaturityMaturity•MaturityMaturity 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 competitionDeclineDecline•DeclineDecline is the period when sales fall off quickly and profits drop

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Product Deletion ProcessProduct Deletion Process

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Discussion QuestionsDiscussion 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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End of End of chapter slideschapter slides

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