1. Designing and Managing Tourism Products

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

3. 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

4. “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

5. 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

6. 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

7. 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

8. Product Levels
Core Product
Facilitating Products
Supporting Products
Core Competency

9. 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

10. 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.

11. 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.

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

13. Product levels

14. 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)

15. 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

16. 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

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

18. 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

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

20. 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

21. 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

22. 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

23. 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

24. 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

25. 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.

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

27. 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

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

29. 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

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

31. 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

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

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

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

35. 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)

36. Product Life-Cycle Strategies
Product development
Introduction
Growth
Maturity
Decline

37. 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

38. 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 ($)
Sales and
Profits ($)

39. 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

40. 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

41. Product Deletion Process

42. 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?

43. End of chapter slides