Chapter 9. Designing and Managing Products

Transcription

1 Chapter 9 Designing and Managing Products Profit is payment you get when you take advantage of change. -Joseph Schumpeter 2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Chapter Objectives Define the term product, including the core, facilitating, supporting, and augmented product 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 Product What the buyer is really buying Every product is a package of problem-solving services Augmented Products 1

2 Facilitating Products Goods or services that must be present for the guest to use the core product Supporting Products Extra products offered to add value to the core product and help to differentiate it from the competition 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 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 2

3 Atmosphere: The Physical Environment Multidimensional Visual, aural, olfactory, tactile 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 organizations must manage the interaction of customers to ensure that some do not negatively affect the experience of others Customer Coproduction Increase capacity Improve customer satisfaction Reduce costs Brand Decisions A brand is a name, term, sign, symbol, design, or a combination of these elements that is intended to identify the goods or services of a seller and differentiate them from competitors Brand Brands are among a company s most valuable assets A Brand represents what the company is and what it stands for A Brand implies trust, consistency, and a defined set of expectations The strongest brands own a place in the customer s mind (Scott Davis, Brand Asset Management) 3

4 New Product Development Product life cycle Product is born Passes through several phases Product Life-Cycle Strategies Product development Introduction Growth Maturity Decline Eventually dies as younger products come along that better serve consumer needs Product Development Product development begins when the company finds and develops a new product idea Sales and Profits Over the Product s Life From Inception to Demise Sales and Profits ($) Product Life Cycle Profits Sales During development, sales are zero and the company s investment costs add up Product Development Losses/ Investments ($) Introduction Time Growth Maturity Decline Introduction Introduction is a period of slow sales growth as the product is being introduced into the market Growth Growth is a period of rapid market acceptance and increasing profits Profits are nonexistent at this stage due to high product introduction expenses 4

5 Maturity Maturity is a period of slowdown in sales growth because the product has achieved acceptance by most of its potential buyers Decline Decline is the period when sales fall off quickly and profits drop Profits level off or decline due to increased marketing outlays to defend the product against competition 5