Product

A product is anything that can be offered in a market, receive attention, be acquired, used, or consumed, and can satisfy a need or desire. Products include physical objects, services, places, organizations, and ideas."

Kotler et al., 2011

Various layers or levels can be distinguished (ausgezeichnet) in any product. Following Serra (2011), we identify three:

Basic Product

• Definition: This is the core benefit or service that the customer is seeking. It answers the question: "What is the customer really buying?"

• Key Insight: Companies should focus on selling the primary benefit of the product, not just its features.

• Example: may include anything from a simple night of rest to relaxation, entertainment, and sharing pleasant moments with friends or family.

Tangible Product

• Definition: The Tangible Product represents what the customer perceives as the actual offering being purchased. This includes all the visible, physical, or measurable components that are provided by the company for a specific price. It’s what the customer experiences firsthand.

• Key Insight: This is what the customer perceives they are paying for.

• Example: The tangible product of the hotel includes the room, bed, amenities, and hotel services.

  • Nights of stay and a specific type of room with a set meal plan. Additionally, the hotel may provide access to different facilities that are also part of the tangible product: pool, parking, gym, landscaped areas, etc.

• Is what customers see and pay for

Augmented Product

• Definition: The Augmented Product goes beyond the basic and tangible elements to include extra services, experiences, and benefits that provide additional value to the customer. This layer is often what differentiates one company from another by exceeding customer expectations and creating memorable experiences

• Key Insight: This level differentiates the company from competitors by offering additional value.

• Example: For the hotel, augmented features might include personalized services, spa treatments, or exclusive guest discounts.

  • Free Wi-Fi, an extensive line of bathroom amenities, chocolates, fresh fruit, complimentary drinks in the room, free cable TV, etc.

• Is what surprises, delights, and keeps them coming back.

Definition

• The brand is a name, symbol, or design, or a combination of them, that serves to identify the goods or services of a supplier.

Advantages

• Identification & Differentiation:

  • Identifies specific products and differentiates them from competitors.

• Quality Association & Legal Protection:

  • Links the brand to consistent quality standards and protects unique product traits.

• Risk Reduction:

  • Mitigates consumer uncertainty due to the intangible nature of tourism products by simplifying decision-making.

Definition:

• begins when the company manages to create a certain level of brand awareness that translates into consumer preference

Generates:

• Room revenue above the competition, resulting in higher returns on hotel investment for owners and encourages more property owners to adopt the brand

Conclusion

•  increases the scale of marketing operations, thereby giving greater visibility to the brand, which increases its value.

Brand Strategies in Tourism

• Some tourist destinations, countries, or regions promote specific areas, while others promote the destination as a unique whole

• Some hotel chains always use the same name for all their establishments, even if they have different locations, features, and service levels

• And some use different brands based on the characteristics of the establishments.

• There are different ways to use the brand: single brand, multiple brands, umbrella brand.

  • Single Brand:

    • Use one brand across all locations and business lines.

    • Example: NH Hotels (until 2013).

  • Multiple Brands:

    • Use different brands for different products or establishments.

  • Umbrella Brand:

    • Maintain different brands for products but share a common element (e.g., company name). usually the name of the company or main brand.

    • Example: Appearing in all variations of the product: Hyatt (Hyatt Resorts, Hyatt Regency, Grand Hyatt, etc.).

• Products age and no longer meet market needs

• constantly searching for new products is crucial. The risk of launching new products can be high, with failure potentially leading to significant losses.

• Not attempting it also poses a high risk to the long-term survival of the company.

1. Analysis of the business

   • Review sales, costs and profit projections to determine if they meet the company's objectives. If they do, the product can move to the development stage

2. Selection of Ideas

   • reducing the numbers of ideas by eleminating poor or unviable ones based on product characteristics, company resources, and market conditions.

3. Development and market testing

   • A product prototype is created and tested in the market. In tourism, market testing can be challenging to implement.

4. Marketing strategy

   • A marketing strategy is designed to introduce the product to the market.

   • Establishes the target market, positioning, market share, and expected benefits for the first years.

   • Must outline pricing, distribution, and marketing budget for the first year

   • And define long-term sales plans, target benefits, and other marketing mix strategies.

5. Idea generation

   • Ideas for new products can come from various sources: market, customers, employees, distributors and suppliers, competitors, conferences, etc.

   • However, most come from internal sources within the company.

6. Development and Concept Testing

   • The product concept is a detailed description of the idea in terms that have meaning for the consumer.

   • Concept testing checks how the consumer interprets and evaluates the product concept.

There are many reasons that can cause a new product to fail:

Lack of Effective Demand:

• Launching products that do not genuinely satisfy a market need can result from errors in market assessment and analysis, overestimating demand, or a high-ranking executive imposing a favored idea without considering market research indications.

Errors in Planning and Execution:

• Lack of proper organizational structure, inadequate budgeting, inappropriate positioning, excessively high pricing, etc., during the product development and launch process.

Perceived Lack of Differentiation:

• Consumers do not see the product as unique or offering new benefits compared to alternatives

Novelty and Consumer Habits:

• The more novel (neuartiger) the product, the more changes are demanded in consumer habits, leading to a higher risk of failure.

Higher-than-Expected Development Costs:

• Development costs exceeding expectations.

Strong Competitive Pressure:

• Preventing the achievement of expected sales volumes.