DEVELOP NEW PRODUCTS AND SERVICES

1. D1.HCS.CL6.07 DEVELOP NEW PRODUCTS AND SERVICES

2. Subject elements This unit comprises four elements: • Analyse markets • Evaluate market trends in food production and/or food and beverage service • Create products or services based on market analysis and within budgetary constraints • Monitor sales performance of products and services

3. Assessment Assessment for this unit may include: • Oral questions • Written questions • Work projects • Workplace observation of practical skills • Practical exercises • Formal report from supervisor

4. Element 1: Analyse markets

5. Analyse markets Performance criteria for this element are: • Target markets are identified in accordance with enterprise marketing and merchandising policies • Analyse market competition • Client requirements are monitored informally in order to evaluate market trends and client needs • New products and services are identified

6. Analyse markets Performance criteria for this element are: • Opportunities to improve sales and services are identified • Product and service range is monitored to identify the demand for individual items and seasonal variations • Product and service range is planned

7. Need for new products and services Need for new products and services It is normal practice for businesses, regardless of industry, to develop and introduce new products and services. This may include: • Improvements to existing offerings • Complete changes of direction

8. Need for new products and services Need for new products and services New products and services will only be successful if: • It is unique when compared with competitor’s offerings • It provides value for money • The customer views the product or service as valuable in their eyes

9. Need for new products and services Examples of new products and services What have been successful new products and services that have entered: • Generally • The hospitality industry specifically?

10. Change A rolling stone gathers no moss!

11. Change • What is change? • Why is it important? • What influences change Change is inevitable

12. Continuous improvement What is it? Why is it important? Who is responsible for implementing it?

13. Continuous improvement • Regardless of their visit it is important that the customer receives a ‘quality offering’ • A quality offering is being able to use a combination of products and services • This combined offering, at a minimum, must meet the customer’s: • Needs • Expectations

14. Continuous improvement Need for continuous improvement Continuous improvement and change focuses on improving: • Products • Services

15. Continuous improvement Products and Services • Which is more important – product or service? • What do these include? • Which aspects can be improved?

16. The customer • The customer is............

17. Market segments Identify market segments Any hospitality organisation, like in any business in any industry, cannot be everything to everyone. It must: • Break down the potential audience into segments with similar characteristics • Choose those segments they believe will be the focus of their efforts

18. Market segments Generic market segments Age Social background  Economic background Cultural background Special interests Physical and mental abilities Dietary needs

19. Market segments Hospitality market segments Business Leisure Religious Sporting

20. Market segments Tourism market segments • Outbound Tourists • Inbound Tourists • Domestic Tourists • International Tourists

21. Target market segments Identify target market segments What are the key target segments for: • Resorts • City hotels • Budget accommodation • Stand alone restaurants • Fine dining restaurant in a hotel • Corner bar • Coffee shop?

22. Target market segments Benefits of establishing target market segments The analysis and collection of information in relation to different target market segments will guide: • Products and services offered • Prices charged • Where advertisements are placed • How advertisements are targeted • Staff required

23. Analyse market competition Importance of analysing the market? • What do you want to analyse? • What information do you seek? • Where do you get this information?

24. Analyse market competition What is market analysis? • Market analysis provides us with the information necessary to understand what can cause changes in our operational environment • A prime intent of this activity is to gain a more insightful and detailed view of the organisationand where it sits in the overall business and other settings • Helps identify ‘current market situation’

25. Current market situation Market situation • Total market characteristics – size, growth, trends • Customer needs, perceptions and buying behaviour • Products – service characteristics • Prices • Customer service and distribution • Channels • Communication

26. Current market situation Competitive situation • Industry structure • The geographic market in which they compete • Their current marketing performance • Their competitive position • Strengths and weaknesses, and vulnerabilities of each significant competitor • Their objectives and competitive strategies • Industry profitability

27. Current market situation Product situation • For each product/service that the organisation offers, sales, profits, contribution margins and growth should be displayed • Product lifecycle and expected demand over the product’s life should be considered • Growth of the product/service should be contrasted with total market growth

28. Situation Analysis Analyse the environments It is vital to understand what can cause changes in our operational environment. It is important that managers analyse what is happening both: • Outside the business (external environment) • Inside the business (internal environment)

29. Analyse the environments SWOT analysis • Strengths – what the business does well • Weaknesses – what the business can improve upon • Opportunities – where the business can improve or take advantage • Threats – where the business may become disadvantaged, weakened or susceptible

30. Analyse the environments Analysis of external environment • Competitors • Economic climate • Customer preferences • E-business

31. Analyse the environments Analysis of external environment • Environment • Technology • Political issues • Legal issues What other external influences exist?

32. Analyse the environments Analysis of internal environment • Environment • Organisational structure • Products • Services • Equipment • Marketing

33. Customer focus • Before we can tailor our products and services to provide an offering that the customer wants, we first need to find out what they actually want • Many businesses make the mistake of providing an offering they THINK the guest wants, but what is offered doesn’t meet their needs

34. Customer focus • Who are your customers? • What are the needs of your customers? • How do you identify their needs?

35. Customer needs Generic needs • Value for money • ‘Offering’ reflecting what was advertised • Expectations met/exceeded • To feel respected • To feel welcomed • To be served by friendly staff

36. Customer needs Generic needs • To be dealt with in a prompt and courteous manner • To receive assistance when necessary • To be in comfortable, clean surroundings • To feel remembered and recognised • To be heard and understood

37. Customer needs Specific needs What are the specific needs of your markets? • Business • Women • Family • Leisure • Elderly • Others

38. Expectations Expectations come from: • The company’s image or reputation in the market • Past visits • Advertisements and promotional messages • Competing hotels • Industry standards • Comments from family, friends and colleagues • Price charged for the offering

39. Identify new products and services As mentioned, an ongoing process for a hotel to stay ‘fresh, unique and in demand’ is to identify new products and services to attract and maintain customers. In hospitality the product/service offering is combined to meet customer needs and consists of the following elements: • A tangible product or products • Environment • Services

40. Identify new products and services Products • What is classified as a product? • What are examples of products in the hospitality environment?

41. Identify new products and services Services • What is classified as a service? • Who provides the service? • What are examples of services in the hospitality environment?

42. Identify new products and services Characteristics of services Pure services are activities or benefits characterised by: • Intangibility • Inseparability • Perishability • Variability

43. Opportunities to improve sales and services Need to identify improvement opportunities The need to identify opportunities for improvement is especially important when new products and services are introduced as new opportunities may become apparent as they are implemented into the marketplace: • How can you do this?

44. Opportunities to improve sales and services Ways to identify improvement opportunities • Observing what occurs in the workplace • Develop and use a checklist to guide what you observe • Involve workers in your observations • Analysing documentation

45. Opportunities to improve sales and services Ways to identify improvement opportunities • Being advised by management/owners • Monitoring the external business environment • Making ‘improvement/continuous improvement (CI)’ a standing topic in every staffmeeting • Involving staff

46. Generate ideas Generating ideas How would you generate ideas? Why is it important to involve staff in the process?

47. Generate ideas Common techniques to generate ideas include: • Talking to colleagues and supervisors • Looking at what happens in other venues • Contacting industry peak bodies • Reading industry literature • Conduct internet research • Using creative thinking techniques

48. Generate ideas Creative thinking techniques Brainstorming Visualising Making associations Lateral thinking Six thinking hats

49. Generate ideas Use relevant knowledge In addition to creative thinking ideas, there is always the need to apply relevant knowledge to a situation where workplace improvements are being considered: • Technical knowledge • Service-based knowledge • Information from different work areas • Information from colleagues

50. Review ideas Review ideas for relevance and practicality When you have captured ideas and information relating to them your next step is to review and evaluate these ideas.