Designing and Managing Products

1. Marketing for Hospitality and Tourism Kotler, Bowen and Makens Designing and Managing Products Chapter 9

2. Learning Objectives • Define the term product, including the core, facilitating, supporting, and augmented product. • Explain how accessibility, atmosphere, customer interaction with the service delivery system, customer interaction with other customers, and customer coproduction are all critical elements to keep in mind when designing a product. • Understand branding and the conditions that support branding. • The new product development process. • Understand how the product life cycle can be applied to the hospitality industry.

3. 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. It includes physical objects, services, places, organizations, and ideas.

4. Product Levels Augmented Products Supporting Products Facilitating Products Core Products

5. Augmented Product Augmented Product Customer Interaction Customer Participation Atmosphere Accessibility

6. Atmosphere’s Effect onPurchase Behavior Attention-Creating Medium Message-Creating Medium Effect-Creating Medium Mood-Creating Medium

7. Customer Interaction with theService Delivery System Consumption Detachment Joining

8. Elements of Branding Strategy Brand Equity Brand Portfolios Brand Positioning

9. Brand Positioning Beliefs and Values Benefits Attributes

10. New Product Development Idea Generation Idea Screening Concept Development and Testing Marketing Strategy Business Analysis Product Development Test Marketing Commercialization

11. Idea Generation Idea Generation Internal Sources External Environment External Sources Crowdsourcing

12. Commercialization Where? When? How? To Whom? Commercialization Decisions

13. Product Life Cycle

14. Product Deletion Phase-Out Drop It Run-Out

15. KeyTerms Augmented products Additional consumer services and benefits built around the core and actual products. Aural The dimension of atmosphere relating to volume and pitch. Brand 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 equity The added value endowed on products and services. It may be reflected in the way consumers think, feel, and act with respect to the brand, as well as in the prices, market share, and profitability the brand commands for the firm. Branding The process of endowing products and services with the power of a brand. It’s all about creating differences between products. Brand promise The marketer’s vision of what the brand must be and do for consumers. Consumption phase Takes place when the customer consumes the service. Core product Answers the question of what the buyer is really buying. Every product is a package of problem-solving services. Crowdsourcing An open-innovation new-product idea program.

16. KeyTerms (cont.) Decline The period when sales fall off quickly and profits drop. Detachment phase When the customer is through using the product and departs. Drop The action taken toward a product that may cause harm or customer dissatisfaction. Facilitating products Those services or goods that must be present for the guest to use the core product. Growth The product life-cycle stage when a new product’s sales start climbing quickly. Introduction The product life-cycle stage when a new product is first distributed and made available for purchase. Joining stage The product life-cycle stage when the customer makes the initial inquiry contact. Maturity The stage in a product life cycle when sales growth slows or levels off. Olfactory The dimension of atmosphere relating to scent and freshness.

17. KeyTerms (cont.) Phase-out The ideal method of removing an unpopular or unprofitable product; it enables a product to be removed in an orderly fashion. Product concept A detailed version of a product idea stated in meaningful consumer terms. Product development Developing the product concept into a physical product to ensure that the product idea can be turned into a workable product. Product idea Envisioning a possible product that company managers might offer to the market.. Product image The way that consumers picture an actual or potential product. Run-out Removing a product after existing stock has been depleted; used when sales for an item are low and costs exceed revenues, such as the case of a restaurant serving a crabmeat cocktail with sales of only one or two items per week. Supporting products Extra products offered to add value to the core product and to help to differentiate it from the competition. Tactile The dimension of atmosphere relating to softness, smoothness, and temperature. Visual The dimension of atmosphere relating to color, brightness, size, and shape.