Transcript No Slide Title

Chapter 9:
Designing and Managing
Products
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
1
What is a Product?
• A Product is anything that can be offered to a
market for attention, acquisition, use, or
consumption and that might satisfy a want or need.
• Includes:
–
–
–
–
–
–
–
–
Physical Objects
Services
Events
Persons
Places
Organizations
Ideas
Combinations of the above
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
2
Core Product
Facilitating Products
-must be present for the gust to use the core
service
Supporting Products
-Add value to the core product
Augmented Product
-physical environment, accessibility,
interactions, physical environment
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
3
Chapter 9: Figure
9-1: Product
levels
Source: Gronroos,
“Developing the
Service Offering A source of
Competituive
Advantage,” in
Add Value to Your
Service, C.
Suprenant, ed.,
Chicago:
American
Marketing
Association.
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
4
Elements that enhance positioning
and create augmented products
• Atmosphere
• Customer interaction with service
delivery system
• Customer interaction with other
customers
• Customer co-production
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
5
Brand
• Brands are among a company’s most
valuable assets
• A Brand represent what the is and stands for
• A Brand implies trust , consistency, and a
defined set of expectations
• The strongest brands own a place in the
customer’s mind
• From Scott Davis, Brand Asset Management
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
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This Land-O-Lakes ad shows the depth of the brand.
Branding
Consistency
Quality & Value
Attributes
Advantages
of
Brand Names
Identification
High Brand
Loyalty
Brand
Equity
Strong Brand
Association
Name Awareness
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
Perceived Quality
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
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Conditions That Support Branding
• Product is easy to identify
• Product is perceived to be the best value
for the price
• Quality and standards are easy to
maintain
• Demand is enough to support branding
effort
• There are economies of scale
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
8
New Product Development Process
Marketing
Strategy
Development
Concept
Development
and Testing
Idea
Screening
Idea
Generation
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
Business
Analysis
Product
Development
Market
Testing
Commercialization
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
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New Product Development
Process Step 1. Idea Generation
Idea Generation is the Systematic Search for New
Product Ideas Obtained Internally From Employees
and Also From:
Customers
Competitors
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
Distributors
Suppliers
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
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New Product Development
Process Step 2. Idea Screening
• Process to spot good ideas and drop poor ones as soon
as possible.
• Many companies have systems for rating and screening
ideas which estimate:
– Market Size
– Product Price
– Development Time & Costs
– Unit Costs
– Rate of Return
• Then, the idea is evaluated against a set of general
company criteria.
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
11
New Product Development Process
Step 3. Concept Development
1. Develop New Product Ideas
into Alternative Detailed
Product Concepts
2. Concept Testing - Test the
New Product Concepts with
Groups of Target Customers
3. Choose the One That Has the
Strongest Appeal to Target
Customers
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
12
New Product Development
Process Step 4. Marketing Strategy
Part One Describes Overall:
Target Market
Planned Product Positioning
Sales & Profit Goals
Market Share
Part Two Describes First-Year:
Product’s Planned Price
Distribution
Marketing Budget
Part Three Describes Long-Term:
Sales & Profit Goals
Marketing Mix Strategy
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
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Step 5. Business Analysis
Step 6. Product Development
Business Analysis
Review of Product Sales, Costs,
and Profits Projections to See if
They Meet Company Objectives
If No, Eliminate
Product Concept
If Yes, Move to
Product Development
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
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Product Development Process
Step 7. Test Marketing
Test Marketing is the Stage Where the Product and Marketing
Program are Introduced into More Realistic Market Settings.
Budget Levels
Atmosphere
Branding
Product
Elements that
May be Test
Marketed by a
Company
Pricing
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
Positioning
Advertising
Location
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
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New Product Development Process
Step 8. Commercialization
Commercialization is the Introduction of
the New Product into the Marketplace.
When is the
Right Time to
Introduce
Product?
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
Where to
Launch a
New
Product?
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
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Product Development through
Acquisition
• Large companies will sometimes buy a
small companies rather than develop
their own new companies.
• Sometimes, companies purchase
distressed chains to turn them around.
For example, Pepsico purchased KFC
and Taco Bell.
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
17
Product Life Cycle
Sales and Profits Over the Product’s Life From Inception to
Demise
Sales and
Profits ($)
Sales
Profits
Time
Product
Development
Introduction
Growth
Maturity
Decline
Losses/
Investments ($)
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
18
Product Deletion Process
Source: Martin Bell, Marketing Concepts and Strategy, 3rd ed., p.267, 1979, Houghton Mifflin Company;
used by permission, Mrs.. Marcellette (Bell) Chapman.
Marketing for Hospitality and Tourism, 3e
Philip Kotler, John Bowen, James Makens
©2003 Pearson Education, Inc.
Upper Saddle River, NJ 07458
19