Tsm Mktg 2024 ranp

Chapter 5
The Tourism Product
Objectives
1. Identify what a tourism product is and its components
2. Enumerate the stages of the product lifecycle and destination lifecycle
3. Recognize that the Philippines has a lot of tourist attractions.
4. Discuss the product development process
Introduction
Tourism sells not just products but a complete experience. The tourism product
goes through a variety of stages from development to phase out.

KEY PLAYERS IN THE TOURISM INDUSTRY

The Tourism industry is a conglomeration of various products and services,
individuals, and organizations, each with specific economic and or political interests.
These players are private and non-private sectors, public sector services, suppliers
such as transportation, accommodation, beverages services, attractions and events,
travel intermediaries, and the tourists themselves.
1. Private And Non-Private Sector- include industry associations that have been
established to protect special interest groups, such as travel agency
associations, financial services, academe, media, and insurance companies.
2. Public Sector Services- cover either national, regional, or provincial tourism
organizations. They come up with marketing programs to promote their
destinations to both intermediaries and individual tourists. The Department of
Tourism and provincial tourism offices fall under this category.
3. Suppliers
a. Transportation Industry-crucial to the success of tourism. Without an
efficient transport system and road networks, tourists would not be
encouraged to come to destinations that have lengthy, tiresome, and costly
travel. This industry includes airlines, processes, buses, and railways.
b. Accommodation Sector-covers a huge part of tourist expanded tour during
travel. There are a variety of accommodation facilities to meet the customer’s
needs, preferences, and budget. Types of accommodation facilities range
from five-star to economy hotels, apartments, inns, motels, bed and
breakfasts, timeshare apartments, and campsites.
Tsm Mktg 2024 ranp

c. Food And Beverage Sector- another important supplier of the tourism

industry. Restaurants, bars, food stalls, and coffee shops help shape the total
travel experience of tourists. These can range from establishments serving
local food the multinational franchise restaurants.
d. Attractions- basic requirements in having a successful tourist destination.
This can be classified as natural or man-made. Tourists are drawn through
attractions for various reasons such as entertainment, leisure and recreation,
education, adventure, etc.
e. Events And Conferences- playing a key role in attracting both leisure and
business travelers to a destination. Huge cup track tourists from all over the
world are either participants or spectators in the event.
4. Travel intermediaries help bring the tourism product to the customer. These are
also known as channels of distribution. Travel intermediaries include travel
agents, tour operators, home-base distributors, etc.
5. Tourist- the center of the tourism industry. Being the main consumers of tourism
products, they choose where they want to go, what they want to eat, and what
they want to do. Tourist satisfaction is the utmost goal of all other key players in
this industry. For the tourism industry to grow, more people need to be attracted
to travel.

THE TOURISM PRODUCTS

In consumer marketing, 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 may
include physical objects, services, places, organizations, and ideas. In tourism
marketing, products have different components that make up the overall tourism product
but there are many products and services that form the entire tourism experience. The
components of tourism products are destination attractions, destination facilities,
accessibility, image, and price.
1. Destination attractions - my destination is a collection of attractions, which is the
element of the tourism product that pulls people to a destination. These are what
the visitor wants to see. Philippine attractions mainly fall under the sun sand and
sea category, but they also include our old churches, historical and cultural
artifacts, festivals, and many others. The Filipinos, known to be the friendliest
people in the world, are also a major tourist attraction.
2. Destination facilities. A wide range of tourist facilities within the destination will
help the tourist enjoy the destination attractions. This includes accommodation
facilities, transportation, food and beverages, shopping centers, and many other
support facilities.
3. Accessibility. For a tourism product to be highly successful, infrastructure
services and transportation systems should be put in place.
Tsm Mktg 2024 ranp

4. Image. Central to the product is its image. This donation image helps the visitor
form expectations of what they will experience. It also motivates them to decide
to visit a said destination.
5. Price. Pricing is an important component of tourism products. It allows
consumers to determine the level of services they may receive at the destination.
Pricing products idly well creates an expectation of excellence and high
standards while pricing it too low might give a consumer doubt on the quality of
the product. Factors such as seasonality, distance, product classification, and
length of time may affect pricing.

PRODUCT TYPE
In most destination facilities, products and services have different types. This
includes core, facilitating, supporting, and augmented products.
a. Core products are products that the consumer is really buying
b. Facilitating products are goods and services that must be present for the guest
to enjoy and use the core product
c. Supporting product. Add value to the core product and help differentiate eat
from its competitors.
d. Augmented products. Product over other products because these include
product accessibility, geographical location, operating hours, atmosphere,
customer satisfaction, and customer interaction with each other.

PRODUCT CONSIDERATIONS
In availing tourism products and services, consumers consider several factors.
These factors include accessibility, atmosphere, customer interactions with the services,
customer interactions with other customers, and co-production. Consumers get
attracted to purchase if these considerations meet the standards of the customers.
a. Accessibility. Refers to how available the product is to the customer, in terms of
location, hours of operation, and ease of availing the products and services.
b. Atmosphere. It is the overall feel of the place. This is much appreciated through
the five senses. The products or services should be appealing to the eye, soft to
the ears, gentle to the touch, and smell sweet. Another term for this is the
ambiance of the place.
c. Customer interaction with the service system is inevitable for the tourism
product. Consumption happens within the destination. Hence, customer
interaction with service staff should be pleasant and memorable.
d. Customer interaction with other customers consuming the product or service
along with them. The experience becomes highly variable depending on how
customers behave and interact with each other.
Tsm Mktg 2024 ranp

e. Co-production of the product or service. It involves the guest in the delivery of

the service can improve customer satisfaction, reduce expenses, and increase
capacity. The presence of self-service counters, for instance, is aimed at making
customers become co-producers of value.

PRODUCT LIFECYCLE
In tourism and hospitality, product lifecycle can be referred to in two levels. First is
the specific product and services on a business or corporate level such as hotels,
restaurants, resort property, etc. The second is as an aggregate of offerings within a
whole destination. Understanding the concept of the product lifecycle will help a
marketer analyze the kinds of promotional tools and activities that will be most effective.
Introducing a new product entails a more aggressive information drive than a product
that is at its maturity stage. The following are the stages of the product lifecycle.
1. Product development. The product development stage begins with an idea of a
new product that could possibly satisfy an existing need or want in a specific
market. The product idea is further developed through market research and
product testing to determine the feasibility of the product. A business plan with a
sound financial and marketing strategy is also prepared during this stage.
2. Introduction. The introduction phase is the period when the product is
introduced to the market. It may be a period of rapid or slow sales growth
depending on the market access ability of the new product. As the product is
being introduced into the market, profits may be non-existent at this stage since
investments have been made during the product development stage. An
aggressive marketing strategy should be implemented to ensure market
awareness and penetration. Since the product is new, the features of the product
should be introduced extensively to its target market.
3. Growth stage. The growth stage is a period of rapid market acceptance and
increasing profits. As the product becomes popular with its target market, an
increase in sales is projected at this stage. Return on investments will materialize
at this stage of the product lifecycle.
4. Maturity stage. The maturity stage is a period where sales plateau because the
product has achieved acceptance by most of its potential buyers. It is also likely
competition has come in and attempts to grab the product's market share. At this
stage to prevent decline, the company can introduce some innovations as
follows:
a. Market modification. The company may introduce innovations to the product
to attract a related segment of the market and increase consumption further.
b. Product modification. The company can opt to change product
characteristics such as product quality, features, and style to attract new
users and stimulate more usage.
Tsm Mktg 2024 ranp

c. Marketing mix modification. This is when the company attempts to improve

sales by changing one or more of the marketing mix elements to attract new
customers and prevent consumers from switching brands.
5. Decline stage. Some successful products stay in the business for a long period
of time. By employing product modification, market modification, and marketing
mix modification, some products stay in the market and avoid decline. The
decline stage the period when sales fall off quickly and profits drop.
6. Phase-out. Without a shift in strategy to adapt to the prevailing business
environment, phase out made the inevitable. This is the stage when the
production of the product or availability of the service will be shut down or deleted
from the company's product line.

DESTINATION LIFE CYCLE

Butler (1980) developed a concept popularly known as the destination lifecycle
(DLC) which uses the product lifecycle as its foundation. It provides a framework for the
marketing and management of destinations as it develops over time (hsu,2007).
Six discrete stages of the destination lifecycle:
1. Exploration. Characterized by a few adventurous tourists, close interaction with
locals, minimal effect on social, cultural, and physical environments, and local
facilities are used.
2. Involvement. Characterized by an increase in tourist arrivals, interaction with
locals is still high, and some changes in the social, cultural, and physical
environment. Infrastructure development begins.
3. Development. Tourist arrivals are fast increasing, loss of local control, rise of
foreign-owned facilities, migrant laborers, and promotion of artificial attractions.
4. Consolidation. Tourism has become a major economic factor. There is heavy
advertising and promotions. Facilities begin to deteriorate, and growth rates
decline.
5. Stagnation. When the carrying capacity of the destination has been reached or
exceeded. It is also characterized by social, environmental, and economic
problems. The inflow of tourists comes from repeat visits and conventions.
6. Decline. Characterized by a downward rate of tourist arrivals. The decline stage
can be mitigated depending on management and marketing efforts to uplift the
destination. Improvements in the destination such as changes in attractions,
development of more exciting products, and market modification strategies may
be applied to rejuvenate the decline of the destination.
When modifications and innovations are introduced to the destinations, rejuvenation
takes place. With rejuvenation, our destination may experience continued growth,
stability, or a slower decline rate.
Tsm Mktg 2024 ranp

PRODUCT DEVELOPMENT
Product development is an integral part of the success of any business.
Competition can come up with a new and innovative product that may affect the sales of
your existing product. The market always tries to find exciting new products for their
changing lifestyle and trends. Customers have become more discriminating and quality
conscious as they use products and services. They can get tired of using the same
thing repeatedly. As the products go through the product lifecycle and reach maturity
point, it is best that product development becomes an ongoing process to ensure
profitability and sustain interest in the product line.
The Philippines has reached natural resources and Filipinos are the warmest of
hosts. Tourism products and services should maximize this key strength. Coming up
with a new product is risky; hence, companies need to ensure that they practice strong
product planning and have a systematic approach to stop product development the
stages in product development are as follows:
1. Idea generation. New products begin with an idea. Idea generation is a
systematic way of coming up with new ideas. Sources of new product ideas
include the external environment, internal sources, customers, competitors,
distributors and suppliers, and other sources.
2. Idea screening. Idea generation leaves you with so many new ideas that need
to be screened to see which ones match the company's objectives and can be
developed further. A new product committee can scream the ideas generated in
a logical and objective manner.
3. Concept development and testing. The product that passed through the
screening can now be developed further period a product concept is developed
and tested. The customers should be consulted on which product concepts are
helpful to them because they are the primary users of the product. Successful
products are usually those that address the specific needs and issues of the end
users.
4. Marketing strategy. A new product or service is developed to try to gain a
marketing edge and to differentiate itself from competitors. A marketing strategy
should be kept in mind as the new product is introduced to the market. A new
product should be developed to match the company’s image and resources,
which in turn should be what its existing and potential markets need.
5. Business analysis. The business analysis stage looks more deeply into how
much revenue the product could generate, what the cost will be, how much
market share the product may achieve, and the expected life of the product.
6. Prototype creation. When the concept has been developed, when marketing
seems to be feasible and the product financially viable, a prototype of the product
is created. The prototype is then presented to its target market for comments on
which adjustments and enhancements should be made.
Tsm Mktg 2024 ranp

7. Test marketing. The product is then launched in a small geographical area to

test the components of the marketing next. There may be a need to adjust any of
the marketing mix components before it is launched in a larger scope.
8. Commercialization. This is when the product is fully launched to the entire
target market either nationally or internationally. It is expected that the stage of
the new product’s development if fully observed, can reap market acceptance of
the product.
9. Evaluation. This is the stage where the company will know whether the product
has gained market acceptance and hence, if production will be continued or be
stopped.

Checklist for new product appraisal

1. Is the product compatible with the current product line?
2. Do we have know-how and appropriate skills?
3. Will it be stable?
4. Will the target market grow?
5. What is the size of the target market?
6. How can we reach the target market?
7. What is the price-value relationship?
8. How will we fare against competitors?
9. Will there be a loyalty impact?
10. How is the product different from other products in the market?
11. What are the copy possibilities?
12. What is the product market like?
13. How is customer acceptance?
14. Is marketing made easy?
15. What are the measures of success?
16. Is there capital available?
17. What are the continuing costs?
18. What is the speed of return on investment?
19. What are the profit margins?
20. What is the expected impact on the current consumers?