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Product Development - Coggle Diagram
Product Development
Stages in Product Development
Contracting
Negotiating with principals and subsequently contracting the components
Require good communication, negotiating skill
Contracting for existing products can often be done relative quickly by using previous suppliers.
Difficulties always arise in acquiring new components.
Accomodation
The number of room that they plan to offer -> ensure there is sufficient supply
Identified through site visits, promotional events or staff working there
For larger tour operator: cheapest rate, buying power, predicted sales
For smaller tour operator: not be able to secure the cheapest price
Types of contract: 3
Based on the level of risk anf predicted sales
Commitment:Cheapest price
Buy a predefined number of beds for the season, regardless of the number of it sells
Allocation = "sale or return" option
Ad hoc: the costliest method
Buy room when needed -> No risk
Transport
Flights; various options
Whole season/time series chartering: tour operator charters a whole aircraft for a specific period.
Part charter: insufficient sales to contract the whole aircraft -> A part charter instead
Whole season chartering
Part chartering: booking a block of seats on specific flights
Ad hoc chartering: An arragement for single return-trip
Time series chartering: A regular sequence of flights and the exclusive use throughout season.
LCC
Both budget alternatives to scheduled airlines
Creates package tour with competitively priced offerings
Schedules flights
Fixed itinerary
Operate regardless of the number of passengers on board
Land- based transport
An operator will need to contract additional services
Transfers
Transers the passengers between airport and accommodation and for optional excursions.
Car hire: need to contract vehicle hire through a car hire company
Ancillary products and services
Product planning
Itinerary planning
3 elemens
The core: what is being offered
The tangible product: The physical elements
Transport from the generating area to the destination
Accomodation at the destination
Transfer from the airport to the accommodation and return
Ancillary services, such as the need for a representative or manager, availability of car hire
The augmented product: extra features the suppliers of the product adds to be competitive
Costing
Identify the approximate price of the package
Review the proposed package and compare it with competitors offering similar packages
Capacity
frequently decided 12-18 months ahead of the holiday season
target capacity figures are confirmed 12 months prior to departure date.
Marketing materials
Second stage of research
Evaluate the available options
Mass market operator looking for sustainable destinations.
Small operators will invest less in the destination (switch destination when product fails to sell )
Review, Research and Planning
Review company strategy and objectives, profitability and performance
Based on thre stategic direction of the company
Negotiation -> Administration -> Marketing
5 area of trends that should be consider
Destination
Transport: based on the accessibility of the destination
Accommodation: varies in attractiveness to different markets
Duration
Holiday type
Key sources of information
External sales data and competitor analysis: identify the trends in the provision for similar market segment.
Market research reports and media: Articles included in the travel sections of national newspaper and consumer magazines.
Internal sales data: detailed analysis of previous years's sales performance will ascertain consumer trends.
Customer satisfaction and feedback: using questionaires
Review current portfolio
A range of products aimed at different markets
Boston Consulting Group Matrix
(BCG Matrix)
cash cow: mature products needing little amendment or investment
dogs: low market share and little opportunity for growth
Stars: high market share in a rapidly growing market
questionaires: products of uncertain future.
Product life cycle
Describes the growth trajectory for products from their introduction to their decline
Brochure production
The promotional materials
Take time to prepare and produce
Need to check and recheck information
Finalize sales and marketing plan
Sales staff training
Information about the company
The products and the information about destinations, activities, and other holiday specific information
Fam trip
Operations and administrative staff training
Administrative staff training
Require additional staff to cope with anticipated demand
Recruit specialist staff
Understand culture, language of the customer
Operation staff training
New products, the staff involved and any anticipated issues
Reservation system.
Product launch and subsequent evaluation of sales
Review of customer-generated content sites
Give the policies to upsell or change services
Product review nad post tour management, including quality review :
Comparing predicted sales with achieved sales and reflecting on any discounting or additional promtion
Enable operators to make decisions about capacity for the next season
Planning a Package Holiday
Small, specialist tour operator able to create in a shorter time
Take ~18 months to develop
The construction needs to follow a similar process
Itinerary Development
A complex procedure and crucial
Consider the logistics at the destination, transport between activities.