Please enable JavaScript.
Coggle requires JavaScript to display documents.
Product Development - Coggle Diagram
Product Development
Stages in Product Development (9 stages)
Review, research and planning
Review company strategy and objectives, profitability and performance
The planning and development of a package originates from the strategic direction of the company and their business objectives
Typical timeframe for planning a package holiday
Negotiation
Administration
Marketing
Stages in planning an inclusive tour
Review, research and planning
Second stage of research
product planning
constracting
Brochure production and website design
Finalize sales and marketing plan
Operations and administration training
Rectuit specialist staff
Product launch and subsequent evaluation of sales
product review and post tour management
5 areas of trends that should be considered
Destination: a destination's popularity is constantly affected by external influences
Transport: The accessibility of the destination will impact on the type of holiday that can be offered
Accomodation: The type of accomodation varies in atteactiveness to different market
Duration: Packages must be planned with a specific duration
Holiday tyoes: Due to technological changes, destionation further afield are more readily accessible
Process of analysising of the company;s existing product(s) and competitive position
External sales data and competitor: TO can identify trends in the provision for similar market segments
Market research reports and media: Articles about upcoming destinations are frequently included in the travel sections of national newspapers and consumer magazines
Internal sales data: An examination and detailed analysis of previous years' sales performance will ascertain consumer trends for the company's products
Consumer satisfaction and feedback: using questionaires, Questionaires can be extremely quickly, which can identify potential new products or destinations.
Review current portfolio
offer a range of products aimed at different markets and this is termed their portfolio
consulting group matrix:
Cash cow: product with high market share, but low market growth, usually mature products needing little amendment or investment
Dogs: Products with low market share and little opportunity for growth
Stars: products with high market share in a rapidly growing market
Question marks: Products of uncertain future
Product life cirle: one of the most theoretical models in marketing and strategic planning, describe the growth trạjectory for products from their introduction to their decline, profit from products at diffirent stages
2nd stage of research
Once a shortlist of destinations and products has been identified ,the company will evaluate the available options
Mass market operators are looking for destinations that are sustainable
Small operators will invest less in the destination and maybe able to switch destinations
Product planning
itinerary planning
The core: this is what being offered
The tangible product: The physical elements
The augment product: extra features the supplier of the product adds to be competitive
tangible elements
Transport from the generating area the the destination
Accomodation at the destination
Transfer fromt he airport the the accomodation and return
Ancillary service
Costing:
An initial cost base analysis will be completed to identify the approximate price of the package
Operators may review thư proposed package and compare it with competitors
Capacity
refers to the number of holidays
frequently decided 12-18 months ahead, confirmed 12 months prior to departure date
poorly planned
overcapacity: operator contracts to provides more packages than there is demand for
under capacity: when TO has fewer holidays to supply than market demand
contracting
carried out be senior members off staff cause it requires an in-depth knowledge
contracting suppliers require good communication and negotiating skills
Contracting for existing products can often be done relatively quickly by using previous suppliers
accommodation:
Commitment: TO agrees to buy a predefined number of beds for the seasons, regardless of the number it sells, the higher number of committed beds, the lower the prices , hotelier may not be able to offer the beds to another operator
Allocation: sale or return option, used for specific period, often used by small and medium-sized TO. This method reduces the financial risk for operators, but more expensive then commitment contract. For hotelier, this is riskier cause they run the risk of beds being unsold
Ad hoc: is this costliest method of buying rooms, no risk for TO,, buying room when needed.
Transport
crucial to the success and profitability to any tour
Flight
account for approximately 40% of the overall package holiday price
unsold seats may result in significant loss to the company
companies their own aircraft need to focus on the maximization of the aircraft
TOs do not own their own aircraft need to reserve seats either on scheduled airlines or on charter craft operated by other company
various options of seats
Whole season chartering
Part chartering - booking a block of seat on specific flights
Ad hoc charting - an arrangement for single return-trip
Time series chartering: a regular sequence of flights and the exclusive use throughout the season
Whole season/ time series chartering
a TO charters a whole aircraft fora specific period
do not operate according to published schedules but are planned in such a way that their air time is maximized
If a flight is delayed at one of the destination or there are technical problems the delay will affect all other subsequent flights using that plane
It's a high risk strategy, provides for a low cost oer seat
Part charter
insufficient slaes, apart charter instead
Low cost carriers
they are bnoth budget alternatives to scheduled airlines, more flexible than chatter airlines
differential pricing
The choice of airline qoute and availability has expanded, enabling customers to build their own travel experience
Some LCC have started to differentiate their products, hybrid model attracting both business and leisure and the ability to upgrade
LCC are moving into the medium- and long-haul markets, provide competitively priced offerings
schedule flight
Scheduled air serivce tend to be used by long haul operators and specialist/ tailor made organizers
"schedule departures"
allow greater flec
more likely to use charter aircraft
contract a specific number of seats, seats that are not sold would be release back to the airline
sale or return
Land-based flight transport: An operator will need to control additional services
Transfers :
Many companies use coaches for the transfer of passengers between airport and accommodation and for optional excursion
Vertically integrated companies have their own coaches
smaller companies will need to negotiate with local transport companies
car hire: they need to contract vehicle hire through a car hire company
Ancillary products and services:
Include tickets to events, guides and the availibility of private transfer service
work with local companies
Brochure production
Key element of promo material
Take time to prepare and produce
Finalize sales and marketing plan
Sales staff training ( knowledge)
Departure airport and the opportunity to use regional- based airports
Info about alternative methods of transport
transfer times to hotel and resorts
Product-specific info
Operations and administrative staff training
Operations staff training: aware of the new product, Reservation system
Administrative: The company may requre additional staff to cope with anticipated demand
recruit specialist staff: The traditional mass market product relies on carrying many passengers
Itinerary Development
planning a new itinerary is a complex procedure
obviously critical to the success of the company
maximum saticfaction for customers at a price
ascertain the principal components of the package when planning a new itinerary
consider the logistics, transport
design new packages but also review current offering and make changes to their itinerary
planning a packaged holiday
will take on average 18 months to develop
The time frame between 12 months to three years for a standardized 3S packaged tour
a small specialist tour operator maybe able to create an itinerary in a much shorter development time
the construction of all packages needs ro follow a similar process