ch 9 kotler

Chapter 9:Designing and Managing Products : 

Marketing for Hospitality and Tourism, 3e ©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458 1 Chapter 9:Designing and Managing Products

What is a Product? : 

Marketing for Hospitality and Tourism, 3e ©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458 2 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

Core Product : 

Marketing for Hospitality and Tourism, 3e ©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458 3 Core Product Facilitating Products -must be present for the guest to use the core service Supporting Products -Add value to the core product Augmented Product -physical environment, accessibility, interactions, physical environment

Slide 4: 

Marketing for Hospitality and Tourism, 3e ©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458 4 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.

Elements that enhance positioning and create augmented products : 

Marketing for Hospitality and Tourism, 3e ©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458 5 Elements that enhance positioning and create augmented products Atmosphere Customer interaction with service delivery system Customer interaction with other customers Customer co-production

Brand : 

Marketing for Hospitality and Tourism, 3e ©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458 6 Brand Brands are among a company’s most valuable assets A Brand represents what the company is and what it 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

Branding : 

Marketing for Hospitality and Tourism, 3e ©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458 7 Advantages of Brand Names Brand Equity Strong Brand Association Attributes Quality & Value Consistency Identification Perceived Quality Name Awareness High Brand Loyalty Branding

Conditions That Support Branding : 

Marketing for Hospitality and Tourism, 3e ©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458 8 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

New Product Development Process : 

Marketing for Hospitality and Tourism, 3e ©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458 9 New Product Development Process Idea Generation

New Product Development Process Step 1. Idea Generation : 

Marketing for Hospitality and Tourism, 3e ©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458 10 Customers Competitors Distributors Suppliers Idea Generation is the Systematic Search for New Product Ideas Obtained Internally From Employees and Also From: New Product Development Process Step 1. Idea Generation

New Product Development Process Step 2. Idea Screening : 

Marketing for Hospitality and Tourism, 3e ©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458 11 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.

New Product Development Process Step 3. Concept Development : 

Marketing for Hospitality and Tourism, 3e ©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458 12 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 New Product Development Process Step 3. Concept Development

New Product Development Process Step 4. Marketing Strategy : 

Marketing for Hospitality and Tourism, 3e ©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458 13 Part Three Describes Long-Term: Sales & Profit Goals Marketing Mix Strategy Part Two Describes First-Year: Product’s Planned Price Distribution Marketing Budget Part One Describes Overall: Target Market Planned Product Positioning Sales & Profit Goals Market Share New Product Development Process Step 4. Marketing Strategy

Step 5. Business AnalysisStep 6. Product Development : 

Marketing for Hospitality and Tourism, 3e ©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458 14 If No, Eliminate Product Concept Business Analysis Review of Product Sales, Costs, and Profits Projections to See if They Meet Company Objectives Step 5. Business AnalysisStep 6. Product Development If Yes, Move to Product Development

Product Development ProcessStep 7. Test Marketing : 

Marketing for Hospitality and Tourism, 3e ©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458 15 Advertising Atmosphere Product Budget Levels Positioning Location Pricing Branding Elements that May be Test Marketed by a Company Test Marketing is the Stage Where the Product and Marketing Program are Introduced into More Realistic Market Settings. Product Development ProcessStep 7. Test Marketing

New Product Development Process Step 8. Commercialization : 

Marketing for Hospitality and Tourism, 3e ©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458 16 When is the Right Time to Introduce Product? Where to Launch a New Product? Commercialization is the Introduction of the New Product into the Marketplace. New Product Development Process Step 8. Commercialization

Product Development through Acquisition : 

Marketing for Hospitality and Tourism, 3e ©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458 17 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.

Product Life Cycle : 

Marketing for Hospitality and Tourism, 3e ©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458 18 Sales and Profits Over the Product’s Life From Inception to Demise Product Life Cycle

Slide 19: 

Marketing for Hospitality and Tourism, 3e ©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458 19 Source: Martin Bell, Marketing Concepts and Strategy, 3rd ed., p.267, 1979, Houghton Mifflin Company; used by permission, Mrs.. Marcellette (Bell) Chapman. Product Deletion Process