Product

Product as part of the marketing mix

A product is anything that can be offered to a market that might satisfy a need. It includes

physical objects and services.

Characteristics of products

Tangible- you can see and physically hold a product e.g a meal in a restaurant.

Homogenous- ‘like’ products are all standardized ( example, one Ramada hotel room is the

same as another irrespective of which country it is in.

Separable- you can easily distinguish between one product and another because of the

features of each

Storage- a product will last and is not perishable.

Characteristics of services

Intangible- services cannot be seen or physically held

Heterogenous- services are not standardized; every experience is individual

Inseparable- it is not possible to separate the service out of the experience. (example, being

waited upon is an integral part of the service element of a meal)

Perishable- cannot be transferred for use at a later date. Cannot be stored.

For example, holiday packages are perishable: if a tour operator has not sold the same

amount of packages, as the number of reservations made with transport and accommodation

providers for a given period, then those packages will be lost and that revenue cannot be

made up again.

Development and modification of travel & tourism products

Customer needs, wants and expectations change all the time , taking into consideration the

rapid pace of change that the industry undergoes. As a result, travel and tourism providers

must constantly seek to develop new products and services that will appeal to their existing

customer base as well as attract new customers.

There are several ways used by travel and tourism providers to develop and modify products

and services to meet the expectation of customers

Product life cycle

INTRODUCTION STAGE

Product is launched into the market

Period of intense marketing to raise awareness and to attract customer loyalty.

Limited volume of sales

High cost of promotion

No competition

GROWTH STAGE

Demand rising steadily

Competitors working on substitute products

Sales volume increasing

Levels of profitability increasing

This stage is critical to the success of the product

MATURITY STAGE

Sales curve peaks within this stage

Product continuing to make a profit

Competition is strong

Marketing is needed to extend the product’s appeal

DECLINE STAGE

Number of sales falls sharply

Organisation needs to decide whether to discard the product or re-launch

Costly stage for the organisation

Uses of the product life cycle for travel and tourism organisations.

Evaluate its products and services in the market to know the changes that can be made if

necessary

Identify which stage they are at growth. They can act on findings as some products are

popular and grow while others decline.

Improve competitive advantage. Enables the organisation to change promotional methods

to attract new market.

Helps the organisation to know the popularity of the destination

Helps in future planning since it provides information about expected future growth.