Based on a
recent study that I was commissioned to prepare and present to an interested island development agency, I publish here (A) a small part of it (specifically the one regarding the product marketing strategy). in order to respond to relevant requests from friends of readers who submitted after the previous post for mountain/winter destinations. In addition to this, I will quote (B) a brief presentation of the well-known model of “three levels” of product evaluation (three product levels) – which of course concerns the product of each destination – in order to understand the true nature of competitive tourism/hotel product.
(A) Concise product proposals
Island X has an interesting tourism product, observing it either completely or individually, but it should improve after a specific analysis. In this case, the local authorities should deal with the following issues:
- Facilitate access to the island by air and sea.
- Protection-upgrading of the natural environment by integration/identification of sensitive areas in spatial planning.
- Creating infrastructure that will cause a sense of security to the tourist, such as a modern hospital, better road network, etc.
- Creation of special tourist infrastructures (eg marinas) that are necessary for the arrival of a tourist package of high economic level.
- Specialization of the human resources involved in tourism and information of the locals who are involved in every way in the tourist activity.
- Creation of traditional hostels, as well as modernization of the existing ones.
Specific product strategies
- Penetration: The island can -since it has not been massified in tourism- take advantage of the margins of increased sales in the existing markets.
- Market development: targeting new markets.
- Product development and diversification: Alternative tourism is the solution to mass tourism, as it resists the changes of international economic instability, utilizes cultural heritage, respects the environment, and contributes to sustainable development.
In addition, this option enhances quality tourism, which implies higher consumer spending and an extension of the tourist season. It would be an advantage if cultural events were added to the historical monuments and the rich natural scenery of the island, which could be an institution. Attracting student excursions – given the environmental flora and fauna – would be an important factor in introducing young people to the island and transferring their experiences to the next student communities.
Concise pricing proposals
Given the resilient demand for the tourism product and in conjunction with the economic crisis, pricing should be determined in relation to the pricing of competing products. The economic crisis leads tourists to choose not always based on the expression “worth the money” – as in our case – but in combination with the low price, which in the current situation is not easy. Nevertheless, prices should be reduced as much as possible, but without compromising the quality of the product provided. [At this point it was deemed necessary to add part (B) to the post]. So we suggest:
- Retention of prices, but not at the expense of the product.
- Although the tourism market has accepted alternative tourism as a new product, this should by no means mean high prices. The factor that would make the product – and consequently the island – attractive is to follow a penetration pricing. The economic offer of the product will make it known in the tourist market and-consequently- the island competitive with others. In addition, “differential” pricing is proposed (price differentiation for the same product depending on conditions). In times of low demand, that is, economical packages and offers must be proposed in order to deal with seasonality.
(B) Model of “three levels” of product evaluation
In fact, each product consists of at least three levels (three product levels). Once this is understood, we can add more value to the product, which helps support its sale.
By understanding the above mechanism it becomes clear that the products/services do not need to compete in terms of prices. In fact, dominance is achieved by increasing the value given to a product, a move that will also yield a profit, the most important aspect of the business. Start-ups are generally more successful when they compete with value rather than price.
The core product
It is not a tangible, natural product. The basic product is actually the benefit of the product that makes it valuable to the customer.
Example: Hotel // is not the tangible, natural product → the benefit is the convenience and comfort, ie the enjoyment of a quality stay due to facilities such as “away from home… like home” and of course much more.
The actual product
This product is the natural product itself. It contains benefits on its own separate from the main product. The actual product is usually designed based on a target market and solves/aspires to solve the problems that the target market has.
Example: Hotel // tangible, natural product for a specific use → stay away from home for any reason.
The augmented product
The augmented product is an intangible aspect of the product. This is the area of the product where its perceived value can be increased. It is not part of the actual product but adds value to it so that customers can now appreciate and recognize the business brand.
Example: Hotel // the non-physical part of the product → these are value-added services, such as customer service both during the stay and follow-up services, which is a key factor for the repetition of consumption and to enhance corporate reputation.
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- Traveldailynews From my previous article. Thanks!