The document discusses product design and management in the hospitality and tourism industry. It defines a product and explains the different levels of a product - the core product, facilitating products, supporting products, and core competency. It also outlines the new product development process and the different stages of a product's lifecycle - development, introduction, growth, maturity, and decline. The goal is to understand how to design, develop, and manage products effectively in hospitality and tourism marketing.

1. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Chapter 9
Designing
and
Managing
Products
Dr. John V. Padua

2. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Chapter Objectives
• Define the term product, including the core,
facilitating, supporting, and augmented
product
• Explain the elements with which one needs to
be concerned when designing a product
• Understand branding and the conditions that
support branding
• Explain the new product development
process
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

3. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
What is a Product?
• A product is anything that can be
offered to a market for attention,
acquisition, use or consumption that
might satisfy a want or need
• Includes physical objects, services,
places, organizations, and ideas
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

4. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Product Levels
• Core Product
• Facilitating Products
• Supporting Products
• Core Competency
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

5. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Core Product
• What the buyer is really buying
• Every product is a package of problem-
solving services
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

6. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Facilitating Products
• Goods or services that must be present
for the guest to use the core product
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

7. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Supporting Products
• Extra products offered to add value to
the core product and help to
differentiate it from the competition
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

8. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Core Competency Review
• Supporting products offer a competitive
advantage only if they are properly
planned and implemented
• They must meet or exceed customer
expectations to have a positive effect
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

9. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
(Scott Davis, Brand Asset Management)
Brand
• Brands are among a company’s most
valuable assets
• The strongest brands own a place in the
customer’s mind
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

10. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
New Product Development Process
IdeaIdea
GenerationGeneration
ConceptConcept
DevelopmentDevelopment
and Testingand Testing
MarketingMarketing
StrategyStrategy
DevelopmentDevelopment
IdeaIdea
ScreeningScreening
BusinessBusiness
AnalysisAnalysis
ProductProduct
DevelopmentDevelopment
MarketMarket
TestingTesting
CommercializationCommercialization
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

11. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Idea Generation
• Internal Sources
• Customers
• Competitors
• Distributors and Suppliers
• Other Sources
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

12. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Idea Screening
• The purpose of screening is to spot
good ideas and drop poor ones as
quickly as possible
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

13. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Concept Development and
Testing
• A product idea envisions a possible product
that company managers might offer to the
market
• A product concept is a detailed version of
the idea stated in meaningful consumer terms
• A product image is the way that consumers
picture an actual or potential product
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

14. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Marketing Strategy
• Includes information such as the target
market and product positioning as well
as both short and long term projections
in terms of sales, profits and costs
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

15. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Business Analysis
• Business analysis involves a review of
the sales, costs, and profit projections
to determine whether they satisfy the
company’s objectives
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

16. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Commercialization
• In launching a new product, a company
must make four decisions:
When?
Where?
To whom?
and How?
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

17. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Product Life-Cycle Strategies
• Product development
• Introduction
• Growth
• Maturity
• Decline
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

18. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Product Development
• Product development begins when the
company finds and develops a new
product idea
• During development, sales are zero and
the company’s investment costs add up
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

19. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Introduction
• Introduction is a period of slow sales
growth as the product is being
introduced into the market
• Profits are nonexistent at this stage due
to high product introduction expenses
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

20. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Growth
• Growth is a period of rapid market
acceptance and increasing profits
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

21. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Maturity
• Maturity is a period of slowdown in
sales growth because the product has
achieved acceptance by most of its
potential buyers
• Profits level off or decline due to
increased marketing outlays to defend
the product against competition
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens

22. ©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
Decline
• Decline is the period when sales fall off
quickly and profits drop
©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens