For the successful introduction of new products or services, it is always better to adopt formally developed procedures than going arbitrarily.
Although there are no prescribed general programmes as the scope of these activities differs among tourism organizations, however most established organizations have their own well-ordered programmes for the development of new tourism products or services.
New product development is, in fact, a full-fledged process involving methodical/an ordered series of stages. The first stage relates to designing a new tourism product strategy incorporating genuine product innovation, i.e., the type of new product/services desired; modification and enhancement of existing products; repositioning of improved new products in addition to the allocation of resources for the new product development.
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However, the formulation of new product strategy should be in harmony with the organization’s overall business objectives, goals and strategies. Once the requisite strategy has been drawn, the next stage concerns idea generation, and for this, each and every source, both internal and external, can be employed.
Many organizations apply creativity techniques such as brain storming, morphological analysis, discovery matrices, checklists etc. to facilitate the generation and evaluation of ideas. Central to the screening process is setting criteria representing the standards that management reckons must be outdone by a new tourism product opportunity.
The focus in this stage is to filter out the best and most appropriate ideas for translation into explicit image and benefit concepts. The selected concepts of new product are subjected to testing by using ‘story-boards’ and written concept statements. The organization then, examines the intended tourism product’s ‘fit’ with existing product ‘lines’ and ‘service production’ viability.
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The next step takes account of the business analysis. The analysis comprises the forecast of initial sales and repeat purchase, the execution of cost-benefit analysis (costs and profits projections), and the development of preliminary qualifying product/ service specifications.
If the overall sale forecasts and the cost-benefit analysis turn out to be acceptable/positive, it is followed by the real product/service development. When it is befitting, tourism product /service mock-ups can be developed, refined and tested by potential consumers i.e., the product may turn to the test market involving high costs and relatively long time periods. But, the test market phase is of little use in the tourism industry.
At this stage, alternate marketing mix combinations (price levels, promotional strategies, varied distribution channels, and different tourism product commercialization may occur across the whole market simultaneously or more characteristically, in a phases rollout manner.
For a rollout introduction, target markets are segmented geographically and at the outset the new tourism product is launched in only one or a few areas. Such a system allows the organization the time to monitor and adapt the new product strategy prior to all resources are committed.
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While the new product development phases are in succession, the stages generally overlap time-wise, and, therefore, appropriate scheduling of activities is significant for an efficient development process.
One has to be pragmatic in planning i.e., proper timing in new product development is a crucial factor. The difficulty is not in finding new ideas, it is in mastering the art of timing; as time is always past and the fun is always now.
Proper timing particularly becomes crucial in view of the gestation period involved between the genesis of new product ideas and their debut into the marketplace. During this time span, the tourism product’s appeal can change substantially owing to changing market conditions, supply conditions, competitors’ strategies and economic trends.
On the contrary, the contenders may also exert themselves to upset the test market resulting in imprecision in analysis details. The delays or unduly slow rollouts can help competitors gain considerable advantage.
The success/failure of new products depends on a variety of factors. Whilst, the success banks on its blending with outfit’s organizational structure, product mix, product lines, and the marketing activity; the failure can be attributed to internal as well as external rationales.
Internal reasons for failure incorporate defective market appraisal and analysis, poor planning and operation processes, deficiency of appropriate resources, poor organizational structure, the development of imitative products/services, poor product positioning, etc. and the external reasons comprise lack of effective consumer demand and high intensity of competition.
The failure of new tourism products can also be assigned to managerial problems such as inadequate budgeting to cover introduction costs, fragmentary controls over performance, poor timing of induction of products and failure to establish a competitive market position.