Hospitality Product Service Matrix

Product Service Matrix

• The success of service marketing relies on understanding consumer benefits and satisfaction.
• For restaurant services, customers seek not only food but also atmosphere, relaxation, entertainment, or status.
• Matching the service product to both customer and supplier viewpoints is vital.

Philip Kotler's Product Components:

• Tangible Product: Includes materials and construction.
• Extended Product Part: Encompasses services.
• Generic Product: Refers to the benefits the product offers.

Basic Hospitality Product Combination:

• Includes goods, services, and environment.

Goods

• Relate to tangible items offered by a hotel to its customers.
• Some examples include food, drinks, beds, furnishings, room, and air conditioning.

Services

• Includes non-physical offerings that a hospitality marketer provides to customers.
• Management must maintain quality as employees play a key role in providing services.
• These services include congeniality, responsiveness, and professionalism.

Environment

• Combination of any tangible or intangible product elements.
• Environment creates the overall customer feeling, such as comfort, security, and relaxation.
• An example is a romantic ambiance with soft music and candlelight in a restaurant.

Hospitality Products

• Designed to satisfy target market needs.
• The hospitality products are a combination of products and services, whether free or for sale.
• Hospitality product has five components

Core Product

• The fundamental benefit a customer receives from a hospitality service.
• Hospitality products provide different core benefits to consumers.

Facilitating Products

• Goods or services necessary to use the core product.
• These goods or services must be present for the guest.

Tangible Product

• The physical embodiment of the basic product.
• Represents the parts of core product you can physically touch.

Supporting Product

• Supporting products add extra value to the core product.
• These are offered to help differentiate it from the competition.

Augmented Product

• Consists of support items completing the total product offering.
• Support items include after-sales service, warranty, delivery, and installation.

Hospitality Customer Satisfaction

• Satisfactions are divided into physiological, economic and psychological

Physiological Satisfactions

• Basic satisfaction a customer seeks from a hospitality product.
• This need is based upon physical comfort and well being.

Economic Satisfactions

• Value gained relative to the sacrifice made for a hospitality product or service.
• Getting the most value for ones money

Psychological Satisfactions

• Psychological satisfactions is a perceived notion.
• Perception of being satisfied.

Customer Dissatisfactions

• Location, facilities, service, image and price can cause satisfaction or dissatisfaction

Location

• Hotel's geographical placement, whether in a village, town, city, or country.
• Distance can play a role is perceived success.

Facilities

• Infrastructure and recreational facilities.
• Includes bedrooms, restaurants, bars, conference rooms, swimming pools, gyms, and tennis courts.

Service

• Facilities provided by a hotel's personnel to guests.
• Includes the general attitude of the staff

Image

• Consumer's perception of the hospitality product or service.
• The view customers have of your brand.

Price

• The expression of value provided through the hotel's location, facilities, and service.
• Price is based on customer satisfaction from the use of the service product.

Satisfactory Services Analysis Factors include:

• What the customer perceives in a product or service.
• How well it satisfies customer needs.
• The benefits it offers.
• How it satisfies demand.
• Who uses it and why.

Level of Service Delivery:

• Consists of five parts:
  • Customer Benefit Concept.
  • Service Concept.
  • Service Offer.
  • Service Forms.
  • Service Delivery System.

Customer Benefit Concept

• The first level in the conceptualization of a service product.
• Conceptualizing the key aspects of a service.

Service Concept

• The second level in the conceptualization of a service product.
• Involves testing the service.

Service Offers

• The third level in service delivery.
• Figuring out the best offers for the service.

Service Forms

• The service provider needs to detail how the service product is delivered to the customer.
• Detailing what should be delivered to the customer.

Service Delivery System

• The two main elements in a delivery system are the people and the physical evidence.
• How a service moves to its end state.

Product Planning and Development:

• Product Planning.
• Product Development.
• Product Features & Modification.

Development Process Steps:

• Consists of six steps.
  • Idea Generation.
  • Screening of Ideas.
  • Formal Business Economic Analysis.
  • Product Development.
  • Test Marketing.
  • Commercialization.

Idea Generation

• Product ideas can come from external or internal sources.
• How an organization generates ideas.

Screening of Ideas

• Best ideas are chosen based on compatibility with resources, objectives, demand, cost, and profitability.
• Which ideas will be implemented.

Formal Business Economic Analysis

• Includes assessment of product development features.
• Also sales, profit forecasts, and marketing strategies for new product development.

Product Development

• Distribution includes of new or improved products for the current market.

Test Marketing

• Placing a product on sale in select areas.
• Also, observe product performance under the proposed marketing plan.

Commercialization

• Introducing a new product or service into the general market.

Product Life Cycle

• The cycle through which every product moves.
• Introduction, growth, maturity, decline, withdrawal or eventual demise are parts of this cycle.

Product Life Cycle Stages:

• There are four stages of the product life cycle:
• Introduction.
• Growth.
• Maturity.
• Decline and possible abandonment.

Introduction Stage

• The product is launched in the market.
• Promotion is needed for tell customers about the product's advantages and uses.
• The goal is to tell consumers and convince middlemen about the new product.
• Also to encourage consumers to try the new product.

Growth Stage

• Sales and profits increase at an increasing rate.
• Competitors react, requiring selective demand development.
• Known as the market acceptance stage.

Maturity Stage

• Sales and profits start their decline.
• More competitors enter the market with advanced product development.
• More advanced products enter the market.

Maturity Stage Phases include:

• Growth Maturity.
• Stable Maturity.
• Decaying Maturity.

Growth Maturity

• Sales growth rate declines with no new distribution channels.

Stable Maturity

• Sales level off or break-even due to market saturation.
• Market loses interest in the product.

Decaying Maturity

• Sales continue to decline.
• Customers shift to other brands or available substitutes

Decline and Possible Abandonment Stage

• New products or brands enter the industry.
• Obsolescence of existing products occurs as concepts are replaced.
• Sales decline due to factors like technical development, changes in consumer tastes, or cheaper substitutes.

Reasons for New Product Failure:

• Inadequate market analysis.
• Product deficiencies.
• Lack of effective marketing.
• Higher than anticipated costs.
• Competitive strength and reaction.
• Poor timing.
• Technical or production problems.

Inadequate Market Analysis

• Inability to determine market demand and buying motives.
• Overestimation of potential sales.

Product Deficiencies

• Poor quality of new products is the biggest reason products fail.

Lack of Effective Marketing

• Insufficient follow-up marketing strategies after introductory programs.
• Poor advertising is a big reason

Higher Costs than Anticipated

• Inflation causing raw material prices increases during the commercialization process.

Competitive Strength and Reaction

• Ease of competitive entry results in others introducing products faster.
• Other companies beat the original product.

Poor Timing of Introduction

• Premature or post-mature product launch.
• Launching a product at the wrong time.

Technical or Production Problems

• Inability to supply the quantity demanded.
• Failing to reach potential demand.

Solutions to Avoid Product Failure:

• Better marketing research to evaluate market needs
• Organizational changes to improve product planning.
• Screening and evaluation of ideas and products.

To Employ Solutions Successfully

• Company needs one of three advantages:
  • Product Advantage regarding better quality and reasonable price.
  • Marketing Advantage using more distribution outlets.
  • Advertising Advantage with effective usage of mass media.

Product Line

• A group of products closely related to each other.
• Products are intended for similar uses and function.
• Men's accessories, home furnishings and appliances, for example.

Product Mix

• Also known as product assortment.
• The complete list of all products offered for sale or produced by a company.
• Examples include Dining table or Nike which sells various items under one brand.

Major Product Line Strategies:

• Expansion of Product Mix.
• Positioning of the Product.
• Contracting of Product Mix.
• Alteration of Existing Product.
• Product Differentiation and Market Segmentation.

Expansion of Product Mix

• Increasing the number of product lines being sold.
• For example: Dairy Queen or Hanes adds new products to their line.

Positioning of the Product

• About consumers' perception of a product.
• Compares to images against competitors' product.
• Improved by shifting promotional themes or focusing on a target markets.
• For example, Perla detergent soap originally promoted as laundry detergent, now emphasizes skin effects.

Contracting of Product Mix

• Involves eliminating and phasing out a "deadwood" product line.
• This strategy is implemented when demand are very low.

Alteration of Existing Product

• Includes redesigning industrial products or new packaging designs for consumer products.
• Perla detergent soap, earlier promoted for laundry, is now for skin effects.

Product Differentiation

• Creating consumer awareness about the product's different features.
• Informing customers what to expect.

Market Segmentation

• Process of knowing the overview of the entire target market.

Brand

• A word, mark, symbol, or a combination used to identify a marketer's product or service.

Brand Name

• Something that can be vocalized or spoken.

Brand Mark

• A non-registered design, symbol or product logo.

Trade Name

• A registered company name.

Trade Mark

• Brands get registered under the intellectual property office, and are given legal protection
• Trademarks can be recognized with presence of any words or symbols on product label or package.

Trademarks on product labels

• Reg. Phil. Pat Off meaning registered under the Philippines Patent Office.
• R means registered.
• *Asterisk Mark.
• C meaning Copyright.

Brand Classifications:

• Manufacturers' Brands.
• Distributors' or Middlemen's Brands.
• National Brands.
• Private Brands.
• Individual or Separate Name Brands.
• Generic Brands.

Manufacturers’ Brands

• Owned by the producer or manufacturer.
• The brand is owned instead of being used by the retailers.

Distributors’ Brands

• Owned by wholesalers or retailers.
• Store brands can be an example

National Brands

• Sold throughout the entire Philippine archipelago or internationally.
• The brand may also be advertised.

Private Brands

• They are not advertised.
• Examples are many restaurants

Individual Brands

• Brand intended for one product.

Generic Brands

• Products don't have official brand names.
• The names identifies contents, manufacturers or middleman.

Importance of Branding for Sellers:

• Simplifies sales promotion.
• Encourages repeat sales.
• Provides protection against substitution.
• Branded merchandise is preferred by middlemen.
• Minimizes comparison.

Characteristics of Good Brand Names:

• Easy to remember with one to three syllables.
• Suggestive of product benefits.
• Distinctive symbols and colors.
• Legally protected, not an imitation.

Packaging

• Activities in product planning involving container design and production.
• Includes designing and producing container or wrapper for a product.
• Design may be for liquid-based products, like tin cans or glasses, while wrappers like tin foil, paper, and carton are for solids.

Reasons for Packaging Products:

• Product protection during its route and storage.
• Implementation of a company's marketing program through product differentiation.
• Increasing profit possibilities, especially if customers buy based on the package.

Packaging Strategies:

• Family Packaging.
• Reuse Packaging.
• Multiple Packaging.

Family Packaging

• Using a common feature on all packages for a product line.
• All products will look the same, despite their differences

Reuse Packaging

• Packaging is designed and promoted to serve other purposes after contents are consumed.
• The customer has added incentive

Multiple Packaging

• Placing several units of a product in a single container.
• Bulk goods for example

Label

• The part carries the verbal information about the product or the seller.
• Label's purpose should be to inform buyers by fairly representing the contents of the package.

Types of Labels:

• Brand Label.
• Grade Label.
• Descriptive Label.

Brand Labels

• Applied with just the brand alone.

Grade Labels

• Identify product quality through letters, numbers, or words.
• Used to show overall quality of a product.

Descriptive Labels

• Written or illustrative information which describe the product or performance.
• Details key aspects of the product.