New Product Development

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Raija Komppula
University of Joensuu Department of Economics Box 111 FIN-80101 JOENSUU

ABSTRACT New product development in tourism companies has been a nearly ignored theme in tourism marketing literature. Research on product development has in major studies handled destinations, development of resorts or sites as a total tourist product. This paper will introduce two case studies, which will aim to help us to identify the major problems as well as key phases of the new product development process in a small tourism company. The two examples represent Finnish activity operators, which at the moment have the challenge to innovate more and more attractive activities to fulfil the customers needs for emotional experiences. The theoretical framework for the study is based on the traditional product (and services) development theory, which suggests it to be a process of following stages: idea generation, service concept development and evaluation, business analysis, service development and testing, market testing, commercialisation and postintroduction evaluation. Based on the existing literature and our case studies we try to evaluate the usefulness of the traditional product development model in small tourism business marketing. We also try to present an advanced model for new product development in a small tourism company.

Raija Komppula 1. INTRODUCTION


In the general marketing literature there has been a considerable amount of research carried out into new product development, the majority of which is based on manufacturing industries, but relatively less attention has been given to services (Edget 1994, Jones 1995, Kelly & Storey 2000). Although product development is a prerequisite for satisfying tourists needs and changing demands as well as insuring the profitability of the industry, new-product development in tourism companies has been a nearly ignored theme in tourism marketing literature. There has been very little interest in the new product development processes in small scale tourism companies, how the new innovations are developed into product concepts in individual tourism companies, although especially in rural tourism development projects all over the Europe the authorities and marketing organisations call for new tourist products.

The research on product development in tourism marketing is dominated by research on destination development, representing in most cases planning approach (see e.g. Gunn 1988, Pearce 1989). In the literature of destination development, destination planning and destination marketing a destination is viewed as an amalgam of individual products and experience opportunities that combine to form a total experience of the area visited ( Murphy, Pritchard & Smith 2000, 44). Medlik and Middleton (1973) suggest that the destination product consists of five components: destination attractions, destination facilities, accessibility, images and price. This ”components model” has been later borrowed by numerous authors.

Middleton (1989) also has introduced the term total tourist product (1989) or the overall tourism product (Middleton & Clarke 2001). He suggests that ”from the standpoint of a potential customer considering any form of tourist visit, the product may be defined as a bundle or package of tangible and intangible components, based on activity at a destination. The package is perceived by the tourist as an experience, available at a price” (Middleton & Clarke 2001, 124-125). This tourist product can be divided in two levels: the total level referring to the complete experience of the tourist from the time one leaves home to the time one returns, being synonymous with the components model. The other level is the specific level, which is that of a discrete product offered by a single business. (Middleton 1989, Middleton & Clarke 2001)