TOURISM PRODUCT DEVELOPMENT - Gov

TOURISM PRODUCT DEVELOPMENT WORKBOOKThis means that when a visitor is looking for newand exciting experiences to have in your destination,they will consider multiple options before finalizingtheir decision. It will be very important for yourbusiness and tourism products to stand out from yourcompetitors. Some of the things you can consider tohelp position your product and your business are:Price: Do you have higher-priced deluxe tours or lowerpriced economy tours?Product quality: Do you offer outstanding customerservice? Do you rent top quality winter gear?Service: Do you provide hotel pick-ups and drop offs orinclude a meal as part of the experience?Diversity of products offered: Do you offer a choice ofthree unique tours?Staff quality: Is your staff qualified, certified, andexperienced?Product features: Do you have specialized resourcepeople (language translators), or exclusive or uniqueopportunities?Flexibility: Can you accommodate customizedpackages, special departures, or special needs suchas dietary restrictions or wheelchair access?5Product PackagingOnce you have developed your products and are readyto market them to your target audience you may wantto consider strategic partnerships to help expand yourreach. Strategic partnerships are those that includevarious tourism products or elements to create oneseamless travel package for visitors. A travel packagemight include return airfares, airport transfers,accommodations, tours and experiences, and meals allfor a special price. Travel packages may be tailored tofit certain traveller styles (we will learn about travellerstyles a little later).In addition to this resource, ITI offers anotherworkshop that focuses solely on packaging tourismproducts. To learn more about product packages andhow you can create your own, please contact yourregional tourism officer or visit ources/tourism-productpackaging

6GrowthStrategiesEach element is explored in greater depth below. Figure1 provides a visual summary of how the frameworkworks. Throughout the explanation of this framework,we’ll refer to the Mountain Biking Tour Company tooutline examples.Whether you are a new or existing tourism operatorthere may come a time when you would like to expandor grow your tourism product offering. While thereare many ways to do so, one of the most common waysto grow is through strategic planning. Below we willexplore the Ansoff Matrix, a tool used for strategicplanning that will provide you with a framework todevelop your strategy for product growth or expansion.The Ansoff MatrixAs you can see in Figure 1, the business risk increasesas you begin to branch out into new markets and newvisitors. This is because it is unfamiliar and there isa greater risk involved in entering new markets withnew products.Low risk is remaining in an already establishedmarket with established tourism products. Forexample, low risk would be remaining close to themountain biking theme, increasing advertising andforming strategic partnerships to expand reach andgain new market shares.It may be considered high-risk if you were a wellestablished mountain biking tour company but decideto introduce cross-country skiing tours to expandyour business into a new season. Your existing visitorsmay not be interested in cross-country skiing and youwould be required to gain a totally new visitor baseto participate in your tours. The risk is high becausecross-country skiing may not be what your business isknown for and visitors could be hesitant to purchase.There are four elements to the Ansoff Matrix: market development strategy, market penetration strategy, product development strategy, and diversification strategy.Figure 1NEW MARKETSCURRENT MARKETSCURRENT PRODUCTSNEW PRODUCTSMarket penetrationstrategyProduct developmentstrategy»» examples»» expand advertising»» target more segments»» examples»» new features and»» for existing productsMarket developmentstrategy»»»»»»»»examplesexpand distributionenter new segmentstarget new marketsINCREASING RISKDiversification strategy»» examples»» new products for newmarket

TOURISM PRODUCT DEVELOPMENT WORKBOOKMarket DevelopmentMarket development appears on the low-risk side ofthe Ansoff Matrix. It is concerned with maximizingprofitability by attracting new visitors for yourproducts or tailoring your existing products to satisfynew visitors. For example, let’s refer to the MountainBiking Tour Company again. Say you cater to activeand adventurous cyclists between the ages of 25 and40. You operate tours in the early mornings and intothe afternoon. However, you find that your bikes gounused in the evening, so you come up with an idea tomaximize their potential. You may consider branchingout to include family cycling tours in the evening.The mountain biking theme remains consistent, butyou have sought out a new user group to grow yourbusiness into a new market.In both product development and market development,the risk is relatively low because you have somefamiliarity with one side of the equation or the other.This allows you to make some assumptions andpredictions that help with matching visitors' needs toproduct benefits.There are two market development approachesoutlined in the Ansoff Matrix: market penetration andmarket-driven product development.Market PenetrationMarket penetration is a growth strategy that involvesselling your existing products or services to yourexisting target markets to achieve a higher marketshare. Market penetration techniques encouragevisitors with interests in similar products to purchaseyours instead of your competitors’. Some of the waysto achieve market penetration include: loweringyour prices to make them more attractive to visitors,increasing promotions and offers to entice buyersto purchase, and expanding your reach by makingstrategic partnerships. Increasing awareness of yourproducts will help position your business in the mindsof visitors, which will increase the likelihood of thempurchasing your product.We mentioned earlier that strategic partnerships as away to achieve a greater reach in your target market.Strategic partnerships occur when two or moreorganizations form an alliance to provide a seamlessexperience for the visitor. Let’s return to the MountainBiking Tour Company example. Currently, biking tours7occur in early morning and again in the early afternoonfor about two hours each. You have noticed that thereare some really interesting craft stores and restaurantsin the town in which you operate. You may decide toapproach one or more of the stores or restaurants tooffer a longer biking tour with stops along the way ata few craft stores and a snack or beverage break inthe middle. You could then advertise a package bikingtour as a full- or half-day excursion with planned stopsto experience more of the destination. This wouldalso increase the reach of each party involved as theycould potentially gain access to visitors they neverhad before. For the visitor, they would receive a totalpackage deal for one all-inclusive price, creating lessplanning and work for them and more time and accessto places they might not have stopped before.For more on product packaging please contact thetourism development officer in your region to find outwhen the next product packaging workshop is takingplace or visit urces/tourism-product-packaging

8Market-Driven ProductDevelopmentTourism Product Development Do your research. Ask questions. Look at your competition. Reach out for help from marketing experts.DiversificationMarket driven product development means yourpreferences, impression and desires are not whatwill determine your product. The goal of productdevelopment is to make a product offering that matchesyour target market. The first step is to understandyour market. Some of the things you can do to help thisprocess are:There are a number of organizations and resourcesavailable to new tourism operators. NorthwestTerritories Tourism (NWTT) is the NWT’s destinationmarketing organization (DMO). NWTT will have accessto up-to-date industry trends and research. NWTT is amembership organization and can assist you in manyareas such as marketing your business, giving youaccess to their research findings, and sharing industrytrends with you.In addition, the Tourism Division at ITI offers numerousprograms and services to help new and growingtourism operators access funds to help start or growtheir businesses. ITI provides training opportunitiesfor tourism business owners and their staff to accessvisitor service training, information on starting atourism business, and/or safety courses such as marineand water safety, and risk management. The ResearchUnit produces statistical reports on a variety of topicsrelated to visitors. These reports are available throughthe ITI website through the publications page(www.iti.gov.nt.ca/en/publications).As you move to the right side of the Ansoff Matrix, thegrowth strategies focus on product development. Thisworkbook has already provided a lot of introductoryinformation on product development, so to completethe discussion of the Ansoff Matrix, we’ll focus on thestrategy of diversification.Tourism product diversification is the process ofexpanding, reinventing, improving, or growingyour existing product offering by developing new oraltered products for both new and existing visitors.Diversification is important because it creates valueand options for the visitor ultimately catering to awider range of tourist interests, values, and travelmotivations. Diversification also promotes growthby offering a wider range of product offerings. Thisstrategy also introduces the most risk as you may beexploring new products and new markets at the sametime. Later in the workshop, we will talk about marketresearch, which will help to inform your decisions andideally decrease the risk.Let’s take a look at the mountain biking exampleagain. This time you decide that you want to sell arock climbing experience to teenagers. Rock climbingis not within your current product offerings and youcurrently do not market to teenagers, so by enteringthis market you are diversifying your business tooffer a product you have never offered before to a newmarket. If we think back to what we have learned aboutventuring into new markets, we might remember thatthe risk is high in this case, but, with good research toinform this decision; this new direction is also exciting.

TOURISM PRODUCT DEVELOPMENT WORKBOOKExercise 1Thinking about what we’ve covered so far about product development, answer the following questions to help yourefine one of your product ideas.Do you have an idea for a product? What features will this product include?Where do you expect visitors to use this product?How much do you expect your visitors to pay for this product?What is your initial plan of how to position this product in the market?What is this product’s advantage over the competition?How do you expect to promote this product?Now that you’ve spent some time thinking about how to develop your product, the next step is to find out whatmotivates your visitors, what they value, and what benefits they will take away. Understanding your target marketis critical to the success of your tourism product. Once you know who is coming, you will be ready to further refinethe services, products, and facilities for your guests.9

10Target MarketsWho is Coming to the NWT?Visitors to the Northwest Territories come from across Canada as well as from around the world. They come fordifferent reasons, and they look for different experiences.Northwest Territories Tourism (NWTT) is the territory’s destination marketing organization (DMO). The DMO isresponsible for marketing the NWT as a world-class destination. NWTT markets the Northwest Territories in eachof the countries listed below by attending travel and trade shows, conducting advertising initiatives, and partneringwith both public and private sectors. Below is a list of the countries that visit the NWT. NWTT markets the NWT asa tourist destination in these same countries.PRIMARYMARKETSPOPULATION AND WORLDECONOMIC RANKCanadaPopulation: 35.2 MillionRanked: 10th Largest EconomyLike most other travel destinations across the country,Canada is the primary market for the NorthwestTerritories, resulting in between 60% to 80% of travellersto the NWT.JapanPopulation: 126.7 MillionRanked: 3rd Largest EconomyThe Japanese have been travelling to Yellowknife for over30 years now. The destination is well known in Japan.The aurora and natural attractions are the big travelmotivators for the group.ChinaPopulation: 1.4 BillionRanked: 2nd Largest EconomyChina is Canada’s third largest market in terms of arrivals,and second in terms of visitor spendingUnited StatesPopulation: 325.4 MillionRanked: 1st Largest EconomyThe United States is Canada’s biggest source ofinternational visitors.South KoreaPopulation: 51.4 MillionRanked: 11th Largest EconomyA thriving economy, a favourable currency, and increasedair travel capacity supported a 17% increase in travel toCanada in 2017.GermanyPopulation: 82.3 MillionRanked: 4th Largest EconomyAccording to DC research, Canada currently ranksthird, behind the United States and Thailand, in termsof consideration for a long haul vacation by Germantravellers.BACKGROUNDSource: NWTT 19/20 Marketing Plan

TOURISM PRODUCT DEVELOPMENT WORKBOOK11SECONDARY MARKETSAustraliaPopulation: 24.7 MillionRanked: 13th Largest EconomyAustralians are avid travellers and are willing to part withtheir money for a dream vacation.FrancePopulation: 67.1 MillionRanked: 7th Largest EconomyFrance remains one of the largest overseas markets forCanada.EMERGING MARKETSMexicoPopulation: 123.7 MillionRanked: 15th Largest EconomyFollowing the removal of the mandatory travel visarequirements, Mexican visitors to Canada increased by47%. Much of this growth has also been attributed to asignificant increase (71%) in direct air access to Canada.

12Understanding your Target MarketUnderstanding your target market is an important stepin developing successful tourism products. Similar toNWTT, which markets the Northwest Territories as adestination nationally and internationally, DestinationCanada (DC) does the same for Canada. The marketswe learned about above are all the places that DCmarkets Canada as a destination, and NWTT partnerswith DC to strengthen our marketing message.To better understand Canada’s target markets, DCdeveloped a market segmentation system based onthe science of psychographics. Psychographics is anevolution of the traditional demographics used toidentify and communicate to target markets. Insteadof just dividing travellers into groups based on age,income, gender, family status or education level, allof which is useful information, psychographics looksdeeper at people’s social values and views of theworld. This system, developed in partnership with theEnvironics Research Group, is called the Explorer’sQuotient (EQ). The focus of EQ is specifically on thetravel market. (NWTT 19/20Marketing Plan)Markets are broken down into psychographic markets(attitudes, beliefs and values) and geographic (location)markets. This approach allows us to develop athorough understanding of these market segments, andto determine what markets are a match for the tourismproducts and services offered in the NorthwestTerritories. Below you will find a breakdown of eachof the traveller segments to give you a better ideaof who is visiting the NWT and help you decide whoyour specific target market might be (NWTT 19/20Marketing Plan)Free Spirits: 13% of the Global MarketFree Spirits are highly social and open-minded. Theirenthusiasm for life extends to their outlook on travel.Experimental and adventurous, they indulge in highend experiences that are shared with other.Cultural Explorers: 12% of the Global MarketCultural Explorers are defined by their love of constanttravel and continuous opportunities to embrace,discover and immerse themselves in the culture, peopleand settings of the places they visit.Authentic Experiencers: 9% of the Global MarketAuthentic Experiencers are typically understatedtravellers looking for authentic, tangible engagementwith destinations they seek, with a particular interestin understanding the history of the places they visit.Personal History Explorers: 13% of the Canadian MarketAs travellers, Personal History Explorers are primarilydefined by their desire to connect to their own culturalroots—and do so by travelling in comfort, style andsecurity.No-Hassle Travellers: 10% of the Canadian MarketNo-Hassle Travellers are cautious, dutiful and reservedpeople who seek secure group travel that allows themto escape from the duties and obligations of everydaylife.Rejuvenators: 6% of the Canadian MarketRejuvenators are family-oriented people who travelwith others to escape form the stresses of everyday lifeto get pampered and indulge themselves.Gentle Explorers: 25% of Canadian MarketGentle Explorers are primarily defined by theirreluctance to venture far beyond the comfort of homeand travel “on condition,” demanding the very best andmost comfortable environments for themselves whenthey must do so.

TOURISM PRODUCT DEVELOPMENT WORKBOOK13Exercise 2Important Note: Internet access will be needed for this quiz. The results can be printed.Now that we have learned about the different types of travellers, let’s take a short quiz to find out what type oftraveller you are. Destination Canada’s Explorer Quotient Traveller Type Quiz will help you to understand thetype of traveller you are and what is important to you when travelling. This insight will help you make informeddecisions when developing your tourism products for the different types of travellers, allowing you to tailor theservice and product to the different traveller values.The quiz can be found at this link: quiz.canada.travel/Now, take the quiz again and think about who is coming to experience your products. Answer the questions again asif you are one of those visitors. Do the results of this quiz resemble any of the traveller types described above?

14TourismTrendsTourism trends are described as the general directionin which the tourism industry is developing orchanging, They have the potential to influence thetypes of tourism products you develop as well as thetype of visitor that comes to the NWT. In this section,you’ll be introduced to equitable (sustainable) tourism,Indigenous tourism, and eco-tourism. It is helpful to beaware of these trends (and other trends that may arisein the future) in order to capitalize on the opportunity.Considering ways in which you can include equitable(sustainable) tourism, eco-tourism, or Indigenoustourism values is a great first step in developing “ontrend” tourism products.Equitable TourismEquitable tourism development is defined by tourismvalues that put local people at the forefront of tourismindustry development. It emphasizes the importantrole that local people play in sustainable tourismdevelopment in communities. The involve

Table of Contents 2 Introduction 3 Tourism Product Development 4 ͧ What Exactly is a Tourism Product? ͧ Developing New Tourism Products 5 ͧ Product Positioning ͧ Product Packaging 6 Growth Strategies 6 ͧ The Ansoff Matrix 7 ͧ Market Development 8 ͧ Tourism Product Development 9 ͧ Exercise 1 10 Target Markets 10 ͧ Who is Coming to the NWT? 12 ͧ Understanding your Target Market