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Chapter 9: Designing and Managing Products and Brands: Building
Customer Value
Chapter Objectives
2. Explain how accessibility, atmosphere, customer interaction with the service delivery
3. Understand branding and the conditions that support branding.
5. Explain the new product development process.
6. Understand how the product life cycle can be applied to the hospitality industry.
Teaching Suggestions
The following explanations and suggestions are outlined based on the Chapter Objectives.
1. Define the term product, including the core, facilitating, supporting, and augmented
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. It includes physical objects, service,
places, organizations, and ideas.
Core Product: the most basic level of a product what the customer is actually
buying
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2. Explain how accessibility, atmosphere, customer interaction with the service
delivery system, customer interaction with other customers, and customer
coproduction are all critical elements to keep in mind when designing a product.
From a managerial standpoint, the core product provides a focus for the business; it is the
reason for being. Facilitating products are those that are essential for providing the core
3. Understand branding and the conditions that support branding.
A brand is a name, term, sign, symbol, design or a combination of these elements that is
intended to identify the goods or services of a seller and differentiate them from those of
competitors. There are five conditions that support branding:
The product is easy to identify by brand or trademark
4. Discuss branding strategy and decisions companies make in building and managing
their brands.
Brands are powerful assets that must be carefully developed and managed. Some analysts
products and facilities
Components of branding strategy include:
Brand Equity. The differential effect that knowing the brand name has on
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Brand Name Selection. Desirable qualities for a brand name include the
following:
o (1) It should suggest some-thing about the product’s benefits and qualities.
Leveraging Brands. Companies can leverage an existing brand by employing co-
branding and ingredient branding. Co-branding, or dual branding, can take
5. Explain the new product development process.
The new product development process includes: idea generation, idea screening, concept
6. Understand how the product life cycle can be applied to the hospitality industry.
The product life cycle is marked by five distinct stages:
(1) Product development
Engage your students in discussion about various hospitality products and services.
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Chapter Outline
I. What Is a Product? [Slide 9-4] A product is anything that can be offered to a market for
II. Product Levels [Slide 9-5]
A. Core product. It answers the question of what the buyer is really buying. Every
product is a package of problem-solving services.
B. Facilitating products. These are services or goods that must be present for the
D. Augmented products. [Slide 9-6] These include accessibility (geographic location
and hours of operation), atmosphere (visual, aural, olfactory, and tactile
dimensions), customer interaction with the service organization (joining,
consumption, and detachment), customer pa
interactions with one another.
1.Accessibility. This refers to how accessible the product is in terms of
III. Branding Strategy. [Slide 9-9] Brand is a name, term, sign, symbol, design, or a
combination of these elements that is intended to identify the goods or services of a seller
and differentiate them from those of competitors.
A. Building strong brands. Brands are powerful assets that must be carefully
B. Brand equity. It is the added value endowed on products and services. It may be
C. Brand positioning. [Slide 9-10] Companies can position brands at any of three
D. Brand name selection. A good name can add greatly to a product’s success.
However, finding the best brand name is a difficult task. It begins with a careful
G. Managing brands. Companies must manage their brands carefully. First, the
IV. New-Product Development [Slide 9-11]
A. New-product development process
2.Idea screening. The purpose of screening is to spot good ideas and drop
poor ones as soon as possible.
4.Marketing strategy development. There are three parts to the marketing
strategy statement. The first part describes the target market, the planned
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7.Market testing. Market testing is the stage in which the product and
V. –
times buy a small restaurant chain such as Chipotle rather than develop their own new
concepts. Another technique is to purchase distressed chains. The mismanagement of a
VI. Product Life-Cycle Stages [Slides 9-14 to 9-15]
A. Product development. It begins when the company finds and develops a new–
product idea.
Answers to Discussion Questions
1. Given all the changes in the branding strategy for Las Vegas over the years, has the
Vegas brand had a consistent meaning to consumers? Is this a benefit or a detriment
to the city as it moves forward?
This is a good topic for class discussion. Ask your students to research the different
branding strategies Las Vegas has used over the years. Which strategies do they think
2. Use a product from the hospitality or travel industries to explain the following terms
(provide an example in your explanation):
This is an excellent assignment for your students either individually or in groups.
For example: the demand of home delivery of fast food is growing due to changes in the
American lifestyle. The increased numbers of households headed by one parent leaves
little time to provide home-cooked meals. The increase in DINK households also means
that no one is home to cook dinner. Marketers can gain a competitive advantage by
providing effective facilitating, supporting and augmented products for these households.
a. Facilitating product
b. Supporting product
Provide complete meals for one stop shopping. Does your restaurant provide
c. Augmented product
Do you have a phone number recognition system? Are customers greeted by name
3. ARAMARK, a large-contract food-service company, is introducing branded food as
part of its campus feeding. Why would ARAMARK pay a royalty to Burger King
when it is capable of making its own hamburgers very efficiently?
This is a good topic for class discussion, particularly if your college or university has
both a contract foodservice company and branded outlets. Ask your students if they know
who provides the foodservice for your college or university. What are their perceptions of
the different food offerings?
4. As a hotel or restaurant manager, how would you gain new product ideas?
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5. Less than a third of new product ideas come from the customer. Does this
Certainly there is no conflict with the basic tenet of marketing. The find a need and fill
Customers may be unable to describe their needs, so asking customers to suggest new
6. If you were the director of new product development for a national fast food chain,
what factors would you consider in choosing cities for test marketing a new
sandwich? Would the place where you live be a good test market? Why or why not?
To facilitate this discussion, first ask your students to define the demographic and
psychographic characteristics of different segments within their city. Which segments
would be best for test marketing a new fast food sandwich? Why?
7. Give examples of co-branding and ingredient branding practices in hotel and
restaurant industry. What are the advantages and disadvantages of these practices?
This could be an interesting assignment for students to conduct outside of the classroom.
You could ask them to research via the web or visit different hospitality operations in
8. Explain why many people are willing to pay more for branded products than for
unbranded products. What does this tell you about the value of branding?
Brand denotes an automatic level of quality and consistency that the customers have
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9. Apply the concept of the product life cycle to a hotel. How does a company keep its
products from going into the decline stage?
The product life-cycle (PLC) concept can describe a product class (fast-food restaurants),
a product form (fast-food hamburgers), or a brand (Popeyes). The PLC applies differently
in each case. Product classes have the longest life cycles. The PLC concept is a useful
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