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Market Product strength and weakness analysis

Market product analysis and market appraisal in terms of strengths and
weaknesses, sometimes called a SWOT (strengths, weaknesses, opportunities
and threats) analysis is as fundamental as the basic market
investigation.
Marketing action must have a strong product responsibility, and ensure
that periodic testing is carried out with precision. All organizations
concerned with the tourist trade, whether public or private sector, must be
market not product oriented. It is not good enough, nor likely to be
successful, to make a product simply because it suits the destination
residents” interests or the resource owners. Product evaluation and new
product formulation starts as an essential part of the development plan, just
as marketing strategy must itself be related to the development plan and the
organization”s business strategy.
The following examples indicate the approach to strength and weakness
analysis as a basis for product formulation.
The British Tourist Authority has carried out from time to time a thorough
SWOT analysis, taking into account visitor surveys. The study also deals
with matters to be addressed, and reports of action taken or planned with
government, local authorities, tourist boards and industry (BTA, 1989; BTA,
1991, 1992).
The SWOT analysis can play an essential part in the marketing
planning process. Such techniques were instrumental, for example, in
overcoming off-season troughs. London hotels with a low winter weekend
occupancy 25 years ago created city weekend breaks which transformed
their trade by attracting new clientele for a new product. The
words “off season” were banished. City attractions in the theatre, entertainment,
shopping and sports (football) were promoted, featuring as city
highlights in the “lively months” and attracting a substantial clientele
from home and abroad.
Once clearly identified, the strengths will be strongly promoted and the
weaknesses in many cases can be corrected. Indeed many of them may in
fact prove to be unjustified perceptions, such as “it always rains there”, or
“restaurants are not good”. Generalizations are rarely true, but criticism can
be very constructive in sharpening the competitive edge.
The SWOT analysis must be a strictly objective assessment. This is
essential in a competitive situation when switching brands or products is a
real possibility. Factors such as food, hygiene, safety and government
controls must be measured as accurately as possible.
Britain: Strengths and Weaknesses As Seen in the Early 1990s (BTA Strategy for Growth publications)
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Strengths

1 Product strengths:
(a) politically stable
(b) internationally recognized
(c) wide touristic appeal
(d) many year-round attractions
(e) international communication centre
(f) English is the main international business language
(g) London Heathrow – international gateway for Europe and the
world
(h) links of kinship with many countries
(i) unique appeal of British countryside
(j) scenic diversity.
(k) London’s worldwide reputation
(l) centre of commerce/business and communications
(m) entertainment capital of the world
(n) heritage, culture and the arts
(o) long history
(p) tradition and pageantry
(q) the Royal Family
(r) entertainment
(s) sporting events
(t) other spectacles
(u) wide range of accommodation from international luxury hotels to
bed and breakfast guest houses
(v) good universities/colleges and English language schools
(w) good information services in Britain and abroad
(x) ease of movement around Britain by a variety of transport

2 Market strengths:
(a) worldwide; EEC and rest of Europe, North America, Australasia,
Middle East and Africa, New Markets, e.g. Far East – a better spread
than other European competitor countries
(b) product market segments
(c) business, business-related, especially conference/trade fair/incentive
travel
(d) youth (including education)
(e) senior citizen
(f) ethnic
(g) visits to friends and relatives
(h) specialist appeals in sports, hobbies and other leisure pursuits,
offering stable and resilient traffic with great worldwide potential.

Weaknesses

(a) service quality: more attention to improvement needed in view of
high and increasing international standards
(b) litter and environmental protection: clean beaches, rivers etc.
(c) unfavourable perceptions: Britain abroad, e.g. climate and value for
money in certain markets
(d) the travel trade not committed to British tourism products –
information and reservation systems need improvement, especially
for the independent travellers
(e) more investment needed in capital projects, especially in resort
amenities
(f) more budget-priced accommodation needed in London and certain
other urban centres
(g) inadequate investment in transport infrastructure, e.g. port facilities,
airports and air traffic control, rail travel, roads and parking,
especially for coaches
(h) better reception and entry formalities required
(i) improved training and better language abilities needed in key tourism
trades
(j) longer opening hours required for attractions, out-of-peak periods
and shops in certain tourism areas.

Greene (1982, p. 28) comments:
It is essential to decide what the strengths and weaknesses of your product are,
bearing in mind the demands and requirements of the different sources of business
and the strengths and weaknesses of your main competitors.

He emphasizes two key points. First, there will almost certainly be several
types of business or several market segments, e.g. business travellers on
weekdays and pleasure travellers at weekends. In fact, the variation in the
segments is likely to be much greater. The second important point is the
competition. In a free market this must be matched. The competitive edge
must not be eroded. Currently in Europe there are serious weaknesses:
world market share is declining substantially, and the competitive edge is in
practice suffering erosion, especially from North America, Asia and the
Pacific. Transatlantic traffic, for so long dominated by American visitors to
Europe, now depends for a majority of passengers on Europeans visiting
north America.
The object of the SWOT analysis must be to select those segments and
products where the organization”s advantages are greatest, whether the
marketing objective is a particular hotel, an airline, a resort or a country as
the destination.
Greene points out that even for the hotel the product can be changed, and
some of the changes can be made quickly, e.g. new decor, special themes,
new designs and staff uniforms. The business can grade up in price and
service, or grade down, moving towards the bargain basement. But this
requires careful market study, as in some cases it will be difficult to change
back.

The action plan

The SWOT analysis will lead to policy formulation, and plans for product
improvement, with the marketing plan following the product/market
match studies. These must be the basis for the operational and business
plan.
Clearly the “action plan” must be a combination of marketing and
product improvement as the two are so directly related, with marketing
orientation the leading force. Sometimes product improvement will follow
naturally from a definition of the offer or repositioning the product in the
marketplace. The opening of a modern hotel in a town or resort may
threaten an old-fashioned hostelry. The new establishment is bound to
attract business. The result will depend to some extent on external factors,
such as whether the total market is growing. However, the traditional hotel
may be able to concentrate on its unique differences: historic connections,
old-fashioned charm, and appeal to new market segments, e.g. overseas
visitors. Marketing initiatives could feature packages for short stays (breaks)
with tours based on local features of interest, and changes in price and
services.
There is sometimes a temptation for a product-dominated approach to be
chosen by the destination authority, usually the local authority. They will be
keen to maximize the use of existing facilities, even if are they not up to date,
or improved to meet changing demand. There is no justification for such a
policy even if, in a largely non-commercial operation, the discipline of profit
and loss may not operate.
Cost benefit guidelines, and appraisals of performance against objectives
are much more difficult but no less necessary. The principle of operation
must be the same; the most effective use of inevitably limited resources in
meeting agreed objectives for the business. This is as compelling for the
destination – the resort – as for the individual business.
It is not the tourists themselves who need or indeed should be managed,
but rather the tourist resources, often the responsibility of the public sector.
Tourist resources are an essential item in the planning and marketing
process. There should be an agreed strategy for their management, clearly
expressed in the business and marketing plans. Of course, special skills are
required in organizing, guiding and catering for large groups of visitors, and
controlling traffic flows, especially at peak times, by road and in congested
areas. Such needs, together with other aspects of the supply of services
necessary to cater for tourist traffic, must be in development and marketing
plans.
The host region has an obligation to welcome, care for and serve the
visitors, their paying guests. The regional or local authority on behalf of the
population must decide how they wish to develop their tourism trade, that
is if they wish to welcome visitors and benefit from their company and
expenditure. The decision must involve the preparation and agreement of a
strategy and plan as the basis for the invitation, the promotion and the
product supervision and delivery.
Market research and analysis, listing of options, careful examination of
product provision, and the product market match, provide the basis for the
formulation of overall policy and the related strategies for both marketing
and product development. The two are interdependent and indeed the time
scale for planning and operation is similar. The main difference is that the
product may require long-term fixed capital investment with limited means
of rapid change, whereas markets may become increasingly volatile with
short-term variations.

Product/market fit

There are a number of ways of preparing product/market fit strategies. The
following charts taken from the British Tourist Authority’s Market Plan,
show how the process can work for a destination authority. Allowance has
to be made for the fact that usually the destination marketing organization,
such as a national or local tourist board, has no direct control or
responsibility for most of the services and facilities making up their
‘product’. Of course, such a body can and should have a powerful influence,
especially if the marketing operations are carried out in consultation and
cooperation with the operating sectors. In this way the destination
promotion will carry commercial messages and often specific sales offers
from the chosen commercial partners.
Combining destinations and product publicity can be very effective. It is
rather like a two-stage rocket. Destination selling attracts attention for the
whole area – the first and vital task. The second and later stage when the
potential traveller has clarified intentions and moved closer to the point of
sale, involves much greater precision as to cost, brand and specific services
to be chosen. This is inevitably a more competitive activity.
It will be noted that BTA segments traffic first into holidays, centred and
touring, and business travel. These main segments are then subdivided into
much more detail, examining specialist activity and varying behaviour
groups which can be separately identified.
A product/market fit chart is given also for a hotel to indicate the
difference, more of detail than principle, applying to any commercial service
or undertaking.
The charts can be much more complex, dependent upon the marketing
task. Since tourism is becoming much more specialized, there are an
increasing number of smaller markets, some mini mass markets and what
are often termed ‘niche’ markets which specialist operators can develop.
Furthermore, a wide range of non-commercial operators – associations,
clubs, institutions, such as schools, church groups and societies offering
travel and recreation as a membership benefit – are together responsible
for a substantial part of total movement. In practice, each category of
product in such cases is likely to appeal to a specialist market segment.
The organizations should ensure cost-effective marketing, especially if
promotional funds are very limited which is usually the case. The likely
clientele must be targeted narrowly, concentrating on priority groups
which may be limited in numbers (Table 9.3). The product list (Table 9.4)
is capable of much expansion to isolate the hotel’s special advantages
and the locality’s attractions as the setting for special events or amenities
and tours, etc.
In planning promotion, priority should be given to yields. Some forms of
traffic will be more profitable or fill empty beds in the slack periods. Some
may be regular, others dependent on intermediaries. Groups and marginal
trade may require substantially discounted rates.
Origins of traffic may need a more detailed analysis, such as domestic
business by distance, e.g. up and beyond 100 miles (160 km) travel.
Overseas business is likely to be concentrated in a few markets; for
example France, Belgium and North America and perhaps in a small
number of cities in each country. Clearly this information is vital in
directing sales efforts.

Table 9.3 Nordic markets: product demand – Sweden

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Key: N, Nil; L, Low; M, Medium; H, High demand.
Region: Lon., London; S. Engl., Southern England; M. Engl., Midlands; N. Engl.,
Northern England; Scot., Scotland; N. Ire., Northern Ireland.

Table 9.4 Product/market fit: table for a hotel

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* A, B, C, D, E, F denote countries of residence of visitors, e.g. A for USA, B for
Germany, C for France, D for the Netherlands, in order of priority. Boxes would be
completed on a scale of 1–5 or 10 as preferred, to denote relative importance or
size, depending on the hotel’s record of visits. Day visits should be indicated for
important segments. Some examples are given.
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