d1.hcs.cl6.07 slide 1. subject elements this unit comprises four elements: analyse markets ...
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DEVELOP NEW PRODUCTS AND SERVICES
D1.HCS.CL6.07
Slide 1
Subject elements
This unit comprises four elements:
Analyse markets
Evaluate market trends in food production and/or food and beverage service
Create products or services based on market analysis and within budgetary constraints
Monitor sales performance of products and services
Slide 2
Assessment
Assessment for this unit may include:
Oral questions
Written questions
Work projects
Workplace observation of practical skills
Practical exercises
Formal report from supervisor
Slide 3
Element 1:Analyse markets
Slide 4
Analyse markets
Performance criteria for this element are:
Target markets are identified in accordance with enterprise marketing and merchandising policies
Analyse market competition
Client requirements are monitored informally in order to evaluate market trends and client needs
New products and services are identified
Slide 5
Analyse markets
Performance criteria for this element are:
Opportunities to improve sales and services are identified
Product and service range is monitored to identify the demand for individual items and seasonal variations
Product and service range is planned
Slide 6
Need for new products and services
Need for new products and services
It is normal practice for businesses, regardless of industry, to develop and introduce new products and services.
This may include:
Improvements to existing offerings
Complete changes of direction
Slide 7
Need for new products and services
Need for new products and services
New products and services will only be successful if:
It is unique when compared with competitor’s offerings
It provides value for money
The customer views the product or service as valuable in their eyes
Slide 8
Need for new products and servicesExamples of new products and services
What have been successful new products and services that have entered:
Generally
The hospitality industry specifically?
Slide 9
Change
A rolling stone gathers no moss!
Slide 10
What is change?
Why is it important?
What influences change
Change is inevitable
Change
Slide 11
Continuous improvement
What is it?
Why is it important?
Who is responsible for implementing it?
Slide 12
Continuous improvement
Regardless of their visit it is important that the customer receives a ‘quality offering’
A quality offering is being able to use a combination of products and services
This combined offering, at a minimum, must meet the customer’s:
Needs
Expectations
Slide 13
Continuous improvement
Need for continuous improvement
Continuous improvement and change focuses on improving:
Products
Services
Slide 14
Continuous improvement
Products and Services
Which is more important – product or service?
What do these include?
Which aspects can be improved?
Slide 15
The customer The customer is............
Slide 16
Market segments
Identify market segments
Any hospitality organisation, like in any business in any industry, cannot be everything to everyone.
It must:
Break down the potential audience into segments with similar characteristics
Choose those segments they believe will be the focus of their efforts
Slide 17
Market segments
Generic market segments
Age
Social background
Economic background
Cultural background
Special interests
Physical and mental abilities
Dietary needs
Slide 18
Market segments
Hospitality market segments
Business
Leisure
Religious
Sporting
Slide 19
Market segments
Tourism market segments
Outbound Tourists
Inbound Tourists
Domestic Tourists
International Tourists
Slide 20
Target market segments
Identify target market segments
What are the key target segments for:
Resorts
City hotels
Budget accommodation
Stand alone restaurants
Fine dining restaurant in a hotel
Corner bar
Coffee shop?
Slide 21
Target market segments
Benefits of establishing target market segments
The analysis and collection of information in relation to different target market segments will guide:
Products and services offered
Prices charged
Where advertisements are placed
How advertisements are targeted
Staff required
Slide 22
Analyse market competition
Importance of analysing the market?
What do you want to analyse?
What information do you seek?
Where do you get this information?
Slide 23
Analyse market competition
What is market analysis?
Market analysis provides us with the information necessary to understand what can cause changes in our operational environment
A prime intent of this activity is to gain a more insightful and detailed view of the organisationand where it sits in the overall business and other settings
Helps identify ‘current market situation’
Slide 24
Current market situation
Market situation
Total market characteristics – size, growth, trends
Customer needs, perceptions and buying behaviour
Products – service characteristics
Prices
Customer service and distribution
Channels
Communication
Slide 25
Current market situationCompetitive situation
Industry structure
The geographic market in which they compete
Their current marketing performance
Their competitive position
Strengths and weaknesses, and vulnerabilities of each significant competitor
Their objectives and competitive strategies
Industry profitability
Slide 26
Current market situation
Product situation
For each product/service that the organisation offers, sales, profits, contribution margins and growth should be displayed
Product lifecycle and expected demand over the product’s life should be considered
Growth of the product/service should be contrasted with total market growth
Slide 27
Situation Analysis
Analyse the environments
It is vital to understand what can cause changes in our
operational environment.
It is important that managers analyse what is happening both:
Outside the business (external environment)
Inside the business (internal environment)
Slide 28
Analyse the environments
SWOT analysis
Strengths – what the business does well
Weaknesses – what the business can improve upon
Opportunities – where the business can improve or take advantage
Threats – where the business may become disadvantaged, weakened or susceptible
Slide 29
Analyse the environments
Analysis of external environment
Competitors
Economic climate
Customer preferences
E-business
Slide 30
Analyse the environments
Analysis of external environment
Environment
Technology
Political issues
Legal issues
What other external influences exist?
Slide 31
Analyse the environments
Analysis of internal environment
Environment
Organisational structure
Products
Services
Equipment
Marketing
Slide 32
Customer focus
Before we can tailor our products and services to provide an
offering that the customer wants, we first need to find out
what they actually want
Many businesses make the mistake of providing an offering
they THINK the guest wants, but what is offered doesn’t
meet their needs
Slide 33
Customer focus Who are your customers?
What are the needs of your customers?
How do you identify their needs?
Slide 34
Customer needsGeneric needs
Value for money
‘Offering’ reflecting what was advertised
Expectations met/exceeded
To feel respected
To feel welcomed
To be served by friendly staff
Slide 35
Customer needs
Generic needs
To be dealt with in a prompt and courteous manner
To receive assistance when necessary
To be in comfortable, clean surroundings
To feel remembered and recognised
To be heard and understood
Slide 36
Customer needs
Specific needs
What are the specific needs of your markets?
Business
Women
Family
Leisure
Elderly
Others
Slide 37
Expectations
Expectations come from:
The company’s image or reputation in the market
Past visits
Advertisements and promotional messages
Competing hotels
Industry standards
Comments from family, friends and colleagues
Price charged for the offering
Slide 38
Identify new products and services
As mentioned, an ongoing process for a hotel to stay ‘fresh,
unique and in demand’ is to identify new products and services
to attract and maintain customers.
In hospitality the product/service offering is combined to meet
customer needs and consists of the following elements:
A tangible product or products
Environment
Services
Slide 39
Identify new products and services
Products
What is classified as a product?
What are examples of products in the hospitality environment?
Slide 40
Identify new products and services
Services
What is classified as a service?
Who provides the service?
What are examples of services in the hospitality environment?
Slide 41
Identify new products and services
Characteristics of services
Pure services are activities or benefits characterised by:
Intangibility
Inseparability
Perishability
Variability
Slide 42
Opportunities to improve sales and services
Need to identify improvement opportunities
The need to identify opportunities for improvement is especially
important when new products and services are introduced as
new opportunities may become apparent as they are
implemented into the marketplace:
How can you do this?
Slide 43
Opportunities to improve sales and services
Ways to identify improvement opportunities
Observing what occurs in the workplace
Develop and use a checklist to guide what you observe
Involve workers in your observations
Analysing documentation
Slide 44
Opportunities to improve sales and servicesWays to identify improvement opportunities
Being advised by management/owners
Monitoring the external business environment
Making ‘improvement/continuous improvement (CI)’ a standing topic in every staff meeting
Involving staff
Slide 45
Generate ideas
Generating ideas
How would you generate ideas?
Why is it important to involve staff in the process?
Slide 46
Generate ideas
Common techniques to generate ideas include:
Talking to colleagues and supervisors
Looking at what happens in other venues
Contacting industry peak bodies
Reading industry literature
Conduct internet research
Using creative thinking techniques
Slide 47
Generate ideas
Creative thinking techniques
Brainstorming
Visualising
Making associations
Lateral thinking
Six thinking hats
Slide 48
Generate ideas
Use relevant knowledge
In addition to creative thinking ideas, there is
always the need to apply relevant knowledge to a
situation where workplace improvements are being
considered:
Technical knowledge
Service-based knowledge
Information from different work areas
Information from colleagues Slide 49
Review ideas
Review ideas for relevance and practicality
When you have captured ideas and information relating to them
your next step is to review and evaluate these ideas.
Slide 50
Review ideas
Review ideas for relevance and practicality
This allows you to:
Make legitimate and rational decisions about the options which were generated.
Evaluating the alternatives to determine:
Which ones remain as viable alternatives
Which ones should be discarded as inappropriate
Slide 51
Review ideas
Practicality considerations
Impact on other existing house protocols, policies and procedures
Impact on layout
Staff ability
Expected revenue
Cost
Impact on service delivery
Slide 52
Monitor and identify demand for products and services Once new products and services have been identified it
is important to identify the demand for specific items
and any seasonal variations that may affect it
How can you do this?
Slide 53
Monitor and identify demand for products and servicesProduct and service lifecycles
When deciding on the introduction of products and services it is important to understand how long they will have a positive and profitable impact. Most products and services will have some lifecycle.
This lifecycle is divided into four stages:
Market introduction
Market growth
Market maturity
Sales decline Slide 54
Monitor and identify demand for products and servicesIdentifying demand for individual products and services
Observation
Conduct a trial run
Place an advertisement
Suppliers
Industry associations
Journals and articles
Other hotels in the chain
Competitors
Feasibility study Slide 55
Monitor and identify demand for products and servicesUnderstand seasonal demand
Ways to identify seasonal demand include:
Analyse historical data
Review sales figures
The level of demand for specific products and services at different times
Identify expected peak times
Identify expected low demand times
Slide 56
Planning product and service range
Once ideas for products and services have been identified as a concept, further thought must be given as to how it is to be introduced into the market:
What are product considerations?
What are service considerations?
Slide 57
Planning product and service range
Product considerations
Product line decisions
Packaging
Warranties
Branding
Brand rejection
Slide 58
Planning product and service range
Service considerations
Intangibility
Inseparability
Perishability
Variability
Slide 59
Element 2:Evaluate market trends in food production and/or food and beverage service
Slide 60
Evaluate market trends in food production and/or food and beverage servicePerformance Criteria for this Element are:
Identify and access information sources on market trends in food production and/or food and beverage service
Evaluate market trends for relevance to the enterprise current and potential markets
Identify and access relevant information to assist development of new products or services
Slide 61
Understanding trends
Identify and access information sources on market
trends
Understanding trends of the industry is vital in ensuring
that what you are seeking to provide to the market is not
only fresh and relevant but is in demand:
How can you gather information on industry trends?
Slide 62
Understanding trends
Types of information sources
Colleagues, supervisors and managers
Representatives
Developing your own industry network
Conferences and seminars
Product launches
Trade magazines
Slide 63
Understanding trends
Types of information sources
Hotel school publications
Newsletters
Brochures
Advertisements
Government bodies
Slide 64
Understanding trends
Types of industry statistics and trends
Industry Statistics
General industry trends
Tourism patterns
Technology
Leisure time
Slide 65
Understanding trendsTypes of industry statistics and trends
Environmental issues
Discount operators
Customer demands
Quality demands
Slide 66
New product and service development
Every hospitality business conducts product and
service development, whether it's done intentionally or
unintentionally
This section will explore some of the steps associated
with product and service development
Slide 67
New product and service development
Risks in new product and service development
Developing a new product or service first and hoping it will sell
Financial risks
Duplication from competitors
The time taken to develop new products or services, particularly in fast moving industries
Slide 68
Steps in product and service developmentNew product or service development process steps
Idea generation
Screening
Idea evaluation
Development - technical and commercial
Commercialisation
Slide 69
Element 3:Create products or services based on market analysis and within budgetary constraints
Slide 70
Create products or services based on market analysis and within budgetary constraintsPerformance criteria for this element are:
Incorporate relevant market trends into food service and menu planning
Develop products and services to take account of market trends
Develop products and services to take account of enterprise operational constraints or limitations
Construct products and services to meet profitability targets
Slide 71
Incorporate trends into menu planningTypes of menus
Table d’hôte
À la carte
Banquet
Conferences
Slide 72
Incorporate trends into menu planningTypes of services
Breakfast:
Continental
English breakfast
American
Eastern
Morning tea
Brunch
Slide 73
Incorporate trends into menu planningTypes of services
Lunch
Afternoon tea
High tea
Dinner
Supper
Slide 74
Menu constraints
Menu length
Cost to maintain each dish on the menu
Ready availability of ingredients
Time available to prepare ingredients
Slide 75
Menu layout trendsEntrée
6 or 8 offerings
Mains
One or two of each of the main foods:
Beef, lamb, chicken, fish, seafood, vegetarian options
Slide 76
Menu layout trends
Side orders
Potato dish (hot)
Green vegetable (hot)
Salad (cold)
Desserts
Chocolate flavoured
Citrus flavoured
Hot dessert
Cold dessert (ice cream)
Slide 77
Menu layout trends
Cheese plate
Cheddar, brie, blue cheese
Coffee and tea selection
Local styles are popular
Italian style coffee
Wide variety of tea
Slide 78
Menu balance
Balance in terms of:
Prices
Ingredients
Cooking styles
Complexity and simplicity
Traditional dishes
New experiences
Taste
Slide 79
Final menu considerations
Considerations
Personal likes and preferences of the owner/manager
Equipment available in the kitchen
Staff skills
Historic records
Market research
Slide 80
Final menu considerations
Considerations
Seasonal offering
Staff numbers
Contractual requirements
Demographic considerations
Local produce
Slide 81
Develop products and services in line with market trendsFood and beverage trends
What are different food and beverage trends around the world?
Refer to Manual on pages 77 – 83 for examples
Slide 82
Consider organisational constraints and limitationsOrganisational requirements
Access and equity principles and practices
Maintaining ethical standards
Meeting goals, objectives, plans, systems and processes
Legislated obligations
Slide 83
Consider organisational constraints and limitationsOrganisational requirements
Management and accountability channels
Manufacturer’s and operational specifications
OHS policies, procedures and programs
Quality assurance and continuous improvement processes and standards
Slide 84
Consider organisational constraints and limitationsInvolve stakeholders
Quantities of items to be obtained or prepared
Timelines that apply
Restrictions that apply – such as preferred supplier arrangements, budget, compatibility, space issues, compliance requirements
Compliance issues that need to be addressed
Slide 85
Consider organisational constraints and limitationsInvolve stakeholders
The needs of those who will be using the product
Customer needs, wants and preferences
Introduction and commissioning requirements
Training required
Financing arrangements
Slide 86
Consider organisational constraints and limitationsTypes of resources
Resources can encompass:
Physical resources
Human resources
Financial resources
Intellectual property
Slide 87
Consider organisational constraints and limitationsCommon resources
Location/premises
Occupational health and safety (OHS) resources
Plant/machinery
Raw materials – used to produce the products or service
Refurbishment requirements
Staff amenities
Slide 88
Consider organisational constraints and limitationsCommon resources
Stock and supplies
Storage space
Technical equipment and software
Staffing
Training
Training materials
Slide 89
Consider organisational constraints and limitationsNotification of new products and services
It is essential that an organisation which chooses to introduce a new product or service to the market lets all relevant stakeholders know about it:
Customers
Managers
Finance
Human resources
Sales and marketing
Staff Slide 90
Consider organisational constraints and limitationsCommunicate information about new products and services
This product and service knowledge can therefore include:
Details about physical products
Information about the services that are available
Information on prices, specials, deals and packages
Details about the operation of the business
Slide 91
Consider organisational constraints and limitationsDevelop organisational policy, procedures and standards
Organisational service culture and values
Strategic goals of the organisation
Service policies, guidelines and processes
Ethical standards established by the organisation
Legislation, codes and practice
Technical standards
Slide 92
Consider organisational constraints and limitationsEffective communication of expectations
Communicating customer service standards can come in many different ways including:
SOPs (Standard Operating Procedures)
Job descriptions
Task sheets
Orientation programs
Slide 93
Consider organisational constraints and limitationsEffective communication of expectations
Formal meetings
Staff briefings at the start and end of shifts
Training sessions
Observation and mentoring
Informal communication during a shift
Slide 94
Consider profitability targets Naturally the introduction of new products and services
normally is an expensive exercise from a financial point of view
When deciding on new products and services they must be done in a way that is financially feasible in the long term
No business aims to introduce any new concept unless there is some financial benefit to it
Slide 95
Consider profitability targets
Initial costs
Closure of revenue generation outlets or rooms
Refurbishment costs
Purchase of furniture, fixtures and equipment
Removal of old equipment
Project management planning and implementing costs
Slide 96
Consider profitability targetsInitial costs
Purchase of new supplies including food, beverages, furnishings or amenities
Employment of staff
Training of staff
Promotional materials and activities to make customers aware of new offerings
Loss of productivity until people come ‘up to speed’
Slide 97
Consider profitability targetsBudgets
What is a budget?
Why is it important to have one when planning new products and services?
What is contained in a budget?
Who prepares a budget?
Slide 98
Deciding prices
Deciding on prices for new products or services
Determining a fair and accurate price for any new product or service can be hard as no existing benchmarks may have been set:
How do you set prices?
What needs to be considered?
Slide 99
Deciding pricesPricing questions
How do my customers perceive my product or service, in terms of price and value?
How do my prices compare with my competitors?
What values and benefits do my customers get from my product or service?
Are my prices consistent with those benefits and values?
Slide 100
Deciding pricesPricing questions
What is the current supply and demand relationship of my product or service?
Am I in an industry where the demand for my product or service has a short life cycle, and thus I need to cash in quickly?
Do I have a product with a recognizable name that allows me the luxury of overpricing?
Slide 101
Deciding prices
Pricing considerations
Price indicates ‘value’
Understand customer perception of ‘value’
Consider fixed and variable costs
Consider the competition
Consider different price points
Slide 102
Element 4:Monitor sales performance of products and services
Slide 103
Monitor sales performance of products and services
Performance criteria for this element are:
Evaluate new products and/or services in consultation with stakeholders
Analyse products and services in terms of business objectives
Adjust products and services based on feedback and profitability
Slide 104
Evaluate new products and services
Need for evaluation
After new products and services have been implemented, a formal evaluation needs to analyse and assess the above information to determine operational effectiveness:
Why is this important?
How do you do it?
Slide 105
Evaluate new products and servicesEvaluation questions
Did it work?
What aspects worked and what didn’t?
Did it represent value for money?
Were sufficient contacts or sales made?
Did it come in on budget?
Slide 106
Evaluate new products and services
Evaluation questions
Did the campaign/idea achieve the stated objectives?
To what extent?
What feedback was received from customers and agencies?
What implications does this have for future undertakings?
What wouldn’t we do the same next time, and why?
Slide 107
Evaluate new products and servicesAreas to evaluate
The procedures or systems
The workflow – that is the order in which things are done
Whether or not there are gaps or overlaps in service provision
The workload of staff
The time it takes to do a task or job
Job design
Slide 108
Evaluate new products and services
Areas to evaluate
Level of customer satisfaction with the service or product provided
Cost
Level of interest created
Demand patterns
Ease of implementation
Increase in sales or leads
Return on investment
Slide 109
Evaluate new products and services
Getting feedback from stakeholders
Owners of the business
Site/property managers
Supervisors
Staff, teams and workgroups
Customers
Government agencies
Slide 110
Methods to gather feedback
Getting feedback from internal management and staff
Encouraging staff to feedback all relevant comments from customers
Not shooting the messenger
Setting agenda items for staff meetings
Developing appropriate documentation
Slide 111
Methods to gather feedbackGetting feedback from internal management and staff
Conduct regular meetings
Conduct specific feedback sessions
Get staff to provide scheduled feedback when problems occur
Gather thoughts during debriefing sessions at the conclusion of shifts
Slide 112
Methods to gather feedbackGetting feedback from customers
From guest comment cards
Use an online option
Observing customers
Direct communication from customer/guest to staff
Management meeting customers on departure
Requiring frontline customer/guest contact staff to inquire about the customer experience
Staff should also be required to feedback any comments they have overheard
Slide 113
Analyse products and services against business objectivesImportance of business objectives
The basic requirement when analysing the success of new products and services is its ability to reach its desired objectives of performance standards:
What types of business objectives exist in relation to new products and services?
How can you measure success against these objectives?
Slide 114
Analyse products and services against business objectivesTypes of business objectives
The basic requirement when analysing the success of new products and services is its ability to reach its desired objectives of performance standards.
Business objectives may be related to:
Quantity
Quality
Time
Sales figures
Profitability
Customer satisfaction
Service standards
Slide 115
Analyse products and services against business objectivesMonitoring and evaluating implementation success of new products and services
Work out what needs to be monitored
Decide on methods or measures to use (see next slide)
Compare what is happening with what should be happening
Take appropriate action
Slide 116
Analyse products and services against business objectivesMethods of analysis
Reports
Obtaining customer feedback
Using a pretend customer
Observation
Use of checklists
Brainstorming sessions
Staff input and review
Slide 117
Adjust products and services
Possible changes to products and services
As a result of input from all stakeholders and a comprehensive analysis of the performance of new products or services the following actions may need to be taken to improve the successful implementation of products or services:
Remove the product or service if it is not successful
Reduce or expand the product or service range
Amend product or service inclusions
Slide 118
Adjust products and services
Possible changes to products and services
Change or enhance the promotional message
Establishing additional or revised pre-programmed decisions to address shortcomings or problems
Providing training to staff to improve service provision
Revising the allocation of duties to staff
Buying new equipment, or more equipment or different equipment
Making changes to establishment policies and standard operating procedures (SOPs)
Slide 119
Adjust products and services
Possible changes to products and services
Increasing staff numbers
Changing operating/trading times
Changing layout of the premises/department
Organise more information for customers
Change prices to meet customer demands whilst still meeting financial expectations
Slide 120