Three Perspectives on Tourism Product Development

In this post, I offer a concise overview of three distinct perspectives on product development within the tourism sector: the product-oriented, the customer-oriented, and the operational environment-oriented perspective. Delving into this piece will show how various factors such as product technical elements, customer demands, and the operational environment can significantly determine the start and emphasis of a tourism product development process. Whether you are an academic, student, or industry practitioner, this exploration promises valuable insights that may expand your understanding of tourism product development in both theory and practice.

The product-oriented perspective

In product-oriented tourism product development, various service elements and features are emphasized as the starting point for product development. For instance, according to the well-known Smith's model, the initial phase of producing a tourism product involves the planning and management of a specific location (such as a lake, tourist resort, or forest). In subsequent phases, other elements, such as service quality, the right service attitude, a broad service range, and the physical and emotional participation of the customer, play a crucial role in shaping the tourism product. All these elements mentioned in the model are measurable and can be evaluated based on economic criteria.

The product-oriented perspective describes tourism product development as a technical process with a clear structure divided into stages such as identifying market opportunities, planning, testing, and introducing the product to the target markets. Through these stages, market needs are transformed into marketable tourism products. The starting point is market research, which aims to reduce potential errors before directing additional resources to the product development process. In the planning stage, product concepts are ideated and drafted, tested before finalization. Once the first three stages are completed, and the product is flawless, high-quality, and safe, it is launched into the market.

The customer-oriented perspective

In customer-oriented tourism product development, the process starts with the experiences and needs of customers, as well as the benefits derived from the product. Most attention is given to activities and services that meet customer needs and ensure high-quality experiences. As a result, the entire product development process is influenced by the choice of the target customer group or market segment that a company or region aims to prioritize. The principles guiding the customer-oriented perspective are rooted in the realm of service marketing. Product development based on a customer-centric approach is, in many respects, also a well-scheduled process divided into different phases with a clear starting and ending point.

In discussions on customer-oriented tourism product development, we cannot omit the concept of co-creation which has gained prominence in service marketing. Vargo and Lusch refer to co-creation as the collaborative production of services wherein the active role of consumers holds significant importance. Consumers are not passive recipients of company offerings; rather, their experiences and knowledge are actively incorporated by involving them in the product development process. Tallink Silja's "1000 Product Developers" and Finnair's "Quality Hunters" are good examples of successful campaigns aiming to actively include consumers in the product development process of these Finnish companies. While the co-creation perspective broadens the involvement of consumers, product development is still perceived as an internal function of the company. Essential information and market knowledge are sourced within the company or from its customers.

The operational environment-based perspective

According to this perspective, the starting point for tourism product development is the operational environment of the company. The operational environment refers to the relationships between societies, regions, industries, and people, often on both global and local scales. This perspective also relies on co-creation, which extends beyond interactions solely between the company and its customers to include other actors and stakeholders. While tourism experts and customers are important, it's also crucial to consider the knowledge and perspectives of tourism workers and local community members. Tourism product development emerges from the interactions among various stakeholders in tourism, influenced by diverse local and international networks. These interactions always occur within specific places, such as villages, hotels, or websites, and involve social, cultural, sensory, natural, and constructed elements.

From the operational environment-oriented perspective, product development is viewed as a holistic activity, where the development of the product also leads to the evolution of the organization's practices. The starting point is the continuous evaluation of operations, which helps the organization and its stakeholders to question established business practices and discover alternative ways of thinking. Product development is not a straightforward process with a clear beginning and end, but rather a continuous, interactive activity. Therefore, an operational environment-oriented perspective emphasizes product development as a collaborative effort between the company and its stakeholders, aimed at creating new ways of operating, meeting customer needs, and establishing business practices. Good examples of operational environment-oriented product development can be found in tourism companies such as TreeHotel and Icehotel. In both cases, product development was led by elements found in the small localities where the companies operate. The Tornio River was the driver of Icehotel innovation process while the Forest in Haralds played a key role in the development of Treehotel as a tourism product or attraction.

These three perspectives are not mutually exclusive; rather, they complement each other in understanding the process of product development in tourism. Product development can take the form of a linear process with a defined beginning and end, or it can manifest as an ongoing interactive activity. Throughout the product development process, not only are the internal operations of the company present, but also customer practices and the specific characteristics of the operational environment.

This blog article is based on the book chapter "Matkailun tuotekehitys" authored by José-Carlos García-Rosell, Minni Haanpää, and Sanna Kyyrä (2017) and published in the book "Matkailututkimuksen avainkäsitteet" edited by Johan Edelheim and Heli Ilola.