What makes tourism products special is the fact that they are the result of close co-operation among different actors. Thus, it is crucial that all the actors involved in the product are familiar with the story of the product and take part in product development. In some cases, the best results are achieved by involving even competitors in product development. Differentiation does not happen only through the developing of new products but also new business practices. Then, the central question is not what to develop but how things are done.
Also customers are actively involved in constructing the product and telling the story of the product. Social media represents an opportunity for customers to continue and share their experiences, allowing them greater influence and a more active role in the product. The internet is studded with travel destinations, activities, reviews of accommodation services (for example, a popular site is tripadvisor) and most tourists find peer reviews as reliable as the information provided by companies.
Finding the heart of the story helps to communicate in a consistent manner: Arctic SnowHotel
Since different actors are involved in developing and putting the product together, it is important to always keep the heart of the story in mind. When the business goal and the story of the product are clear, it is easier to communicate consistently to different stakeholders and also make sure that the story is still recognisable when delivered to the final customer.
The product of Arctic SnowHotel – a company situated in the village of Lehtojärvi, Rovaniemi, Finland – may be described either through the company actions or the initiatives of business partners. The elements of the product presented in co-operation and negotiation meetings differ from those communicated to the end customer. While the main message to end customers who come to spend a night in the hotel can be “surpassing oneself” or “heroism”, the back yard of the hotel is sold to charter Christmas tourists as a winter playground, a Lappish village or an reindeer farm. This can indeed become a source of confusion.
The relationship between human and nature, which is the core of Arctic SnowHotel’s product, can be used to build a consistent communication strategy that is applied to business partners, locals and end-customers. The construction of the snow and ice hotel reveals the entrepreneur’s technical skills, through which a hard, moody material such as ice becomes a piece of art, a source of creativity and unforgettable experience for the customer. At the same time, it is a message to other small entrepreneurs and locals that by believing in one’s knowledge, networking abilities, humbleness, continuous learning and high level of professionalism it is possible to convert difficult conditions into a success.
While the construction of the hotel every year creates a sense of pride and inspiration source among employees, by spending a night in arctic conditions, customers get a sense of survival. Ice is an extreme element, making the construction a challenging task. However, while the entrepreneur has run his head against the brick wall many times, he has always been able to learn something new and thus find a solution. In the spirit of the entrepreneur, the customer may find an inspiration for problem-solving and coping with challenges and situations that appear to be hopeless.
Arctic SnowHotel is also a good example of sustainability and regional prosperity: energy consumption is less than in a normal hotel, ice melts in spring flowing into the lake from where it came from, and when winter returns the hotel is built again by using local manpower. These are good reasons for the customers to trade one night in a conventional hotel for one night in the SnowHotel.
Strengthening organisational practices as the basis for product development: Eräsetti Wild North
Inside an organisation we can find practices that hinder or promote product development. Usually, such practices – routinised ways of thinking and doing – are difficult to identify, just because “it has always been done this way.”
The rearrangement of the practices of Eräsetti Wild North came at the right time as the company was in the middle of organisational change. Metsähallitus bought the activity company Eräsetti. As a result of the acquisition of Eräsetti by Metsähallitus, product development was reorganised again, creating a product development team. The members of the team come from different organisational levels and functions from top and middle management to tour guides. The meetings of the product development team have helped to facilitate the flow of information between the operations and sales department, to build a common vision and understanding of the company and to generate ideas for new products.
It is good to reflect – at the company level – upon product development related practices and routines, such as the composition of a product development team or meetings, frequency and timing, and the influence of the product development process. Regarding information accessibility, information flow and the effectiveness of product development, it is necessary to determine whether product development should be the responsibility of one or two persons or involve all staff members. Should product development be a continuous process embedded in the day-to-day operations of the company, be done in meetings taking place at regular intervals or only when needed? When does it provide more benefits than harm to involve guides or representatives of the top management in the product development team?
Product development, an integral part of business development: Jaakkola Reindeer Farm
One of the owners of Jaakkola Reindeer Farm, a family-run business, studied at the Rovaniemi University of Applied Sciences and developed – as part of her thesis – the company’s most important product “a visit to a reindeer farm”. In the process of writing the thesis, she realised that product development in a small company is not just product development, but an essential part of business development and the construction of the entrepreneur’s own identity.
For Jaakkola Reindeer Farm the starting point of product development has been a long history, traditional ways of doing things, an authentic operating environment – an inhabited reindeer farm – and other resources such as castrated bucks trained to pull a sled, farm equipment and premises. In addition, the business couple’s personal interests and strengths, hospitality, Sámi roots and love for Lappish old stories have contributed to building a solid foundation for product development.
The company’s product development has focused on the product experience, storytelling elements and systematisation of day-to-day operations. A variety of training and tools have been used to promote the entrepreneurs’ skills in those areas. Participation in entrepreneurship and storytelling training programmes have proved to play a key role in supporting the business couple in their product development efforts and constructing their entrepreneurial identity, in finding their “own voice”.
They have also succeeded in gaining a customer perspective by observing the customer behaviour and practices during the visits to the reindeer farm. Different tools and consumer-production models have help them in training their employees, managing large groups, developing product ideas and pricing them. With the help of the experience triangle, they have made sure that experience-based elements are considered in their products. The outcome of the development process is not only a more experience-based and higher quality reindeer farm visit, but also new practices and ways of doing as well as a stronger entrepreneurial identity.
Co-operation among competitors in riverboat cruises
Competing companies do not usually co-operate with one another. Changes in the operating environment, breakthroughs in different sectors and business development have, however, led tourism enterprises to adopt new practices. Riverboat cruises represent a good example of how two competing companies create a single product together for tourists visiting Rovaniemi.
Riverboat cruises are sold to individual travellers visiting Rovaniemi. Both companies sell the cruises together at the same prices, switching responsibility for their implementation every other week. A single riverboat cruise has the capacity for 10 persons. Before companies began to co-operate in relation to this product, it was not uncommon that both companies left the dock at the same time with half empty boats. By pooling resources it was possible to develop a profitable product, whose continuation was secured. The price remains reasonable, as the majority of the cruises are no longer unprofitable. At the same time, customers have a good time in boats, which are now filled with a nice atmosphere.
In this example, we see a good case of simultaneous competition and co-operation. Companies that are competitors can benefit more by co-operating closely in particular areas than by competing with one another. This business approach is called “co-opetition” and it can be applied to business areas, in which the company does not have a competitive advantage. Companies can limit close co-operation to those particular areas and continue competition in other business areas.
In many occasions business co-operation leads to a situation, where the “winner takes it all”. Through co-opetition companies can achieve better results, excelling the value of the initial investment of the participating companies. More about co-opetition and other form of co-operation in the tourism industry can be found HERE.
Facilitating the sharing and continuation of product experiences through social media: Upitrek and SantaPark
Social media has made the internet a significant part of people’s everyday practices. There are many different channels (e.g. Twitter, Facebook, YouTube, Flicks), trough which users can produce content as well as comment, share and assess content generated by other users.
In social media, the consumer is king: most people trust user reviews more than the information provided by companies themselves. Through social media companies can gain access to customer information and tourists’ reviews on destinations. Furthermore, social media offers an opportunity to follow how customers continue the product experience by sharing stories and the pictures of their holidays with friends and other tourists.
Upitrek, a nature-based tourism company situated in the Finnish region of Kainuu, turned to social media when it realised that its customers were already there. Usually when a Upitrek programme finishes most customers start to exchange their e-mail addresses. A couple of weeks after the Upitrek experience pictures of the trek are available on internet photo galleries. Customers start writing to each other, exchanging pictures and commenting on their trip experiences; the best and worst parts of the trip and the things that they missed.
As such, storytelling continues in social media as a result of the customers’ own initiative. Upitrek realised that it would be possible and beneficial to support customers in this particular practice. Upitrek is now on Facebook supporting their customers in sharing their experiences. Another way to support this practice is to create an online guest book so that customers can leave their comments on it.
SantaPark, which is situated in Rovaniemi closed to the Arctic Circle, has introduced a new service that allows customers to make a greeting video and send it by e-mail to friends around the world or share it directly by using social media (e.g. Facebook or Twitter). Greeting videos are an easy, fun and up-to-date way of sending greetings from holidays. After all, most of the post is nowadays electronic. Customers can send as many greetings as they want free of charge. At the same time as customers are sending greetings, they are also promoting SantaPark among their friends and relatives.
Many entrepreneurs are reluctant to participate in social media due to fears of negative or inappropriate comments. Studies have, however, showed that 70% of the comments posted in social media are positive, 20% neutral and only 10% negative. The ones who post negative comments do it anyway somewhere on the internet. It is, then, better to open a channel for feedback to make entrepreneurs aware of those opinions and give them the possibility to respond (or react) to them.
What is this about?
It is not possible to separate business development from product development since the way things are done in a company and particular business processes can be a source of differentiation and an integral part of the product. Tourism product development thus creates new ways of doing things in close co-operation with different stakeholders such as entrepreneurs, customers, employees, regional developers, local authorities, business partners and locals, among others. Products are stories that companies should be able to communicate to all of these parties. At the same time, however, these stories may take different forms in different situations: when presented to the customer, giving instructions to the guides, negotiating with business partners, etc. It is important to always be consistent with the core story of the product, one’s business ideology and values when dealing with different contexts.
Products are created when different stakeholders come together. From this perspective, it offers customers a more meaningful role in consuming and producing products, or in continuing the product experience by, for example, buying souvenirs and sharing their moments with friends in social media. On the other hand, this allows room for employees’ creativity, improvisation and improving work practices as well as customer service. For product developers, it is also comforting to know that products do not need to be completely finished. Products are always a little bit different depending on who are the end-customers, who is the guide and which route is selected. This does not mean, however, that successful products would not be in line with the basic requirements of the industry.
Open the product developer’s workbook (link on the right). It will help you to apply the content of this page to your own case.