TOURISM PRODUCT

DEVELOPMENT
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Table of Contents
Page
2 Introduction
3 Tourism Product Development
4 ͧͧ What Exactly is a Tourism Product?
ͧͧ Developing New Tourism Products

5 ͧͧ Product Positioning
ͧͧ Product Packaging

6 Growth Strategies
6 ͧͧ The Ansoff Matrix

7 ͧͧ Market Development

8 ͧͧ Tourism Product Development

9 ͧͧ Exercise 1

10 Target Markets
10 ͧͧ Who is Coming to the NWT?

12 ͧͧ Understanding your Target Market

13 ͧͧ Exercise 2
 TOURISM PRODUCT DEVELOPMENT WORKBOOK 1

14 Tourism Trends
14 ͧͧ Equitable Tourism

15 ͧͧ Community-Based Tourism

16 ͧͧ Indigenous Cultural Tourism

17 ͧͧ Eco-Tourism

18 ͧͧ Exercise 3

19 Product Considerations in the NWT

19 ͧͧ Government Regulation
ͧͧ Safety Plans

20 ͧͧ Risk Management
ͧͧ Land Access – Consultation Process

21 ͧͧ Exercise 4

22 Next Steps
22 ͧͧ Government Support
2

Introduction Tourism
Hello and welcome to the Tourism Product
Product
Development
Development workbook. Here you will learn all about
product development and how it can support the
growth of your tourism business, the NWT tourism
industry, and your community.

Product development is an important part of growing Tourism product development means bringing new and
the tourism industry here in the NWT. This resource innovative products, experiences, and services to the
is just one of the ways that the GNWT Department market for tourists to buy. Product development can
of Industry, Tourism, and Investment (ITI) supports take many forms. For example, you have identified a
growing tourism businesses and operators just like you. gap in the current marketplace and decide to develop
a product or experience to meet the demand. Product
In this workbook, you will learn how to develop a development could mean developing a product or
product based on the different types of visitors, experience that is already being offered in the area but
their motivations for travel, their travel values, and is new to your business. Or, if you are already a tourism
their countries of origin. You will also learn about operator, you may be looking to expand your existing
community-based tourism, Indigenous tourism, and tourism offerings to include additional services,
eco-tourism for a tourism industry that remains experiences, or tangible products such as souvenirs.
equitable and sustainable for everyone involved. You
will also complete activities that will help bring you There are many stages of product development,
closer to developing your own tourism product. but they all begin with identifying a need in the
marketplace. Once you have identified the need for a
The training does not end here though. Once you have particular product, you will want to come up with a
your tourism products developed, you may be ready to concept or idea. You will then want to create a plan for
market them to your target audience or even develop how you will bring your idea to life. You will have an
strategic partnerships with other operators to create opportunity within this booklet to generate product
custom tourism packages. Keep in touch with your ideas, learn how to develop a product based on your
regional tourism officer to stay informed about other target market, and create a plan for turning your ideas
training or mentorship opportunities to support your into products.
growing business.
Developing products that are tailored to visitors’
needs will improve the profitability of your tourism
business. Making more products available to tourists
will increase the length of time that they stay in the
NWT, increase the amount of money they spend, and
encourage new and repeat visitors.
 TOURISM PRODUCT DEVELOPMENT WORKBOOK 3

What Exactly is a Tourism Product? Some of the things you might consider when developing
your product are:
A tourism product is a good, a service, or a package
of goods and services for people to purchase while
• adeveloping
personal and business philosophy for why you are
a tourism product (e.g. you are a cultural
visiting a new destination. Tourism products and knowledge keeper and want to find respectful ways
services help visitors explore the destination that to share your community’s stories);
they are visiting by offering them the chance to view
attractions, shop for souvenirs, take tours, or purchase • andemand
understanding of industry trends and market
(e.g. the Chinese market is growing and you
experiences. Tourism products are much more than
want to include a Mandarin-language tour to your
just the tangible souvenir tourists take home to their
offering);
friends and families; they are the experiences that
they have in the NWT and at your business. As a • the ability to seize opportunities as they arise (e.g.
you are a retail store owner and an operator would
tourism operator, you supply the tourism products.
For example, say you are the owner and operator of the like to bring a big group of visitors on a Sunday
Mountain Biking Tour Company, which provides biking afternoon when you’re not usually open);
tours to active cyclists. Your tourism product would
then be mountain biking tours. Keep this company in
• a(e.g.knowledge of visitor needs and buying patterns
your market research shows that millennials use
mind as we will refer to this in later examples. their phones to do research on a destination so you
update your website to be mobile-friendly); and

Developing New Tourism Products • familiarization with competitors’ products and

pricing (e.g. your standard fishing trip is similar to
other tourism operators so you price yours slightly
Sometimes product development involves creating a lower to be more attractive to cost-conscious
totally new experience. It may also involve expanding visitors.)
or enhancing an existing product. Expansion of
products can focus on new tourist markets, improved Your personal or business philosophy should set the
product lines, or seasonal experiences. You may want foundation of your product development journey.
to expand your business by offering a diverse array A personal/business philosophy is simply your
of tourism products that cater to different types of inspiration for developing a tourism product; for
tourists. This could improve sales, strengthen your example, you might believe strongly in providing
current market position or take advantage of new people with exceptional northern hospitality and
market opportunities. Some examples of product therefore you decide to open a bed and breakfast.
expansion or enhancements include: Understanding who visits the North and why they
come is also important, as tourists from one part of
• Expanding a service into a new season the world will have different expectations, customs,
• Offering winter gear rental as part of the service and needs than those from another part. Seizing
• Hotel pick-ups and drop-offs opportunities is also important when developing
tourism products because the tourism industry is
To develop a new or innovative product, it is helpful always changing. It is helpful to have a thorough
to have a thorough understanding of current market understanding of current market trends and upcoming
trends, traveller types, motivations, and values. trends to adjust your service or product offerings to
meet the visitor demand. Also, being aware of your
competitor’s products and pricing will help you when
you are ready to price your products so as to not over-
or under-charge.
4

When developing a product, you also need to determine

the purpose of the product. Is your desire to educate,
Product Positioning
develop skills, offer experiential learning, offer
Product positioning refers to where a product or
opportunities for relaxation, or simply entertain?
service stands in the minds of visitors and/or how
Product purpose is the reason why visitors buy, and
they are able to distinguish your products and services
it must be directly linked to what the visitor wants.
from your competitors. It is a strategy for promoting
This want is called consumer demand. Doing your
and marketing your products to your specific target
homework will set you and your business up for
audience.
success. Later on in this workbook, we will take a
closer look at tourism industry trends, visitor types Today, it is very important to have an online presence.
and motivations. If you would like to dig deeper into Nearly all your potential visitors will do their travel
industry trends and visitor types, and how to market research online through their computers, smartphones,
effectively based on this information, the GNWT offers or tablets. Visitors will check out potential tourism
a marketing workshop similar to this one. Please destinations, products, and services before arriving
contact your regional tourism development officer to at a destination. If they cannot locate your business
inquire about an upcoming workshop or visit through a search engine, like Google, you may lose out
www.iti.gov.nt.ca/en/services/tourism-training- on business.
resources/tourism-marketing
Product differentiation (standing out) from your
competitors will be very important during the visitor’s
path to purchasing your products. The “Path to
Purchase” model describes the steps that visitors take
prior to and after their trip. It consists of the research it
takes to decide on a destination, the planning that goes
into a trip, the act of being on vacation, and the sharing
of experiences afterwards. It is helpful as a tourism
operator to understand the process that visitors go
through to arrive at your destination, as it will help you
to make informed decisions around positioning your
products in the minds of visitors.

POST-
DREAMING PLANNING BOOKING ANTICIPATING EN ROUTE DESTINATION HOLIDAY
SHARING
Thinking Collecting Physical process Getting ready Commencing On holiday ... Back to the
about holdiays information to go the holidays 'real world'
generally and seeking – bringing it
recommendations 'Now it's real' back by sharing
Starting to exciting but memories.
consider also scary
activiely where Talking about
to go it with friends,
posting the
edited version
in social media

Adapted from TNS Travel Model

 TOURISM PRODUCT DEVELOPMENT WORKBOOK 5

This means that when a visitor is looking for new

and exciting experiences to have in your destination,
Product Packaging
they will consider multiple options before finalizing
Once you have developed your products and are ready
their decision. It will be very important for your
to market them to your target audience you may want
business and tourism products to stand out from your
to consider strategic partnerships to help expand your
competitors. Some of the things you can consider to
reach. Strategic partnerships are those that include
help position your product and your business are:
various tourism products or elements to create one
Price: Do you have higher-priced deluxe tours or lower- seamless travel package for visitors. A travel package
priced economy tours? might include return airfares, airport transfers,
accommodations, tours and experiences, and meals all
Product quality: Do you offer outstanding customer for a special price. Travel packages may be tailored to
service? Do you rent top quality winter gear? fit certain traveller styles (we will learn about traveller
styles a little later).
Service: Do you provide hotel pick-ups and drop offs or
include a meal as part of the experience? In addition to this resource, ITI offers another
workshop that focuses solely on packaging tourism
Diversity of products offered: Do you offer a choice of products. To learn more about product packages and
three unique tours? how you can create your own, please contact your
regional tourism officer or visit www.iti.gov.nt.ca/en/
Staff quality: Is your staff qualified, certified, and services/tourism-training-resources/tourism-product-
experienced? packaging

Product features: Do you have specialized resource

people (language translators), or exclusive or unique
opportunities?

Flexibility: Can you accommodate customized

packages, special departures, or special needs such
as dietary restrictions or wheelchair access?
 6

Growth
Each element is explored in greater depth below. Figure
1 provides a visual summary of how the framework
works. Throughout the explanation of this framework,

Strategies
we’ll refer to the Mountain Biking Tour Company to
outline examples.

As you can see in Figure 1, the business risk increases

as you begin to branch out into new markets and new
Whether you are a new or existing tourism operator visitors. This is because it is unfamiliar and there is
there may come a time when you would like to expand a greater risk involved in entering new markets with
or grow your tourism product offering. While there new products.
are many ways to do so, one of the most common ways
to grow is through strategic planning. Below we will Low risk is remaining in an already established
explore the Ansoff Matrix, a tool used for strategic market with established tourism products. For
planning that will provide you with a framework to example, low risk would be remaining close to the
develop your strategy for product growth or expansion. mountain biking theme, increasing advertising and
forming strategic partnerships to expand reach and
gain new market shares.
The Ansoff Matrix
It may be considered high-risk if you were a well-
There are four elements to the Ansoff Matrix: established mountain biking tour company but decide
to introduce cross-country skiing tours to expand
• market development strategy, your business into a new season. Your existing visitors
• market penetration strategy, may not be interested in cross-country skiing and you
• product development strategy, and would be required to gain a totally new visitor base

• diversification strategy. to participate in your tours. The risk is high because

cross-country skiing may not be what your business is
known for and visitors could be hesitant to purchase.

Figure 1
CURRENT PRODUCTS NEW PRODUCTS

Market penetration Product development

CURRENT MARKETS

strategy strategy
»» examples »» examples
»» expand advertising »» new features and
»» target more segments »» for existing products

Market development Diversification strategy

strategy »» examples
NEW MARKETS

»» examples »» new products for new

»» expand distribution market
»» enter new segments
»» target new markets

INCREASING RISK
 TOURISM PRODUCT DEVELOPMENT WORKBOOK 7

Market Development occur in early morning and again in the early afternoon
for about two hours each. You have noticed that there
are some really interesting craft stores and restaurants
Market development appears on the low-risk side of
in the town in which you operate. You may decide to
the Ansoff Matrix. It is concerned with maximizing
approach one or more of the stores or restaurants to
profitability by attracting new visitors for your
offer a longer biking tour with stops along the way at
products or tailoring your existing products to satisfy
a few craft stores and a snack or beverage break in
new visitors. For example, let’s refer to the Mountain
the middle. You could then advertise a package biking
Biking Tour Company again. Say you cater to active
tour as a full- or half-day excursion with planned stops
and adventurous cyclists between the ages of 25 and
to experience more of the destination. This would
40. You operate tours in the early mornings and into
also increase the reach of each party involved as they
the afternoon. However, you find that your bikes go
could potentially gain access to visitors they never
unused in the evening, so you come up with an idea to
had before. For the visitor, they would receive a total
maximize their potential. You may consider branching
package deal for one all-inclusive price, creating less
out to include family cycling tours in the evening.
planning and work for them and more time and access
The mountain biking theme remains consistent, but
to places they might not have stopped before.
you have sought out a new user group to grow your
business into a new market. For more on product packaging please contact the
tourism development officer in your region to find out
In both product development and market development,
when the next product packaging workshop is taking
the risk is relatively low because you have some
place or visit www.iti.gov.nt.ca/en/services/tourism-
familiarity with one side of the equation or the other.
training-resources/tourism-product-packaging
This allows you to make some assumptions and
predictions that help with matching visitors' needs to
product benefits.

There are two market development approaches

outlined in the Ansoff Matrix: market penetration and
market-driven product development.

Market Penetration
Market penetration is a growth strategy that involves
selling your existing products or services to your
existing target markets to achieve a higher market
share. Market penetration techniques encourage
visitors with interests in similar products to purchase
yours instead of your competitors’. Some of the ways
to achieve market penetration include: lowering
your prices to make them more attractive to visitors,
increasing promotions and offers to entice buyers
to purchase, and expanding your reach by making
strategic partnerships. Increasing awareness of your
products will help position your business in the minds
of visitors, which will increase the likelihood of them
purchasing your product.

We mentioned earlier that strategic partnerships as a

way to achieve a greater reach in your target market.
Strategic partnerships occur when two or more
organizations form an alliance to provide a seamless
experience for the visitor. Let’s return to the Mountain
Biking Tour Company example. Currently, biking tours
8

Market-Driven Product Tourism Product Development

Development As you move to the right side of the Ansoff Matrix, the
Market driven product development means your
growth strategies focus on product development. This
preferences, impression and desires are not what
workbook has already provided a lot of introductory
will determine your product. The goal of product
information on product development, so to complete
development is to make a product offering that matches
the discussion of the Ansoff Matrix, we’ll focus on the
your target market. The first step is to understand
strategy of diversification.
your market. Some of the things you can do to help this
process are:

• Do your research. Diversification

• Ask questions. Tourism product diversification is the process of
• Look at your competition. expanding, reinventing, improving, or growing

• Reach out for help from marketing experts. your existing product offering by developing new or
altered products for both new and existing visitors.
Diversification is important because it creates value
There are a number of organizations and resources
and options for the visitor ultimately catering to a
available to new tourism operators. Northwest
wider range of tourist interests, values, and travel
Territories Tourism (NWTT) is the NWT’s destination
motivations. Diversification also promotes growth
marketing organization (DMO). NWTT will have access
by offering a wider range of product offerings. This
to up-to-date industry trends and research. NWTT is a
strategy also introduces the most risk as you may be
membership organization and can assist you in many
exploring new products and new markets at the same
areas such as marketing your business, giving you
time. Later in the workshop, we will talk about market
access to their research findings, and sharing industry
research, which will help to inform your decisions and
trends with you.
ideally decrease the risk.
In addition, the Tourism Division at ITI offers numerous
Let’s take a look at the mountain biking example
programs and services to help new and growing
again. This time you decide that you want to sell a
tourism operators access funds to help start or grow
rock climbing experience to teenagers. Rock climbing
their businesses. ITI provides training opportunities
is not within your current product offerings and you
for tourism business owners and their staff to access
currently do not market to teenagers, so by entering
visitor service training, information on starting a
this market you are diversifying your business to
tourism business, and/or safety courses such as marine
offer a product you have never offered before to a new
and water safety, and risk management. The Research
market. If we think back to what we have learned about
Unit produces statistical reports on a variety of topics
venturing into new markets, we might remember that
related to visitors. These reports are available through
the risk is high in this case, but, with good research to
the ITI website through the publications page
inform this decision; this new direction is also exciting.
(www.iti.gov.nt.ca/en/publications).