About the Topic

"Same Same, but Different"

Product Development in Tourism


The term “same same, but different” is a famous expression from Thai English (Tinglishi), which means similar, but different in some ways (Kravanja, 2011). If you have the opportunity to visit South East Asian countries, like Thailand, Cambodia and Vietnam, you cannot escape from hearing street vendors loudly proclaiming “same same, but different” in an attempt to convince tourists that their products are different from the next stall. While the uniqueness of their products is sometimes debatable, their service and entrepreneurship spirit add enormous value to the shopping experience.

 

Like the Thai street vendor, one of the global tourism industry’s main challenges is to provide added value through product changes (i.e., innovation, diversification and modification), providing more varied and higher quality tourism experiences for conscious and saturated multi-option customers (Weiermair, 2003). Achieving this requires competition based on product differentiation.

 

Edward Chamberlin (1962) in his Theory of Monopolistic Competition proposed the concept of product differentiation (or simply differentiation), defined as the process of distinguishing a product or service from others, to make it more attractive to a particular target market (Kotler & Keller, 2012). In tourism, product differentiation is a strategy in which tourism companies attempt to create and exploit differences between their products and those offered by competitors. These differences may lead to competitive advantage if customers perceive the difference and have a preference for it (Yang, 2010).


The father of the competitive advantage, Porter (1985), defined three main strategies to differentiate a company from its competitors: "Cost Leadership" (no frills), "Differentiation" (creating uniquely desirable products and services) and "Focus" (offering a specialized service in a niche market).

  • A differentiation strategy is based on persuading customers that a tourism product or service is superior in some way to that offered by competitors (Evans et al., 2003; Riege & Perry, 2000). To develop competitive products is the inevitable course for tourism companies to solve the problem of product homogenization and to create tourism products or services, different from the habitual by means of supply, organization and the human resource involved. Therefore, differentiation is directly linked with other terms such as “product development” and “product diversification”.

 

Ansoff (1965) distinguished a company´s existing products from new products and markets by proposing two product policy strategies: “Product Development” (developing new products or improved versions of an existing product to offer to an existing market) and “Diversification” (entering new markets with new products).

  • Product development includes innovation (new products) and modification (different variants of existing products). Innovation is the introduction of a product or service that is new or significantly improved with respect to its characteristics or intended uses. Quality assurance, marketing practices, and customer and employee satisfaction were among the most important areas for product innovation. Modification is to offer different product or services variants of an existing product/service. Improvement of customer quality and service or repacking existing products are examples of product modification.
  • Unlike product development, where the products are offered only to the existing markets, diversification allows a company to enter additional lines of business that are different from the current products, services and markets (Kenny, 2009). The diversification strategy implies the simultaneous development of new tourist products and of the new markets (e.g., a tour operator specialized in the soft tourism can vary his mix of products offering also tourist tours with cultural character or treatment vacations in resorts). Today, diversification of services is one of the instruments of the tourist enterprise’s growth strategy, due to which it can extend its services and spheres of activity.

Note that these differentiation strategies (innovation, modification and diversification) are often difficult to distinguish as the transition point from one product or market to another is not clear and they are usually complementary to one another. Most important here is that tourism companies may only survive in the market if they can demonstrate the unique aspects of their product or service and create a sense of value. The value-added service and fine sentiments service are the embodiment of the “exclusive” element in the market competition. Market demand is changing all the time. Consequently, products should be constantly revitalized to ensure competitiveness and differentiation. Besides this, quality assurance, good marketing practices, and customer and employee satisfaction are among the most important areas or fields for product innovation and differentiation (Yang, 2010).
Ultimately, product differentiation is an attempt to generate an alternative, social product or service, and at the same time, it is a tribute to a creative thinking. Same same, but different!


References
Ansoff, H.I. (1965). Corporate Strategy. US: McGraw-Hill Inc.
Chamberlin, E.H. (1962). The Theory of Monopolistic Competition: A Re-orientation of the Theory of Value. [8th ed.]. Harvard: Harvard University Press.
Evans, N.; Campbell, D. & Stonehouse, G. (2003). Strategic Management for Travel and Tourism. Oxford: Butterworth-Heinemann.
Kenny, G. (2009). Diversification strategy: How to grow a business by diversifying successfully. UK: Kogan Page.
Kotler, P. & Keller, K.L. (2012). Marketing Management. [14th ed.]. New Jersey: Prentice Hall.
Kravanja, B. (2011). Same same, but different: An inquiry into paradise imagery of tourism industry and tourist practices. EthnoAntrophoZoom, 9, pp. 73-107.
Porter, M.E. (1985). Competitive Advantage. New York: The Free Press.
Riege, A.M. & Perry, C. (2000). National marketing strategies in international travel and tourism, European Journal of Marketing, 34(11), pp. 1290-1305.
Yang, Z. (2010). Analysis on Product Differentiation Strategy and Product Innovation of Travel Agency in China. Proceedings of the 7th International Conference on Innovation & Management, pp. 593-596.
Weiermair, K. (2003). Neue Urlaubs- und Reisemodelle zwischen Abenteuer und Entspannung, 6. CBR-Tourism Symposium, Munich, Conference Proceedings, pp. 10-27.