Della_Corte_Definitivo_Layout 1 09/08/12 19:05 Pagina 301 The evolution of tourist product as expression of experience-based innovation* 14 Della Corte V. Abstract Tourism industry is habitually defined as a hypercompetitive sector, characterized by high radical and abrupt technological changes, shows an increasing variety and variability as much as an overwhelming in demand and globalization. In this context, it becomes more and more difficult to propose attractive products and offers and to gain competitive advantage. And yet there are firms which, even if in a period of economic recession, still show very high performance results. Looking at tourist product more specifically, there are different configurations proposed by the literature on the theme over time (Rispoli, Tamma, 1995; Della Corte, 2000; 2005; 2009): between the “point to point” scheme and the all inclusive package there are intermediate forms, such as the network configuration. On the other hand, packages themselves have evolved into dynamic packages, with a more high-tech innovation cut. In this scenario, where ICT seems to predominate, the organic level of mar* For this chapter, I always thank Jay B. Barney, for his precious hints and suggestions, and Giovanna Del Gaudio and Alessandra Iavazzi for the support they gave me in the research activities preliminary to the chapter. I am particularly honoured and delighted to take part in this book, dedicated to a professional and admirable colleague I will never forget. Della_Corte_Definitivo_Layout 1 09/08/12 19:05 Pagina 302 302 Capitolo 14 keting activities, which is the marketing made during the service delivery once the tourist has arrived in the destination, has an increasing importance and efficacy on demand and therefore, on firms’ performance. In the paper, using resource-based theory (Rumelt, 1981; Wernefelt, 1984; Barney, 1986, 1991, 2002; Dierickx, Cool, 1989; Della Corte, Sciarelli, 1998; 2006) and service-dominant logic SDL (Vargo, 2004, 2006, 2008a, 2008b) as theoretical frameworks, I try to show the new structure of tourist product in the two phases of tourist’s decision process: the phase of choice and the phase of lived experience. The most innovative firms manage to make tourist a co-productor, motivating him-her in the creation and selling of the offers, up to count on him-her as a strategic resource for competitive advantage. Some empirical evidence is given to the issue, through data analysis of clients of very innovative firms. 14.1 Introduction Tourism industry is considered to be a hypercompetitive industry (D’Aveni, 1994; D’Aveni, Gunther, 1995), characterized by important factors: 1) high variety and variability in demand: demand targets have more information, more needs and are more focused on the quality-price relationship; besides, owing to the information and inputs they receive on the web, they can sometimes change their mind not only with reference to their choice for hotels and attractions to visit but even for the destination itself; 2) abrupt and radical changes in high technology, first of all web technologies, that have opened the access to more demand targets and have allowed new forms of web-specialized organizations like internet providers; these have grown rapidly, even becoming market leaders (think about expedia.com rather than Travelocity.com); 3) globalization, that makes competition higher and higher: this aspect, however, has to be taken into account in its multi-faceted implications. On one side, there is a sort of massification in the offer that makes needs and tastes more homogeneous internationally speaking (think about New York city as a shopping city also for made in Italy products); on the other side, each single firm has to compete with many others at an international level; in this competition, working on specific and local attractive factors can become a relevant source of differentiation factor. Thus the Della_Corte_Definitivo_Layout 1 09/08/12 19:05 Pagina 303 The evolution of tourist product as... 303 local aspect acquires importance both in identity and in image building; 4) changes in tourism chain and in inter-firm relationships: low cost companies, through their websites, propose different services according to which the customer can buy different services of the overall product (i.e., accommodation, events and fun fairs’ tickets, car rentals, etc.). This has totally upset the traditional role of the tour operator, thus opening competition to completely different schemes. In this scenario, it becomes more and more difficult to make tourist choose a specific proposal, and to satisfy an increasingly fickle and variable demand. This has meant also a deep change in the concept’s meaning: on one side, there have been significant changes in the way tourist products are proposed and sold on the market; on the other side, there is a growing attention on importance of the “experiential” product. This process will be explained in the following paragraphs. In this paper, after examining the literature on the field, I try to explain the evolution of tourist product’s configurations, suggesting an experiential vision as an approach able to foster innovation now and in the future. 14.2 Literature overview: definitions of tourist product Literature on tourism product has evolved in the last 10 years, even if in a rather fragmented and unsystematic way. It is therefore useful to study the issue taking into account the still existing gaps in the literature. In the analysis, some of the main contributions on the topic have been included. As it can be drawn in figure 14.1, the topic has been examined under different perspectives. Some contributions have a clear demand approach, while others are mainly concentrated on the offer. Some studies, on the other hand, show an overlapping view trying to integrate the two approaches. Besides, some authors have a vision of tourist product which is more connected with the decision of the tourist to take a holiday and to reserve a journey, while others better specify product’s main features in the face of service delivery and lived experience. In this direction, social and experiential approaches share a combined approach, with a very strict relation between Della_Corte_Definitivo_Layout 1 09/08/12 19:05 Pagina 304 304 Capitolo 14 the induced and the organic level, in an overlapping perspective. Other studies mainly contribute on specific tourist product, since there is a variety of sub-sections in the industry, according to demand’s motivation and local resources (cultural tourism, wellness tourism, meeting and incentives, etc.). In the paper, after trying to systematize the literature, I try to explain the main evolution path of theory on the topic, as well as to propose a theoretical model for innovation in tourist product’s configuration. As it can be seen in the figure, innovation regards the perspectives, as well as the levels of marketing (both induced and organic) and can regard the general concept of tourist product as well as its declinations in more specific terms. Figure 14.1: The circle of perspectives in tourism product analysis and the role of innovation Source: our elaboration. Della_Corte_Definitivo_Layout 1 09/08/12 19:05 Pagina 305 The evolution of tourist product as... 305 Starting with a systematization of the literature, as showed in Table 14.1, some authors (Jefferson, Lickorish, 1988; Middelton, 1988; Peroni, et al., 1988; Lewis, Chambers, 1989; Smith, 1994; Hjalager, 2002) define “tourist product” according to the offer side, while others (Medlik, Middelton, 1973; Gunn, 1988; Coltman, 1989; Pine, Gilmore, 2000; Middelton, Clark, 2001; Huang, Chu, 2002; Cerquetti, 2007; Xu, 2009) according to the demand side. Besides, other scholars conceive the tourist product as a global framework that encompasses both the offer side and the demand side. The offer perspective underlines the importance of the set of goods, environmental resources and services that shape the tourist product (Lewis, Chambers, 1989). This view is extremely clear in Hjalager (2002) definition, that views the tourist product as a collection of services from several segments of suppliers (e.g., accommodation, transport, catering, and entertainment). Innovative, among the approaches that are more concentrated on the offer, still remains Smith’s contribution, since the scholar considers a range of factors, from the most material ones to the intangible, thus also considering the involvement of customer in the process. According to Smith (1994), in fact, tourism product consists of a range of components and of the process by which those components are shaped. These components are: physical plant, that is the core component of Smith’s model and refers to the natural, cultural, artistic resources and other infrastructures and accommodations; service, which refers to the performance of specific resources and competencies able to match tourists needs; hospitality, which concerns the style or the way through which the service is offered; freedom of choice, which regards the tourist complex range of options through which he/she fulfills his/her expectations. The fifth dimension, that is the tourist involvement in the service process, represents the starting point for the development of an overlapping perspective since the user is conceived as integral part of the process. From the demand perspective, literature contributions (Medlik, Middelton, 1973; Gunn, 1988; Coltman, 1989) in the early stage of their development highlight that tourism product is the result of implicit and explicit needs which guide customer choices. In a further step, a wider definition of tourism product comes out, stressing the attention on the experiential factors (Pine, Gilmore, 2000; Middelton, Clark, 2001; Hsiao et al., 2006; Cerquetti, 2007; Xu, 2009). Della_Corte_Definitivo_Layout 1 09/08/12 19:05 Pagina 306 306 Capitolo 14 Not only the experiential component but also the presence of asymmetric information between the offer and the demand side, in terms of information regarding the local services, products and resources, have led some scholars to deepen the issue according to an overlapping perspective (Casarin, 1996; Martini, 2002; Pencarelli et al., 2002; Della Corte, 2009; Di Vittorio, 2010). This vision shares the idea that the firm specific products and services have to meet the global product perceived by the tourist (Della Corte, 2009). Table 14.1: Main contributions on tourism product Perspective Offer side Author Contribution Middleton (1988) A group of specific products combined in different ways according to five components model: destination attractions, destination facilities, accessibility, images and price Jefferson, Lickorish (1988) Set of both tangible and intangible characteristics as well as symbolic associations and destination promotion activities Peroni (1989) Product with three dimensions: end product, overall product and utility product Lewis, Chambers (1990) A collection of goods, environmental resources and services Smith (1994) It is a set of five elements: physical plant, service, hospitality, freedom of choice and involvement Rispoli, Tamma (1996) Demand side Global tourism product concerns the whole attractive factors in which the tourist translates through his culture, motivations, value system, personality, socio-economic conditions, behaviour his/her demand Hjalager (2002) The tourist product comprises services from several segments of suppliers: accommodation, transport, catering, entertainment, etc. Medlik, Middelton (1973) A bundle of activities, services and benefits that represents the whole tourist experiences Gunn (1988) […] tourism product as a complex consumptive experience that results from a process where tourists use multiple travel services during the course of their visit (information, transportation, accommodation, and attraction services) Coltman (1989) It is not possible to generally define a tourist product: a tourist product exists for each market target Della_Corte_Definitivo_Layout 1 09/08/12 19:05 Pagina 307 The evolution of tourist product as... Perspective 307 Author Contribution Pine, Gilmore (2000) Tourism product concept is the result of a complexity of goods, services, attractive factors (historical, cultural, natural, etc.), information and reputation that allow to satisfy needs and expectations of travel and holiday Middelton, Clark (2001) […]from the standpoint of a potential customer considering any form of tourist visit, the product may be defined as a bundle or package of tangible and intangible components, based on activity at a destination. The package is perceived by the tourist as an experience, available at a price Hsiao et al. (2006) Tourism product is the result of new demands on attributes made by consumers such as quality (guarantees), integrity, safety, diversity and associated information (services) Cerquetti (2007) Tourism product aims at reconfiguring itself as an experience-product, in which tourist, in order to organize his/her holiday in a “multidimensional” and “multi-topic” way, has an even more active role Demand side (continue) Xu (2009) Casarin (1996) Pencarelli et al. (2002) […] product is a complete experience that fulfills multiple tourism needs and provides corresponding benefits A set of both environmental and instrumental factors […] considering the provider and consumer approaches in a distinctive point of view, the tourism product can be considered a complex offer of goods/services/information/context elements oriented on the creation of involving and unforgettable experiences Martini (2002) Tourism product is the complex of attractive factors available on a destination Della Corte (2009) From the demand side, tourism product represents the global experience lived by tourist. From the offer side, the tourism product is a complex product, linked to the actions of several actors in the market, which provides a wide and differentiate products’ offer, more or less integrated, according to different forms and configurations Di Vittorio (2010) Tourism product must be analyzed in both tourist and firms perspective. The tourism product concept perceived by tourist (experience) is different from the one perceived by the firm (service) Overlapping Italian contributions on the issue International contributions on the issue Della_Corte_Definitivo_Layout 1 09/08/12 19:05 Pagina 308 308 Capitolo 14 Although the research stream on tourism product has been deeply analyzed, there are still unsolved questions that form the current academic debate. In particular, if the current literature agrees that the customer plays a key role in creating the tourism product, it is necessary to understand how and to what extent the consumer/tourist can influence new product configurations or alter the existing one. Table 14.2: Main contributions on social tourism product Year Author Contribution Hunziker The relationships and phenomena in the field of tourism resulting from participation in travel by economically weak or otherwise disadvantaged elements in society Haulot The totality of relations and phenomena deriving from the participation of those social groups with modest incomesparticipation which is made possible or facilitated by measures of a well-defined social character Seabrook social tourism designed specifically to enhance and offer insight into the lives of people, which figures neither in the glossy brochures, nor in the media coverage of third-world countries 2002 Nilsson [social tourism] was launched as ‘true’ and non commercial form of tourism. It was cheap and aimed to make people feel friendship with each other 2006 Minnaert et al. […] tourism with an added more value, which aims to benefit either the host or the visitor in the tourism exchange 1951 1982 1995 Source: our elaboration. As regards the social perspective of the tourist product, it is necessary to analyze this concept in the light of the above theoretical distinction between the demand side and the supply side. Della_Corte_Definitivo_Layout 1 09/08/12 19:05 Pagina 309 The evolution of tourist product as... 309 If literature on social tourism product (Hunziker, 1951; Haulot, 1982; Seabrook, 1995; Nilsson, 2002; Minnaert et al., 2006) stresses its attention on the social contents (see table 14.2), it is also true that this view of the product requires specific relations between the local actors and the local community for its creation. The social aspect is relevant in both phases of the marketing plan: induced level and organic one. At the induced level, social and non conventional marketing activities are getting ground: viral marketing, guerrilla marketing, web word of mouth processes generated by organizations like Tripadvisor are becoming more and more efficacious. Tripadvisor was originally a small website where comments from travellers were collected. Now it is one of the most important review sites: its users are well educated, frequent travellers, whose reviews are gathered in a specific database further corrected with specific algorithms. This system has become a very efficacious media tool for commercial applications, since it now provides direct access to on-line travel agencies, like Orbitz or Expedia, and several tourism firms are setting comments on Tripadvisor regarding their organization on their websites. At the organic level, social interactions can be a strategic resource in dealing with the customers. Indeed, even at a destination level, one of main roles of Destination Management Organizations in the process of creation, development and refreshment of the social product is to build and maintain social networks as well as to encourage local participation (Falk, Kilpatrick, 2000), in order to create a social atmosphere (Della Corte, Micera, 2007) that allows the tourist to live a true experience with locals. The experiential component implies, according to Pine and Gilmore (1998), the tourist’s involvement at different levels (absorption or immersion according to an active or passive participation), as the experience is created by the interaction between the user and the service both at individual and systemic level as well as with reference to the destination and to the local community (Gentile et al., 2007). In this direction, it is important to underline that destination itself can be defined as a complex bundle of services and experiences, of resource and competencies. As shown in table 14.3, in fact, literature on destination product (Ashworth, Voogt, 1990; Ritchie, 1993; Murphy et al., 2000; Cantone et al., 2007; Vasilliadis, 2008) focuses on the complex set of factors and attributes allowing to create the facilities and services of a destination. Della_Corte_Definitivo_Layout 1 09/08/12 19:05 Pagina 310 310 Capitolo 14 Table 14.3: Main contributions on destination product Year Author 1990 Ashworth, Voogt The tourism product of a Destination [is] a bundle of services and experiences Ritchie Tourism destination [is] a package of tourism facilities and services, which, like any other consumer product, is composed of a number of multi-dimensional attributes Murphy et al. Destination product […] considers the environmental impacts of the destination’s setting, plus the effect of service infrastructure on the visitor experience Cantone et al. Tourist destination product (TDP) is a complex offer system including resources generic and specific - and tourist services of an area 2008 Vasilliadis Destination tourism products comprise a set of tangible and non-tangible components based on an activity at the destination 2009 Della Corte Destination product is a place that is autonomously able to attract tourists 1993 2000 2007 Contribution Source: our elaboration. Considering then the variety of tourism product, according to different targets with different motivations, part of the literature concentrates on specific tourism products, taking into account the peculiar resources and attributes connected with the destination. The various characteristics of these resources and attributes, according to the need they are able to satisfy, contribute in setting up the specific tourism products, identified by some scholars (Weed, Bull, 2004; GarciaAltes, 2005; Myers et al., 2005; Datzira-Masip, 2006; Hudson, Ritchie, 2006; Ignatov, Smith, 2006; Weed, 2009), some of the main contributions are synthesized in the table below (Table. 14.4). Della_Corte_Definitivo_Layout 1 09/08/12 19:05 Pagina 311 The evolution of tourist product as... 311 Table 14.4: Further contributions on tourism product Topic Author Culinary tourism Ignatov, Smith, 2006 […] tourism trips during which the purchase or consumption of regional foods (including beverages), or the observation and study of food production (from agriculture to cooking schools) represent a significant motivation or activity Hall, Mitchell, 2003. Canadian Tourism Commission, 2002 Wolf, 2004 Long, 2004 Sport tourism Weed, 2009 […] social, economic and cultural phenomenon arising from the unique interaction of activity, people and place Gibson et al., 1997 McPherson, Curtis, 1989 Hinch, Higham, 2001 Gammon, Robinson, 2003 Weed, Bull, 2004 Cultural heritage tourism Datzira-Masip, 2006 […] cultural heritage tourism should be considered as visitors and tourists travelling to a destination who are mainly interested and motivated in cultural attractions and resources, both tangible and intangible Richards, 2001 Meethan, 2001 Richardson, Fluker, 2004 McKercher, 2002 McKercher et al., 2003 Health tourism Garcia-Altes, 2005 People travelling from their place of residence for health reasons […] who would travel to experience therapies that will help to make them well or to improve their health Kaspar, 1996 Laws, 1996 Ross, 2001 Henderson, 2004 Garcia-Altes, 2005 Smith, Puczkó, 2009 Wellness tourism Myers et al., 2005 Wellness tourism is a way of Müller et al., 2001 life oriented toward optimal De Botton, 2002 health and well-being in which the body, mind and spirit are integrated by the individual to live more fully within the human and natural community Filminduced tourism Hudson, Ritchie, 2006 […]tourist visits to a place because this place featured on the cinema screen, video or television Source: our elaboration. Definition Other contribution Riley and Van Dore, 1992 Evans, 1997 Riley et al., 1998 Busby and Klug, 2001 Beeton, 2005 Della_Corte_Definitivo_Layout 1 09/08/12 19:05 Pagina 312 312 Capitolo 14 14.3 The theoretical framework The analysis of such definitions induces to confirm an overlapping vision, even in its more pronounced web-based social meaning, since from the tourist point of view tourist product is an experience, chosen according to his-her own decision process and with the specific aim of tasting, living the atmospheres, habits and knowledge of the visited destination. Involving the tourist, therefore, becomes a strategic choice for firms, since his/her requests, complaints, congratulations can be relevant hints to get advantage from his/her own experiences, learning and personal knowledge. In this optic, tourist product is a bundle of local resources, firms’ competences and tourists themselves’ knowledge that can all become “strategic”, that means able to generate and sustain competitive advantage. Since the tourist is a decision maker, more and more informed and active in his/her role, it is more appropriate to consider an overall framework of analysis, with a double perspective: on one side, resource-based theory (RBT - Penrose, 1959; Barney, 1991; Grant, 1991; Peteraf, 1993), that enables to better analyze and combine tourist offer through the above underlined resources and competences that build the overall product; on the other side, service-dominant logic (SDL - Vargo, Lush, 2006, 2008a, 2008b; Payne et al., 2008; Gumesson, Polese, 2009), which is more concentrated on the marketing process in a scheme where the customer is a co-actor and networking interactions are widespread between producers and customers. The resource-based approach allows to identify the bundle of resources and competences that constitute the sources able to generate a sustained competitive advantage. In order to generate rents, these resources have to be valuable, scarce, imperfectly imitable and effectively exploited by the organization (Barney, 1991). For the creation and the development of the tourist product, the RBT helps in understanding and embracing two essential assumptions: the first refers to the firm-specific resources, linked to the specificity of the components that shape the tourist product while the second is related to the assemblage (Della Corte, 2009) capabilities that concern the ability to create different forms of integration among services related to both tour operators activity and/or to other networking models among tourist actors. In accordance with the RBT assumptions, the complex set of resources and competences is in fact strongly influenced by two typical Della_Corte_Definitivo_Layout 1 09/08/12 19:05 Pagina 313 The evolution of tourist product as... 313 aspects of SDL. First, the central role of the consumer that, with his/her requests, preferences, needs and personal background directs the companies’ strategic choices involved in the service creation and provision. Hence, overlapping the RBT perspective with the SDL, the consumer is conceived as a value-creating resource that involves a change or a reorientation of the strategic policies within the organization and the network that is responsible for carrying out solutions matching as much as possible the costumer requirements. The evolutionary vision coming out of this logic is based on the assumption that the consumer becomes a strategic resource if the firm behavior is oriented on the co-creation of value offers with the customer (Vargo, Lush, 2004). SDL approach implies a change in vision regarding how value is created (Tronvoll, 2012) considering the customer as an operant1 resource (Vargo, Lush, 2004). According to SDL, value is created when the consumer really encounters the service and, in tourism lives and experiences, the “tourist product” in all its components. This process, in SDL logic, can be translated in the concept of value-in-context (Vargo et al., 2008). In my view, I agree with the main assumptions of SDL apart from the concept of resources as services (Vargo, Lusch, 2004). Indeed, resources are firms’ assets, including capabilities, organizational processes, firms’ attributes, information, knowledge (Barney, 1991), controlled by or available for a firm, in order to improve its performance. As Della Corte et al. (2009) pointed out, these are the sources of the company’s main activity and, consequently, of the goods/services offered to clients. With this theoretical observation, it is possible to match the RBT with the SDL approach. However, following RBT vision (Barney, 1996, 2006; Della Corte, Sciarelli, 1999) in the light of the SDL approach, the customer can be considered a strategic resource (co-producer and value co-creator) able to generate a competitive advantage if the value co-creation process is well implemented by the organization and, in case of the tourist product, by the inter-firm network that must actively act on the value prepositions emerging during service provision. 1 S-D logic distinguishes operand resources as typically physical while operant resources as typically human, such as knowledge, skills and information (Hunt, Derozier, 2004). Della_Corte_Definitivo_Layout 1 09/08/12 19:05 Pagina 314 314 Capitolo 14 Second, the networking through inter-firm collaboration (Lazzeretti, Petrillo, 2006) represents an important route to understand how resources can be integrated according to a dynamic process that takes into account the customer requirements and the changing context in order to configure in a new manner (co-creation approach) the existing resources able to generate new value offers. However, the purpose of this chapter is to demonstrate how, in tourist industry, tourist can be viewed as a strategic resource as well as user and co-actor in value co-creation process. This, in RBT logic, consequently, means conceiving the firm as embedded in a set of profitable relations where the network allows to generate new opportunities both for the network and for the single firm, thanks to knowledge, resources and experiences sharing among the stakeholders of the networks. Figure 14.2: An integrated theoretical framework Source: our elaboration. 14.4 Tourist products’ main configurations: an overlapping perspective The analysis of tourist product’s main configurations and their relative evolution reflects the above explained approaches: there is, in fact, another side, a need for relevant contents in tourism offers’ constitution; on the offer side, a growing involvement of consumer both in product creation and in its provision. As suggested by Coopers et al (2005), the consumer as decision maker is surrounded and characterized by perceptions, learning, personality and behaviour, motivations and idea; in a wider context where he/she receives Della_Corte_Definitivo_Layout 1 09/08/12 19:05 Pagina 315 The evolution of tourist product as... 315 cultural, socio-economic inputs, as well as familiar rather than social groups’ influences. Moreover, the AIDAS’ Model’s scheme (Strong, 1925) is based on the continuous interaction between the customer, the destination and firms operating in that destination, through the phases of: – awareness, that is the time when the potential tourist decides to take a travel, investing part of his/her spare time and money in a journey; – interest, which is the interest in specific travel products and therefore destinations; – desire, when he/she starts thinking about that specific destination more intensely, generating also expectations on it; – action, which refers to the specific action of booking; – satisfaction: this variable refers to another marketing phase, that is the phase of service delivery, when the customer judges the received services, confirming or not his/her expectations. This process recalls the two main levels of marketing plan: the induced one, that refers to the decision process before the travel is actually made and the organic one, which refers to the time of service provision. As regards the first one, it includes the traditional marketing policies (product, price, promotion, placement), while the second one is characterized by three main variables: service escape, that is the atmosphere (sounds, smells, lights, colours, furniture); quality-price relationship and productivity (Della Corte, 2001). Starting analyzing the first part of the model (AIDA), it is clear that a single accommodation firm (for example, a hotel), in order to catch customer attention, needs also a precise destination promotional activity made by other organizations (Local Authorities rather than Destination Management Organizations). This makes the interaction between firms, organizations and customers tighter and tighter. Linking the demand perspective with the offer one, it is possible to focus on different configurations of tourist products (Rispoli, Tamma, 1995; Della Corte, 2000, 2009), with different roles and interactions between involved actors. On a hypothetical continuum (Rispoli, Tamma, 1995), the first configuration is known as the “point-to-point” or as the “do-it-yourself ” scheme (Figure 14.3), according to which the tourist chooses the single services in order to plan his/her travel; therefore, in this case, the tourist creates his/her own product. Della_Corte_Definitivo_Layout 1 09/08/12 19:05 Pagina 316 316 Capitolo 14 Figure 14.3: The “ point-to-point” configuration Source: elaboration from Rispoli, Tamma, 1995; Della Corte, 2000, 2009. At the other extreme there is the package configuration (Figure 14.4), which is the traditional all inclusive product proposed by tour operators, that comprises travel, overnights and other eventual services (theatre tickets, special dinners, tickets for fun fairs, museums, etc.). In this case, the tour operator is responsible for the proposed package, which is sold with its brand, even if the included services are provided by other firms. The tour operator, than, by assembling different services, covers a very delicate and critical role, that requires creativity and selection of adequate services. The final offer is than sold through the tour operator’s brand and this firm is responsible for the whole packaging: for any problem during the journey, the customer can turn to the tour operator. Figure 14.4: The package configuration Source: elaboration from Rispoli, Tamma, 1995; Della Corte, 2000, 2009. Della_Corte_Definitivo_Layout 1 09/08/12 19:05 Pagina 317 The evolution of tourist product as... 317 Between the two extremes, there are other possible intermediate configurations. The first one is the network. This refers to situations where local firms co-operate and co-project complex offers, aimed at attracting tourists to choose that destination and its relative offers. In these cases, more firms decide to co-work on a specific project, with specific promotions (Figure 14.5). Figure 14.5: The network configuration Source: elaboration from Rispoli, Tamma, 1995; Della Corte, 2000, 2009. Considering demand evolution, its relative changes and its increasing attention to the web, a new configuration has been developed in the last decade; it’s dynamic packaging. Different definitions have been given to this scheme. Some studies define it as an “industry buzzword” for enabling the consumers (or booking agent) to build a customized itinerary by assembling multiple components of their choices and complete the transaction in real time (Murua et al., 2005). Interesting appears the definition given by Cardoso and Lange (2007), according to whom dynamic packaging has been introduced as an innovative technology allowing for the automated online configuration and assembling of packaged travel products for individual customers. An appropriate level of integration of tourism information systems is a key factor for further realizing the strategic opportunities of dynamic packaging. I personally define dynamic packaging as bundle of different services, Della_Corte_Definitivo_Layout 1 09/08/12 19:05 Pagina 318 318 Capitolo 14 combined by the firm in real time, in terms of offers and relative prices. The idea for the customer is that he/she can directly choose the services to include in the overall product, but they are actually selected and proposed by the firm (Figure 14.6). The advantage of this configuration is double: for the customer, since he/she can choose among a range of opportunities and for the tour operator, since it can propose its offers in a more flexible scheme that recalls the “do-it-yourself ” format, inserting just the selected firms with which the tour operator has its commercial agreements. An interesting example of an intuitive approach in planning and booking is Kuoni’s introduction of ‘holiday concept boxes’ (which help customers build a picture of the holiday they want through a series of visual cues) and ‘ inspirational areas’ in its shops to help clients explore what they want from a holiday and Pocketvillage.com’s ‘Inspire Me’ facility, enabling customers to draw the landscape of their dreams or to pack a virtual suitcase (Mintel, 2011). Figure 14.6: The Dynamic Packaging configuration Source: elaboration from Rispoli, Tamma, 1995; Della Corte, 2000, 2009. It is however important to distinguish between Dynamic Packaging in its tight meaning and in its broader one. The first one refers to a wide scheme of services (from accommodation to travel, to tickets for tourist buses, museums, events, etc.), proposed by the tour operator among a wide range of alternatives, instead of the traditional all inclusive package. This type of configuration is nowadays adopted by lots Della_Corte_Definitivo_Layout 1 09/08/12 19:05 Pagina 319 The evolution of tourist product as... 319 of tour operators. TUI and Thomas Cook dominate the package tour operator rankings with a 60% share of ATOL passenger licenses amongst the top 50 companies. Outside of the ‘big two’, the leading online travel agency (OTA) Expedia holds the largest number of passenger licenses. Both of the ‘big two’ operators are pursuing a mixed offline/online booking strategy, although the trend is towards distribution via the web. TUI controls around 850 high street stores but has closed 120 since 2008 and plans a further 100-150 closures by 2016. In the quarter to June 2011, the group’s UK proportion of online bookings increased from 38% to 40%. Following Thomas Cook’s merger with the Cooperative Travel and Midlands Co-operative Travel which received approval in August 2011, Thomas Cook will own 70% of the 1,240-strong shop network, of which around 75 stores are expected to close. The group is also pursuing an online strategy: in 2009/10, its UK controlled internet distribution reached 33% of overall product distribution, up from 30% in 2008/09 (Mintel, 2011). Dynamic packaging in its broader meaning: nowadays a real revolution in sector has taken place, since low cost airlines have changed roles and functions in the industry, for a couple of reasons. At the beginning, they have been the main actors of disintermediation, since they have started to sell tickets on the web, avoiding the travel agencies’ channel. Successively they have even started proposing other services on their websites, through which the customer can reserve accommodation, rather than car rentals, tickets for fun fairs and museums, etc. The airline company just has commercial agreements with the firms whose offers are proposed through their website and get royalties from them. EasyJet and Ryanair continue to play a major role in the independently booked holiday market. The launch of easyJet Holidays in February 2011, in partnership with Low Cost Travel Group, represents a challenge to the ‘big two’ tour operators, with the battle lines increasingly drawn up around price versus exclusivity. EasyJet launched a campaign in summer 2011 against TUI and Thomas Cook by highlighting the saving customers could make by booking its lower priced holidays. In July 2011, Thomson rolled out a counter campaign, ‘No Comparison’, claiming that its products are unique and should be judged on quality rather than price (Mintel, 2011). What changes a lot in the two schemes is the responsibility: in the first case, even if the customer has the sensation of building up his/her own product, the alternatives are proposed by the tour operator which, in any case, holds the responsibility for the whole travel with its own brand. In the other case, Della_Corte_Definitivo_Layout 1 09/08/12 19:05 Pagina 320 320 Capitolo 14 the relationship between the customer and the firm whose offers are proposed on the airline company’s website is direct. So, in case of problems, the customer has to turn to each single firm separately, thus assuming the responsibility of his/her choices. However, the main features of dynamic packaging are: personalized products to clients, price dynamicity, specialized communication to specific targets up to one-to-one relationships (Dall’Ara, 2002). 14.5 Some empirical data on configurations’ preferences A research conducted on a sample of 300 Italian and foreign tourists who visited the city of Naples and stayed in the most competitive 4 and 5 stars hotels in the city, shows us how they booked their holiday. The information emerged from an empirical investigation through an auto-fill in survey on a sample of Italian, foreign (European and extra-European) and cruise tourists. The data listed below are the results of the analysis conducted between January and June 2012 on a sample of 1004 tourists. They focus on the way through which tourists visiting Naples book their holiday and show that for all the favorite tool is internet (Figure 14.7). More specifically, on the web the approaches seem to be oriented on poin-topoint configuration and broad dynamic packaging through airline companies’ websites. This shows that dynamic web-solution are the most appropriate commercial choices and that especially low-cost airline companies have “unstructured” the sector. Figure 14.7: Preferred channel Italian tourists European tourists Rest of the world’s tourists 19% 18% 29% 7% 8% 9% 66% adv to 0% 9% 64% web agency internet Source: our elaboration. adv to 71% web agency internet adv to web agency internet Della_Corte_Definitivo_Layout 1 09/08/12 19:05 Pagina 321 The evolution of tourist product as... 321 In order to understand tourists’ behavior linked to their age, the research identifies 4 age classes and studies the existing links between the two variables (reservations and age classes). It shows that young tourists (Figure 14.8) use different tools in order to make their reservations, with a peak for Europeans in using internet (67%). Figure 14.8: Preferred channel according to different age classes (15-24) Source: our elaboration. Tourists between 25 and 44 years old (Figure 14.9) prefer to make their reservation through internet (55% Italians, 51% European, 33% Rest of the world) but a large part of them uses travel and web agencies or tour operator to arrange their visit in Naples, excepted for European travelers, who are absolutely the most web-oriented. Figure 14.9: Preferred channel according to different age classes (25-44) Source: our elaboration. Della_Corte_Definitivo_Layout 1 09/08/12 19:05 Pagina 322 322 Capitolo 14 The use of travel and web agencies and tour operators considerably decreases for tourists between 45 and 64 years (Figure 14.10), especially for tourists coming from other countries. Figure 14.10: Preferred channel according to different age classes (45-64) Source: our elaboration. As regards the over 65, it’s surprising to see that also in this case internet is the most appreciated channel, followed by travel agencies. These data confirm those proposed by ITB World Travel Trends Report, according to which in 2010 over 40% of outbound tourist in Europe preferred internet channels, followed by travel agencies (25%). In Italy, according to different sources (Osservatorio Turismo On line, PhoCus Wright), on line reservations in the sector have mainly regarded online agencies (46%), followed by low cost airlines (16%), full cost airlines (22%), hotels (12%) and railways (4%). 14.6 The experience-based innovation “Innovation has become a buzzword” (Brooker et al., 2012) and literature on the issue has analyzed this concept according different theoretical lens (economics, innovation, entrepreneurship and technology). Innovation is often cited as a key attribute of entrepreneurship, in a Shumpeterian view, but novel concepts of potential value can be significant sources of differentiation (Tidd, Bessant, 2009; Brooker et al., 2012). In this specific research context, the chosen approach is that suggested Della_Corte_Definitivo_Layout 1 09/08/12 19:05 Pagina 323 The evolution of tourist product as... 323 by Kumar et al (2000), that define strategic innovation with reference to: value proposition and implementation of a unique business system. Beyond such a vision, the concept of “innovation” in tourism is linked to a series of factors, such as level of customer service, effective strategic plans and marketing campaigns, use of new technologies, etc. Therefore, it can be studied according to different levels of analysis to better understand how innovation can be embedded within the tourist product. From a previous study conducted by Della Corte et al. (2009), a clear model on innovation comes out. It considers different aspects of the innovation concept: – Technological: the role of technology encompasses both the organic and the induced level. At the induced level, technology plays a key role in the innovation process, contributing to introduce new aspects in the product development or creation, in promotional activities, in price policies, as well as in placement activities. Hence, in the induced phase, the traditional four Ps in marketing have to be activated. As regards product innovation, technology has favoured the web-based activities and the deep changes in the placement and selling of tourist products (Gopalakrishnan, Damanpour, 1997; Langley et al., 2005; Naranjo Valencia et al., 2010), as underlined in the previous paragraph. This process regards both the launch of new products as well as the development and refreshment of already existing ones. Besides, it has favoured social activities, mainly based on blogging and social networks, that have been activating on line tourism communities. Innovative tools like web 3.0 will push to the use of intelligence systems of booking and personal trip advisors, as well as recommendation systems (Cooper, 2011), delivering tailored information (Dwyer et al., 2007), through the most modern forms of relational marketing in tourism, like viral marketing (Alkharabshesh et al., 2011). At the organic level, where the tourist actively participates to the visit, the technological component acts on servicescape, service quality and efficiency, contributing to customize the services up to reach very high levels of customer satisfaction and getting to one-to-one products. In particular, in the organic phase it can contribute to emphasize the learning and the emotions of customers during the visit (see also the connections with the experiential factor). Della_Corte_Definitivo_Layout 1 09/08/12 19:05 Pagina 324 324 Capitolo 14 Typical examples of technological innovation are the site re-buildings in three-dimensions (3D), which characterize the archeological site of Masada (Israel). In particular information and Communication Technology thus represents a significant opportunity for firms in the sector. What can however be considered a strategic resource is the use of technology itself, thus recalling the specific web and marketing competences necessary for this purpose. – Systemic: As regards the systemic point of view, innovation becomes (Forrest 1991; Ziman, 1991; Lundvall, 1992; Rothwell, 1992, Morvillo, 2007) a strategic asset for firms that engage in inter-firm networks, collaborating with external firm’s environment in order to increase the destination competitiveness. The systemic logic of offer, even if not innovative in its meaning, is challenging in its applications, since it implies the convergence on specific goals of different stakeholders. In this direction, the innovation refers to the capacity of activate profitable interactions among local actors and between local and external actors. This can take place according to different actions, like: a. the creation of specific circuits in collaboration with commercial and manufacturing activities, cultural companies and other tourist stakeholders. This can take place through the collaboration and the interaction between the DMO and tour operators’ dynamic packaging that work together in assembling different proposals; b. co-planning activities between public and private actors; c. involvement and co-planning activities with locals in order to create a tourist product that overlaps both the experiential and the social sides. A typical example of systemic innovation can be the creation of movie-maps for film-friendly destination, such as New Zealand. Through the promotion of The Lord of the Rings, New Zealand became one of the principal places in which firms and institutions collaborated and leveraged off the success of the film trilogy. The movie maps represent a tool to promote the tourism destination via cooperation and the support of public institutions - in this case, Della_Corte_Definitivo_Layout 1 09/08/12 19:05 Pagina 325 The evolution of tourist product as... 325 Tourism New Zealand, is necessary in order to develop a systemic approach in destination management. Moreover, the systemic innovation recalls the assumption of the knowledge-based view (Grant, 1991) since it helps in understanding how firms can innovate in an effective way (Díaz-Díaz et al., 2008). The main construct at the base of this vision is “to create, build and maintain competitive advantage through utilization of knowledge and through collaboration practices” (du Plessis, 2007). If at both organizational and systemic level, the aim is to develop innovation programs, as we have already underlined, changing customer needs, abrupt and dynamic technological changes, globalization and changes in tourism chain and in inter-firm relationships became increasingly complex, specially at firm level, due to the fact that internalizing innovations is really costly and difficult (Cavusgil et al., 2003). Hence, the necessity of tourist firms to collaborate and cooperate in order to build and continuously improve the tourist product which has led them to start working collaboratively across firm boundaries. In this direction, the collaboration among different stakeholders of the tourist chain allows to better codify all tourist’s information, complaints and suggestions that come out from his/her global experience (this assertion is linked to the concept of tourist knowledge codification) that, in SD Logic, may constitute the input for the innovation process able to generate an innovative output in terms of products and services that are going to shape new value propositions for the tourist product. Sharing this vision, based both on knowledge sharing among the actors of the network and knowledge codification of the user/customer, is possible to understand how the innovative process may generate from the network to after invade firm boundaries. Indeed, acquiring knowledge and skills through collaboration can be translate in the concept that both system and firms may successful and rapidly innovate in an effective way (du Plessis, 2007). – Experiential: Tourist firms need not only to monitor the technological innovation but also to transform the customer’s desires in experiences. Indeed, for tourism companies, innovation, linked with the customer experience, has become a keystone. The necessity to create experience offerings originates from the construct that innovating Della_Corte_Definitivo_Layout 1 09/08/12 19:05 Pagina 326 326 Capitolo 14 experiences help in co-creating value with customer, that in SDL terms may be translated into the creation of mutual value (Vargo, Lusch, 2004). One of the literature frequent examples about the experiential component in innovation is linked to the Walt Disney Company that is able to create in its theme park a global experience able to encounter the consumer sensibility (Pine, Gilmore, 2008). However, the company recognizes the importance of the experiential innovation as it aims at making the intangible aspects more tangible and memorable to consumers. “The primary goal of the command center, as stated by Disney, is to make guests happier”, putting its efforts “in the name of a better guest experience” (The New York Times, 2010). Pine and Gilmore (1998) propose a model where the tourist takes part in the journey in a more active or passive way, either through an absorption process (that is when the experience penetrates in his/her mind, like when he/she goes to the theatre) or through an immersion process (that is when the person lives the experience physically or virtually - Williams, 2006). By the different interactions between the above cited aspects different experiential profiles come out (education, entertainment, escapist and esthetic) identified by Pine and Gilmore (1998). The esthetic dimension concerns the natural feature of tourism: being in a place with its own atmosphere. Scholars (Pine, Gilmore, 1998; Pencarelli, Forlani, 2002; Williams, 2006), link this component to the looking over or admiring new landscapes. This means that the tourist immerses himself/herself in the surrounding environment with a passive role. As regards the entertainment component, we usually conceptualize the tourist as absorbed in some entertaining activities, specifically conceived for him/her. Indeed, through educational activities, the tourist may acquire new skills and information as well as put into practice the acquired competences, going beyond the educational boundaries and reaching the escapist activities, mainly referred to the interest in trying, experimenting. This can be the example of the surf activities in the New South Wales coast since the tourist offer includes the Surf schools where first tourists can learn all the technics and rules from surf accredited academy (education dimension) and then experience this sport. Della_Corte_Definitivo_Layout 1 09/08/12 19:05 Pagina 327 The evolution of tourist product as... 327 In sum, the entertainment dimension includes sensing, the educational one learning, the escapist on trying and doing, and the esthetic one being there (Petkus, 2002). From the first seminal works (Pine, Gilmore, 1998) on the four “Realms” of the tourists experience, only small theoretical steps have been made headway for the evolution of this model. If the transaction to the SDL has emphasized the importance of operant resources (such as the customer) “with which the firm is constantly striving to make better value propositions than its competitors” (Vargo, Lusch, 2004), it is even more true that, mostly for the above mentioned characteristics and factors of tourism sector, a superior value preposition springs out from the interaction between the service provider and the customer and, more precisely, the value creation derives from the consumers’ experiences. Hence, although Pine and Gilmore (1998) have identified different dimensions and degrees of involvement in the tourism experience, it is also important to state that this clear theoretical distinction does not encounter the real practical necessity in the tourism field. As a matter of fact, an overlapping perspective among some model’s dimensions is required. Literature on the issue has, indeed, identified the “edutainment” (education+entertainment) as the results of the match between education and entertainment. For example, the heritage sites may offer virtual reality in the cultural heritage, providing a valuable support to the traditional methods culture offerings (Della Corte et al., 2009). This is the case of Masada National Park, the offer of which is enriched by an innovative museological experience that combines archaeological artifacts and a theatrical atmosphere, together with accompanying radio play and audio explanations. The integration between archaeological artifacts, theatrical, music and video create an unforgettable experience inviting the visitor to become the first player within Masada history (Della Corte et al., 2009). In the same direction the education component needs to be analyzed with escapist one, originating the “edupist” (education+ escapist) activities. These can refer to the above mentioned sport activities, regarding both theory and practice. Finally, the link between education and esthetic creates the “eduthetic” activities (education+esthetic). An example can be the sightseeing in New Zealand, where through tours of New Zealand, tourists see famous tourist attractions, stunning scenery or eco locations. Della_Corte_Definitivo_Layout 1 09/08/12 19:05 Pagina 328 328 Capitolo 14 Figure 14.11: The four dimensions of experience Source: our elaboration from Pine, Gilmore, 1998. The main limit of this so widespread approach, however, is that it does not take into account the possibility to match the dimensions even during a specific journey. Besides, there can be experiential contexts on more than one dimension. Alone or combined with others, can be encountered in the same vacation. Taking into account the two proposed theoretical frameworks, the scheme has to be examined in an overlapping perspective of local resources and competences on one side and on the tourist on the other, in an intricated set of interactions where each part has its own knowledge and experience in the overall product provision. 14.7 Conclusions and hints for future research This study has several limits. First of all, the literature review is based on some of the most important contributions. I do apologize in advance for missing any. Secondly, this is a theoretical chapter, that requires applications Della_Corte_Definitivo_Layout 1 09/08/12 19:05 Pagina 329 The evolution of tourist product as... 329 with reference to the experience-based innovation. However, it is a systematization of fragmented works and tries to point out the new directions and visions in having and offering tourist products. This approach conducts to a vision of perceived value in marketing activities, mainly based on interactions between the firms and the tourist in product building and experiencing. Perceived value, from this point of view, overwhelms customer satisfaction, since it occurs at each stage of the purchasing process (Sanchez-Rodríguez et al., 2004), here including the prepurchase one (Woodruff, 2009), while customer satisfaction traditionally refers to post-consumption (Oliver, 1981). It can be therefore interesting to test the proposed model through the application of the Cognition-AffectBehaviour paradigm, that supports the experiential approach, with a totally new approach to the study of consumer behaviour, in its interactions with firms’ strategy ain the proposal of tourist products. Morevoer, the idea that destination image is based on specific agents (Gartner, 1993), like the induced ones (i.e., promotional activies and advertisements); organic ones, acquired through personal experience and the autonomous ones (like popular culture) is now widely shared. In the knowledge-based society this approach favours a vision of destination itself as a complex product, ale to conduct to info-tainment to edu-tainment experiences, according to target’s main features and needs. We can in fact conclude that nowadays tourist are looking for experiences rather than destinations themselves (Cooper, 2011). This also shows that there are significant relationships between tourist products, destinations and strategic management approach. If we consider the evolution of strategy and strategic planning in the field, we can in fact assert that we passed from a traditional strategic planning approach in the 80’s (based on S.W.O.T. analysis, comepteitive forces, value chain and competitive strategies), to a vision approach in the 90s, which is a more dynamic, engaging, bottom-up process, based on knowledge sharing and shared visions, to the experience strategies according to which destinations have to co-build and co-engineer unique experiences (of any kind) for the customer. This, in my view is the future orientation in tourism theory and practice: in a more and more threatening competitive set, the destinations and firms that will adopt this approach will have more chances of success. Della_Corte_Definitivo_Layout 1 09/08/12 19:05 Pagina 330 330 Capitolo 14 References ALKHARABSHEH K. S., ALSARAYREH M. N., RUMMAN M. A., AL FARAJAT A. H. (2011). 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