Microsoft Word 2007 ichrie conference Proceedings Final-Final 06-06-07. doc

Key Words:
new product development, knowledge management, tourism, cluster, and destination 
INTRODUCTION 
The increasing demands of customers concerning quality and innovativeness of products and services put 
companies under a great pressure. In addition, globalization, technological advances, intense competition, short 
product life cycles and sophisticated and demanding tourism markets also force tourism firms to increase their new 
product development processes in order to survive. As destinations and their resources represent the major factors 
creating and attracting tourism demand, it becomes evident that tourism firm’s competitiveness heavily depends on 
destinations’ ability to continually refresh and update their products. NSD has also been proposed as a competitive 
necessity and an important ingredient for moving firms to the experience economy, attracting and boosting long-
term customer relationships and for enhancing business profitability (Storey and Easingwood, 1999; Gustafsson et 
al. 1999). This is also true if even more important in the tourism sector, whereby destinations compete with each 
other in terms of the experiences that their visitors can live. The necessity of destinations to engage in continuous 
product innovation processes has also been highlighted in the case study of AlpNet, whereby the members of the 
knowledge network of the tourism suppliers at the Alps (Pechlaner et al. 2002) stressed that new product 
development is one of the most fundamental activity whereby the network should utilize its knowledge resources for 
enhancing the competitiveness of its members. Indeed, knowledge is nowadays regarded as a source of competitive 
advantage for destinations and indispensable factor for developing new products. Lebe (2006) argued that 
destinations with a poor level of destination knowledge management concentrate solely on marketing campaigns and 
neglect other vital, knowledge-bound aspects of destination management, such as the continuous creation and 
engagement of customers through experiences.
However, 
although 
knowledge is widely recognized as a competitive resource for developing new products, 
little is known on how knowledge management can contribute to New Product Development (NPD) processes in 
general as well as at the level of tourism destinations and clusters of tourism firms. In this vein, this paper aims to 
discuss and elaborate the links between NPD and knowledge management. Based on the findings, the paper further 
develops and proposes a framework that it can be used by destination management organizations in order to evaluate 
the effectiveness of the knowledge management activities of their tourism clusters for engaging and developing 
NPD processes.