Principles of Marketing - Chapter 08

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Product, Services, and BrandingStrategy

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1. What Is a Product?

2. Product and Service Decisions

3. Branding Strategy: Building Strong Brands

4. Services Marketing

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Products, Services, and Experiences

Product is anything that can be offered in a market

for attention, acquisition, use, or consumptionthat might satisfy a need or want

Soap

Toothpaste

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Service is a form of product that consists of

activities, benefits, or satisfactions offered forsale that are essentially intangible and do notresult in ownership

Medical consultation Legal advice

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Experiences represent what buying the productor service will do for the customer

Atrium

Ferrari

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Core benefits

Actual product

Augmented product

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Levels of Product and Services


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Levels of Product and Services

Core benefits represent what the buyer is really buying

Actual product represents the design, brand name, andpackaging that delivers the core benefit to the customer

Augmented product represents additional services orbenefits of the actual product

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Product and Service Classifications

Consumer products

Industrial products

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Consumer products are products and services for

personal consumption Classified by how consumers buy them

Convenience product

Shopping products

Specialty products Unsought products

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Convenience products are consumer products andservices that the customer usually buysfrequently, immediately, and with a minimumcomparison and buying effort

Newspapers Candy Fast food

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Shopping products are consumer products and

services that the customer compares carefullyon suitability, quality, price, and style

Furniture

Cars

Appliances

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Specialty products are consumer products and services

with unique characteristics or brand identification forwhich a significant group of buyers is willing to make aspecial purchase effort

Medical services

Designer clothes High-end electronics

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Unsought products are consumer products thatthe consumer does not know about or knowsabout but does not normally think of buying

Umbrellas in Karachi

Insurance

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Industrial products are products purchased for furtherprocessing or for use in conducting a business

Classified by the purpose for which the product ispurchased

Materials and parts Capital Raw materials

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Materials and parts include raw materials and

manufactured materials and parts usually solddirectly to industrial users

Wheat

Lumber

Iron Cement

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Capital items are industrial products that aid in

the buyers production or operations Buildings

Elevators

Computers

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Organization marketingconsists of activitiesundertaken to create, maintain, or changeattitudes and behavior of target consumerstoward an organization

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Organizations, Persons, Places, and Ideas


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Person marketingconsists of activitiesundertaken to create, maintain, orchange attitudes and behavior of target

consumers toward particular people

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Place marketingconsists of activities undertaken

to create, maintain, or change attitudes andbehavior of target consumers toward particularplaces

Tourism

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Social marketingis the use of commercialmarketing concepts and tools in programsdesigned to influence individuals behavior toimprove their well-being and that of society

Public health campaign

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Individual Product and Service Decisions

Product attributes

Branding

Packaging

Labeling

Product support services

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Product attributes are the benefits of the product

or service Quality

Features

Style and design

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Quality in terms of the product or service is the

lack of defects

Quality in terms of the customer is the value and

satisfaction provided by the product or service

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Product quality includes level and consistency

Quality level is the level of quality thatsupports the products positioning

Performance quality is the ability of a product

to perform its functions

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Quality consistency is the freedom from defects

and the delivering of a targeted level ofperformance

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Product features are a competitive tool for

differentiating a product from competitorsproducts

Product features are assessed based on the value to

the customer versus the cost to the company

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Product style and design add value to

customer value

Style describes the appearance of theproduct

Design contributes to a productsusefulness as well as to its looks

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Brand is the name, term, sign, or design, or acombination of these, that identifies themaker or seller of a product or service

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Consumer benefits

Quality

Consistency

Seller benefits

Segmentation Communicate product features

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Packaginginvolves designing and producing the

container or wrapper for a product

Label identifies the product or brand, describes

attributes, and provides promotion

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Product support services augment actual products

Companies must continually:

Assess the value of current services to obtain ideas fornew ones

Assess the costs of providing these services

Develop a package of services to satisfy customers andprovide profit to the company

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Product Line Decisions

Product line is a group of products that are closely

related because they function in a similarmanner, are sold to the same customer groups,are marketed through the same types of outlets,or fall within given price ranges

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Product linelength is the number of items in the

product line Line stretching

Line filling

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Product line stretchingis when a companylengthens its product line beyond itscurrent range

Downward

Upward Combination of both

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Downward product line stretchingis used by companies

at the upper end of the market to plug a market hole orrespond to a competitors attack

Upward product line stretchingis by companies at the

lower end of the market to add prestige to their currentproducts

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Combination line stretchingis used by companies

in the middle range of the market to achieveboth goals of upward and downward linestretching

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Product line fillingoccurs when companies add

more items within the present range of the line More profits

Satisfying dealers

Excess capacity

Plugging holes to fend off competitors

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Product Mix Decisions

Product mix consists of all the products and items

that a particular seller offers for sale Width

Length

Depth Consistency

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Product Mix Decisions

Product mix width is the number of different

product lines the company carries

Product mix length is the total number of itemsthe company carries within its product lines

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Product line depth is the number of versions

offered of each product in the line

Consistency is how closely the various product

lines are in end use, production requirements,or distribution channels

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Brandrepresents the consumers perceptions andfeelings about a product and its performance. It

is the companys promise to deliver a specificset of features, benefits, services, andexperiences consistently to the buyers

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Brand equity is the positive differential

effect that knowing the brand name hason customer response to the product orservice

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Brand equity provides competitive advantage

Consumer awareness and loyalty

Benefits

Beliefs and value

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Customer equity is the value of the customerrelationships that the brand creates

Brand valuation is the process of estimating thetotal financial value of the brand

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Brand strategy decisions include:

Brand positioning

Brand name selection

Brand sponsorship

Brand development

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Brand strategy decisions include:

Product attributes

Product benefits

Product beliefs and values

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Brand Positioning


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Brand Name Selection

Desirable qualities Suggests benefits and qualities Easy to pronounce, recognize, and remember Distinctive Extendable

Translatable for the global economy

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Brand Sponsorship

Manufacturers brand

Private brand

Licensed brand

Co-brand

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Private brands provide retailers withadvantages

Product mix control

Higher margins

Exclusivity

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Brand Sponsorship


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Brand Development

Line extensions

Brand extensions

Multibrands

New brands

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Brand Development

Line extensions occur when a company extends

existing brand names to new forms, colors,sizes, ingredients, or flavors of an existingproduct category

Brand extensions extend a brand name to a newor modified product in a new category

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Brand Development

Multibrands are additional brands in the same

category

New brands are used when existing brands are

inappropriate for new products in new productcategories or markets

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Managing Brands

Requires:

Continuous brand communication

Customer-centered training

Brand audits

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Types of Service Industries

Government

Private not-for-profit organizations

Business services

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Nature and Characteristics of a Service

Intangibility

Inseparability

Variability

Perishability

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Intangibility refers to the fact that services cannot

be seen, tasted, felt, heard, or smelled beforethey are purchased

Inseparability refers to the fact that servicescannot be separated from their providers

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Variability refers to the fact that service quality

depends on who provides it as well as when,where, and how it is provided

Perishability refers to the fact that services cannotbe stored for later sale or use

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Marketing Strategies for Service Firms

In addition to traditional marketing strategies,

service firms often require additional strategies Service-profit chain

Internal marketing

Interactive marketing

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Service-profit chain links service firm profits withemployee and customer satisfaction

Internal service quality

Satisfied and productive service employees

Greater service value

Satisfied and loyal customers Healthy service profits and growth

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Internal marketingmeans that the service firm must orientand motivate its customer contact employees andsupporting service people to work as a team to providecustomer satisfaction

Internal marketing must precede external marketing

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Interactive marketingmeans that servicequality depends heavily on the quality ofthe buyer-seller interaction during theservice encounter

Service differentiation Service quality

Service productivity

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Managing service differentiation creates acompetitive advantage from the offer,delivery, and image of the service

Offer can include distinctive features

Delivery can include more able and reliable

customer contact people, environment, orprocess

Image can include symbols and branding

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Managing service quality provides acompetitive advantage by deliveringconsistently higher quality than itscompetitors

Service quality always varies depending oninteractions between employees andcustomers

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Service recovery can turn disappointedcustomers into loyal customers

Empower employees

Responsibility

Authority

Incentive

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Managing service productivity refers tothe cost side of marketing strategiesfor service firms

Employee recruiting, hiring, and

training strategies

Service quantity and quality strategies

Principles of Marketing - Chapter 08

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