Product, Services, and Branding Strategy

Product, Services, and Branding

Strategy

Chapter 8

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Learning Goals

1. Understand products and the major classifications of products and services

2. Learn the decisions companies make regarding their products and services

3. Understand branding strategy4. Identify the four characteristics

that affect the marketing of a service

5. Realize additional product issues

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• Produce 7.5 million doughnuts each day

• Sell more than doughnuts; they sell an experience

• New store openings are eagerly anticipated in part due to extensive promotion

Case StudyKrispy KremeKrispy Kreme

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Definitions

• Product Anything offered to a market for

attention, acquisition, use, or consumption that might satisfy a need or want.

• Service A form of product that consists of

activities, benefits or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything.

Goal 1: Understand products and their classifications

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What is a Product?

• Products, Services, and Experiences Market offerings may consist of a

combination of goods and services Experiences are used to differentiate

offerings• Levels of Product and Services

Core benefit, actual and augmented product

• Product and Service Classifications Consumer products and industrial

products


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What is a Product?

• Convenience

• Shopping

• Specialty

• Unsought

• Frequent purchases bought with minimal buying effort and little comparison shopping

• Low price

• Widespread distribution

• Mass promotion by producer

Types of Consumer Products


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What is a Product?

• Convenience

• Shopping

• Specialty

• Unsought

• Less frequent purchases

• More shopping effort for comparisons.

• Higher than convenience good pricing

• Selective distribution in fewer outlets

• Advertising and personal selling



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What is a Product?

• Convenience

• Shopping

• Specialty

• Unsought

• Strong brand preference and loyalty, requires special purchase effort, little brand comparisons, and low price sensitivity

• High price

• Exclusive distribution

• Carefully targeted promotions



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What is a Product?

• Convenience

• Shopping

• Specialty

• Unsought

• Little product awareness and knowledge (or if aware, sometimes negative interest)

• Pricing varies

• Distribution varies

• Aggressive advertising and personal selling by producers and resellers



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Product and Service Classifications

•Consumer products

• Industrial products Materials and parts Capital items Supplies and services


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Product and Service Classifications

• Organizations, persons, places, and ideas Organizational marketing makes

use of corporate image advertising Person marketing applies to

political candidates, entertainment sports figures, and professionals

Place marketing relates to tourism Social marketing promotes ideas


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Product and Service Decisions

• Individual Product

• Product Line

• Product Mix

• Product attributes Quality, features,

style and design

• Branding• Packaging• Labeling• Product support

services

Key Decisions Key Decisions

Goal 2: Learn decisions companies make regarding products

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• Product line A group of

products that are closely related because they may: •function in a similar manner

•be sold to the same customer groups,

•be marketed through the same types of outlets

•fall within given price ranges



• Product Line

• Product Mix


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• Product Line

• Product Mix

• Product line length Line stretching:

adding products that are higher or lower priced than the existing line

Line filling: adding more items within the present price range



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• Product Line

• Product Mix

• Product mix Also known as

product assortment

Consists of all the product lines and items that a particular seller offers for sale



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• Product Line

• Product Mix

• Product mix width: Number of different

product lines carried by company

• Product mix depth: Number of different

versions of each product in the line

• Product mix consistency



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Branding Strategy

• Brand equity is the positive differential effect that knowing the brand name has on customer response to the product or service

• One measure of equity is the extent to which customers are willing to pay more for the brand

• Brand valuation is the process of estimating the total financial value of a brand

Goal 3: Understand branding strategy

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Branding Strategy

• Brands with strong equity have many competitive advantages: High consumer awareness Strong brand loyalty Helps when introducing new

products Less susceptible to price

competition


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Brand Strategy

• Brand Positioning

• Brand Name Selection

• Brand Sponsorship

• Brand Development

• Three levels of positioning: Product

attributes• Least effective

Benefits Beliefs and values

• Taps into emotions



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Brand Strategy





• Good Brand Names: Suggest something

about the product or its benefits

Are easy to say, recognize and remember

Are distinctive Are extendable Translate well into

other languages Can be registered

and legally protected



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Brand Strategy





• Manufacturer brands

• Private (store) brands Costly to establish

and promote Higher profit margins

• Licensed brands Name and character

licensing has grown

• Co-branding Advantages /

disadvantages



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Brand Strategy





• Line extensions Minor changes to

existing products

• Brand extensions Successful brand

names help introduce new products

• Multibrands Multiple product

entries in a product category

• New brands New product category



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Managing Brands

• Brands are known through advertising, personal experience, word of mouth, the Internet

• Everyone in the company represents the brand

• Companies need to periodically run a brand audit


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Services Marketing

•Services Account for 74% of U.S.

gross domestic product. Service industries include

business organizations, government, and private not-for-profit organizations.


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Characteristics of Services

• Intangibility Consumers look for service quality signals

• Inseparability Services can’t be separated from providers

• Variability Employees and other factors result in

variability

• Perishability Services can’t be inventoried for later sale


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Service Firm Marketing Strategies

• The Service-Profit Chain Internal Marketing Interactive Marketing

• Managing Service Differentiation

• Managing Service Quality

• Managing Service Productivity

Goal 4: Identify 4 characteristics that affect marketing a service

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Product Decisions and Social Responsibility

•Acquiring and dropping products

•Patent protection

•Product quality and safety

•Product warranties

Goal 5: Realize additional product issues

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International Product and Services Marketing

•Special challenges: Which products should be

marketed internationally? Should the products be

standardized or adapted for world markets? Packaging?

Goal 5: Realize additional product issues

Product, Services, and Branding Strategy

Business

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