Download Product - Rome Business School

Master in Marketing and Communication
Module 8
Product, Services, and Brands:
Building Customer Value
Lecture 8 - slide 1
Product, Services, and
Branding Strategy
Topic Outline
• What Is a Product?
• Product and Services
Decisions
• Branding Strategy:
Building Strong
Brands
• Services Marketing
Lecture 8 - slide 2
What Is a Product?
Products, Services, and Experiences
Product is anything that can be offered in a
market for attention, acquisition, use, or
consumption that might satisfy a need or
want
Experiences represent what buying the
product or service will do for the customer
http://www.jordans.com/
Lecture 8 - slide 3
What Is a Product?
Levels of Product and Services
Lecture 8 - slide 4
What Is a Product?
Levels of Product and Services
• Core benefits represent what the buyer is
really buying.
• Actual product represents the design,
brand name, and packaging that delivers
the core benefit to the customer.
• Augmented product represents additional
services or benefits of the actual product.
Lecture 8 - slide 5
What Is a Product?
Product and Service Classifications
Consumer
products
Industrial
products
Lecture 8 - slide 6
What Is a Product?
Product and Service Classifications
• Consumer products are products and
services for personal consumption
• Classified by how consumers buy them
–
–
–
–
Convenience products
Shopping products
Specialty products
Unsought products
Lecture 8 - slide 7
What Is a Product?
Product and Service Classifications
Convenience
Shopping
Specialty
Unsought
Lecture 8 - slide 8
Marketing considerations for consumer products
Lecture 8 - slide 9
What Is a Product?
Product and Service Classifications
Convenience products are consumer products and
services that the customer usually buys
frequently, immediately, and with a minimum
comparison and buying effort
• Newspapers
• Candy
• Fast food
Lecture 8 - slide 10
What Is a Product?
Product and Service Classifications
Shopping products are consumer products and
services that the customer compares carefully on
suitability, quality, price, and style
• Furniture
• Cars
• Appliances
Lecture 8 - slide 11
What Is a Product?
Product and Service Classifications
Specialty products are consumer products and
services with unique characteristics or brand
identification for which a significant group of
buyers is willing to make a special purchase effort
• Medical services
• Designer clothes
• High-end electronics
Lecture 8 - slide 12
What Is a Product?
Product and Service Classifications
Unsought products are consumer products that the
consumer does not know about or knows about
but does not normally think of buying
• Life insurance
• Funeral services
• Blood donations
Lecture 8 - slide 13
What Is a Product?
Product and Service Classifications
Industrial products are products purchased for
further processing or for use in conducting a
business
• Classified by the purpose for which the product is
purchased
Lecture 8 - slide 14
What Is a Product?
Product and Service Classifications
Capital items are industrial products that aid in the
buyer’s production or operations
Materials and parts include raw materials and
manufactured materials and parts usually sold
directly to industrial users
Supplies and services include operating supplies,
repair and maintenance items, and business
services
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Lecture 8 - slide 15
What Is a Product?
Organizations, Persons, Places, and Ideas
Organization marketing consists of activities
undertaken to create, maintain, or change
attitudes and behavior of target consumers
toward an organization
Lecture 8 - slide 16
What Is a Product?
Organizations, Persons, Places, and Ideas
Person marketing consists of
activities undertaken to
create, maintain, or
change attitudes and
behavior of target
consumers toward
particular people
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http://www.rachaelray.com/
Lecture 8 - slide 17
What Is a Product
Organizations, Persons, Places, and Ideas
Place marketing consists of activities undertaken to
create, maintain, or change attitudes and
behavior of target consumers toward particular
places
Social marketing is the use of commercial
marketing concepts and tools in programs
designed to influence individuals’ behavior to
improve their well-being and that of society
Lecture 8 - slide 18
Product and Service Decisions
Individual Product and Service Decisions
Lecture 8 - slide 19
Product and Service Decisions
Individual Product and Service Decisions
Product attributes are the benefits of the product
or service
• Quality
• Features
• Style and design
Lecture 8 - slide 20
Product and Service Decisions
Individual Product and Service
Decisions
Product quality includes level and consistency
• Quality level is the level of quality that supports
the product’s positioning
• Conformance quality is the product’s freedom
from defects and consistency in delivering a
targeted level of performance
Lecture 8 - slide 21
Product and Service Decisions
Individual Product and Service
Decisions
Product features are a competitive tool for
differentiating a product from competitors’
products
Product features are assessed based on the value to
the customer versus the cost to the company
Lecture 8 - slide 22
Product and Service Decisions
Individual Product and Service Decisions
Style describes the
appearance of the
product
Design contributes to a
product’s usefulness as
well as to its looks
Lecture 8 - slide 23
Product and Service Decisions
Individual Product and Service
Decisions
Brand is the name, term, sign, or design—or a
combination of these—that identifies the maker
or seller of a product or service
Brand equity is the differential effect that the brand
name has on customer response to the product
and its marketing
Lecture 8 - slide 24
Product and Service Decisions
Individual Product and Service
Decisions
Packaging involves designing and
producing the container or
wrapper for a product
Labels identify the product or
brand, describe attributes, and
provide promotion
Lecture 8 - slide 25
Product and Service Decisions
Individual Product and Service
Decisions
Product support services augment actual products
Lecture 8 - slide 26
Product and Service Decisions
Product Line Decisions
Product line is a group of products that are closely
related because they
• function in a similar manner
• are sold to the same customer groups
• are marketed through the same types of outlets
• fall within given price ranges
Lecture 8 - slide 27
Product line decisions
• Product Line Length. This refers to the number of
products in the line. The line is too short if adding items
increases profits; too long if dropping items increases
profits. Company objectives of full-line offerings may
decrease strict profit criterion on length.
• Product Line Stretching. This occurs when a company
lengths its product line beyond its current range.
Downward stretch offers items to lower end of the market.
Upward stretch introduces items to high end of market.
Two-way stretch extends the line both upward and
downward.
• Product Line Filling. This adds items within the existing
product range of the line.
Lecture 8 - slide 28
Product and Service Decisions
Product Mix Decisions
Product mix (or product
portfolio) consists of
all the products and
items that a particular
seller offers for sale
• Width
• Length
• Depth
• Consistency
Lecture 8 - slide 29
Four dimensions of the product mix
• Mix Width. This refers to how many product lines the
company carries. (Unilever producing cooking oil, toilet
soap, cosmetics etc)
• Mix Length. This refers to the total number of items the
company carries within its product lines.
• Mix Depth. This refers to how many versions are offered
of each product in the line (such as size of packaging and
different formulations).
• Mix Consistency. This refers to how closely related the
various product lines are in end use, production
requirements, distribution channels, or other ways.
Lecture 8 - slide 30
Product Mix - Example
Product lines
Cosmetics
• Lipstick
• Powder
• Eye shadow
• ….
Colors
• Green
• Blue
• Black
•….
Sublines
Length
Application modes
• Pencil
• Roll on
• Powder
•…
Width
Jewellery
• Ring
• Bracelet
• Necklace
•….
Fashion
• Skirt
• Shirt
• Trousers
•…
Depth
Lecture 8 - slide 31
Branding Strategy: Building Strong Brands
Brand represents the consumer’s perceptions and
feelings about a product and its performance. It is
the company’s promise to deliver a specific set of
features, benefits, services, and experiences
consistently to the buyers
Lecture 8 - slide 32
Branding Strategy: Building Strong
Brands
Brand Positioning
Brand strategy decisions
include:
• Product attributes
• Product benefits
• Product beliefs and values
Lecture 8 - slide 33
Branding Strategy: Building Strong Brands
Brand Name Selection
Desirable qualities
1. Suggest benefits and qualities
2. Easy to pronounce, recognize, and remember
3. Distinctive
4. Extendable
5. Translatable for the global economy
6. Capable of registration and legal protection
Lecture 8 - slide 34
In-Class Exercise
Brand Name!
• Form groups of three to five. Complete the following
task: Using the qualities that a good brand name
should possess, create a brand name for a personal
care product that has the following positioning
statement: “Intended for sports participants and
enthusiasts, _________ is a deodorant that combines
effective odor protection with an enduring and
seductive fragrance that will enhance your romantic
fortunes.”
• Each group will share its findings with the class.
Lecture 8 - slide 35
Branding Strategy: Building Strong
Brands
Brand Sponsorship
Manufacturer’s brand
Private brand
Licensed brand
Co-brand
Lecture 8 - slide 36
Branding Strategy: Building Strong Brands
Brand Development Strategies
Lecture 8 - slide 37
Nature and characteristics of a service
A service is any activity or benefit that
one party can offer to another which is
essentially intangible and does not
result in the ownership of anything.
Lecture 8 - slide 38
The tangible-intangible continuum
for goods and services
• Most company offerings to customers contain an
element of service and this is illustrated by the service
continuum.
Lecture 8 - slide 39
Categorising offerings along the
service continuum
• Pure tangible goods
– toothpaste
• Tangible goods accompanied by one or more service
– computer and warranty
• Hybrid offer consists of equal parts of goods and
services
– restaurants
• Service with accompanying minor goods
– air travel
• Pure service
– teaching, consulting
Lecture 8 - slide 40
Services Marketing
Nature and Characteristics of a Service
Lecture 8 - slide 41
Tangibilising service offerings
Lecture 8 - slide 42
Services Marketing
Types of Service Industries
• Government
• Private not-for-profit organizations
• Business services
Lecture 8 - slide 43
Marketing strategies
for service firms
•
•
•
•
•
•
•
Additional Ps
The service profit chain
Internal marketing
Interactive marketing
Managing differentiation
Managing service quality
Managing productivity
Lecture 8 - slide 44
Additional Ps of services marketing
People
Physical environment
Process
Lecture 8 - slide 45
Shangri-La focuses on its people
as a selling proposition
Source: Shangri-La International Hotel Management Limited/TBWA Hong Kong
Lecture 8 - slide 46
Services Marketing
Marketing Strategies for Service Firms
Service-profit chain links service firm profits with
employee and customer satisfaction
• Internal service quality
• Satisfied and productive service employees
• Greater service value
• Satisfied and loyal customers
• Healthy service profits and growth
Lecture 8 - slide 47
Types of marketing in service industries
Lecture 8 - slide 48
Services Marketing
Marketing Strategies for Service Firms
Internal marketing means that the service firm
must orient and motivate its customer contact
employees and supporting service people to
work as a team to provide customer satisfaction
Internal marketing must precede external marketing
Lecture 8 - slide 49
Services Marketing
Marketing Strategies for Service Firms
Interactive marketing means that service quality
depends heavily on the quality of the buyerseller interaction during the service encounter
Lecture 8 - slide 50
Services Marketing
Service Differentiation
Managing service differentiation
creates a competitive 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, or process
• Image can include symbols and
branding
Lecture 8 - slide 51
Services Marketing
Service Quality
Managing service quality provides
a competitive advantage by
delivering consistently higher
quality than its competitors
Service quality always varies
depending on interactions
between employees and
customers
Lecture 8 - slide 52
Services Marketing
Service Productivity
Managing service productivity refers to the cost
side of marketing strategies for service firms
• Employee recruiting, hiring, and training
strategies
• Service quantity and quality strategies
Lecture 8 - slide 53
Exercise
Services Marketing
Consider a service that you currently manage or
that you would like to manage.
• How can you make your service “tangible”?
• What strategies would you adopt about these
specific elements of the service marketing mix?
– People
– Physical
– Processes
Lecture 8 - slide 54