Download Product and Service Decisions

Ch 8 -0
Copyright © 2011 Pearson Education
Principles of Marketing,
Arab World Edition
Philip Kotler, Gary Armstrong, Anwar Habib, Ahmed
Tolba
Presentation prepared by Annelie Moukaddem Baalbaki
CHAPTER EIGHT
Products, Services, and Brands:
Building Customer Value
Lecturer: Insert your name here
Ch 8 -1
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Chapter Learning Outcomes
Topic Outline
8.1 What Is a Product?
8.2 Product and Services Decisions
8.3 Branding Strategy: Building Strong Brands
8.4 Services Marketing
Ch 8 -2
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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. It includes physical
object, services, events, persons, places,
organizations, …
Service is any activity or benefit that one party can
offer to another that is essentially intangible and
does no result in the ownership of anything.
Experiences represent what buying the product or
service will do for the customer.
Ch 8 -3
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What Is a Product?
Ch 8 -4
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Three Levels of product
Core benefit: What is the buyer really buying?
Actual product: Product and service features, design, a
quality level, a brand name, packaging.
Augmented product around the core benefit and actual
product offering additional customer services and
benefits.
•
Consumers see products as complex bundles of benefits that
satisfy their needs.
What Is a Product?
Product and Service Classifications
Consumer products
Industrial products
Ch 8 -6
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What Is a Product?
Product and Service Classifications
Consumer products are products and services for personal
consumption.
Classified by how consumers go about buying them.
•
Convenience products
•
Shopping products
•
Specialty products
•
Unsought products
Ch 8 -7
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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
Ch 8 -8
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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
Ch 8 -9
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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
Ch 8 -10
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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
Ch 8 -11
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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.
• Materials and parts
• Capital
• Supplies and services
Ch 8 -12
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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.
Ch 8 -13
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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.
Person marketing consists of activities undertaken to
create, maintain, or change attitudes and behavior of target
consumers toward particular people.
Ch 8 -14
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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.
Ch 8 -15
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Product and Service Decisions
Ch 8 -16
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Marketers make P&S decisions at 3 levels:
1.
Individual product decisions
2.
Product-line decisions
3.
Product-mix decisions
Product and Service Decisions
Individual Product and Service Decisions
Product attributes are the benefits of the product or service.
• Quality
• Features
• Style and design
Ch 8 -18
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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.
Ch 8 -19
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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.
Ch 8 -20
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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.
Ch 8 -21
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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.
Ch 8 -22
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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.
Ch 8 -23
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Product and Service Decisions
Individual Product and Service Decisions
Product-support services
Customer service is another element of product
strategy.
A company usually includes some support
services that can be a minor or a major part of
total offering.
Product-support services augment actual
products.
Ch 8 -24
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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, or fall within given price ranges.
Ch 8 -25
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Product and Service Decisions
Product Line Decisions
Product line length is the number of items in the
product line.
• Product line filling occurs when companies add more
items within the present range of the line.
• Product line stretching
Its when a company lengthens its product line beyond its current
range.
a.
At the upper end of the market, company can stretch their lines
downward.
b.
At the lower end of a market it can stretch their lines upward.
c.
In the middle range of the market, it may decide to stretch their
lines in both directions (two-way stretch)
Ch 8 -26
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Product and Service Decisions
Product Mix Decisions
Product mix consists of all the products and items that a particular
seller offers for sale.
Width
Length refers to the total number of items the company carries
within its product lines.
Depth refers to the number of versions offered of each product in
the line.
Consistency refers to how closely related the various product lines
are in end use, production requirements, distribution channels,
…
Ch 8 -27
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Branding Strategy: Building Strong Brands
Brand Equity
Brand equity is the differential effect that knowing the
brand name has on customer response to the product and
its marketing.
It’s a measure of the brand’s ability to capture consumer
preference and loyalty.
Ch 8 -28
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Branding Strategy: Building Strong Brands
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
Ch 8 -29
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Branding Strategy: Building Strong Brands
Brand Positioning
Marketers need to position their brands clearly in target
customer’s minds.
• Product attributes
• Product benefits
• Product beliefs and values
Ch 8 -30
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Branding Strategy: Building Strong Brands
Brand Name Selection
A good name can add greatly to a product’s success. However,
finding the best brand name is a difficult task
Desirable qualities
• Suggest benefits and qualities
• Easy to pronounce, recognize, and remember
• Distinctive
• Extendable
• Translate easy into foreign languages
• Capable of registration and legal protection
Ch 8 -31
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Branding Strategy: Building Strong Brands
Brand Sponsorship
Ch 8 -32
Manufacturer’s
brand
Private brand
Licensed
brand
Co-brand
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Branding Strategy: Building Strong Brands
Ch 8 -33
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Branding Strategy
Managing Brands
• Companies must manage their brands carefully.
• Companies must put great care into managing the touch
points that customers come to know their brand through:
– Advertising
– personal experience with the brand
– word of mouth
– company web pages
Ch 8 -34
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Branding Strategy
International and Regional Branding Decisions
Many local brands in the Arab world have succeeded in
dominating their markets by benefiting from their local
knowledge of consumer needs and preferences.
Many of them have even extended their operations
internationally as well as regionally.
Ch 8 -35
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Services Marketing
Types of Service Industries
• Government
• Private not-for-profit organizations
• Business services
Ch 8 -36
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Services Marketing
Ch 8 -37
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Services Marketing
Marketing Strategies for Service Firms
In addition to traditional marketing strategies, service firms
often require additional strategies.
• Service-profit chain
• Internal marketing
• Interactive marketing
Ch 8 -38
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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
Ch 8 -39
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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.
Ch 8 -40
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Services Marketing
Marketing Strategies for Service Firms
Interactive marketing means that service quality depends
heavily on the quality of the buyer-seller interaction during the
service encounter.
• Service differentiation
• Service quality
• Service productivity
Ch 8 -41
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Services Marketing
Ch 8 -42
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Services Marketing
Marketing Strategies for Service Firms
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.
Ch 8 -43
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Services Marketing
Marketing Strategies for Service Firms
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.
Ch 8 -44
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Services Marketing
Marketing Strategies for Service Firms
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
Ch 8 -45
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Ch 8 -46
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