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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 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education What Is a Product? Ch 8 -4 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education Product and Service Decisions Ch 8 -16 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education Branding Strategy: Building Strong Brands Brand Sponsorship Ch 8 -32 Manufacturer’s brand Private brand Licensed brand Co-brand Copyright © 2011 Pearson Education Branding Strategy: Building Strong Brands Ch 8 -33 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education Services Marketing Types of Service Industries • Government • Private not-for-profit organizations • Business services Ch 8 -36 Copyright © 2011 Pearson Education Services Marketing Ch 8 -37 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education Services Marketing Ch 8 -42 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education 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 Copyright © 2011 Pearson Education This work is protected by local and international copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work (including on the World Wide Web) will destroy the integrity of the work and is not permitted. The work and materials from this site should never be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor the intended pedagogical purposes and the needs of other instructors who rely on these materials. Ch 8 -46 Copyright © 2011 Pearson Education