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Products, Services and Brands:
Building Customer Value
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
• Soap
• Toothpaste
What Is a Product?
Products, Services, and Experiences
 Service is a form of product that consists of
activities, benefits, or satisfactions offered for sale
that are essentially intangible and do not result in
ownership
• Doctor’s exam
• Financial services
What Is a Product?
Products, Services, and Experiences
 Experiences represent what buying the product or
service will do for the customer
• Disney
• Airlines
What Is a Product?
Levels of Product & Services
 basic level is the core customer value. It represents
what the buyer is really buying
 Second level is turning the core benefits into an
actual product. It represents the design, brand
name, and packaging that delivers the core benefit to
the customer
 In the third stage building an augmented product by
offering additional consumer services and benefits
Augmented
Product
Levels of Product
Installation
Packaging
Brand
Name
Delivery
& Credit
Quality
Level
Features
Core
Benefit
or
Service
AfterSale
Service
Design
Warranty
Actual
Product
Core
Product
What Is a Product?
Product and Service Classifications
 There are two types of products:
Consumer Products
Industrial Products
What Is a Product?
Product and Service Classifications
Consumer products are products and
services for personal consumption
• It is classified by how consumers buy them
Consumer Products
Convenience
Products
Shopping
Products
Specialty
Products
Unsought
Products
What Is a Product?
Product and Service Classifications
Convenience products
Consumer products and services that the customer
usually buys frequently, immediately, and with a
minimum comparison and buying effort.
• Newspapers
• Candy
• Fast food
• Soft drinks
• Cigarettes.
What Is a Product?
Product and Service Classifications
Shopping products
Consumer products and services that the customer
compares carefully on suitability, quality, price, and
style
• Furniture
• Cars
• Appliances
• Jewelry
• Hotel
What Is a Product?
Product and Service Classifications
Specialty products
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
What Is a Product?
Product and Service Classifications
Unsought products
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
What Is a Product?
Product and Service Classifications
 Industrial products are products purchased for
further processing or for use in conducting a
business
Industrial
Products
Materials
And
Parts
Capital
Items
Supplies
and
Services
What Is a Product?
Product and Service Classifications
 Materials and parts include raw materials and
manufactured materials and parts usually sold
directly to industrial users.
• Wheat
• Iron
• Cement
• Cotton
What Is a Product?
Product and Service Classifications
 Capital items are industrial products that aid in the
buyer’s production or operations.
• Buildings
• Elevators
• Computers
What Is a Product?
Product and Service Classifications
 Supplies and services include operating supplies,
repair and maintenance items, and business services.
What Is a Product?
Organizations, Persons, Places, and Ideas
• Organizations-Profit (businesses) and Nonprofit
(colleges, churches and museums)
• Persons –Entertainers, doctors, lawyers and
architects
• Places-Tourist attracting sites, new residents,
company offices and factories
• Social –Reduce smoking, drug abuse, family
planning and human rights
Product and Service Decisions
INDIVIDUAL PRODUCT
AND SERVICE DECISION
LINE DECISION
PRODUCT MIX
DECISION
Product and Service Decisions
Individual Product and Service Decisions
Product
attributes
Branding
Packaging
Labeling
Product
Support
services
Product and Service Decisions
Individual Product and Service Decisions
 Product attributes are the benefits of the product or
service
Quality
Features
Styles
&
Design
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.
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
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. It goes to the very heart of a product
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
Product and Service Decisions
Individual Product and Service Decisions
 Packaging involves designing and producing the
container or wrapper for a product
 The primary function of the package was to hold
and protect the product
Product and Service Decisions
Individual Product and Service Decisions
 Labeling identifies the product or brand, describes
attributes, and provides promotion
Product and Service Decisions
Individual Product and Service Decisions
 The label might also describe several things about
the product• who made it
• where it was made
• when it was made
• its contents
• how it is to be used and
• how to use it safely
Product and Service Decisions
Individual Product and Service Decisions
 Product support services augment actual products
Companies must continually:
• Assess the value of current services to obtain ideas
for new ones
• Assess the costs of providing these services
• Develop a package of services to satisfy customers
and provide profit to the company
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.
Product and Service Decisions
Product Line Decisions
 Product line length is the number of items in the
product line
Product Line Length
Line
Stretching
Line Filling
Downward
Both Ways
Upward
Product and Service Decisions
Product Line Decisions
• Line filling: adding more items within the present
range of the line
 More profits
 Satisfying dealers
• Line stretching: when a company lengthens its product
line beyond its current range
• Downward: add low-end products
• Upward: add prestige to the current products
• Both ways: achieve both goals of line filling and line
stretching
Product and Service Decisions
Product Mix Decisions
 Product mix consists of all the products and items
that a particular seller offers for sale
• A company's product mix has four important
dimensions
Product and Service Decisions
Product Mix Decisions
 Width:
total number of different product lines the company
carries
 Length:
total number of items the company carries within its
product lines
 Depth:
number of versions offered of each product in the line
 Consistency:
how closely related the various product lines are in end
use, production requirements, distribution channels or
some other way
Branding Strategy: Building Strong Brands
Brand represents the consumer’s perceptions and
feelings about a product and its performance.
Brand Equity
 Brand equity is the positive differential effect that
knowing the brand name has on customer response
to the product or service.
Building Strong Brands
Brand positioning
Attributes
Benefits
Beliefs and values
Brand name selection
Selection
Protection
Brand sponsorship
Manufacturer’s brand
Private brand
Licensing
Co-branding
Brand development
Line extensions
Brand extensions
Multibrands
New brands
Branding Strategy: Building Strong Brands
Brand Positioning
Brand positioning includes:
 Product attributes
 Product benefits
 Product beliefs and values
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
Branding Strategy: Building Strong Brands
Brand Sponsorship
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Manufacturer’s brand:
A brand created and owned by a manufacturer of a product or
service
Private brand (store)
A brand created and owned by a reseller of a product or service
Licensed brand:
license names or symbols previously created by other
manufacturers, names of well-known celebrities, or characters
from popular movies and books
Co-brand:
Co-branding occurs when two established brand names of
different companies are used on the same product
Branding Strategy: Building Strong Brands
Brand Development Strategies
Brand Name
Product Category
Existing
New
Existing
Line
Extensions
Brand
Extension
New
Multibrands
New Brands
Branding Strategy: Building Strong Brands
Brand Development Strategies
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Line extensions
occur when a company extends existing brand names to
new forms, colors, sizes, ingredients, or flavors of an
existing product category
Brand extensions
extend a brand name to a new or modified product in a
new category
Multibrands
additional brands in the same category
New brands
are used when existing brands are inappropriate for new
products in new product categories or markets
Branding Strategy: Building Strong Brands
Managing Brands
Requires:
 Continuous brand communication
 Customer-centered training
 Brand audits
Services Marketing
Types of Service Industries
 Government
 Private not-for-profit organizations
 Business services
Services Marketing
Nature and Characteristics of a Service
Intangibility
Services cannot be seen,
tasted, felt, heard or
smelled before purchase
Inseparability
Services cannot be
separated from their
providers
Services
Variability
Quality of services
depends on who provides
them and when, where
and how
Perishability
Services cannot be
stored for later sale or
use.
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
Marketing Strategies for Service Firms
Service-profit chain
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
Marketing Strategies for Service Firms
Three Types of Service Marketing
Company
Employee
Customers
Interactive Marketing
Marketing Strategies for Service Firms
Internal marketing
Orienting
and
motivating
customer-contact
employees and supporting service people to work as
a team to provide customer satisfaction
Marketing Strategies for Service Firms
Interactive marketing
Training service employees in the fine art of
interacting with customers to satisfy their needs
Marketing Strategies for Service Firms
External Marketing
Product
Variety
Quality
Design
Features
Brand name
service
Packaging
Price
List Price
Discounts
Allowance
Payment Period
Credit terms
4 P’S
Promotion
Advertising
Personal selling
Sales Promotion
Public Relations
Place
Channels
Coverage
Assortments
Locations
Inventory
Transportations
Logistics
Marketing Strategies for Service Firms
Major Marketing Tasks
Managing Service Differentiation
• creates a competitive advantage from the offer, delivery,
and image of the service
Managing Service Quality
Empower employees
 Responsibility
 Authority
 Incentive
Managing Service Productivity
• Train current or new employees
• Increase quantity by decreasing qualities technology