Download 8. Product, Services, and Brands: Building Customer Value

CHAPTER 8
Product, Services,
and Branding
Strategy
Roadmap: Previewing the Concepts
 Define product and the major classifications of
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products and services.
Describe the decisions companies make regarding
their individual products and services, product
lines, and product mixes.
Discuss branding strategy – the decisions firms
make in building and managing their brands.
Identify the four characteristics that affect the
marketing of a service and the additional marketing
considerations that services require.
Discuss two additional product issues: socially
responsible product decisions and international
product and services marketing.
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FIJI WATER – “The Taste of Paradise”
Product
 Brand name: FIJI
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Natural Artesian Water.
Product source: comes
from an underground
location in Fiji islands.
Key benefits: ultra-clean
taste, no impurities or
pollutants.
Brand image: “The Taste
of Paradise.”
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Promotion
 It’s a brand experience!
 Name, packaging, label,


celebrity endorsers and
places through which it is
sold contributes to “Taste
of Paradise” imagery.
Ads evoke exotic origins:
tropical forest, volcanoes.
High price charged
supports premium appeal.
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The Product-Service Continuum
Sugar
Pure Tangible
Good
Restaurant
Education
Pure
Service
Offer another example of a pure service.
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What Is a Product?
 Anything that can be offered to a
market for attention, acquisition, use,
or consumption and that might satisfy
a want or need.
– Includes: physical objects, services,
events, persons, places, organizations,
ideas, or some combination thereof.
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What Is a 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.
– Examples: banking, hotel, airline, retail,
tax preparation, home repairs.
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Consumer Experiences
 Creating / managing
customer experiences
differentiates offers
from each other.
– All Bass Pro Shop stores
offer hunting and fishing
skill clinics. The home
store in Springfield,
Missouri, has an art
gallery, archery and
pistol range, wildlife
museum, and arcade.
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Knot Tying
Clinic
Art Gallery
Entrance
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Figure 7-1
Three Levels of Product
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Consumer Products
 Products and services bought by final
consumers for personal consumption.
– Also includes other marketable entities.
 Classified by how consumers buy
them:
– Convenience goods
– Shopping goods
– Specialty goods
– Unsought goods
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Convenience & Shopping Products
 Convenience Goods  Shopping Goods
– Bought frequently
and immediately
– Low priced
– Mass advertising
– Many purchase
locations
– Examples: candy,
soda, newspapers
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– Bought less
frequently
– Higher price
– Fewer purchase
locations
– Comparison shop
– Examples: cars,
furniture, appliances
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Specialty & Unsought Products
 Specialty Products
– Special purchase
efforts
– High price
– Unique
characteristics
– Brand identification
– Few purchase
locations
– Example: Rolex
watches, Ferrari cars
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 Unsought Products
– New innovations
– Are often products
consumers do not
want to think about
– Require a lot of
advertising and
personal selling
– Examples: blood
donation, cemetery
plots, insurance
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Let’s Talk!
Why might a tropical fish be
classified by different consumers
as a convenience good, a
shopping good, OR a specialty
good? Explain.
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Industrial Products
 Those purchased for
further processing or
for use in conducting
business.
– Includes materials and
parts, capital items,
supplies, and services.
 Distinction between
consumer and industrial
products is based on the
purpose for which an
item is bought.
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Other Market Offerings
 Organizations: Profit (businesses) and
nonprofit (schools and churches).
– Includes corporate image advertising.
 Persons: Politicians, entertainers, sports
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figures, doctors, and lawyers.
Places: Create, maintain, or change attitudes
or behavior toward particular places (e.g.,
tourism).
Ideas (social marketing): Public health
campaigns, environmental campaigns, family
planning, or human rights.
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Marketing in Action
Place and Person Marketing
A montage of place and person marketing images.
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Figure 7-2
Individual Product Decisions
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Product & Service Attributes
 Product quality
– Performance quality
– Conformance quality
 Features
– Value to consumer
– Cost to company
 Style and design
– Influences
experience
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Branding
 A brand is a name,
term, sign, symbol,
or design, or a
combination of
these, that
identifies the maker
or seller of a
product or service.
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Branding
 Advantages to buyers:
– Product identification
– Product quality
 Advantages to sellers:
– Basis for product’s quality
– Provides legal protection
– Helps to segment markets
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Packaging
 Designing and producing

the container or wrapper
for a product.
Developing a good
package:
–
–
–
–
Market the brand
Protect the elements
Ensure product safety
Address environmental
concerns
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Marketing in Action
Innovative
Packaging
Dutch Boy’s packaging
innovation offers paint
in plastic containers
with twist-off tops. The
paint container is easy
to carry, doesn’t need a
screwdriver to pry
open, doesn’t dribble
when poured, and
doesn’t take a hammer
to bang the lid shut.
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Labeling
 Printed information appearing on or
with the package.
 Performs several functions:
– Identifies product or brand.
– Describes several things about the
product.
– Promotes the product through attractive
graphics.
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Marketing in Action
Labeling
As Americans become
increasingly concerned
about cholesterol, the
FDA (Food and Drug
Administration) has
responded by requiring
food manufacturers to
list trans fat (i.e., trans
fatty acids) on the
Nutrition Facts portion
of product labels,
effective 1/1/06.
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Product Support Services
 Assess the value of current services
and obtain ideas for new services.
 Assess the cost of providing the
services.
 Put together a package of services that
delights the customers and yields
profits for the company.
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Product Line Decisions
 Product line length:
– The number of items in a product line.
 Adjust line length by:
– Stretching
 Downward
 Upward
 Both directions
– Filling
iams.com
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Marketing in Action
Product Line Stretching
Marriott offers a full line of hotel brands,
each aimed at a different market.
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Let’s Talk!
Choose a partner in
class and discuss your
favorite products.
How could the existing
product line be
stretched or filled?
Explain.
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Product Mix Decisions
 Product mix:
– all of the product lines and items that a particular
seller offers for sale.
 Product mix dimensions include:
– Length: the number of items in a line.
– Width: the number of different product lines the
company carries.
– Depth: the number of versions offered of each
product in the line.
– Consistency: how closely related various lines are.
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Brand Equity
 The positive differential effect that
knowing the brand name has on
customer response to the product or
service.
 Provides:
– Greater brand awareness and loyalty
– Basis for strong, profitable customer
relationships
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Figure 7-3
Major Brand Strategy Decisions
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Brand Positioning
 Can position brands
at any of three
levels:
– Product attributes
 Least desirable;
easily copied.
– Product benefits
– Beliefs and values
 Hits consumers
on a deeper level,
touching universal
emotions.
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Brand Name Selection
 Desirable qualities for a brand name include:
1. It should suggest product’s benefits and
qualities.
2. It should be easy to pronounce, recognize, and
remember.
3. It should be distinctive.
4. It should be extendable.
5. It should translate easily into foreign languages.
6. It should be capable of registration and legal
protection.
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Let’s Talk!
Boudreaux’s Butt Paste is a
real product that is used in
the treatment of diaper rash.
Evaluate this brand name
against the criteria for a
good brand name that were
previously discussed.
How does it fare? Explain.
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Brand Sponsorship
 Manufacturer’s
brands
– Also called national
brands
 Private brands
– Also called store or
distributor brands
 Licensed brands
 Co-branding
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Mi Casa brand products are only
available at Stop & Shop stores.
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Figure 7-4
Brand Development Strategies
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Brand Development
 Line extension:
– introduction of additional items in a given
product category under the same brand name
(e.g., new flavors, forms, colors, ingredients, or
package sizes).
 Brand extension:
– using a successful
brand name to
launch a new or
modified product
in a new category.
Copyright 2007, Prentice-Hall Inc.
Video Snippet
Swiss Army’s successful
brand name has been
instrumental in launching
brand extensions. Watch
the snippet to see
what they’ve done.
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Marketing in Action
Line Extensions
Liquid-Plumr
Power Jet is
the latest
offering in the
line of Liquid
Plumr brand
products.
Liquid-plumr.com
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Brand Development
 Multibranding:
– offers a way to establish different features
and appeal to different buying motives.
 New brands:
– developed based on belief that the power
of its existing brand is waning and a new
brand name is needed. Also used for
products in new product category.
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Figure 7-5
Four Service Characteristics
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Let’s Talk!
How do the service
characteristics of
intangibility, variability,
inseparability, and
perishability relate to
restaurants?
Explain.
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The Service-Profit Chain
 Internal service quality.
 Satisfied and productive service
employees.
 Great service value.
 Satisfied and loyal customers.
 Healthy service profits and growth.
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Figure 7-6
Three Types of Service Marketing
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Major Service Marketing Tasks
 Managing service differentiation:
– Develop a differentiated offer, delivery, and image.
 Managing service quality:
– Be customer obsessed, set high service quality
standards, have good service recovery, empower
front-line employees.
 Managing service productivity:
– Train current employees or hire new ones, increase
quantity and sacrifice quality, harness technology.
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Additional Product Considerations
 Product Decisions and Social
Responsibility
 International Product and Service
Marketing
– Which products & services to introduce?
– Whether to standardize or adapt?
– Packaging presents challenges.
– Services marketers face special
challenges; growth will continue.
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Rest Area: Reviewing the Concepts
 Define product and the major classifications of




products and services.
Describe the decisions companies make regarding
their individual products and services, product
lines, and product mixes.
Discuss branding strategy – the decisions firms
make in building and managing their brands.
Identify the four characteristics that affect the
marketing of a service and the additional
marketing considerations that services require.
Discuss two additional product issues: socially
responsible product decisions and international
product and services marketing.
Copyright 2007, Prentice-Hall Inc.
7-45