Download Ch. 7

7
Product, Services, and Branding
Strategy
ROAD MAP: Previewing the Concepts
• Define product and the major classifications of
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products and services.
Describe the roles of product and service branding,
packaging, labeling, and product support services.
Explain the decisions companies make when
developing product lines and mixes.
Identify the four characteristics that affect the
marketing of a service.
Discuss the additional marketing considerations that
services require.
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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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The Product-Service Continuum
Sugar
Pure Tangible Good
Restaurant
College
Education
Pure Service
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BMW & Daimler Electric
PARIS—Two ofScooters
the splashiest premieres at the Paris Motor Show Thursday weren't the
sleek coupes or roadsters that typically steal the show but electric scooters
unveiled by BMW AG's Mini and Daimler AG's Smart, which also went a step
further by displaying an electric bicycle.
Though all are concept designs, executives at both companies said they will determine
within weeks whether to ready them for production, using the
reaction in Paris to make the final decision. "It's a very attractive concept
for us," said Thomas Weber, Daimler's
management board member responsible
for R & D. “This is a huge market.”
Honda Motor Co. plans to launch its own allelectric scooter in Japan later this year,
while Peugeot aims to re-enter the market
in 2011 after its first foray 15 tears ago.
A recent study by Pike Research estimates
some 466 million electric bikes, motorcycles and scooters will be sold world-wide
over the next six years.The majority of sales
are expected in China, where some 100 MM
electric
bicycles are already on the road.
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The Folding Bike Goes Cool
Once the pocket protector of the cycling world, these
adaptable rides have evolved into a stylish mode of
transport
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Copyright 2009 Pearson Education, Inc. Publishing as
Prentice Hall
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Levels of a Product
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Consumer Products
• Products and
services bought by
final consumers for
personal
consumption.
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Convenience Products
• Purchased frequently and immediately
• Low priced
• Mass advertising
• Many purchase locations
– Examples: candy, soda, newspapers
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Shopping Products
• Bought less frequently
• Higher price
• Fewer purchase locations
• Comparison shop
– Examples: furniture, clothing, cars, appliances
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Specialty Products
• Special purchase efforts
• High price
• Unique characteristics
• Brand identification
• Few purchase locations
– Examples: Lamborghini, Rolex Watch
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Unsought Products
• New innovations
• Products consumers do not want to think
about
• Require much advertising and personal
selling
• Examples: life insurance, cemetery plots,
blood donation
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Industrial Products
• Those purchased for
further processing or
for use in conducting
business.
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Industrial Products
Materials and Parts
Raw materials, manufactured
materials, and parts
Capital Items
Products that aid in
buyer’s production or operations
Supplies and Services
Operating supplies, repair,
and maintenance items
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Other Market Offerings
• Organizations: Profit (businesses) and nonprofit
(schools and churches).
• Persons: Politicians, entertainers, sports
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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Organization Marketing
Companies use
corporate image
advertising to
market themselves
to various publics.
General Electric
Stands for
“imagination at
work.”
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Individual Product Decisions
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Product and Service Attributes
Quality
Performance and Satisfaction
Includes Level & Consistency
Features
Differentiates a product from the
competition; assessed based on
value and cost
Style & Design
Style = Appearance
Design = heart of the product
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Product Design
The innovative Discover
2GO card is a gottahave-it accessory for
people who want to
dash off to the gym,
the mall, or a
restaurant with nothing
more than their keys
and a credit card.
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New Looks on Old Ideas
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The power of the press
A new process will make solid-state rechargeable batteries that should greatly
outperform existing ones
The new development is the work of Planar Energy of Orlando, Florida—a
company spun out of America’s National Renewable Energy Laboratory in 2007.
The firm is about to complete a pilot production line that will print lithium-ion
batteries onto sheets of metal or plastic, like printing a newspaper.
Planar says its cells will be more reliable than conventional lithium-ion cells, will be
able to store two to three times more energy in the same weight and will last for
tens of thousands of recharging cycles. They could also be made for a third of the
cost.
Branding
• Creating, maintaining, protecting, and
enhancing products and services.
• 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 story
– 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:
– Packaging concept
– Package elements
– Product safety
– Environmental concerns
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Innovative Packaging
Dutch Boy
recently came up
with a long
overdue
innovation—paint
in plastic
containers with
twist-off caps.
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"The packet has long been
the bane of our consumers,"
said Dave Ciesinski, vice
president of Heinz Ketchup.
"The biggest complaint is there
is no way to dip and eat it
on-the-go.“
Heinz has long struggled to
find a design that lets diners
dip or squeeze ketchup that
could also be sold at a price
acceptable to its restaurant customers. For this effort, it bought
its design team a used minivan two years ago to test if their
ideas really worked while eating on the road.
Heinz sells more than 11 million cases of its ketchup packets in
the U.S. every year and it will continue to sell the traditional
packet. The new packet is in test markets in the Midwest and
Southeast and will roll out at select fast-food
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restaurants in the fall (of 2010).
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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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Innovative Labeling
Innovative
labeling can
help to
promote a
product.
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Labeling Design
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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
Number of Items in the Product Line
Stretching
Filling
Lengthen beyond
current range.
Lengthen within
current range
Can be:
Downward
Upward
Both Directions
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Two-Way Stretch
Marriott added the Renaissance Hotels line to serve the upper end of the
market and the TownePlace Suites line to serve the moderate and lower ends.
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Line Extension
Click the picture above to play video
As Marriott’s product
extension grew in
popularity, it
extended the
product further.
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Product Mix Decisions
• Product Mix: all of the product lines and items
that a particular seller offers for sale.
• 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 the 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:
– More brand awareness and loyalty
– Basis for strong, profitable customer
relationships
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Major Brand Strategy Decisions
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Brand Positioning
• Can position brands at any of three levels.
Product Attributes
Product Benefits
Beliefs and Values
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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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Brand Sponsorship
Manufacturer’s Brands
Co-Branding
Four Options
Private
Brands
Licensed Brands
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Line Extensions
Morton sells an entire line of salts and seasonings for every occasion.
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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.
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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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This Is Your Brain . . . .
Big brand requires less brain work (top) than weaker one.
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Slide 11-90
Nature and Characteristics of
a Service
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Discussion Question
• How can an airline deal with the
intangibility, inseparability, variability,
and perishability of its service
offering?
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The Service-Profit Chain
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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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International Product and
Services Marketing
Decide Which Products & Services to Introduce
Decide How Much to Standardize or Adapt
Packaging Presents New Challenges
Service Marketers Face Special Challenges
Trend Toward Global Service Companies Will Continue
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Rest Stop: Reviewing the Concepts
1. Define product and the major classifications of
products and services.
2. Describe the decisions companies make
regarding their individual products and services,
product lines, and product mixes.
3. Discuss branding strategy—the decisions
companies make in building and managing their
brands.
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Rest Stop: Reviewing the Concepts
4. Identify the four characteristics that affect the
marketing of a service and the additional
marketing considerations that services require.
5. Discuss two additional product issues: socially
responsible product decisions and international
product and services marketing.
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Q: All the following are
examples of products except:
1. physical objects.
2. events.
3. places.
4. all the above are examples of
products.
AK, 7e – Chapter 7
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Q: The _____ economy is one in
which people outsource entire
activities to someone else in
order to create memorable
events.
1. agrarian
2. goods-based
3. service
4. experience
AK, 7e – Chapter 7
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Q: Luxury goods such as
Rolex watches or expensive
crystal are examples of _____
products.
1. convenience
2. specialty
3. sought
4. shopping
AK, 7e – Chapter 7
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Q: Product quality includes
both _____ quality and _____
quality.
1.
2.
3.
4.
performance, conformance
consistent, conformance
persistent, conformance
product, service
AK, 7e – Chapter 7
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Q: All the following are
examples of product line
decisions except:
1. downward extension.
2. horizontal extension.
3. upward extension.
4. line filling.
AK, 7e – Chapter 7
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Q: Mercedes introduced C-Class
cars for $30,000 without hurting its
ability to sell other models priced
at $100,000 or more. The new car
was an example of successful:
1. downward extension.
2. sideward extension.
3. upward extension.
4. line filling.
AK, 7e – Chapter 7
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Q: Avon markets more than
1,300 items and K-Mart stocks
more than 15,000 items. These
items are examples of:
1. product line.
2. line filling.
3. product mix.
4. line extension.
AK, 7e – Chapter 7
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Q: The extent to which
products in a product mix are
related to each other
constitutes a product mix’s:
1.
2.
3.
4.
depth.
width.
consistency.
match.
AK, 7e – Chapter 7
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Q: When two companies place
their brand names on the same
product, they are _______ the
product.
1. licensing
2. private branding
3. multibranding
4. co-branding
AK, 7e – Chapter 7
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Q: _____ is the value of a
brand.
1. Brand equity
2. Brand power
3. Brand preference
4. Brand insistence
AK, 7e – Chapter 7
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Q: Because services cannot be
stored for later sale or use,
they are:
1. intangible.
2. perishable.
3. inseparable.
4. variable.
AK, 7e – Chapter 7
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Q: Which of the following is
not a part of the service-profit
chain?
1. Internal service quality
2. External service quality
3. Satisfied and productive
employees
4. Satisfied and loyal customers
AK, 7e – Chapter 7
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Q: Hotels and resorts charge
lower prices in the off-season
to offset the ______________
of service characteristics.
1. inseparability
2. variability
3. intangibility
4. perishability
AK, 7e – Chapter 7
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Q: Do you think we should
enact legislation that would
curb the number of lawsuits
filed every year?
1. Yes
2. No
AK, 7e – Chapter 7
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