Chapter Eight Product Services and Brands Building Customer
Chapter Eight Product, Services, and Brands: Building Customer Value Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide
Product, Services, and Branding Strategy • What Is a Product? • Product and Services Decisions • Branding Strategy: Building Strong Brands • Services Marketing 8 - 2 Topic Outline
What Is a Product? Products, Services, and Experiences that can be offered in a market for attention, acquisition, use, or consumption that might satisfy a need or want • May be tangible goods or services 8 - 3 • Product is anything
What Is a Product? Products, Services, and Experiences product that consists of activities or benefits offered that are essentially intangible and do not result in the ownership of anything 8 - 4 • Service is a form of Express Delivery Services
What Is a Product? Products, Services, and Experiences • Experiences 8 - 5 represent what buying the product or service will do for the customer • Market offerings may consist of a combination of goods & services Experiences include zoos, restaurants, museums, Disney, etc.
What Is a Product? 8 - 6 Levels of Product and Services
What Is a Product? Product and Service Classifications two broad classes based on the types of buyers who use them: v Consumer products v Industrial products 8 - 7 • Product and service classifications fall into
What Is a Product? Product and Service Classifications services for personal consumption • Classified by how consumers buy them v Convenience products v Shopping products v Specialty products v Unsought products 8 - 8 • Consumer products are products and
What Is a Product? Product and Service Classifications and services that the customer usually buys frequently, immediately, and with a minimum comparison and buying effort v Candy v Fast Food • Low price • Widespread distribution • Mass promotion by producer 8 - 9 • Convenience products are consumer products
What Is a Product? Product and Service Classifications requiring more shopping effort that the customer compares carefully on suitability, quality, price, and style v Furniture v Cars • Higher priced than convenience goods • Selective distribution in fewer outlets • Advertising and personal selling by producer and reseller 8 - 10 • Shopping products are less frequent purchases
What Is a Product? Product and Service Classifications • • services with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort v Medical services & designer clothes Strong brand preference and loyalty, little brand comparisons, and low price sensitivity High price Exclusive distribution Carefully targeted promotion 8 - 11 • Specialty products are consumer products and
How can an aquarium fish be a convenience good, shopping good, or specialty good to different consumers? Provide examples. 8 - 12 Discussion Question
What Is a Product? Product and Service Classifications that the consumer does not know about or knows about but does not normally think of buying v Life insurance v Funeral services v Blood donations • Pricing and distribution varies • Aggressive advertising and personal selling 8 - 13 • Unsought products are consumer products
What Is a Product? Product and Service Classifications further processing or for use in conducting a business • Classified by the purpose for which the product is purchased v Materials and Parts v Supplies and Services v Capital Items 8 - 14 • Industrial products are products purchased for
What Is a Product? Organizations, Persons, Places, and Ideas places, persons and ideas: • Organization marketing create or change attitudes and behavior of target consumers toward an organization • Place marketing create or change attitudes and behavior of target consumers toward particular places 8 - 15 • “Products” also include organizations,
Person marketing create or change attitudes and behavior of target consumers toward particular people: • Political candidates • Professionals • Entertainers • Sports figures 8 - 16 What Is a Product? Organizations, Persons, Places, and Ideas
8 - 17 Social marketing is the use of commercial marketing concepts and tools to influence individuals’ behavior to improve their wellbeing and that of society
Product and Service Decisions 8 - 18 Individual Product and Service Decisions Product attributes (benefits): § Quality § Features § Style & Design
Product and Service Decisions Individual Product and Service Decisions • Quality level is the level of quality that supports the product’s positioning (Performance Quality) • Conformance quality is the product’s freedom from defects and consistency in delivering a targeted level of performance 8 - 19 Product quality includes level and consistency
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 8 - 20 Individual Product and Service Decisions
Product and Service Decisions Individual Product and Service Decisions appearance of the product • Design contributes to a product’s usefulness as well as to its looks • Innovative design can help revitalize a company, such as Apple 8 - 21 • Style describes the
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 8 - 22 Individual Product and Service Decisions
Individual Product and Service Decisions Brand Benefits: v Helps identify beneficial products v Indicates quality v Promise of consistency • Seller benefits v Aids in segmentation v Communicates product features 8 - 23 • Consumer benefits
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 8 - 24 Individual Product and Service Decisions
Product and Service Decisions Individual Product and Service Decisions 8 - 25 Product support services augment actual products
Product and Service Decisions Product Line Decisions 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 8 - 26 • Product line is a group of products that are
Product and Service Decisions Product Line Decisions items (sometimes consisting of different brands) in the product line v Line stretching: Adding products that are higher or lower priced than the existing line (downward or upward stretch) v Line filling: Adding more items within the present price range 8 - 27 • Product line length is the total number of
Product and Service Decisions Product Mix Decisions of all the product lines and items that a particular seller offers for sale v Width v Length v Depth v Consistency 8 - 28 • Product mix (or product assortment) consists
Product Mix Decisions • Product mix width: The number of different • Product mix length: Total number of items the company carries within its product lines • Product mix depth: Number of versions offered of each product in the line • Consistency: How closely related the various product lines of a company are in end use, production requirements, distribution channels, etc. 8 - 29 product lines the company carries
Branding Strategy: Building Strong Brands and feelings about a product and its performance • Brand is the company’s promise to deliver a specific set of features, benefits, services, and experiences consistently to the buyers • Brand equity is the positive differential effect that knowing the brand name has on consumer response to the product or its marketing 8 - 30 • Brand represents the consumer’s perceptions
Brand Equity § High consumer awareness § Strong brand loyalty § Helps when introducing new products § Less susceptible to price competition 8 - 31 Brands with strong equity have many competitive advantages:
Brand Positioning Brand positioning strategy decisions include: • Product attributes v Least effective • Product benefits • Product beliefs and values v Taps into emotions 8 - 32 Branding Strategy: Building Strong Brands
Branding Strategy: Building Strong Brands Desirable qualities: • Should suggest something about product’s benefits and qualities: Intensive Care (lotion), Ford Mustang • Be easy to pronounce, recognize, and remember: i. Phone, Tide • Be distinctive: Lexus • Be extendable: Amazon. com • Should translate easily: Exxon • Capable of registration and legal protection 8 - 33 Brand Name Selection
Branding Strategy: Building Strong Brands v Manufacturer labeled • Private brand (or store brand) v Retailer or wholesaler labeled v Lower priced & higher margin v Exclusive • Licensed brand v Fashion & children’s characters • Co-branding 8 - 34 Brand Sponsorship • Manufacturer’s brand
Co-Branding • When two established brand names of different companies are used on the same product v Broader consumer appeal v Greater brand equity • Co-branding Limitations v Complex legal contracts v Requires careful coordination of integrated marketing communication v Requires that partners trust one another 8 - 35 • Co-branding Advantages
8 - 36 Brand Development Strategies • Line extensions: Changes to existing products, staying within the product category • Brand extensions: Successful brand names help introduce new products in a new category • Multibrands: Multiple product entries in the same product category • New brands: New product category
Services Marketing Types of Service Industries include: v Business organizations v Government v Not-for-profit organizations 8 - 37 • Service industries
Services Marketing 8 - 38 Nature and Characteristics of a Service
Services Marketing Strategies for Service Firms service firms often require additional strategies: v Service-profit chain v Internal & Interactive marketing 8 - 39 • In addition to traditional marketing strategies,
Services Marketing Strategies for Service Firms • The Service-Profit Chain: Links service firm profits • Service-Profit Chain consists of five links: • Internal service quality leads to… • Satisfied and productive service employees which results in… • Greater service value which leads to… • Satisfied and loyal customers resulting in… • Healthy service profits and growth 8 - 40 with employee and customer satisfaction
Services Marketing Strategies for Service Firms Service firms orient and motivate their employees to work as a team to provide customer satisfaction • Internal marketing must precede external marketing 8 - 41 • Internal marketing:
Services Marketing Strategies for Service Firms quality depends heavily on the quality of the buyer-seller interaction during the service encounter. • Competitive advantage can be obtained from the following sources: v Service differentiation v Service quality v Service productivity 8 - 42 • Interactive marketing recognizes that service
Services Marketing Strategies for Service Firms differentiation creates a competitive advantage from the following: v Offer can include distinctive features v Delivery can include more able and reliable customer contact people, environment, or process v Image can include symbols and branding 8 - 43 • Managing service
Services Marketing Strategies for Service Firms provides a competitive advantage by delivering consistently higher quality than its competitors • Service quality varies depending on interactions between employees and customers • Top service firms are “customer obsessed” • Service recovery and employee empowerment are key 8 - 44 • Managing service quality
Services Marketing Strategies for Service Firms cost side of marketing strategies for service firms • Employee recruiting, hiring, and training strategies • Service quantity strategies (key is to avoid reducing quality in the quest for greater quantity) 8 - 45 • Managing service productivity refers to the
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