Chapter Eight Products Services and Brands Building Customer
Chapter Eight Products, Services, and Brands: Building Customer Value Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide
Product, Services, and Branding Strategy Topic Outline • What Is a Product? • Product and Services Decisions • Branding Strategy: Building Strong Brands • Services Marketing Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 2
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 • Products include more than just tangible objects such as cars, computers or cell phones. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 3
What Is a Product? Products, Services, and Experiences • Broadly defined, “products” also include service, events, persons , places , organizations , ideas , or mixes of these. • Services are the form of product that consists of activities, benefits or satisfactions offered for sale that are essentially intangible and don’t result in the ownership of anything such as Banking Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 4
What Is a Product? Products , services and experiences • Product is a key element in the overall marketing offering, marketing mix planning begins with building an offering that brings value to target customers. • This offering becomes the basis upon which the company builds profitable customer relationships • A company’s market offering includes both tangible goods and services Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 5
What Is a Product? Products , services and experiences • The offer may consist of a pure tangible good such as soap, toothpaste or salt. • At the other extreme are the pure services for which the offer consists primarily of a service. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 6
What Is a Product? Products , services and experiences • Experiences represent what buying the product or service will do for the customer • Experiences have always been an important part of marketing for some companies • Companies that market experiences realize that customers are really buying much more that just products and services, they are buying what those offers will do for them Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 7
A ____ is anything that can be offered to a market that might satisfy a need or a want. 1. 2. 3. 4. position product promotion none of the above Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 8
A ____ is anything that can be offered to a market that might satisfy a need or a want. 1. 2. 3. 4. position product promotion none of the above Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 9
What Is a Product? Levels of Product and Services • Product planners need to think about products and services on three levels, each level adds more customer value. The most basic level is the core customer value, which addresses the question “ what is the buyer really buying ? “ • When designing products, marketers must first define the core, problem solving benefits or services that consumers seek Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 10
What Is a Product? Levels of Product and Services • At the second level, product planners must turn the core benefits into an actual product, they need to develop product and service features, design, a quality level or a brand name and packaging. • For Ex. The Black. Berry is an actual product. Its name , parts, styling, features have all been combined to deliver the core customer value Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 11
What Is a Product? Levels of Product and Services • Finally , product planners must build an augmented product around the core benefit and actual product by offering additional consumer services and benefits. • For ex. The Black. Berry solution offers more than just a communication device, it provides customers with a complete solution to mobile connectivity problems. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 12
What Is a Product? Levels of Product and Services Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 13
The most basic level of a product is called its ____. 1. 2. 3. 4. augmented product actual product core benefit position Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 14
The most basic level of a product is called its ____. 1. 2. 3. 4. augmented product actual product core benefit position Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 15
What Is a Product? Product and Service Classifications Consumer products Industrial products Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 16
What Is a Product? Product and Service Classifications • Consumer products are products and services for personal consumption • Classified by how consumers buy them – Convenience products – Shopping products – Specialty products – Unsought products Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 17
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 • They are usually low priced, and marketers place them in many locations to make them available when consumers need them Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 18
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 Shopping products marketers distribute their products through fewer outlets but provide deeper sales support to help customers in their comparison efforts. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 19
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 • Buyers normally don’t compare specialty products, they invest only the time needed to reach dealers carrying the wanted products Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 20
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 • Unsought products require a lot of advertising, personal selling, and other marketing efforts Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 21
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 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 22
Types of consumer products include convenience products, shopping products, specialty products, and ____ products. 1. 2. 3. 4. unique luxury unsought all of the above Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 23
Types of consumer products include convenience products, shopping products, specialty products, and ____ products. 1. 2. 3. 4. unique luxury unsought all of the above Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 24
____ products are purchased frequently, with little comparison or shopping effort. 1. 2. 3. 4. Convenience Shopping Industrial Unsought Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 25
____ products are purchased frequently, with little comparison or shopping effort. 1. 2. 3. 4. Convenience Shopping Industrial Unsought Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 26
Consumer product with unique brand identification for which buyers are willing to make a special purchase effort is called _____ product. 1. 2. 3. 4. convenience shopping specialty unsought Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 27
Consumer product with unique brand identification for which buyers are willing to make a special purchase effort is called _____ product. 1. 2. 3. 4. convenience shopping specialty unsought Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 28
____ products are those purchased for further processing or for use in conducting a business. 1. 2. 3. 4. Industrial Shopping Unsought Physical Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 29
____ products are those purchased for further processing or for use in conducting a business. 1. 2. 3. 4. Industrial Shopping Unsought Physical Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 30
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 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 31
Your visit to a doctor’s office is an example of a ____. 1. 2. 3. 4. pure tangible good pure intangible good unsought product impure tangible good Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 32
Your visit to a doctor’s office is an example of a ____. 1. 2. 3. 4. pure tangible good pure intangible good unsought product impure tangible good Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 33
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 • Both profit and non profit organization practice organization marketing • Business firms sponsor public relations or corporate image advertising campaign to market themselves and polish their images Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 34
What Is a Product? Organizations, Persons, Places, and Ideas • Person marketing consists of activities undertaken to create, maintain, or change attitudes and behavior of target consumers toward particular people. • People use person marketing to build their reputation Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 35
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 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 36
What Is a Product Organizations, Persons, Places, and Ideas • Social marketing programs include public health campaigns to reduce smoking , alcoholism, drug abuse, and obesity • Other social marketing efforts include environmental campaign to promote clean air and conservation • Still others address issues such as family planning and human rights and racial equality Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 37
Product and Service Decisions Individual Product and Service Decisions Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 38
Product and Service Decisions Individual Product and Service Decisions Product attributes are the benefits of the product or service • Quality • Features • Style and design Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 39
Product and Service Decisions Individual Product and Service Decisions • Quality has a direct impact on product or service performance, thus , its closely linked to customer value and satisfaction. • Quality can be defined as “ freedom from defects” • The American society for quality defines quality as the characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 40
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 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 41
The two dimensions of product quality are ____ and ____. 1. 2. 3. 4. value; features style; design level; consistency style; value Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 42
The two dimensions of product quality are ____ and ____. 1. 2. 3. 4. value; features style; design level; consistency style; value Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 43
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 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 44
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 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 45
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 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 46
Product and Service Decisions Individual Product and Service Decisions • Branding helps buyers in many ways. Brand names help consumers identify products that might benefit them. Brands also say something about product quality and consistency • Buyers who always buy the same brands know that they will get the same features , benefits and quality each time they buy. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 47
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 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 48
Product and Service Decisions Individual Product and Service Decisions • Labels range from simple tags attached to products to complex graphics that are part of the package • Labels identify the product or brand, describe attributes, and provide promotion Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 49
Product and Service Decisions Individual Product and Service Decisions Product support services augment actual products Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 50
Product and Service Decisions Individual Product and Service Decisions • Customer service is another element of the product strategy. A company’s offer usually includes some support services, which can be a minor or a major part of the total offering. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 51
A(n) ____ is a name, term, sign, symbol, or combination of these intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors. 1. 2. 3. 4. package position image brand Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 52
A(n) ____ is a name, term, sign, symbol, or combination of these intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors. 1. 2. 3. 4. package position image brand Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 53
The designing and producing of the container or wrapper for a product is called ____. 1. 2. 3. 4. packaging labeling manufacturing industrial design Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 54
The designing and producing of the container or wrapper for a product is called ____. 1. 2. 3. 4. packaging labeling manufacturing industrial design Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 55
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 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 56
Product and Service Decisions Product Line Decisions Product line length is the number of items in the product line • Line stretching • Line filling Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 57
Line stretching • Occurs when a company lengthens its product line beyond its current range. • The company can stretch its lines downward, backward or both ways • Companies located at the upper end of the market can stretch their lines downward, to plug a market hole that otherwise would attract a new competitor or to respond to a competitor’s attack on the upper end Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 58
Line stretching • The company may add low end products because it finds faster growth taking place in the low end segments • Companies can also stretch their product lines upward in order to add prestige to their current products, or they may be attracted by a faster growth rate or higher margins Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 59
A company can lengthen its product line by ____ it or by ____ it. 1. 2. 3. 4. modifying; stretching; switching filling; stretching brushing; combing Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 60
A company can lengthen its product line by ____ it or by ____ it. 1. 2. 3. 4. modifying; stretching; switching filling; stretching brushing; combing Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 61
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 • Depth • Consistency Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 62
Product Mix Decisions • Width : refers to the number of different product lines the company carries • Length : refers to the total number of items the company carries within its product lines • Depth: refers to the number of the versions offered of each product in the line • Consistency: how closely related the various product lines in the end use Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 63
Which of the following is not a dimension in a company’s product mix? 1. 2. 3. 4. Width Depth Consistency Age Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 64
Which of the following is not a dimension in a company’s product mix? 1. 2. 3. 4. Width Depth Consistency Age Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 65
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 ability to capture customer preference and loyalty • A brand has positive brand equity when consumers talk favorably about the product and vice versa Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 66
Brand Equity • Marketers measure the brand strength along four dimensions which are : 1. Differentiation 2. Knowledge 3. Relevance “ how consumers feel it meets their needs” 4. Esteem Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 67
Branding Strategy: 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 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 68
Branding Strategy: Building Strong Brands Brand Positioning Brand strategy decisions include: • Product attributes • Product benefits • Product beliefs and values Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 69
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 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 70
Branding Strategy: Building Strong Brands Brand Sponsorship Manufacturer’s brand Private brand Licensed brand Co-brand Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 71
Brand Sponsorship • A manufacturer has four sponsorship options • The product maybe launched as a national brand ( manufacturer’s brand). Such as Sony • The manufacturer may sell to the reseller who give the product a private brand also called as store or distributor brand Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 72
Brand Sponsorship • Most manufacturers create their own brand names, other market licensed brands • Finally, two companies can join forces and co-brand a product. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 73
Licensing • Most manufactures take years and spend millions to create their own brand names. However some companies license names of well known celebrities , or characters from popular movies. For a fee any of these can provide an instant and proven brand name Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 74
Co-Branding • The practice of using the established brand names of two different companies on the same product. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 75
Branding Strategy: Building Strong Brands Brand Development Strategies Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 76
Managing brands • First , the brand positioning must be communicated to consumers. • Ad campaign help to create name recognition, brand knowledge and maybe even some brand preference. However, brands aren’t maintained by advertising but by brand experience • Company needs to periodically audit the strength Copyright © brand 2010 Pearson Education, Inc. and weakness Chapter 8 - slide 77 Publishing as Prentice Hall
Services Marketing Nature and Characteristics of a Service Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 78
Services 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 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 79
Services 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 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 80
Services 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 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 81
Services 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 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 82
Services 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 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 83
Services 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 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter 8 - slide 84
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