Chapter Nine Products and Brands Copyright Houghton Mifflin

Chapter Nine Learning Objectives • To learn about product fundamentals that affect marketing products online • To identify consumer products best suited to online marketing • To determine how enterprise products are sold and developed online • To understand why branding is so important online Copyright © Houghton Mifflin Company. All rights reserved. 2

Product Fundamentals • Product - the market offer of a good, service, idea, or other item of value • Key criteria: buyer and use – Who is the buyer? – How will the product be used? • Most products sold online are identical to offline products • Product is focus for other marketing mix • Many consumers research products online, purchase offline Copyright © Houghton Mifflin Company. All rights reserved. 3

Product Fundamentals (cont’d) Types of Products Sold Online Goods • Durables – ex. washing machines • Non-durables – ex. shampoo • Disposables – ex. paper cups • Perishables Services – ex. counseling Digitals – ex. Tickets; software; news Mixed – ex. computer and downloaded software – ex. frozen foods Copyright © Houghton Mifflin Company. All rights reserved. 4

Product Fundamentals (cont’d) FOCUS: Digital Products • Core product; license and service / support • Product development process: Open Source? – Linux; Firefox • Product Augmentation – Online news • Your blog: A product ? Copyright © Houghton Mifflin Company. All rights reserved. 5

Product Fundamentals (cont’d) FOCUS: Digital Products • Standards – Proprietary versus Open • Standards Setting – QWERTY – Railroad Gauge – TCP/IP – WINTEL Copyright © Houghton Mifflin Company. All rights reserved. 6

Product Fundamentals (cont’d) • The Internet facilitates product mass customization • Large quantities of customized products semiproduced in advance of sale • Well-suited to Internet marketing, interactive environment • Examples: cosmetics, cereal, apparel, music, shoes Copyright © Houghton Mifflin Company. All rights reserved. 7

Product Fundamentals (cont’d) Purchasing Products Online Advantages Disadvantages • Greater product assortment • • • Availability • Comparisons • Information access • Sales (mostly) untaxed • Access for shoppers in remote areas Copyright © Houghton Mifflin Company. All rights reserved. Security and privacy risk Purchasing process breakdown Delivery risk Lack of sensory contact Poor quality product pictures, distorted colors • S&h costs • Complicated returns 8

Consumer Products Classified by Buyer Habits, View of Process Convenience Shopping • Staples • Best suited to online sales – Frequent Repurchase • Emergency Specialty • Less well suited – Crisis Unsought – Noncrisis • Some unlikely products sold online • Impulse Copyright © Houghton Mifflin Company. All rights reserved. 9

Enterprise and New Products Typed By How They Solve Problems Goods Finished products • Raw materials and parts • For sale and resale – Inputs to production • Equipment – Machines needed to run the business • Supplies Services • Repairs, training, etc. Information • Research, intelligence, etc. – Expendables 10

Enterprise and New Products (cont’d) • New products • Internet is a platform for collaborative development of new products • Opportunity screening from web sites, chat rooms, online focus groups • Online product testing • Online product intelligence gathering • Digital product changes can be made in real time Copyright © Houghton Mifflin Company. All rights reserved. 11

Branding • Branding is becoming more critical to online marketing success as competition intensifies • Cyberbrands created by Amazon, e. Bay, AOL, Yahoo!, Google, and others • Bricks and mortar brands extended online - mixed branding strategy • Some cyberbrands have also gone offline • Online branding important for both consumer and enterprise products • True cyberbrands are frictionless - digital inventory Copyright © Houghton Mifflin Company. All rights reserved. 12

Branding (cont’d) • The domain name is a branding tool • Should be meaningful, short, descriptive, associated with product characteristics • Domain names identify brands • Creates awareness as well as addresses • Caution: even great domain names can fail Copyright © Houghton Mifflin Company. All rights reserved. 13

Branding (cont’d) • Must build brand awareness – Online and offline promotions – Oneline • Must create, maintain, and protect the brand • Risks – Highly visible brand names, bad cobranding matches, complaint sites Copyright © Houghton Mifflin Company. All rights reserved. 14