Transcript Chapter 7

Products, Services,
and Brands
Building Customer Value
Chapter 7
Rest Stop: Previewing the Concepts
1.
2.
3.
4.
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.
Identify the four characteristics that affect the
marketing of services and the additional
marketing considerations that services
require.
Discuss branding strategy—the decisions
companies make in building and managing
their brands.
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First Stop
ESPN – It’s A Brand!
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Brand Experience
ESPN: More than a network
or Web site, ESPN is a
meaningful part of customers’
lives that is synonymous with
sports entertainment, and
linked with consumers’ sports
memories, realities, and
anticipations.
Global Power: ESPN truly
lives up to its tagline, “The
Worldwide Leader in Sports.”
Strong Brand Equity: ESPN
is as much recognized and
revered as Nike, Google, or
Coca-Cola megabrands.
•
•
•
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ESPN Media Presence
Television: Grown to 7 ESPN
networks. Partners with ABC to
produce NASCAR, college
sports, World Cup soccer, and
more. Pioneered high-definition
broadcasting. Achieves high
advertising and cable revenues.
Online and Publishing: Web
sites are #1 in respective
categories; partnered with
YouTube to post sports content.
Magazine and book title sales
are strong.
ESPN is Everywhere: Airports,
health clubs, gas stations.
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What Is a Product?
• Products are:
 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?
• Services are:
 Any
activity, benefit, or satisfaction
offered for sale that is essentially
intangible and does not result in the
ownership of anything.
• E.g., banking, hotel, airline tickets, retail,
tax preparation, home repairs.
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Products, Services, and Experiences
• Marketing offerings:
 Includes
both tangible goods and services, as
well as combinations of both.
• Pure good: Camay soap
• Pure service: Legal representation
• Combination: Restaurant meal
• Creating and managing customer
experiences differentiates marketing offers
from the competition.
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Levels of Product and Services
• Core customer value:
 What
the consumer is really buying.
• Actual product:
 Includes
the brand name, features, design,
packaging, and quality level.
• Augmented product:
 Additional
services and benefits such as
delivery and credit, instructions, installation,
warranty, and service.
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Product and Service Classification
• Consumer products:
 Products
and services bought by final
consumers for personal consumption.
 Also included are other marketable
entities.
 Classified by how consumers buy them:
• Convenience, shopping, specialty, and
unsought goods.
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Types of Consumer Goods
•
Convenience goods:
 Purchased
frequently and immediately
with little comparison shopping.
 Low priced.
 Mass advertising and promotion.
 Widespread distribution with many
convenient locations.
 E.g., candy, soda, newspapers.
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Types of Consumer Goods
•
Shopping products:
 Bought
less frequently, more planning and
effort, brand comparisons on basis of price,
quality, style.
 Higher price.
 Selective distribution in fewer purchase
locations.
 Advertising and personal selling is undertaken
by both producer and reseller.
 E.g., furniture, clothing, cars, appliances.
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Types of Consumer Goods
• Specialty products:
 Strong
brand preference and loyalty, special
purchasing effort, little comparison shopping.
 High price.
 Exclusive distribution in only one or a few
outlets per market area.
 Carefully targeted promotion by both producer
and reseller.
 E.g., Lamborghini, Rolex watches.
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Types of Consumer Goods
• Unsought products:
 Little
product awareness or knowledge of the
brand, sometimes negative interest.
 Pricing strategies vary.
 Distribution strategies vary.
 Require aggressive advertising and personal
selling by both producer and resellers.
 E.g., life insurance, cemetery plots, blood
donation.
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Product and Service Classification
• Industrial products:
 Those
purchased for further processing
or for use in conducting business.
 Distinction between consumer and
industrial products is based on the
purpose for which an item is bought
(e.g., home or business use).
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Types of Industrial Goods
• 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, maintenance, and
repair items.
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Other Market Offerings
• Organizations:
 Profit
and nonprofit (schools and churches).
• Persons:
 Politicians,
• Places:
sports figures, doctors, etc.
 Create,
maintain, or change attitudes or
behavior toward particular places.
• Ideas (social marketing):
 Public
health campaigns, environmental
campaigns, family planning, or human rights.
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Individual Product Decisions
• Product (and service) attributes
• Branding
• Packaging
• Labeling
• Product support services
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Product and Service Attributes
• Product quality dimensions:
 Performance
quality
 Conformance quality
• Product feature considerations:
 Value
to consumer
 Cost to company
• Product style and design:
 Shapes
the buyer’s usage experience
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Branding
• Branding involves building and
managing brands.
• A brand:
 Is
a name, term, sign, symbol, design,
or a combination of these, that identifies
the products or services of one seller or
group of sellers and differentiates them
from those of competitors.
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Branding
• Advantages to buyers:
 Helps
identify products.
 Cue to product quality and consistency.
• Advantages to sellers:
 Basis
for product’s quality story.
 Provides legal protection.
 Helps to segment markets.
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Packaging
• Packaging:
 Involves
designing and producing the
container or wrapper for a product.
• Ideally, good packages should:
 Help
to market the brand.
 Protect the contents.
 Provide convenience and ease of use.
 Ensure product and user/child safety.
 Address environmental concerns.
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Labeling
• Labeling refers to printed information
•
appearing on or with the package,
including the product name.
Performs several functions:
 Identifies
product or brand.
 Describes several things about the product.
 Promotes the product through attractive
graphics.
• Labeling is regulated by the government.
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Product Support Services
• Monitoring of support services is key:
 Talk
with customers to assess the value and
quality of current services and to obtain ideas
for new services.
 Fix problems and put together a package of
new services that delights the customers and
yields profits for the company.
 New technologies can often enhance many
support service offerings.
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Product Line Decisions
• Product line:
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.
• Product line length is a major decision.
 Filling
(adding more).
 Stretching (downward, upward, or both ways).
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Product Mix Decisions
• Product mix:
 The
set of all of the product lines and items
that a particular seller offers for sale.
• Product mix dimensions include:
 Width:
the number of different product lines
the company carries.
 Length: the number of items in a line.
 Depth: the number of versions offered of
each product in the line.
 Consistency: how closely related various
lines are.
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Nature and Characteristics
of a Service
• Intangibility:
• Variability:
 Services
 Quality
cannot
be seen, tasted,
felt, heard, or
smelled before
purchase.
• Inseparability:
 Services
cannot
be separated
from their
providers.
of services
depends on who
provides them and
when, where, and
how they are
delivered.
• Perishability:
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 Services
cannot be
stored for later sale
or use.
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The Service-Profit Chain
• The service profit chain links employee
•
and customer satisfaction to firm profits.
Five links exist within the 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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Services Marketing
• External marketing:
 Traditional
marketing via the 4 “Ps.”
• Internal marketing:
 Orienting
and motivating customer-contact
employees and the supporting service people
to work as a team to provide customer
satisfaction.
• Interactive marketing:
 Training
service employees in the fine art of
interacting with customers to satisfy their
needs.
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Major Service Marketing Tasks
• Managing service differentiation:
 Develop
a differentiated offer, delivery, and
image.
• Managing service quality:
 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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Building Strong Brands
• Brand equity:
 Is
the differential effect that knowing the
brand name has on customer response
to the product or its marketing.
 Is a valuable asset that offers many
competitive advantages.
 Builds strong and profitable customer
relationships that result in loyal
customers (customer equity).
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Major Brand Strategy Decisions
• Brands are assets that must be
carefully developed and managed via:
 Brand
positioning
 Brand name selection
 Brand sponsorship
 Brand development
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Brand Positioning
• Marketers can position brands clearly in
customers’ minds at any of three levels:
 Product
attributes
 Product benefits
 Beliefs and values
• Marketers should create a brand mission
and vision of what the brand must be and
do when positioning the brand.
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Brand Name Selection
•
Desirable qualities for a brand name:
1. It should suggest the product’s benefits and
2.
3.
4.
5.
6.
qualities.
It should be easy to pronounce, recognize,
and remember.
It should be distinctive.
It should be extendable.
It should translate easily into foreign
languages.
It should be capable of registration and legal
protection.
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Brand Sponsorship
• Brand sponsorship options include:
 National
brands (e.g., Sony)
• Also called manufacturer brands
 Store
brands (e.g., Equate)
• Also called private brands
 Licensed
brands
• Name or character licensing
 Co-branding
• Creates broader appeal and brand equity
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Brand Development
• Line extension:
 Extending
an existing brand name to
new forms, colors, sizes, ingredients, or
flavors within a product category.
• Brand extension:
 Extending
an existing brand name to
new product categories.
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Brand Development
• Multibranding:
 Offers
a way to establish different features
and appeal to different customer segments,
lock up more reseller shelf space, and capture
a larger market share.
• 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 a
new product category.
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Managing Brands
• Continuously communicate the brand’s
positioning to consumers.
• Manage all brand touch points to
maximize the brand experience.
• Live the brand–the firm must train
employees to be customer centered.
• Implement internal branding campaign
among employees.
• Audit brand’s strengths and weaknesses
on a regular basis.
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Rest Stop: Reviewing the Concepts
1.
2.
3.
4.
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.
Identify the four characteristics that affect the
marketing services and the additional
marketing considerations that services require.
Discuss branding strategy—the decisions
companies make in building and managing
their brands.
Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall
7 - 37