Transcript Chapter 8 - Austin Community College

C H A P T E R
8
Product and
Service Concepts
McGraw-Hill/Irwin
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.
Learning Objectives
After studying this chapter, you should be able to:
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Understand the differences between goods and services.
Differentiate between consumer and business products,
and discuss the different types of each.
Recognize that marketers need to appreciate the
perspective of the consumer.
Define and discuss the importance of product quality,
product design, branding, packaging, and customer
service.
Explain how the different product components need to be
integrated to meet the needs of customers.
Bearden Marketing 5th Ed
8-2
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Frito-Lay
Frito-Lay is noted for the quality of products it
provides to consumers and the exceptional
service it gives to retail customers. The
company’s basic business philosophy is: “Make
the best product possible; sell it at a fair profit;
and make service a fundamental part of doing
business.”
Bearden Marketing 5th Ed
8-3
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What is a Product?
The term product is defined
as an idea, a physical entity
(a good), a service, or any
combination of the three that
is an element of exchange
to satisfy individual or
business objectives.
From a marketing viewpoint,
the key element of this
definition is “to satisfy
individual or business
objectives.”
Bearden Marketing 5th Ed
8-4
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Types of Products
Goods are usually defined as physical products such
as cars, golf clubs, soft drinks, or other concrete entities.
Services, in contrast, are normally defined as
nonphysical products such as a haircut, a football
game, or a doctor’s diagnosis.
Exhibit 8-1
Bearden Marketing 5th Ed
8-5
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Characteristics of Services
Tangibility
Perishability
An interesting difference between goods and
services relates to tangibility. Because
goods are tangible, marketing strategies
typically emphasize the intangible benefits
derived from consuming the product.
Perishability also has an important
effect on the marketing of services. Services
cannot normally be stored, so marketers of
services use different strategies to manage
demand.
more
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Characteristics of Services (con’t)
Separability
Variability
Bearden Marketing 5th Ed
Goods like tennis racquets, tuxedos, or
tomatoes can be produced, stored, and then
sold to customers. Services, on the other
hand, are typically produced and consumed
simultaneously.
The difficulty of standardizing services,
especially when they are delivered by
people, has important implications for
marketers. Even well-trained and
professional service providers have bad
days. Therefore, there will always be some
variability in service quality.
8-7
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Consumer and Business Products
An important distinction is between consumer
and business products. This categorization is
based on the way a product is used, and not on
the specific characteristics of the product.
Consumer
Products
Business
Products
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Consumer products are those
purchased by consumers for their
own personal use.
Business products are those
purchased by a firm or organization
for its own use.
8-8
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Consumer and Business Products
Exhibit 8-3
Bearden Marketing 5th Ed
8-9
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Product Components
To provide the benefits consumers want, marketers need
to integrate the components that make up a product
effectively. These consist of the product and customer
service features illustrated below.
Exhibit 8-5
Bearden Marketing 5th Ed
8-10
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Branding
Brand
A name, term, sign, symbol, design, or
combination that a firm uses to identify
its products and differentiate them from
those of competitors.
Brand Name
The element of a brand that can be
vocalized, such as IBM, Tide, Snickers,
or Diet Coke.
Brand Mark
The element of a brand that cannot be
vocalized, such as the MGM lion, the
Buick symbol, or the Nike Swoosh.
Trademark
A brand or part of a brand that is
registered with the U.S. Patent and
Trademark Office.
Bearden Marketing 5th Ed
8-11
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Building Brands
Many firms focus considerable effort on building brands.
However, sometimes too much attention is paid to the
brand and not enough to the customers of the brand. A
basic brand-building process is presented below.
Exhibit 8-6
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8-12
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The World’s Most Valuable Brands
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8-13
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Types of Brands
Generics
Brands
Manufacturer
Brands
Distributor
Brands
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8-14
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Choosing a Brand Name
Choosing an effective brand name is an important
decision for both manufacturer and distributor brands.
The brand name communicates a great deal, which can
facilitate brand awareness and brand image.
An effective brand name:
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suggests something about the product’s benefits
is easy to pronounce, recognize, and remember
is distinctive in some way
can be translated into other languages
Ideally, a brand name should help to communicate to
consumers the major benefits of the firm’s product.
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8-15
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Branding Alternatives
Co-branding combines two brand names on the
same product. Many companies like to be
associated with a brand like Titleist.
Licensing typically consists of the right to use a
trademark in exchange for paying royalties on
the sales of the licensed product.
Bearden Marketing 5th Ed
8-16
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.
Packaging
Packaging is an important component for many
products. A package is the container or wrapper
for a product. It typically includes a label, a
printed description of the product on the
package.
Bearden Marketing 5th Ed
8-17
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Packaging
A product’s package might perform a number of
different functions, including:
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Protecting the product until consumed.
Storing the product until consumed.
Facilitating consumption of the product.
Promoting the product.
Facilitating disposal of the product.
Bearden Marketing 5th Ed
8-18
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Branding Alternatives
The final product component is customer
service, which describes the assistance
provided to help a customer with the purchase
or use of a product.
Bearden Marketing 5th Ed
8-19
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.
Summary
After studying this chapter, you should be able to:





Understand the differences between goods and services.
Differentiate between consumer and business products, and
discuss the different types of each.
Recognize that marketers need to appreciate the
perspective of the consumer.
Define and discuss the importance of product quality,
product design, branding, packaging, and customer service.
Explain how the different product components need to be
integrated to meet the needs of customers.
Bearden Marketing 5th Ed
8-20
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.