C HAPTER 7 Product, Services, and Branding Strategy

Copyright 2007, Prentice-Hall Inc.7-2  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.  Discuss branding strategy – the decisions firms make in building and managing their brands.  Identify the four characteristics that affect the marketing of a service and the additional marketing considerations that services require.  Discuss two additional product issues: socially responsible product decisions and international product and services marketing. Roadmap: Previewing the Concepts

Copyright 2007, Prentice-Hall Inc.7-3 Product  Brand name: FIJI Natural Artesian Water.  Product source: comes from an underground location in Fiji islands.  Key benefits: ultra-clean taste, no impurities or pollutants.  Brand image: “The Taste of Paradise.” Promotion  It’s a brand experience!  Name, packaging, label, celebrity endorsers and places through which it is sold contributes to “Taste of Paradise” imagery.  Ads evoke exotic origins: tropical forest, volcanoes.  High price charged supports premium appeal. FIJI WATER – “The Taste of Paradise”

Copyright 2007, Prentice-Hall Inc.7-4 The Product-Service Continuum Sugar Restaurant Education Pure Tangible Good Pure Service Offer another example of a pure service.

Copyright 2007, Prentice-Hall Inc.7-5 What Is a Product?  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.

Copyright 2007, Prentice-Hall Inc.7-6 What Is a Service?  A form of product that consists of activities, benefits, or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything. –Examples: banking, hotel, airline, retail, tax preparation, home repairs.

Copyright 2007, Prentice-Hall Inc.7-7 Consumer Experiences  Creating / managing customer experiences differentiates offers from each other. –All Bass Pro Shop stores offer hunting and fishing skill clinics. The home store in Springfield, Missouri, has an art gallery, archery and pistol range, wildlife museum, and arcade. Knot Tying Clinic Art Gallery Entrance

Copyright 2007, Prentice-Hall Inc.7-8 Figure 7-1 Three Levels of Product

Copyright 2007, Prentice-Hall Inc.7-9 Consumer Products  Products and services bought by final consumers for personal consumption. –Also includes other marketable entities.  Classified by how consumers buy them: –Convenience goods –Shopping goods –Specialty goods –Unsought goods

Copyright 2007, Prentice-Hall Inc.7-10 Convenience & Shopping Products  Convenience Goods –Bought frequently and immediately –Low priced –Mass advertising –Many purchase locations –Examples: candy, soda, newspapers  Shopping Goods –Bought less frequently –Higher price –Fewer purchase locations –Comparison shop –Examples: cars, furniture, appliances

Copyright 2007, Prentice-Hall Inc.7-11 Specialty & Unsought Products  Specialty Products –Special purchase efforts –High price –Unique characteristics –Brand identification –Few purchase locations –Example: Rolex watches, Ferrari cars  Unsought Products –New innovations –Are often products consumers do not want to think about –Require a lot of advertising and personal selling –Examples: blood donation, cemetery plots, insurance

Copyright 2007, Prentice-Hall Inc.7-12 Let’s Talk! Why might a tropical fish be classified by different consumers as a convenience good, a shopping good, OR a specialty good? Explain.

Copyright 2007, Prentice-Hall Inc.7-13 Industrial Products  Those purchased for further processing or for use in conducting business. –Includes materials and parts, capital items, supplies, and services.  Distinction between consumer and industrial products is based on the purpose for which an item is bought.

Copyright 2007, Prentice-Hall Inc.7-14 Other Market Offerings  Organizations: Profit (businesses) and nonprofit (schools and churches). –Includes corporate image advertising.  Persons: Politicians, entertainers, sports figures, doctors, and lawyers.  Places: Create, maintain, or change attitudes or behavior toward particular places (e.g., tourism).  Ideas (social marketing): Public health campaigns, environmental campaigns, family planning, or human rights.

Copyright 2007, Prentice-Hall Inc.7-15 Place and Person Marketing A montage of place and person marketing images. Marketing in Action

Copyright 2007, Prentice-Hall Inc.7-16 Figure 7-2 Individual Product Decisions

Copyright 2007, Prentice-Hall Inc.7-17 Product & Service Attributes  Product quality –Performance quality –Conformance quality  Features –Value to consumer –Cost to company  Style and design –Influences experience

Copyright 2007, Prentice-Hall Inc.7-18 Branding  A brand is a name, term, sign, symbol, or design, or a combination of these, that identifies the maker or seller of a product or service.

Copyright 2007, Prentice-Hall Inc.7-19 Branding  Advantages to buyers: –Product identification –Product quality  Advantages to sellers: –Basis for product’s quality –Provides legal protection –Helps to segment markets

Copyright 2007, Prentice-Hall Inc.7-20 Packaging  Designing and producing the container or wrapper for a product.  Developing a good package: –Market the brand –Protect the elements –Ensure product safety –Address environmental concerns

Copyright 2007, Prentice-Hall Inc.7-21 Marketing in Action Dutch Boy’s packaging innovation offers paint in plastic containers with twist-off tops. The paint container is easy to carry, doesn’t need a screwdriver to pry open, doesn’t dribble when poured, and doesn’t take a hammer to bang the lid shut. Innovative Packaging

Copyright 2007, Prentice-Hall Inc.7-22 Labeling  Printed information appearing on or with the package.  Performs several functions: –Identifies product or brand. –Describes several things about the product. –Promotes the product through attractive graphics.

Copyright 2007, Prentice-Hall Inc.7-23 Marketing in Action As Americans become increasingly concerned about cholesterol, the FDA (Food and Drug Administration) has responded by requiring food manufacturers to list trans fat (i.e., trans fatty acids) on the Nutrition Facts portion of product labels, effective 1/1/06. Labeling

Copyright 2007, Prentice-Hall Inc.7-24 Product Support Services  Assess the value of current services and obtain ideas for new services.  Assess the cost of providing the services.  Put together a package of services that delights the customers and yields profits for the company.

Copyright 2007, Prentice-Hall Inc.7-25 Product Line Decisions  Product line length: –The number of items in a product line.  Adjust line length by: – Stretching  Downward  Upward  Both directions –Filling iams.com

Copyright 2007, Prentice-Hall Inc.7-26 Marketing in Action Marriott offers a full line of hotel brands, each aimed at a different market. Product Line Stretching

Copyright 2007, Prentice-Hall Inc.7-27 Choose a partner in class and discuss your favorite products. How could the existing product line be stretched or filled? Explain. Let’s Talk!

Copyright 2007, Prentice-Hall Inc.7-28 Product Mix Decisions  Product mix: –all of the product lines and items that a particular seller offers for sale.  Product mix dimensions include: –Length: the number of items in a line. –Width: the number of different product lines the company carries. –Depth: the number of versions offered of each product in the line. –Consistency: how closely related various lines are.

Copyright 2007, Prentice-Hall Inc.7-29 Brand Equity  The positive differential effect that knowing the brand name has on customer response to the product or service.  Provides: –Greater brand awareness and loyalty –Basis for strong, profitable customer relationships

Copyright 2007, Prentice-Hall Inc.7-30 Figure 7-3 Major Brand Strategy Decisions

Copyright 2007, Prentice-Hall Inc.7-31 Brand Positioning  Can position brands at any of three levels: –Product attributes  Least desirable; easily copied. –Product benefits –Beliefs and values  Hits consumers on a deeper level, touching universal emotions.

Copyright 2007, Prentice-Hall Inc.7-32 Brand Name Selection  Desirable qualities for a brand name include: 1.It should suggest product’s benefits and qualities. 2.It should be easy to pronounce, recognize, and remember. 3.It should be distinctive. 4.It should be extendable. 5.It should translate easily into foreign languages. 6.It should be capable of registration and legal protection.

Copyright 2007, Prentice-Hall Inc.7-33 Let’s Talk! Boudreaux’s Butt Paste is a real product that is used in the treatment of diaper rash. Evaluate this brand name against the criteria for a good brand name that were previously discussed. How does it fare? Explain.

Copyright 2007, Prentice-Hall Inc.7-34 Brand Sponsorship  Manufacturer’s brands –Also called national brands  Private brands –Also called store or distributor brands  Licensed brands  Co-branding Mi Casa brand products are only available at Stop & Shop stores.

Copyright 2007, Prentice-Hall Inc.7-35 Figure 7-4 Brand Development Strategies

Copyright 2007, Prentice-Hall Inc.7-36 Brand Development  Line extension: –introduction of additional items in a given product category under the same brand name (e.g., new flavors, forms, colors, ingredients, or package sizes).  Brand extension: –using a successful brand name to launch a new or modified product in a new category. Swiss Army’s successful brand name has been instrumental in launching brand extensions. Watch the snippet to see what they’ve done. Video Snippet

Copyright 2007, Prentice-Hall Inc.7-37 Marketing in Action Liquid-Plumr Power Jet is the latest offering in the line of Liquid Plumr brand products. Line Extensions Liquid-plumr.com

Copyright 2007, Prentice-Hall Inc.7-38 Brand Development  Multibranding: –offers a way to establish different features and appeal to different buying motives.  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 new product category.

Copyright 2007, Prentice-Hall Inc.7-39 Figure 7-5 Four Service Characteristics

Copyright 2007, Prentice-Hall Inc.7-40 Let’s Talk! How do the service characteristics of intangibility, variability, inseparability, and perishability relate to restaurants? Explain.

Copyright 2007, Prentice-Hall Inc.7-41  Internal service quality.  Satisfied and productive service employees.  Great service value.  Satisfied and loyal customers.  Healthy service profits and growth. The Service-Profit Chain

Copyright 2007, Prentice-Hall Inc.7-42 Figure 7-6 Three Types of Service Marketing

Copyright 2007, Prentice-Hall Inc.7-43  Managing service differentiation: –Develop a differentiated offer, delivery, and image.  Managing service quality: –Be customer obsessed, 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. Major Service Marketing Tasks

Copyright 2007, Prentice-Hall Inc.7-44  Product Decisions and Social Responsibility  International Product and Service Marketing –Which products & services to introduce? –Whether to standardize or adapt? –Packaging presents challenges. –Services marketers face special challenges; growth will continue. Additional Product Considerations

Copyright 2007, Prentice-Hall Inc.7-45  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.  Discuss branding strategy – the decisions firms make in building and managing their brands.  Identify the four characteristics that affect the marketing of a service and the additional marketing considerations that services require.  Discuss two additional product issues: socially responsible product decisions and international product and services marketing. Rest Area: Reviewing the Concepts