Product and Services Concepts 8 Product and Services Concepts Prepared by Deborah Baker Texas Christian University

Learning Objectives 1. Define the term product 2. Classify consumer products 3. Discuss the importance of services to the economy 4. Discuss the differences between services and goods

Learning Objectives 5. Define the terms product item, product line, and product mix Describe marketing uses of branding Describe marketing uses of packaging and labeling Describe how and why product warranties are important marketing tools

Product is the “heart” of Marketing Mix Chapter 8 What Is a Product? Product is the “heart” of Marketing Mix Promotion Place (Distribution) Price Product 1

Types of Consumer Products Chapter 8 Types of Consumer Products Unsought Products Specialty Shopping Convenience Consumer Business PRODUCTS 2

The Importance of Services Chapter 8 The Importance of Services 79% of workers are in service sector. U.S. service exports will top $650 billion by 2010, the same value as manufactured goods. Service occupations will be responsible for nearly all net job growth through 2012. 64 of Fortune’s top 100 companies are service companies. 3

How Services Differ from Goods Chapter 8 How Services Differ from Goods Intangible Inseparable Heterogeneous Perishable Online: National Amusements and AMC Theatres Online http://www.nationalamusements.com http://www.amctheatres.com http://www.movietickets.com 4

Product Items, Lines, and Mixes Chapter 8 Product Items, Lines, and Mixes Product Item Product Line Product Mix A specific version of a product that can be designated as a distinct offering among an organization’s products. A group of closely-related product items. All products that an organization sells. Online http://www.marriott.com 5

Benefits of Product Lines Chapter 8 Benefits of Product Lines Equivalent Quality Efficient Sales and Distribution Standardized Components Package Uniformity Advertising Economies 5

Adjustments Adjustments to Product Items, Lines, and Mixes Chapter 8 Adjustments Product Modification Product Repositioning Product Line Extension or Contraction Adjustments to Product Items, Lines, and Mixes Online http://www.unilever.com 5

Types of Product Modifications Chapter 8 Types of Product Modifications Quality Modification Functional Modification Style Modification 5

Repositioning Why reposition established brands? Chapter 8 Repositioning Changing Demographics Declining Sales Changes in Social Environment Why reposition established brands? 5

The elements of a brand that The value of company and brand names. Chapter 8 Branding Brand Name Mark Equity That part of a brand that can be spoken, including letters, words, and numbers. The elements of a brand that cannot be spoken. The value of company and brand names. 6

Branding Strategies Brand No Brand Manufacturer’s Brand Private Brand Chapter 8 Branding Strategies Brand No Brand Manufacturer’s Brand Private Brand Individual Brand Family Brand Combi- nation 6

Manufacturers’ Brands Versus Private Brands Chapter 8 Manufacturers’ Brands Versus Private Brands Manufacturers’ Brand Private The brand name of a manufacturer. A brand name owned by a wholesaler or a retailer. Also known as a private label or store brand. 6

Individual Brands Versus Family Brands Chapter 8 Individual Brands Versus Family Brands Individual Brand Family Using different brand names for different products. Marketing several different products under the same brand name. 6

Complementary Branding Chapter 8 Cobranding Ingredient Branding Cooperative Branding Complementary Branding Types of Cobranding Online http://www.minutemaid.com http://www.disney.com http://www.bose.com 6

Functions of Packaging Chapter 8 Functions of Packaging Contain and Protect Promote Facilitate Storage, Use, and Convenience Facilitate Recycling Online Online http://www.levesquedesign.com/ http://www.design4packaging.com 7

Labeling Persuasive Informational Helps make proper selections Chapter 8 Labeling Persuasive Informational Helps make proper selections Lowers cognitive dissonance Includes use/care Focuses on promotional theme Consumer information is secondary 7

Product Warranties Express Warranty Implied Warranty Written Guarantee Chapter 8 Product Warranties Written Guarantee Express Warranty Implied Warranty Unwritten Guarantee Online http://www.landsend.com http://www.llbean.com 8