Chapter 1 Product, Services, and Branding Strategy 7 Product, Services, and Branding Strategy

ROAD MAP: Previewing the Concepts Define product and the major classifications of products and services. Describe the roles of product and service branding, packaging, labeling, and product support services. Explain the decisions companies make when developing product lines and mixes. Identify the four characteristics that affect the marketing of a service. Discuss the additional marketing considerations that services require.

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.

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.

The Product-Service Continuum College Education Sugar Restaurant Pure Tangible Good Pure Service

A Krispy Kreme isn’t just a doughnut. It’s a truly sweet experience.

Chapter 1 Levels of a Product

Consumer Products Products and services bought by final consumers for personal consumption.

Convenience Products Purchased frequently and immediately Low priced Mass advertising Many purchase locations Examples: candy, soda, newspapers

Shopping Products Bought less frequently Higher price Fewer purchase locations Comparison shop Examples: furniture, clothing, cars, appliances

Specialty Products Special purchase efforts High price Unique characteristics Brand identification Few purchase locations Examples: Lamborghini, Rolex Watch

Unsought Products New innovations Products consumers do not want to think about Require much advertising and personal selling Examples: life insurance, cemetery plots, blood donation

Industrial Products Those purchased for further processing or for use in conducting business.

Industrial Products Materials and Parts Capital Items Chapter 1 Industrial Products 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, repair, and maintenance items

Other Market Offerings Organizations: Profit (businesses) and nonprofit (schools and churches). 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.

Organization Marketing Companies use corporate image advertising to market themselves to various publics. General Electric Stands for “imagination at work.”

Individual Product Decisions Chapter 1 Individual Product Decisions

Product and Service Attributes Chapter 1 Product and Service Attributes Quality Features Style & Design Performance and Satisfaction Includes Level & Consistency Differentiates a product from the competition; assessed based on value and cost Style = Appearance Design = heart of the product

Product Design The innovative Discover 2GO card is a gotta-have-it accessory for people who want to dash off to the gym, the mall, or a restaurant with nothing more than their keys and a credit card.

Branding Creating, maintaining, protecting, and enhancing products and services. 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.

Branding Advantages to buyers: Advantages to sellers: Product identification Product quality Advantages to sellers: Basis for product’s quality story Provides legal protection Helps to segment markets

Packaging Designing and producing the container or wrapper for a product. Developing a good package: Packaging concept Package elements Product safety Environmental concerns

Innovative Packaging Dutch Boy recently came up with a long overdue innovation—paint in plastic containers with twist-off caps.

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

Innovative Labeling Innovative labeling can help to promote a product.

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.

Product Line Decisions Chapter 1 Product Line Decisions Product Line Length Number of Items in the Product Line Filling Lengthen within current range Stretching Lengthen beyond current range. Can be: Downward Upward Both Directions

Two-Way Stretch Marriott added the Renaissance Hotels line to serve the upper end of the market and the TownePlace Suites line to serve the moderate and lower ends.

Click the picture above to play video Line Extension As Marriott’s product extension grew in popularity, it extended the product further. Click the picture above to play video

Product Mix Decisions Product Mix: all of the product lines and items that a particular seller offers for sale. 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 the various lines are.

Brand Equity The positive differential effect that knowing the brand name has on customer response to the product or service. Provides: More brand awareness and loyalty Basis for strong, profitable customer relationships

Major Brand Strategy Decisions

Brand Positioning Product Attributes Product Benefits Can position brands at any of three levels. Product Attributes Product Benefits Beliefs and Values

Brand Name Selection Desirable qualities for a brand name include: It should suggest product’s benefits and 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

Manufacturer’s Brands Brand Sponsorship Manufacturer’s Brands Four Options Co-Branding Private Brands Licensed Brands

Line Extensions Morton sells an entire line of salts and seasonings for every occasion.

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.

Interactive Student Assignment Chapter 1 Choose a partner and go to the following website: Tide Products Look at the various line extensions (e.g., liquid, powder, etc.) and determine why they were developed.

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.

Nature and Characteristics of a Service Chapter 1 Nature and Characteristics of a Service

Chapter 1 Discussion Question How can an airline deal with the intangibility, inseparability, variability, and perishability of its service offering?

The Service-Profit Chain

Major Service Marketing Tasks 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.

International Product and Services Marketing Decide Which Products & Services to Introduce Decide How Much to Standardize or Adapt Chapter 1 International Product and Services Marketing Packaging Presents New Challenges Service Marketers Face Special Challenges Trend Toward Global Service Companies Will Continue

Rest Stop: Reviewing the Concepts Chapter 1 Rest Stop: Reviewing the Concepts 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 companies make in building and managing their brands.

Rest Stop: Reviewing the Concepts Chapter 1 Rest Stop: Reviewing the Concepts 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.