Products, Services, and Brands Building Customer Value Chapter 7

Rest Stop: Previewing 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. 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. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall First Stop ESPN – It’s A Brand! 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. 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. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 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. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 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. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

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. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

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. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

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. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

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. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

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. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

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. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

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. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

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). Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

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. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Other Market Offerings Organizations: Profit and nonprofit (schools and churches). Persons: Politicians, sports figures, doctors, etc. Places: Create, maintain, or change attitudes or behavior toward particular places. Ideas (social marketing): Public health campaigns, environmental campaigns, family planning, or human rights. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Individual Product Decisions Product (and service) attributes Branding Packaging Labeling Product support services Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

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 Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 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. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 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. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 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. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 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. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

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. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Product Line Decisions 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). Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 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. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Nature and Characteristics of a Service Intangibility: Services cannot be seen, tasted, felt, heard, or smelled before purchase. Inseparability: Services cannot be separated from their providers. Variability: Quality of services depends on who provides them and when, where, and how they are delivered. Perishability: Services cannot be stored for later sale or use. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

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. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 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. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

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. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

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). Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Major Brand Strategy Decisions Brands are assets that must be carefully developed and managed via: Brand positioning Brand name selection Brand sponsorship Brand development Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 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. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall Brand Name Selection Desirable qualities for a brand name: It should suggest the 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. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 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 Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 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. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 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. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 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. Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall

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. 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