Chapter 7: Products, Services, & Brands Abdullah Sultan, PhD

Copyright 2007, Prentice Hall, Inc. 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 2007, Prentice Hall, Inc.

Copyright 2007, Prentice Hall, Inc. What Is a Service? Services are: Any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything. E.g., banking, hotel, airline, retail, tax preparation, home repairs. Copyright 2007, Prentice Hall, Inc.

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 will differentiate your marketing offers from the competition. Copyright 2007, Prentice Hall, Inc.

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 2007, Prentice Hall, Inc.

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. Consumer products: Products and services bought by final consumers for personal consumption Also included are other marketable entities Classified by how consumers buy them Copyright 2007, Prentice Hall, Inc.

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 2007, Prentice Hall, Inc.

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 2007, Prentice Hall, Inc.

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 2007, Prentice Hall, Inc.

Types of Consumer Goods Unsought products: Little product awareness or knowledge of the brand, sometimes negative interest The consumer either does not know about or knows about but does not normally think of buying Pricing strategies vary Distribution strategies vary Require aggressive advertising and personal selling by both producer and resellers E.g., life insurance, cemetery plots, organ donations Copyright 2007, Prentice Hall, Inc.

Types of Industrial Goods Materials and parts: Raw materials, manufactured materials, and parts Capital items: Products that aid in buyer’s production or operations (e.g., machines, lands, buildings) Supplies and services: Operating supplies, maintenance, and repair items Copyright 2007, Prentice Hall, Inc.

Other Market Offerings Organization: Profit (businesses) and nonprofit (schools and churches) Person: Politicians, entertainers, sports figures, doctors, and lawyers Place: 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.

What Do Consumers Look For When Making Product Decisions? Product attributes Branding Packaging Labeling Product support services Copyright 2007, Prentice Hall, Inc.

Product and Service Attributes Product quality dimensions: Performance quality Conformance quality Product feature considerations: Value to consumer Cost to company Managers need to balance between value and cost Product style and design (marketing research): How will it influence the user experience? Copyright 2007, Prentice Hall, Inc.

Copyright 2007, Prentice Hall, Inc. Branding Branding involves building and managing brands. A brand: Is a name, term, sign, symbol, or 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 2007, Prentice Hall, Inc.

Copyright 2007, Prentice Hall, Inc. 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 2007, Prentice Hall, Inc.

Copyright 2007, Prentice Hall, Inc. 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 2007, Prentice Hall, Inc.

Copyright 2007, Prentice Hall, Inc. Labeling Labeling refers to 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.

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 2007, Prentice Hall, Inc.

Copyright 2007, Prentice Hall, Inc. Brand Equity Brand equity: Is the positive differential effect that knowing the brand name has on customer response to the product or service. Is a valuable asset that offers many competitive advantages. Builds strong and profitable customer relationships that result in loyal customers. Copyright 2007, Prentice Hall, Inc.

Major Brand Strategy Decisions Brands are assets that must be carefully developed and managed via: Brand positioning Brand name selections Brand development Copyright 2007, Prentice Hall, Inc.

Copyright 2007, Prentice Hall, Inc. Brand Positioning Marketers can position brands at any of three levels: Product attributes (e.g., The Body Shop talks about their products’ natural ingredients, unique scents, and special textures; But easily copied by competitors). Product benefits (e.g., Volvo (safety), FedEx (on-time delivery, Lexus (quality)). Beliefs and values (Starbuck’s offers memorable experience, Ritz-Carlton offers luxurious rooms), Copyright 2007, Prentice Hall, Inc.

Copyright 2007, Prentice Hall, Inc. Brand Name Selection Desirable qualities for a brand name: It should suggest the product’s benefits and qualities (e.g., Beautyrest (beds), Curves (women’s fitness centers), Die Hard (batteries)). It should be easy to pronounce, recognize, and remember (Tide, Dove, Pepsi). It should be distinctive (Lexus vs. Apple). It should be extendable (Sony vs. Kleenex). It should translate easily into foreign languages (Exxon vs. Enco in Japan). It should be capable of registration and legal protection. Copyright 2007, Prentice Hall, Inc.

Copyright 2007, Prentice Hall, Inc. 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; Pepsi offers deferent flavors of soft drinks). Brand extension: Using a successful brand name to launch a new or modified product in a new category (Dove Soap and Dove Shampoo, Mercedes Benz and Mercedes trucks, Al-ghanim cars and Al-ghanim electronics). Copyright 2007, Prentice Hall, Inc.

Copyright 2007, Prentice Hall, Inc. Brand Development Multibranding: Offers a way to establish different features and appeal to different buying motives (Pepsi offers deferent drinks and snacks). 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 (Toyota and Lexus, Apple computers and Apple iPod, Sony and Playstation). Copyright 2007, Prentice Hall, Inc.