1. Chapter 8 Products, Services, and Branding
Idil Yaveroglu
Lecture Notes

2. Product vs. Service Product Service
Anything offered to a market for attention, acquisition, use, or consumption that might satisfy a need or want.
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.

3. Product?

5. Consider Apple What goods and services do they offer?
How do they differentiate through experience?
What is their core, actual and augmented product offering?

6. Types of Consumer Products
Convenience
Frequent purchases bought with minimal buying effort and little comparison shopping
Low price
Widespread distribution
Mass promotion by producer
Eg. Toothpaste, candy, milk
Shopping
Less frequent purchases
More shopping effort for comparisons
Higher than convenience good pricing
Selective distribution in fewer outlets
Advertising and personal selling
Eg. Shoes, clothing,

7. Types of Consumer Products
Specialty
Strong brand preference and loyalty, requires special purchase effort, little brand comparisons, and low price sensitivity
High price
Exclusive distribution
Carefully targeted promotions
Eg. Luxury products,
Unsought
Little product awareness and knowledge (or if aware, sometimes negative interest)
Pricing varies
Distribution varies
Aggressive advertising and personal selling by producers and resellers

8. Unsought Product

9. Product and Service Classifications
Consumer products
Industrial products
Materials and parts
Capital items
Supplies and services
Organization, Person, Places and Ideas
watch?v=EZWy1_KLtuc

12. Product and Service Decisions
-Quality
-Features
-Quality and Design
A name, term, sign, symbol, or design that identifies the product
-Contain and protect
-Promote the product
-Differentiate the product
-Serves to identify the product
-Describes the product
-Promotes the product

13. Differentiating by Packaging

16. Product Mix Decisions
Product mix - the number of product lines offered by a company.
Product line - A group of closely-related product items.
Product mix width - the number of product lines a company markets
Product line depth - the number of brands within each product line

17. P&G’s Product Lines and Mix
Width of the product mix
Laundry Baby Care Deodorants Hair Care Household Oral Care Cosmetics ….
Cleaners
Depth of the product lines

18. HOW DOES AN EXTENSIVE PRODUCT LINE BENEFIT BOTH CONSUMERS AND RETAILERS?

19. Product Mix Decisions
Benefits of multiple product lines (greater width)
Diversifies risk
Capitalizes on established reputations
Protection from competition
Increased growth and profits
Greater market impact
Economical resource usage

20. Product Line Depth Advantages of Greater Product Depth
Attracts buyers with different preferences
Increases sales/profits by further market segmentation
Capitalizes on economies of scale
Evens out seasonal sales patterns

21. Branding Decisions
Brands: A name, term, symbol, design, or combination thereof that identifies a seller’s products and differentiates them from competitors’ products.
used to simplify choices and reduce purchase risk for consumers
Brand Mark: The elements of a brand that cannot be spoken.
Brand equity - marketplace value of a brand based on reputation and goodwill
Brand equity is the positive differential effect that knowing the brand name has on customer response to the product or service

22. Brand Equity Facts
Coca Cola’s assets are worth $15 billion. Its market value however is worth $101 billion.
Microsoft’s assets are worth $7 billion and its market value is $61 billion.

23. Brand Equity Facts
Coca Cola charges 30-40% more than RC Cola – and still outsells it almost 10 to 1.
Tylenol charges $6.99 for 100 tablets while Advil charges $4.99 – still Tylenol is the leader.
Of the leading brands in 20 product categories in the year 1925, 17 – or 85% of them were still the market leader in 2000.

24. Brand Equity Leaders in 1925 Nabisco Wrigley Gillette Ivory Coca-Cola
Campbell’s
Lipton

25. Brand Equity Leaders in 2000 Nabisco Wrigley Gillette Ivory Coca-Cola
Campbell’s
Lipton

26. Brand Positioning Three levels of positioning: Product attributes
Least effective
Benefits
Beliefs and values
Taps into emotions

31. http://www.youtu be.com/watch?v= sTw4CTZzz9Q

33. Brand Name Selection Good Brand Names:
Suggest something about the product or its benefits (Die Hard Batteries, Craftsman Tools, Easy- Off Cleaners, Silk and Shine Shampoo)
Are easy to say, recognize and remember (Tide, Delta, Pampers etc)
Are distinctive
Are extendable (in case you want to extend to other categories)
Translate well into other languages
Can be registered and legally protected

34. Brand Sponsorship Manufacturer brands Private (store) brands
Costly to establish and promote
Higher profit margins
Licensed brands
Name and character licensing has grown
Co-branding

35. Brand Development Line extensions Brand extensions Multibrands
Minor changes to existing products
Brand extensions
Successful brand names help introduce new products
Levis Tailored Classics, Swiss Army,
Multibrands
Multiple product entries in a product category (P&G)
New brands
New product category
Product Category/
Existing
New
Existing Brand Name
Line Extension
Brand Extension
New Brand Name
Multibrands
New Brands

36. Advantages of Extensions
Facilitate New Product Acceptance
Improve brand image
Reduce risk perceived by consumers
Increase the probability of gaining distribution and trial
Increase efficiency of promotional expenditures
Reduce costs of introductory and follow up marketing programs
Avoid cost of developing a new brand
Permit consumer variety seeking

37. Disadvantages of Brand Extensions
Can confuse or frustrate consumers
Can fail and hurt parent brand image
Can succeed but cannibalize sales of parent brand
Can succeed but diminish identification with any one category
Can dilute brand meaning
Can cause the company to forgo the chance to develop a new brand

38. McDonalds “Made for you” Service (2000)
Expanded menu which included pizza, breakfast bagels, Arch Deluxe sandwich
New Tastes Menu (2001)
McDonalds ketchup (2000) – Germany
McCafe (2001) – Portugal and Austria
McTreat
McSnack Spot

39. Examples of Category Extensions
Successful Category Extensions
Unsuccessful Category Extensions
Ivory shampoo and conditioner
Vaseline Intensive Care skin lotion
Hershey chocolate milk
Jell-O pudding Pops
Visa traveler’s checks
Sunkist Orange Soda
Colgate toothbrushes
Mars Ice Cream Bars
Aunt Jemima pancake syrup
Honda Lawn movers
Campbell’s tomato sauce
LifeSavers chewing gum
Cracker Jack cereal
Harley Davidson wine coolers
Bic perfumes
Ben-Gay aspirin
Kleenex diapers
Clorox Laundry detergent
Levi’s Tailored classics
Domino’s fruit flavored bubble gum
Smucker’s ketchup
Fruit of the Loom Laundry detergent