1. Chapter 8 - slide 1 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Chapter Eight Products, Services, and Brands: Building Customer Value

2. Chapter 8 - slide 2 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Product, Services, and Branding Strategy What Is a Product? Product and Services Decisions Branding Strategy: Building Strong Brands Services Marketing Topic Outline

3. Chapter 8 - slide 3 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall What Is a Product? Product is anything that can be offered in a market for attention, acquisition, use, or consumption that might satisfy a need or want Products include more than just tangible objects such as cars, computers or cell phones. Products, Services, and Experiences

4. Chapter 8 - slide 4 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall What Is a Product? Broadly defined, “products” also include service, events, persons, places, organizations, ideas, or mixes of these. Services are the form of product that consists of activities, benefits or satisfactions offered for sale that are essentially intangible and don’t result in the ownership of anything such as Banking Products, Services, and Experiences

5. Chapter 8 - slide 5 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall What Is a Product? Product is a key element in the overall marketing offering, marketing mix planning begins with building an offering that brings value to target customers. This offering becomes the basis upon which the company builds profitable customer relationships A company’s market offering includes both tangible goods and services Products, services and experiences

6. Chapter 8 - slide 6 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall What Is a Product? The offer may consist of a pure tangible good such as soap, toothpaste or salt. At the other extreme are the pure services for which the offer consists primarily of a service. Products, services and experiences

7. Chapter 8 - slide 7 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall What Is a Product? Experiences represent what buying the product or service will do for the customer Experiences have always been an important part of marketing for some companies Companies that market experiences realize that customers are really buying much more that just products and services, they are buying what those offers will do for them Products, services and experiences

8. Chapter 8 - slide 8 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall A ________ is anything that can be offered to a market that might satisfy a need or a want. 1.position 2.product 3.promotion 4.none of the above

9. Chapter 8 - slide 9 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall A ________ is anything that can be offered to a market that might satisfy a need or a want. 1.position 2.product 3.promotion 4.none of the above

10. Chapter 8 - slide 10 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall What Is a Product? Product planners need to think about products and services on three levels, each level adds more customer value. The most basic level is the core customer value, which addresses the question “ what is the buyer really buying ? “ When designing products, marketers must first define the core, problem solving benefits or services that consumers seek Levels of Product and Services

11. Chapter 8 - slide 11 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall What Is a Product? At the second level, product planners must turn the core benefits into an actual product, they need to develop product and service features, design, a quality level or a brand name and packaging. For Ex. The BlackBerry is an actual product. Its name, parts, styling, features have all been combined to deliver the core customer value Levels of Product and Services

12. Chapter 8 - slide 12 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall What Is a Product? Finally, product planners must build an augmented product around the core benefit and actual product by offering additional consumer services and benefits. For ex. The BlackBerry solution offers more than just a communication device, it provides customers with a complete solution to mobile connectivity problems. Levels of Product and Services

13. Chapter 8 - slide 13 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall What Is a Product? Levels of Product and Services

14. Chapter 8 - slide 14 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The most basic level of a product is called its ________. 1.augmented product 2.actual product 3.core benefit 4.position

15. Chapter 8 - slide 15 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The most basic level of a product is called its ________. 1.augmented product 2.actual product 3.core benefit 4.position

16. Chapter 8 - slide 16 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall What Is a Product? Consumer products Industrial products Product and Service Classifications

17. Chapter 8 - slide 17 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall What Is a Product? Consumer products are products and services for personal consumption Classified by how consumers buy them –Convenience products –Shopping products –Specialty products –Unsought products Product and Service Classifications

18. Chapter 8 - slide 18 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall What Is a Product? Convenience products are consumer products and services that the customer usually buys frequently, immediately, and with a minimum comparison and buying effort Newspapers Candy Fast food They are usually low priced, and marketers place them in many locations to make them available when consumers need them Product and Service Classifications

19. Chapter 8 - slide 19 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall What Is a Product? Shopping products are consumer products and services that the customer compares carefully on suitability, quality, price, and style Furniture Cars Shopping products marketers distribute their products through fewer outlets but provide deeper sales support to help customers in their comparison efforts. Product and Service Classifications

20. Chapter 8 - slide 20 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall What Is a Product? Specialty products are consumer products and services with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort Medical services Designer clothes Buyers normally don’t compare specialty products, they invest only the time needed to reach dealers carrying the wanted products Product and Service Classifications

21. Chapter 8 - slide 21 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall What Is a Product? Unsought products are consumer products that the consumer does not know about or knows about but does not normally think of buying Life insurance Funeral services Blood donations Unsought products require a lot of advertising, personal selling, and other marketing efforts Product and Service Classifications

22. Chapter 8 - slide 22 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall What Is a Product? Industrial products are products purchased for further processing or for use in conducting a business Classified by the purpose for which the product is purchased –Materials and parts –Capital –Supplies and services Product and Service Classifications

23. Chapter 8 - slide 23 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Types of consumer products include convenience products, shopping products, specialty products, and ________ products. 1.unique 2.luxury 3.unsought 4.all of the above

24. Chapter 8 - slide 24 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Types of consumer products include convenience products, shopping products, specialty products, and ________ products. 1.unique 2.luxury 3.unsought 4.all of the above

25. Chapter 8 - slide 25 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall ________ products are purchased frequently, with little comparison or shopping effort. 1.Convenience 2.Shopping 3.Industrial 4.Unsought

26. Chapter 8 - slide 26 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall ________ products are purchased frequently, with little comparison or shopping effort. 1.Convenience 2.Shopping 3.Industrial 4.Unsought

27. Chapter 8 - slide 27 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Consumer product with unique brand identification for which buyers are willing to make a special purchase effort is called _________ product. 1.convenience 2.shopping 3.specialty 4.unsought

28. Chapter 8 - slide 28 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Consumer product with unique brand identification for which buyers are willing to make a special purchase effort is called _________ product. 1.convenience 2.shopping 3.specialty 4.unsought

29. Chapter 8 - slide 29 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall ________ products are those purchased for further processing or for use in conducting a business. 1.Industrial 2.Shopping 3.Unsought 4.Physical

30. Chapter 8 - slide 30 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall ________ products are those purchased for further processing or for use in conducting a business. 1.Industrial 2.Shopping 3.Unsought 4.Physical

31. Chapter 8 - slide 31 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall What Is a Product? Capital items are industrial products that aid in the buyer’s production or operations Materials and parts include raw materials and manufactured materials and parts usually sold directly to industrial users Supplies and services include operating supplies, repair and maintenance items, and business services Product and Service Classifications

32. Chapter 8 - slide 32 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Your visit to a doctor’s office is an example of a ________. 1.pure tangible good 2.pure intangible good 3.unsought product 4.impure tangible good

33. Chapter 8 - slide 33 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Your visit to a doctor’s office is an example of a ________. 1.pure tangible good 2.pure intangible good 3.unsought product 4.impure tangible good

34. Chapter 8 - slide 34 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall What Is a Product? Organization marketing consists of activities undertaken to create, maintain, or change attitudes and behavior of target consumers toward an organization Both profit and non profit organization practice organization marketing Business firms sponsor public relations or corporate image advertising campaign to market themselves and polish their images Organizations, Persons, Places, and Ideas

35. Chapter 8 - slide 35 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall What Is a Product? Person marketing consists of activities undertaken to create, maintain, or change attitudes and behavior of target consumers toward particular people. People use person marketing to build their reputation Organizations, Persons, Places, and Ideas

36. Chapter 8 - slide 36 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall What Is a Product Place marketing consists of activities undertaken to create, maintain, or change attitudes and behavior of target consumers toward particular places Social marketing is the use of commercial marketing concepts and tools in programs designed to influence individuals’ behavior to improve their well-being and that of society Organizations, Persons, Places, and Ideas

37. Chapter 8 - slide 37 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall What Is a Product Social marketing programs include public health campaigns to reduce smoking, alcoholism, drug abuse, and obesity Other social marketing efforts include environmental campaign to promote clean air and conservation Still others address issues such as family planning and human rights and racial equality Organizations, Persons, Places, and Ideas

38. Chapter 8 - slide 38 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Product and Service Decisions Individual Product and Service Decisions

39. Chapter 8 - slide 39 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Product and Service Decisions Product attributes are the benefits of the product or service Quality Features Style and design Individual Product and Service Decisions

40. Chapter 8 - slide 40 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Product and Service Decisions Quality has a direct impact on product or service performance, thus, its closely linked to customer value and satisfaction. Quality can be defined as “ freedom from defects” The American society for quality defines quality as the characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs Individual Product and Service Decisions

41. Chapter 8 - slide 41 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Product and Service Decisions Product quality includes level and consistency Quality level is the level of quality that supports the product’s positioning Conformance quality is the product’s freedom from defects and consistency in delivering a targeted level of performance Individual Product and Service Decisions

42. Chapter 8 - slide 42 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The two dimensions of product quality are ________ and ________. 1.value; features 2.style; design 3.level; consistency 4.style; value

43. Chapter 8 - slide 43 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The two dimensions of product quality are ________ and ________. 1.value; features 2.style; design 3.level; consistency 4.style; value

44. Chapter 8 - slide 44 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Product and Service Decisions Product features are a competitive tool for differentiating a product from competitors’ products Product features are assessed based on the value to the customer versus the cost to the company Individual Product and Service Decisions

45. Chapter 8 - slide 45 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Product and Service Decisions Style describes the appearance of the product Design contributes to a product’s usefulness as well as to its looks. It goes to the very heart of a product Individual Product and Service Decisions

46. Chapter 8 - slide 46 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Product and Service Decisions Brand is the name, term, sign, or design—or a combination of these—that identifies the maker or seller of a product or service Brand equity is the differential effect that the brand name has on customer response to the product and its marketing Individual Product and Service Decisions

47. Chapter 8 - slide 47 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Product and Service Decisions Branding helps buyers in many ways. Brand names help consumers identify products that might benefit them. Brands also say something about product quality and consistency Buyers who always buy the same brands know that they will get the same features, benefits and quality each time they buy. Individual Product and Service Decisions

48. Chapter 8 - slide 48 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Product and Service Decisions Packaging involves designing and producing the container or wrapper for a product The primary function of the package was to hold and protect the product Individual Product and Service Decisions

49. Chapter 8 - slide 49 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Product and Service Decisions Labels range from simple tags attached to products to complex graphics that are part of the package Labels identify the product or brand, describe attributes, and provide promotion Individual Product and Service Decisions

50. Chapter 8 - slide 50 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Product and Service Decisions Product support services augment actual products Individual Product and Service Decisions

51. Chapter 8 - slide 51 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Product and Service Decisions Customer service is another element of the product strategy. A company’s offer usually includes some support services, which can be a minor or a major part of the total offering. Individual Product and Service Decisions

52. Chapter 8 - slide 52 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall A(n) ________ is a name, term, sign, symbol, or combination of these intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors. 1.package 2.position 3.image 4.brand

53. Chapter 8 - slide 53 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall A(n) ________ is a name, term, sign, symbol, or combination of these intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors. 1.package 2.position 3.image 4.brand

54. Chapter 8 - slide 54 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The designing and producing of the container or wrapper for a product is called ________. 1.packaging 2.labeling 3.manufacturing 4.industrial design

55. Chapter 8 - slide 55 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The designing and producing of the container or wrapper for a product is called ________. 1.packaging 2.labeling 3.manufacturing 4.industrial design

56. Chapter 8 - slide 56 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Product and Service Decisions Product line is 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 Decisions

57. Chapter 8 - slide 57 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Product and Service Decisions Product line length is the number of items in the product line Line stretching Line filling Product Line Decisions

58. Chapter 8 - slide 58 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Occurs when a company lengthens its product line beyond its current range. The company can stretch its lines downward, backward or both ways Companies located at the upper end of the market can stretch their lines downward, to plug a market hole that otherwise would attract a new competitor or to respond to a competitor’s attack on the upper end Line stretching

59. Chapter 8 - slide 59 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The company may add low end products because it finds faster growth taking place in the low end segments Companies can also stretch their product lines upward in order to add prestige to their current products, or they may be attracted by a faster growth rate or higher margins Line stretching

60. Chapter 8 - slide 60 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall A company can lengthen its product line by ________ it or by ________ it. 1.modifying; stretching 2.stretching; switching 3.filling; stretching 4.brushing; combing

61. Chapter 8 - slide 61 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall A company can lengthen its product line by ________ it or by ________ it. 1.modifying; stretching 2.stretching; switching 3.filling; stretching 4.brushing; combing

62. Chapter 8 - slide 62 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Product and Service Decisions Product mix consists of all the products and items that a particular seller offers for sale Width Length Depth Consistency Product Mix Decisions

63. Chapter 8 - slide 63 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Width : refers to the number of different product lines the company carries Length : refers to the total number of items the company carries within its product lines Depth: refers to the number of the versions offered of each product in the line Consistency: how closely related the various product lines in the end use Product Mix Decisions

64. Chapter 8 - slide 64 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Which of the following is not a dimension in a company’s product mix? 1.Width 2.Depth 3.Consistency 4.Age

65. Chapter 8 - slide 65 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Which of the following is not a dimension in a company’s product mix? 1.Width 2.Depth 3.Consistency 4.Age

66. Chapter 8 - slide 66 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Is the differential effect that knowing the brand name has on customer response to the product and its marketing It’s a measure of the brand ability to capture customer preference and loyalty A brand has positive brand equity when consumers talk favorably about the product and vice versa Brand Equity

67. Chapter 8 - slide 67 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Marketers measure the brand strength along four dimensions which are : 1.Differentiation 2.Knowledge 3.Relevance “ how consumers feel it meets their needs” 4.Esteem Brand Equity

68. Chapter 8 - slide 68 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Brand represents the consumer’s perceptions and feelings about a product and its performance. It is the company’s promise to deliver a specific set of features, benefits, services, and experiences consistently to the buyers Branding Strategy: Building Strong Brands

69. Chapter 8 - slide 69 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Branding Strategy: Building Strong Brands Brand strategy decisions include: Product attributes Product benefits Product beliefs and values Brand Positioning

70. Chapter 8 - slide 70 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Branding Strategy: Building Strong Brands Desirable qualities 1.Suggest benefits and qualities 2.Easy to pronounce, recognize, and remember 3.Distinctive 4.Extendable 5.Translatable for the global economy 6.Capable of registration and legal protection Brand Name Selection

71. Chapter 8 - slide 71 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Branding Strategy: Building Strong Brands Manufacturer’s brand Private brand Licensed brand Co-brand Brand Sponsorship

72. Chapter 8 - slide 72 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall A manufacturer has four sponsorship options The product maybe launched as a national brand ( manufacturer’s brand). Such as Sony The manufacturer may sell to the reseller who give the product a private brand also called as store or distributor brand Brand Sponsorship

73. Chapter 8 - slide 73 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Most manufacturers create their own brand names, other market licensed brands Finally, two companies can join forces and co-brand a product. Brand Sponsorship

74. Chapter 8 - slide 74 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Most manufactures take years and spend millions to create their own brand names. However some companies license names of well known celebrities, or characters from popular movies. For a fee any of these can provide an instant and proven brand name Licensing

75. Chapter 8 - slide 75 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall The practice of using the established brand names of two different companies on the same product. Co-Branding

76. Chapter 8 - slide 76 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Branding Strategy: Building Strong Brands Brand Development Strategies

77. Chapter 8 - slide 77 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall First, the brand positioning must be communicated to consumers. Ad campaign help to create name recognition, brand knowledge and maybe even some brand preference. However, brands aren’t maintained by advertising but by brand experience Company needs to periodically audit the brand strength and weakness Managing brands

78. Chapter 8 - slide 78 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Services Marketing Nature and Characteristics of a Service

79. Chapter 8 - slide 79 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Services Marketing Service-profit chain links service firm profits with employee and customer satisfaction Internal service quality Satisfied and productive service employees Greater service value Satisfied and loyal customers Healthy service profits and growth Marketing Strategies for Service Firms

80. Chapter 8 - slide 80 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Services Marketing Internal marketing means that the service firm must orient and motivate its customer contact employees and supporting service people to work as a team to provide customer satisfaction Internal marketing must precede external marketing Marketing Strategies for Service Firms

81. Chapter 8 - slide 81 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Services Marketing Interactive marketing means that service quality depends heavily on the quality of the buyer-seller interaction during the service encounter Service differentiation Service quality Service productivity Marketing Strategies for Service Firms

82. Chapter 8 - slide 82 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Services Marketing Managing service differentiation creates a competitive advantage from the offer, delivery, and image of the service Offer can include distinctive features Delivery can include more able and reliable customer contact people, environment, or process Image can include symbols and branding Marketing Strategies for Service Firms

83. Chapter 8 - slide 83 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Services Marketing Managing service quality provides a competitive advantage by delivering consistently higher quality than its competitors Service quality always varies depending on interactions between employees and customers Marketing Strategies for Service Firms

84. Chapter 8 - slide 84 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Services Marketing Managing service productivity refers to the cost side of marketing strategies for service firms Employee recruiting, hiring, and training strategies Service quantity and quality strategies Marketing Strategies for Service Firms