Marketing 7 Chapter 2 Additional

Chapter 2

Products, Services, Products, Services, and Brands and Brands

Building Customer ValueBuilding Customer Value

Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 7 - 2

1. Define product and the major classifications of products and services.

2. Describe the decisions companies make regarding their individual products and services, product lines, and product mixes.

3. Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require.

4. Discuss branding strategy—the decisions companies make in building and managing their brands.

Rest Stop:Rest Stop: Previewing the ConceptsPreviewing the Concepts


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 – It’s A Brand!First Stop

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.


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.


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.


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.


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.


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.


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.



• 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.



• 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.



• 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.


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).


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.


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.


• Product (and service) attributes

• Branding

• Packaging

• Labeling

• Product support services

Individual Product Decisions


• Product quality dimensions:Performance qualityConformance quality

• Product feature considerations:Value to consumerCost to company

• Product style and design:Shapes the buyer’s usage experience

Product and Service Attributes


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.


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.


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.


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.


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.


Product Line Decisions

• Product line: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).


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.


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.


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.


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.


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.


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).


• Brands are assets that must be carefully developed and managed via:Brand positioningBrand name selectionBrand sponsorshipBrand development

Major Brand Strategy Decisions


Brand Positioning

• Marketers can position brands clearly in customers’ minds at any of three levels:Product attributesProduct benefitsBeliefs and values

• Marketers should create a brand mission and vision of what the brand must be and do when positioning the brand.


Brand Name Selection

• Desirable qualities for a brand name:1. It should suggest the product’s benefits and

qualities.2. It should be easy to pronounce, recognize,

and remember.3. It should be distinctive.4. It should be extendable.5. It should translate easily into foreign

languages.6. It should be capable of registration and legal

protection.


Brand Sponsorship

• Brand sponsorship options include:National brands (e.g., Sony)

• Also called manufacturer brandsStore brands (e.g., Equate)

• Also called private brandsLicensed brands

• Name or character licensingCo-branding

• Creates broader appeal and brand equity


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.


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.


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.


1. Define product and the major classifications of products and services.

2. Describe the decisions companies make regarding their individual products and services, product lines, and product mixes.

3. Identify the four characteristics that affect the marketing services and the additional marketing considerations that services require.

4. Discuss branding strategy—the decisions companies make in building and managing their brands.

Rest Stop: Reviewing the Concepts

Marketing 7 Chapter 2 Additional

Documents

Transcript of Marketing 7 Chapter 2 Additional