Product, Services, and Branding Strategies Chapter 9.

Product, Services, Product, Services, and Branding and Branding

StrategiesStrategies

Chapter 9Chapter 9

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Objectives

Be able to define Be able to define productproduct and know and know the major classifications of products the major classifications of products and services.and services.Understand the decisions companies Understand the decisions companies make regarding their individual make regarding their individual products and services, product lines, products and services, product lines, and product mixes.and product mixes.Understand how firms build and Understand how firms build and manage their brands.manage their brands.

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Objectives

Know the four characteristics of Know the four characteristics of services and the additional services and the additional marketing considerations that marketing considerations that services require.services require.

Review additional product issues Review additional product issues related to social responsibility and related to social responsibility and international marketing.international marketing.

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Cosmetics Cosmetics companies sell companies sell billions of dollars billions of dollars worth of worth of productsproductsConsumers buy Consumers buy more than just a more than just a particular smellparticular smell

The “promise”, The “promise”, image, company, image, company, name, package, name, package, and ingredients are and ingredients are all part of the all part of the product, as are the product, as are the stores where it is stores where it is sold.sold.

cCosmetics IndustryCosmetics Industry

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Definition

ProductProduct Anything offered Anything offered

to a market for to a market for attention, attention, acquisition, acquisition, consumption or consumption or use that might use that might satisfy a need satisfy a need or want.or want.

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Definition

ServiceService Any Any activityactivity or or

benefitbenefit that one that one party can offer to party can offer to another that is another that is essentially essentially intangible and intangible and does not result in does not result in the ownership of the ownership of anything.anything.

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What is a Product?

Products, Products, Services, & Services, & ExperiencesExperiences Market Market

offerings, offerings, pure pure tangible tangible goods, pure goods, pure services, services, experiencesexperiences Experiences include zoos and aquariums Experiences include zoos and aquariums

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Figure 9-1:

Three Levels of Product

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Describe the Describe the core core benefit, actual benefit, actual product, product, andand augmented product augmented product aspects of an aspects of an automobile purchase.automobile purchase.

Discussion Question

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What is a Product?

Product and service Product and service classifications fall into classifications fall into two broad classes based two broad classes based on the types of buyers on the types of buyers who use them:who use them: Consumer productsConsumer products Industrial productsIndustrial products

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What is a Product?

ConvenienceConvenience

ShoppingShopping

SpecialtySpecialty

UnsoughtUnsought

Frequent purchases Frequent purchases bought with minimal bought with minimal buying effort and little buying effort and little comparison shoppingcomparison shoppingLow priceLow priceWidespread Widespread distributiondistributionMass promotion Mass promotion by producerby producer

Types of Types of Consumer ProductsConsumer Products

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What is a Product?


ShoppingShopping

SpecialtySpecialty

UnsoughtUnsought

Less frequent purchases Less frequent purchases requiring more shopping requiring more shopping effort and price, quality, effort and price, quality, and style comparisons. and style comparisons. Higher priced than Higher priced than convenience goodsconvenience goodsSelective distribution in Selective distribution in fewer outletsfewer outletsAdvertising and personal Advertising and personal selling by producer and selling by producer and resellerreseller


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What is a Product?


ShoppingShopping

SpecialtySpecialty

UnsoughtUnsought

Strong brand preference Strong brand preference and loyalty, requires and loyalty, requires special purchase effort, special purchase effort, little brand comparisons, little brand comparisons, and low price sensitivityand low price sensitivity

High priceHigh price

Exclusive distributionExclusive distribution

Carefully targeted Carefully targeted promotion by producers promotion by producers and resellersand resellers


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How can tropical fish How can tropical fish be a convenience be a convenience good, specialty good, good, specialty good, or shopping good to or shopping good to different consumers?different consumers?

Provide examples.Provide examples.

Discussion Question

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What is a Product?


ShoppingShopping

SpecialtySpecialty

UnsoughtUnsought

Little product awareness Little product awareness and knowledge (or if and knowledge (or if aware, sometimes aware, sometimes negative interest)negative interest)

Pricing variesPricing varies

Distribution variesDistribution varies

Aggressive advertising Aggressive advertising and personal selling by and personal selling by producers and resellersproducers and resellers


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The Goal:The Goal: Sell plots to baby Sell plots to baby boomers prior to an boomers prior to an actual death in the family actual death in the family – “preneed policies”.– “preneed policies”.

Special Challenges:Special Challenges: Emotional – marketing Emotional – marketing done at the wrong time done at the wrong time could boomerang.could boomerang.

Pay Now . . . Die Later Selling Cemetery Plots

Opportunities:Opportunities:Many states treat Many states treat preneed policies as preneed policies as tax exempt, and now tax exempt, and now allow cemeteries to allow cemeteries to have funeral homes. have funeral homes. On-site funeral On-site funeral homes provide homes provide greater convenience.greater convenience.

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Unusual Promotions:Unusual Promotions: Buy one plot get a second Buy one plot get a second

for a pennyfor a penny ““Heaven Can Wait” Heaven Can Wait”

cemetery runcemetery run Boy Scout campouts at Boy Scout campouts at

cemeteriescemeteries

Other Advertising:Other Advertising: Freestanding insertsFreestanding inserts ““Penny pincher” bags Penny pincher” bags

Pay Now . . . Die Later Selling Cemetery Plots

Lakeview Cemetery:Lakeview Cemetery: Brochure direct mail Brochure direct mail

with map and open with map and open plots designatedplots designated

Stresses need to Stresses need to preplan as a method of preplan as a method of sparing loved onessparing loved ones

Other Sales Methods:Other Sales Methods: Grief informationGrief information Via clergy membersVia clergy members

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What is a Product?

Product and Service ClassificationsProduct and Service Classifications Industrial products are those Industrial products are those

purchased for use in conducting a purchased for use in conducting a business or those purchased as business or those purchased as ingredients or components to be used ingredients or components to be used in manufacturing.in manufacturing. Materials and partsMaterials and parts Capital itemsCapital items Supplies and servicesSupplies and services

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Industrial products also include business services, such as landscaping, technology, food services, or custodial.

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What is a Product?

Product and Service ClassificationsProduct and Service Classifications ““Products” also include organizations, Products” also include organizations,

persons, places, and ideaspersons, places, and ideas Organizational marketing makes use of Organizational marketing makes use of

corporate image advertising corporate image advertising Person marketing applies to political Person marketing applies to political

candidates, entertainment sports figures, and candidates, entertainment sports figures, and professionals professionals

Place marketing relates to tourismPlace marketing relates to tourism Social marketing campaigns promote ideasSocial marketing campaigns promote ideas

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Social marketing promotes ideas or causes for the purpose of improving an individual’s well-being or the well-being of society.

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Product & Service Decisions

Individual Individual ProductProduct

Product Line Product Line

Product MixProduct Mix

Product attributesProduct attributes Quality, features, style Quality, features, style

and designand design

BrandingBranding

PackagingPackaging

LabelingLabeling

Product support Product support servicesservices

Key DecisionsKey Decisions

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Figure 9-2:

Individual Product and Service Decisions

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Innovative product Innovative product design can help design can help revitalize a revitalize a company, such as company, such as with the Apple iMac.with the Apple iMac.

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Brand:Brand: A name, term, sign, A name, term, sign,

symbol, design, or a symbol, design, or a combination of combination of these, that identifies these, that identifies the maker or sellers the maker or sellers of a product or of a product or service.service.

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Packaging involves designing a Packaging involves designing a container or wrapper for a productcontainer or wrapper for a product

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Many aspects of a food product’s Many aspects of a food product’s label are dictated by lawlabel are dictated by law

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Support services Support services via the web via the web include FAQ files, include FAQ files, email queries, live email queries, live chat with chat with customer service customer service personnel, and personnel, and software updatessoftware updates

1-800 Flowers

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Product LineProduct Line


Product line lengthProduct line length Line stretching:Line stretching:

adding products that adding products that are higher or lower are higher or lower priced than the priced than the existing lineexisting line

Line filling:Line filling: adding adding more items within the more items within the present price rangepresent price range


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Would you classify Would you classify Tide’s product line Tide’s product line

as an example of as an example of line stretchingline stretching or or line fillingline filling? ?

Why?Why?

Discussion Question

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Product Line Product Line


Product line width:Product line width: Number of different Number of different

product lines carried by product lines carried by companycompany

Product line depth:Product line depth: Number of different Number of different

versions of each product versions of each product in the linein the line

Product line Product line consistencyconsistency


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Branding Strategy

Brands are powerful Brands are powerful assets that must be assets that must be carefully developed carefully developed and managed.and managed. Both Tiger Woods Both Tiger Woods

and Nike can be and Nike can be considered brandsconsidered brands

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Branding Strategy

Brands with strong Brands with strong equity have many equity have many competitive competitive advantages:advantages: High consumer awareness High consumer awareness Strong brand loyaltyStrong brand loyalty Helps when introducing Helps when introducing

new productsnew products Less susceptible to price Less susceptible to price

competitioncompetition

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Figure 9-3:

Major Brand Strategy Decisions

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Brand Strategy

Brand PositioningBrand Positioning

Brand Name Brand Name Selection Selection

Brand SponsorshipBrand Sponsorship

Brand DevelopmentBrand Development

Three levels of Three levels of positioning:positioning: Product attributesProduct attributes

Least effectiveLeast effective BenefitsBenefits Beliefs and valuesBeliefs and values

Taps into Taps into emotions emotions


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Brand Strategy


Brand Name Brand Name Selection Selection



Good Brand Names:Good Brand Names: Suggest something about Suggest something about

the product or its benefitsthe product or its benefits Are easy to say, Are easy to say,

recognize and rememberrecognize and remember Are distinctiveAre distinctive Are extendableAre extendable Translate well into Translate well into

other languagesother languages Can be registered and Can be registered and

legally protectedlegally protected


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Evaluate the brand name Evaluate the brand name for the product at left for the product at left according to the criteria according to the criteria previously listed. previously listed.

Would you have chosen Would you have chosen this name for this product?this name for this product?

Discussion Question

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Brand Strategy


Brand Name Brand Name SelectionSelection



Manufacturer brandsManufacturer brands


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Brand Strategy





Private (store) brandsPrivate (store) brands Costly to establish and Costly to establish and

promotepromote Higher profit marginsHigher profit margins


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Brand Strategy





Licensed brandsLicensed brands Name and character Name and character

licensing has grownlicensing has grown


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Brand Strategy





Co-brandingCo-branding AdvantagesAdvantages

Broader consumer appealBroader consumer appeal Greater brand equityGreater brand equity Efficient means of Efficient means of

expansion into new product expansion into new product categoriescategories

LimitationsLimitations Complex legal contractsComplex legal contracts Requires careful Requires careful

coordination of IMCcoordination of IMC Requires that partners trust Requires that partners trust

one anotherone another


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Brand Strategy





Line extensionsLine extensions Minor changes to existing Minor changes to existing

productsproducts

Brand extensionsBrand extensions Successful brand names help Successful brand names help

introduce new productsintroduce new products

MultibrandsMultibrands Multiple product entries in a Multiple product entries in a

product categoryproduct category

New brandsNew brands New product categoryNew product category


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Figure 9-4:

Brand DevelopmentStrategies

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Brand Strategy

Line Extensions May Line Extensions May Feature Different ThingsFeature Different Things

FlavorsFlavors

ColorsColors

FormsForms

IngredientsIngredients

Package SizesPackage Sizes

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Services Marketing

ServicesServices Account for 74% of Account for 74% of

U.S. gross domestic U.S. gross domestic product.product.

Service industries Service industries include business include business organizations, organizations, government, and government, and private not-for-profit private not-for-profit organizations.organizations.

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Figure 9-5:

Four Services Characteristics

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Site59 Video Clip

The perishability of services such as airline seats creates special challenges for marketers

BusinessNow

Click the picture above to play video

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Figure 9-6:

Three Types of Marketing in Services Industries

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Services Marketing

Service Firm Marketing StrategiesService Firm Marketing Strategies The Service-Profit ChainThe Service-Profit Chain

Internal Marketing:Internal Marketing: service firms service firms train and effectively motivate their train and effectively motivate their employees to work as a team to employees to work as a team to satisfy the customer satisfy the customer

Interactive Marketing:Interactive Marketing: recognizes that recognizes that service quality depends heavily on the service quality depends heavily on the

quality of buyer-seller interaction quality of buyer-seller interaction

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Services Marketing

Service Firm Marketing StrategiesService Firm Marketing Strategies Managing Service DifferentiationManaging Service Differentiation

British Airways British Airways differentiates its differentiates its service by offering service by offering first-class world first-class world travelers private travelers private “demi-cabins”“demi-cabins”

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Services Marketing

Service Firm Marketing StrategiesService Firm Marketing Strategies Managing Service QualityManaging Service Quality

One method of differentiationOne method of differentiation Customer retention is often the best measureCustomer retention is often the best measure Top service firms are “customer obsessed”Top service firms are “customer obsessed” Service recovery and employment Service recovery and employment

empowerment are key empowerment are key Managing Service ProductivityManaging Service Productivity

Many methods of enhancing productivity Many methods of enhancing productivity Key is to avoid reducing qualityKey is to avoid reducing quality

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Product Decisions and Social Product Decisions and Social ResponsibilityResponsibility Acquisitions and mergersAcquisitions and mergers Legal complianceLegal compliance Product liability issuesProduct liability issues WarrantiesWarranties

Additional Product Considerations

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International Product and Services International Product and Services MarketingMarketing Special challenges:Special challenges:

Which products should be marketed Which products should be marketed internationally? internationally?

Should the products be standardized Should the products be standardized or adapted for world markets? or adapted for world markets?

How should packaging be adapted?How should packaging be adapted? How can other barriers be overcome?How can other barriers be overcome?

Additional Product Considerations

Product, Services, and Branding Strategies Chapter 9.

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