Armstrong Mai10e Stppt07

Products, Services, and Brands
Building Customer Value
Chapter 7
Rest Stop: Previewing the Concepts
1. 2.
3. 4.
Define product and the major classifications of products and services. Describe the decisions companies make regarding their individual products and services, product lines, and product mixes. Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. Discuss branding strategythe decisions companies make in building and managing their brands.
Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 7-2
First Stop
ESPN Its A Brand!
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 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.
7-3
Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall
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.
7-4
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.
7-5
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:

Actual product:
Includes Additional
What
the consumer is really buying.
Augmented product:
the brand name, features, design, packaging, and quality level. services and benefits such as delivery and credit, instructions, installation, warranty, and service.
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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.
Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall 7 - 10
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
Capital items:
Products Operating
materials, manufactured materials, and parts.

that aid in buyers production or operations. supplies, maintenance, and repair items.
7 - 14
Supplies and services:

Other Market Offerings
Organizations:
Persons:
Profit
and nonprofit (schools and churches).

sports figures, doctors, etc.
Places:
Politicians,
Create,
Ideas (social marketing):

Public
maintain, or change attitudes or behavior toward particular places. health campaigns, environmental campaigns, family planning, or human rights.
7 - 15
Individual Product Decisions
Product (and service) attributes Branding Packaging Labeling Product support services
7 - 16
Product and Service Attributes
Product quality dimensions:

Performance
Product feature considerations:

Value
quality Conformance quality to consumer Cost to company

Shapes
Product style and design:

the buyers usage experience
7 - 17 Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall
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.
7 - 18
Branding
Advantages to buyers:
Helps
Advantages to sellers:
Basis
identify products. Cue to product quality and consistency. for products quality story. Provides legal protection. Helps to segment markets.
Packaging
Packaging:
Involves
Ideally, good packages should:

Help
designing and producing the container or wrapper for a product.
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
Labeling is regulated by the government.

product or brand. Describes several things about the product. Promotes the product through attractive graphics.
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
Product line length is a major decision.

Filling
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.
(adding more). Stretching (downward, upward, or both ways).
7 - 23
Product Mix Decisions
Product mix:
The
Product mix dimensions include:

Width:
set of all of the product lines and items that a particular seller offers for sale.
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.
Intangibility:
Services
Nature and Characteristics of a Service
Variability:
Quality
Inseparability:
Services
cannot be seen, tasted, felt, heard, or smelled before purchase. cannot be separated from their providers.
Perishability:
Services
of services depends on who provides them and when, where, and how they are delivered. cannot be stored for later sale or use.
7 - 25
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:
Internal marketing:
Orienting
Traditional
marketing via the 4 Ps.
Interactive marketing:
Training
and motivating customer-contact employees and the supporting service people to work as a team to provide customer satisfaction. service employees in the fine art of interacting with customers to satisfy their needs.
7 - 27
Major Service Marketing Tasks
Managing service differentiation:

Develop
a differentiated offer, delivery, and
Managing service quality:

Set
image.
Managing service productivity:

Train
high service quality standards, have good service recovery, empower front-line employees.
current employees or hire new ones, increase quantity and sacrifice quality, harness technology.
7 - 28
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).
Major Brand Strategy Decisions
Brands are assets that must be

carefully developed and managed via:
Brand
positioning Brand name selection Brand sponsorship Brand development
7 - 30
Brand Positioning
Marketers can position brands clearly in

customers minds at any of three levels:
Product
Marketers should create a brand mission

and vision of what the brand must be and do when positioning the brand.
attributes Product benefits Beliefs and values
Brand Name Selection
Desirable qualities for a brand name:

1. It should suggest the products benefits and
2. 3. 4. 5. 6.
qualities. It should be easy to pronounce, recognize, and remember. It should be distinctive. It should be extendable. It should translate easily into foreign languages. It should be capable of registration and legal protection.
7 - 32
Brand Sponsorship
Brand sponsorship options include:

National Store
brands (e.g., Sony)
Also called manufacturer brands
brands (e.g., Equate) brands
Also called private brands

Licensed
Name or character licensing

Co-branding
Creates broader appeal and brand equity

Brand Development
Line extension:
Extending
Brand extension:
Extending
an existing brand name to new forms, colors, sizes, ingredients, or flavors within a product category. an existing brand name to new product categories.
7 - 34
Brand Development
Multibranding:
Offers
New brands:
Developed
a way to establish different features and appeal to different customer segments, lock up more reseller shelf space, and capture a larger market share.
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.
7 - 35
Managing Brands
Continuously communicate the brands positioning to consumers. Manage all brand touch points to maximize the brand experience. Live the brandthe firm must train employees to be customer centered. Implement internal branding campaign among employees. Audit brands strengths and weaknesses
on a regular basis.
Rest Stop: Reviewing the Concepts
1. 2.
3.
4.
Define product and the major classifications of products and services. Describe the decisions companies make regarding their individual products and services, product lines, and product mixes. Identify the four characteristics that affect the marketing services and the additional marketing considerations that services require. Discuss branding strategythe decisions companies make in building and managing their brands.
7 - 37
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.
Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall
7 - 38

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Products, Services, and Brands

Building Customer Value

Rest Stop: Previewing the Concepts

ESPN Media Presence

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

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

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

Products, Services, and Experiences

both tangible goods and services, as well as combinations of both.

Creating and managing customer

Levels of Product and Services

Core customer value:

the consumer is really buying.

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

Product and Service Classification

Types of Consumer Goods

Types of Consumer Goods

Types of Consumer Goods

Types of Consumer Goods

Product and Service Classification

Types of Industrial Goods

Materials and parts:

materials, manufactured materials, and parts.

Supplies and services:

Other Market Offerings

and nonprofit (schools and churches).

Ideas (social marketing):

Individual Product Decisions

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

Product and Service Attributes

Product quality dimensions:

Product feature considerations:

quality Conformance quality to consumer Cost to company

Product style and design:

Branding involves building and

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

Ideally, good packages should:

designing and producing the container or wrapper for a product.

Labeling refers to printed information

Labeling is regulated by the government.

Product Support Services

Monitoring of support services is key:

Product Line Decisions

Product line length is a major decision.

(adding more). Stretching (downward, upward, or both ways).

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

Product Mix Decisions

Product mix dimensions include:

Nature and Characteristics of a Service

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

The Service-Profit Chain

The service profit chain links employee

marketing via the 4 Ps.

Major Service Marketing Tasks

Managing service differentiation:

a differentiated offer, delivery, and

Managing service quality:

Managing service productivity:

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

Building Strong Brands

Major Brand Strategy Decisions

Brands are assets that must be

positioning Brand name selection Brand sponsorship Brand development