Chapter 7 - Products, Services - Brands-Building Customer Value

Chapter Outline
A. What is a Product?
B. Product and Service Decisions
C. Services Marketing
D. Branding Strategy: Building Strong Brands
Copyright 2017 Pearson Education, Ltd

(Armstrong, Kotler & Opresnik)
A. What is a Product?
A product is anything that can be offered to a

market for attention, acquisition, use or
consumption that might satisfy a want or need.
Products also include services, events, persons,
places, organizations, ideas or a
mixture of these.

Services
Services are a form of product that consist of

activities, benefits or satisfactions offered for
sale that are essentially intangible and do not
result in the ownership of anything.

Products, Services and Experiences
A company’s market offering often includes both

tangible goods and services.
At one extreme, the market offer may consist of
a pure tangible good; no services accompany
the product.
At the other extreme are pure services, for
which the market offer consists primarily of a
service.

Products, Services and Experiences
To differentiate their offers, beyond simply

making products and delivering services, they
are creating and managing customer
experiences with their brands or company.

Three Levels of Product

Levels of Product and Services
3 levels of product and services:
• Core customer value which addresses the
question: “What is the buyer really
buying?” Lifestyle? Problem solving? Experience?
• Actual product
• Augmented product around the core
benefit and actual product by offering
additional consumer services and benefits.
Copyright 2017 Pearson Education, Ltd (Armstrong, Kotler & Opresnik)

Levels of Product and Services
When developing products, marketers first must

identify the core customer value that consumers
seek from the product.
They then design the actual product and find
ways to augment it to create this customer value
and the most satisfying customer experience.

Product and Service Classifications
Consumer Products
Consumer products are products and services
bought by final consumers for personal
consumption. They include:
Convenience products – are consumer products
and services that customers usually buy
frequently, immediately and with minimal
comparison and buying effort.

Shopping products – are less frequently

purchased consumer products and services that
customers compare carefully on suitability,
quality, price and style.

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.

Unsought products – are consumer products

that the consumer either does not know about
or knows about but does not normally consider
buying.

Discussion Question
 Into which category do emergency

medical service fall into?
• Convenience
• Shopping
• Specialty
• Unsought

Types of Consumer Products

Industrial Products
Industrial products
materials
are those products and parts
purchased for further
processing or for use
in conducting a capital
business. items
supplies
and services
Industrial Products
The distinction between a consumer product and

an industrial is based on the purpose for which
the product is purchased.
3 groups of industrial products:

Materials and parts – include raw materials as
well as manufactured materials and parts.

Industrial Products
Capital items – are industrial products that aid in

the buyer’s production or operations, including
installations and accessory equipment.
Supplies and services – Supplies include

operating supplies and repair and maintenance
items.

B. Product and Service Decisions
Individual Product and Service Decisions

• Product and Service Attributes
- Product quality
- Product features
- Product style and design
• Branding
• Packaging
• Labeling
• Product support services
Product Line Decisions
Product Mix Decisions
Individual Product Decisions

Product and Service Attributes
Product Quality refers to the characteristics of a

product or service that bear on its ability to
satisfy stated or implied customer needs.
• Product quality has two dimensions: level and
consistency.

Product Style and Design

• Style describes the appearance of a product.
• Design contributes to a product’s usefulness as
well as to its looks.

Product Features
• Competitive tool for differentiating a product
from competitors’ products
• Assessed based on the value to the customer
versus its cost to the company

Branding
A brand is a name, term,
sign, symbol, or design,
or a combination of
these, that
identifies the maker or
seller of a product or
service.

Branding
Branding helps buyers in the following ways:
- Brand names help consumers identify
products that might benefit them.
- Brands also say something about product
quality and consistency.

Branding
Branding gives the seller several advantages:

- The seller’s name and trademark provide legal
protection for unique product features that
otherwise might be copied by competitors.
- Branding helps the seller to segment markets.

Packaging
Packaging involves designing

and producing the container
or wrapper for a product.
Companies are realizing the

power of good packaging to
create immediate consumer
recognition of a brand.

Labeling
• Labels range from simple tags attached to

products to complex graphics that are part
of the packaging.
• Labels perform several functions:
- The label identifies the product or brand.
- The label describes several things
about the product.

Labeling
- The label might help to promote the

brand, support its positioning and
connect with customers.
• Labeling has been affected in recent times
by unit pricing (stating the price per unit of
a standard measure), open dating (stating
the expected shelf life of the product) and
nutritional labeling (stating the nutritional
values of the product).
Product Support Services
Customer service is an important element of

product strategy. Keeping customers happy
after the sale is the key to building lasting
relationships.

Product Line 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 Mix Decisions
A product mix (or

product portfolio) Whole
Milk
consists of all the
Skim
product lines and Milk
items that a Choc

Milk
particular seller
offers for sale.

Discussion Question
 Does this
advertisement
illustrate Burberry’s
product mix or a
product line?
 What is the
difference?
Copyright 2017 Pearson Education, Ltd (Armstrong, Kotler &

Opresnik)
C. Services Marketing
The Nature and Characteristics of a Service

Marketing Strategies for Service
Firms
Internal service quality Service-profit
chain is the chain
Satisfied and productive service employees that links service
firm profits with
Greater service value
employee and
customer
Satisfied and loyal customers
satisfaction.
Healthy service profits and growth

3 types of Services Marketing

3 types of Services Marketing
Internal marketing – means that the service

must orient and motivate its customer-contact
employees and supporting service people to
work as a team to provide customer satisfaction.
Interactive marketing – means that service

quality depends heavily on the quality of the
buyer-seller interaction during the service
encounter.
D. Brand Strategy: Building Strong
Brands

Building Strong Brands:
Brand Positioning
Attributes e.g. fluid absorption, fitting and
disposable diapers. (characteristic)
Benefits e.g. FedEx (guaranteed on-time

delivery), Nike (performance), Lexus (quality)
and Walmart (low prices).
Beliefs and Values engaging customers on a

deep, emotional level e.g. Pampers position as
“where we grow together”.
Brand Name Selection
1. The name should suggest something about
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. Copyright 2017 Pearson Education, Ltd
Brand Sponsorship
National Brands versus Store Brands
National brands – Manufacturers’ brands.
Store brands – Retailers and wholesalers own
brands or private brands.
Licensing – Companies license names or symbols

previously created by other manufacturers,
names of well-known celebrities or characters of
popular motives and books for a fee
Brand Sponsorship
Co-branding – occurs when two established brand
names of different companies are used on the same
product.

Brand Development

Brand Development
Line Extensions – occur when a company

extends existing brand names to new forms,
colors, sizes, ingredients or flavors of an existing
product category

Brand Development
Brand Extensions – extends a current brand

name to new or modified products in a new
category. E.g. Kellogg’s extended its Special K
cereal brand into a full line of cereals plus lines
of crackers, fruit crisps, snack and nutrition bars,
breakfast shakes, protein waters and other
health and nutrition products.

Brand Development
Multibrands – Companies market many different

brands in a given product category.
E.g. PepsiCo: Soft drinks – Pepsi, Sierra Mist,
Slice, Mountain Dew and Mug root beer Sports
and energy drinks

Brand Development
New Brands – A company might believe that the

power of its existing brand name is waning. It
may create a new brand name when it enters a
new product category for which none of its
current brand names are appropriate.

Looking Ahead to Chapter 8
Developing New
Products
and Managing the Product Life-Cycle

Chapter 7 - Products, Services - Brands-Building Customer Value

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Chapter Outline

Copyright 2017 Pearson Education, Ltd

A product is anything that can be offered to a

Copyright 2017 Pearson Education, Ltd

Services are a form of product that consist of

Copyright 2017 Pearson Education, Ltd

A company’s market offering often includes both

Copyright 2017 Pearson Education, Ltd

To differentiate their offers, beyond simply

Copyright 2017 Pearson Education, Ltd

Copyright 2017 Pearson Education, Ltd

Copyright 2017 Pearson Education, Ltd (Armstrong, Kotler & Opresnik)

When developing products, marketers first must

Copyright 2017 Pearson Education, Ltd

Copyright 2017 Pearson Education, Ltd

Shopping products – are less frequently

Copyright 2017 Pearson Education, Ltd (Armstrong, Kotler & Opresnik)

Specialty products – are consumer products

Copyright 2017 Pearson Education, Ltd

Unsought products – are consumer products

Copyright 2017 Pearson Education, Ltd

 Into which category do emergency

Copyright 2017 Pearson Education, Ltd

Copyright 2017 Pearson Education, Ltd (Armstrong, Kotler & Opresnik)

The distinction between a consumer product and

3 groups of industrial products:

Copyright 2017 Pearson Education, Ltd

Capital items – are industrial products that aid in

Supplies and services – Supplies include

Copyright 2017 Pearson Education, Ltd

Individual Product and Service Decisions

Copyright 2017 Pearson Education, Ltd

Product Quality refers to the characteristics of a

Copyright 2017 Pearson Education, Ltd

Product Style and Design

Copyright 2017 Pearson Education, Ltd

Copyright 2017 Pearson Education, Ltd

Copyright 2017 Pearson Education, Ltd

Copyright 2017 Pearson Education, Ltd

Branding gives the seller several advantages:

Copyright 2017 Pearson Education, Ltd

Packaging involves designing

Companies are realizing the

Copyright 2017 Pearson Education, Ltd

• Labels range from simple tags attached to

Copyright 2017 Pearson Education, Ltd

- The label might help to promote the

Customer service is an important element of

Copyright 2017 Pearson Education, Ltd

Copyright 2017 Pearson Education, Ltd

A product mix (or

items that a Choc

Copyright 2017 Pearson Education, Ltd

Copyright 2017 Pearson Education, Ltd (Armstrong, Kotler &

The Nature and Characteristics of a Service

Copyright 2017 Pearson Education, Ltd

Healthy service profits and growth

Copyright 2017 Pearson Education, Ltd

Internal marketing – means that the service

Interactive marketing – means that service

Copyright 2017 Pearson Education, Ltd

Benefits e.g. FedEx (guaranteed on-time

Beliefs and Values engaging customers on a