7 - 1

Products, Services, and Brands

Building Customer ValueChapter 7

7 - 2

Rest Stop: Previewing the Concepts

• 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

7 - 3

Rest Stop: Previewing the Concepts

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

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

7 - 4

First Stop: Nike: Building a Deep-Down Brand-Customer Relationship!

• Sales dip indicates Nike’s loss of connection with customers

• Nike renews focus on customer relationships• Uses community-oriented, digitally led, social

networking tools• Result - Market share growth in the U.S.

7 - 5

7 - 6

What Is a Product?What Is a Product?

• Tangible objects, services, events, persons, organizations, places, ideas, or a mixture of these

• Services are a form of product • Activities, benefits, or satisfactions offered for

sale • Essentially intangible • Do not result in the ownership of anything

7 - 7

Products, Services and Experiences

• Market offerings often include both tangible goods and services• Pure tangible good• Pure service

• Many companies now marketing experiences

Olive Garden sells more than just Italian food—it serves up an idealized Italian family meal experience

7 - 8

Figure 7.1 - Three Levels of Products

7 - 9

Levels of Products and Services

• Core customer value• What the consumer is really buying

• Actual product• Brand name, service features, design, packaging, and

quality level

• Augmented product• Additional services and benefits such as delivery and

credit, instructions, installation, warranty, and service

7 - 10

Consumer Products

• A product bought by final consumers for personal consumption

• Classified by how consumers buy them

7 - 11

Convenience Products

• Consumer products that customers usually buy frequently, immediately, and with minimal comparison and buying effort• Low priced• Placed in many locations to make them readily

available• E.g. Laundry detergent, candy, magazines, and

fast food

7 - 12

Shopping products

• Consumer products that the customer, in the process of selecting and purchasing, usually compare on such attributes as suitability, quality, price, and style• Less frequently purchased• Distributed through fewer outlets• Greater sales support• E.g. Furniture, clothing, used cars

7 - 13

Specialty products

• Consumer products with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort • Different brands are not usually compared• E.g. Specific brands of cars, high-priced

photographic equipment, designer clothes, and the services of medical or legal specialists

7 - 14

Unsought Products

• Consumer products that the consumer either does not know about or knows about but does not normally consider buying• Require a lot of advertising, personal selling, and

other marketing efforts• New innovations are generally unsought till

advertised• Known but unsought products and services are

life insurance, preplanned funeral services

7 - 15

Industrial Products

• Products bought by individuals and organizations for further processing or for use in conducting a business

7 - 16

Organizations

• Organization marketing consists of activities undertaken to create, maintain, or change the attitudes and behavior of target consumers toward an organization

• Business firms sponsor public relations or corporate image marketing campaigns to market themselves and polish their images

7 - 17

Organization Marketing

• IBM’s Smarter Planet campaign markets IBM as a company that helps improve the world’s IQ

This ad tells how IBM technologies are helping to create safer food supply chains

7 - 18

Persons

• Person marketing consists of activities undertaken to create, maintain, or change attitudes or behavior toward particular people

• Organizations use well-known personalities to help sell their products or causes

7 - 19

Places and Ideas

• Place marketing • Involves activities undertaken to create,

maintain, or change attitudes or behavior toward particular places

• Idea marketing• Social marketing: The use of commercial

marketing concepts and tools in programs designed to influence individuals’ behavior to improve their well-being and that of society

7 - 20

Figure 7.2 - Individual Product Decisions

7 - 21

Product and Service Attributes

• Product quality: The characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs

• Product features• Differentiate the company’s product from competitors’

products

• Product style and design

7 - 22

Branding

• A name, term, sign, symbol, or 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

• Customers attach meanings to brands and develop brand relationships

7 - 23

Packaging and Labeling

• Packaging: Designing and producing the container or wrapper for a product• Protects the product• Attracts customers and closes the sale

• Labels• Identify the product• Describe the product• Promote the brand

7 - 24

Product Support Services

• An important part of the customer’s overall brand experience

• Firms must survey customers to assess the value of current services and obtain ideas for new ones

Nordstrom thrives on stories about its after-sale service. It wants to “Take care of customers, no matter what it takes,” before, during, and after the sale

7 - 25

7 - 26

Product Line Decisions

7 - 27

7 - 28

Product Mix Decisions

7 - 29

The Product Mix

Campbell’s product mix consists of three major product lines. Each product line consists of several sublines. Each line and subline has many individual items

7 - 30

Figure 7.3 - Four Service Characteristics

7 - 31

The Nature and Characteristics of a Service

• The service provider’s task is to make the service tangible in one or more ways and send the right signals about quality

7 - 32

The Service-Profit Chain

• The chain that links service firm profits with employee and customer satisfaction

• The five links• Internal service quality• Satisfied and productive service employees• Greater service value• Satisfied and loyal customers• Healthy service profits and growth

7 - 33

Figure 7.4 - Three Types of Service Marketing

7 - 34

Services Marketing

7 - 35

Marketing at Work

• Web retailer Zappos prioritizes excellent customer service

• Zappos knows that happy customers begin with happy, dedicated, and energetic employees

Enthusiastic employees make outstanding brand ambassadors for Zappos

7 - 36

Managing Service Differentiation

• Developing a differentiated offer, delivery, and image• The offer can include features that set one

company’s offer apart from competitors’ offers• Service delivery can be differentiated with better

customer-contact people or a superior delivery process

• Images can be differentiated through symbols and branding

7 - 37

Managing Service Quality and Productivity

• Managing service quality• Identify what customers expect• Set high quality standards• Emphasize service recovery in case of a mistake

• Managing service productivity• Train current employees better or hire new ones• Increase quantity by reducing quality• Use technology

7 - 38

Building Strong Brands

• Brand equity: The differential effect that knowing the brand name has on customer response to the product or its marketing Consumers sometimes bond very

closely with specific brands. To this customer, this isn’t just a cup of coffee, it’s a deeply satisfyingDunkin’ Donuts brand experience

7 - 39

Figure 7.5 – Major Brand Strategy Decisions

7 - 40

Brand PositioningBrand Positioning

• Marketers can position brands clearly in customers’ minds at any of three levels• Product attributes• Product benefits• Beliefs and values

Successful brands engage customers on an emotional level, as does this ad, which suggests the connection that hardcore users have with the WD-40 brand

7 - 41

Brand Name Selection• A brand name should:

• Suggest the product’s benefits and qualities• Be easy to pronounce, recognize, and remember• Be distinctive• Be extendable• Translate easily into foreign languages• Be capable of registration and legal protection

7 - 42

Brand Sponsorship

7 - 43

Brand Sponsorship

• Sellers of children’s products attach an almost endless list of character names to clothing, toys, school supplies, linens, dolls, lunch boxes, cereals, and other items

SpongeBob alone has generated more than $8 billion in sales and licensing fees over the past decade

7 - 44

Marketing At Work

• Consumer frugality results in increased sales of store brands

• Store brands now offer much greater selection, and are rapidly achieving name-brand quality

Walmart’s store brands account for a whopping 40 percent of its sales, and its Great Value brand is the nation’s largest single food brand

7 - 45

Brand Development

7 - 46

Figure 7.6 - Brand Development Strategies

7 - 47

Managing Brands

• Communicate the brand’s positioning

• Manage all brand touch points

• Train employees to live the brand

• Audit the brands’ strengths and weaknesses

Brands are not maintained by advertising but by customers’ brand experiences

7 - 48

Rest Stop: Reviewing the Concepts

• 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

7 - 49

Rest Stop: Reviewing the Concepts

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

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

7 - 50

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 © 2013 Pearson Education, Inc. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice HallPublishing as Prentice Hall