Chapter 7 first hall eln

Chapter 9Chapter 9

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

ObjectivesObjectives• Objective 1:Objective 1: Define product and the major Define product and the major

classifications of products and servicesclassifications of products and services

• Objective 2:Objective 2: Describe the decisions companies Describe the decisions companies make regarding their individual products and make regarding their individual products and services, product lines, and product mixesservices, product lines, and product mixes

• Objective 3:Objective 3: Discuss branding strategy—the Discuss branding strategy—the decisions companies make in building and managing decisions companies make in building and managing their brandstheir brands

• Objective 4:Objective 4: Identify the four characteristics that Identify the four characteristics that affect the marketing of a service and the additional affect the marketing of a service and the additional marketing considerations that services requiremarketing considerations that services require

Cosmetics IndustryCosmetics Industry

• Cosmetics Cosmetics companies sell companies sell billions of billions of dollars worth of dollars worth of productsproducts

• Consumers buy Consumers buy more than just more than just a particular a particular smellsmell

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

The Cosmetics IndustryThe Cosmetics Industry

Case StudyCase Study

What is a Product?What is a Product?• ProductProduct • Anything that can be offered to a market Anything that can be offered to a market

for attention, acquisition, use, or for attention, acquisition, use, or consumption and that might satisfy a consumption and that might satisfy a want or needwant or need– Products include physical objects, Products include physical objects,

services, events, persons, places, services, events, persons, places, organizations, ideas, or mixes of these organizations, ideas, or mixes of these entitiesentities

• ServicesServices • A form of product that consists of A form of product that consists of

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

Products, Services and Products, Services and ExperiencesExperiences

• Market OfferingMarket Offering • Brings value to target customers and satisfies their needs—the Brings value to target customers and satisfies their needs—the

basis upon which the company builds profitable relationships with basis upon which the company builds profitable relationships with consumersconsumers

• Pure Tangible GoodPure Tangible Good • One extreme of the market offering spectrum—no services One extreme of the market offering spectrum—no services

accompany the productaccompany the product

• Pure ServicesPure Services • The other extreme of the market offering spectrum—no tangible The other extreme of the market offering spectrum—no tangible

good accompanies the servicegood accompanies the service

• ExperiencesExperiences • They are memorable and personal, taking place in the minds of They are memorable and personal, taking place in the minds of

individual consumersindividual consumers– consumers purchase experiences for what those offers will do for themconsumers purchase experiences for what those offers will do for them

Figure 9-1:

Three Levels of Product

Levels of Product and Levels of Product and ServicesServices

• Core BenefitCore Benefit • The basic level of a product—addresses the The basic level of a product—addresses the

question “What is the buyer really buying?”question “What is the buyer really buying?”

• Actual ProductActual Product• The product and service features, design, a quality The product and service features, design, a quality

level, a brand name, and packages—the physical level, a brand name, and packages—the physical product or service that the customer is buyingproduct or service that the customer is buying

• Augmented ProductAugmented Product • Additional consumer services and benefits built Additional consumer services and benefits built

around the core productaround the core product

• Marketers must: Marketers must: – Identify the core consumer needs, Identify the core consumer needs, – Design the actual product to satisfy those needs, and Design the actual product to satisfy those needs, and – Find ways to augment it in order to create the Find ways to augment it in order to create the

bundle of benefits that will provide the most bundle of benefits that will provide the most satisfying customer experiencesatisfying customer experience

Discussion QuestionDiscussion Question

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

Consumer ProductsConsumer Products• Consumer Products:Consumer Products: products and services bought by products and services bought by

final consumers for personal consumptionfinal consumers for personal consumption• Types of Consumer ProductsTypes of Consumer Products::• Convenience Products:Convenience Products: consumer products and services

that the customer usually buys frequently, immediately, and with a minimum of comparison and buying effort

• Shopping Products:Shopping Products: less-frequently-purchased consumer products and services that customers compare carefully on suitability, quality, price, and style

• Specialty Products:Specialty Products: 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:Unsought Products: consumer products that the consumer either does not know about or knows about but does not normally think of buying (innovative products)

What is a Product?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 shopping

• Low priceLow price• Widespread distributionWidespread distribution• Mass promotion by Mass promotion by

producerproducer

Types of Types of Consumer Consumer ProductsProducts

What is a Product?What is a Product?

• ConvenienceConvenience

• ShoppingShopping• SpecialtySpecialty• UnsoughtUnsought

• Less frequent purchases Less frequent purchases requiring more shopping effort requiring more shopping effort and price, quality, and style and price, quality, and style comparisons.comparisons.

• Higher than convenience Higher than convenience good pricinggood pricing

• Selective distribution in fewer Selective distribution in fewer outletsoutlets

• Advertising and personal Advertising and personal selling by producer and selling by producer and resellerreseller

Types of Types of Consumer Consumer ProductsProducts

ShoppingShopping

What is a Product?What is a Product?

• ConvenienceConvenience• ShoppingShopping

• SpecialtySpecialty• UnsoughtUnsought

• Strong brand preference and Strong brand preference and loyalty, requires special loyalty, requires special purchase effort, little brand purchase effort, little brand comparisons, and low price comparisons, and low price sensitivitysensitivity

• High priceHigh price

• Exclusive distributionExclusive distribution

• Carefully targeted promotion Carefully targeted promotion by producers and resellersby producers and resellers

Types of Types of Consumer Consumer ProductsProducts

SpecialtySpecialty

Performance 480 hp @ 6,000 rpm0-60 mph: 3.7 sec.

Top Track Speed: 193 mphMSRP

$ 122,900.00

Porsche 911 Porsche 911 TurboTurbo

Ed’s Car

What is a Product?What is a Product?

• ConvenienceConvenience• ShoppingShopping• SpecialtySpecialty

• UnsoughtUnsought

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

Types of Types of Consumer Consumer ProductsProducts

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

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

Pay Now . . . Die LaterPay Now . . . Die Later Selling Cemetery PlotsSelling Cemetery Plots

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

• Unusual Promotions:Unusual Promotions:– Buy one plot get a second for a Buy one plot get a second for a

pennypenny– ““Heaven Can Wait” cemetery runHeaven Can Wait” cemetery run– Boy Scout campouts at cemeteriesBoy Scout campouts at cemeteries

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

Pay Now . . . Die LaterPay Now . . . Die Later Selling Cemetery PlotsSelling Cemetery Plots

• Lakeview Cemetery:Lakeview Cemetery:– Brochure direct mail with map Brochure direct mail with map

and open plots designatedand open plots designated– Stresses need to preplan as a Stresses need to preplan as a

method of sparing loved onesmethod of sparing loved ones

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

Product & Service Classification: Product & Service Classification: Industrial ProductsIndustrial Products

• Industrial ProductsIndustrial Products • Those products purchased for further processing or Those products purchased for further processing or

for use in conducting a businessfor use in conducting a business

• Materials and Parts:Materials and Parts: include raw materials and include raw materials and manufactured materials and partsmanufactured materials and parts

• Capital Items:Capital Items: industrial items that aid in the industrial items that aid in the buyer’s production or operations, including buyer’s production or operations, including installations and accessory equipmentinstallations and accessory equipment

• Supplies and Services:Supplies and Services: supplies include operating supplies include operating supplies and repair and maintenance items—supplies and repair and maintenance items—– Services include maintenance and repair services and Services include maintenance and repair services and

business advisory servicesbusiness advisory services

Organizations, Persons, Organizations, Persons, Places, and IdeasPlaces, and Ideas

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

• Corporate Image Advertising:Corporate Image Advertising: a major tool companies use a major tool companies use to market themselves in various publicsto market themselves in various publics

• Person Marketing:Person Marketing: activities undertaken to create, maintain, activities undertaken to create, maintain, or change attitudes or behavior toward particular peopleor change attitudes or behavior toward particular people

• Place Marketing:Place Marketing: activities undertaken to create, maintain, activities undertaken to create, maintain, or change attitudes or behavior toward particular placesor change attitudes or behavior toward particular places

• Social Marketing:Social Marketing: the use of commercial marketing concepts the use of commercial marketing concepts and tools in programs designed to influence individuals’ and tools in programs designed to influence individuals’ behavior to improve their well-being and that of societybehavior to improve their well-being and that of society

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

Social MarketingSocial Marketing

Marketing a CityMarketing a City

Product and Service Product and Service DecisionsDecisions

• 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 Key Decisions Decisions

DesignDesign

Brands and LogosBrands and Logos

PackagingPackaging

LabelsLabels

Product & Service Product & Service DecisionsDecisions

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

Individual Product and Individual Product and Service DecisionsService Decisions

• Product and Service Attributes:Product and Service Attributes: developing a developing a product or service involves defining the benefits that product or service involves defining the benefits that it will offer—these benefits are delivered through it will offer—these benefits are delivered through product attributesproduct attributes

• Product quality:Product quality: quality can be defined as quality can be defined as “freedom from defects”—or we can define quality in “freedom from defects”—or we can define quality in terms of customer satisfactionterms of customer satisfaction– Two dimensions: level and consistencyTwo dimensions: level and consistency

• Quality Level:Quality Level: performance quality—the ability of a product to performance quality—the ability of a product to perform its functionsperform its functions

• Quality Consistency:Quality Consistency: conformance quality—freedom from defects conformance quality—freedom from defects and consistency in delivering a targeted level of performanceand consistency in delivering a targeted level of performance

Individual Product and Individual Product and Service DecisionsService Decisions

• Product Features:Product Features: a competitive tool for a competitive tool for differentiating the company’s product from differentiating the company’s product from competitor’s productscompetitor’s products

• Product Style and Design:Product Style and Design: Style simply Style simply describes the appearance of a product, design describes the appearance of a product, design contributes to a product’s usefulness as well contributes to a product’s usefulness as well as to its looksas to its looks

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

• Consumers view a brand as an important part Consumers view a brand as an important part of a product, and branding can add value to a of a product, and branding can add value to a productproduct

Branding Strategy:Branding Strategy:Individual Product and Service Individual Product and Service

DecisionsDecisions• Packaging:Packaging: involves designing and producing the container involves designing and producing the container

or wrapper for a product—may include a primary container or wrapper for a product—may include a primary container and a secondary containerand a secondary container

• Packaging, today, must perform certain sales tasks from Packaging, today, must perform certain sales tasks from attracting attention to describing the product, to making the attracting attention to describing the product, to making the sale.sale.

• Labeling:Labeling: ranging from simple tags attached to the products ranging from simple tags attached to the products to complex graphics that are part of the package, the labels to complex graphics that are part of the package, the labels identify the product or brand—they may also describe the identify the product or brand—they may also describe the product and may promote the product through attractive product and may promote the product through attractive graphicsgraphics

• Product Support Services:Product Support Services: customer service is another customer service is another element of product strategy—it can be a minor or major part element of product strategy—it can be a minor or major part of the total offerof the total offer

Product and Service Product and Service DecisionsDecisions

• Individual Individual ProductProduct

• Product LineProduct Line • Product MixProduct Mix

• Product line Product line lengthlength– Line stretching:Line stretching:

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

– Line filling:Line filling: adding adding more items within more items within the present price the present price rangerange

Key Key Decisions Decisions

Product Line DecisionsProduct Line Decisions

• Product Line Stretching:Product Line Stretching: – Occurs when a company lengthens its product Occurs when a company lengthens its product

line beyond its current rangeline beyond its current range• Can stretch downward to plug a market hole that Can stretch downward to plug a market hole that

otherwise would attract a new competitor or to otherwise would attract a new competitor or to respond to a competitor’s attack on the upper endrespond to a competitor’s attack on the upper end

• Can stretch upward in order to add prestige to their Can stretch upward in order to add prestige to their current product or to take advantage of faster growth current product or to take advantage of faster growth rate or higher margins at the higher end—or rate or higher margins at the higher end—or

• It can stretch in both directionsIt can stretch in both directions

• Product Line Filling:Product Line Filling: adding more items adding more items within the present range of the linewithin the present range of the line

Branding Strategies:Branding Strategies:Product Line DecisionsProduct Line Decisions

• Product Line:Product Line: – A group of products that are closely A group of products that are closely

related because they function in a similar related because they function in a similar manner, are sold to the same customer manner, are sold to the same customer groups, are marketed through the same groups, are marketed through the same types of outlets, or fall within given price types of outlets, or fall within given price rangesranges

• Product Line Length:Product Line Length: – The number of items in the product lineThe number of items in the product line

• Line is too short if the manager can increase Line is too short if the manager can increase profits by adding items—line is too long if profits by adding items—line is too long if the manager can increase profits by the manager can increase profits by dropping itemsdropping items

Product and Service Product and Service DecisionsDecisions

• Individual Individual ProductProduct

• Product Line Product Line

• Product MixProduct Mix

• Product line width:Product line width:– number of different number of different

product lines carried product lines carried by companyby company

• Product line depth:Product line depth:– Number of different Number of different

versions of each versions of each product in the lineproduct in the line

• Product line Product line consistencyconsistency

Key Key Decisions Decisions

Product Mix DecisionsProduct Mix Decisions• Product Mix:Product Mix: consists of all the product lines and consists of all the product lines and

items that a particular seller offers for sale—also items that a particular seller offers for sale—also known as product assortment—has four important known as product assortment—has four important dimensions: width, length, depth, and consistencydimensions: width, length, depth, and consistency

– Product mix width:Product mix width: refers to the number of different refers to the number of different product lines the company carriesproduct lines the company carries

– Product Mix Length:Product Mix Length: refers to the total number of refers to the total number of items the company carries within its product linesitems the company carries within its product lines

– Product Line Depth:Product Line Depth: refers to the number of refers to the number of versions offered of each product in the lineversions offered of each product in the line

– Product Mix Consistency:Product Mix Consistency: refers to how closely refers to how closely related the various product lines are in end us, related the various product lines are in end us, production requirements, distribution channels, or production requirements, distribution channels, or some other waysome other way

Proctor & GambleProctor & Gamble