Chapter 7 Product, Services, and Branding Strategy Professor Marshall Queens College.

Chapter 7Chapter 7 Product, Services, and Branding Product, Services, and Branding

StrategyStrategy

Professor MarshallProfessor Marshall

Queens CollegeQueens College

What is a Product?What is a Product?

Anything that can be offered to a market for Anything that can be offered to a market for attention, acquisition, use, or consumption and attention, acquisition, use, or consumption and that might satisfy a want or need.that might satisfy a want or need.

– Includes: physical objects, services, events, Includes: physical objects, services, events, persons, places, organizations, ideas, or some persons, places, organizations, ideas, or some combination thereof.combination thereof.

What is a Service?What is a Service?

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

– Examples: banking, hotel, airline, retail, tax Examples: banking, hotel, airline, retail, tax preparation, consulting, home repairs.preparation, consulting, home repairs.

Three levels of a ProductThree levels of a Product

Augmented Product

Delivery After-and sale

credit service

Installation Warranty

Core Benefit

Actual Product

Brand FeaturesName

Quality Design level

Packaging

Consumer ProductsConsumer Products

Products and services bought by final Products and services bought by final consumers for personal consumption.consumers for personal consumption.

Classified based on how consumers buy them.Classified based on how consumers buy them.

Includes:Includes:– Convenience ProductsConvenience Products– Shopping ProductsShopping Products– Specialty ProductsSpecialty Products– Unsought ProductsUnsought Products

Convenience ProductsConvenience Products

Purchased frequently & immediately

Low priced

Mass advertising

Many purchase locations– Examples: candy, soda, newspapers

Shopping ProductsShopping Products

Bought less frequently

Higher price

Fewer purchase locations

Comparison shop – Examples: furniture, clothing, cars, appliances

Specialty ProductsSpecialty Products

Special purchase efforts High price Unique characteristics Brand identification Few purchase locations

– Examples: Lamborghini, Rolex Watch

Unsought ProductsUnsought Products

New innovationsProducts consumers do not want to think aboutRequire much advertising and personal sellingExamples: life insurance, cemetery plots, blood donation

Industrial ProductsIndustrial Products

Those purchased for further processing or for Those purchased for further processing or for use in conducting business.use in conducting business.

If a consumer buys a lawnmower for use at home, it is a consumer product. If the same consumer buys a lawn mower for use at his landscaping business, it is an industrial product.

Industrial ProductsIndustrial ProductsMaterials and Parts:Materials and Parts:

– Raw materials, manufactured materials and Raw materials, manufactured materials and partsparts

Capital Items:Capital Items:– Products that aid in buyer’s production or Products that aid in buyer’s production or

operationsoperations

Supplies and Services:Supplies and Services:– Operating supplies, repair, and maintenance Operating supplies, repair, and maintenance

itemsitems

Other Market OfferingsOther Market OfferingsOrganizations: Profit (businesses) and nonprofit (schools and Organizations: Profit (businesses) and nonprofit (schools and churches).churches).

– Designed to create or change attitudesDesigned to create or change attitudes

Persons: Politicians, entertainers, sports figures, doctors, and Persons: Politicians, entertainers, sports figures, doctors, and lawyers. lawyers.

– When you start your career, you will be marketing yourself!When you start your career, you will be marketing yourself!

Places: create, maintain, or change attitudes or behavior toward Places: create, maintain, or change attitudes or behavior toward particular places (e.g., tourism).particular places (e.g., tourism).

– I Love New YorkI Love New York– Virginia is for LoversVirginia is for Lovers– It’s like a Whole Other Country - TexasIt’s like a Whole Other Country - Texas

Ideas (social marketing): Public health campaigns, environmental Ideas (social marketing): Public health campaigns, environmental campaigns, family planning, or human rights.campaigns, family planning, or human rights.

– Truth Campaign – anti smokingTruth Campaign – anti smoking– Anti drugAnti drug– Conservation Conservation – The Ad Council – leader in PSAs (public service announcements) The Ad Council – leader in PSAs (public service announcements)

http://www.adcouncil.org/http://www.adcouncil.org/

Individual Product DecisionsIndividual Product Decisions

BrandingBranding PackagingPackagingProduct Product attributesattributes

LabelingLabeling Product Product support support servicesservices

Product and Service AttributesProduct and Service AttributesQualityQuality

– includes durability, reliability, precision, ease of operation and includes durability, reliability, precision, ease of operation and repairrepair

– Total Quality Management (TQM) is an approach in which all Total Quality Management (TQM) is an approach in which all of the company’s people are involved in constantly improving of the company’s people are involved in constantly improving the quality of products, services, and business processes. the quality of products, services, and business processes. This is an entire field (quality assurance).This is an entire field (quality assurance).

FeaturesFeatures– Can be offered with all sorts of features; different models.Can be offered with all sorts of features; different models.

Style & DesignStyle & Design– Style is just the appearance of the productStyle is just the appearance of the product– Design goes to the heart of the product Design goes to the heart of the product

Example: iPod comes in different storage capacities (features). The style is small, sleek. The design is stylish, portable, unique, fashionable.

Product Line DecisionsProduct Line Decisions

Product Line Length Product Line Length – # of items in the product line# of items in the product line– Too short if we can increase profit by adding itemsToo short if we can increase profit by adding items– Too long if we can increase profit by removing itemsToo long if we can increase profit by removing items

StretchingStretching– Downward – add a low end productDownward – add a low end product– Upward – add a high end productUpward – add a high end product– Both directions – example: MarriottBoth directions – example: Marriott

Filling – add items in between high and lowFilling – add items in between high and low

A product line is a group of products that are closely related. They might function in a similar manner, or might be sold to the same groups, or might fall in the same price ranges. http://www.mauijim.com/mjweb/public/catalog/consumer_collection_sort.jsp

Product Mix DecisionsProduct Mix Decisions

Product Mix (or product assortment)Product Mix (or product assortment): all of : all of the product lines and items that a the product lines and items that a particular seller offers for sale.particular seller offers for sale.WidthWidth: the number of different product : the number of different product lines the company carries.lines the company carries.

– Maui Jim = 6Maui Jim = 6

DepthDepth: the number of versions offered of : the number of versions offered of each product in the line.each product in the line.

– Maui Jim = average of 5Maui Jim = average of 5

ConsistencyConsistency: how closely related the : how closely related the various lines are.various lines are.

– Maui Jim = very consistentMaui Jim = very consistent

BrandingBranding

Creating, maintaining, protecting, and enhancing Creating, maintaining, protecting, and enhancing products and services.products and services.

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

BrandingBranding

Advantages to buyers:Advantages to buyers:– Product identificationProduct identification– Product qualityProduct quality

Advantages to sellers:Advantages to sellers:– Basis for product’s quality storyBasis for product’s quality story– Provides legal protectionProvides legal protection– Helps to segment marketsHelps to segment markets

Brand EquityBrand EquityThe positive differential effect that knowing The positive differential effect that knowing the brand name has on customer response the brand name has on customer response to the product or service.to the product or service.

– How much more are you willing to pay for the How much more are you willing to pay for the brand of your choice?brand of your choice?

Provides:Provides:– More brand awareness and loyaltyMore brand awareness and loyalty– Basis for strong, profitable customer Basis for strong, profitable customer

relationshipsrelationships

Brand Valuation – the process of estimating Brand Valuation – the process of estimating total financial value of a brandtotal financial value of a brand

One study found that customers are willing to pay 20% more for the brand of their choice relative to its nearest competitor. Tide & Heinz lovers will pay a 100% premium. Loyal Coke drinkers will pay a 50% premium.

Major Brand Strategy DecisionsMajor Brand Strategy Decisions

Brand Brand name name

selectionsselections

Brand Brand sponsorshipsponsorship

Brand Brand positioningpositioning

Brand Brand developmentdevelopment

Brand PositioningBrand Positioning

Can position brands at any of three levels:Can position brands at any of three levels:– Product attributes – Dove soap ¼ cleansing creamProduct attributes – Dove soap ¼ cleansing cream

Competitors can easily copy attributesCompetitors can easily copy attributes

– Product benefits – Dove soap benefit of softer skinProduct benefits – Dove soap benefit of softer skinVolvo (safety), Nike (performance), FedEx (overnight), Volvo (safety), Nike (performance), FedEx (overnight), Lexus (quality)Lexus (quality)

– Beliefs and values (Emotion) - Dove soap softer Beliefs and values (Emotion) - Dove soap softer skin will make you more attractiveskin will make you more attractive

Brand Name SelectionBrand Name SelectionDesirable qualities for a brand name include:Desirable qualities for a brand name include:

1.1. It should suggest product’s benefits and qualitiesIt should suggest product’s benefits and qualities1.1. OFF!, Craftsman, BeautyrestOFF!, Craftsman, Beautyrest

2.2. It should be easy to pronounce, recognize, and It should be easy to pronounce, recognize, and rememberremember

1.1. Tide, Crest, PuffsTide, Crest, Puffs3.3. It should be distinctiveIt should be distinctive

1.1. KodakKodak4.4. It should be extendableIt should be extendable

1.1. Amazon.com (started as bookseller but expanded to other Amazon.com (started as bookseller but expanded to other products)products)

5.5. It should translate easily into foreign languagesIt should translate easily into foreign languages6.6. It should be capable of registration and legal protectionIt should be capable of registration and legal protection

See Video Case: Accenture

Brand SponsorshipBrand Sponsorship

Manufacturer’s brandsManufacturer’s brands

Private brands (store brands) – Sears created Private brands (store brands) – Sears created Kenmore & CraftsmanKenmore & Craftsman

Licensed brands – character names: Scooby-Licensed brands – character names: Scooby-Doo, Sesame Street, Donald DuckDoo, Sesame Street, Donald Duck

Co-branding – Mattel teamed with Coca-Cola Co-branding – Mattel teamed with Coca-Cola to create Soda Fountain Sweetheart Barbieto create Soda Fountain Sweetheart Barbie

Brand DevelopmentBrand Development

Line ExtensionLine Extension: introduction of additional items in a : introduction of additional items in a given product category under the same brand name given product category under the same brand name (e.g., new flavors, forms, colors, ingredients, or (e.g., new flavors, forms, colors, ingredients, or package sizes).package sizes).Brand ExtensionBrand Extension: using a successful brand name to : using a successful brand name to launch a new or modified product in a new category.launch a new or modified product in a new category.

– Involves some risk: Heinz pet food – bad ideaInvolves some risk: Heinz pet food – bad idea

MultibrandingMultibranding: (introduce additional brands in the : (introduce additional brands in the same product category) offers a way to establish same product category) offers a way to establish different features and appeal to different buying different features and appeal to different buying motives.motives.New BrandsNew Brands: developed based on belief that the : developed based on belief that the power of its existing brand is waning and a new brand power of its existing brand is waning and a new brand name is needed. Also used for products in new name is needed. Also used for products in new product category.product category.

PackagingPackaging

Designing and producing the container or Designing and producing the container or wrapper for a product.wrapper for a product.

– Usually involves the primary container, secondary Usually involves the primary container, secondary disposable package, and shipping containerdisposable package, and shipping container

– Packaging is an important marketing tool: attract Packaging is an important marketing tool: attract attention and describe the productattention and describe the product

Creating a package involves:Creating a package involves:– Packaging conceptPackaging concept– Package elementsPackage elements– Product safetyProduct safety– Environmental concernsEnvironmental concerns

LabelingLabeling

Printed information appearing on or with the Printed information appearing on or with the package.package.Performs several functions:Performs several functions:

– IdentifiesIdentifies product or brand product or brand– DescribesDescribes several things about the product several things about the product– PromotesPromotes the product through attractive graphics the product through attractive graphics

Legal concernsLegal concerns– No deceptive labelsNo deceptive labels– Unit pricing (price per unit), open dating (shelf life), Unit pricing (price per unit), open dating (shelf life),

nutritional labelingnutritional labeling

Product Support ServicesProduct Support Services

Assess the value of current services and Assess the value of current services and obtain ideas for new services.obtain ideas for new services.Assess the cost of providing the services.Assess the cost of providing the services.Put together a package of services that Put together a package of services that delights the customers and yields profits for delights the customers and yields profits for the company.the company.

Examples: Warranties, customer service, extended service plans, etc.

Nature and Characteristics of a Nature and Characteristics of a ServiceService

Services

Intangibility

Cannot be seen, felt, tasted, or smelled

Variability

Quality depends on who provides the services and when, where and how it is done

Inseparability

Cannot be separated from their providers

Perishability

Services cannot be stored for later use

Major Service Marketing TasksMajor Service Marketing Tasks

Managing Service Differentiation:Managing Service Differentiation:– Develop a differentiated offer, delivery, and image.Develop a differentiated offer, delivery, and image.

Managing Service Quality:Managing Service Quality:– Be customer obsessed, set high service quality standards, Be customer obsessed, set high service quality standards,

have good service recovery, empower front-line employees.have good service recovery, empower front-line employees.Managing Service Productivity:Managing Service Productivity:

– Train current employees or hire new ones, increase quantity & Train current employees or hire new ones, increase quantity & sacrifice quality, harness technology.sacrifice quality, harness technology.

Example: Airlines offer in-flight movies and frequent flyer programs

Cellular phone companies: ‘Can you hear me now?’, Rollover minutes

International Product and International Product and Services MarketingServices Marketing

Decide which products and services to introduceDecide which products and services to introduceDecide how much to standardize or adaptDecide how much to standardize or adaptPackaging presents new challenges (translation)Packaging presents new challenges (translation)Service marketers face special challengesService marketers face special challengesTrend toward global service companies will Trend toward global service companies will continuecontinue

– Example Deutsche Bank (Germany, England, Frank, Example Deutsche Bank (Germany, England, Frank, Asia, America)Asia, America)

Video CaseVideo Case

AccentureAccenture(14 minutes)(14 minutes)

ThoughtsThoughtsWhat is the core service that Accenture offers? What are the What is the core service that Accenture offers? What are the supplemental services?supplemental services?

The core is probably consulting services or advice. Supplemental The core is probably consulting services or advice. Supplemental services would include speed of service, quality, cost, interactions with services would include speed of service, quality, cost, interactions with Accenture’s personnel, hard copies of reports and databases generated, Accenture’s personnel, hard copies of reports and databases generated, etc.etc.

What are the tangibles and intangibles that a consulting firm delivers?What are the tangibles and intangibles that a consulting firm delivers?

Tangibles are fewer (e.g., the report, the people, the offices) than Tangibles are fewer (e.g., the report, the people, the offices) than intangibles (the quality of the advice, the vision).intangibles (the quality of the advice, the vision).

What makes branding difficult for a professional service? Why is it critical What makes branding difficult for a professional service? Why is it critical to the firm’s success?to the firm’s success? Branding is difficult for any service, mostly because of the lack of Branding is difficult for any service, mostly because of the lack of heterogeneity (your experience of Accenture varies with every phone call, heterogeneity (your experience of Accenture varies with every phone call, with different consultants, and even with the same consultant at different with different consultants, and even with the same consultant at different points in a project). Branding is important because it signals credibility points in a project). Branding is important because it signals credibility and expertise.and expertise.