chapter 8 product, service, and brands (building customer value)

PRODUCT, SERVICE and BRANDS:BUILDING CUSTOMER VALUE

CHAPTER 8

CHAPTER 8: LEARNING OBJECTIVES

• Define Product• Understand the levels of product and

services• Understand the decisions companies make

regarding their individual products and services, product lines, and product mixes

• Explain how companies build and manage their brands

• Enumerate the four characteristics of service marketing

WHAT IS A PRODUCT?

Product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need.

—Also include services, events, persons, place, organizations, ideas, or a mixture of these—

EXAMPLES OF PRODUCT

EVENT PLACE IDEAS(new product)

SERVICESSERVICES are a form of product that

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

EXAMPLES

Doctor’s Examination

HAIR CUT

Product, Service, Experience PURE TANGIBLE GOOD PURE SERVICE

COMBINATION OF THIS TWO

Levels of Product

CORE CUSTOMER

VALUE

ACTUAL PRODECT

AUGMENTED PRODUCT

What is the buyer

really buying?

To develop product and

service features, design, a

quality level, a brand name,

and packaging.

Offering additional consumer

services and benefits.

AUGMENTED:

PACKAGING

FEATURES

DESIGN

QUALITY LEVEL

BRAND

DELIVERY

WARRANTY

AFTER SALES SERVICES

CREDIT/PAYMENT TERMS

INSTALLATION

NOKIA N8:

THE CORE PRODUCT:

COMMUNICATIONMESSAGING

THE ACTUAL PRODUCTPACKAGING-Anodised

Aluminium case, available in 6 different colours.

Size: 113.5 x 59 x 12.9 mm Weight (with battery): 135 g Volume: 86 cc FEATURES-Works on Symbian

^3, Has a 12 MP camera, Radio and Music player and Gaming.

QUALITY LEVEL: Phone camera is of exceptional quality with HD recording.

BRAND: Nokia, which happens to be one of the most trusted cell phone brands in India.

AUGMENTED PRODUCTDELIVERY: Then product

can be purchased from any Electronic goods showroom. It can be also ordered online.

INSTALLATION: Not required.

WARRANTY: The product has a warranty period of 1 year.

AFTER SALE SERVICES: Can be acquired from any Nokia service centre.

CREDIT/PAYMENT TERMS: EMI Facilities.

Product and service classification

Product and services classes

Consumer products

Are products and services bought by final consumers for personal consumption.

Industrial Products

A product brought by individuals and organizations for further processing for use in conducting a business.

Types of consumer product

Consumer Product

Convenience Product

Shopping Product

Specialty Product

Unsought Product

Marketing Considerati

ons

Convenience Shopping Specialty Unsought

Customer buying

behavior

Frequent purchase, little planning, little

comparison or shopping effort, low

customer involvement

Less frequent purchase,

much planning and shopping

effort, comparison of

brands on price, quality, style

Strong brand preference and loyalty, special purchase effort,

little comparison of brands, low price

sensitivity

Little product awareness

Price Low price Higher Price High Price Varies

Distribution Widespread distribution,

convenient locations

Selective distribution in fewer outlets

Exclusive distribution in only one or few outlets per market area

Varies

Promotion Mass promotion by the producer

Advertising and personal selling

by both the producer and

resellers

More carefully targeted promotion

by both the producer and

reseller

Aggressive advertising and

personal selling by the producer and

reseller

Examples Toothpaste, magazines and

detergent

Clothing and appliances

Luxury goods such Rolex or fine

crystals

Life insurance and red cross blood

donations

Industrial Product typesMaterials and parts - Raw materials and

manufactured materials and parts.

Capital Items – Industrial products that aid in the buyer’s production or operation.

Supplies and services – Operating supplies and repair and maintenance items.

Organizations,Persons,Places and Ideas

Organization marketing - consist of activities undertaken to create, maintain, or change the attitudes and behavior of target consumers towards an organization.

Person marketing - consist of activities undertaken to create, maintain, or change the attitudes or behavior toward particular people.

Place marketing - Involves activities undertaken to create, maintain, or change the attitudes or behavior toward particular people.

Ideas – is a concept or mental impression, ideas can also be marketed. All marketing is the marketing of an idea.

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.

Product and Service Decisions

ProductAttributes

Branding Packaging LabelingProduct

Support and Services

Product and Service Attributes

Developing a product or service involves defining the benefits that it will offer.

- Product Quality - Product Features- Product Style and Design

- Total Quality Management- - is an approach in which all of the company’s

people are involved in constantly improving the quality of the products, services, and business.

BrandingA 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

PackagingThe activities of designing and producing

the container or wrapper for the product.

LabelingThe label identify the product or brand.

Product Support and Services

Product Line Decisions

- 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 range.

Product Mix Decisions

- The set of al product lines and items that particular seller offers for sale

• Services Marketing– is a sub field of marketing, which can be split into the two main areas of goods marketing (which includes the marketing of fast moving consumer goods (FMCG) and durables) and services marketing. Services marketing typically refers to both business to consumer (B2C) and business to business (B2B) services.

Nature & Characteristics of a Service

– Company must consider four special characteristics when designing marketing programs intangibility, inseparability, variability, and perishability.

SERVICES

Intangibility – Services cannot be seen, tasted, felt, heard or smelled before purchase.

Inseparability – Services cannot be separated from their providers.

Variability – Quality of services depends on who provides them, when, where, & how.

Perishability – Services cannot be stored for later sale or use.

Service-Profit Chain– Chain that links services firm profits with employee &

costumer satisfaction. This chain consist of five links:

Internal service quality – Superior employee section & training, a quality work environment, & strong support for those dealing with costumer.

Satisfied & productive service employees – More satisfied, loyal & hardworking employees.

Greater service value – More effective & efficient costumer value.

Satisfied & loyal costumers – Satisfied costumers who remain loyal, repeat purchase, and refer other costumers.

Healthy service profits & growth – superior service firm performance.

BRANDINGSTRATEGY

Building Strong Brands

1. Brand Positioning2.Brand Name Selection3. Brand Sponsorship4. Brand Development

Brand PositioningWhat are the ATTRIBUTES of the

productWhat are the BENEFITS of the productHow about VALUES and BELIEFS

Brand Name SelectionIt should suggest something about the

product’s benefits and qualitiesEasy to pronounce, recognize and

rememberBrand name should be distinctiveExtendable

Brand Sponsorship

Manufacturer’s brand (National Brand)Private BrandLicensingCo- branding

Private Brandcreated and owned by reseller of a

product or service

Licensingis the accreditation of the brand name

Co- branding the practice of using the established brand

names of two different companies on the same product

Brand DevelopmentLine ExtensionsBrand ExtensionsMultibrandsNew Brands

Line Extensionsextending an existing brand name to new

forms, color, sizes, ingredients or flavors of an existing product category

Brand Extension Extending an existing brand name to new

product categories

Multibrands companies often market different brands

in a given product category

New Brands a company might believe that the power

of its existing brand name is wanting, so new brand name needed