marketing: an introductionportal.unimap.edu.my/portal/page/portal30/lecture notes... · 2020. 3....

Marketing: An IntroductionFourteenth Edition

Chapter 07Products, Services, and

Brands: Building Customer

value

Copyright © 2020, 2017, 2015 Pearson Education, Inc. All Rights Reserved


Objectives Outline (1 of 4)

7.1 Define product and describe the major classifications of

products and services.

7.2 Describe the decisions companies make regarding their

individual products and services, product lines, and product

mixes.



7.3 Identify the four characteristics that affect the marketing

of services and the additional marketing considerations that

services require.

7.4 Discuss branding strategy—the decisions companies

make in building and managing their brands.


First Stop Nike: More Than Just

Innovative Sports Gear—a Total Brand

Experience

The Nike ―swoosh‖—

it’s everywhere!


Objective Outline 7-1

Define product and describe the major classifications of



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.

• A service is an activity, benefit, or satisfaction offered for

sale; it is intangible and does not result in ownership of

anything.


Products, Services, and

Experiences (1 of 2)

• Market offerings include both tangible goods and services.

• Companies create and manage customer experiences with

their brands or companies.

– To differentiate their offers from that of the competitors


Products, Services, and

Experiences (2 of 2)

More than just selling

products, Apple’s highly

successful retail stores

create engaging life-

feels-good brand

experiences.


Figure 7.1 Three Levels of Product


Product and Service Classifications

• Consumer products are bought by final consumers for

personal consumption.

• Industrial products are bought by individuals and

organizations for further processing or for use in

conducting a business.

– Materials and parts, capital items, and supplies and

services


Table 7.1 Marketing Considerations for

Convenience and Shopping Products

Marketing

ConsiderationsConvenience Shopping

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, and style

Price Low price Higher price

Distribution Widespread distribution;

convenient locations

Selective distribution in fewer

outlets

Promotion Mass promotion by the

producer

Advertising and personal selling

by both the producer and

resellers

Examples Toothpaste, magazines,

and laundry detergent

Major appliances, televisions,

furniture, and clothing


Table 7.1 Marketing Considerations

for Specialty and Unsought Products

Marketing

ConsiderationsSpecialty Unsought

Customer

buying

behavior

Strong brand preference and

loyalty; special purchase effort;

little comparison of brands; low

price sensitivity

Little product awareness

or knowledge (or, if

aware, little or even

negative interest)

Price High price Varies

Distribution Exclusive distribution in only one

or a few outlets per market area

Varies

Promotion More carefully targeted

promotion by both the producer

and resellers

Aggressive advertising

and personal selling by

the producer and resellers

Examples Luxury goods, such as Rolex

watches or fine crystal

Life insurance and Red

Cross blood donations


Other Market Offerings

• Organizations

• Persons

• Places

• Ideas


Objective Outline 7-1 Summary

• What is a product?—physical products, services, and

experiences

• Actual and augmented product—core customer value

• Consumer products—convenience, shopping, specialty,

and unsought

• Industrial products—materials and parts, capital items, and

supplies and services

• Organization, person, place, and idea marketing



Describe the decisions companies make regarding their


mixes.


Product and Service Decisions

• Individual Product Decisions

• Product Line Decisions

• Product Mix Decisions


Figure 7.2 Individual Product

Decisions


Product and Service Attributes (1 of 3)

• Product quality is one of the marketer’s major positioning

tools.

• A product can be offered with varying features.

• Another way to add customer value is through distinctive

product style and design.


Branding (2 of 3)

Consumers view a

brand as an

important part of a

product, and

branding can add

value to a

consumer’s

purchase.


Packaging (3 of 3)

Innovative Child

Guard safety

packaging likely

saved P&G’s fast-

growing Tide

PODS and other

unit-dose laundry

detergent brands.


Product Line Decisions (1 of 2)

• A product line is closely related products that:

– Have similar functions and customer groups

– Are sold through similar outlets or fall within given price

ranges

• Product line length is the number of items in the product

line.

– Product line filling

– Product line stretching


Product Line Decisions (2 of 2)

Through skillful line

stretching and filling,

BMW now has brands

and lines that

successfully appeal to

the rich, the super-

rich,

and the hope-to-be-

rich.


Product Mix (or Product Portfolio)

―Colgate World of Care‖—

products that ―every day, people

like you trust to care for

themselves and the ones they

love.‖


Product Mix Decisions

Width

• Number of different product lines the company carries

Length

• Total number of items a company carries within its product lines

Depth

• Number of versions offered for each product in the line

Consistency

• Relativity of the various product lines in end use, production

requirements, distribution channels, or some other aspect



• Product attribute decisions—quality, features, and style

and design

• Branding, packaging, and labeling decisions

• Product support services—enhance customer service and

satisfaction

• Product line and product mix decisions



Identify the four characteristics that affect the marketing of

services and the additional marketing considerations that

services require.


Figure 7.3 Four Service

Characteristics


Service Profit Chain (1 of 2)

• Links service firm profits with employee and customer

satisfaction

• The chain consists of five links:

– Internal service quality

– Satisfied and productive service employees

– Greater service value

– Satisfied and loyal customers

– Healthy service profits and growth


Figure 7.4 Three Types of Services

Marketing


Service Profit Chain (2 of 2)

Zappos knows that delivering

customer happiness begins

with happy, dedicated,

energetic employees. Zappos

is ―Powered by Service.‖


Marketing Tasks for Service

Companies

Managing service differentiation

• Developing a differentiated offer, delivery, and image

Managing service quality

• Delivering consistently higher quality than the competitors

Managing service productivity

• Training current employees or hiring new ones

• Increasing the quantity of service by giving up some quality

• Harnessing the power of technology



• Services characteristics: intangible, inseparable, variable,

and perishable

• Service profit chain—internal and interactive marketing

• Competitive differentiation, service quality, and service

productivity



Discuss branding strategy—the decisions companies make

in building and managing their brands.


Brand Equity (1 of 2)

• The differential effect that knowing the brand name has on

customer response to the product or its marketing

• With positive brand equity, consumers react more

favorably to the brand than to an unbranded version of the

same product.


Brand Equity (2 of 2)

• Consumer perception dimensions:

– Differentiation

– Relevance

– Knowledge

– Esteem

• Brand value is the total financial value of a brand.

• Customer equity is the value of customer relationships that

the brand creates.


Figure 7.5 Major Brand Strategy

Decisions (1 of 2)


Major Brand Strategy Decisions (2 of 2)

Kroger’s store

brands—from Private

Selection to Simple

Truth—account for 25

percent of the grocery

retailer’s sales.


Brand Positioning and Brand Name

Selection

• Marketers should establish a mission and vision for the

brand when positioning it.

• Desirable qualities for a brand name should be

– Based on the product’s benefits and qualities

– Easy to pronounce, recognize, and remember

– Distinctive and extendable

– Easily translated into foreign languages

– Capable of registration and legal protection


Brand SponsorshipNational brands

• Marketed under the manufacturer’s own name Store

brands

• Created and owned by a reseller of a product or service

Licensing

• Use names and symbols created by other companies or

well-known movie characters or celebrities for a fee Co-

branding

• Use the established brand names of two different

companies on the same product


Figure 7.6 Brand Development

Strategies


Managing Brands (1 of 2)

Nest has extended its line

to include a host of its own

smart-home product.


Managing Brands (2 of 2)

• Communicate the brand’s positioning

• Manage all brand touch points

• Train employees to be customer centered

• Audit the brand’s strengths and weaknesses



• Brand equity’s positive effect

• Brand positioning

• Brand name selection

• Brand sponsorship options—national, private, licensed,

and co-brand

• Brand development through line and brand extensions,

multibrands or new brands



7.1 Define product and describe the major classifications of


7.2 Describe the decisions companies make regarding their


mixes.



7.3 Identify the four characteristics that affect the marketing

of services and the additional marketing considerations that

services require.

7.4 Discuss branding strategy—the decisions companies

make in building and managing their brands.


Copyright

marketing: an introductionportal.unimap.edu.my/portal/page/portal30/lecture notes... · 2020. 3....

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