Presentation on theme: "Chapter 7 Product, Services, and Branding Strategy"— Presentation transcript:
1Chapter 7 Product, Services, and Branding Strategy Professor MarshallQueens College
2What is a Product?Anything that can be offered to a market for attention, acquisition, use, or consumption and that might satisfy a want or need.Includes: physical objects, services, events, persons, places, organizations, ideas, or some combination thereof.
3What is a Service?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: banking, hotel, airline, retail, tax preparation, consulting, home repairs.
4Three levels of a Product Augmented ProductDelivery After- and sale credit serviceInstallation WarrantyActual ProductBrand Features NameQuality Design levelPackagingCore Benefit
5Consumer ProductsProducts and services bought by final consumers for personal consumption.Classified based on how consumers buy them.Includes:Convenience ProductsShopping ProductsSpecialty ProductsUnsought Products
8Specialty Products Special purchase efforts High price Unique characteristicsBrand identificationFew purchase locationsExamples: Lamborghini, Rolex Watch
9Unsought Products New innovations Products consumers do not want to think aboutRequire much advertising and personal sellingExamples: life insurance, cemetery plots, blood donation
10Industrial ProductsThose purchased for further processing or for 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.
11Industrial Products Materials and Parts: Capital Items: Raw materials, manufactured materials and partsCapital Items:Products that aid in buyer’s production or operationsSupplies and Services:Operating supplies, repair, and maintenance items
12Other Market Offerings Organizations: Profit (businesses) and nonprofit (schools and churches).Designed to create or change attitudesPersons: Politicians, entertainers, sports figures, doctors, and lawyers.When you start your career, you will be marketing yourself!Places: create, maintain, or change attitudes or behavior toward particular places (e.g., tourism).I Love New YorkVirginia is for LoversIt’s like a Whole Other Country - TexasIdeas (social marketing): Public health campaigns, environmental campaigns, family planning, or human rights.Truth Campaign – anti smokingAnti drugConservationThe Ad Council – leader in PSAs (public service announcements)
13Individual Product Decisions Product support servicesProductattributesBrandingPackagingLabeling
14Product and Service Attributes Qualityincludes durability, reliability, precision, ease of operation and repairTotal Quality Management (TQM) is an approach in which all of the company’s people are involved in constantly improving the quality of products, services, and business processes. This is an entire field (quality assurance).FeaturesCan be offered with all sorts of features; different models.Style & DesignStyle is just the appearance of the productDesign goes to the heart of the productExample: iPod comes in different storage capacities (features). The style is small, sleek. The design is stylish, portable, unique, fashionable.
15Product Line Decisions 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.Product Line Length# of items in the product lineToo short if we can increase profit by adding itemsToo long if we can increase profit by removing itemsStretchingDownward – add a low end productUpward – add a high end productBoth directions – example: MarriottFilling – add items in between high and low
16Product Mix DecisionsProduct Mix (or product assortment): all of the product lines and items that a particular seller offers for sale.Width: the number of different product lines the company carries.Maui Jim = 6Depth: the number of versions offered of each product in the line.Maui Jim = average of 5Consistency: how closely related the various lines are.Maui Jim = very consistent
17BrandingCreating, maintaining, protecting, and enhancing products and services.A brand is a name, term, sign, symbol, or design, or a combination of these, that identifies the maker or seller of a product or service.
18Branding Advantages to buyers: Advantages to sellers: Product identificationProduct qualityAdvantages to sellers:Basis for product’s quality storyProvides legal protectionHelps to segment markets
19Brand EquityThe positive differential effect that knowing the brand name has on customer response to the product or service.How much more are you willing to pay for the brand of your choice?Provides:More brand awareness and loyaltyBasis for strong, profitable customer relationshipsBrand Valuation – the process of estimating total financial value of a brandOne 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.
20Major Brand Strategy Decisions Brand name selectionsBrandpositioningBrand sponsorshipBrand development
21Brand Positioning Can position brands at any of three levels: Product attributes – Dove soap ¼ cleansing creamCompetitors can easily copy attributesProduct benefits – Dove soap benefit of softer skinVolvo (safety), Nike (performance), FedEx (overnight), Lexus (quality)Beliefs and values (Emotion) - Dove soap softer skin will make you more attractive
22Brand Name Selection Desirable qualities for a brand name include: It should suggest product’s benefits and qualitiesOFF!, Craftsman, BeautyrestIt should be easy to pronounce, recognize, and rememberTide, Crest, PuffsIt should be distinctiveKodakIt should be extendableAmazon.com (started as bookseller but expanded to other products)It should translate easily into foreign languagesIt should be capable of registration and legal protectionSee Video Case: Accenture
23Brand Sponsorship Manufacturer’s brands Private brands (store brands) – Sears created Kenmore & CraftsmanLicensed brands – character names: Scooby-Doo, Sesame Street, Donald DuckCo-branding – Mattel teamed with Coca-Cola to create Soda Fountain Sweetheart Barbie
24Brand DevelopmentLine Extension: introduction of additional items in a given product category under the same brand name (e.g., new flavors, forms, colors, ingredients, or package sizes).Brand Extension: using a successful brand name to launch a new or modified product in a new category.Involves some risk: Heinz pet food – bad ideaMultibranding: (introduce additional brands in the same product category) offers a way to establish different features and appeal to different buying motives.New Brands: developed based on belief that the power of its existing brand is waning and a new brand name is needed. Also used for products in new product category.
25PackagingDesigning and producing the container or wrapper for a product.Usually involves the primary container, secondary disposable package, and shipping containerPackaging is an important marketing tool: attract attention and describe the productCreating a package involves:Packaging conceptPackage elementsProduct safetyEnvironmental concerns
26Labeling Printed information appearing on or with the package. Performs several functions:Identifies product or brandDescribes several things about the productPromotes the product through attractive graphicsLegal concernsNo deceptive labelsUnit pricing (price per unit), open dating (shelf life), nutritional labeling
27Product Support Services Assess the value of current services and obtain ideas for new services.Assess the cost of providing the services.Put together a package of services that delights the customers and yields profits for the company.Examples: Warranties, customer service, extended service plans, etc.
28Nature and Characteristics of a Service IntangibilityCannot be seen, felt, tasted, or smelledInseparabilityCannot be separated from their providersServicesVariabilityQuality depends on who provides the services and when, where and how it is donePerishabilityServices cannot be stored for later use
29Major Service Marketing Tasks Managing Service Differentiation:Develop a differentiated offer, delivery, and image.Managing Service Quality:Be customer obsessed, set high service quality standards, have good service recovery, empower front-line employees.Managing Service Productivity:Train current employees or hire new ones, increase quantity & sacrifice quality, harness technology.Example: Airlines offer in-flight movies and frequent flyer programsCellular phone companies: ‘Can you hear me now?’, Rollover minutes
30International Product and Services Marketing Decide which products and services to introduceDecide how much to standardize or adaptPackaging presents new challenges (translation)Service marketers face special challengesTrend toward global service companies will continueExample Deutsche Bank (Germany, England, Frank, Asia, America)
32ThoughtsWhat is the core service that Accenture offers? What are the supplemental services? The core is probably consulting services or advice. Supplemental services would include speed of service, quality, cost, interactions with Accenture’s personnel, hard copies of reports and databases generated, etc.What are the tangibles and intangibles that a consulting firm delivers? Tangibles are fewer (e.g., the report, the people, the offices) than intangibles (the quality of the advice, the vision).What makes branding difficult for a professional service? Why is it critical to the firm’s success? Branding is difficult for any service, mostly because of the lack of heterogeneity (your experience of Accenture varies with every phone call, with different consultants, and even with the same consultant at different points in a project). Branding is important because it signals credibility and expertise.