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Product, Services, and Branding Strategy
Chapter 8
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Learning Goals Understand products and the major classifications of products and services Learn the decisions companies make regarding their products and services Understand branding strategy Identify the four characteristics that affect the marketing of a service Realize additional product issues
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Case Study Krispy Kreme
Produce 7.5 million doughnuts each day Sell more than doughnuts; they sell an experience New store openings are eagerly anticipated in part due to extensive promotion
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Case Study Krispy Kreme
Krispy Kreme sells doughnuts. But what are customers really buying? As Krispy Kreme expands, how important are the two dimensions of product quality? Discuss the brand equity of Krispy Kreme versus that of Dunkin’ Donuts. Krispy Kreme sells a product that is high in sugar. What is its social responsibility in offering such a product? What possible liability could they face?
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Definitions Product Service
Anything offered to a market for attention, acquisition, use, or consumption that might satisfy a need or want. 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. Goal 1: Understand products and their classifications
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What is a Product? Products, Services, and Experiences
Market offerings may consist of a combination of goods and services Experiences are used to differentiate offerings Levels of Product and Services Core benefit, actual and augmented product Product and Service Classifications Consumer products and industrial products Goal 1: Understand products and their classifications
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What is a Product? Goal 1: Understand products and their classifications
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Types of Consumer Products
What is a Product? Types of Consumer Products Frequent purchases bought with minimal buying effort and little comparison shopping Low price Widespread distribution Mass promotion by producer Convenience Shopping Specialty Unsought Goal 1: Understand products and their classifications
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Types of Consumer Products
What is a Product? Less frequent purchases More shopping effort for comparisons. Higher than convenience good pricing Selective distribution in fewer outlets Advertising and personal selling Types of Consumer Products Convenience Shopping Specialty Unsought Goal 1: Understand products and their classifications
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Types of Consumer Products
What is a Product? Types of Consumer Products Strong brand preference and loyalty, requires special purchase effort, little brand comparisons, and low price sensitivity High price Exclusive distribution Carefully targeted promotions Convenience Shopping Specialty Unsought Goal 1: Understand products and their classifications
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Types of Consumer Products
What is a Product? Types of Consumer Products Little product awareness and knowledge (or if aware, sometimes negative interest) Pricing varies Distribution varies Aggressive advertising and personal selling by producers and resellers Convenience Shopping Specialty Unsought Goal 1: Understand products and their classifications
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Product and Service Classifications
Consumer products Industrial products Materials and parts Capital items Supplies and services Goal 1: Understand products and their classifications
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Product and Service Classifications
Organizations, persons, places, and ideas Organizational marketing makes use of corporate image advertising Person marketing applies to political candidates, entertainment sports figures, and professionals Place marketing relates to tourism Social marketing promotes ideas Goal 1: Understand products and their classifications
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Product and Service Decisions
Key Decisions Product attributes Quality, features, style and design Branding Kellogg’s Packaging Starkist Labeling Product support services Individual Product Product Line Product Mix Goal 2: Learn decisions companies make regarding products
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Product and Service Decisions
Key Decisions Product line A group of products that are closely related because they may: function in a similar manner be sold to the same customer groups, be marketed through the same types of outlets fall within given price ranges Special K Individual Product Product Line Product Mix Goal 2: Learn decisions companies make regarding products
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Product and Service Decisions
Key Decisions Product line length Line stretching: adding products that are higher or lower priced than the existing line Line filling: adding more items within the present price range Individual Product Product Line Product Mix Goal 2: Learn decisions companies make regarding products
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Product and Service Decisions
Key Decisions Product mix Also known as product assortment Consists of all the product lines and items that a particular seller offers for sale Kellogg’s Individual Product Product Line Product Mix Goal 2: Learn decisions companies make regarding products
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Product and Service Decisions
Key Decisions Product mix width: Number of different product lines carried by company Product mix depth: Number of different versions of each product in the line Product mix consistency Individual Product Product Line Product Mix Goal 2: Learn decisions companies make regarding products
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Branding Strategy Brand equity is the positive differential effect that knowing the brand name has on customer response to the product or service One measure of equity is the extent to which customers are willing to pay more for the brand Campbell’s Brand valuation is the process of estimating the total financial value of a brand Goal 3: Understand branding strategy
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Branding Strategy Brands with strong equity have many competitive advantages: High consumer awareness Strong brand loyalty Helps when introducing new products Less susceptible to price competition Goal 3: Understand branding strategy
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Brand Strategy Key Decisions Three levels of positioning:
Product attributes Least effective Benefits Beliefs and values Taps into emotions Brand Positioning Brand Name Selection Brand Sponsorship Brand Development Goal 3: Understand branding strategy
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Brand Strategy Key Decisions Brand Positioning Brand Name Selection
Good Brand Names: Suggest something about the product or its benefits Mr. Clean Are easy to say, recognize and remember Are distinctive Are extendable Translate well into other languages Can be registered and legally protected Key Decisions Brand Positioning Brand Name Selection Brand Sponsorship Brand Development Goal 3: Understand branding strategy
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Brand Strategy Key Decisions Manufacturer brands
Private (store) brands Costly to establish and promote Higher profit margins Licensed brands Name and character licensing has grown Co-branding Advantages / disadvantages Brand Positioning Brand Name Selection Brand Sponsorship Brand Development Goal 3: Understand branding strategy
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Brand Strategy Key Decisions Line extensions Brand extensions
Minor changes to existing products Brand extensions Successful brand names help introduce new products Multibrands Multiple product entries in a product category New brands New product category Brand Positioning Brand Name Selection Brand Sponsorship Brand Development Goal 3: Understand branding strategy
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Managing Brands Brands are known through advertising, personal experience, word of mouth, the Internet Everyone in the company represents the brand Companies need to periodically run a brand audit Goal 3: Understand branding strategy
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Services Marketing Services
Account for 74% of U.S. gross domestic product. Service industries include business organizations, government, and private not-for-profit organizations. Goal 3: Understand branding strategy
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Characteristics of Services
Intangibility Consumers look for service quality signals Inseparability Services can’t be separated from providers Variability Employees and other factors result in variability Perishability Services can’t be inventoried for later sale Goal 3: Understand branding strategy
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Service Firm Marketing Strategies
The Service-Profit Chain Internal Marketing Interactive Marketing Managing Service Differentiation Managing Service Quality Managing Service Productivity Goal 4: Identify 4 characteristics that affect marketing a service
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Product Decisions and Social Responsibility
Acquiring and dropping products Patent protection Product quality and safety Product warranties Goal 5: Realize additional product issues
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International Product and Services Marketing
Special challenges: Which products should be marketed internationally? Should the products be standardized or adapted for world markets? Packaging? Goal 5: Realize additional product issues
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