1. Products and Brands Chapter Nine

2. Copyright © Houghton Mifflin Company. All rights reserved.9–29–2 Chapter Nine Learning Objectives To learn about product fundamentals that affect marketing products online To identify consumer products best suited to online marketing To determine how enterprise products are sold and developed online To understand why branding is so important online

3. Copyright © Houghton Mifflin Company. All rights reserved.9–39–3 Product Fundamentals Product - the market offer of a good, service, idea, or other item of value Key criteria: buyer and use –Who is the buyer? –How will the product be used? Most products sold online are identical to offline products Product is focus for other marketing mix Many consumers research products online, purchase offline

4. Copyright © Houghton Mifflin Company. All rights reserved.9–49–4 Product Fundamentals (cont’d) Goods Durables –ex. washing machines Non-durables –ex. shampoo Disposables – ex. paper cups Perishables –ex. frozen foods Services –ex. counseling Digitals –ex. Tickets; software; news Mixed –ex. computer and downloaded software Types of Products Sold Online

5. Copyright © Houghton Mifflin Company. All rights reserved.9–59–5 Product Fundamentals (cont’d) FOCUS: Digital Products Core product; license and service / support Product development process: Open Source? –Linux; Firefox Product Augmentation –Online news Your blog: A product ?

6. Copyright © Houghton Mifflin Company. All rights reserved.9–69–6 Product Fundamentals (cont’d) FOCUS: Digital Products Standards –Proprietary versus Open Standards Setting –QWERTY –Railroad Gauge –TCP/IP –WINTEL

7. Copyright © Houghton Mifflin Company. All rights reserved.9–79–7 Product Fundamentals (cont’d) The Internet facilitates product mass customization Large quantities of customized products semiproduced in advance of sale Well-suited to Internet marketing, interactive environment Examples: cosmetics, cereal, apparel, music, shoes

8. Copyright © Houghton Mifflin Company. All rights reserved.9–89–8 Product Fundamentals (cont’d) Advantages Greater product assortment Availability Comparisons Information access Sales (mostly) untaxed Access for shoppers in remote areas Disadvantages Security and privacy risk Purchasing process breakdown Delivery risk Lack of sensory contact Poor quality product pictures, distorted colors S&h costs Complicated returns Purchasing Products Online

9. Copyright © Houghton Mifflin Company. All rights reserved.9–99–9 Consumer Products Convenience Staples –Frequent Repurchase Emergency – Crisis – Noncrisis Impulse Shopping Best suited to online sales Specialty Less well suited Unsought Some unlikely products sold online Classified by Buyer Habits, View of Process

10. Copyright © Houghton Mifflin Company. All rights reserved.9–10 Enterprise and New Products Goods Raw materials and parts –Inputs to production Equipment –Machines needed to run the business Supplies –Expendables Typed By How They Solve Problems Finished products For sale and resale Services Repairs, training, etc. Information Research, intelligence, etc.

11. Copyright © Houghton Mifflin Company. All rights reserved.9–11 Enterprise and New Products (cont’d) New products Internet is a platform for collaborative development of new products Opportunity screening from web sites, chat rooms, online focus groups Online product testing Online product intelligence gathering Digital product changes can be made in real time

12. Copyright © Houghton Mifflin Company. All rights reserved.9–12 Branding Branding is becoming more critical to online marketing success as competition intensifies Cyberbrands created by Amazon, eBay, AOL, Yahoo!, Google, and others Bricks and mortar brands extended online - mixed branding strategy Some cyberbrands have also gone offline Online branding important for both consumer and enterprise products True cyberbrands are frictionless - digital inventory

13. Copyright © Houghton Mifflin Company. All rights reserved.9–13 Branding (cont’d) The domain name is a branding tool Should be meaningful, short, descriptive, associated with product characteristics Domain names identify brands Creates awareness as well as addresses Caution: even great domain names can fail

14. Copyright © Houghton Mifflin Company. All rights reserved.9–14 Branding (cont’d) Must build brand awareness –Online and offline promotions –Oneline Must create, maintain, and protect the brand Risks –Highly visible brand names, bad cobranding matches, complaint sites