1. Product and Services Strategy
Chapter 8
Product and Services Strategy

2. What is a Product?
A Product is 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
Combinations of the above

3. What is a Service?
A Service is a form of product that consist of activities, benefits, or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything.
Examples include:
Banking
Hotels
Tax Preparation
Home Repair Services

4. Products, Services, and Experiences
Service With Accompanying Minor Goods
Tangible Good With Accompanying Services
Pure Tangible Good
Hybrid Offer
Pure Service
Auto With Accompanying Repair Services
Airline Trip With Accompanying Snacks
Soap
Restaurant
Doctor’s Exam
The Product-Service Continuum

5. Levels of Product (Fig. 8.1)
Brand
Name
Quality
Level
Packaging
Design
Features
Delivery
& Credit
Installation
Warranty
After-
Sale
Service
Core
Benefit or
Actual Product
Core Product
Augmented Product

6. Product Classifications Consumer Products
Convenience Products
Buy frequently & immediately
Low priced
Mass advertising
Many purchase locations
i.e Candy, newspapers
Shopping Products
Buy less frequently
Higher price
Fewer purchase locations
Comparison shop
i.e Clothing, cars, appliances
Specialty Products
Special purchase efforts
High price
Unique characteristics
Brand identification
Few purchase locations
i.e Lamborghini, Rolex
Unsought Products
New innovations
Products consumers don’t
want to think about these products
Require much advertising &
personal selling
i.e Life insurance, blood donation

7. Product Classifications Industrial Products
Materials
and
Parts
Capital
Items
Supplies
and
Services

8. Product Classifications Other Marketable Entities
Activities undertaken to create, maintain, or change the attitudes and behavior toward the following:
Organizations - Profit (businesses) and nonprofit (schools and churches).
Persons – Politicians, entertainers, sports figures, doctors and lawyers.
Places - Business sites and tourism.
Ideas (social ideas marketing) – public health campaigns, environmental campaigns, and others such as family planning, or human rights.

9. Individual Product Decisions (Fig. 8.2)
Product Attributes
Branding
Labeling
Packaging
Product Support Services

10. Product Attributes
Developing a Product or Service Involves Defining the Benefits that it Will Offer Such as:
Product Quality
Product Features
Product Style
& Design
Ability of a Product to Perform Its Functions; Includes Level & Consistency
Help to Differentiate the Product from Those of the Competition
Process of Designing a Product’s Style & Function

11. Branding Advantages of Brand Names Brand Equity Consistency
Quality & Value
Attributes
Identification
Advantages of
Brand Names
Brand
Equity
High Brand
Loyalty
Strong Brand
Association
Name Awareness
Perceived Quality

12. Major Branding Decisions (Fig. 8.3)
Brand Name Selection
Selection
Protection
Major Branding Decisions (Fig. 8.3)
Brand Sponsor
Manufacturer’s Brand
Private Brand
Licensed Brand
Co-branding
Brand Strategy
Line Extensions
Brand Extensions
Multibrands
New Brands

13. Four Brand Strategies (Fig. 8.4)
Line Extension
Dannon Yogurt Flavors
Multibrands
Seiko Lasalle & Pulsar
Brand Extension
Barbie Electronics
New Brands
Windex (by acquisition)
Brand Name
Existing
New
Product Category

14. Brand Strategy Line Extension Brand Extension Multibrands New Brands
Existing brand names extended to new forms, sizes, and flavors of an existing product category.
Brand Extension
Existing brand names extended to new or modified product categories.
Multibrands
New brand names introduced in the same product category.
New Brands
New brand names in new product categories.

15. Discussion Connections
List as many specific examples as you can find of each of the following:
brand licensing,
co-branding,
line extensions, and
brand extensions.
Can you find a single brand that has done all of these?
Pick and describe a familiar brand that has been widely extended. What are the benefits and dangers for this specific brand?

16. Packaging
Activity of designing and producing the container or wrapper for a product.
Packaging used to just contain and protect the product.
Packing now has promotional value and marketers should:
Establish a packaging concept,
Develop specific elements of the package,
Tie together elements to support the positioning and marketing strategy.

17. Labeling Printed information appearing on or with the package.
Performs several functions:
Identifies product or brand
Describes several things about the product
Promotes the product through attractive graphics.

18. Product - Support Services
Companies should design its support services to profitably meet the needs of target customers and gain competitive advantage.
How?
Step 1. Survey customers to assess the value of current services and to obtain ideas for new services.
Step 2. Assess costs of providing desired services.
Step 3. Develop a package of services to delight customers and yield profits to the company.

19. Product Line Decisions
Product Line Length
Number of Items in the Product Line
Stretching
Lengthen beyond current range
Filling
Lengthen within current range
Two-Way
Downward
Upward

20. Product Mix Decisions Consistency
Width - number of different product lines
Consistency
Length - total number of items
in product lines
Product Mix -
all the product
lines & items
offered
Depth - number of versions of each product

21. Discussion Connections
Using P&G’s Web site ( , its annual report, or other sources, develop a list of all the company’s product lines and individual products. What surprises you about this list of products?
Is P&G’s product mix consistent?
What overall strategy or logic appears to have guided the development of this product mix?

22. Nature and Characteristic of a Service
Intangibility
Inseparability
Can’t be seen, tasted, felt, heard, or smelled before purchase.
Can’t be separated from service
providers.
Quality depends on who provides them and when, where and how.
Can’t be stored for later sale or use.
Variability
Perishability

23. The Service-Profit Chain
Internal
Service Quality
Healthy
Service Profits
and Growth
Satisfied and
Loyal
Customers
Satisfied and
Productive Service
Employees
Greater Service
Value

24. Marketing Strategies for Service Firms
Managing Service Differentiation
Develop differentiated offer, delivery and image.
Managing Service Quality
Empower front-line employees,
Become “Customer obsessed”,
Develop high service quality standards,
Watch service performance closely.
Managing Service Productivity
Train current or new employees better,
Work on quality as well as quantity,
Utilize technology.

25. International Product and Services Marketing
Decide Which Products & Services to Introduce
Decide How Much to Standardize or Adapt
Packaging Presents New Challenges
International Product and Services Marketing
Service Marketers Face Special Challenges
Trend Toward Global Service Companies Will Continue

26. Review of Concept Connections
Define product and the major classifications of products and services.
Describe the roles of product and service branding, packaging, labeling, and product support services.
Explain the decisions companies make when developing product lines and mixes.
Identify the four characteristics that affect the marketing of a service.
Discuss the additional marketing considerations for services.