Product and Services Concepts Chapter 8 Product and Services Concepts Prepared by Deborah Baker Texas Christian University Chapter 8 Ver 2e Chapter 8

Chapter 8 Objectives 1. Define the term “product.” Product and Services Concepts Chapter 8 Objectives 1. Define the term “product.” 2. Classify consumer products. 3. Discuss the importance of services to the economy. 4. Identify the differences between services and goods. (continued) Chapter 8 Ver 2e Chapter 8

Product and Services Concepts Chapter 8 Objectives 5. Explain why services marketing is important to manufacturers. 6. Define the terms “product item,” “product line,” and “product mix.” 7. Describe marketing uses of branding. (continued) Chapter 8 Ver 2e Chapter 8

Product and Services Concepts Chapter 8 Objectives 8. Describe marketing uses of packaging and labeling. 9. Describe how and why product warranties are important marketing tools. Chapter 8 Ver 2e Chapter 8

Product is the “heart” of Marketing What is a Product? Product is the “heart” of Marketing Mix Price Promotion Place (Distribution) Chapter 8 Ver 2e

Types of Consumer Products ©2000 South-Western College Publishing Unsought Products Specialty Shopping Convenience Consumer Business PRODUCTS Chapter 8 Ver 2e

Types of Consumer Products Specialty Products Convenience Shopping Unsought Chapter 8 Ver 2e ©2000 South-Western College Publishing

The Importance of Services to the U.S. More than eight in ten workers are in service sector Services are 74% of U.S. GDP Services produced a $55.7 billion balance-of-trade surplus (1993) Service occupations will be responsible for all job growth through 2005 Chapter 8 Ver 2e ©2000 South-Western College Publishing

How Services Differ from Goods Intangibility Characteristics That Distinguish Services Inseparability Heterogeneity Perishability Chapter 8 Ver 2e

Services Marketing in Manufacturing Services are a major factor for success of manufacturing firms Services provide a strong competitive advantage when products are similar Services are often bundled into purchases of manufactured goods Chapter 8 Ver 2e

Efficient Sales and Distribution Advertising Economies Product Lines Equivalent Quality Efficient Sales and Distribution Standardized Components Package Uniformity Advertising Economies Why Form Product Lines? Chapter 8 Ver 2e

Width of the product mix Depth of the product lines Gillette’s Product Lines and Mix Width of the product mix Blades and Writing razors Toiletries instruments Lighters Mach 3 Series Paper Mate Cricket Sensor Adorn Flair S.T. Dupont Trac II Toni Atra Right Guard Swivel Silkience Double-Edge Soft and Dri Lady Gillette Foamy Super Speed Dry Look Twin Injector Dry Idea Techmatic Brush Plus Depth of the product lines Chapter 8 Ver 2e

Product Lines and Product Mix Product Mix Width Spreads risk across multiple lines Capitalizes on established reputations Attracts buyers with different preferences Capitalizes on economies of scale Increases sales/profits by further market segmentation Evens out seasonal sales patterns Product Line Depth Chapter 8 Ver 2e

Adjustments to Products Adjustments to Product Items, Lines, and Mixes Product Modification Product Line Extension or Contraction Product Repositioning Chapter 8 Ver 2e ©2000 South-Western College Publishing

Types of Product Modifications Functional Modification Quality Modification Types of Product Modifications Functional Modification Style Modification Chapter 8 Ver 2e ©2000 South-Western College Publishing

Product Repositioning Why reposition established brands? Changing Demographics Changes in Social Environment Declining Sales Chapter 8 Ver 2e

Symptoms of Product Line Overextension Product Line Contraction Symptoms of Product Line Overextension Some products are not contributing to profit because of low sales or cannibalization Manufacturing or marketing resources are disproportionately allocated to slow-moving products Items in the line have become obsolete because of new product entries Chapter 8 Ver 2e

Branding is the main tool used to distinguish products Benefits of Branding Purposes of Branding Branding is the main tool used to distinguish products from competition Product Identification Repeat Sales New-Product Sales Chapter 8 Ver 2e

Brand Names Good brand names have several of these features… Product and Services Concepts Brand Names Good brand names have several of these features… Is easy to pronounce Is easy to recognize and remember Is short and distinctive Describes the product and product use Describes product benefits Has a positive connotation Reinforces the desired product image Is legally protectable in home and foreign markets Chapter 8 Ver 2e Chapter 8

Branding Strategies Brand No Brand Manufacturer’s Brand Private Brand Product and Services Concepts Branding Strategies Brand No Brand Manufacturer’s Brand Private Brand Individual Brand Family Brand Combi- nation Chapter 8 Ver 2e Chapter 8

Complementary Branding Cobranding Types of Cobranding Ingredient Branding Complementary Branding Cooperative Branding Chapter 8 Ver 2e ©2000 South-Western College Publishing

TM Trademarks A Trademark is the exclusive right to use a brand Product and Services Concepts Trademarks A Trademark is the exclusive right to use a brand Many parts of a brand and associated symbols qualify for trademark protection The mark has to be continuously protected Rights continue for as long as it is used TM Chapter 8 Ver 2e Chapter 8

Facilitate Storage, Use, Packaging Contain and Protect Functions of Packaging Promote Facilitate Storage, Use, and Convenience Facilitate Recycling Chapter 8 Ver 2e

Labeling Forms of Labeling Focuses on promotional theme Persuasive Focuses on promotional theme Information is secondary Informational Helps make proper selections Lowers cognitive dissonance Includes use/care Chapter 8 Ver 2e

Product Warranties Warranties Express Warranty Implied Warranty Written Guarantee Warranties Implied Warranty Unwritten Guarantee Chapter 8 Ver 2e