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principles of MARKETING
Principles of Marketing, 5th Canadian Edition principles of MARKETING Chapter 8 Products and Services Strategies © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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Principles of Marketing, 5th Canadian Edition
Chapter Objectives Define product and its classifications Describe the roles of product/service branding, packaging, labelling, and product support services Explain product line/mix development decisions Identify characteristics that affect services Discuss additional considerations for services For further details about this topic see page 320 © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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Product and Services Strategies: What is a Product?
Principles of Marketing, 5th Canadian Edition ? Product and Services Strategies: What is a Product? A cluster of benefits that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or a need. It includes physical objects, services, persons, places, organizations, and ideas. For further details about this topic see page 321 © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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Product and Services Strategies: What is a Service?
Principles of Marketing, 5th Canadian Edition Product and Services Strategies: What is a Service? Any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything tangible. For further details about this topic see page 322 © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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What is a Product? The Product-Service Continuum
Principles of Marketing, 5th Canadian Edition What is a Product? The Product-Service Continuum Hybrid offer Pure tangible good Service Dominated offerings For further details about this topic see page 322 © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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Principles of Marketing, 5th Canadian Edition
Levels of Product Core benefit or service Augmented product Installation After- Sale Delivery and credit Warranty Brand name Quality level Design Features Packaging Core product Actual product For further details about this topic see pages © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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Product Classifications: Consumer Products
Principles of Marketing, 5th Canadian Edition Product Classifications: Consumer Products Types of Consumer Products Convenience products Shopping Specialty Unsought For further details about this topic see pages © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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Product Classifications: Industrial Products
Principles of Marketing, 5th Canadian Edition Product Classifications: Industrial Products Capital items Installations Accessory equipment Materials and parts Raw materials Manufactured materials and parts Supplies and services Business services For further details about this topic see pages © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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Product Classifications: Marketable Entities
Principles of Marketing, 5th Canadian Edition Product Classifications: Marketable Entities Organizations Image advertising Persons Places Business site marketing Tourism marketing Ideas Social marketing For further details about this topic see pages © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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Individual Product Decisions
Principles of Marketing, 5th Canadian Edition Individual Product Decisions Branding Product attributes Packaging Support Services Labelling For further details about this topic see pages © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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Product Attributes: Quality
Principles of Marketing, 5th Canadian Edition Product Attributes: Quality The ability of a product to perform its functions including: overall durability reliability precision ease of operation/repair other valued attributes For further details about this topic see pages © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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Product Attributes: Quality
Principles of Marketing, 5th Canadian Edition Product Attributes: Quality Performance quality Conformance quality Total quality management Return on quality Improve customer value For further details about this topic see pages © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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Product Attributes: Features and Design
Principles of Marketing, 5th Canadian Edition Product Attributes: Features and Design Features as a tool for differentiation Value of features versus cost to company Style based solely on visual impact Does not make product perform better Design contributes to usefulness Two together = attention, improved performance, cut costs, competitive advantage For further details about this topic see pages © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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Principles of Marketing, 5th Canadian Edition
Branding Name, term, sign, symbol or design or a combination intended to identify goods or services of a seller or group to differentiate them from competitors “Battle of the brands” For further details about this topic see page 331 © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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Principles of Marketing, 5th Canadian Edition
Branding Gives personality Helps find products with desired benefits Aids repeat purchase Suggests quality of product Basis of product story Gives legal protection Helps in segmenting markets Symbol of ongoing promise Buyer’s viewpoint Seller’s viewpoint For further details about this topic see pages © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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Principles of Marketing, 5th Canadian Edition
Branding Four levels of meaning Attributes Benefits Values Personality For further details about this topic see page 332 © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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Principles of Marketing, 5th Canadian Edition
Brand Equity High consumer brand awareness Brand loyalty Leverage bargaining with resellers Aids launch of line and brand extensions Defence against fierce price competition THE major enduring asset Set of loyal customers Customer equity Customer lifetime value For further details about this topic see pages © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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Major Branding Decisions
Principles of Marketing, 5th Canadian Edition Major Branding Decisions To brand or not to brand Brand No brand Brand name selection Brand sponsor Brand strategy repositioning Selection Protection Manufacturer’s brand Private brand Licensed brand Co-branding New brands Line extensions Brand extensions Multibrands Brand repositioning No brand repositioning For further details about this topic see page 335 © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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Brand Name Selection: Desirable Qualities
Principles of Marketing, 5th Canadian Edition Brand Name Selection: Desirable Qualities Suggest benefits and qualities Easy to pronounce, recognize, and remember Distinctive Translate easily Capable of registration and legal protection Craftsman For further details about this topic see pages © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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Brand Sponsor: Manufacturer vs. Private
Principles of Marketing, 5th Canadian Edition Brand Sponsor: Manufacturer vs. Private Manufacturer’s brands vs. private brands Private often hard to establish Private may yield higher profit margins Private offers exclusivity Slotting fees Private brands gaining quality and increasing sales Personal brands For further details about this topic see pages © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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Brand Sponsor: Licensing and Co-Branding
Principles of Marketing, 5th Canadian Edition Brand Sponsor: Licensing and Co-Branding Licensing Provides instant and proven brand name Royalties paid Co-branding Two established brand names of different companies on the same product Broad consumer appeal and minimal risk and investment Legal contracts, coordination, and trust For further details about this topic see pages © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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Principles of Marketing, 5th Canadian Edition
Four Brand Strategies Line extension New brands Brand Multibrands Existing New Product Category Brand Name For further details about this topic see pages © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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Packaging: Developing a Good Package
Principles of Marketing, 5th Canadian Edition Packaging: Developing a Good Package “The 5th P” Primary container Secondary package Shipping package Labelling Contains and protects product As a marketing tool Reinforce positioning Competitive advantage Packaging concept Product safety “Green” packaging For further details about this topic see pages © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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Labelling: Key Functions
Principles of Marketing, 5th Canadian Edition Labelling: Key Functions Identify product or brand Describe product characteristics Provide promotional and design elements Legal and ethical issues Avoid misleading or dangerous practices Consumer Packaging and Labelling Act Weights and Measures Act For further details about this topic see pages © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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Product Support Services
Principles of Marketing, 5th Canadian Edition Product Support Services Major tool for competitive advantage Design for target customer needs and profit Survey needs and wants Assess costs versus benefits Internet For further details about this topic see page 347 © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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Product Decisions and Social Responsibility
Principles of Marketing, 5th Canadian Edition Product Decisions and Social Responsibility Competition Act Legal obligations to stakeholders Patent laws Hazardous Products Act Food and Drug Act Product liability For further details about this topic see pages © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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Product Line Decisions: Stretching Downward
Principles of Marketing, 5th Canadian Edition Product Line Decisions: Stretching Downward High Low New products Present products Price Quality For further details about this topic see pages © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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Product Line Decisions: Stretching Upward
Principles of Marketing, 5th Canadian Edition Product Line Decisions: Stretching Upward High Low Present products New products Price Quality For further details about this topic see page 349 © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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Product Line Decisions: Stretching Both Ways
Principles of Marketing, 5th Canadian Edition Product Line Decisions: Stretching Both Ways High Low New products Present products Price Quality New Products For further details about this topic see pages © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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Product Line Decisions
Principles of Marketing, 5th Canadian Edition Product Line Decisions Product Line Length Selected Proctor and Gamble Products Fabric Care Household Personal Deodorants Care Cleaning Ivory Snow Ivory Ivory Secret Dryel Comet Camay Sure Tide Mr. Clean Olay Old Spice Joy Swiffer Coast Cheer Zest Oxydol Safeguard Product Mix Width For further details about this topic see pages © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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Services Marketing: Service Sector Organizations
Principles of Marketing, 5th Canadian Edition Services Marketing: Service Sector Organizations Governments Private non-profits Service businesses For further details about this topic see pages © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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Four Service Characteristics
Principles of Marketing, 5th Canadian Edition Four Service Characteristics Intangibility Cannot be seen tasted, felt or smelled before purchasing Inseparability From the provider Services Variability Depends on who provides and under what conditions Perishability Cannot be stored for resale or later use For further details about this topic see pages © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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The Service Profit Chain
Principles of Marketing, 5th Canadian Edition The Service Profit Chain Focus on both customer and employee satisfaction Healthy service profits and growth Satisfied and loyal customers Greater service value Satisfied and productive service employees Internal service quality For further details about this topic see page 354 © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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Three Types of Marketing In Service Industries
Principles of Marketing, 5th Canadian Edition Three Types of Marketing In Service Industries Company Internal marketing External Employees Customers Interactive For further details about this topic see page 354 © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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The Service-Profit Chain
Principles of Marketing, 5th Canadian Edition The Service-Profit Chain Managing Service Differentiation Managing Service Quality Exceed expectations Perceived must exceed expected Credibility and reliability Responsiveness Tangible cues Innovative features Service delivery Service image Empowerment Customer obsessed Top management commitment to quality Watch performance closely For further details about this topic see pages © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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The Service-Profit Chain
Principles of Marketing, 5th Canadian Edition The Service-Profit Chain Managing Productivity Train employees better Hire better staff Trade off with quality Harness technology For further details about this topic see pages © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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International Product and Services Marketing
Principles of Marketing, 5th Canadian Edition International Product and Services Marketing Which countries to enter? Which products to introduce? How much to standardize or adapt? Suitable packaging approach? Follow clients overseas? Non-tariff barriers to services? For further details about this topic see pages © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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Principles of Marketing, 5th Canadian Edition
Chapter Review What is a product and its major classifications? What are the important elements affecting “product”? How do you develop a product line/mix? What affects the marketing of a service? What additional considerations affect services? For further details about this topic see pages © 2002 Pearson Education Canada Inc. © 2002 Pearson Education Canada Inc.
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