1. Products, Services, and Brands Building Customer Value
Chapter 7

2. Rest Stop: Previewing the Concepts
Define product and the major classifications of products and services.
Describe the decisions companies make regarding their individual products and services, product lines, and product mixes.
Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require.
Discuss branding strategy—the decisions companies make in building and managing their brands.
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First Stop
ESPN – It’s A Brand!
Brand Experience
ESPN: More than a network or Web site, ESPN is a meaningful part of customers’ lives that is synonymous with sports entertainment, and linked with consumers’ sports memories, realities, and anticipations.
Global Power: ESPN truly lives up to its tagline, “The Worldwide Leader in Sports.”
Strong Brand Equity: ESPN is as much recognized and revered as Nike, Google, or Coca-Cola megabrands.
ESPN Media Presence
Television: Grown to 7 ESPN networks. Partners with ABC to produce NASCAR, college sports, World Cup soccer, and more. Pioneered high-definition broadcasting. Achieves high advertising and cable revenues.
Online and Publishing: Web sites are #1 in respective categories; partnered with YouTube to post sports content. Magazine and book title sales are strong.
ESPN is Everywhere: Airports, health clubs, gas stations.
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What Is a Product?
Products are:
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, or some combination thereof.
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What Is a Service?
Services are:
Any activity, benefit, or satisfaction offered for sale that is essentially intangible and does not result in the ownership of anything.
E.g., banking, hotel, airline tickets, retail, tax preparation, home repairs.
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6. Products, Services, and Experiences
Marketing offerings:
Includes both tangible goods and services, as well as combinations of both.
Pure good: Camay soap
Pure service: Legal representation
Combination: Restaurant meal
Creating and managing customer experiences differentiates marketing offers from the competition.
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7. Levels of Product and Services
Core customer value:
What the consumer is really buying.
Actual product:
Includes the brand name, features, design, packaging, and quality level.
Augmented product:
Additional services and benefits such as delivery and credit, instructions, installation, warranty, and service.
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8. Product and Service Classification
Consumer products:
Products and services bought by final consumers for personal consumption.
Also included are other marketable entities.
Classified by how consumers buy them:
Convenience, shopping, specialty, and unsought goods.
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9. Types of Consumer Goods
Convenience goods:
Purchased frequently and immediately with little comparison shopping.
Low priced.
Mass advertising and promotion.
Widespread distribution with many convenient locations.
E.g., candy, soda, newspapers.
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10. Types of Consumer Goods
Shopping products:
Bought less frequently, more planning and effort, brand comparisons on basis of price, quality, style.
Higher price.
Selective distribution in fewer purchase locations.
Advertising and personal selling is undertaken by both producer and reseller.
E.g., furniture, clothing, cars, appliances.
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11. Types of Consumer Goods
Specialty products:
Strong brand preference and loyalty, special purchasing effort, little comparison shopping.
High price.
Exclusive distribution in only one or a few outlets per market area.
Carefully targeted promotion by both producer and reseller.
E.g., Lamborghini, Rolex watches.
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12. Types of Consumer Goods
Unsought products:
Little product awareness or knowledge of the brand, sometimes negative interest.
Pricing strategies vary.
Distribution strategies vary.
Require aggressive advertising and personal selling by both producer and resellers.
E.g., life insurance, cemetery plots, blood donation.
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13. Product and Service Classification
Industrial products:
Those purchased for further processing or for use in conducting business.
Distinction between consumer and industrial products is based on the purpose for which an item is bought (e.g., home or business use).
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14. Types of Industrial Goods
Materials and parts:
Raw materials, manufactured materials, and parts.
Capital items:
Products that aid in buyer’s production or operations.
Supplies and services:
Operating supplies, maintenance, and repair items.
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15. Other Market Offerings
Organizations:
Profit and nonprofit (schools and churches).
Persons:
Politicians, sports figures, doctors, etc.
Places:
Create, maintain, or change attitudes or behavior toward particular places.
Ideas (social marketing):
Public health campaigns, environmental campaigns, family planning, or human rights.
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16. Individual Product Decisions
Product (and service) attributes
Branding
Packaging
Labeling
Product support services
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17. Product and Service Attributes
Product quality dimensions:
Performance quality
Conformance quality
Product feature considerations:
Value to consumer
Cost to company
Product style and design:
Shapes the buyer’s usage experience
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Branding
Branding involves building and managing brands.
A brand:
Is a name, term, sign, symbol, design, or a combination of these, that identifies the products or services of one seller or group of sellers and differentiates them from those of competitors.
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Branding
Advantages to buyers:
Helps identify products.
Cue to product quality and consistency.
Advantages to sellers:
Basis for product’s quality story.
Provides legal protection.
Helps to segment markets.
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Packaging
Packaging:
Involves designing and producing the container or wrapper for a product.
Ideally, good packages should:
Help to market the brand.
Protect the contents.
Provide convenience and ease of use.
Ensure product and user/child safety.
Address environmental concerns.
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Labeling
Labeling refers to printed information appearing on or with the package, including the product name.
Performs several functions:
Identifies product or brand.
Describes several things about the product.
Promotes the product through attractive graphics.
Labeling is regulated by the government.
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22. Product Support Services
Monitoring of support services is key:
Talk with customers to assess the value and quality of current services and to obtain ideas for new services.
Fix problems and put together a package of new services that delights the customers and yields profits for the company.
New technologies can often enhance many support service offerings.
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23. Product Line Decisions
A group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges.
Product line length is a major decision.
Filling (adding more).
Stretching (downward, upward, or both ways).
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Product Mix Decisions
Product mix:
The set of all of the product lines and items that a particular seller offers for sale.
Product mix dimensions include:
Width: the number of different product lines the company carries.
Length: the number of items in a line.
Depth: the number of versions offered of each product in the line.
Consistency: how closely related various lines are.
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25. Nature and Characteristics of a Service
Intangibility:
Services cannot be seen, tasted, felt, heard, or smelled before purchase.
Inseparability:
Services cannot be separated from their providers.
Variability:
Quality of services depends on who provides them and when, where, and how they are delivered.
Perishability:
Services cannot be stored for later sale or use.
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26. The Service-Profit Chain
The service profit chain links employee and customer satisfaction to firm profits.
Five links exist within the chain:
Internal service quality.
Satisfied and productive service employees.
Great service value.
Satisfied and loyal customers.
Healthy service profits and growth.
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Services Marketing
External marketing:
Traditional marketing via the 4 “Ps.”
Internal marketing:
Orienting and motivating customer-contact employees and the supporting service people to work as a team to provide customer satisfaction.
Interactive marketing:
Training service employees in the fine art of interacting with customers to satisfy their needs.
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28. Major Service Marketing Tasks
Managing service differentiation:
Develop a differentiated offer, delivery, and image.
Managing service quality:
Set high service quality standards, have good service recovery, empower front-line employees.
Managing service productivity:
Train current employees or hire new ones, increase quantity and sacrifice quality, harness technology.
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29. Building Strong Brands
Brand equity:
Is the differential effect that knowing the brand name has on customer response to the product or its marketing.
Is a valuable asset that offers many competitive advantages.
Builds strong and profitable customer relationships that result in loyal customers (customer equity).
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30. Major Brand Strategy Decisions
Brands are assets that must be carefully developed and managed via:
Brand positioning
Brand name selection
Brand sponsorship
Brand development
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Brand Positioning
Marketers can position brands clearly in customers’ minds at any of three levels:
Product attributes
Product benefits
Beliefs and values
Marketers should create a brand mission and vision of what the brand must be and do when positioning the brand.
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Brand Name Selection
Desirable qualities for a brand name:
It should suggest the product’s benefits and qualities.
It should be easy to pronounce, recognize, and remember.
It should be distinctive.
It should be extendable.
It should translate easily into foreign languages.
It should be capable of registration and legal protection.
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Brand Sponsorship
Brand sponsorship options include:
National brands (e.g., Sony)
Also called manufacturer brands
Store brands (e.g., Equate)
Also called private brands
Licensed brands
Name or character licensing
Co-branding
Creates broader appeal and brand equity
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Brand Development
Line extension:
Extending an existing brand name to new forms, colors, sizes, ingredients, or flavors within a product category.
Brand extension:
Extending an existing brand name to new product categories.
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Brand Development
Multibranding:
Offers a way to establish different features and appeal to different customer segments, lock up more reseller shelf space, and capture a larger market share.
New brands:
Developed based on belief that the power of its existing brand is waning and a new brand name is needed. Also used for products in a new product category.
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Managing Brands
Continuously communicate the brand’s positioning to consumers.
Manage all brand touch points to maximize the brand experience.
Live the brand–the firm must train employees to be customer centered.
Implement internal branding campaign among employees.
Audit brand’s strengths and weaknesses on a regular basis.
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37. Rest Stop: Reviewing the Concepts
Define product and the major classifications of products and services.
Describe the decisions companies make regarding their individual products and services, product lines, and product mixes.
Identify the four characteristics that affect the marketing services and the additional marketing considerations that services require.
Discuss branding strategy—the decisions companies make in building and managing their brands.
Copyright 2011, Pearson Education Inc. Publishing as Prentice-Hall