chapter 8 product, service, and brands (building customer value)
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PRODUCT, SERVICE and BRANDS:BUILDING CUSTOMER VALUE
CHAPTER 8
CHAPTER 8: LEARNING OBJECTIVES
• Define Product• Understand the levels of product and
services• Understand the decisions companies make
regarding their individual products and services, product lines, and product mixes
• Explain how companies build and manage their brands
• Enumerate the four characteristics of service marketing
WHAT IS A PRODUCT?
Product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need.
—Also include services, events, persons, place, organizations, ideas, or a mixture of these—
EXAMPLES OF PRODUCT
EVENT PLACE IDEAS(new product)
SERVICESSERVICES are a form of product that
consists of activities, benefits, or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything.
EXAMPLES
Doctor’s Examination
HAIR CUT
Product, Service, Experience PURE TANGIBLE GOOD PURE SERVICE
COMBINATION OF THIS TWO
Levels of Product
CORE CUSTOMER
VALUE
ACTUAL PRODECT
AUGMENTED PRODUCT
What is the buyer
really buying?
To develop product and
service features, design, a
quality level, a brand name,
and packaging.
Offering additional consumer
services and benefits.
AUGMENTED:
PACKAGING
FEATURES
DESIGN
QUALITY LEVEL
BRAND
DELIVERY
WARRANTY
AFTER SALES SERVICES
CREDIT/PAYMENT TERMS
INSTALLATION
NOKIA N8:
THE CORE PRODUCT:
COMMUNICATIONMESSAGING
THE ACTUAL PRODUCTPACKAGING-Anodised
Aluminium case, available in 6 different colours.
Size: 113.5 x 59 x 12.9 mm Weight (with battery): 135 g Volume: 86 cc FEATURES-Works on Symbian
^3, Has a 12 MP camera, Radio and Music player and Gaming.
QUALITY LEVEL: Phone camera is of exceptional quality with HD recording.
BRAND: Nokia, which happens to be one of the most trusted cell phone brands in India.
AUGMENTED PRODUCTDELIVERY: Then product
can be purchased from any Electronic goods showroom. It can be also ordered online.
INSTALLATION: Not required.
WARRANTY: The product has a warranty period of 1 year.
AFTER SALE SERVICES: Can be acquired from any Nokia service centre.
CREDIT/PAYMENT TERMS: EMI Facilities.
Product and service classification
Product and services classes
Consumer products
Are products and services bought by final consumers for personal consumption.
Industrial Products
A product brought by individuals and organizations for further processing for use in conducting a business.
Types of consumer product
Consumer Product
Convenience Product
Shopping Product
Specialty Product
Unsought Product
Marketing Considerati
ons
Convenience Shopping Specialty Unsought
Customer buying
behavior
Frequent purchase, little planning, little
comparison or shopping effort, low
customer involvement
Less frequent purchase,
much planning and shopping
effort, comparison of
brands on price, quality, style
Strong brand preference and loyalty, special purchase effort,
little comparison of brands, low price
sensitivity
Little product awareness
Price Low price Higher Price High Price Varies
Distribution Widespread distribution,
convenient locations
Selective distribution in fewer outlets
Exclusive distribution in only one or few outlets per market area
Varies
Promotion Mass promotion by the producer
Advertising and personal selling
by both the producer and
resellers
More carefully targeted promotion
by both the producer and
reseller
Aggressive advertising and
personal selling by the producer and
reseller
Examples Toothpaste, magazines and
detergent
Clothing and appliances
Luxury goods such Rolex or fine
crystals
Life insurance and red cross blood
donations
Industrial Product typesMaterials and parts - Raw materials and
manufactured materials and parts.
Capital Items – Industrial products that aid in the buyer’s production or operation.
Supplies and services – Operating supplies and repair and maintenance items.
Organizations,Persons,Places and Ideas
Organization marketing - consist of activities undertaken to create, maintain, or change the attitudes and behavior of target consumers towards an organization.
Person marketing - consist of activities undertaken to create, maintain, or change the attitudes or behavior toward particular people.
Place marketing - Involves activities undertaken to create, maintain, or change the attitudes or behavior toward particular people.
Ideas – is a concept or mental impression, ideas can also be marketed. All marketing is the marketing of an idea.
Social Marketing
The use of commercial marketing concepts and tools in programs designed to influence individuals’ behavior to improve their well being and that of society.
Product and Service Decisions
ProductAttributes
Branding Packaging LabelingProduct
Support and Services
Product and Service Attributes
Developing a product or service involves defining the benefits that it will offer.
- Product Quality - Product Features- Product Style and Design
- Total Quality Management- - is an approach in which all of the company’s
people are involved in constantly improving the quality of the products, services, and business.
BrandingA 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
PackagingThe activities of designing and producing
the container or wrapper for the product.
LabelingThe label identify the product or brand.
Product Support and Services
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 range.
Product Mix Decisions
- The set of al product lines and items that particular seller offers for sale
• Services Marketing– is a sub field of marketing, which can be split into the two main areas of goods marketing (which includes the marketing of fast moving consumer goods (FMCG) and durables) and services marketing. Services marketing typically refers to both business to consumer (B2C) and business to business (B2B) services.
Nature & Characteristics of a Service
– Company must consider four special characteristics when designing marketing programs intangibility, inseparability, variability, and perishability.
SERVICES
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, when, where, & how.
Perishability – Services cannot be stored for later sale or use.
Service-Profit Chain– Chain that links services firm profits with employee &
costumer satisfaction. This chain consist of five links:
Internal service quality – Superior employee section & training, a quality work environment, & strong support for those dealing with costumer.
Satisfied & productive service employees – More satisfied, loyal & hardworking employees.
Greater service value – More effective & efficient costumer value.
Satisfied & loyal costumers – Satisfied costumers who remain loyal, repeat purchase, and refer other costumers.
Healthy service profits & growth – superior service firm performance.
BRANDINGSTRATEGY
Building Strong Brands
1. Brand Positioning2.Brand Name Selection3. Brand Sponsorship4. Brand Development
Brand PositioningWhat are the ATTRIBUTES of the
productWhat are the BENEFITS of the productHow about VALUES and BELIEFS
Brand Name SelectionIt should suggest something about the
product’s benefits and qualitiesEasy to pronounce, recognize and
rememberBrand name should be distinctiveExtendable
Brand Sponsorship
Manufacturer’s brand (National Brand)Private BrandLicensingCo- branding
Private Brandcreated and owned by reseller of a
product or service
Licensingis the accreditation of the brand name
Co- branding the practice of using the established brand
names of two different companies on the same product
Brand DevelopmentLine ExtensionsBrand ExtensionsMultibrandsNew Brands
Line Extensionsextending an existing brand name to new
forms, color, sizes, ingredients or flavors of an existing product category
Brand Extension Extending an existing brand name to new
product categories
Multibrands companies often market different brands
in a given product category
New Brands a company might believe that the power
of its existing brand name is wanting, so new brand name needed