s 2015 chp 7 products services and brands 2014-5

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Copyright © 2011 Pearson Education

Chapter 7Products, Services, and Brands

- Building Customer Value

Veronica Mak

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Lect. 2 Lect. 5

Lect. 5

Lect. 5

Lect. 5

Lect. 5

Lect. 6

Lect. 7

Lect. 8

Lect.5-8

Lect.5-8

Lect.5-8

Lect. 3 & 4

Lect. 3&4

Today’s Lecture

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What is a Product?

A product is anything that can be offered to a market for

attention,

acquisition, use, or

consumption that

might satisfy a want

or need.

- Include services, events, persons, places, organizations,

ideas or mixes of these.

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Services

Services are a form of product that consistof activities, benefits, or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything.

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Products, Services and Experiences

• Market offerings often include both tangible goods and services– Pure tangible good– Pure service

• Many companies now marketing experiences

Olive Garden sells more than just Italian food—it serves up an idealized Italian family meal experience

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Three Levels of Product-to create value and satisfying customer experience.

CCV= What is the Customer really Buying?

-Steps of product development:

-1. identify core customer value

-2. design actual product

-3. find ways to augment

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Discussion Question

Describe the THREE levels of product

for Harley-Davidson?

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Levels of Products and Services

• Core customer value• What the consumer is really buying

– Actual product• Brand name, service 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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Three Levels of Product-to create value and satisfying customer experience.

Harley-Davidson

•Actual product

•Augmented product:

•Company-sponsored the Harley Owner’s Group (H.O.G): travel adventures, events, publications.

•Clothes and accessories both for riders and for those who simply like to associate with the brand.

CCV: “Harley-Davidson stands for independence, freedom, individuality, expressing one’s self, adventure on the open road, and experiencing life to its fullest”.

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• Umpqua Bank vs HSBC • Nike vs Adidas• IBM vs Apple

Core Customer Values

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Consumer Products

• A product bought by final consumers for personal consumption

• Classified by how consumers buy them

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Convenience Products

• Consumer products that customers usually buy frequently, immediately, and with minimal comparison and buying effort– Low priced– Placed in many locations to make them readily

available– Mass promotion– E.g. Laundry detergent, candy, magazines, and

fast food

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Shopping products

• Consumer products that the customer, in the process of selecting and purchasing, usually compare on such attributes as suitability, quality, price, and style– Less frequently purchased– Distributed through fewer outlets– Greater sales support– E.g. Furniture, clothing, used cars

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Specialty products

• Consumer products with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort – Different brands are not usually

compared– Careful targeted promotion– E.g. Luxury goods, specific brands

of cars, high-priced photographic equipment, designer clothes, and the services of medical or legal specialists

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Unsought Products

• Consumer products that the consumer either does not know about or knows about but does not normally consider buying– Require a lot of advertising, personal selling, and

other marketing efforts– New innovations are generally unsought till

advertised– Known but unsought products and services are

life insurance, preplanned funeral services

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Industrial Products

• Products bought by individuals and organizations for further processing or for use in conducting a business

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Organizations

• Organization marketing consists of activities undertaken to create, maintain, or change the attitudes and behavior of target consumers toward an organization

• Business firms sponsor public relations or corporate image marketing campaigns to market themselves and polish their images

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Organization Marketing

• IBM’s Smarter Planet campaign markets IBM as a company that helps improve the world’s IQ

This ad tells how IBM technologies are helping to create safer food supply chains

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Persons

• Person marketing consists of activities undertaken to create, maintain, or change attitudes or behavior toward particular people

• Organizations use well-known personalities to help sell their products or causes

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Places

• Place marketing – Involves activities undertaken to create,

maintain, or change attitudes or behavior toward particular places

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Ideas: Social Marketing

Social marketing is the use of commercial marketing concepts and tools in programs designedto influence individuals’ behavior to improve their well-being and thatof society.

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Figure 7.2 - Individual Product Decisions

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Product and Service Attributes

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Packaging

Packaging : power of good packaging to create immediate consumer recognition of a brand.

-Visibility, Information, Emotion, Workability

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Labeling

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Product Support Services

• An important part of the customer’s overall brand experience

• Firms must survey customers to assess the value of current services and obtain ideas for new ones

Nordstrom thrives on stories about its after-sale service. It wants to “Take care of customers, no matter what it takes,” before, during, and after the sale

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Branding

identifies the maker or seller of a product or service.Customers attach meanings to brands and develop brand relationships

A brand is a name, term, sign, symbol, or design, or a combination of these, that

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• Building Strong Brands

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Building Strong Brands

• Brand equity: The differential effect that knowing the brand name has on customer response to the product or its marketing Consumers sometimes bond very

closely with specific brands. To this customer, this isn’t just a cup of coffee, it’s a deeply satisfyingStarbucks brand experience

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• Young & Rubicam’s Brand Asset Evaluator measures brand strength along four consumer perception dimensions:

• differentiation (what makes the brand stand out),

• relevance (how consumers feel it meets their needs),

• knowledge (how much consumers know about the brand), and

• esteem (how highly consumers regard and respect the brand).

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Brand valuation is the process of estimating the total financial value of a brand.

Many competitive advantages:• High level of consumer brand

awareness and loyalty. • More leverage in bargaining

with resellers.

• More easily launch line and brand extensions.

• Defense against fierce price competition.

• Forms the basis for building strong and profitable customer relationships.

• The fundamental asset underlying brand equity is customer equity—the value of the customer relationships that the brand creates.

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Figure 7.5 – Major Brand Strategy Decisions

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- Brand Positioning

Brand Attributes

Brand Benefits

Brand Value and Belief

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Brand PositioningBrand Positioning

• Marketers can position brands clearly in customers’ minds at any of three levels– Product attributes– Product benefits– Beliefs and values

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- Brand Positioning

Marlboro Sponsorship

Package Opening

Strong Taste

Brown Filter

Red and White

Package

Red, V-shape logoMarlboro

Cowboy

Marlboro Boundar

y

Marlboro Masculine

Sports

Iron Man

Tough and

Brave

Strongly Built

Adventurous

Youth & Energy

Freedom and raw

Icon of America

n

Power

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- Brand Name Selection

• Benefits• Remember • Extension• TrAnslation• Distinctive

• Protection

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- Brand Sponsorship• Manufacturer’s brand:

Rolex• Private Brand: Select of

Park’n Shop• Licensing: Hello Kitty

keychain• Co-branding:

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Brand Sponsorship

• Sellers of children’s products attach an almost endless list of character names to clothing, toys, school supplies, linens, dolls, lunch boxes, cereals, and other items

SpongeBob alone has generated more than $8 billion in sales and licensing fees over the past decade

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Marketing At Work

• Consumer frugality results in increased sales of store brands

• Store brands now offer much greater selection, and are rapidly achieving name-brand quality

Walmart’s store brands account for a whopping 40 percent of its sales, and its Great Value brand is the nation’s largest single food brand

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Figure 7.6 - Brand Development Strategies

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Brand Development

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Managing Brands

• Communicate the brand’s positioning

• Manage all brand touch points

• Train employees to live the brand

• Audit the brands’ strengths and weaknesses

Brands are not maintained by advertising but by customers’ brand experiences

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Product Line

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 is a group of products that are

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Product Line Decisions

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Product Mix Decisions

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The Product Mix

Campbell’s product mix consists of three major product lines. Each product line consists of several sublines. Each line and subline has many individual items

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Figure 7.3 - Four Service Characteristics

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The Nature and Characteristics of a Service

• The service provider’s task is to make the service tangible in one or more ways and send the right signals about quality

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The Service-Profit Chain

• The chain that links service firm profits with employee and customer satisfaction

• The five links– Internal service quality– Satisfied and productive service employees– Greater service value– Satisfied and loyal customers– Healthy service profits and growth

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Figure 7.4 - Three Types of Service Marketing

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Services Marketing

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Marketing at Work

• Web retailer Zappos prioritizes excellent customer service

• Zappos knows that happy customers begin with happy, dedicated, and energetic employees

Enthusiastic employees make outstanding brand ambassadors for Zappos

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Managing Services

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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

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Reviewing the Concepts

• 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

s 2015 chp 7 products services and brands 2014-5

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