Chapter Eight
Product, Services, and Brands:
Building Customer Value
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Product, Services, and
Branding Strategy
Topic Outline
• Product, Services, and Experiences
• Product and Services Decisions
• Services Marketing
• Branding Strategy: Building Strong
Brands
• Product Life Cylce Strategies (Chapter
9)
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What Is a Product?
Products, Services, and Experiences
Product is anything that can be offered in a market
for attention, acquisition, use, or consumption
that might satisfy a need or want
Service is a product that consists of activities,
benefits or satisfaction that is essentially
intangible and does not result in the ownership
of anything
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What Is a Product?
Products, Services, and Experiences
Experiences represent what buying the product or
service will do for the customer
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What Is a Product?
Levels of Product and Services
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What Is a Product?
Product and Service Classifications
Consumer
products
Industrial
products
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What Is a Product?
Product and Service Classifications
• Consumer products are products and
services for personal consumption
• Classified by how consumers buy them
– Convenience products
– Shopping products
– Specialty products
– Unsought products
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What Is a Product?
Product and Service Classifications
Convenience products
consumer products and services that
the customer usually buys frequently,
immediately, and with a minimum
comparison and buying effort
– Newspapers
– Candy
– Fast food
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What Is a Product?
Product and Service Classifications
Shopping products
consumer products and services that
the customer compares carefully on
suitability, quality, price, and style
– Furniture
– Cars
– Appliances
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What Is a Product?
Product and Service Classifications
Specialty products
consumer products and services with unique
characteristics or brand identification for which a
significant group of buyers is willing to make a
special purchase effort
• Medical services
• Designer clothes
• High-end electronics
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What Is a Product?
Product and Service Classifications
Unsought products
consumer products that the consumer does not
know about or knows about but does not
normally think of buying
• Life insurance
• Funeral services
• Blood donations
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What Is a Product?
Product and Service Classifications
Industrial products
products purchased for further processing or for
use in conducting a business
• Classified by the purpose for which the product is
purchased
– Materials and parts
– Capital
– Raw materials
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What Is a Product?
Product and Service Classifications
Capital items are industrial products that aid
in the buyer’s production or operations
Materials and parts include raw materials and
manufactured materials and parts usually
sold directly to industrial users
Supplies and services include operating
supplies, repair and maintenance items,
and business services
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What Is a Product?
Organizations, Persons, Places, and Ideas
Organization marketing consists of activities
undertaken to create, maintain, or change
attitudes and behavior of target consumers
toward an organization
What Is a Product?
Organizations, Persons, Places, and Ideas
Person marketing consists of activities
undertaken to create, maintain, or change
attitudes and behavior of target consumers
toward particular people
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What Is a Product
Organizations, Persons, Places, and
Ideas
Place marketing consists of activities undertaken
to create, maintain, or change attitudes and
behavior of target consumers toward
particular places
Social marketing is the use of commercial
marketing concepts and tools in programs
designed to influence individuals’ behavior to
improve their well-being and that of society
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Product and Service Decisions
Individual Product and Service Decisions
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Product and Service Decisions
Individual Product and Service Decisions
Product or service attributes
communicate and deliver the benefits
• Quality
• Features
• Style and design
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Product and Service Decisions
Individual Product and Service
Decisions
• Product Quality Level is the level of quality that
supports the product’s positioning
• Product Conformance Quality is the product’s
freedom from defects and consistency in
delivering a targeted level of performance
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Product and Service Decisions
Individual Product and Service
Decisions
Product features
• are a competitive tool for differentiating a
product from competitors’ products
• are assessed based on the value to the customer
versus the cost to the company
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Product and Service Decisions
Individual Product and Service
Decisions
Style describes the
appearance of the
product
Design contributes to a
product’s usefulness as
well as to its looks
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Product and Service Decisions
Individual Product and Service
Decisions
Brand is the name, term, sign, or design—or a
combination of these—that identifies the maker
or seller of a product or service
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Product and Service Decisions
Individual Product and Service
Decisions
Packaging involves designing and producing the
container or wrapper for a product
Labels identify the product or brand, describe
attributes, and provide promotion
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Product and Service Decisions
Individual Product and Service
Decisions
Product support services augment actual products
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Product and Service Decisions
Product Line Decisions
Product line is 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
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Product and Service Decisions
Product Line Decisions
Product line length is the number of items in the
product line
• Line stretching
• Line filling
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Product and Service Decisions
Product Mix Decisions
Product mix consists of all the products and items
that a particular seller offers for sale
» Width
» Length
» Depth
» Consistency
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Services Marketing
Types of Service Industries
• Government
• Private not-for-profit organizations
• Business services
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Services Marketing
Nature and Characteristics of a Service
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Services Marketing
Marketing Strategies for Service Firms
In addition to traditional
marketing strategies, service
firms often require
additional strategies
• Service-profit chain
• Internal marketing
• Interactive marketing
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Services Marketing
Marketing Strategies for Service Firms
Service-profit chain links service firm profits
with employee and customer satisfaction
• Internal service quality
• Satisfied and productive service
employees
• Greater service value
• Satisfied and loyal customers
• Healthy service profits and growth
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Services Marketing
Marketing Strategies for Service Firms
Internal marketing means that the service firm must
orient and motivate its customer contact
employees and supporting service people to
work as a team to provide customer satisfaction
Internal marketing must precede external marketing
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Services Marketing
Marketing Strategies for Service Firms
Interactive marketing means that service quality
depends heavily on the quality of the buyer-
seller interaction during the service
encounter
• Service differentiation
• Service quality
• Service productivity
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Services Marketing
Marketing Strategies for Service Firms
Managing service differentiation
creates a competitive advantage
from the offer, delivery, and image
of the service
• Offer can include distinctive
features
• Delivery can include more able and
reliable customer contact people,
environment, or process
• Image can include symbols and
branding
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Services Marketing
Marketing Strategies for Service Firms
Managing service quality provides
a competitive advantage by
delivering consistently higher
quality than its competitors
Service quality always varies
depending on interactions
between employees and
customers
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Services Marketing
Marketing Strategies for Service Firms
Managing service productivity refers to the cost side
of marketing strategies for service firms
• Employee recruiting, hiring, and training
strategies
• Service quantity and quality strategies
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Branding Strategy: Building Strong Brands
Brand equity
The differential effect that knowing the
brand name has on customer response to
the product or its marketing.
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Branding Strategy: Building Strong Brands
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Branding Strategy: Building Strong
Brands
Brand Positioning
Brand strategy decisions
include:
• Product attributes
• Product benefits
• Product beliefs and values
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Branding Strategy: Building Strong Brands
Brand Name Selection
Desirable qualities
1. Suggest benefits and qualities
2. Easy to pronounce, recognize, and remember
3. Distinctive
4. Extendable
5. Translatable for the global economy
6. Capable of registration and legal protection
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Branding Strategy: Building Strong
Brands
Brand Sponsorship
Manufacturer’s brand
Private brand
Licensed brand
Co-brand
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Branding Strategy: Building Strong Brands
Brand Development Strategies
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Product Life-Cycle Strategies
Product Life Cycle
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Product Life-Cycle Strategies
• Product development
– Sales are zero and investment costs mount
• Introduction
– Slow sales growth and profits are nonexistent
• Growth
– Rapid market acceptance and increasing profits.
• Maturity
– Slowdown in sales growth and profits level off or
decline
• Decline
– Sales fall off and profits drop
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Product Life-Cycle Strategies
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Product Life-Cycle Strategies
Introduction Stage
• Slow sales growth
• Little or no profit
• High distribution and promotion expense
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Product Life-Cycle Strategies
Growth Stage
• Sales increase
• New competitors enter the market
• Price stability or decline to increase
volume
• Consumer education
• Profits increase
• Promotion and manufacturing costs gain
economies of scale
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Product Life-Cycle Strategies
Maturity Stage
• Slowdown in sales
• Many suppliers
• Substitute products
• Overcapacity leads to competition
• Increased promotion and R&D to
support sales and profits
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Product Life-Cycle Strategies
Maturity Stage Modifying Strategies
• Market modifying
• Product
modifying
• Marketing mix
modifying
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Product Life-Cycle Strategies
Decline Stage
• Maintain the product
• Harvest the product
• Drop the product
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