Chapter 8

Products, Services, and Brands:

Building Customer Value
Learning Objectives
8-1 Define product and describe the major classifications of products and services.

8-2 Describe the decisions companies make regarding their individual products and
services, product lines, and product mixes.

8-3 Identify the four characteristics that affect the marketing of services and the
additional marketing considerations that services require.

8-4 Discuss branding strategy—the decisions companies make in building and managing
their brands.
What is a Product?
Product is anything that can be offered in a market for attention, acquisition, use, or
consumption that might satisfy a need or want.

Services are a form of product that consists of activities, benefits, or satisfactions and
that is essentially intangible and does not result in the ownership of anything.
What Is a Product?
Products, Services, and Experiences

Products and services are becoming more commoditized.

Companies are now creating and managing customer experiences with their brands
or company.
What Is a Product?
Levels of the Product
Product planners need to think about products and services on three levels. Each level adds
more customer value.

The most basic level is the core customer value, which addresses the question “What is the
buyer really buying?”

At the second level, product planners must turn the core benefit into an actual product. They
need to develop product and service features, a design, a quality level, a brand name, and
packaging.

Finally, product planners must build an augmented product around the core benefit and actual
product by offering additional consumer services and benefits.
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 What Is a Product?
Product and Service Classifications
 What Is a Product?
Product and Service Classifications

Consumer products

Industrial products
What is a Product?
What is a Product?

Product and Service Classifications

Consumer products are products and services bought by final consumers for personal
consumption.
◦ Convenience products
◦ Shopping products
◦ Specialty products
◦ Unsought products
What Is a Product?
Product and Service Classifications
Convenience products are consumer products and services that the customer
usually buys frequently, immediately, and with a minimum comparison and buying
effort.
◦ Newspapers
◦ Candy
◦ Fast food
What Is a Product?
Product and Service Classifications
Shopping products are less frequently purchased consumer products and services
that the customer compares carefully on suitability, quality, price, and style.
◦ Furniture
◦ Cars
◦ Appliances
What Is a Product?
Product and Service Classifications
Specialty products are 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
What Is a Product?
Product and Service Classifications

Unsought products are 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
What Is a Product?

Product and Service Classifications

Industrial products are those products purchased for further processing or for use in
conducting a business.
◦ Materials and parts
◦ Capital items
◦ Supplies and services
What Is a Product?
Product and Service Classifications
Materials and parts include raw materials and manufactured materials and parts.

Capital items are industrial products that aid in the buyer’s production or operations.

Supplies and services include operating supplies, repair and maintenance items, and
business services.
What Is a Product?
Product and Service Classifications

Organizations, Persons, Places, and Ideas

Organization marketing

Person marketing

Place marketing

Social marketing
Organization marketing consists of activities undertaken to create, maintain, or change the
attitudes and behaviors of target consumers toward an organization.

Person marketing consists of activities undertaken to create, maintain, or change the

attitudes or behavior of target consumers toward particular people.

Place marketing consists of activities undertaken to create, maintain, or change attitudes

and behavior toward particular places.

Social marketing uses commercial marketing concepts to influence individuals’ behavior to

improve their well-being and that of society.
Product and Service Decisions
Figure 8.2 Individual Product Decisions
Product and Service Decisions
Individual Product and Service Decisions

Communicate and deliver benefits by product and service attributes.

◦Quality
◦Features
◦Style and design
 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.

A classic stunt by former bargain footwear retailer Payless

dramatically illustrated the power of brands in shaping
perceptions. Fashion influencers paid as much as $645 for
“Palessi” shoes that normally sell for less than $40.
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.
Product and Service Decisions
Individual Product and Service Decisions

Product support services augment actual

products.
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.
 Sony U.S. Product Portfolio

Computer Cameras Televisions Portable

Sony Pictures Games
Theatre Electronics

VAIO Cyber-shot Televisions Walkman Video Movies PlayStation

-Notebook MP3 -Theatre -PS4
-Desktop Alpha SLR Home theatre -DVD -PS3
systems Rolly -Blu-ray -PS2
Digital home Handycam -Portable
Blu-ray disc Reader digital Television
Disc burner Printers book -Comedy
DVD players -Drama
Location free Digital picture Sony cell phone -Daytime
frames Home audio -Cartoons
Mylo components GPS
Photo services Music
Software

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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

Product line stretching and filling: Through skillful line

stretching and filling, Google Nest is positioning itself to
more fully serve the smart homes of the future.

Google Nest is a trademark of Google LL

C
 Product Line Filling
Adding more items within the present range of the line for earning extra profits,
satisfying dealers, using excess capacity, being the leading full-line company, and
plugging holes to keep out competitors.

However, line filling is overdone if it results in cannibalization and customer

confusion. The company should ensure that new items are noticeably different
from existing ones.
Product Line Stretching
Line stretching occurs when a company lengthens its product line beyond its current
range.

Down-Market
Down-Market Stretch
Stretch
(introduce
(introduce aa lower-priced
lower-priced line)
line)

Up-Market
Up-Market Stretch
Stretch
(enter
(enter the
the high
high end
end of
of the
the market)
market)

Two-Way
Two-Way Stretch
Stretch
(product
(product lines
lines in
in both
both directions)
directions)
Product and Service Decisions
Product Mix Decisions
Product mix consists of all the product
lines and items that a particular seller
The product mix: Colgate-Palmolive’s nicely
offers for sale. consistent product mix contains many brands that
constitute the “Colgate World of Care”— products
◦ Width that “every day, people like you trust to care for
themselves and the ones they love.”
◦ Length
◦ Depth
◦ Consistency
 Proctor & Gamble Product Mix

Product Mix Width

Detergents Toothpaste Bar Soap Disposable Diapers Paper Products

Ivory Snow Gleem Ivory Pampers Charmin

Dreft Crest Camay Luvs Puffs

Tide Zest Bounty

Product Line Cheer Safeguard

Length
Dash Oil of Olay

Bold
Gain
Era

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Product Mix Dimensions
Width refers to the number of different product lines the
company carries.

Length refers to the total number of items a company carries

within its product lines. Width Length

Depth refers to the number of versions offered for each

product in the line.
Depth Consistency
Consistency refers to how closely related the various product
lines are in end use, production requirements, distribution
channels, or some other way.
Services Marketing
Figure 8.3 Four Service Characteristics
Services Marketing
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.
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
Brand Strategy: Building Strong Brands (1
of 6)
Brand Equity and Brand Value
Brand equity is the differential effect that knowing the brand name has on customer
response to the product or its marketing.

Brand value is the total financial value of a brand.

Consumers’ relationships with brands: To devoted

Instagram users, the brand stands for much more
than just a photo sharing service. It means
growing closer to friends and family through
shared experiences in the moment.

Lorenzo Di Cola/NurPhoto/Getty Images

Brand Strategy: Building Strong Brands
Brand Strategy: Building Strong Brands
Building Strong Brands

Brand Positioning

Marketers can position brands at any of three levels.

◦ Attributes
◦ Benefits
◦ Beliefs and values
Brand Strategy: Building Strong Brands
Building Strong Brands
Brand Name Selection

 Suggests benefits and qualities

 Easy to pronounce, recognize, and remember
 Distinctive Keri Miksza

 Extendable Store brand quality: ALD I offers a “no risk,

 Translatable for the global economy all reward” Twice As Nice Guarantee on its
store brands. “We’ve designed and tested
 Capable of registration and legal protection our brands to meet or exceed the national
brands in taste and quality."
 Brand Strategy: Building Strong Brands
Brand Sponsorship
Manufacturer’s brand
Private brand
Licensed brand
Co-brand

Protecting the brand name: This ad asks advertisers and

others to always add the registered trademark symbol and
©Kimberly-Clark Worldwide, Inc. Reprinted with
the words “Brand Tissue” to the Kleenex name, helping to permission.
keep from “erasing our coveted brand name that we’ve
worked so hard for all these years.”
Brand Sponsorship
Manufacturer’s brand (national brands):The product is sold under the manufacturer’s own
brand name.

Private brand (store brand):A brand is created and owned by a reseller of a product or service.

Licensed brand: License names or symbols previously created by other manufacturers, names
of well-known celebrities, or characters from popular movies and books.

Co-brand: The practice of using the established brand names of two different companies
on the same product.

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Brand Strategy: Building Strong Brands
Line Extension vs. Brand Extension
In a line extension, the parent brand covers a new product within a product category it
currently serves, such as with new flavors, forms, colors or package sizes.

EXAMPLES???

In a brand extension, the parent brand is used to enter a different product category from
that currently served by the parent brand.

EXAMPLES???
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New brands:
A company might believe that the power of its existing brand name is waning, so a new brand
name is needed. Or it may create a new brand name when it enters a new product category for
which none of its current brand names are appropriate.

Offering too many new brands can result in a company spreading its resources too thin.

Multiple brands:
Companies often market many different brands in a given product category.

A major drawback of multi-branding is that each brand might obtain only a small market share
and none may be very profitable.

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