8
Principles of Marketing
Product, Services, and
Branding Strategy
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
• Soap
• Toothpaste
8-4
What Is a Product?
Products, Services, and Experiences
Service is a form of product that consists
of activities, benefits, or satisfactions
offered for sale that are essentially
intangible and do not result in
ownership
• Doctor’s exam
• Legal advice
8-5
What Is a Product?
Products, Services, and Experiences
Experiences represent what buying the
product or service will do for the
customer
• Disney
• American Girl
• Toys “R” Us
8-6
Levels of Products
Core benefit: The fundamental need or want that consumers satisfy by consuming the product or
service. For example, the need to process digital images.
Generic product: A version of the product containing only those attributes or characteristics
absolutely necessary for it to function. For example, the need to process digital images could be
satisfied by a generic, low-end, personal computer using free image processing software or a
processing laboratory.
Expected product: The set of attributes or characteristics that buyers normally expect and agree to
when they purchase a product. For example, the computer is specified to deliver fast image
processing and has a high-resolution, accurate colour screen.
Augmented product: The inclusion of additional features, benefits, attributes or related services that
serve to differentiate the product from its competitors. For example, the computer comes pre-loaded
with a high-end image processing software for no extra cost or at a deeply discounted, incremental
cost.
Potential product: This includes all the augmentations and transformations a product might undergo
in the future. To ensure future customer loyalty, a business must aim to surprise and delight customers
in the future by continuing to augment products. For example, the customer receives ongoing image
processing software upgrades with new and useful features.
8-8
What Is a Product?
Product and Service Classifications
• Consumer products
• Industrial products
8-9
What Is a Product?
Product and Service Classifications
Consumer products are products and
services for personal consumption
• Classified by how consumers buy them
• Convenience product
• Shopping products
• Specialty products
• Unsought products
8-10
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
8-11
What Is a Product?
Product and Service Classifications
Shopping products are consumer
products and services that the
customer compares carefully on
suitability, quality, price, and style
• Furniture
• Cars
• Appliances
8-12
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
8-13
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
8-14
What Is a Product?
Product and Service Classifications
Industrial products are 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
8-15
What Is a Product?
Product and Service Classifications
Materials and parts include raw materials
and manufactured materials and parts
usually sold directly to industrial users
• Wheat
• Lumber
• Iron
• Cement
8-16
What Is a Product?
Product and Service Classifications
Capital items are industrial products
that aid in the buyer’s production or
operations
• Buildings
• Elevators
• Computers
8-17
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
8-18
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
• Donald Trump
8-19
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
• Tourism
8-20
What Is a Product?
Organizations, Persons, Places, and Ideas
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
• Public health campaign
• Tourism
8-21
Product and Service Decisions
Individual Product and Service Decisions
• Product attributes
• Branding
• Packaging
• Labeling
• Product support services
8-22
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
8-29
Product and Service Decisions
Individual Product and Service Decisions
Packaging involves designing and
producing the container or wrapper for
a product
Label identifies the product or brand,
describes attributes, and provides
promotion
8-31
Product and Service Decisions
Individual Product and Service Decisions
Product support services augment actual products
Companies must continually:
• Assess the value of current services to obtain
ideas for new ones
• Assess the costs of providing these services
• Develop a package of services to satisfy
customers and provide profit to the company
8-32
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
8-33
Product and Service Decisions
Product Line Decisions
Product line length is the number of
items in the product line
• Line stretching
• Line filling
8-34
Product and Service Decisions
Product Line Decisions
Product line stretching is when a
company lengthens its product line
beyond its current range
• Downward
• Upward
• Combination of both
8-35
Product and Service Decisions
Product Line Decisions
Downward product line stretching is used by
companies at the upper end of the market to
plug a market hole or respond to a competitor’s
attack. (Samsung Phones)
Upward product line stretching is by companies
at the lower end of the market to add prestige to
their current products (HUL’s Dove Soap &
Magnum Ice-cream)
8-36
Product and Service Decisions
Product Line Decisions
Combination line stretching is used by
companies in the middle range of the
market to achieve both goals of
upward and downward line stretching
(Volkswagen)
8-37
Product and Service Decisions
Product Line Decisions
Product line filling occurs when
companies add more items within the
present range of the line
• More profits
• Satisfying dealers
• Excess capacity
• Plugging holes to fend off competitors
8-38
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
8-39
Product and Service Decisions
Product Mix Decisions
Product mix width is the number of
different product lines the company
carries
Product mix length is the total number
of items the company carries within its
product lines
8-40
Product and Service Decisions
Product Line Decisions
Product line depth is the number of
versions offered of each product in the
line
Consistency is how closely the various
product lines are in end use, production
requirements, or distribution channels
8-41
Individual Product Decisions
Product
Product Attributes
Attributes
Branding
Branding
Packaging
Packaging
Labeling
Labeling
Product
Product Support
Support Services
Services
Product Attribute
Decisions
Quality
Quality Features
Features
Design
Design
Packaging
Competitive
Advantages
Sales Product
Tasks Safety
Packaging
Packaging
Labeling
Labeling
Identifies Promotes
Describes
Branding Strategy:
Building Strong Brands
Brand represents the consumer’s
perceptions and feelings about a
product and its performance. It is the
company’s promise to deliver a
specific set of features, benefits,
services, and experiences consistently
to the buyers
8-42
Branding Strategy:
Building Strong Brands
Brand equity is the positive
differential effect that knowing the
brand name has on customer
response to the product or service
8-43
Branding Strategy:
Building Strong Brands
Customer equity is the value of the
customer relationships that the brand
creates
Brand valuation is the process of
estimating the total financial value of
the brand
8-45
Branding Strategy:
Building Strong Brands
Brand Name Selection
Desirable qualities
• Suggests benefits and qualities
• Easy to pronounce, recognize, and
remember
• Distinctive
• Extendable
• Translatable for the global economy
8-48
Branding Strategy:
Building Strong Brands
Brand Sponsorship
• Manufacturer’s brand
• Private brand
• Licensed brand
• Co-brand
8-49
Branding Strategy:
Building Strong Brands
Brand Sponsorship
Private brands provide retailers with
advantages
• Product mix control
• Slotting fees for manufacturers’
brands
• Higher margins
• Exclusivity
8-50
Branding Strategy:
Building Strong Brands
Brand Development
• Line extensions
• Brand extensions
• Multibrands
• New brands
8-51
Brands
Consistency
Consistency Quality
Quality &
& Value
Value
Attributes
Attributes Advantages Identification
Identification
of
Brand Names
Association Brand Loyalty
Association Equity Loyalty
Credibility
Credibility Awareness
Awareness
Brand Strategy
Product Category
Existing New
Brand Name
Existing Line Brand
Extension Extension
New
New Multibrands
Brands
Brand Strategy
Line Extension
Existing brand names extended to new forms,
sizes, and flavors of an existing product
category e.g:Surf excel
Brand Extension
Existing brand names extended to new product
categories e.g: Honda car, Honda bike,Nature
fresh fresh sunflower oil, nature fresh flour.
Multibrands
New brand names introduced in the same
product category.maruti zen, maruti 800,
maruti esteem, Titan & Sonata.
New Brands
New brand names in new product categories,
e.g: Electrolux, kelvinator .
Branding Strategy:
Building Strong Brands
Brand Development
Line extensions occur when a company
extends existing brand names to new
forms, colors, sizes, ingredients, or
flavors of an existing product category
Brand extensions extend a brand name
to a new or modified product in a new
category
8-52
Branding Strategy:
Building Strong Brands
Brand Development
Multibrands are additional brands in the
same category
New brands are used when existing
brands are inappropriate for new
products in new product categories or
markets
8-53
Branding Strategy:
Building Strong Brands
Managing Brands
Requires:
• Continuous brand communication
• Customer-centered training
• Brand audits
8-54
Services Marketing
Types of Service Industries
• Government
• Private not-for-profit organizations
• Business services
8-55
Services Marketing
Nature and Characteristics of a Service
• Intangibility
• Inseparability
• Variability
• Perishability
8-56
Services Marketing
Nature and Characteristics of a Service
Intangibility refers to the fact that services
cannot be seen, tasted, felt, heard, or
smelled before they are purchased
Inseparability refers to the fact that
services cannot be separated from their
providers
8-57
Services Marketing
Nature and Characteristics of a Service
Variability refers to the fact that service
quality depends on who provides it as well
as when, where, and how it is provided
Perishability refers to the fact that services
cannot be stored for later sale or use
8-58
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
8-64
Services Marketing
Marketing Strategies for Service Firms
Service recovery can turn
disappointed customers into loyal
customers
• Empower employees
• Responsibility
• Authority
• Incentive
8-65
