Product, Services, and Branding Strategy

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Product, Services, and Branding Strategy

• Chapter 8

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Learning Goals

• Understand products and the major classifications
  of products and services
• Learn the decisions companies make regarding
  their products and services
• Understand branding strategy
• Identify the four characteristics that affect the
  marketing of a service
• Realize additional product issues

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Case StudyKrispy Kreme

• Produce 7.5 million doughnuts each day
• Sell more than doughnuts they sell an experience

• New store openings are eagerly anticipated in
  part due to extensive promotion

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Definitions

• Product
• Anything offered to a market for attention,
  acquisition, use, or consumption that might
  satisfy a need or want.
• Service
• 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.

Goal 1 Understand products and their
classifications
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What is a Product?

• Products, Services, and Experiences
• Market offerings may consist of a combination of
  goods and services
• Experiences are used to differentiate offerings
• Levels of Product and Services
• Core benefit, actual and augmented product
• Product and Service Classifications
• Consumer products and industrial products

Goal 1 Understand products and their
classifications
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What is a Product?

• Products, Services, Experiences
• Market offerings, pure tangible goods, pure
  services, experiences

Experiences include zoos and aquariums
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Figure 8-1 Three Levels of Product
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What is a Product?
Types of Consumer Products

• Frequent purchases bought with minimal buying
  effort and little comparison shopping
• Low price
• Widespread distribution
• Mass promotion by producer

• Convenience
• Shopping
• Specialty
• Unsought

Goal 1 Understand products and their
classifications
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What is a Product?

• Less frequent purchases
• More shopping effort for comparisons.
• Higher than convenience good pricing
• Selective distribution in fewer outlets
• Advertising and personal selling

Types of Consumer Products

• Convenience
• Shopping
• Specialty
• Unsought

Goal 1 Understand products and their
classifications
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What is a Product?
Types of Consumer Products

• Strong brand preference and loyalty, requires
  special purchase effort, little brand
  comparisons, and low price sensitivity
• High price
• Exclusive distribution
• Carefully targeted promotions

• Convenience
• Shopping
• Specialty
• Unsought

Goal 1 Understand products and their
classifications
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What is a Product?
Types of Consumer Products

• Little product awareness and knowledge (or if
  aware, sometimes negative interest)
• Pricing varies
• Distribution varies
• Aggressive advertising and personal selling by
  producers and resellers

• Convenience
• Shopping
• Specialty
• Unsought

Goal 1 Understand products and their
classifications
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Product and Service Classifications

• Consumer products
• Industrial products
• Materials and parts
• Capital items
• Supplies and services

Goal 1 Understand products and their
classifications
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Product and Service Classifications

• Organizations, persons, places, and ideas
• Organizational marketing makes use of corporate
  image advertising
• Person marketing applies to political candidates,
  entertainment sports figures, and professionals
• Place marketing relates to tourism
• Social marketing promotes ideas

Goal 1 Understand products and their
classifications
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Product and Service Decisions
Key Decisions

• Product attributes
• Quality, features, style and design
• Branding
• Packaging
• Labeling
• Product support services

• Individual Product
• Product Line
• Product Mix

Goal 2 Learn decisions companies make regarding
products
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Product Service Decisions

• Innovative product design can help revitalize a
  company, such as with the Apple iMac.

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Product and Service Decisions

• Product line
• A group of products that are closely related
  because they may
• function in a similar manner
• be sold to the same customer groups,
• be marketed through the same types of outlets
• fall within given price ranges

Key Decisions

• Individual Product
• Product Line
• Product Mix

Goal 2 Learn decisions companies make regarding
products
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Product and Service Decisions
Key Decisions

• Product line length
• Line stretching adding products that are higher
  or lower priced than the existing line
• Line filling adding more items within the
  present price range

• Individual Product
• Product Line
• Product Mix

Goal 2 Learn decisions companies make regarding
products
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Product and Service Decisions
Key Decisions

• Product mix
• Also known as product assortment
• Consists of all the product lines and items that
  a particular seller offers for sale

• Individual Product
• Product Line
• Product Mix

Goal 2 Learn decisions companies make regarding
products
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Product and Service Decisions
Key Decisions

• Product mix width
• Number of different product lines carried by
  company
• Product mix depth
• Number of different versions of each product in
  the line
• Product mix consistency

• Individual Product
• Product Line
• Product Mix

Goal 2 Learn decisions companies make regarding
products
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Product Service Decisions

• Brand
• A name, term, sign, symbol, design, or a
  combination of these, that identifies the maker
  or sellers of a product or service.

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Branding Strategy

• Brand equity is the positive differential effect
  that knowing the brand name has on customer
  response to the product or service
• One measure of equity is the extent to which
  customers are willing to pay more for the brand
• Brand valuation is the process of estimating the
  total financial value of a brand

Goal 3 Understand branding strategy
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Branding Strategy

• Brands with strong equity have many competitive
  advantages
• High consumer awareness
• Strong brand loyalty
• Helps when introducing new products
• Less susceptible to price competition

Goal 3 Understand branding strategy
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Branding Strategy

• Brands are powerful assets that must be
  carefully developed and managed.
• Both Tiger Woods and Nike can be considered
  brands

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Brand Strategy
Line Extensions May Feature Different Things

• Flavors
• Colors

• Forms
• Ingredients

• Package Sizes

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Brand Strategy
Key Decisions

• Three levels of positioning
• Product attributes
• Least effective
• Benefits
• Beliefs and values
• Taps into emotions

• Brand Positioning
• Brand Name Selection
• Brand Sponsorship
• Brand Development

Goal 3 Understand branding strategy
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Brand Strategy

• Good Brand Names
• Suggest something about the product or its
  benefits
• Are easy to say, recognize and remember
• Are distinctive
• Are extendable
• Translate well into other languages
• Can be registered and legally protected

Key Decisions

• Brand Positioning
• Brand Name Selection
• Brand Sponsorship
• Brand Development

Goal 3 Understand branding strategy
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Brand Strategy
Key Decisions

• Manufacturer brands
• Private (store) brands
• Costly to establish and promote
• Higher profit margins
• Licensed brands
• Name and character licensing has grown
• Co-branding
• Advantages / disadvantages

• Brand Positioning
• Brand Name Selection
• Brand Sponsorship
• Brand Development

Goal 3 Understand branding strategy
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Brand Strategy
Key Decisions

• Line extensions
• Minor changes to existing products
• Brand extensions
• Successful brand names help introduce new
  products
• Multibrands
• Multiple product entries in a product category
• New brands
• New product category

• Brand Positioning
• Brand Name Selection
• Brand Sponsorship
• Brand Development

Goal 3 Understand branding strategy
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Figure 9-4 Brand DevelopmentStrategies
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Managing Brands

• Brands are known through advertising, personal
  experience, word of mouth, the Internet
• Everyone in the company represents the brand
• Companies need to periodically run a brand audit

Goal 3 Understand branding strategy
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Services Marketing

• Services
• Account for 74 of U.S. gross domestic product.
• Service industries include business
  organizations, government, and private
  not-for-profit organizations.

Goal 3 Understand branding strategy
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Characteristics of Services

• Intangibility
• Consumers look for service quality signals
• Inseparability
• Services cant be separated from providers
• Variability
• Employees and other factors result in variability
• Perishability
• Services cant be inventoried for later sale

Goal 3 Understand branding strategy
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Figure 9-6 Three Types of Marketing in
Services Industries
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Service Firm Marketing Strategies

• The Service-Profit Chain
• Internal Marketing
• Interactive Marketing
• Managing Service Differentiation
• Managing Service Quality
• Managing Service Productivity

Goal 4 Identify 4 characteristics that affect
marketing a service
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Product Decisions and Social Responsibility

• Acquiring and dropping products
• Patent protection
• Product quality and safety
• Product warranties

Goal 5 Realize additional product issues
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International Product and Services Marketing

• Special challenges
• Which products should be marketed
  internationally?
• Should the products be standardized or adapted
  for world markets? Packaging?

Goal 5 Realize additional product issues