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Chapter 8: Product, Services, and Brands: Building Customer Value

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Josh Johnstone

on 11 December 2014

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Transcript of Chapter 8: Product, Services, and Brands: Building Customer Value

Product, Services, and Brands: Building Customer Value

Chapter 8
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

Product, Services, and Experiences
Product and Services Decisions
Services Marketing
Branding Strategy: Building Strong Brands

What Is a Product?
Products and services fall into two broad classes based on the types of consumers that use them: consumer
Products
Industrial Products
Consumer products are products and services for personal consumption
Classified by how consumers buy them
Convenience products
Shopping products
Specialty products
Unsought products
Organization marketing consists of activities undertaken to create, maintain, or change attitudes and behavior of target consumers toward an organization
Brand is the name, term, sign, or design—or a combination of these—that identifies the maker or seller of a product or service

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.

In addition to traditional marketing strategies, service firms often require additional strategies
Service-profit chain
Internal marketing
Interactive marketing
Products, Services, and Experiences

To differentiate their offers, beyond simply making products and delivering services, companies are creating and managing customer experiences
Experiences represent what buying the product or service will do for the customer
Developing Marketing Information
Packaging involves designing and producing the container or wrapper for a product
Labels identify the product or brand, describe attributes, and provide promotion
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
Person marketing consists of activities undertaken to create, maintain, or change attitudes and behavior of target consumers toward particular people
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

Product line length is the number of items in the product line
Line stretching
Line filling
Product mix consists of all the products and items that a particular seller offers for sale
Width: number of different product lines
Length: number of items the within product line
Depth: number of versions in product line
Consistency: Similarity between product lines
Government
Private not-for-profit organizations
Business services

Brand Equity
The differential effect that knowing the brand name has on customer response to the product or its marketing.

"Products are created in the factory, but brands are created in the mind.”
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
Desirable qualities
Suggest benefits and qualities
Easy to pronounce, recognize, and remember
Distinctive
Extendable
Translatable for the global economy
Capable of registration and legal protection
Example: “To busy multitaskers who need help remembering things, Evernote is digital content management application that makes it easy to capture and remember moments and ideas from your everyday life using your computer, phone, tablet, and the Web.”
Differentiation and Positioning
Developing a Positioning Statement: "To (target segment and need) our (brand) is (concept) that (point of difference)"
Products, Services, and Experiences
What Is a Product?
Levels of Product and Services
What Is a Product?
Levels of Product and Services
the ultimate liquid athletic equipment
What Is a Product?
Product and Service Classifications
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
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
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
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
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
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
What Is a Product?
Product and Service Classifications
What Is a Product?
Organizations, Persons, Places, and Ideas
What Is a Product?
Organizations, Persons, Places, and Ideas
What Is a Product?
Organizations, Persons, Places, and Ideas
What Is a Product?
Individual Product and Service Decisions



What Is a Product?
Individual Product and Service Decisions



Product or service attributes
communicate and deliver the benefits
Quality
Features
Style and design

What Is a Product?
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
What Is a Product?
Individual Product and Service Decisions



Product features
A competitive tool for differentiating a product from competitors’ products
Assessed based on the value to the customer versus the cost to the company
What Is a Product?
Individual Product and Service Decisions



Style and Design
Style describes the appearance of the product
Design contributes to a product’s usefulness as well as to its looks
What Is a Product?
Individual Product and Service Decisions
What Is a Product?
Individual Product and Service Decisions
What Is a Product?
Individual Product and Service Decisions
What Is a Product?
Product Line Decisions
What Is a Product?
Product Line Decisions
What Is a Product?
Types of Service Industries
What Is a Product?
Nature and Characteristics of a Service
Intangibility: Services cannot be seen, tasted, felt, heard, or smelled before they are purchased.
Inseparability: Services cannot be separated from their providers.
Variability:Service quality depends on who provides the services as well as when, where, and how they are provided.
Perishability: Services cannot be stored for later sale or use.
What Is a Product?
Marketing Strategies for Service Firms
What Is a Product?
Marketing Strategies for Service Firms
What Is a Brand?
Branding Strategy: Building Strong Brands
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
What Is a Product?
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
What Is a Product?
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
What Is a Product?
Marketing Strategies for Service Firms
Brand strategy decisions include:
Product attributes
Product benefits
Product beliefs and values
What Is a Brand?
Branding Strategy: Brand Position
What Is a Brand?
Branding Strategy: Name Selection
Manufacturer’s brand
Private brand
Licensed brand
Co-brand
What Is a Brand?
Brand Sponsorship

What Is a Brand?
Brand Development Strategies
What Is a Brand?
Brand Development Strategies
Line Extension: Extends existing brand names to new forms
Multibrand: different brands in a given product category
Brand Extension: extends a current brand name to new or modified products
New Brads:
Full transcript