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Products, services and brands Chapter 7

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Mario Mata

on 28 March 2014

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Transcript of Products, services and brands Chapter 7

Copyright © 2011 Pearson Education, Inc.  
Publishing as Prentice Hall
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Rest Stop: Reviewing the Concepts
Define product and the major classifications of products and services.
Describe the decisions companies make regarding their individual products and services, product lines, and product mixes.
Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require.
Discuss branding strategy—the decisions companies make in building and managing their brands.
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Continuously communicate the brand’s positioning to consumers.
Manage all brand touch points to maximize the brand experience.
Live the brand – the firm must train employees to be customer centered.
Implement internal branding campaign among employees.
Audit brands strengths and weaknesses on a regular basis.
Managing Brands
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Multibranding:
Offers a way to establish different features and appeal to different customer segments, lock up more reseller shelf space, and capture a larger market share.
New brands:
Developed based on belief that the power of its existing brand is waning and a new brand name is needed. Also used for products in a new product category.
Brand Development
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Figure 7.6:

Brand Development Strategies

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Nickelodeon has developed a stable full of hugely popular characters which can be licensed by marketers – such as SpongeBob SquarePants – that generate billions of dollars of retail sales each year.
Marketing in Action
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Private labels are growing rapidly.
Brand sponsorship options include:
National brands
Also called manufacturer brands
Store brands
Also called private brands
Licensed brands
Name or character licensing
Co-branding
Creates broader appeal and brand equity
Brand Sponsorship
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Marketers can position brands clearly in customers’ minds at any of three levels:
Product attributes
Product benefits
Beliefs and values
Marketers should create a brand mission and vision of what the brand must be and do when positioning the brand.
Brand Positioning
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Brand equity:
Measures the brand’s ability to capture consumer preference and loyalty.
Is a valuable asset that offers many competitive advantages.
Builds strong and profitable customer relationships that result in loyal customers (customer equity).
Building Strong Brands
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
The differential effect that knowing the brand name has on customer response to the product or its marketing.
Brand Equity
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Managing service quality:
Set high service quality standards, have good service recovery, empower front-line employees.
Service recovery is critical.
Managing service productivity:
Train current employees or hire new ones, increase quantity and sacrifice quality, harness technology.
Major Service Marketing Tasks
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Managing service differentiation:
Develop a differentiated offer, delivery, and image.
PetSmart is a one-stop shop for all pet needs, including boarding.
Major Service Marketing Tasks
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Four Seasons has perfected the art of internal and interactive marketing to its employees.
The Four Seasons hires only the best people with the right attitude who will follow the golden rule. Employees receive 3 months of training, including improvisation exercises to help them understand customers.
Salaries are among the 75th – 90th percentile for the industry. All employees, regardless of position, eat together regularly for free in the hotel. Plus employees are allowed free nightly stays at any Four Seasons resort or hotel.
Marketing in Action
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Figure 7.4:

Three Types of Service Marketing
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
The service profit chain links employee and customer satisfaction to firm profits.
Five links exist within the chain:
Internal service quality.
Satisfied and productive service employees.
Great service value.
Satisfied and loyal customers.
Healthy service profits and growth.
The Service-Profit Chain
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Figure 7.3:

Four Service Characteristics
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Product mix dimensions include:
Width: the number of different product lines the company carries.
Length: the number of items in a line.
Depth: the number of versions offered of each product in the line.
Consistency: how closely related various lines are.
Product Mix Decisions
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Many auto manufacturers may have filled and stretched their lines too far, particularly in light of recent economic problems.
Product line length is a major decision.
Filling (adding more).
Stretching (downward, upward or both ways).
Product Line Decisions
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
The Lexus Covenant promises that dealers will “treat each customer as we would a guest in our own home” and “go to any lengths to serve them better.”
Marketing in Action
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Labeling and logos can enhance a brand’s positioning and personality. Pepsi’s new logo is “more adventurous, more youthful, with a bit more personality to it.”
Marketing in Action
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Take an up-close look at the label for the Tabasco brand hot pepper sauce.
How well does it fulfill its functions of identifying the brand, describing product, and promoting the brand via attractive graphics?
Fuel for Thought
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Labeling refers to printed information appearing on or with the package, including the product name.
Performs several functions:
Identifies product or brand.
Describes several things about the product.
Promotes the product through attractive graphics.
Labeling is regulated by the government.
Labeling
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Amazon.com has launched a multi-year initiative to create “frustration-free packaging” for many toys, electronics, and other manufactured items in order to eliminate “wrap rage”.

Visit the web page where this is explained. A short video (1:36) demonstrates how Amazon’s repackaging efforts save buyers time.
Marketing in Action
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall

Involves designing and producing the container or wrapper for a product.
Packaging
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Advantages to buyers:
Helps identify products.
Cue to product quality and consistency.
Advantages to sellers:
Basis for product’s quality story.
Provides legal protection.
Helps to segment markets.
Branding
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Branding involves building and managing brands.
A name, term, sign, symbol, design, or a combination of these, that identifies the products or services of one seller or group of sellers and differentiates them from those of competitors.
Brand
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
OXO approaches product design by focusing on the desired end-user experience, and then translating its notions into eminently usable gadgets.
Marketing in Action
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Product and Service Attributes
Product quality dimensions:
Performance quality.
Conformance quality.
Product feature considerations:
Value to consumer.
Cost to company.
Product style and design:
Shapes the buyer’s usage experience.
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Figure 7.2:

Individual Product Decisions
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Organizations:
Profit and nonprofit (schools and churches).
Persons:
Politicians, sports figures, doctors, etc.
Places:
Create, maintain, or change attitudes or behavior toward particular places.
Ideas (social marketing):
Public health campaigns, environmental campaigns, family planning, or human rights.
Other Market Offerings
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Product and Service Classification
Industrial products:
Those purchased for further processing or for use in conducting business.
Distinction between consumer and industrial products is based on the purpose for which an item is bought (e.g., home or business use).
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Why might tropical fish be classified by different consumers as convenience goods, shopping goods, OR a specialty good?

Think about high-definition televisions for a moment. Are products likely to change classification categories over time?
Fuel for Thought
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Types of Consumer Goods
Unsought products:
Little product awareness or knowledge of the brand, sometimes negative interest.
Pricing strategies vary.
Distribution strategies vary.
Require aggressive advertising and personal selling by both producer and resellers.
E.g., life insurance, cemetery plots, blood donation.
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Shopping products:
Bought less frequently, more planning and effort, brand comparisons on basis of price, quality, style.
Higher price.
Selective distribution in fewer purchase locations.
Advertising and personal selling is undertaken by both producer and reseller.
E.g., furniture, clothing, cars, appliances.
Types of Consumer Goods
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Types of Consumer Goods
Convenience goods:
Purchased frequently and immediately with little comparison shopping.
Low priced.
Mass advertising and promotion.
Widespread distribution with many convenient locations.
E.g., candy, soda, newspapers.
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Product and Service Classification
Consumer products:

Products and services bought by final consumers for personal consumption.

Also included are other marketable entities.
Classified by how consumers buy them:
Convenience, shopping, specialty, and unsought goods.
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
People who buy a BlackBerry device are buying more than a cell phone. They are buying the ability to “Connect to everything you through the power of the BlackBerry smartphone.”
Marketing in Action
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Core customer value:
What the consumer is really buying.
Actual product:

Includes the brand name, features, design, packaging, and quality level.

Augmented product:
Additional services and benefits such as delivery and credit, instructions, installation, warranty, and service.
Levels of Product and Services
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Figure 7.1:

Three Levels of Product
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Products, Services and Experiences
Marketing offerings:

Includes both tangible goods and services, as well as combinations of both.

Pure good: Camay soap.

Pure service: Legal representation.

Combination: Restaurant meal.
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Services:
Services are intangible. Examples include banking, hotel accommodations, airline travel, tax preparation, legal services, cable and satellite service and others.
What Is a Service?
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Any activity, benefit, or satisfaction offered for sale that is essentially intangible and does not result in the ownership of anything.
Service
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Anything that can be offered to a market for attention, acquisition, use, or consumption and that might satisfy a want or need.
Product
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Rest Stop: Previewing the Concepts
Define product and the major classifications of products and services.
Describe the decisions companies make regarding their individual products and services, product lines, and product mixes.
Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require.
Discuss branding strategy—the decisions companies make in building and managing their brands.

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Chapter 7
Products, Services, and Brands

Building Customer Value

Line extension:
Extending an existing brand name to new forms, colors, sizes, ingredients, or flavors within a product category.
Brand extension:
Extending an existing brand name to new product categories.
Brand Development
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Desirable qualities for a brand name:
It should suggest the product’s benefits and qualities.
It should be easy to pronounce, recognize, and remember.
It should be distinctive.
It should be extendable.
It should translate easily into foreign languages.
It should be capable of registration and legal protection.
Brand Name Selection
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Figure 7.5:

Brand Strategy Decisions
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
External marketing:
Traditional marketing via the 4 “Ps.”
Internal marketing:
Orienting and motivating customer-contact employees and the supporting service people to work as a team to provide customer satisfaction.
Interactive marketing:
Training service employees in the fine art of interacting with customers to satisfy their needs.
Services Marketing
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Zappos knows that happy customers begin with happy, dedicated, and “perpetually chipper” employees. Employees “tweets” to customers bear that out.
Marketing in Action
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Sony has a large and diverse product portfolio, divided into four primary product businesses, each of which has hundreds of products in its mix.
Marketing in Action
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
The set of all of the product lines and items that a particular seller offers for sale.
Product Mix
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
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
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Monitoring of support services is key:
Talk with customers to assess the value and quality of current services and to obtain ideas for new services.
Fix problems and put together a package of new services that delights the customers and yields profits for the company.
New technologies can often enhance many support service offerings.
Product Support Services
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Logos are easily recognizable symbols, signs, or stylized written portrayals of business brand names. Logos provide a short-cut to product and firm identification. But just how good are you at recognizing the letterforms used in corporate logos?
Find out by visiting this Web site, and playing the retail alphabet game!
Marketing in Action
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Social marketing is designed to influence individual’s behavior to improve their well-being and that of society.
UNCF powerfully markets the idea that “A mind is a terrible thing to waste.”

Marketing in Action
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Types of Industrial Goods
Materials and parts:
Raw materials, manufactured materials, and parts.
Capital items:
Products that aid in buyer’s production or operations.
Supplies and services:
Operating supplies, maintenance, and repair items.
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Types of Consumer Goods
Specialty products:
Strong brand preference and loyalty, special purchasing effort, little comparison shopping.
High price.
Exclusive distribution in only one or a few outlets per market area.
Carefully targeted promotion by both producer and reseller.
E.g., Lamborghini, Rolex watches.
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Products:
Include physical objects, services, events, persons, organizations, places, ideas, or a combination thereof.
What Is a Product?
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
ESPN Media Presence

Television: Grown to 7 ESPN networks. Partners with ABC to produce NASCAR, college sports, World Cup soccer and more. Pioneered high-definition broadcasting. Achieves high advertising and cable revenues.
Online and Publishing: Websites are #1 in respective categories; partnered with YouTube to post sports content. Magazine and book title sales are strong.
ESPN is Everywhere: Airports, health clubs, gas stations.
Brand Experience

ESPN: More than a network or website, ESPN is a meaningful part of customers’ lives that is synonymous with sports entertainment, and linked with consumers’ sports memories, realities, and anticipations.
Global Power: ESPN truly lives up to its tagline, “The Worldwide Leader in Sports”.
Strong Brand Equity: ESPN is as much recognized and revered as Nike, Google, or Coca-Cola megabrands.
First Stop
ESPN – It’s A Brand!
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
The intangible nature of services creates buyer uncertainty. To combat this, service providers often practice “evidence management” tactics that show customers honest evidence of their capabilities. Mayo Clinic is a stellar example as its Sharing Mayo Clinic blog lets web site visitors hear directly from workers and former patients.
Marketing in Action
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Ideally, good packages should:
Help to market the brand.
Protect the contents.
Provide convenience and ease of use.
Ensure product and user/child safety.
Address environmental concerns.
Packaging
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
Creating and managing customer experiences differentiates marketing offers from competitors. Umpqua Bank designs its “stores” to make banking a pleasurable experience. Their banks feature a cozy coffee bar, big-screen TVs showing investment news, comfy seating, WiFi access, and an online music store.
Marketing in Action
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
BRAND
BRANDING
PACKAGING
Full transcript