MKT-202

Lecture

Chapter 8PRODUCTS, SERVIICES, AND

BRANDS:

BUIILDIING CUSTOMER VALUE

Topics of the lecture

What is a product/service?

Product◦ Anything tangible offered to a market that results in its ownership that might satisfy a need or want.

Example: T-shirt, Soap, mobile phone, book.

Service◦ Any activity or benefit that one party can offer to another that is essentially intangible and does not result in ownership of anything.

Example: Banking, hotel, airline, repair services.

Levels of products

Core product: core, problem solving benefit

Ex: a person buying an Apple iPad buying entertainment, self-

expression, productivity.

Actual product: develop product features, a design, brand

name, packaging.

Ex: iPad is actual product, its name, styling, features are combined to

deliver the core customer value of staying connected.

Augmented product: offering additional consumer services

and benefits.

Ex: iPad is more than just a digital device. Provides complete

connectivity solution.

Classifications of Products

Consumer

products

Products

Convenience

products

Business or

industrial

Products

Shopping

products

Specialty

products

Unsought

products

Consumer productsConsumer products are

products and services bought by final consumers for personal consumption.

Types of consumers products:

Convenience products-

Shopping products-

Specialty products.

Unsought products.

Summery of consumer

products

Industrial Products

Industrial products are products purchased for further processing or for use in conducting a business.

The main difference between a consumer product and an industrial product is its “purpose” e.g. of cocacola, computer.

Classification of industrial products:

Materials and parts: raw materials (wheat, cotton), manufactured materials & parts (iron, yarn, cement)

Capital items: that aid in buyer’s production—installation (factories, office) & accessory (hand tools) and office equipment (computer, fax machines)

supplies & services: supplies (lubricant, coal, paper, paint), repair services (window cleaning)

4 characteristics of services

Organization, person, place

and social marketing

Organization marketing: consists of activities undertaken to

create, maintain or change the attitudes and behavior of

target consumers toward an organization. Ex: PR

Person marketing: consists of activities undertaken to create,

maintain or change the attitudes and behavior of target

consumers toward particular people. Ex: spokesperson

Place marketing: consists of activities undertaken to create,

maintain or change the attitudes and behavior of target

consumers toward particular places. Ex: I NY

Social marketing: the use of commercial marketing concepts

and tools in programs designed to influence individuals’

behavior to improve their well being and that of society. Ex:

healthcare, education,

7Ps, an Extended

Marketing Mix

Product/Service

Positioning

Physical Evidence

The appearance of

capital used in bringing

the offer to market

Processes

The processes

involved

in serving

the customer

People

The appearance

and

behavior of

personnel

Product

Price

Promotion

Place

Product and Service Decisions

Product and service decisions when designing and

marketing a product are made at three levels:

◦ Individual product decisions

◦ Product line decisions

◦ Product mix decisions

1. Individual Product

Decisions parameters

a. Product attributes

Developing a Product or Service Involves Defining the

Benefits that it Will Offer Such as:

Product quality : Ability of a product to satisfy a need.

Influences ‘customer value’ and ‘satisfaction’.

Comprises of performance and conformance quality.

Product features : Help to differentiate the product

from those of the Competitors

Product Style & Design: Style describes the appearance

of a product(grabs attention). Design makes the product

perform better (consumer insight is vital).

b. Branding

Creating, maintaining, protecting and

enhancing products and services

A brand is a name, term, sigh, symbol, or a

design , or a combination of these, that

identifies the maker or seller or a product

or service.

c. Packaging

Poorly designed packages can cause

headaches for consumers and lost sales

for the company where as innovative

packaging can give a company an

advantage over competitors and boost

sales.

d. Labeling and product support services

Product Label helps identify the product or brand,

describes several things (who made it, where it was

made, when it was made, its contents, usage directions,

safety guidelines), and provide promotion (support its

positioning).

Product support services: continue building

relationships. Use phone, email, Internet, interactive

voice and data technologies

2. Product Line

Decisions

A 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

Line filling: adding more items within the present price range. Nike produces several lines of athletic shoes and apparel).

Line stretching: When a company lengthens its product line beyond its current range. Ex: add low end or high end products

- Downward Stretch

- Upward Stretch

- Two-Way Stretch

3. Product Mix Decisions

Product mix consists of all the products (product lines) and items that

a particular seller offers for sale.

Example: Sony Electronics, Sony Computer Entertainment (games), Sony

pictures Entertainment (movies, TV shows, music, DVDs), Sony Financial

Services (life insurance, banking, etc).

Product mix width refers to the number of different product lines.

Product mix length refers to the number of items the company

carries within its product lines.

Product mix depth refers to the number of different versions of each

product in the line. styles, sizes, colors, models. e.g. LCD, LED, HD,

low definition.

Product mix of a

Men’s clothing store

Product mix

width

Occasion

based Formal Casual

western Salwar

kameezsaree

8 sizes 6 sizes6 sizes

7 colors5 colors5 colors

Product mix

depth

Product mix

length

Ladies’ Clothing store

Brand Equity

THE POSITIVE DIFFERENTIAL EFFECT THAT KNOWING THE

BRAND NAME HAS ON CUSTOMER RESPONSE TO THE

PRODUCT OR SERVICE.

It’s the brand's ability to capture consumer preference

and loyalty.

It’s the basis for strong, profitable customer

relationships

Brand building

1.Brand positioning

3 levels

A. Companies can position the brand on product

attributes.

B. A brand can better positioned by associating its

name with a desirable benefit.

C. The strongest brands go beyond attribute or

benefit positioning. They are positioned on strong

beliefs and values, engaging customers on a deep,

emotional level.

Brand Name Selection

Should suggest products benefits and qualities

Easy to pronounce, recognize and remember

Name should be distinctive

Name should be extendable

Should easily translate into foreign language

Should be capable of registration and legal protection

Once the brand name is chosen, it must be protected. Many

firms try to build a brand that eventually gets identified with the

product category.

For instance, Kleenex, Scotch tape, Ziploc, BAND-AID, Jell-O etc.

Brand Sponsorship/Endorsement

A manufacturer has four sponsorship options:

1. Manufacturer brands (National Brand): Selling products

under their own brand name: Sony BRAVIA; AXE shower gel;

Johnson Baby powder.

2. Private (store) brands: retailers and wholesalers create

their own store brands; usually lower cost than

manufacturer brands : Wall Mart – Great Value products.

3. Licensed brands: Name and character licensing has

grown: Disney characters on children accessories; CK; Gucci

etc.

4. Co-branding: when two established brand names of

different companies are used on the same product: Puma-

Ferrari

Brand development

4 dimensions

Brand development strategies

1. Line extension: extending an existing brand name to new forms, colors, sizes, ingredients, or flavors of an existing product category. Maggi introducing Maggi soup of various flavors like creamy chicken, rich tomato, sweet corn, mixed vegetable etc.

2. Brand extension: extending an existing brand name to new product categories. For instance: Maggi introducing Maggi soup, Maggi tomato ketchup, Maggi seasonings, Maggi chicken stocks beside Maggi noodles etc.

3. Multi-brands: extending an existing product category by adding new brand to it. For example, Unilever soap brands of Lux, Rexona, Dove, Lifebuoy, Dettol, Cinthol, Pears etc.

4. New brands: extending a product line by adding new product category and new brand to the existing ones. For instance, Tata motors introducing Tata Ace brand of pickup trucks.