8-Product_ Services_ and Branding Strategy by walsabri

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									      Chapter 8
Product, Services, and
  Branding Strategy
            Learning Goals

1. Define product and the major classifications
   of products and services
2. Describe the decisions companies make
   regarding their products and services
3. Discuss branding strategy
4. Identify the four characteristics that affect
   the marketing of a service
5. Discuss additional product issues




                                                   8-2
                  Case Study
                 Krispy Kreme


• Produce 7.5 million    • New store openings
  doughnuts each day       are eagerly anticipated
• Sell more than           in part due to
  doughnuts; they sell     extensive promotion
  an experience



                                                 8-3
            Learning Goals

1. Define product and the major classifications
   of products and services
2. Describe the decisions companies make
   regarding their products and services
3. Discuss branding strategy
4. Identify the four characteristics that affect
   the marketing of a service
5. Discuss additional product issues




                                                   8-4
                    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.


                                                          8-5
  Goal 4: Discuss how companies position their products
        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
  – Core benefit, actual and augmented product




                                                 8-6
Levels of Product and Services
           Figure 8.1




                                 8-7
         Discussion Question

• Consider Starbucks
  – What goods and
    services do they
    offer?
  – How do they
    differentiate through
    experience?
  – What is their core,
    actual and
    augmented product
    offering?
                               8-8
          What is a Product?

Types of Consumer   • Frequent purchases
                      bought with minimal
    Products          buying effort and little
                      comparison shopping
•   Convenience     • Low price
                    • Widespread distribution
•   Shopping        • Mass promotion by
•   Specialty         producer

•   Unsought


                                                 8-9
                      Convenience Product

   Types of Consumer
       Products

     •   Convenience
     •   Shopping
     •   Specialty
     •   Unsought


                                            8 - 10
Marketing in Action
          What is a Product?
                    • Less frequent purchases
Types of Consumer   • More shopping effort for
    Products          comparisons
                    • Higher than convenience
                      good pricing
•   Convenience     • Selective distribution in
•   Shopping          fewer outlets
                    • Advertising and personal
•   Specialty         selling
•   Unsought


                                                  8 - 11
                      Shopping Product

   Types of Consumer
       Products

     •   Convenience
     •   Shopping
     •   Specialty
     •   Unsought


                                         8 - 12
Marketing in Action
          What is a Product?

Types of Consumer   • Strong brand preference
                      and loyalty, requires
    Products          special purchase effort,
                      little brand comparisons,
                      and low price sensitivity
•   Convenience
                    • High price
•   Shopping        • Exclusive distribution
•   Specialty       • Carefully targeted
                      promotions
•   Unsought


                                                  8 - 13
                      Specialty Product

   Types of Consumer
       Products

     •   Convenience
     •   Shopping
     •   Specialty
     •   Unsought


                                          8 - 14
Marketing in Action
          What is a Product?

Types of Consumer   • Little product awareness
                      and knowledge (or if
    Products          aware, sometimes
                      negative interest)
•   Convenience     • Pricing varies
                    • Distribution varies
•   Shopping        • Aggressive advertising
•   Specialty         and personal selling by
                      producers and resellers
•   Unsought


                                                 8 - 15
     Product and Service
        Classifications
• Consumer products
• Industrial products
  – Materials and parts
  – Capital items
  – Supplies and services
• Organization, Person, Places and
  Ideas

                                     8 - 16
     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
                                        8 - 17
                      Marketing a City




                                         8 - 18
Marketing in Action
            Learning Goals

1. Define product and the major classifications
   of products and services
2. Describe the decisions companies make
   regarding their products and services
3. Discuss branding strategy
4. Identify the four characteristics that affect
   the marketing of a service
5. Discuss additional product issues




                                                   8 - 19
Individual Product and
  Service Decisions
       Figure 8.2




                         8 - 20
       Individual Product and
         Service Decisions

    Attributes        • Quality
                        – Lined to customer value
                          and satisfaction
                        – The whole company needs
•   Attributes            to be involved (TQM)
                      • Features
•   Branding            – Competitive tool for
                          differentiating product
•   Packaging           – Should be valued by the
                          customer as determined
•   Labeling              through market research
                      • Style and Design
•   Product Support     – Good design contributes to
                          product’s usefulness as
                          well as looks
                                                    8 - 21
       Individual Product and
         Service Decisions

    Attributes        • Brand
                        – A name, term, sign,
                          symbol, or design that
                          identifies the product
•   Attributes          – Branding can add value to
                          a product
•   Branding            – Branding helps buyers
                           • Identify products
•   Packaging              • Determine quality
                        – Branding helps sellers
•   Labeling               • Convey product quality
                           • Provide legal protection
•   Product Support        • Segment markets


                                                        8 - 22
                         Branding

              Click to
            Procter and
            Gamble Co.
            website to
           see how well
             you know
           their brands

Marketing in Action
  Click on picture for              8 - 23
   website with Action
Marketing in quiz
       Individual Product and
         Service Decisions

    Attributes        • Often includes primary,
                        secondary and shipping
                        packages
                      • Functions of packaging
•   Attributes           – Contain and protect
                         – Promote the product
•   Branding             – Differentiate the product
•   Packaging
•   Labeling
•   Product Support
                                                       8 - 24
      Packaging can Differentiate

             POM brand
             Pomegranate
              juice used a
              distinctively
             shaped bottle
                 to gain
              attention on
              the grocery
                  shelf
                                8 - 25
Marketing in Action
       Individual Product and
         Service Decisions

    Attributes        • Serves to identify the
                        product
                      • Describes the product
                      • Promotes the product
•   Attributes        • Must be careful not to:
•   Branding             – Mislead customers
                         – Fail to describe ingredients
•   Packaging            – Fail to include safety
                           warnings
•   Labeling
•   Product Support
                                                     8 - 26
       Individual Product and
         Service Decisions

    Attributes        • Survey customers regularly
                        to assess current customer
                        service
                      • Companies use a mix of
•   Attributes          phone, email, fax, Internet
                        and interactive voice and
•   Branding            data technologies
•   Packaging
•   Labeling
•   Product Support
                                                 8 - 27
    Product Line Decisions

• Product line
  – A group of products that are closely related because
    they may…
    • function in a similar manner
    • are sold to the same customer groups
    • Market through the same types of outlets
    • fall within given price ranges
• 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
                                                          8 - 28
  Product Mix Decisions

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




                                            8 - 29
   Product Mix Decisions

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

                                        8 - 30
            Learning Goals

1. Define product and the major classifications
   of products and services
2. Describe the decisions companies make
   regarding their products and services
3. Discuss branding strategy
4. Identify the four characteristics that affect
   the marketing of a service
5. Discuss additional product issues




                                                   8 - 31
       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
                                          8 - 32
      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


                                        8 - 33
           Brand Strategy

Key Decisions         • Three levels of
                        positioning:
• Brand Positioning     – Product
• Brand Name              attributes
                           • Least effective
  Selection
                        – Benefits
• Brand Sponsorship
                        – Beliefs and
• Brand                   values
  Development              • Taps into
                             emotions
                                               8 - 34
                      Product Positioned
                         on Emotions
          MasterCard
          positions its
       credit card based
         on consumer
           emotions




                                           8 - 35
Marketing in Action
           Brand Strategy

Key Decisions         • Good Brand Names:
                         – Suggest something about
                           the product or its benefits
• Brand Positioning      – Are easy to say, recognize
• Brand Name               and remember
                         – Are distinctive
  Selection              – Are extendable
• Brand Sponsorship      – Translate well into other
                           languages
• Brand                  – Can be registered and
  Development              legally protected


                                                    8 - 36
           Brand Strategy

Key Decisions         • Manufacturer brands
                      • Private (store) brands
                         – Costly to establish and
• Brand Positioning        promote
• Brand Name             – Higher profit margins
  Selection           • Licensed brands
                         – Name and character
• Brand Sponsorship        licensing has grown
• Brand               • Co-branding
  Development            – Advantages/
                           disadvantages

                                                     8 - 37
           Brand Strategy

Key Decisions         • Line extensions
                         – Minor changes to existing
                           products
• Brand Positioning   • Brand extensions
                         – Successful brand names
• Brand Name               help introduce new
  Selection                products
                      • Multibrands
• Brand Sponsorship      – Multiple product entries in a
                           product category
• Brand
                      • New brands
  Development            – New product category


                                                     8 - 38
       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
                       Video Snippet
                      Reebok transforms to
                         fit pop culture
                                             8 - 39
            Learning Goals

1. Define product and the major classifications
   of products and services
2. Describe the decisions companies make
   regarding their products and services
3. Discuss branding strategy
4. Identify the four characteristics that affect
   the marketing of a service
5. Discuss additional product issues




                                                   8 - 40
      Services Marketing

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




                                           8 - 41
Characteristics of Services
         Figure 8.5




                              8 - 42
   Service Firm Marketing
         Strategies
• The Service-Profit Chain
  – Internal Marketing
  – Interactive Marketing
• Managing Service Differentiation
• Managing Service Quality
• Managing Service Productivity


                                     8 - 43
            Learning Goals

1. Define product and the major classifications
   of products and services
2. Describe the decisions companies make
   regarding their products and services
3. Discuss branding strategy
4. Identify the four characteristics that affect
   the marketing of a service
5. Discuss additional product issues




                                                   8 - 44
     Product Decisions and
      Social Responsibility
•   Acquiring and dropping products
•   Patent protection
•   Product quality and safety
•   Product warranties




                                      8 - 45
 International Product and
    Services Marketing
• Special challenges:
  – Which products should be marketed
    internationally?
  – Should the products be
   standardized or adapted for world
   markets? Packaging?




                                    8 - 46
            Learning Goals

1. Define product and the major classifications
   of products and services
2. Describe the decisions companies make
   regarding their products and services
3. Discuss branding strategy
4. Identify the four characteristics that affect
   the marketing of a service
5. Discuss additional product issues




                                                   8 - 47

								
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