Product, services, and branding strategy. Chapter 8

1. Product, Services, and Branding Strategy

Chapter 8

2. Learning Goals

1. Understand products and the major
classifications of products and
services
2. Learn the decisions companies make
regarding their products and services
3. Understand branding strategy
4. Identify the four characteristics that
affect the marketing of a service
5. Realize additional product issues
8-2

3. Case Study Krispy 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
8-3

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.
8-4
Goal 1: Understand products and their classifications

5. 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
8-5
Goal 1: Understand products and their classifications

6. What is a Product?

Types of Consumer
Products
• Convenience
• Frequent purchases
bought with minimal
buying effort and
little comparison
shopping
• Shopping
• Low price
• Specialty
• Widespread
distribution
• Unsought
• Mass promotion by
producer
8-6
Goal 1: Understand products and their classifications

7. What is a Product?

Types of Consumer
Products
• Convenience
• Shopping
• Specialty
• Unsought
• Less frequent
purchases
• More shopping effort
for comparisons.
• Higher than
convenience good
pricing
• Selective distribution in
fewer outlets
• Advertising and
personal selling
Goal 1: Understand products and their classifications
8-7

8. What is a Product?

Types of Consumer
Products
• Convenience
• Shopping
• Specialty
• Unsought
• Strong brand
preference and
loyalty, requires
special purchase
effort, little brand
comparisons, and low
price sensitivity
• High price
• Exclusive distribution
• Carefully targeted
promotions
Goal 1: Understand products and their classifications
8-8

9. What is a Product?

Types of Consumer
Products
• Convenience
• Shopping
• Specialty
• Unsought
• Little product
awareness and
knowledge (or if
aware, sometimes
negative interest)
• Pricing varies
• Distribution varies
• Aggressive advertising
and personal selling by
producers and
resellers
8-9
Goal 1: Understand products and their classifications

10. Product and Service Classifications

• Consumer products
• Industrial products
Materials and parts
Capital items
Supplies and services
8 - 10
Goal 1: Understand products and their classifications

11. 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 - 11
Goal 1: Understand products and their classifications

12. Product and Service Decisions

Key Decisions
• Individual
Product
• Product Line
• Product Mix
• Product attributes
Quality, features,
style and design
Branding
Packaging
Labeling
Product support
services
8 - 12
Goal 2: Learn decisions companies make regarding products

13. Product and Service Decisions

Key Decisions
• Individual
Product
• 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
8 - 13
ranges
Goal 2: Learn decisions companies make regarding products
• Product Line
• Product Mix

14. Product and Service Decisions

Key Decisions
• Individual
Product
• Product Line
• Product Mix
• 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 - 14
Goal 2: Learn decisions companies make regarding products

15. Product and Service Decisions

Key Decisions
• Individual
Product
• Product Line
• Product Mix
• Product mix
Also known as
product assortment
Consists of all the
product lines and
items that a
particular seller
offers for sale
8 - 15
Goal 2: Learn decisions companies make regarding products

16. Product and Service Decisions

Key Decisions
• Individual
Product
• Product Line
• Product Mix
• 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
8 - 16
Goal 2: Learn decisions companies make regarding products

17. 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 - 17
Goal 3: Understand branding strategy

18. 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 - 18
Goal 3: Understand branding strategy

19. Brand Strategy

Key Decisions
• Brand Positioning
• Brand Name
Selection
• Brand Sponsorship
• Brand Development
• Three levels of
positioning:
Product attributes
• Least effective
Benefits
Beliefs and values
• Taps into
emotions
8 - 19
Goal 3: Understand branding strategy

20. Brand Strategy

• Good Brand Names:
Suggest something
about the product or its
benefits
Brand Positioning
Are easy to say,
Brand Name
recognize and
Selection
remember
Are distinctive
Brand Sponsorship
Are extendable
Brand Development
Translate well into
other languages
Can be registered and
8 - 20
legally protected
Goal 3: Understand branding strategy
Key Decisions

21. Brand Strategy

Key Decisions
• Brand Positioning
• Brand Name
Selection
• Brand Sponsorship
• Brand Development
• 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
Goal 3: Understand branding strategy
8 - 21

22. Brand Strategy

Key Decisions
• Brand Positioning
• Brand Name
Selection
• Brand Sponsorship
• Brand Development
• 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 category8 - 22
Goal 3: Understand branding strategy

23. 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
8 - 23
Goal 3: Understand branding strategy

24. Services Marketing

• Services
Account for 74% of U.S. gross
domestic product.
Service industries include
business organizations,
government, and private notfor-profit organizations.
8 - 24
Goal 3: Understand branding strategy

25. Characteristics of Services

• Intangibility
Consumers look for service quality signals
• Inseparability
Services can’t be separated from providers
• Variability
Employees and other factors result in
variability
• Perishability
Services can’t be inventoried for later sale
8 - 25
Goal 3: Understand branding strategy

26. Service Firm Marketing Strategies

• The Service-Profit Chain
Internal Marketing
Interactive Marketing
• Managing Service Differentiation
• Managing Service Quality
• Managing Service Productivity
8 - 26
Goal 4: Identify 4 characteristics that affect marketing a service

27. Product Decisions and Social Responsibility

• Acquiring and dropping
products
• Patent protection
• Product quality and safety
• Product warranties
8 - 27
Goal 5: Realize additional product issues

28. 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 - 28
Goal 5: Realize additional product issues