Chapter 7
Product, Services, and Branding
Strategy
Professor Marshall
Queens College
What is a Product?
Anything that can be offered to a market for
attention, acquisition, use, or consumption and
that might satisfy a want or need.
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Includes: physical objects, services, events,
persons, places, organizations, ideas, or some
combination thereof.
What is a 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.
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Examples: banking, hotel, airline, retail, tax
preparation, consulting, home repairs.
Three levels of a Product
Augmented Product
Delivery
and
credit
Brand
Name
Actual Product
Aftersale
service
Features
Core
Benefit
Quality
level
Design
Packaging
Installation
Warranty
Consumer Products
Products and services bought by final
consumers for personal consumption.
Classified based on how consumers buy
them.
Includes:
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Convenience Products
Shopping Products
Specialty Products
Unsought Products
Convenience Products
Purchased frequently & immediately
Low priced
Mass advertising
Many purchase locations
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Examples: candy, soda, newspapers
Shopping Products
Bought less frequently
Higher price
Fewer purchase locations
Comparison shop
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Examples: furniture, clothing, cars, appliances
Specialty Products
Special purchase efforts
High price
Unique characteristics
Brand identification
Few purchase locations
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Examples: Lamborghini, Rolex Watch
Unsought Products
New innovations
Products consumers do not want to think
about
Require much advertising and personal selling
Examples: life insurance, cemetery plots,
blood donation
Industrial Products
Those purchased for further processing or for
use in conducting business.
If a consumer buys a lawnmower for use at home, it is a consumer product.
If the same consumer buys a lawn mower for use at his landscaping
business, it is an industrial product.
Industrial Products
Materials and Parts:
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Raw materials, manufactured materials and
parts
Capital Items:
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Products that aid in buyer’s production or
operations
Supplies and Services:
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Operating supplies, repair, and maintenance
items
Other Market Offerings
Organizations: Profit (businesses) and nonprofit (schools
and churches).
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Designed to create or change attitudes
Persons: Politicians, entertainers, sports figures, doctors,
and lawyers.
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When you start your career, you will be marketing yourself!
Places: create, maintain, or change attitudes or behavior
toward particular places (e.g., tourism).
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I Love New York
Virginia is for Lovers
It’s like a Whole Other Country - Texas
Ideas (social marketing): Public health campaigns,
environmental campaigns, family planning, or human
rights.
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Truth Campaign – anti smoking
Anti drug
Conservation
The Ad Council – leader in PSAs (public service announcements)
http://www.adcouncil.org/
Individual Product Decisions
Product
attributes
Branding
Packaging
Labeling
Product
support
services
Product and Service Attributes
Quality
–
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includes durability, reliability, precision, ease of operation and
repair
Total Quality Management (TQM) is an approach in which all
of the company’s people are involved in constantly improving
the quality of products, services, and business processes.
This is an entire field (quality assurance).
Features
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Can be offered with all sorts of features; different models.
Style & Design
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Style is just the appearance of the product
Design goes to the heart of the product
Example: iPod comes in different storage capacities (features). The style is
small, sleek. The design is stylish, portable, unique, fashionable.
Product Line Decisions
A product line is a group of products that are closely related. They might function
in a similar manner, or might be sold to the same groups, or might fall in the same
price ranges. http://www.mauijim.com/mjweb/public/catalog/consumer_collection_sort.jsp
Product Line Length
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# of items in the product line
Too short if we can increase profit by adding items
Too long if we can increase profit by removing items
Stretching
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Downward – add a low end product
Upward – add a high end product
Both directions – example: Marriott
Filling – add items in between high and low
Product Mix Decisions
Product Mix (or product assortment): all of
the product lines and items that a
particular seller offers for sale.
Width: the number of different product
lines the company carries.
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Maui Jim = 6
Depth: the number of versions offered of
each product in the line.
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Maui Jim = average of 5
Consistency: how closely related the
various lines are.
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Maui Jim = very consistent
Branding
Creating, maintaining, protecting, and enhancing
products and services.
A brand is a name, term, sign, symbol, or design, or a
combination of these, that identifies the maker or
seller of a product or service.
Branding
Advantages to buyers:
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Product identification
Product quality
Advantages to sellers:
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Basis for product’s quality story
Provides legal protection
Helps to segment markets
Brand Equity
The positive differential effect that knowing
the brand name has on customer
response to the product or service.
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How much more are you willing to pay for the
brand of your choice?
Provides:
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More brand awareness and loyalty
Basis for strong, profitable customer
relationships
Brand Valuation – the process of
estimating total financial value of a brand
One study found that customers are willing to pay 20% more for the brand of their
choice relative to its nearest competitor. Tide & Heinz lovers will pay a 100%
premium. Loyal Coke drinkers will pay a 50% premium.
Major Brand Strategy Decisions
Brand
positioning
Brand
name
selections
Brand
sponsorship
Brand
development
Brand Positioning
Can position brands at any of three levels:
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Product attributes – Dove soap ¼ cleansing cream
Competitors can easily copy attributes
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Product benefits – Dove soap benefit of softer skin
Volvo (safety), Nike (performance), FedEx (overnight),
Lexus (quality)
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Beliefs and values (Emotion) - Dove soap softer
skin will make you more attractive
Brand Name Selection
Desirable qualities for a brand name include:
1.
It should suggest product’s benefits and qualities
1.
2.
It should be easy to pronounce, recognize, and
remember
1.
3.
Kodak
It should be extendable
1.
5.
6.
Tide, Crest, Puffs
It should be distinctive
1.
4.
OFF!, Craftsman, Beautyrest
Amazon.com (started as bookseller but expanded to other
products)
It should translate easily into foreign languages
It should be capable of registration and legal protection
See Video Case: Accenture
Brand Sponsorship
Manufacturer’s brands
Private brands (store brands) – Sears created
Kenmore & Craftsman
Licensed brands – character names: ScoobyDoo, Sesame Street, Donald Duck
Co-branding – Mattel teamed with Coca-Cola
to create Soda Fountain Sweetheart Barbie
Brand Development
Line Extension: introduction of additional items in a
given product category under the same brand name
(e.g., new flavors, forms, colors, ingredients, or
package sizes).
Brand Extension: using a successful brand name to
launch a new or modified product in a new category.
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Involves some risk: Heinz pet food – bad idea
Multibranding: (introduce additional brands in the
same product category) offers a way to establish
different features and appeal to different buying
motives.
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 new
product category.
Packaging
Designing and producing the container or
wrapper for a product.
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Usually involves the primary container, secondary
disposable package, and shipping container
Packaging is an important marketing tool: attract
attention and describe the product
Creating a package involves:
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Packaging concept
Package elements
Product safety
Environmental concerns
Labeling
Printed information appearing on or with the
package.
Performs several functions:
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Identifies product or brand
Describes several things about the product
Promotes the product through attractive graphics
Legal concerns
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No deceptive labels
Unit pricing (price per unit), open dating (shelf life),
nutritional labeling
Product Support Services
Assess the value of current services and
obtain ideas for new services.
Assess the cost of providing the services.
Put together a package of services that
delights the customers and yields profits for
the company.
Examples: Warranties, customer service, extended service plans, etc.
Nature and Characteristics of a
Service
Intangibility
Inseparability
Cannot be seen,
felt, tasted, or
smelled
Cannot be
separated from their
providers
Services
Variability
Quality depends on
who provides the
services and when,
where and how it is
done
Perishability
Services cannot be
stored for later use
Major Service Marketing Tasks
Managing Service Differentiation:
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Develop a differentiated offer, delivery, and image.
Managing Service Quality:
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Be customer obsessed, set high service quality standards,
have good service recovery, empower front-line employees.
Managing Service Productivity:
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Train current employees or hire new ones, increase quantity &
sacrifice quality, harness technology.
Example: Airlines offer in-flight movies and frequent flyer programs
Cellular phone companies: ‘Can you hear me now?’, Rollover minutes
International Product and
Services Marketing
Decide which products and services to introduce
Decide how much to standardize or adapt
Packaging presents new challenges (translation)
Service marketers face special challenges
Trend toward global service companies will
continue
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Example Deutsche Bank (Germany, England, Frank,
Asia, America)
Video Case
Accenture
(14 minutes)
Thoughts
What is the core service that Accenture offers? What are the supplemental
services?
The core is probably consulting services or advice. Supplemental
services would include speed of service, quality, cost, interactions with
Accenture’s personnel, hard copies of reports and databases generated,
etc.
What are the tangibles and intangibles that a consulting firm delivers?
Tangibles are fewer (e.g., the report, the people, the offices) than
intangibles (the quality of the advice, the vision).
What makes branding difficult for a professional service? Why is it critical
to the firm’s success?
Branding is difficult for any service, mostly because of the lack of
heterogeneity (your experience of Accenture varies with every phone call,
with different consultants, and even with the same consultant at different
points in a project). Branding is important because it signals credibility
and expertise.