Lecture 5
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Nissan engineers marry a LEAF to a Frontier for use around the shop.mp4
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Pet dryer
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What Is a Product?
Products, Services, and Experiences
Product is anything that can be offered in a market for attention, acquisition, use, or consumption that might satisfy a need or want
Experiences represent what buying the product or service will do for the customer
Therefore a product can be:
•
•
•
•
•
•
•
An item, a service or a combination of both.
An idea or concept e.g.‐ hair removal (electrolysis).
A process e.g.‐ bad debt collection, a bank account.
A person/ place e.g.‐ Pres Obama, NAPA.
Written, sung, played or performed. e.g. Soca
A smell or taste e.g.‐ cologne, Curve, Thai curry
The whole organization and its products e.g.‐ Massey
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What Is a Product?
Levels of Product and Services
Secondary added value
ben
efits
Primary added value
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Product levels
CORE – rest and sleep.
BASIC – bed, bathroom, towels, desk and drawers.
EXPECTED – clean bed-sheets, fresh towels, working lamps and relatively quite.
AUGMENTED BEYOND EXPECTATIONS – remote AC, TV, lights, drapes, fresh flowers, fine dining and room service.
POTENTIAL – in the future.
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PRODUCT BENEFIT/ DIMENSION
• Functional – products have some sort of functional purpose. E.g.‐ cars for transport, clothes to cover our body, shoes to protect feet, food, insurance, etc.
• Symbolic – purchased because they represent some deeper and less transparent, emotional or instinctive need. This is the symbolic benefit and it fits with the consumer behavior and lifestyle. E.g.‐ a Rolex watch,Q7,
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PRODUCT BENEFIT
• Combination of both functional and symbolic benefits – this must be catered for in the design of product.
– Some products are more functional e.g.‐ projector.
– Some more symbolic e.g.‐ perfume, fashion ,clothes
– Most consumer products are bought for emotional needs or symbolic??????
• Buyers purchase benefits and are only interested in features that produce benefits they are looking for.
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What Is a Product?
Product and Service Classifications
Consumer products
Industrial/commercial products
What Is a Product?/consumer
• Consumer products
• Consumer products are products and services for personal consumption
• Classified by how consumers buy them
– Convenience products
– Shopping products
– Specialty products
– Unsought products
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•
•
•
Durables – tangible goods, survive many uses.
Non‐durable or consumable goods – tangible goods normally consumed in a few uses.
Services – intangible, inseparable, perishable e.g.‐ haircuts.
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What Is a Product?
Product and Service Classifications
Convenience products are consumer products and services that the customer usually buys frequently, immediately, and with a minimum comparison and buying effort
• Newspapers
• Candy
• Fast food
What Is a Product?
Product and Service Classifications
Shopping products are consumer products and services that the customer compares carefully on suitability, quality, price, and style
• Furniture
• Cars
• Appliances
What Is a Product?
Product and Service Classifications
Specialty products are consumer products and services with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort
• Medical services
• Designer clothes
• High‐end electronics
What Is a Product?
Product and Service Classifications
Unsought products are consumer products that the consumer does not know about or does not normally think of buying
• Life insurance
• Funeral services
• Blood donations
Other consumer goods
• Fast moving consumer goods FMCG – quick turnover.
• Staple goods – basic products that will be consumed on a regular basis.
• Distress or emergency goods – have to buy and does not need convincing. E.g. battery, tyre, pain
• Impulse goods – spur of the moment purchase.
• Own label goods – produced for a retailer by a manufacturer and carries retailer name e.g. cuisine, members club
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What Is a Product?/industrial
Product and Service Classifications
Industrial/commercial products are products purchased for further processing or for use in conducting a business
• Classified by the purpose for which the product is purchased
– Materials and parts
– Capital
– Raw materials
What Is a Product?
Product and Service Classifications
Capital items are industrial products that aid in the buyer’s production or operations‐ plant and machinery
Materials and parts include raw materials and manufactured materials and parts usually sold directly to industrial users
Supplies and services include operating
supplies, repair and maintenance items, and
business services
•MARKETING DIFERENT TYPES OF PRODUCTS
What Is a Product?
Organizations, Persons, Places, and Ideas
Organization marketing consists of activities undertaken to create, maintain, or change attitudes and behavior of target consumers toward an organization
First Citizens, Scotia– loans notice the number of ads
What Is a Product?
Organizations, Persons, Places, and Ideas
Person marketing consists of activities undertaken to create, maintain, or change attitudes and behavior of target consumers toward particular people
What Is a Product
Organizations, Persons, Places, and Ideas
Place marketing consists of activities undertaken to create, maintain, or change attitudes and behavior of target consumers toward particular places. What happens In Vegas stays in Vegas, Come
on down
Trinidad and Tobago
What is a product
Social marketing is the use of commercial marketing concepts and tools in programs designed to influence individuals’ behavior to improve their well‐being and that of society, Payless and cancer, diabetes program, fibre, free radicals,H1N1, carbon tax
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Product and Service Decisions
Product attributes
Product attributes are the benefits of the product or service
• Quality
• Features
• Style and design
Product and Service Decisions
Individual Product and Service Decisions
Product quality includes level and consistency
• Quality level is the level of quality that supports the product’s positioning
• Conformance quality is the product’s freedom from defects and consistency in delivering a targeted level of performance
Product and Service Decisions
Individual Product and Service Decisions
Product features are a competitive tool for differentiating a product from competitors’ products
Product features are assessed based on the value to the customer versus the cost to the company
Product and Service Decisions
Individual Product and Service Decisions
Style describes the appearance of the product
Design contributes to a product’s usefulness as well as to its looks
Good design is about looking at everyday things with new eyes and working out how they can be made better
James Dyson, Ford Magazine, summer 1999
Innovation, design and creativity are disciplines that span across boundaries and need to be understood in an integrated manner
Bettina Von Stamm
Product and Service Decisions
Product line is a group of products that are closely related Pigly
Wigly
because they function in a similar manner, 1916
are sold to the same customer groups,
memphis
are marketed through the same types of outlets, or fall within given price ranges
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Commodity Products/sugar flour bread
High Price
Differentiation
Branded
Products
High product/image
Differentiation
Low Price
Differentiation
Commodity
Products
Low product/image
Differentiation
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Line Stretching‐ lengthening the product line beyond its current range
• Down Market Stretch‐ middle/high positioned but introduces a low priced line, Sony, because of opportunities and competition (AIWA), Panasonic, Hilo
• Up‐Market Stretch‐ middle to high end for more growth, higher margins, new positioning eg Lexus , Infinity, Acura
• Two‐Way Stretch‐ in both directions, eg Texas instruments
• Fen of Marabella, Brand Source
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Product and Service Decisions
Product Mix Decisions
Product mix/product assortment consists of all the products and items that a particular seller offers for sale
• Width
• Length
• Depth
• Consistency
Product system‐product mix (product assortment) is the set of all products and items a seller offers for sale
L=20
Detergents
Toothpaste
Soap
Diapers
Dishwash
Tide
Colgate
Refresh
Luv
Squeezy
Breeze
Aquafresh
Lifebuoy
Cheekie
Ciff
Skip
Close up
Lux
Pampers
Lanher
Bio
Pepsodent
Dior
No brand
Enclean
W=5
Depth=12 Close up
Green Mint
x 3 sizes
Lemon
x 3 sizes
Red
x 3 sizes
Eucalyptus
x 3 sizes
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Product Life‐Cycle Strategies
Product Life Cycle
Product Life‐Cycle Strategies
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Product Life‐Cycle Strategies
Fads are temporary periods of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity
Adopted with great zeal, peak early and decline quickly
Touch lamps
Tattoo, piercing
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Seasonal PLC
seasonal
Summer or every day
• T’dad vs US
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Question marks
•
•
•
•
•
•
Cost x
Revenue
0
Profit
‐ve
Low market share
High market growth
Drop or go  resources requires investment.
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Stars •
•
•
•
•
•
Cost 2x
Revenue
2.5 x
Profit
‐ve
High market share
High market growth
Promote aggressively
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Cash cows
•
•
•
•
•
•
Cost x
Revenue
3x
Profit 2x
Low market growth
High market share
High profits some to bank, some invested in ??????
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Dogs •
•
•
•
•
Cost
x
Revenue x
LMS
LMG
Harvest, divest liquidate reposition.
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Marketing concepts/strategies for products
Porter’s three generic strategies:
Cost
Differentiation
There three main strategies:
1)cost leadership
2)differentiation
3)focus
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Focus
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Cost efficiency
• Economies of scale
Experience
Cost Efficiency
• Supply cost
Product Process
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Differentiation
• Selling some unique selling proposition (USP) that the competition does not have
• Differentiates and distinguish it’s offering from it’s competitors
• Price is not important (will pay any price)
• Customers are brand or product loyal
• Eg quality‐Multibionta Vitamins,probiotics
• Mega Vim‐brocolli
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Differentiation strategy
Ethan Allan
Differentiation strategy is when a company concentrates on creating a highly differentiated product line and marketing program so it comes across as an industry class leader. e.g. Ethen Allan
Focus • Aims at a very select market sector e.g. Signature collection smaller niche
• Charges higher prices e.g. Stetchers
• Offer special USP e.g. simply the best
• Reputation acquired as being specialist e.g. cardiologist
• Very intimate with segment (small),edible oils
• Pursue either cost or differentiation focus strategies‐
Chinese food for muslims
• Can attack ignored market sectors e.g. RAJ, wedding dresses
• Niche markets e.g. Rolex , Benz, Ferrari
Focus strategy
• Focus strategy is when a company focuses its effort on serving few market segments well rather than going after the whole market
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Competitive Strategies
Basic Competitive Strategies
Michael Porter’s four basic competitive positioning strategies
Overall cost leadership
Differentiation
Focus
Middle of the road
Figure 2.11
Routes to competitive advantage
ANSOFF
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Market penetration
• This involves selling more of the existing product in the existing market.
• the encouragement of the existing users to use more of the product
• For example encouraging cornflake eaters to use a whole bowl instead of the half bowl that they are accustomed too because they can now get 100 percent of the daily vitamins. • Increase the size of purchase (30% more)
• Advertising other uses‐baking soda
• Giving price incentive for increased usage
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Penetration • Nonusers to use the product‐ for example non‐
smokers to smoke, avon
– Trial use thru sampling
– Price up or down
– New uses
• Attracting consumers from the competition for example brand switching and young users – Establishing sharper brand differences
– Increasing promo effort
– Initiating price cuts
• Consumers perceived quality/price is a key determinant for fast tracking market penetration.
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Market development
• This involves expanding into new markets with existing product for example export to other Caribbean countries, Mayaro branch • This strategy looks for new markets where needs might not be met with its current product so adapt product version for particular segment
• Seek out new distribution channels. (Grenada, Cuba, Panama, Malaysia an opportunity for export‐ new market)
• Advertising in other media to attract different groups e.g. pink community
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Product development
• This allows for the development of a modified version of the existing product, which can appeal to the existing market.
• If the product can be tailored specifically to the needs of an existing consumer group or to some new consumer group, then there can be product development,
– for example) jeans with pocket for I‐pod
– Special material
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Product development
•
•
•
•
•
•
•
•
Adapt to suit felt needs, ‐‐‐‐smaller‐I‐pad mini
Modify, color, Window 8
Magnify/minify, stronger, longer, thicker Substitute, other ingredients different type of materials Rearrange, patterns ,layout, cakes
Combine, blend, Reverse ,inside out
Different variations, models and sizes
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Diversification
• This is where the strategy of offering new products in a new market can be accomplished.
• It may be a risky venture because one is moving into an area where one has little or no experience.
• Ansoff considers two types of Diversification (1) integrative growths that are backward and forward integration within the industry,
• (2) diversification that can become possible with new technologies.
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Product-based competition
Five basic strategies:
• Product proliferation (e.g Nissan)
– Many new products simultaneously or in close
succession
– Market response determines support (supporting
those products that prove successful)
– Cover all segments and block new entrants (market
coverage)
• Value (e.g. Toyota/Lexus)
– New quality/cost trade-off curves
– Continuous improvement/re-engineering (maintain
leadership)
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Product-based competition
• Design (e.g. Hyundai)
– Aesthetics, touch, ease of use, etc.
– Engineering design + aesthetic design
• Innovation (e.g. BENZ)
– Technological and marketing innovations
– Either market pioneers or fast-followers
– Utilise both radical and incremental innovation
• Service (e.g. KIA)
– Customer relations, physical distribution, after-sales
service.
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. BOWMAN’S Strategic Clock
Perceived
Added
Value
4
3
5
2
6
1
7
8
Price
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•SEGMENTATION
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Market Segmentation
Market segmentation is the process that companies use to divide large heterogeneous markets into small markets that can be reached more efficiently and effectively
with products and services that match their unique needs
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Why segment?
• People differ in
–
–
–
–
wants,
purchasing power,
geographic location,
buying attitudes
– habits. (different strokes different folks)
• Heterogeneous ( different cultures)
• Can’t serve all because not all buyers are alike
• So divide into Subgroups with similar behavior and needs therefore homogeneous
• Easier to serve small groups, than large groups of dissimilar habits
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TV stations/cable
• LMN, Lifetime‐ women
• Nat geo, Animal Planet, Discovery‐ ed
• CNN, FOX, CW11, ABC, CBS‐ news
• ESPN, SPEED,‐ sports
• HBO, MAX, TMC‐ action movies
• Encore – westerns
• TNT‐ latino
•
•
•
•
•
•
Catwalk Westport
Francis
Detour
Stephenson Bradford
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Customer based approach to market segmentation of butter
HEALTH
CONSCIOUS/
LOW
CHOLESTEROL
CALORIE
CONTROL
REDUCED
FAT
REAL
BUTTER
EX‐BUTTER
USERS SEEKING
EASE OF
SPREADING
Anchor and
New Zealand
Original butter taste
REAL BUTTER TASTE
VALUE SEEKERS
Supermarket own label
“Krona” launched with “real
butter taste”
Identify another segment
Golden ray
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Market Segmentation
Market Segmentation
Segmenting Consumer Markets
Geographic segmentation
Nations, regions state, NCS, EW Corridor
Psychographic segmentation
Social class
lifestyle
Personality traits
Demographic segmentation
Age , sex, income, religion, race
Education, occupation
Behavioral segmentation
Occasion
Benefit
User rate
loyalty
Market Segmentation
Requirements for Effective Segmentation
• To be useful, market segments must be:
Measurable
Accessible
Substantial
Differentiable
Actionable
Geodemographic Segmentation
Teens show surprising similarity no matter where in the world they live. For instance, this teen could live almost anywhere. Thus, many companies target teenagers with worldwide marketing campaigns.
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Market Targeting
Target Marketing Strategies
Market Targeting
Target Marketing Strategies
Undifferentiated marketing targets the whole market with one offer
– Mass marketing‐small coke, KFC, but now
– Focuses on common needs rather than what’s different
Market Targeting
Target Marketing Strategies
Differentiated marketing targets several different market segments and designs separate offers for each‐ costume, silver, 10‐14ct, 22ct, diamonds
• Goal is to achieve higher sales and stronger position
• More expensive than undifferentiated marketing
Niche Marketing
•
•
•
•
A more narrowly defined group seeking a distinctive mix of benefits whose needs are not being served e.g. Ferrari Car command high prices because of its product and services? What about people with limited mobility?
Division of segments into sub segments
Tatil charges 100% loading for underage second driver, no other insurance will. patricksamuel2006
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Marketing Targeting
Target Market Strategies
Micromarketing is the practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations
• Local marketing
• Individual marketing
Market Targeting
Socially Responsible Target Marketing
• Benefits customers with specific needs
• Concern for vulnerable segments
• Children
– Alcohol
– Cigarettes
– Internet abuses
Positioning
Product position is the way the product is defined by consumers on important attributes—the place the product occupies in consumers’ minds relative to competing products
–
–
–
Perceptions
Impressions
Feelings
Positioning • Tide is positioned as a powerful, all‐purpose family detergent;
• Ivory is positioned as the gentle detergent for fine washables and baby clothes. • At Subway restaurants, you “Eat Fresh;” patricksamuel2006
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In the automobile market
• Nissan Versa and Honda Fit are positioned on economy,
• Mercedes and Cadillac on luxury,
• Porsche and BMW on performance.
• Volvo positions powerfully on safety.
• Toyota positions its fuel efficient, hybrid Prius
as a high‐tech solution to the energy shortage. “How far will you go to save the planet?” it asks
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Positioning strategies, Company
Attribute positioning e.g.‐ tall black handsome
Benefit positioning e.g. clothing that moves User positioning e.g.‐ sport group. Saucony
Use positioning ‐safety, durable. Non flammable material
• Competitive positioning. Tylenol vs. Advil
• Product leader positioning.RBC , SAM
• Quality vs price positioning. SUNNY
•
•
•
•
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Positioning problems
• Under positioning: product is of better quality than advertise e.g. Royal Oak Rum
• Over positioning: advertise as high quality but in fact is it less than?????? KIA
• Confused, whether the product is high end or medium end or low end e.g. LG, Samsung
• Doubtful, as to the claims of the product. e.g. Aoquli
soap, weight loss ring.
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High moisturizing
4
7
2
5
8
Nondeodorant
3
Deodorant
1
6
Low moisturizing
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Positioning of clothing stores/
• Neiman and Marcus, Bloomingdale, Macy, JC Penny, Sears,Kohls, Walmart, K Mart, Target
High
price
High quality
Low
quality
Low
price
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Differentiation and Positioning
Positioning maps show consumer perceptions of their brands versus competing products on important buying dimensions
Differentiation and Positioning
Selecting an Overall Positioning Strategy
Value proposition is the full mix of benefits upon which a brand is positioned
Differentiation and Positioning
Choosing a Differentiation and Positioning Strategy
Identifying a set of possible competitive advantages to build a position by providing superior value from:
Product differentiation
Service differentiation
Channel differentiation
People differentiation
Image differentiation
Differentiation and Positioning
Identifying Possible Value Differences and Competitive Advantages
Competitive advantage is an advantage over competitors gained by offering consumers greater value,
either through lower prices or
by providing more benefits that justify higher prices
Product differentiation
•
•
•
•
•
Product uniqueness and novelty
Technically superior
Product quality
Product attractiveness and design
High performance to cost ratio
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Differentiation vs standardisation
• Key questions:
– How to deliver distinctive products to market whilst
building on core capabilities and conserving
development, production and marketing resources?
– How to balance the needs of high-volume
manufacturing/service delivery with the needs of
individual customers?
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Product platforms
– Common platforms for a range of products
– Shared components/parts, production processes,
knowledge, people and relationships
– Improves efficiency.
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Product platforms
High
Audi TT
Audi A3
Single platform
Many common parts
Product
price
VW Golf
Seat Leon
Skoda Oktavia
Low
Overall cost leadership
Differentiation
Generic strategy
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Product portfolios
Volkswagen
Group
Volkswagen
 Fox
 Lupo
 Polo
 Golf
 Passat
 Jetta
 Beetle
 Touran
 Phaeton
 Touareg
Volkswagen
Commercial
Vehicles
 Caddy
 Transporter
 Crafter
 Carravelle
 California
Audi
 A3
 A4
 A6
 A6
 A8
 R8
 Q7
 TT
Seat
 Alteo
 Alhambra
 Toledo
 Leon
 Ibiza
Skoda
 Fabia
 Octavia
 Roomster
 Superb
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Bentley
 Brooklands

Arnage
 Continental
 Azure
Lamborghini
 Murcielago
 Gallardo
Bugatti
 EB110
 Veyron
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Product platforms
• The benefits of product platforms include:
– Increased product variety and ability to serve multiple
market segments (mass customisation)
– Greater speed to market
– Improved management of demand and uncertainty
– Accommodating differential technology change
– Reducing production costs
– Supports late-stage differentiation of products
– Reduces service infrastructure requirements
– Greater speed and efficiency in technological learning
and knowledge creation.
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•BRANDING
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Market introduction of brands
Twinings
Schweppes
Levis
Agfa
Coca-Cola
Philips
Pepsi-Cola
Persil
Nivea
1706
1798
1850
1873
1886
1891
1898
1907
1911
Boeing
Adidas
Volvo
McDonald’s
Benetton
Nike
Body Shop
Swatch
Eternity
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1916
1920
1926
1937
1965
1972
1976
1982
1988
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Distinctive and believable
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Brand represents
•
•
•
•
the consumer’s perceptions
feelings about a product
its performance.
It is the company’s promise to deliver
– a specific set of features,
– benefits,
– services, – and experiences consistently to the buyers
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Brand • A name, term, sign, symbol or design, or a combination of these, intended to identify the goods or services of one seller or a group of sellers and to differentiate them from those of competitors”
• Trade name‐ legal name of the organ
• Trade mark‐ registered, protected name, symbol or logo for owner’s sole use
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Searching…….
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Creating Brand LOYALTY
• Ads.
• Sponsorship:
– Sports.
– Education – SEA, BSc. – Travel.
• Customer/fan club.
• Factory visits.
• Retail unit (merchandising Nestle).
• Public service and social responsibility.
• Value leader./PR
• Strong spokes‐ person. e.g.Lara, Darren
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Benefits of branding
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Strategic functions of brands
•
•
•
•
•
•
•
•
Sign of ownership.
Differentiating device.
Functional device.
Symbolic device.
Risk reducer.
Shorthand device, BUD
Legal device.
Strategic device.
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Branding Strategy: Building Strong Brands
Brand Name Selection
Desirable qualities 1. Suggest benefits and qualities
2. Easy to pronounce, recognize, and remember
3. Distinctive
4. Extendable
5. Translatable for the global economy
6. Capable of registration and legal protection
Brand Name Rules
•
•
•
•
Shock
Alliterative‐same sound/letter
Relate to positioning
Link to a picture
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Branding Strategy: Building Strong Brands
Brand Sponsorship
Manufacturer’s brand‐IBM, Kellog
Private brand‐ Sears, Sam‐Walmart
Massey–talk to me
Licensed brand‐CK, Gucci, Levi
Co‐brand‐ Nabisco&Pillsbury‐Oreo
BRAND NAME DECISIONS
• Industrial names:
– Unilever‐‐ different name for each product. If one fails it does not hurt the company or others.
– Seiko high quality/ can sell a lower quality brand watch without hurting Seiko‐ Orient
– (General Mills, Betty Crocker, Nature Valley and Gold Medal)
• Blanket family name – e.g. Heinz, Cambell GE.
• Separate family name for all products e.g. SEARS, Kenmore for appliances, Craftsmen for tools and Homart for home installations.
• Company’s trade name combined with individual product name – e.g. Kellogg’s (rice kipsies, raisin
• bran and nut and honey).
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Branding Strategy: Building Strong Brands
Brand Development Strategies
Brand strategy
• LE‐new flavours, colours, sizes, ingredients
• BE‐use of successful brand name to launch new products, Mattel Barbie cosmetics
• Mb‐Proctor & Gamble has 9 detergents
• NB‐ Matsushita‐ Panasonic, Technics, National, Quasar patricksamuel2006
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Betty Crock
Making cakes like
your mother used to
make them!
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Monolithic Identity
An organization uses one style or identity throughout
1948
1955
1930
1961
1904
1900
1971
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Coke thru the years
1941
1943
1963
2001
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Why brand building
l1
. Build stable, long‐term demand
• Added value looked for by customers
• Develop a sound basis for future growth and expansion
• Recruit the growing power of intermediaries
• Become recognised as a company with a reputation that is going places and that people want to work for
• Create a reputation as an organization that people will want to develop relationships with.
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Slide 119
l1
The fifth point 'Become....' is reframed and 'Creat... with' and for clarity. Please conform it.
AQ:; 17/05/2007
72% of customers will pay a 20% premium for their preferred brand.
50% will pay 25% more
40% will pay 30% more
25% say that price doesn’t matter
Over 70% use brands to guide a buying decision
And 50% are brand driven.
Davis 2002
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Successful brands have 4 key attributes:
1. Quality
2. Superior service
3. First to market :
–
–
–
–
–
new technology
new positioning concept
new distribution channel
new market segment
exploitation of a new gap
4. Differentiation
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•Brand Equity Models patricksamuel2006
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Brand Value (M$) in year 2011
Brand Value (M$) in year 2011
1 Apple Inc.
153285 Technology
2 Google
111498 Software
3 IBM
100849 Software
4 McDonald's
81016 F&D&T
5 Microsoft
78243 Software
6 Coca‐Cola
73752 F&D&T
7 AT&T
69916 Telecom
8 Marlboro
67522 F&D&T
9 China Mobile
57326 Telecom
10 GE
50318 Technology
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Brand 6 levels of meaning
•
•
•
•
•
•
Attributes – good engineering, quality, performance
Benefits – feeling of safety, savings, etc.
Values – the producer’s values e.g. prestige
Culture – the producer’s culture – creativity or efficiency
Personality – projection of personality
e.g fun or austere
User – can suggest the type of consumer who buys it
Kotler (2001)
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Brands as focusing devices
Brands as a contact point
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Brand Asset Valuator
• Advertising agency Young and Rubicam (Y&R) developed a model of brand equity called Brand Asset Valuator (BAV). – The four key components of brand equity according to BAV are:
– Differentiation
– Relevance
– Esteem
– Knowledge
– Differentiation and relevance combine to determine brand strength.
– Esteem and knowledge combine to create brand structure.
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Brandz Model
• According to this model, brand building involves a sequential series of steps, where each step is contingent upon successfully accomplishing the previous step.
• Research has shown that bonded consumers,
– build stronger relationships with the brand,
– and spend more of their category expenditures on the brand than those at lower levels of the pyramid.
• Samsung , LG patricksamuel2006
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Top of mind awareness
Brand uniqueness
Brand relevance
Brand unawareness to awareness
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The Brand Pyramid
• Brand salience – how often and easily consumers think of the brand • Brand performance‐ is how well the product or service meets customers’ functional needs
• Brand imagery ‐describes the extrinsic properties of the product or service
• Brand judgments‐ focus on customers’ own personal opinions and evaluations
• Brand feelings ‐are the customers’ emotional responses and reactions with respect to the brand. • Brand resonance‐ refers to the nature of the relationship customers have with the brand and the extent to which they feel they’re “in sync” with it. patricksamuel2006
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Resonance
Feelings
Judgment Imagery Performance Brand salience
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Aaker Model
• Former UC‐Berkeley marketing professor David Aaker
views brand equity as a set of five categories of brand assets and liabilities linked to a brand that add to or subtract from the value provided by a product or service to a firm and/or to that firm’s customers. These categories of brand assets are:
•
•
•
•
•
Brand loyalty
Brand awareness
Perceived quality
Brand associations
Other proprietary assets such a patents, trademarks, and channel relationships
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Aaker Brand Equity Model
Brand
Brand Identity
awareness
Brand Perceived cost vs. quality
loyalty
Proprietary assets
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ALINA WHEELER / brand identity
COHERENCE
MEANING
DURABILTY
VALUE
DIFFERENTIATI
ON
Relevance COMMITMENT
AUTHENTICITY
FLEXIBILITY
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Figure 14.6 The structure of PepsiCo’s brand equity model Equitrak
Source: (Krish et al., 2001). Used with permission.
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CUSTOMER BASED BRAND EQUITY
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A product brand is one where an organization gives a unique name to every product in its portfolio. Davis (2002) cites Procter and Gamble as the classic example with the following list:
1. Laundry and cleaning: Bounce, Cheer, Cascade,
Comet, Era, Dawn, Joy, Tide
2. Health care: Ivory, Crest
3. Beauty care: Cover Girl, Ivory, Head & Shoulders
4. Food and beverage: Pringles, Folgers
5. Paper: Pampers, Luvs, Always.
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International Applicability
When competing in global markets it is important to choose names that are universally acceptable.
The following are unlikely to succeed in the UK:
•
•
•
•
•
•
•
•
Pschitt (France) – a soft drink
Sic (France) – a soft drink
Skum (Denmark) – confectionery
Bums (Sweden) – biscuits
Zit (Greece) – soft drink
Super Piss (Finland) – antifreeze
Arses (Turkey) – photographic film
Bimbo (Spain) ‐ bread
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Brand appeal
Quality
Status
Performance
Cost/ benefit
Global presence
Social corporate responsibility‐WWE
• Strong ads with strong personalities
•
•
•
•
•
•
• Positioning
–
–
–
–
•
•
•
•
•
Relevance
Credibility
Differentiation
sustainability
USP‐ tag lines
Delivery
After sales service
Personality figuresupport
comfort
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Relevance Esteem Feelings
Associations Quality Authenticity attributes Commitment
Perceived Value Knowledge Bonding Loyalty Awareness patricksamuel2006
Personality Expectations
Benefits
Opinions and evaluations Distinctiveness
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Packaging: The 8th P
All the activities of designing and producing
the container for a product.
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Product and Service Decisions
Individual Product and Service Decisions
Labels identify the product or brand, describe attributes, and provide promotion
Packaging
Informs customers./information
Meets legal information requirements.
Aids the use of the product.
Protects the product from the environment and vice versa.
• Attracts attention to the product at the retailer level.
•
•
•
•
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Packaging
•
•
•
•
Adds value – re‐useable‐pump, containers
Tamper Resistance‐ food & drug products
Trade mark
Messages (overt and covert)
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Colour Messages
Summer, easy to read,
Sociable, Oranges,
cheap and cheerful,
Attention
Attention
Upmarket,
Expensive
“girly”, cosmetics,
Baby goods
Not Food.
Cool, Clean
Warmth,
Premium Product,
Attention
Natural, Spring, Irish,
Money, recyclable
Strong food flavour, With Gold – exclusive
Otherwise – Death
earthiness
Purity and Cleanliness. Death in Japan
Snow. Weddings.
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Services Marketing
Types of Service Industries
• Government
• Private not‐for‐profit organizations
• Business services
Services Marketing
Nature and Characteristics of a Service
SERVICES
• INTANGIBLE ‐Unlike physical products they cannot be seen, tasted, felt, heard or smelled before they are bought e.g.‐
face‐lift, orthodontics. Therefore look for evidence of quality before by seeking advice and previous work done.
• INSEPARABLE ‐Services are produced and consume simultaneously with the product. Goods are manufactured, inventory and distributed.
• When a doctor renders a service he is part of the service and a different doctor will not render the same service e.g.‐ Dr. Lall vsa Dr in San Fernando hospital e.g.‐ Brigo for Montano.
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SERVICES
• VARIABLE – because service depend on who provides them, when and where they are produced; services a highly variable e.g.‐ different outlet, different persons at KFC.
• PERISHABLE – services cannot be stored. Person can be charged for missed appointments. The service finishes with each offering and starts again with a new e.g.‐ massage
• ONGOING– many services consist of some form of ongoing benefit that can last a lifetime e.g.‐ vacation, rest and relax.
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Services Marketing
Marketing Strategies for Service Firms
In addition to traditional marketing strategies, service firms often require additional strategies
• Service‐profit chain
• Internal marketing
• Interactive marketing
Services Marketing
Marketing Strategies for Service Firms
Service‐profit chain links service firm profits with •
•
•
•
•
•
employee and customer satisfaction
Internal service quality
Satisfied and productive service employees
Greater service value
Satisfied and loyal customers
Healthy service profits and growth
Bonuses, commissions, medicals, trips
Services Marketing
Marketing Strategies for Service Firms
Internal marketing means that the service firm must orient and motivate its customer contact employees and supporting service people to work as a team to provide customer satisfaction
Internal marketing must precede external marketing
Training and development
Services Marketing
Marketing Strategies for Service Firms
Interactive marketing means that service quality depends heavily on the quality of the buyer‐seller interaction during the service encounter
• Service differentiation
• Service quality
• Service productivity
Services Marketing
Marketing Strategies for Service Firms
Managing service differentiation
creates a competitive advantage from the offer, delivery, and image of the service
• Offer can include distinctive features
• Delivery can include more able and reliable customer contact people, environment, or process
• Image can include symbols and branding
Services Marketing
Marketing Strategies for Service Firms
Managing service quality provides a competitive advantage by delivering consistently higher quality than its competitors
Service quality always varies depending on interactions between employees and customers
Services Marketing
Marketing Strategies for Service Firms
Managing service productivity refers to the cost side of marketing strategies for service firms
• Employee recruiting, hiring, and training strategies
• Service quantity and quality strategies
• Thank you
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Product differentiation/design
(Continued)
• Form
• Durability
– size, shape, physical structure
– expected operating life
– balanced with technological
obsolescence
• Features
– supplements basic function
• e.g. car CD player, trim level,
child seats
• Reliability
– probability of
malfunction/failure
• Performance quality
– appropriate to target market
and competitor performance
levels
• Conformance quality
• Repair---ability
– ease of repair, cost, technical
support
• Style
– each product identical, meets
the promised specification and
performance
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– aesthetics – look and feel
– distinctive and difficult to copy
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