7
Products, Chapter Services, Brands: Building Customer Value
7-1
and
Prentice Hall, Copyright 2009
Chapter 1
What Is a Product?
Products are:
Anything
that can be offered to a market for attention, acquisition, use, or consumption and that might satisfy a want or need.
Includes physical objects, services, events,
persons, places, organizations, ideas, or some combination thereof.
Prentice Hall, Copyright 2009
7-2
What Is a Service?
Services are:
Any
activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything.
E.g., banking, hotel, airline, retail, tax
preparation, home repairs.
Prentice Hall, Copyright 2009
7-3
Levels of Product and Services
Core customer value:
What
the consumer is really buying
Actual product:
Includes
the brand name, features, design, packaging, and quality level services and benefits such as delivery and credit, instructions, installation, warranty, and service
7-4
Augmented product:
Additional
Prentice Hall, Copyright 2009
Types of Consumer Goods
Convenience goods:
Purchased
frequently and immediately with little comparison shopping Low priced Mass advertising and promotion Widespread distribution with many convenient locations E.g., candy, soda, newspapers
Prentice Hall, Copyright 2009 7-5
Types of Consumer Goods
Shopping products:
Bought
less frequently, more planning and effort, brand comparisons on basis of price, quality, style Higher price Selective distribution in fewer purchase locations Advertising and personal selling is undertaken by both producer and reseller E.g., furniture, clothing, cars, appliances
Prentice Hall, Copyright 2009 7-6
Types of Consumer Goods
Specialty products:
Strong
brand preference and loyalty, special purchasing effort, little comparison shopping High price Exclusive distribution in only one or a few outlets per market area Carefully targeted promotion by both producer and reseller E.g., Lamborghini, Rolex watches
Prentice Hall, Copyright 2009 7-7
Types of Consumer Goods
Unsought products:
Little
product awareness or knowledge of the brand, sometimes negative interest Pricing strategies vary Distribution strategies vary Require aggressive advertising and personal selling by both producer and resellers E.g., life insurance, cemetery plots, blood donation
Prentice Hall, Copyright 2009 7-8
Individual Product Decisions
Product attributes Branding Packaging Labeling Product support services
Prentice Hall, Copyright 2009
7-9
Branding
Branding involves building and
managing brands. A brand:
Is
a name, term, sign, symbol, or design, or a combination of these, that identifies the products or services of one seller or group of sellers differentiates and them from those of competitors.
7-10
Prentice Hall, Copyright 2009
Branding
Advantages to buyers:
Helps
identify products Cue to product quality and consistency
Advantages to sellers:
Basis
for products quality story Provides legal protection Helps to segment markets
Prentice Hall, Copyright 2009 7-11
Packaging
Packaging:
Involves
designing and producing the container or wrapper for a product
Ideally, good packages should:
Help
to market the brand Protect the contents Provide convenience and ease of use Ensure product and user/child safety Address environmental concerns
Prentice Hall, Copyright 2009 7-12
Labeling
Labeling refers to printed information
appearing on or with the package. Performs several functions:
Identifies
product or brand Describes several things about the product Promotes the product through attractive graphics
Prentice Hall, Copyright 2009 7-13
Product Line Decisions
Product line:
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. The number of items in a product line
Product line length:
Adjust line length by:
Filling Stretching
Downward, upward, or in both directions
7-14
Prentice Hall, Copyright 2009
Product Mix Decisions
Product mix:
The
set of all of the product lines and items that a particular seller offers for sale.
Product mix dimensions include:
Length:
the number of items in a line. Width: the number of different product lines the company carries. Depth: the number of versions offered of each product in the line. Consistency: how closely related various lines are.
Prentice Hall, Copyright 2009 7-15
Brand Equity
Brand equity:
Is
the positive differential effect that knowing the brand name has on customer response to the product or service. Is a valuable asset that offers many competitive advantages. Builds strong and profitable customer relationships that result in loyal customers.
Prentice Hall, Copyright 2009 7-16
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). a successful brand name to launch a new or modified product in a new category.
7-17
Brand extension:
Using
Prentice Hall, Copyright 2009
Brand Development
Multibranding:
Offers
a way to establish different features and appeal to different buying motives. 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.
7-18
New brands:
Developed
Prentice Hall, Copyright 2009