Services,
and Products, Brands
and
Building Customer Value
Chapter
7
Rest Stop: Previewing the
Concepts
Concepts
1.
2.
3.
4.
Define product and the major
classifications of products and services.
Describe the decisions companies make
regarding their individual products and
services, product lines, and product mixes.
Identify the four characteristics that affect
the marketing of services and the
additional marketing considerations that
services require.
Discuss branding strategythe decisions
companies make in building and managing
their brands.
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First Stop
ESPN Its A Brand!
Brand Experience
ESPN Media Presence
ESPN: More than a network Television: Grown to 7 ESPN
or website, ESPN is a
networks. Partners with ABC
meaningful part of
to produce NASCAR, college
customers lives that is
sports, World Cup soccer and
synonymous with sports
more. Pioneered highentertainment, and linked
definition broadcasting.
with consumers sports
Achieves high advertising and
memories, realities, and
cable revenues.
anticipations.
Online and Publishing:
Global Power: ESPN truly
Websites are #1 in respective
lives up to its tagline, The
categories; partnered with
Worldwide Leader in
YouTube to post sports
Sports.
content. Magazine and book
title sales are strong.
Strong Brand Equity:
ESPN is as much
ESPN is Everywhere:
recognized and revered as
Airports, health clubs, gas
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Nike, Google, or Coca-Cola
stations.
Product
Anything that can be offered
to a market for attention,
acquisition, use, or
consumption and that might
satisfy a want or need.
satisfy
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What Is a Product?
Products:
Include
physical
objects,
services,
events,
persons,
organizations,
places, ideas,
or a
combination
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Service
Any activity, benefit, or
satisfaction offered for sale
that is essentially intangible
and does not result in the
ownership of anything.
ownership
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What Is a Service?
Services:
Services are
intangible. Examples
include banking,
hotel
accommodations,
airline travel, tax
preparation, legal
services, cable and
satellite service and
others.
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Products, Services and
Products,
Experiences
Experiences
Marketing offerings:
Includes both
tangible goods and
services, as well as
combinations of
both.
Pure good: Camay
soap.
Pure service: Legal
representation.
Combination:
Restaurant meal.
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7-8
Marketing in Action
Creating and managing
customer experiences
differentiates marketing
offers from competitors.
Umpqua Bank designs its
stores to make banking
a pleasurable
experience. Their banks
feature a cozy coffee bar,
big-screen TVs showing
investment news, comfy
seating, WiFi access,
and an online music
store.
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Figure 7.1:
Three Levels of Product
Three
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Levels of Product and
Levels
Services
Services
Core customer value:
What the consumer is really buying.
Actual product:
Includes the brand name, features, design,
packaging, and quality level.
Augmented product:
Additional services and benefits such as
delivery and credit, instructions,
installation, warranty, and service.
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Marketing in Action
People who buy a BlackBerry device are buying
more than a cell phone. They are buying the ability
to Connect to everything you through the power of
the BlackBerry smartphone.
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Product and Service
Product
Classification
Classification
Consumer products:
Products and services bought by
final consumers for personal
consumption.
Also included are other marketable
entities.
Classified by how consumers buy
them:
Convenience, shopping, specialty,
and unsought goods.
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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.
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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.
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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.
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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.
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Fuel for Thought
Why might tropical fish
be classified by
different consumers as
convenience goods,
shopping goods, OR a
specialty good?
Think about highdefinition televisions for
a moment. Are
products likely to
change classification
categories over time?
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Product and Service
Product
Classification
Classification
Industrial products:
Those purchased for further
processing or for use in conducting
business.
Distinction between consumer and
industrial products is based on the
purpose for which an item is bought
(e.g., home or business use).
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Types of Industrial Goods
Materials and parts:
Raw materials, manufactured
materials, and parts.
Capital items:
Products that aid in buyers
production or operations.
Supplies and services:
Operating supplies, maintenance,
and repair items.
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Other Market Offerings
Organizations:
Profit and nonprofit (schools and
churches).
Persons:
Politicians, sports figures, doctors, etc.
Places:
Create, maintain, or change attitudes or
behavior toward particular places.
Ideas (social marketing):
Public health campaigns, environmental
campaigns, family planning, or human
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Marketing in Action
Social marketing is
designed to
influence individuals
behavior to improve
their well-being and
that of society.
UNCF powerfully
markets the idea
that A mind is a
terrible thing to
waste.
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Figure 7.2:
Individual Product Decisions
Individual
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Product and Service
Product
Attributes
Attributes
Product quality dimensions:
Performance quality.
Conformance quality.
Product feature considerations:
Value to consumer.
Cost to company.
Product style and design:
Shapes the buyers usage
experience.
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Marketing in Action
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OXO
approaches
product design
by focusing on
the desired enduser experience,
and then
translating its
notions into
eminently
usable gadgets.
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Brand
A name, term, sign, symbol,
design, or a combination of
these, that identifies the
products or services of one
seller or group of sellers and
differentiates them from
those of competitors.
those
Branding involves building and
Branding
managing brands.
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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.
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Packaging
Packaging:
Involves
designing and
producing the
container or
wrapper for a
product.
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Packaging
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.
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Marketing in Action
Amazon.com has
launched
a multi-year initiative to
create frustration-free
packaging for many toys,
electronics, and other
manufactured items in
order to eliminate wrap
rage.
Visit the web page where
this is explained. A short
video (1:36) demonstrates
how Amazons
repackaging efforts save
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Labeling
Labeling refers to printed information
appearing on or with the package,
including the product name.
Performs several functions:
Identifies product or brand.
Describes several things about the
product.
Promotes the product through attractive
graphics.
Labeling is regulated by the
government.
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Fuel for Thought
Take an up-close
look at the label for
the Tabasco brand
hot pepper sauce.
How well does it
fulfill its functions
of identifying the
brand, describing
product, and
promoting the
brand attractive
graphics?
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Marketing in Action
Logos are easily recognizable
symbols, signs, or stylized written
portrayals of business brand
names. Logos provide a short-cut
to product and firm identification.
But just how good are you at
recognizing the letterforms used in
corporate logos?
Find out by visiting this Web site,
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Marketing in Action
Labeling and logos
can enhance a
brands positioning
and personality.
Pepsis new logo is
more adventurous,
more youthful, with
a bit more
personality to it.
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Product Support Services
Monitoring of support services is key:
Talk with customers to assess the value
and quality of current services and to
obtain ideas for new services.
Fix problems and put together a package
of new services that delights the
customers and yields profits for the
company.
New technologies can often enhance
many support service offerings.
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Marketing in Action
The Lexus Covenant promises that dealers will
treat each customer as we would a guest in our
own home and go to any lengths to serve them
better.
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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.
given
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Product Line Decisions
Product line
length is a
major
decision.
Filling
(adding
more).
Stretching
(downward
, upward or
both
ways).
Many auto manufacturers may
have filled and stretched their lines
too far, particularly in light of recent
economic problems.
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Product Mix
The set of all of the
product lines and
items that a particular
seller offers for sale.
seller
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Product Mix Decisions
Product mix dimensions include:
Width: the number of different
product lines the company carries.
Length: the number of items in a
line.
Depth: the number of versions
offered of each product in the line.
Consistency: how closely related
various lines are.
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Marketing in Action
Sony has a large and diverse product portfolio,
divided into four primary product businesses,
each of which has hundreds of products in its
mix.
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Figure 7.3:
Four Service Characteristics
Four
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Marketing in Action
The intangible nature of
services creates buyer
uncertainty. To combat
this, service providers
often practice evidence
management tactics
that show customers
honest evidence of their
capabilities. Mayo Clinic
is a stellar example as
its Sharing Mayo Clinic
blog lets web site
visitors hear directly
from workers and former
patients.
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The Service-Profit Chain
The service profit chain links employee
and customer satisfaction to firm
profits.
Five links exist within the chain:
Internal service quality.
Satisfied and productive service
employees.
Great service value.
Satisfied and loyal customers.
Healthy service profits and growth.
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Marketing in Action
Zappos knows that happy customers begin with
happy, dedicated, and perpetually chipper
employees.
Employees tweets to customers bear that out.
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Figure 7.4:
Three Types of Service
Marketing
Marketing
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Services Marketing
External marketing:
Traditional marketing via the 4 Ps.
Internal marketing:
Orienting and motivating customer-contact
employees and the supporting service
people to work as a team to provide
customer satisfaction.
Interactive marketing:
Training service employees in the fine art
of interacting with customers to satisfy
their needs.
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Marketing in Action
Four Seasons has perfected the art of
internal and interactive marketing to its
employees.
The Four Seasons hires only the best
people with the right attitude who will follow
the golden rule. Employees receive 3
months of training, including improvisation
exercises to help them understand
customers.
Salaries are among the 75th 90th percentile
for the industry. All employees, regardless
of position, eat together regularly for free in
the hotel. Plus employees are allowed free
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Major Service Marketing
Major
Tasks
Tasks
Managing service
differentiation:
Develop a
differentiated
offer, delivery,
and image.
PetSmart is a
one-stop shop
for all pet
needs, including
boarding.
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Major Service Marketing
Major
Tasks
Tasks
Managing service quality:
Set high service quality standards,
have good service recovery,
empower front-line employees.
Service recovery is critical.
Managing service productivity:
Train current employees or hire new
ones, increase quantity and sacrifice
quality, harness technology.
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Brand Equity
The differential effect
that knowing the brand
name has on customer
response to the
product or its
marketing.
marketing.
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Building Strong Brands
Brand equity:
Measures the brands ability to
capture consumer preference and
loyalty.
Is a valuable asset that offers many
competitive advantages.
Builds strong and profitable customer
relationships that result in loyal
customers (customer equity).
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Figure 7.5:
Brand Strategy Decisions
Brand
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Brand Positioning
Marketers can position
brands clearly in
customers minds at any
of three levels:
Product attributes
Product benefits
Beliefs and values
Marketers should create
a brand mission and
vision of what the brand
must be and do when
positioning the brand.
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Brand Name Selection
Desirable qualities for a brand name:
1. It should suggest the products benefits
2.
3.
4.
5.
6.
and qualities.
It should be easy to pronounce,
recognize, and remember.
It should be distinctive.
It should be extendable.
It should translate easily into foreign
languages.
It should be capable of registration and
legal protection.
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Brand Sponsorship
Brand sponsorship options include:
National brands
Also called
manufacturer
brands
Store brands
Also called
private brands
Licensed brands
Name or character
licensing
Private labels are growing rapidly.
Co-branding
Creates broader appeal and brand equity
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Marketing in Action
Nickelodeon has
developed a stable
full of hugely popular
characters which can
be licensed by
marketers such as
SpongeBob
SquarePants that
generate billions of
dollars of retail sales
each year.
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Figure 7.6:
Brand Development Strategies
Brand
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Brand Development
Line extension:
Extending an existing brand name to new
forms, colors, sizes, ingredients, or flavors
within a product category.
Brand extension:
Extending an existing brand name to
new product categories.
Watch this video and learn how Swiss Army
developed its brand extensions!
Click on filmstrip icon at left to play video
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Brand Development
Multibranding:
Offers a way to establish different features
and appeal to different customer
segments, lock up more reseller shelf
space, and capture a larger market share.
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 a new product category.
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Managing Brands
Continuously communicate the brands
positioning to consumers.
Manage all brand touch points to
maximize the brand experience.
Live the brand the firm must train
employees to be customer centered.
Implement internal branding campaign
among employees.
Audit brands strengths and
weaknesses on a regular basis.
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1.
2.
3.
4.
Rest Stop: Reviewing the
Concepts
Concepts
Define product and the major
classifications of products and services.
Describe the decisions companies make
regarding their individual products and
services, product lines, and product mixes.
Identify the four characteristics that affect
the marketing of services and the
additional marketing considerations that
services require.
Discuss branding strategythe decisions
companies make in building and managing
their brands.
Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall
7 - 62
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mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.
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PublishingasPrenticeHall
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