Product, Services, and

Brands
Chapter: 8
 Value-Driven Marketing
Value
• A customer’s subjective assessment of benefits relative to the costs in determining the worth of a
product
• Customer value = customer benefits – customer costs
• Customer benefits
• Anything desired by the customer that is received in an exchange
• Customer costs
• Anything a customer gives up in an exchange for benefits
• Monetary price of the benefit
• Search costs (time and effort) to locate the product
• Risks associated with the exchange
 Benefits

 Consumers don’t buy products; they buy benefits

 Functional benefits: relating to the practical purpose a

product serves

 Psychological benefits: relating to how a product

makes one feel
 What is a Product?

Whatever is offered for “sale” in a marketing exchange

Can be tangible goods (Laptop), services (VU education), ideas (Don’t

smoke), places (Muree hills ), persons (sportsman).
 What is a Product ?

• Products, Services, and Experiences

• Market offerings, pure tangible goods, pure services,
experiences
 Definitions

Product
• Anything offered to a market for attention, acquisition, use, or
consumption that might satisfy a need or want.

Service
• Any activity or benefit that one party can offer to another that is
essentially intangible and does not result in ownership of
anything.
Levels of Products
 Augmented
Product

Installation

Packaging
Brand Features
Name
Core After-
Delivery
& Credit
Benefit or Sale
Quality Service Service
Design
Level

Warranty

Actual Core
Product Product
Product Classifications

Consumer
products
Industrial
products
 Product Classifications
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
 Product Classifications
Consumer Products
Convenience products are consumer products and services that the customer usually buys
frequently, immediately, and with a minimum comparison and buying effort
• Low price
• Widespread distribution
• Mass promotion by producer
E.g:
• Newspapers
• Candy
• Fast food
 Product Classifications
Consumer Products
Shopping products are consumer products and services that the customer compares carefully
on suitability, quality, price, and style
*less frequent purchases
*higher price
*selective distribution in fewer outlets
*advertising & personal selling by both producer and resellers
• Furniture
• Clothing
• Major Appliances
 Product Classifications
Consumer Products
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
*strong brand preference and loyalty
*little comparison of brands
*high price
*exclusive distribution
*more carefully targeted promotion by producers and resellers
• Luxury goods
• Designer clothes
• High-end electronics
 Product Classifications
Consumer Products

Unsought products are consumer products that the consumer does not know about or knows
about but does not normally think of buying
*little product awareness
*price varies
*distribution varies
*aggressive advertising & personal selling by producer & reseller
• Life insurance
• Funeral services
• Blood donations
 Product Classifications
Industrial Products

Industrial 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 items
• Supplies and services
 Product Classifications
Industrial Products

Capital items are industrial products that aid in the buyer’s production or
operations, including installations and accessory equipment.
Materials and parts include raw materials and manufactured materials and parts
usually sold directly to industrial users
Supplies and services include operating supplies(lubricants, coal, paper, pencil),
repair and maintenance items(window cleaning, computer repair), and business
services(legal, management consulting, advertisement)
 Individual Product Decisions

The important decisions in the development and marketing of individual

products and services.
 Product Attributes

Product attributes are the benefits of the product

or service
• Quality
• Features
• Style and design
 Freedom from defects, Ability of a Product to
Perform Its Functions, “Quality is when our
Product Quality customers come back and our products don’t”;
Includes Level(performance quality) &
Consistency(conformance quality)

Help to Differentiate the Product from

Product Features
Those of the Competition

Style describes the appearance of the product

Design contributes to a product’s usefulness as well as to
Product Style its looks. Product designers should think less about
& Design product attributes and technical specifications and
more about how customers will use and benefit from
the product.
 Branding

A name, term, sign, symbol, or design, or a combination of these,

intended to identify the goods or services of one seller or group of
sellers and to differentiate them from the competitors.
 Packaging

 Activity of designing and producing the container or

wrapper for a product.
 Packaging used to just contain and protect the
product.
 Labeling

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.
 Product - Support Services

Companies should design its support services to profitably meet

the needs of target customers and gain competitive advantage.

How?
Step1.Survey customers to assess the value of current services and
to obtain ideas for new services.
Step2.Assess costs of providing desired services.
Step3.Develop a package of services to delight customers and yield
profits to the company.
 Product Line Decisions

A product line is 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
 Product Line Decisions

Product line length is the number of items in the product line. A

company can expand its product line in two ways:
• Line stretching (change of quality- upward, downward or both way)
• Line filling (change size or style)
 Product Line Decisions

Product mix consists of all the products and items that a particular seller offers for
sale
• Width (no. of diff. product lines a company carries)
• Length (total no. of items the company carries within its product lines)
• Depth (no. of versions offered of each product in the line)
• Consistency (how closely related the various product lines are in end use, production
requirements, distribution channels, or some other way.)
 Branding Strategy: Building Strong
Brands
The major brand strategy decisions involve brand positioning, brand name selection, brand
sponsorship, and brand development
Brand positioning Brand name Brand Sponsorship Brand
selection Development

•Selection
•Attributes •Manufacturer’s • Line extension
•Protection brand • Brand extension
•Benefits
•Beliefs and •Private brands • Multibrands
values •Licensing • New Brands
•Co branding
 Brand Positioning
Companies can position brands at any of the three levels:
• Product attributes (pamper: absorption, fit, disposable)
• Product benefits (pamper: skin-health benefits from dryness, ”there are
fewer wet bottoms in the world because of us”)

• Product beliefs and values (pamper: helping mom with her baby’s
development)
 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 Sponsorship

• Manufacturer’s (National) brand

• Private (store) brand
• Licensed brand
• Co-brand
Brand Development Strategies
Product Category
Existing New
Line Brand

Existing
Extension Extension
Brand Name (Colgate (Colgate:
toothpaste, Toothpaste &
different Toothbrush)
flavors)

Multibrands
New Brand
(Unilever: Lux,
(Olper’s(milk),
Dove & Sunsilk
Olfrute(juices))
New

Shampoo)
Services Marketing
Nature and Characteristics of a Service
Marketing Strategies for Service Firms

In addition to traditional marketing strategies, service

firms often require additional strategies
• Service-profit chain
• Internal marketing
• Interactive 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
Three types of service marketing

Company

Internal External
Marketing Marketing

Employee Customer

Interactive
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

 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
 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
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
 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