CHAPTER 7: Products, Services, and Brands: Building Customer Value

Product

Anything that can be offered to a market that satisfies a want or need.

Services

Intangible things offered for sale and do not result in ownership.

4 types of consumer products

convenience, shopping, specialty, unsought

Convenience Products

Customers buy frequently, low price, widespread distribution at convenient locations, mass promotion. (laundry detergent and fast food)

Shopping Products

Less frequently purchase, higher price, selective distribution, customers compare on quality and style (furniture and appliances)

Specialty Products

Unique consumer products with strong brand preference and loyalty, high price, exclusive distribution, targeted promotion (designer clothes and fancy restaurants)

Unsought Products

little Product awareness and consideration of buying, price varies (life insurance)

Industrial Products

Products purchased for further processing or for use in conducting a business.

4 types of product marketing offerings

Organization, Person, Place, Social

Organization marketing

shaping public perception of an organization (ex: A university running an ad campaign to promote its reputation and attract students.)

Person marketing

influence how people perceive individuals (ex: politician using social media and PR campaigns to build a positive public image)

Place marketing

Promotes a location to attract tourists, businesses, or residents (ex: "What Happens in Vegas, Stays in Vegas" – Promoting Las Vegas as an entertainment hub)

Social marketing:

marketing strategies to drive positive social behavior changes. (ex: Anti-smoking campaigns or sustainability initiatives encouraging eco-friendly habits)

Product and service attributes are delivered through product…: (3)

• Product Quality: Characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs 

• Product Features: a competitive tool for differentiating the company’s product from competitors’ products.

• Product Style and Design: Design is a larger concept than style. Style simply describes the appearance of a product.

5 features of an individual product/service

1. Product and service attributes

2. branding

3. packaging

4. labeling and logos

5. product support services

What are Product lines

group of related products that work similarly, targets the same customers, are sold in similar stores, and have similar price ranges (ex: apple iphone models)

2 ways to expand a product line:

1. line filling: adding more items within the present range of the line

   • ex: new lipstick shade

2. line stretching: downward (lower end products), upward (premium products) , or both ways

   • faat food chain adding high end items to the menu

4 types of Product mix decisions

width, length, depth, consistency

product mix width:

How many different product lines a company offers.

• Ex: Samsung offers smartphones, TVs, home appliances, and laptops.

Product mix length

The total number of products across all product lines.

• Ex: Nike has many products across their shoe line like running shoes, basketball shoes, and soccer cleats.

Product mix depth:

The number of variations within a product line (sizes, colors, flavors, etc.).

• Ex: Colgate offers different toothpaste types like Whitening, Cavity Protection, and Sensitive.

Product mix consistency:

How closely related the product lines are in terms of use, production, or distribution.

• Ex: Apple maintains consistency by focusing on tech products like iPhones, MacBooks, and iPads.

4 types of service characteristics:

intangibility, variability, perishability, inseparability

Service Intangibility

Services cannot be seen, tasted, felt, heard, or smelled before they are bought. Ex: People undergoing cosmetic surgery cannot see the result before the purchase.

Service Variability

Quality of services depends on who provides them as well as when, where, and how they are provided.

Ex: Some hotels have reputations for providing better service, but one employee may be cheerful while another might be grumpy.

Service Perishability

Services cannot be stored for later sale or use.

Ex: Some doctors charge patients for missed appointments because the service value existed only at that point and disappeared.

Service Inseparability

Services cannot be separated from their providers.

Ex: A restaurant experience is inseparable from the food and service provided by the waitstaff.

Service profit chain:

links service firm profits with employee and customer satisfaction

ex: happy employees → happy customers → higher profits.

Internal service quality

Investing in superior employee selection, training, providing a quality work environment

Satisfied and productive service employees

When employees are satisfied and well-trained, they become more loyal, productive, and engaged in their work.

Greater service value

Satisfied employees deliver higher service quality, leading to more satisfaction from customers, leading to better customer experiences and engagement.

Satisfied and loyal customers

When customers experience superior service, they become satisfied, more likely to return, and may refer others, leading to increased loyalty.

Healthy service profits and growth

Loyal customers generate more sales, and satisfied employees improve overall performance, leading to greater profitability and business growth.

Internal Marketing

Strategy where service firms treat their employees as customers, enhancing customer satisfaction.

Interactive Marketing

The concept where service quality is largely determined by the quality of the buyer-seller interaction that occurs during the service encounter.

ex: BuzzFeed use quizzes to engage customers while collecting useful data on preferences.

External Marketing

Marketing efforts focused on reaching and engaging target audiences outside the organization

ex: ads and sponsors

Brand equity

• overall perception of a brand's strength in the market

Brand Value

total financial value of a brand

4 major brand strategy decisions

1. brand positioning

2. brand name selection

3. brand sponsorship

4. brand development

Three Levels of Brand Positioning:

1. Attributes: Basic product/service features (e.g., FedEx’s speed and reliability).

2. Benefits: What the attributes do for customers (e.g., FedEx’s peace of mind with guaranteed delivery).

3. Emotional Connection: Strong beliefs, values, and feelings

   • fosters brand loyalty (e.g., Disney’s ability to evoke nostalgia and happiness).

Aspects of a good brand name selection

• Suggests product benefits

• Easy to pronounce, recognize, and remember

• Distinctive and unique

• Extendable for future product categories

• Translates well into foreign languages

• Legally protectable

4 types of Brand sponsorships

1. National Brands (Manufacturer’s Brands): Sold under the company’s own name (ex: Nike and apple makes and sells their own products)

2. Store Brands (Private Brands): Created and owned by retailers (ex: kirkland from costco, trader joes)

3. Licensed Brands: Companies pay to use established brand names, celebrities, or characters (ex: Disney liscences its characters to lego, nfl liscences its logo to nike)

4. Co-Branding: Two established brands collaborate on a product (ex:Taco Bell & Doritos made a taco) Risks: If one brand’s reputation suffers, the co-brand can be affected.

4 types of brand development

Line extension: Extends existing brand name of an existing product

• ex: Coca cola has diet coke, cherry coke

Brand extension: Extends existing brand name with a new product

• ex: Apple known for computers extended to smartphones

Multibrands: Same product category extends a new brand name

• ex: pepsico owns pepsi, mountain dew, gatorade (all soda competing against eachother)

New brands: New brand name with a new product category

• ex: toyota created lexus (diff products so cant compete together)

• may create a new brand name when it enters a new product category for which none of its current brand names is appropriate.