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

Product: anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need.

• Include services, events, persons, places, organizations, and ideas or a mixture of these.

Services: form of product that consists of activities, benefits, or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything.

Consumer products: products and services bought by final consumers for personal consumption

• include convenience products, shopping products, specialty products, and unsought products.

Consumer products: consumer products and services that customers usually buy frequently, immediately, and with minimal comparison and buying effort.

• include laundry detergent, soft drinks, and fast food

Shopping products: less frequently purchased consumer products and services that customers compare carefully on suitability, quality, price, and style.

• include furniture, clothing, major appliances, and hotel services.

Specialty products: consumer products and services with unique characteristics or brand identifications for which a significant group of buyers is willing to make a special purchase effort.

• include specific brands of cars, high-priced photography equipment, designer clothes, gourmet foods, and the services of medical or legal specialists.

Unsought products: Consumer products that a consumer either does not know about or knows about but does not normally consider buying.

• life insurance, preplanned funeral services, and blood donations to the Red Cross.

Industrial products: products purchased for further processing or for use in conducting a business.

Concept of a product could include other market offerings: 

Organization marketing: create, maintain, or change the attitudes and behavior of target consumers toward an organization.

Person marketing: create, maintain, or change attitudes or behavior toward particular people.

Place marketing: create, maintain, or change attitudes or behavior toward particular places.

Social marketing: using traditional business marketing concepts and tools to encourage behaviors that will create individual and societal well-being.

Individual product and services

Product and service attributes: Developing a product or service involves defining the benefits that it will offer.

• benefits are communicated and delivered by product attributes such as quality, features, and style and design.

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.

Branding: A name, term, sign, symbol, or design or a combination of these that identifies the maker or seller of a product or service. 

• Customers attach meanings to brands and develop brand relationships.

Packaging: Designing and producing the container or wrapper for a product.

Labeling and Logos: Lael identifies the product or brand, describes several things about the product, promotes the brand and engages customers.

• Logos must be redesigned from time to time, many brands are adapting their logos to meet the needs of new digital devices

Product support services: Many companies use a sophisticated mix of phone, email, online, social media, mobile, and interactive voice and data technologies 

Product line decisions: 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 mix decisions: All the product lines and items that a particular seller offers for sale

• Product mix length: total number of items a company carries within its product lines

• Product line depth: number of versions offered of each product in the line

• consistency of the product mix: how closely related the various product lines are in end use, production requirements, distribution channels, or some other way.

The Nature and Characteristics of a Service

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—say, Marriott—have reputations for providing better service than others but within a given Marriott hotel, one registration-counter employee may be cheerful whereas another standing just a few feet away may 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 when the patient did not show up.

Service inseperability: services require the same service provider.

Service profit chain: links service firm profits with employee and customer satisfaction.

Internal service quality. Superior employee selection and training, a quality work environment, and strong support for those dealing with customers, which results in…

Satisfied and productive service employees: More satisfied, loyal, and hardworking employees, which results in…

Greater service value: More effective and efficient customer value creation, engagement, and service delivery, which results in…

Satisfied and loyal customers: Satisfied customers who remain loyal, make repeat purchases, and refer other customers, which results in…

Healthy service profits and growth: Superior service firm performance.

Internal marketing: service firm must orient and motivate its customer-contact employees and supporting service people to work as a team to provide customer satisfaction.

Interactive marketing: service quality depends heavily on the quality of the buyer–seller interaction during the service encounter.

External marketing: Focuses on reaching and engaging target audiences outside the organization through various channels.

Brand equity: Differential effect that knowing the brand name has on customer response to the product and its marketing.

Brand Value: total financial value of a brand

Three Levels of Brand Positioning:

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

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

2. Emotional Connection: Strong beliefs, values, and feelings (e.g., FedEx’s “What we deliver by delivering” campaign).

Emotional Branding & Loyalty: Emotional engagement fosters brand loyalty (e.g., Disney’s ability to evoke nostalgia and happiness).

Brand names:

Good brand names:

• Suggests product benefits (e.g., Beautyrest, Headspace).

• Easy to pronounce, recognize, and remember (e.g., iPad, Twitter).

• Distinctive and unique (e.g., Swiffer, Zappos).

• Extendable for future product categories (e.g., Amazon).

• Translates well into foreign languages (e.g., Coca-Cola in Chinese: “Ke Kou Ke Le” = “tasty fun”).

• Legally protectable (does not infringe on existing trademarks).

Brand sponsorships:

Sponsorship Options:

• National Brands (Manufacturer’s Brands): Sold under the company’s own name (e.g., Samsung Galaxy, Kellogg’s Frosted Flakes).

• Store Brands (Private Brands): Created and owned by retailers (e.g., ALDI’s Baker’s Choice, AmazonBasics)

• Licensed Brands: Companies pay to use established brand names, celebrities, or characters (e.g., Disney, Calvin Klein, SpongeBob).

• Co-Branding: Two established brands collaborate on a product (e.g., Taco Bell & Doritos, Yale & Nest).

Licensing:

Companies can pay to use existing brand names, characters, or symbols on their products.

• Popular in apparel, toys, and merchandise (e.g., Disney, Star Wars, Hello Kitty).

Co-Branding:

• Combines strengths of two brands to expand market appeal (Uber and spotify)

• Risks: If one brand’s reputation suffers, the co-brand can be affected.

Brand Development:

Line extension: A company extends existing brand names to new forms, colors, sizes, ingredients, or flavors of an existing product category

Brand extension: Extends a current brand name to new or modified products in a new category.

Multibrands: Companies often market many different brands in a given product category

New brands: A company might believe that the power of its existing brand name is waning so a new brand name is needed. 

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