Product, Services, and Branding Strategy

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Product, Services, and Branding Strategy

• Chapter 8

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Learning Goals

1. Understand products and the major classifications
   of products and services
2. Learn the decisions companies make regarding
   their products and services
3. Understand branding strategy
4. Identify the four characteristics that affect the
   marketing of a service
5. Realize additional product issues

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Case StudyKrispy Kreme

• Produce 7.5 million doughnuts each day
• Sell more than doughnuts they sell an experience

• New store openings are eagerly anticipated in
  part due to extensive promotion

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Definitions

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

Goal 1 Understand products and their
classifications
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What is a Product?

• Products, Services, and Experiences
• Market offerings may consist of a combination of
  goods and services
• Experiences are used to differentiate offerings
• Levels of Product and Services
• Core benefit, actual and augmented product
• Product and Service Classifications
• Consumer products and industrial products

Goal 1 Understand products and their
classifications
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Levels of Product
Augmented Product
Installation
Packaging
Features
Brand Name
Delivery Credit
After- Sale Service
Core Benefit or Service
Quality Level
Design
Warranty
Actual Product
Core Product
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What is a Product?
Types of Consumer Products

• Frequent purchases bought with minimal buying
  effort and little comparison shopping
• Low price
• Widespread distribution
• Mass promotion by producer

• Convenience
• Shopping
• Specialty
• Unsought

Goal 1 Understand products and their
classifications
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What is a Product?

• Less frequent purchases
• More shopping effort for comparisons.
• Higher than convenience good pricing
• Selective distribution in fewer outlets
• Advertising and personal selling

Types of Consumer Products

• Convenience
• Shopping
• Specialty
• Unsought

Goal 1 Understand products and their
classifications
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What is a Product?
Types of Consumer Products

• Strong brand preference and loyalty, requires
  special purchase effort, little brand
  comparisons, and low price sensitivity
• High price
• Exclusive distribution
• Carefully targeted promotions

• Convenience
• Shopping
• Specialty
• Unsought

Goal 1 Understand products and their
classifications
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What is a Product?
Types of Consumer Products

• Little product awareness and knowledge (or if
  aware, sometimes negative interest)
• Pricing varies
• Distribution varies
• Aggressive advertising and personal selling by
  producers and resellers

• Convenience
• Shopping
• Specialty
• Unsought

Goal 1 Understand products and their
classifications
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Product and Service Classifications

• Consumer products
• Industrial products
• Materials and parts
• Capital items
• Supplies and services

Goal 1 Understand products and their
classifications
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Product and Service Decisions
Key Decisions

• Product attributes
• Quality, features, style and design
• Branding
• Packaging
• Labeling
• Product support services

• Individual Product
• Product Line
• Product Mix

Goal 2 Learn decisions companies make regarding
products
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Packaging
Competitive Advantages
Product Safety
Sales Tasks
Packaging Labeling
Promotes
Identifies
Describes
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Product and Service Decisions

• Product line
• A group of products that are closely related
  because they may
• function in a similar manner
• be sold to the same customer groups,
• be marketed through the same types of outlets
• fall within given price ranges

Key Decisions

• Individual Product
• Product Line
• Product Mix

Goal 2 Learn decisions companies make regarding
products
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Product and Service Decisions
Key Decisions

• Product line length
• Line stretching adding products that are higher
  or lower priced than the existing line
• Line filling adding more items within the
  present price range

• Individual Product
• Product Line
• Product Mix

Goal 2 Learn decisions companies make regarding
products
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Product and Service Decisions
Key Decisions

• Product mix
• Also known as product assortment
• Consists of all the product lines and items that
  a particular seller offers for sale

• Individual Product
• Product Line
• Product Mix

Goal 2 Learn decisions companies make regarding
products
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Product and Service Decisions
Key Decisions

• Product mix width
• Number of different product lines carried by
  company
• Product mix depth
• Number of different versions of each product in
  the line

• Individual Product
• Product Line
• Product Mix

Goal 2 Learn decisions companies make regarding
products
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Branding Strategy

• Brand equity is the positive differential effect
  that knowing the brand name has on customer
  response to the product or service
• One measure of equity is the extent to which
  customers are willing to pay more for the brand
• Brand valuation is the process of estimating the
  total financial value of a brand

Goal 3 Understand branding strategy
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Branding Strategy

• Brands with strong equity have many competitive
  advantages
• High consumer awareness
• Strong brand loyalty
• Helps when introducing new products
• Less susceptible to price competition

Goal 3 Understand branding strategy
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Brand Strategy
Key Decisions

• Three levels of positioning
• Product attributes
• Least effective
• Benefits
• Beliefs and values
• Taps into emotions

• Brand Positioning
• Brand Name Selection
• Brand Sponsorship
• Brand Development

Goal 3 Understand branding strategy
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Brand Strategy

• Good Brand Names
• Suggest something about the product or its
  benefits
• Are easy to say, recognize and remember
• Are distinctive
• Are extendable
• Translate well into other languages
• Can be registered and legally protected

Key Decisions

• Brand Positioning
• Brand Name Selection
• Brand Sponsorship
• Brand Development

Goal 3 Understand branding strategy
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Brand Strategy
Key Decisions

• Manufacturer brands
• Private (store) brands
• Costly to establish and promote
• Higher profit margins
• Licensed brands
• Name and character licensing has grown
• Co-branding
• Advantages / disadvantages

• Brand Positioning
• Brand Name Selection
• Brand Sponsorship
• Brand Development

Goal 3 Understand branding strategy
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Brand Strategy
Key Decisions

• Line extensions
• Minor changes to existing products
• Brand extensions
• Successful brand names help introduce new
  products
• Multibrands
• Multiple product entries in a product category
• New brands
• New product category

• Brand Positioning
• Brand Name Selection
• Brand Sponsorship
• Brand Development

Goal 3 Understand branding strategy
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Brand Strategy
Line Extension
Brand Extension
Product Category
Existing
New
Multibrands
New Brands
Existing
Brand Name
New
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Services Marketing

• Services
• Service industries include business
  organizations, government, and private
  not-for-profit organizations.

Goal 3 Understand branding strategy
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Characteristics of Services

• Intangibility
• Consumers look for service quality signals
• Inseparability
• Services cant be separated from providers
• Variability
• Employees and other factors result in variability
• Perishability
• Services cant be inventoried for later sale

Goal 3 Understand branding strategy
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Product Decisions and Social Responsibility

• Acquiring and dropping products
• Patent protection
• Product quality and safety
• Product warranties

Goal 5 Realize additional product issues
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International Product and Services Marketing

• Special challenges
• Which products should be marketed
  internationally?
• Should the products be standardized or adapted
  for world markets? Packaging?

Goal 5 Realize additional product issues