Marketing Chapter 8(ii)

Chapter 8: Products, Services, and Brands: Building Customer Value

• Product is anything offered in a market for attention, acquisition, use, or consumption. It satisfies a need or want.

• Services are a form of product consisting of activities, benefits, or satisfactions. They are essentially intangible and do not result in ownership.

• Products and services are becoming more commoditized. Companies focus on creating customer experiences.

• Customer Experiences are actively created and managed by brands to enhance the customer's interaction.

• Products have three levels:

  • Core Customer Value: the basic benefit the customer is buying
  • Actual Product: Brand name, features, design, quality, packaging, warranty
  • Augmented Products: delivery and credit, after-sale service

• Product Classifications

  • Consumer Products: Bought for personal use.
    • Convenience Products: Frequently purchased, little planning. (e.g., toothpaste, candy)
    • Shopping Products: Less frequent purchases, careful comparison. (e.g., furniture, cars)
    • Specialty Products: Unique characteristics, strong brand preference. (e.g., designer clothes, high-end electronics)
    • Unsought Products: Little product awareness or knowledge. (e.g., life insurance, blood donations)
  • Industrial Products: Purchased for use in another product or conducting business.
    • Materials and Parts: Raw materials, manufactured parts.
    • Capital Items: Aid in buyer's production or operations.
    • Supplies and Services: Operating supplies, repair, maintenance items, business services.

• Product and Service Classifications other than consumer and industrial include:

  • Organizations: Organization marketing aims to change attitudes and behaviors towards an organization.
  • Persons: Personal marketing aims to change attitudes or behaviors towards people.
  • Places: Place marketing aims to change attitudes or behaviors towards places.
  • Ideas: Social marketing uses commercial strategies to promote ideas.

• Individual Product Decisions include quality, features, style, design, branding, packaging, labeling, logos, and product support services.

• Product Quality

  • Conformance quality meets explicit and implicit customer expectations.
  • Conformance quality ensures consistency of quality.
  • Total quality management processes to ensure quality.

• Product Features differentiate products from competitors and is assessed by the value it provides to the customer, as compared to its cost to the company.

• Style is product appearance. Design contributes functionality and looks.

• Brand is a name, term, sign, or design that identifies a maker or seller of a product or service.

• Packaging involves designing and producing containers or wrappings. It supports identification of the product, brand, and attributes for promotion.

• Labels identify products or brands and provide attributes and promotional information.

• Product Support Services augment actual products. (e.g., warranties, repairs). This includes Brand logo makeovers which ensure logos keep pace with digital times.

• Product Line Decisions

  • Product line is a group of closely related products that share similar functions, target customers, or price ranges.
  • Product line length determines the number of items in the line.
  • Product line length can involve Line stretching and Line filling.

• Product Mix Decisions

  • Product mix is all product lines and items offered for sale by the company. 
  • A product mix includes Width, Length, Depth, and Consistency

• Services Marketing:

  • Characterized by intangibility, inseparability, variability, and perishability.
  • Firms often employ additional strategies for marketing, including:
    • Service-profit chain, which links service firm profits with employee and customer satisfaction.
  • Internal marketing, orienting and motivating customer-contact employees to provide customer satisfaction.
  • Interactive marketing, focusing on buyer/seller interactions for better customer service quality and differentiation.
  • Managing service differentiation creates competitive advantage in service quality and service productivity.