Strategic Marketing: Product and Service Decisions

Product and Service Decisions

• A product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need.
• There are four differences between products and services:
  • Intangibility
  • Variability
  • Inseparability
  • Perishability

Product and Service Attributes

• Features
• Quality
• Style
• Design

Branding

• Brand is the name, term, sign, or design—or a combination of these—that identifies the maker or seller of a product or service.
• Products exist on shelves, but brands exist in minds.
• Brand Equity: the positive differential effect that knowing the brand name has on consumer response to marketing actions.
• Brand awareness or familiarity reflects the customer's ability to identify a brand.
• Brand image, or customers' perceptions and associations with the brand, are represented by the links of the brand name node to other informational nodes in the model.

Associative Network Memory Model of Brand Equity

• The human mind is a network of nodes and connecting links.
• The key characteristics of a brand, which influence its brand equity, are captured as nodes and linkages.
• Brand strategy involves building awareness to provide an anchor point, then building linkages to positive, unique memory nodes to establish an identity that matches target customers' needs in a cost-efficient manner.

Awareness

• Awareness is the first step in building brand equity.
• It is essential to build awareness to provide an anchor point for the brand.

Brand Equity Advantages

• High loyalty
• Price insensitivity
• Strong associations – clear meaning

Brand Positioning

• Brand positioning by benefits
• Brand positioning by attributes
• Brand positioning by beliefs

How to Build Strong Brands

• Brand name selection should be desirable, easy to pronounce, recognize, and remember, distinctive, extendable, translatable, and capable of registration and legal protection.

Brand Development Strategy

• Product category
• Existing brand name
• New brand name
• Line extension
• Brand extension
• Multibrands
• New brands
• Risks of line extensions: brand name losing its meaning, consumer confusion, and cannibalizing other items in the line.
• Risks of brand extensions: diluting value of the brand, confusing image/positioning of the main brand, and harming attitudes towards other products of the same brand.

Brand Architecture

• Spectrum of brand architecture:
  • Single master brand
  • House of brands
  • Endorsed brands
  • Sub-brands

Packaging

• Packaging involves designing and producing the container or wrapper for a product.
• Firms want unique or different packaging to differentiate their products.

Product Support Services

• Take care of customers and keep them happy, before, during, and after the sale.

Product Portfolio Decisions

• Product hierarchy: need, family, product class, product line, and product type
• Product portfolio (product mix): all the products and items that a particular seller offers for sale
• Product line: a group of products that are closely related
• Product mix decisions:
  • Product portfolio width: the number of product lines a company markets
  • Product portfolio length: the number of brands within each product line
  • Product portfolio depth: the number of versions offered for each product in the line

Test your knowledge on product and service decisions in marketing, including branding, product portfolio decisions, and the differences between products and services. Learn about the marketing strategy and what constitutes a product.