Marketing: An Introduction PDF

Marketing: An Introduction Fifteenth Edition Chapter 07 Products, Services, and Brands: Building Customer Value Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Objectives Outline (...

Marketing: An Introduction Fifteenth Edition Chapter 07 Products, Services, and Brands: Building Customer Value Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Objectives Outline (1 of 2) 7.1 Define product and describe the major classifications of products and services. 7.2 Describe the decisions companies make regarding their individual products and services, product lines, and product mixes. Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Objectives Outline (2 of 2) 7.3 Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. 7.4 Discuss branding strategy—the decisions companies make in building and managing their brands. Copyright © 2023 Pearson Education, Ltd. All Rights Reserved First Stop: FiLLi Café: A Saffron- Infused Tea Experience More than just tea, FiLLi Café in the UAE sells an experience, a “Tea & Talk” experience of enjoying an aromatic cup of saffron tea while lounging with friends or family. Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Objective Outline 7.1 Define product and describe the major classifications of products and services. Copyright © 2023 Pearson Education, Ltd. All Rights Reserved What Is a Product? A product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. A service is an activity, benefit, or satisfaction offered for sale; it is intangible and does not result in ownership of anything. Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Products, Services, and Experiences (1 of 2) Market offerings include both tangible goods and services. Companies create and manage customer experiences with their brands or companies. – To differentiate their offers from that of the competitors Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Products, Services, and Experiences (2 of 2) Creating customer experiences: Louis Vuitton doesn’t just sell high-quality products and create unique designs, it gives customers the ultimate shopping experience. Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Figure 7.1 Three Levels of Product Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Product and Service Classifications Consumer products are bought by final consumers for personal consumption. Industrial products are bought by individuals and organizations for further processing or for use in conducting a business. – Materials and parts, capital items, and supplies and services Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Table 7.1 (1 of 2) Marketing Considerations for Convenience and Shopping Products Marketing Convenience Shopping Considerations Customer buying Frequent purchase; little Less frequent purchase; much behavior planning, little comparison or planning and shopping effort; shopping effort; low customer comparison of brands on price, involvement quality, and style Price Low price Higher price Distribution Widespread distribution; Selective distribution in fewer convenient locations outlets Promotion Mass promotion by the Advertising and personal selling producer by both the producer and resellers Examples Toothpaste, magazines, Major appliances, televisions, and laundry detergent furniture, and clothing Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Table 7.1 (2 of 2) Marketing Considerations for Specialty and Unsought Products Marketing Specialty Unsought Considerations Customer buying Strong brand preference and Little product awareness or behavior loyalty; special purchase knowledge (or, if aware, little or effort; little comparison of even negative interest) brands; low price sensitivity Price Highest price Varies Distribution Exclusive distribution in only Varies one or a few outlets per market area Promotion More carefully targeted Aggressive advertising and promotion by both the personal selling by the producer producer and resellers and resellers Examples Luxury goods, such as Rolex Life insurance and Red watches or fine crystal Cross blood donations Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Other Market Offerings Organizations Persons Places Ideas Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Objective Outline 7.1 Summary What is a product?—physical products, services, and experiences Actual and augmented product—core customer value Consumer products—convenience, shopping, specialty, and unsought Industrial products—materials and parts, capital items, and supplies and services Organization, person, place, and idea marketing Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Objective Outline 7.2 Describe the decisions companies make regarding their individual products and services, product lines, and product mixes. Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Product and Service Decisions Individual Product Decisions Product Line Decisions Product Mix Decisions Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Figure 7.2 Individual Product Decisions Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Product and Service Attributes Product quality is one of the marketer’s major positioning tools. A product can be offered with varying features. Another way to add customer value is through distinctive product style and design. Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Branding A classic stunt by former bargain footwear retailer Payless dramatically illustrated the power of brands in shaping perceptions. Fashion influencers paid as much as $645 for “Palessi” shoes for that normally sold for less than $40. Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Packaging Smart packaging: British dairy brand Yeo Valley Organic uses “always on” connected packaging developed by connected experience agency Sharp End across its full range of 90 organic products. Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Product Line Decisions (1 of 2) A product line is closely related products that: – Have similar functions and customer groups – Are sold through similar outlets or fall within given price ranges Product line length is the number of items in the product line. – Product line filling – Product line stretching Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Product Line Decisions (2 of 2) Product line stretching and filling: Ridesharing service Uber traded up with UberBLACK (“high-end rides with professional drivers”), and competitor Lyft added Lyft Lux (“add a little luxury to your ride and arrive in style”). Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Product Mix (or Product Portfolio) “The product mix: Colgate-Palmolive’s nicely consistent product mix contains dozens of brands that constitute the “Colgate World of Care”—products that “every day, people like you trust to care for themselves and the ones they love.” Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Product Mix Decisions Width Number of different product lines the company carries Length Total number of items a company carries within its product lines Depth Number of versions offered for each product in the line Consistency Relativity of the various product lines in end use, production requirements, distribution channels, or some other aspect Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Objective Outline 7.2 Summary Product attribute decisions—quality, features, and style and design Branding, packaging, and labeling decisions Product support services—enhance customer service and satisfaction Product line and product mix decisions Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Objective Outline 7.3 Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Figure 7.3 Four Service Characteristics Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Service Profit Chain (1 of 2) Links service firm profits with employee and customer satisfaction The chain consists of five links: – Internal service quality – Satisfied and productive service employees – Greater service value – Satisfied and loyal customers – Healthy service profits and growth Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Figure 7.4 Three Types of Services Marketing Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Service Profit Chain (2 of 2) The service profit chain: Perennial customer service champion Wegmans knows that “In order to be a great place to shop, we must first be a great place to work.” Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Marketing Tasks for Service Companies Managing service differentiation Developing a differentiated offer, delivery, and image Managing service quality Delivering consistently higher quality than the competitors Managing service productivity Training current employees or hiring new ones Increasing the quantity of service by giving up some quality Harnessing the power of technology Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Objective Outline 7.3 Summary Services characteristics: intangible, inseparable, variable, and perishable Service profit chain—internal and interactive marketing Competitive differentiation, service quality, and service productivity Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Objective Outline 7.4 Discuss branding strategy—the decisions companies make in building and managing their brands. Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Brand Equity (1 of 2) The differential effect that knowing the brand name has on customer response to the product or its marketing With positive brand equity, consumers react more favorably to the brand than to an unbranded version of the same product. Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Brand Equity (2 of 2) Consumer perception dimensions: – Differentiation – Relevance – Knowledge – Esteem Brand value is the total financial value of a brand. Customer equity is the value of customer relationships that the brand creates. Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Figure 7.5 Major Brand Strategy Decisions Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Major Brand Strategy Decisions The “What we deliver by delivering” campaign by FedEx shows that the brand is about more than just efficient package deliveries; it’s about what those package deliveries mean to the people receiving them. Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Brand Positioning and Brand Name Selection Marketers should establish a mission and vision for the brand when positioning it. Desirable qualities for a brand name should be – Based on the product’s benefits and qualities – Easy to pronounce, recognize, and remember – Distinctive and extendable – Easily translated into foreign languages – Capable of registration and legal protection Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Brand Sponsorship National brands Marketed under the manufacturer’s own name Store brands Created and owned by a reseller of a product or service Licensing Use names and symbols created by other companies or well-known movie characters or celebrities for a fee Co- branding Use the established brand names of two different companies on the same product Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Figure 7.6 Brand Development Strategies Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Managing Brands (1 of 2) Companies must manage their brands carefully. The brand’s positioning must be continuously communicated. Major brand marketers spend huge amounts on advertising to create brand awareness and build preference and loyalty. Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Managing Brands (2 of 2) Communicate the brand’s positioning Manage all brand touch points Train employees to be customer centered Audit the brand’s strengths and weaknesses Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Objective Outline 7.4 Summary Brand equity’s positive effect Brand positioning Brand name selection Brand sponsorship options—national, private, licensed, and co-brand Brand development through line and brand extensions, multibrands or new brands Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Final Thoughts What are the four characteristics of a service? Apply these to a dentist’s office. Copyright © 2023 Pearson Education, Ltd. All Rights Reserved Copyright This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work (including on the World Wide Web) will destroy the integrity of the work and is not permitted. The work and materials from it should never be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor the intended pedagogical purposes and the needs of other instructors who rely on these materials. Copyright © 2023 Pearson Education, Ltd. All Rights Reserved