Principles of Marketing (19th Edition) - Chapter 8 PDF

Principles of Marketing Nineteenth Edition, Global Edition Chapter 8 Products, Services, and Brands: Building Customer Value...

Principles of Marketing Nineteenth Edition, Global Edition Chapter 8 Products, Services, and Brands: Building Customer Value Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  Learning Objectives 8.1 Define product and describe the major classifications of products and services. 8.2 Describe the decisions companies make regarding their individual products and services, product lines, and product mixes. 8.3 Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. 8.4 Discuss branding strategy—the decisions companies make in building and managing their brands. Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  Learning Objective 1 Define product and describe the major classifications of products and services. Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  What is a Product? Product, Service, and Experiences Product is anything that can be offered in a market for attention, acquisition, use, or consumption that might satisfy a need or want. - tangible Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  What is a Product? Product, Service, and Experiences Services are a form of product that consists of activities, benefits, or satisfactions and that is essentially intangible and does not result in the ownership of anything. - intangible Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  What is a Product? Product, Service, and Experiences Products and services are becoming more commoditized. Companies are now creating and managing customer experiences with their brands or company. Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Creating customer experiences: Airbnb’s “Night At” program transforms iconic locations into unforgettable one-night experiences, everything from an underwater night’s sleep with the sharks at a Paris aquarium (above) to a sleepover at Dracula’s castle in Transylvania for Halloween. Chesnot/Getty Images Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  What is a Product? Levels of Products and Services Figure 8.1 Three Levels of Product Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  What is a Product? Product and Service Classifications Consumer products Industrial products Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  What is a Product? Product and Service Classifications Consumer products are products and services bought by final consumers for personal consumption. Convenience products Shopping products Specialty products Unsought products Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  What is a Product? Consumer Products Convenience products are consumer products and services that the customer usually buys frequently, immediately, and with a minimum comparison and buying effort. ▪ Newspapers ▪ Candy ▪ Fast food ~ price , easy to access, mass production Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  What is a Product? Shopping products are less frequently purchased consumer products and services that the customer compares carefully on suitability, quality, price, and style. ▪ Appliances ▪ Cars ▪ Furniture ~ price , selective, advertisement by products Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  What is a Product? Specialty products are consumer products and services with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort. ▪ Designer clothes ▪ Food products ▪ Medical services ~ price very expensive, exclusive (boutique) Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  What is a Product? Unsought products are consumer products that the consumer does not know about or knows about but does not normally think of buying. ▪ Life insurance ▪ Funeral services ▪ Blood donations ~ price varies, require lots of advertisement to increase awareness Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  What is a Product? Table 8.1 Marketing Considerations for Consumer Products Type of Consumer Product Marketing Convenience Shopping Specialty Unsought Considerations Customer buying Frequent purchase; Less frequent purchase; much Strong brand preference Little product awareness behavior little planning, little planning and shopping effort; and loyalty; special or knowledge (or, if comparison or shopping comparison of brands on price, purchase effort; little aware, little or even effort; low customer quality, and style comparison of brands; negative interest) involvement low price sensitivity Price Low price Higher price Highest price Varies Distribution Widespread distribution; Selective distribution in fewer Exclusive distribution in Varies convenient locations outlets only one or a few outlets per market area Promotion Mass promotion by the Advertising and personal selling More carefully targeted Aggressive advertising producer by both the producer and promotion by both the and personal selling resellers producer and resellers by the producer and resellers Examples Toothpaste, magazines, Major appliances, televisions, Luxury goods, such as Life insurance and Red and laundry detergent furniture, and clothing Rolex watches or fine Cross blood donations crystal Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  What is a Product? Product and Service Classifications Industrial products are those products purchased for further processing or for use in conducting a business. Materials and parts Capital items Supplies and services Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  What is a Product? Industrial Products Materials and parts include raw materials and manufactured materials and parts. (e.g. iron, cement, wheat, etc.) Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Capital items are industrial products that aid in the buyer’s production or operations. (e.g. equipment, building, vehicles, etc.) Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  What is a Product? Industrial Products Supplies and services include operating supplies, repair and maintenance items, and business services. (e.g. parking, legal consultation, etc.) Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  Learning Objective 2 Describe the decisions companies make regarding their individual products and services, product lines, and product mixes. Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Product and Service Decisions 1) Individual Product Decisions 2) Product Line Decisions 3) Product Mix Decisions Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  Product and Service Decisions (1) Individual Product and Service Decisions Figure 8.2 Individual Product Decisions Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  Product and Service Decisions (1) Individual Product and Service Decisions Communicate and deliver benefits by product and service attributes. Quality Features Style and design Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Product quality Refers to the characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs. Product Features Competitive tool for differentiating a product from competitors’ products Assessed based on the value to the customer versus its cost to the company Style and Design Style describes the appearance of the product. Design contributes to a product’s usefulness as well as to its looks. Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  Product and Service Decisions (1) Individual Product and Service Decisions Brand is the name, term, sign, or design or a combination of these, that identifies the maker or seller of a product or service. Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  Product and Service Decisions (1) Individual Product and Service Decisions Packaging involves designing and producing the container or wrapper for a product. Labels and logos identify the product or brand, describe attributes, and provide promotion. Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  Product and Service Decisions (1) Individual Product and Service Decisions Brand logo makeovers: Many companies are redesigning their logos to keep them in sync with the rapidly evolving digital times. rvlsoft/Shutterstock, General Motors, International House of Pancakes, LLC, and Audi of America Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  Product and Service Decisions (1) Individual Product and Service Decisions Product support services augment actual products. Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Product and Service Decisions (2) Product Line Decisions Product line is 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. Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Product and Service Decisions (2) Product Line Decisions Product line length is the number of items in the product line. Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Product and Service Decisions (3) Product Mix Decisions Product mix (product portfolio) consists of all the product lines and items that a particular seller offers for sale. ▪ Width ▪ Length ▪ Depth ▪ Consistency Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Product and Service Decisions (3) Product Mix Decisions Width: the number of different product lines the company carries. Length: the number of items in a line. Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Product and Service Decisions (3) Product Mix Decisions Depth: the number of versions offered of each product in the line. Consistency: how closely related various lines are. Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  Learning Objective 3 Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  Services Marketing Types of Service Industries Government Private not-for-profit organizations Business organizations Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  Services Marketing Figure 8.3 Four Service Characteristics Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  Services Marketing Managing service quality enables a service firm to differentiate itself by delivering consistently higher quality than its competitors provide. Customer service quality: The social media provide opportunities to root out and remedy customer dissatisfaction with service. Southwest Airlines employs a team of “social care” specialists who respond very quickly to customer comments and concerns. Courtesy of Southwest Airlines Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  Learning Objective 4 Discuss branding strategy—the decisions companies make in building and managing their brands. Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Brand Strategy: Building Strong Brands Figure 8.5 Major Brand Strategy Decisions Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  Brand Strategy: Building Strong Brands Brand Positioning Marketers can position brands at any of three levels. Attributes Benefits Beliefs and values Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  Brand Strategy: Building Strong Brands Brand positioning: Brands like Disney form strong emotional connections with customers. Says one Disney World Resort regular: “I have a deep love and bond to all things Disney.” Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  Brand Strategy: Building Strong Brands Brand Name Selection 1. Suggests benefits and qualities 2. Easy to pronounce, recognize, and remember 3. Distinctive 4. Extendable 5. Translatable for the global economy 6. Capable of registration and legal protection Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  Brand Strategy: Building Strong Brands Brand Sponsorship a) Manufacturer’s brand (also called national brands) b) Private brand (also called store brands ) c) Licensed brand (name or character licensing) d) Co-brand (creates broader appeal and brand equity) Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  Brand Strategy: Building Strong Brands Figure 8.6 Brand Development Strategies Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  Brand Strategy: Building Strong Brands Brand Development Strategies a) Line extension: Extending an existing brand name to new forms, colors, sizes, ingredients, or flavors within a product category. Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  Brand Strategy: Building Strong Brands b) Brand extension: Extending an existing brand name to new product categories. Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  Brand Strategy: Building Strong Brands c) Multibranding: Offers a way to establish different features and appeal to different customer segments, lock up more reseller shelf space, and capture a larger market share. Copyright © 2024 Pearson Education Ltd. All Rights Reserved.  Brand Strategy: Building Strong Brands d) New brands: Developed based on belief that the power of its existing brand is waning, and a new brand name is needed. Also used for products in a new product category. Copyright © 2024 Pearson Education Ltd. All Rights Reserved.