5
Principles of Marketing
PRODUCT, SERVICES, AND
BRANDING STRATEGY
Chapter Outline
1. What Is a Product?
2. Product and Service Decisions
3. Branding Strategy: Building Strong
Brands
4. Services Marketing
8-3
What Is a Product?
Products, Services, 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
• Soap
• Toothpaste
8-4
What Is a Product?
Products, Services, and Experiences
Service is a form of product that
consists of activities,
benefits, or satisfactions
offered for sale that are
essentially intangible and
do not result in ownership
• Doctor’s exam
• Legal advice
8-5
What Is a Product?
Products, Services, and
Experiences
Experiences represent what
buying the product or
service will do for the
customer
• Disney
• American Girl
• Toys “R” Us
8-6
What Is a Product?
Levels of Product and Services
Core benefits represent what the buyer is really
buying
Actual product represents the design, brand name,
and packaging that delivers the core benefit to
the customer
Augmented product represents additional services
or benefits of the actual product
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What Is a Product?
Product and Service Classifications
• Consumer products
• Industrial products
8-9
What Is a Product?
Product and Service Classifications
Consumer products are products and services for
personal consumption
• Classified by how consumers buy them
• Convenience product
• Shopping products
• Specialty products
• Unsought products
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What Is a Product?
Product and Service Classifications
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
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What Is a Product?
Product and Service Classifications
Shopping products are consumer products
and services that the customer compares
carefully on suitability, quality, price,
and style
• Furniture
• Cars
• Appliances
8-12
What Is a Product?
Product and Service Classifications
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
• Medical services
• Designer clothes
• High-end electronics
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What Is a Product?
Product and Service Classifications
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
8-14
What Is a Product?
Product and Service Classifications
Industrial products are products purchased for further
processing or for use in conducting a business
Classified by the purpose for which the product is purchased
• Materials and parts - manufactured materials and parts
usually sold directly to industrial users
• Capital - industrial products that aid in the buyer’s
production or operations, PC
• Raw materials
8-15
What Is a Product? Additional marketing
offering…
Organizations, Persons, Places, and Ideas
Organization marketing consists of activities
undertaken to create, maintain, or
change attitudes and behavior of target
consumers toward an organization
Example, promotion activities by Indah Water
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What Is a Product?
Organizations, Persons, Places, and Ideas
Person marketing consists
of activities undertaken to
create, maintain, or
change attitudes and
behavior of target
consumers toward
particular people
• Donald Trump, Tiger
Woods
8-19
What Is a Product?
Organizations, Persons, Places, and
Ideas
Place marketing consists of
activities undertaken to create,
maintain, or change attitudes
and behavior of target
consumers toward particular
places
• Tourism
8-20
What Is a Product?
Organizations, Persons, Places, and Ideas
Social marketing is the use of commercial
marketing concepts and tools in programs
designed to influence individuals’ behavior to
improve their well-being and that of
society
• Public health campaign
• Tourism
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Product and Service Decisions
Individual Product and Service Decisions
• Product attributes
• Branding
• Packaging
• Labeling
• Product support services
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Product and Service Decisions
Individual Product and Service Decisions
(1) Product attributes are the benefits of the
product or service
• Quality – lack defects, value and satisfaction
level, reliable performance
• Features - tool for differentiating a product from
competitors’ products
• Style and design – appearance and usefulness
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Product and Service Decisions
Individual Product and Service Decisions
(2) Brand is the name, term, sign, or
design, or a combination of these, that
identifies the maker or seller of a product
or service
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Product and Service Decisions
Individual Product and Service Decisions
(3) Packaging involves designing and producing
the container or wrapper for a product
(4) Label identifies the product or brand, describes
attributes, and provides promotion
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Product and Service Decisions
Individual Product and Service
Decisions
(5) Product support services
Companies must continually:
• Assess the value of current
services to obtain ideas for new
ones
• Assess the costs of providing these
services
• Develop a package of services to
satisfy customers and provide profit
to the company
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Product and Service Decisions
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
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Product and Service Decisions
Product Mix Decisions
Product mix consists of all the products and items
that a particular seller offers for sale
• Width
• Length
• Depth
• Consistency
8-39
Branding Strategy:
Building Strong Brands
Brand represents the consumer’s perceptions
and feelings about a product and its
performance.
It is the company’s promise to deliver a specific set of
features, benefits, services, and experiences
consistently to the buyers
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Branding Strategy: Building Strong
Brands
Brand equity is the positive differential effect that
knowing the brand name has on customer
response to the product or service.
A powerful brand has high brand equity.
Consumers are willing to purchase even though
it is expensive.
Brand valuation – the process of estimating the
total financial value of a brand.
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Branding Strategy:
Building Strong Brands
Brand equity provides competitive advantage
“Consumer Awareness and
Loyalty”
8-44
Branding Strategy:
Brand Strategy Decisions
Brand strategy decisions include:
• Brand positioning
• Brand name selection
• Brand sponsorship
• Brand development
8-46
Branding Strategy:
Brand Strategy Decisions
(1) Brand Positioning
Brand strategy decisions include:
• Product attributes
• Product benefits
• Product beliefs and values
8-47
Branding Strategy:
Brand Strategy Decisions
(2) Brand Name Selection
Desirable qualities
• Suggests benefits and qualities
• Easy to pronounce, recognize, and remember
• Distinctive
• Extendable, allow expansion into other
categories
• Translate easily into foreign language
8-48
Branding Strategy:
Brand Strategy Decisions
(3) Brand Sponsorship
• Manufacturer’s brand, Coke, Panasonic
• Private brand, Tesco Cola,
• Licensed brand, Walt Disney characters
• Co-brand, two different companies on the same
products, Kmart and Martha Stewart
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Branding Strategy:
Brand Strategy Decisions
Brand Sponsorship
Private brands provide retailers with
advantages
• Product mix control
• Slotting fees for manufacturers’
brands
• Higher margins
• Exclusivity
8-50
Branding Strategy:
Building Strong Brands
(4 )Brand Development
• Line extensions : occur when a company extends existing
brand names to new forms, colors, sizes, ingredients, or
flavors of an existing product category, Coke, Diet
Coke, Cherry Coke
• Brand extensions : extend a brand name to a new or
modified product in a new category, Victorinox multi-
tool knives, cutlery, watch, luggage
• Multi-brands : additional brands in the same category,
Loreal (Redken, Kerastase, Loreal)
• New brands : new products in new product categories or
markets, Matsushita uses separate names (Panasonic,
Technics, JVC)
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Branding Strategy:
Building Strong Brands
Managing Brands
Requires:
• Continuous brand communication, advertising
• Customer-centered training, brand experience
• Brand audits, strengths and weaknesses
8-54
Services Marketing
Types of Service Industries
• Government
• Private not-for-profit organizations
• Business services
8-55
Services Marketing
Nature and Characteristics of a Service
• Intangibility – cannot be seen, tasted, felt,
heard or smelled
• Inseparability – cannot be separated from the
providers
• Variability – depends on who provides the
service
• Perishability – cannot be stored
8-56
Services Marketing
Marketing Strategies for Service Firms
In addition to traditional marketing strategies,
service firms often require additional strategies
• Service-profit chain
• Internal marketing
• Interactive marketing
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Services Marketing
Marketing Strategies for Service Firms
(1) Service-profit chain links service firm profits with
employee and customer satisfaction
• Internal service quality
• Satisfied and productive service employees
• Greater service value
• Satisfied and loyal customers
• Healthy service profits and growth
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Services Marketing
Marketing Strategies for Service Firms
(2) Internal marketing means that the service firm must
orient and motivate its customer contact employees and
supporting service people to work as a team to provide
customer satisfaction
Internal marketing must precede external marketing
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Services Marketing
Marketing Strategies for Service Firms
(3) Interactive marketing means that service
quality depends heavily on the quality of the
buyer-seller interaction during the service
encounter
• Service differentiation
• Service quality
• Service productivity
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Services Marketing
Marketing Strategies for Service Firms
Managing service differentiation creates a
competitive advantage from the offer,
delivery, and image of the service
• Offer can include distinctive features
• Delivery can include more able and reliable
customer contact people, environment, or
process
• Image can include symbols and branding
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Services Marketing
Marketing Strategies for Service Firms
Managing service quality provides a
competitive advantage by delivering
consistently higher quality than its
competitors
Service quality always varies depending on
interactions between employees and
customers
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Services Marketing
Marketing Strategies for Service Firms
Service recovery can turn disappointed
customers into loyal customers
• Empower employees
• Responsibility
• Authority
• Incentive
8-65
Services Marketing
Marketing Strategies for Service Firms
Managing service productivity refers to
the cost side of marketing strategies
for service firms
• Employee recruiting, hiring, and
training strategies
• Service quantity and quality strategies
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