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i t ’s good and
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Chapter - Eight & Nine
Product, Services, and Brands: Building Customer Value.
New Product Development & Product life Cycle Strategies.
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• Product or Service – can you tell the difference?
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Product is anything that can be offered in a market for attention, acquisition, use, or consumption that might satisfy a need or want
Service is a product that consists of activities, benefits or satisfaction that is essentially intangible and does not result in the ownership of anything
Products, Services, and Experiences
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Levels of Product and Services
Augmented product represents additional services or benefits of the actual product.
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Consumer products
Industrial products
Product and Service Classifications
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Homogeneous
Shopping Products
Heterogeneous
Shopping Products
Shopping Products
Homogeneous
Shopping Products
Heterogeneous
Shopping Products
Shopping Goods
Specialty Products
Convenience Products Impulse Products
Emergency Products
Staples
Convenience Goods Impulse Products
Emergency Products
Specialty Goods
Staples
Consumer Goods Classification
Unsought Goods
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Convenience goods – Consumer usually purchases frequently, immediately, and with a minimum of effort.
• Staples are goods consumer purchase on a regular basis.
• Impulse goods are purchased without any planning or search effort.
• Emergency goods are purchased when a need is urgent.
Shopping goods - Consumer compares quality, price and style.
• Homogeneous shopping goods are similar in quality but different enough in price.
• Heterogeneous shopping goods differ in product features and services that may be more important than price.
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Specialty goods – Have unique characteristics or brand identification for which a sufficient number of buyers are willing to make special purchasing effort.
Unsought goods – Consumers does not know about or does not normally think of buying.
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Product and Service Decisions
• Marketers make product and service decisions at three levels:
Individual product decisions
Product line decisions
Product mix decisions
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Product and Service Decisions
Individual Product and Service Decisions
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Product Attributes
• Product form—size, shape, or physical structure
• Features—supplement basic functions
• Customization–individual versus mass
• Performance—level at which the product’s primary characteristics operate
• Conformance—degree to which all the produced units are identical and meet the promised specifications
• Durability—product’s operating life
• Reliability—probability that a product will not malfunction or fail
• Repairability—the ease of fixing a product when it malfunction or fails
• Style—product’s look and feel to the buyer.
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Branding
A name, term, sign, symbol or design, or a
combination of them, intended to identify the
Goods or services of one seller or group of
sellers and to differentiate them from those
of competitors.
Consumers view a brand as an important part of a product,
and branding can add value to a consumer’s purchase.
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Packaging
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Labeling
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Product Support Services
• Customer service is another important element of product strategy.
• Support services are an important part of the customer’s overall brand experience.
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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
Product Line Decisions
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Product mix consists of all the products and items that a particular seller offers for sale
» Width
» Length
» Depth
» Consistency
Product Mix Decisions
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Product-Mix Pricing
• Product-line pricing (various levels: $200, $400, and $600)
• Optional-feature pricing (sunroof, theft protection)
• Captive-product pricing (require the use of ancillary products: razors, films)
• Two-part pricing (fixed fee plus variable usage fee: telephone service)
• By-product pricing (production of certain goods often result in by-products; meat and fat in sausage)
• Product-bundling pricing—offer products only in a bundle: product plus service
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Product Line Pricing
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Optional-feature pricing
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Captive-product pricing
Some products require the use of ancillary products, or captive products.
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Two-part pricing
Consisting of a fixed fee plus a variable usage fee.
If you talk beyond the plan then you have to pay extra usage fee.
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By-product pricing
production of certain goods often result in by-products; meat. Any income
earned on the by-products will make it easier for the company to charge at lower price on its main product if competition forces it to do so.
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Product-bundling pricing
Sellers often bundle products and features.
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Warranty is a document that is issued to protect a consumers’
right. The warranty is basically a promise ensuring the
customer specific conditions, facts, or products are true. A
guarantee is a document that also protects the right of a
consumer. A guarantee promises that something that is sold is
of the quality that is promised.
Warranty and Guarantee
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Services Marketing
Nature and Characteristics of a Service
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Service Attributes
• Ordering ease—how easy to place an order
• Delivery—how well (e.g., speed, accuracy, and care) product or service is brought to the customer
• Installation—work done to make a product operational
• Customer training—To operate the equipment properly and efficiently
• Customer consulting—data, information, systems, and advice that the seller offers to buyers
• Maintenance and repair—service programs for helping customers keep purchased products in good working order
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Branding Strategy: Building Strong Brands
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The Role of Brands
Identify the maker
Simplify product handling
Organize accounting
Offer legal protection
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The Role of Brands
Signify quality
Create barriers to entry
Serve as a competitive
advantage
Secure price premium
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• Brand equity is a phrase used in the marketing industry which describes the value of having a well-known brand name, based on the idea that the owner of a well-known brand name can generate more money from products with that brand name than from products with a less well known name, as consumers believe that a product with a well-known name is better than
products with less well-known names.
Brand Equity
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The BRANDZ Model
Presence—Do I know about it?
Relevance—does something for me
Performance—can it deliver?
Advantage—better
than others
Bonding
nothing better
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Co-branding
Co-branding, also called brand partnership, is when two
companies form an alliance to work together, creating
marketing synergy.
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Ingredient BrandingIngredient Branding is a marketing strategy where a component or an
ingredient of a product or service is pulled into the spotlight and given
it’s own identity. Everyone is familiar with the now famous “Intel
Inside”, and it’s corresponding success. But why does it work?
It works because, in general, consumers will pay more for a branded
product (name brand vs. generic). Consumers trust established
brands.
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Brand Development Strategies
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• Product Life Cycle Stages: Development
Product Life-Cycle Marketing
Strategies
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• Product Life Cycle Stages: Introduction
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• Product Life Cycle Stages: Growth
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• Product Life Cycle Stages: Maturity
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• Product Life Cycle Stages: Decline
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• Product Life Cycle Stages: Decline
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