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Chapter 8 - slide 1 Chapter Eight Product, Services, and Brands: Building Customer Value
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Chapter 8 - slide 1
Chapter Eight
Product, Services, and Brands: Building Customer Value
Chapter 8 - slide 2Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Products, Services, and Branding Strategy
• What Is a Product?• Product and Services Decisions• Branding Strategy: Building
Strong Brands• Services Marketing
Topic Outline
Chapter 8 - slide 3Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
What Is a Product?
A Product is anything that can be offered in a market for attention, acquisition, use, or consumption that might satisfy a need or want
Experiences represent what buying the product or service will do for the customer
Products, Services, and Experiences
Chapter 8 - slide 4Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
What Is a Product?Levels of Product and Services
Chapter 8 - slide 5Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
What Is a Product?
Product and Service Classifications
Chapter 8 - slide 6Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
What Is a Product?
• Consumer products are products and services for personal consumption
• Classified by how consumers buy them– Convenience products– Shopping products– Specialty products– Unsought products
Product and Service Classifications
Chapter 8 - slide 7Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
What Is a Product?
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
Product and Service Classifications
Chapter 8 - slide 8Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
What Is a Product?
Shopping products are consumer products and services that the customer compares carefully on suitability, quality, price, and style
• Furniture• Cars• Appliances
Product and Service Classifications
Chapter 8 - slide 9Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
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
• Medical services• Designer clothes• High-end electronics
Product and Service Classifications
Chapter 8 - slide 10Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
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
Product and Service Classifications
Chapter 8 - slide 11Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
What Is a Product?
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– Capital– Raw materials
Product and Service Classifications
Chapter 8 - slide 12Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
What Is a Product?
Capital items are industrial products that aid in the buyer’s production or operations
Materials and parts include raw materials and manufactured materials and parts usually sold directly to industrial users
Supplies and services include operating supplies, repair and maintenance items, and business services
Product and Service Classifications
Chapter 8 - slide 13Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
What Is a Product?
Organization marketing consists of activities undertaken to create, maintain, or change attitudes and behavior of target consumers toward an organization
Organizations, Persons, Places, and Ideas
Chapter 8 - slide 14Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
What Is a Product?
Person marketing consists of activities undertaken to create, maintain, or change attitudes and behavior of target consumers toward particular people
Organizations, Persons, Places, and Ideas
Chapter 8 - slide 15Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
What Is a Product?
Place marketing consists of activities undertaken to create, maintain, or change attitudes and behavior of target consumers toward particular places
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
Organizations, Persons, Places, and Ideas
Chapter 8 - slide 16Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Product and Service DecisionsIndividual Product and Service Decisions
Chapter 8 - slide 17Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Product and Service Decisions
Product attributes are the benefits of the product or service
• Quality• Features• Style and design
Individual Product and Service Decisions
Chapter 8 - slide 18Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Product and Service Decisions
Product quality includes level and consistency• Quality level is the level of quality that supports
the product’s positioning• Conformance quality is the product’s freedom
from defects and consistency in delivering a targeted level of performance
Individual Product and Service Decisions
Chapter 8 - slide 19Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Product and Service Decisions
Product features are a competitive tool for differentiating a product from competitors’ products
Product features are assessed based on the value to the customer versus the cost to the company
Individual Product and Service Decisions
Chapter 8 - slide 20Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Product and Service Decisions
Style describes the appearance of the productDesign contributes to a product’s usefulness as well as to its looks
Individual Product and Service Decisions
Chapter 8 - slide 21Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
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
Brand equity is the differential effect that the brand name has on customer response to the product and its marketing
Individual Product and Service Decisions
Chapter 8 - slide 22Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Product and Service Decisions
Packaging involves designing and producing the container or wrapper for a product
Labels identify the product or brand, describe attributes, and provide promotion
Individual Product and Service Decisions
Chapter 8 - slide 23Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Product and Service Decisions
Product support services augment actual products
Individual Product and Service Decisions
Chapter 8 - slide 24Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Product and Service Decisions
A 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
Chapter 8 - slide 25Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Product and Service Decisions
Product line length is the number of items in the product line
• Line stretching• Line filling
Product Line Decisions
Chapter 8 - slide 26Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Product and Service Decisions
Product mix consists of all the products and items that a particular seller offers for sale
• Width• Length• Depth• Consistency
Product Mix Decisions
Chapter 8 - slide 27Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Branding Strategy: Building Strong BrandsBrand Development Strategies
Chapter 8 - slide 28Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Product Life-Cycle Strategies
Product Life Cycle
Chapter 8 - slide 29Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• Product development – Sales are zero and investment costs mount
• Introduction – Slow sales growth and profits are nonexistent
• Growth– Rapid market acceptance and increasing profits.
• Maturity – Slowdown in sales growth and profits level off or decline
• Decline– Sales fall off and profits drop
Product Life-Cycle Strategies
Chapter 8 - slide 30Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Product Life-Cycle Strategies
Fads are temporary periods of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity
Chapter 8 - slide 31Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Product Life-Cycle Strategies
Chapter 8 - slide 32Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Product Life-Cycle Strategies
• Slow sales growth• Little or no profit• High distribution and promotion expense
Introduction Stage
Chapter 8 - slide 33Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Product Life-Cycle Strategies
• Sales increase• New competitors enter the market• Price stability or decline to increase volume• Consumer education • Profits increase• Promotion and manufacturing costs gain
economies of scale
Growth Stage
Chapter 8 - slide 34Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Product Life-Cycle Strategies
• Slowdown in sales• Many suppliers• Substitute products• Overcapacity leads to competition• Increased promotion and R&D to support
sales and profits
Maturity Stage
Chapter 8 - slide 35Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Product Life-Cycle Strategies
• Market modifying• Product
modifying• Marketing mix
modifying
Maturity Stage Modifying Strategies
Chapter 8 - slide 36Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Product Life-Cycle Strategies
• Maintain the product• Harvest the product• Drop the product
Chapter 8 - slide 37Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
Product Life-Cycle Strategies
Summary of Product Life Cycle
