Mgt 252

Lecture 7 Product, Services, and Branding Strategies

1. Product: anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a need or want.

2. Service: a form of product that consists of activities, benefits, or satisfaction offered for sale that are essentially intangible and do not result in the ownership of anything.

3. Experiences are used to differentiate offerings.

In marketing, product=product + service

4. Three levels of product

1. Core benefit: e.g. Beer: enjoyment
2. Actual product: brand name, features, design, packaging, quality level
3. Augmented product: after sale service, financing, warranty, installation, delivery

5. Types of Consumer Products

1. Convenience: Frequent purchases bought with minimal buying effort and little comparison shopping

e.g. snack foods, milk, soap

Marketing: -Low Price, -Widespread Distribution, -Readily available

1. Shopping: Less frequent purchases; more comparison effort

e.g. cars, furniture, clothes

Marketing: -Higher Price, -Selective Distribution, -Personal Selling, advertising

1. Specialty: Strong brand preference and loyalty, requires special purchase effort, little brand comparisons and low price sensitivity

e.g. high-end luxury cars, designer clothes

Marketing: -High Price, -Exclusive distribution, -Carefully targeted promotions

1. Unsought: Little product awareness and knowledge (or if aware, sometimes negative interest)

e.g. life insurance, preplanned funeral services, donation, charity

Marketing: -Aggressive advertising, -Personal selling

6. Product and Service Classifications

1. Consumer Products
2. Business Products

-Materials and parts

-Capital items

-Suppliers and services

1. Organizations, persons, places, and ideas

-Organizational marketing makes use of corporate image advertising

-Person marketing applies to political candidates, entertainment sports figures, and professionals

-Place marketing relates to tourism

-Social marketing promotes ideas

7. Individual Product and Service Decisions (5 steps)

1. Product and service attributes

-Quality

Lined to customer value and satisfaction – The whole company needs to be involved (TQM)

-Features

Competitive tool for differentiating product; Should be valued by the customer as determined through market research

-Style and Design

Good design contributes to product’s usefulness as well as looks

1. Branding
2. Packaging

-Often includes primary, secondary and shipping packages

-Functions of packaging: contain and protect; promote the product; differentiate the product

1. Labelling

a. Labelling serves to identify the product, b. describe the product, promote the product

c. Must be careful not to: mislead customers, fail to describe ingredients, fail to include safety warnings

d. Fine prints

1. Product support services

-Survey customers regularly to assess current customer service

-Companies use a mix of phone, email, fax, Internet and interactive voice and date technologies

8. Product Lines: A broad group of products, intended for similar uses and having similar characteristics

Products in the same product line often:

-function in a similar manner

-are sold to the same customer groups

-marketed through the same types of outlets

-fall within given price ranges

examples: Panasonic: TVs, DVD players, musical keyboards, telephones, audio equipment, etc.

Why offer product line: a. better value b. additional customers c. more consumption d. allows for heterogeneity of demand within a category

9. Product Line Decisions

Product line length: the number of items in the product line

• Line stretching: Adding products that lengthen a product line beyond its current range: higher or lower than the current products in the line
• Line filling: Adding more items within the present range

Adding more brands and/or adding more products within the current price (or other product attribute) range

10. Product Mix Decisions

Product mix/assortment

-Consists of all the product lines and items that a particular seller offers for sale

• Width (of a product assortment): number of product lines – P&G and Panasonic have wide product assortments
• Length of a line: number of products in a line - P&G markets 11 laundry detergent, 8 soaps, 7 hair care brands
• Depth of a product: number of versions of each product carried- P&G sells 16 varieties of Crest toothpastes
• Consistency of a product assortment: how closely related the product lines are- Similar functions, production requirement, distribution channels

11. Individual Product and Service Decisions

Branding

• Brand: a name, term, sign, symbol, or design that identifies the product
• Branding can add value to a product
• Branding helps buyers identify products, determine quality
• Branding helps sellers convey product quality, segment markets and provide legal protection

12. Brand Equity: the positive differentiated effect that knowing the brand name has on customer response to the product or service