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marketing chapter-8 from philip kotler. Products, Services and Brands: Building Customer Value.
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INTRODUCTION
The marketing process of creating value for customers and build customer relationships to capture value from customers in return is performed by satisfying customers with various types of products, services and brands.
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
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• Financial services
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
What Is a Product?Products, Services, and Experiences
basic level is the core customer value. It represents what the buyer is really buying
Second level is turning the core benefits into an actual product. It represents the design, brand name, and packaging that delivers the core benefit to the customer
In the third stage building an augmented product by offering additional consumer services and benefits
What Is a Product?
Levels of Product & Services
Augmented product
Delivery After and sale credit service
Productsupport Warranty
Three Levels of Product
Actual product
Brand Featuresname
Quality Design level
Packaging
CoreCustomer
value
What Is a Product?Product and Service Classifications
There are two types of products:
Consumer Products Industrial Products
What Is a Product?Product and Service Classifications
Consumer products are products and services for personal consumption
• It is classified by how consumers buy them
Consumer Products
Specialty Products
Unsought Products
Shopping Products
Convenience Products
Convenience products consumer products and services that the customer
usually buys frequently, immediately, and with a minimum comparison and buying effort
• Newspapers• Candy• Fast food
What Is a Product?Product and Service Classifications
Shopping productsconsumer products and services that the customer
compares carefully on suitability, quality, price, and style
• Furniture• Cars• Appliances
What Is a Product?Product and Service Classifications
Specialty productsconsumer 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
What Is a Product?Product and Service Classifications
Unsought productsconsumer products that the consumer does not
know about or knows about but does not normally think of buying
• Life insurance• Funeral services• Blood donations
What Is a Product?Product and Service Classifications
Industrial products are products purchased for further processing or for use in conducting a business
What Is a Product?Product and Service Classifications
Materials AndParts
CapitalItems
Suppliesand
Services
Industrial Products
Materials and parts include raw materials and manufactured materials and parts usually sold directly to industrial users
• Wheat• Lumber• Iron• Cement
What Is a Product?Product and Service Classifications
Capital items are industrial products that aid in the buyer’s production or operations
• Buildings• Elevators• Computers
What Is a Product?Product and Service Classifications
Supplies and services include operating supplies, repair and maintenance items, and business services
What Is a Product?Product and Service Classifications
• Organizations-Profit (businesses) and Nonprofit (colleges, churches and museums)
• Persons –Entertainers, doctors, lawyers and architects
• Places-Tourist attracting sites, new residents, company offices and factories
• Social –Reduce smoking, drug abuse, family planning and human rights
What Is a Product?Organizations, Persons, Places, and Ideas
Product and Service Decisions
INDIVIDUAL PRODUCT AND SERVICE DECISION LINE DECISION PRODUCT MIX
DECISION
Product and Service Decisions Individual Product and Service Decisions
Product attributes LabelingBranding Packaging
ProductSupportservices
Product attributes are the benefits of the product or service
Product and Service Decisions Individual Product and Service Decisions
Quality Features
Styles&
Design
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
Product and Service Decisions Individual 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
Product and Service Decisions Individual Product and Service Decisions
Style describes the appearance of the product Design contributes to a product’s usefulness as well
as to its looks. It goes to the very heart of a product
Product and Service Decisions 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
Brand equity is the differential effect that the brand name has on customer response to the product and its marketing
Product and Service Decisions Individual Product and Service Decisions
Packaging involves designing and producing the container or wrapper for a product
The primary function of the package was to hold and protect the product
Product and Service Decisions Individual Product and Service Decisions
Labeling identifies the product or brand, describes attributes, and provides promotion
Product and Service Decisions Individual Product and Service Decisions
The label might also describe several things about the product-
• who made it • where it was made• when it was made• its contents• how it is to be used and• how to use it safely
Product and Service Decisions Individual Product and Service Decisions
Product support services augment actual products
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
Product and Service Decisions Individual Product and Service 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
Product and Service DecisionsProduct Line Decisions
Product line length is the number of items in the product line
Product and Service DecisionsProduct Line Decisions
Product Line Length
Line FillingLine
Stretching
Both Ways UpwardDownward
• Line filling: adding more items within the present range of the line
More profits Satisfying dealers• Line stretching: when a company lengthens its product
line beyond its current range• Downward: add low-end products• Upward: add prestige to the current products• Both ways: achieve both goals of line filling and line
stretching
Product and Service DecisionsProduct Line Decisions
Product mix consists of all the products and items that a particular seller offers for sale
• A company's product mix has four important dimensions
Product and Service DecisionsProduct Mix Decisions
Width: total number of different product lines the company carries Length: total number of items the company carries within its
product lines Depth: number of versions offered of each product in the line Consistency: how closely related the various product lines are in end
use, production requirements, distribution channels or some other way
Product and Service DecisionsProduct Mix Decisions
Brand represents the consumer’s perceptions and feelings about a product and its performance.
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.
Brand Equity
Building Strong BrandsBrand positioning
AttributesBenefits
Beliefs and values
Brand name selectionSelectionProtection
Brand sponsorshipManufacturer’s brand
Private brandLicensing
Co-branding
Brand developmentLine extensions
Brand extensionsMultibrandsNew brands
Brand positioning includes: Product attributes
Product benefits
Product beliefs and values
Branding Strategy: Building Strong Brands Brand Positioning
Desirable qualities 1. Suggest benefits and qualities2. Easy to pronounce, recognize, and remember3. Distinctive4. Extendable5. Translatable for the global economy6. Capable of registration and legal protection
Branding Strategy: Building Strong Brands Brand Name Selection
Manufacturer’s brand:• A brand created and owned by a manufacturer of a product or
service Private brand:• A brand created and owned by a reseller of a product or service Licensed brand:• license names or symbols previously created by other
manufacturers, names of well-known celebrities, or characters from popular movies and books
Co-brand:• Co-branding occurs when two established brand names of
different companies are used on the same product
Branding Strategy: Building Strong Brands Brand Sponsorship
Branding Strategy: Building Strong Brands
Brand Extension
New BrandsMultibrands
Line Extensions
Existing
New
Existing New
Product Category
Bra
nd
Nam
e
Brand Development Strategies
Line extensions • occur when a company extends existing brand names to new
forms, colors, sizes, ingredients, or flavors of an existing product category
Brand extensions • extend a brand name to a new or modified product in a new
category Multibrands • additional brands in the same category New brands• are used when existing brands are inappropriate for new
products in new product categories or markets
Branding Strategy: Building Strong BrandsBrand Development Strategies
Branding Strategy: Building Strong Brands
Requires: Continuous brand communication Customer-centered training Brand audits
Managing Brands
Government
Private not-for-profit organizations
Business services
Services Marketing Types of Service Industries
Services Marketing
IntangibilityServices cannot be seen,
tasted, felt, heard or smelled before purchase
Services
VariabilityQuality of services
depends on who provides them and when, where
and how
PerishabilityServices cannot be stored
for later sale or use.
InseparabilityServices cannot be separated from their
providers
Nature and Characteristics of a Service
In addition to traditional marketing strategies, service firms often require additional strategies
• Service-profit chain• Internal marketing• Interactive marketing
Services MarketingMarketing Strategies for Service Firms
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
Services MarketingMarketing Strategies for Service Firms
Marketing Strategies for Service Firms
Company
CustomersEmployee
Inte
rnal
Mar
ketin
g External Marketing
Interactive Marketing
Three Types of Service Marketing
Orienting and motivating customer-contact employees and supporting service people to work as a team to provide customer satisfaction
Marketing Strategies for Service FirmsInternal marketing
Training service employees in the fine art of
interacting with customers to satisfy their needs
Marketing Strategies for Service FirmsInteractive marketing
Product Variety Quality Design
Features Brand name
service Packaging
Place Channels Coverage
Assortments Locations
Inventory Transportations
Logistics
Promotion Advertising
Personal selling Sales Promotion Public Relations
Price List Price Discounts Allowance
Payment Period Credit terms
4 P’S
Marketing Strategies for Service FirmsExternal Marketing
Managing Service Differentiation• creates a competitive advantage from the offer, delivery,
and image of the service Managing Service QualityEmpower employees Responsibility Authority Incentive
Managing Service Productivity• Train current or new employees• Increase quantity by decreasing qualities technology
Marketing Strategies for Service FirmsMajor Marketing Tasks