CHAPTER 8

PRODUCTS, SERVICES AND BRANDING STRATEGY

Group Members
Madiha Munawar Ch. Sindhu 21 Rida Kaukab Malik ( GL ) 13 Rana Hamza Irfan 12 Qura-tul-ain Fatima Siddiqui 30 Shazib Qamar-ul-Haq Siddiqui 46

OBJECTIVES
To understand the concept of a product To explain how to classify products To examine the concepts of product item product line, and product mix and understand how they are To explain the concept of Branding, Branding Strategy and Brand Development

PRODUCT
By Madiha Munawar Roll no. 21

What Is a Product?

Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need.

A product is more than a range of physical objects.

It might include Services Events People Organization Ideas

Services
A Service is defined as Any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything.

E.g. Banking , Hotels, Airlines, Home repair services etc.

Product, Services, Experience?

A companys market offering often includes both tangible goods and services. Each component can be a minor or a major part of the total offer. To differentiate their offers, beyond simply making products and delivering services, companies are staging , marketing, and delivering memorable customer experiences.

Levels of product and services Core Benefit Actual Product Augmented product

Augmented Product AfterSale Services Actual Product Features

Delivery & Credit

Brand

Quality

Core Benefi t

Design

Packaging Installation Warranty

CORE BENEFIT The most basic level is the core benefit, which address the question what is the buyer really buying? ACTUAL PRODUCT At the second level, product planners must turn the core benefit into an actual product. They need to develop product and service features,design,a quality level, brand name, and packaging. AUGMENTED PRODUCT Finally, product planners must build an augmented product around the core benefit and actual product by offering additional consumer services and benefits.

Classification of Products
Consumer products Industrial products

Consumer Products
Products purchased by final consumers for personal consumption

Consumer Product Classes

Convenience

Shopping

Consumer Products
Specialty

Unsought
9-3

Marketing convenience consideration

Shopping

Specialty

unsought

Customer Buying Behavior

Frequent Less frequent Strong brand Little product purchase, little purchase, much preference and awareness, comparison or planning and loyalty, special knowledge shopping effort, shopping effort, purchase effort, low customer comparison of little involvement brands on price,comparison of quality style brands, low price sensitivity

Price

Low price

High price

High Price

Varies

Distribution

Widespread Distribution, convenient locations

Selective distribution in fewer outlets

Exclusive Varies distribution in only one or fewer outlets per market area

Promotion

Mass Advertising More carefully Aggressive promotion by and personal targeted advertising the producer selling by both promotion by and personal producer and both producer selling by resellers and resellers producer and reseller

Examples

Toothpaste, magazines, laundry detergent

Major appliances, televisions, furniture, clothing

Luxury goods, Life such as insurance, red watches or cross blood fine crystals donations

Convenience Products
Relatively inexpensive, frequently purchased items, with a minimum comparison and buying effort.
Marketed through many retail outlets Relatively low Price Little promotional effort at the retail level

Shopping Products
Less frequently purchased, buyers characteristically compares on such basis as suitability, quality, price and styling.
Do not have brand loyalty appeal Require fewer retail outlets Gross margins are higher Supported (servicing and promoting the product) by both the producer and channel members

Specialty Products
items with unique characteristics that buyers are willing to expend considerable effort to obtain Are pre-selected by the consumer Have no close substitutes or alternatives Are available in a limited number of retail outlets Have high gross margins

Is Ben & Jerrys Ice Cream a Convenience, Shopping, or Specialty Product? Why?
Reprinted with permission of Ben & Jerrys.

Unsought Products
Products purchased to solve a sudden problem, products of which the customers are unaware, and products that people do not necessarily think about buying Price and other features not considered No consideration of substitutes or alternatives Purchased infrequently

Industrial Products
Those products which are purchased for further processing or for use in conducting a business

The distinction between the consumer product and an industrial product is based on the purpose for which the product Is bought.

Groups of Industrial Products

Materials and Parts Capital Items Supplies and Services

Materials and Parts

Materials and Parts include
Raw Materials Manufactured Materials

Raw materials consists of farm products (wheat,

cotton, fruits) and natural products (fish, crude petroleum, iron core).

Manufactured materials and parts consist of

component materials (iron, yarn, cement) and component parts (small motors, tires).

Capital Items
Capital items aid in the buyers production or operations.
These includes Installations Accessory Equipment

Industrial Products
Installations Major purchases Office buildings, factories and warehouses, production lines, very large machines Accessory Equipment

Equipment used in production or office activities File cabinets, small motors, calculators, and tools

Supplies and Services

Supplies are the convenience products of industrial field.

Supplies include
Operating Supplies (lubricants, coal, paper, pencils) Repair and maintenance items (paints, nails, brooms)

Services
Maintenance and Repair Services
window cleaning, computer repair

Business Advisory Services

Legal management consulting, advertising)

Other Marketing Offerings

Organizations Persons Places ideas

Organization Marketing
Organization marketing consists of activities undertaken to maintain or change the attitudes as behavior of target customers towards an organization. Corporate image advertising is a major tool companies use to market themselves to various publics.

Person Marketing
Person marketing consists of activities undertaken to create, maintain or change attitudes and behavior toward particular people. E.g. Donald Trump

Place Marketing
Place marketing involves activities undertaken to create, maintain or change attitudes or behavior towards particular place. Cities, states, regions and even entire nations compete to attract tourists, new residents, company offices and factories. Michigan says, Great Lakes, Great times to attract tourists. Great Lakes, Great Jobs to attract residents, and Great Lakes, Great Locations to attract businesses.

Ideas
Marketing of social ideas is called Social Marketing. 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. Social marketing programs include public health campaigns to reduce smoking, alcoholism, drug abuse, and overeating .

Product and Service Decisions

By: Rida Kaukab Roll No. 13

Marketers make product and service decisions at three levels: 1. Individual product decisions

Product attributes Branding Packaging Labeling Product support services

1. Product line decisions 2. Product mix decisions

Product and Service Attributes

Developing a product or service involves defining the benefits that it will offer. These benefits are communicated and delivered by product attributes such as: Product Quality Features Style And Design

Product Quality
Product quality is the ability of a product to perform its functions; it includes the products overall durability, reliability, precision, ease of operation and repair, and other valued attributes. Product quality is one of the marketers major positioning tools. Quality has a direct impact on product or service performance: thus, it is closely linked to customer value and satisfaction. In the narrowest sense, quality can be defined as freedom from defects. In a broader sense quality is defined in terms of creating customer value and satisfaction. Siemens defines quality this way: quality is when our customers come back and our products dont.

Product Quality (contd)

Total quality management (TQM) is an approach in which all the companys people are involved in constantly improving the quality of products, services and business processes. TQM improves the companys market share and profits. Today, companies are taking a return on quality approach. Viewing quality as an investment and holding quality efforts accountable for bottom-line results.

Product quality has two dimensions:

Product Quality (contd)

Level In developing a product, the marketer must first choose a quality level that will support the products position in the target market. Here product quality means performance quality- the ability of a product to perform its functions. E.g. a Rolls-Royce provides higher performance quality than a Chevrolet: it has a smoother ride, handles better and lasts longer Consistency Beyond quality level, high quality can also mean high levels of quality consistency. Here product quality means conformance quality- freedom from defects and consistency in delivering a targeted level of performance. In this sense, a Chevrolet can have just as much quality as a Rolls-Royce. Although a Chevy doesn't perform as well as a Rolls, it can as consistently deliver the quality that customers pay for and expect.

Product Features A product can be offered with varying features

A product can be offered with varying features The company can create higher-level models by adding more features Features are a competitive tool for differentiating the companys product from competitors product How can a company identify new features and decide which ones to add to its products? the company should periodically survey buyers who have used the product and ask questions like: How do you like the product? Which specific features of the product do u like the most? Which features could we add to improve the product? The company can then assess each features value to customers versus its cost to the company. Features that customers value little in relation to costs should be dropped and vice versa.

Another way to add customer value is through distinctive product style and design Design is a larger concept than style Style simply describes the appearance of a product but it does not necessarily make the product perform better Unlike style, design is more than skin deep- it goes to the very heart of a product. Good design contributes to a products usefulness as well as to its looks. Good design begins with a deep understanding of customer needs.it involves shaping the customers product or service experience. e.g. Kaiser Permanente, the nations largest health maintenance organization has recently hired IDEO, a design firm, to help it design the next generation medical building. Good design can improve product or service performance, cut costs, and create strong competitive advantage in the target market

Product Style And Design

Branding
Brand

A name, term, sign, symbol or design, or a combination of these intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.

Packaging The activities of designing and

producing the container or wrapper for a product. Package includes

A products primary container( the tube holding Colgate Total toothpaste) A secondary package i.e. thrown away when the product is about to be used (the cardboard box containing the tube of Colgate) A shipping package necessary to store, identify and ship the product ( a corrugated box carrying six dozen tubes of Colgate) Protect the product from damage Offer convenience to consumers Promote the product by communicating its features, uses, benefits, and image

Packaging Functions

Major Packaging Considerations (contd)

Promotional Role (Informing the Consumer)

Verbal and nonverbal symbols Size, shape, texture, color, and graphics Transportation, storage, and handling

Reseller Needs

Environmentally Responsible

Biodegradable and recyclable

Packaging and Marketing Strategy

Innovative Packaging
Unique features or ways of packaging, that make a product more distinct from its competitors Take a look at the example on page 244, where Dutch Boy came up with a long overdue innovation- paint in plastic containers with twist off caps.

Labeling
Labeling, printed information appearing on or with package, is also part of packaging. Universal Product Code (UPC)

A series of electronically readable lines identifying a product and containing inventory and pricing information

Functions of a label

Labeling (contd)

Identifies the product or brand, e.g. the name Sunkist stamped on oranges Describes several things about the product, like, who made it, where it was made, its contents and how to use it, etc. Promotes the product through attractive graphics.

Product Support Services

Customer service is another element of product strategy Here customers are surveyed periodically to assess the value of current services and to obtain the ideas for new ones. E.g. Cadillac holds regular focus group interviews with owners and carefully watches complaints that come into its dealerships Once the company assesses the value of various support services to customers, it must then assess the costs of providing these services. It can develop a package of services that will both delight customers and yield profits to the company Based on its interviews, Cadillac has setup a system directly linking each dealership with a group of 10 engineers who can help walk mechanics through difficult repairs. Many companies are now using a sophisticated mix of phone, e-mail, fax, internet and interactive voice and data technologies to provide support services that were not possible before

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. Examples: 1. Nike has several lines of athletic shoes and apparel 2. Nokia has several lines of telecommunication products

Product Line Decisions

Product line (contd)

The major product line decision involves product line length i.e. the number of items in the product line. A company can lengthen its product line in two ways:
1. 2.

Line stretching Line filling

Line Stretching
Product line stretching occurs when a company lengthen its product line beyond its current range. This is done when
1.

2.

3.

Companies located at the upper end of the market can stretch their lines downward E.g. DaimlerChrysler stretched its Mercedes line downward by introducing Mercedes C-Class cars. Companies located at the lower end of the market can stretch their lines upward E.g. Japanese auto companies introduced an up market automobile: Toyota launched Lexus; Nissan launched Infinity Companies in the middle range of the market may decide to stretch their lines in both directions E.g. Marriott offers a full line of hotel brands, each aimed at a different target market

Line Filling
Line filling is adding more items within the present range of the line E.g. Sony filled its walkman lines by adding solar-powered and waterproof Walkmans, ultralight models for exercisers, the CD Walkman, and the memory stick Walkman Reasons for product line filling are: 1. Reaching for extra profits 2. Satisfying dealers 3. Being the leading full line company 4. Using excess capacity 5. Plugging holes to keep out competitors

A product mix (or product assortment) consists of all the product lines and items that a particular seller offers for sale For instance:

Product Mix Decisions

Avons product mix consists of five major product lines:

Beauty products Wellness products Jewelry & accessories Gifts Inspirational products

A companys product mix has four important dimensions:

Product Mix Width : refers to the number of different product lines the company carries e.g. P&G markets a wide product mix consisting of 250 brands organized into five major product lines:
Personal and beauty House and home Health and wellness Baby and family Pet nutrition and care products

Product Mix Length: refers to the total number of items the company carries within its product lines e.g. in its house and home line includes seven laundry detergents, six hand soaps, five shampoos and four dishwashing detergents.

Product line Depth: refers to the number of versions offered of each product in the line. E.g. P&Gs Crest toothpaste comes in 16 varieties. Product Mix Consistency: refers to how closely related the various product lines are in end use, production requirements, distribution channels or some other way.

The Concepts of Product Mix Width and Depth Applied to Selected U.S. Procter & Gamble Products

Source: Reprinted by permission of The Procter and Gamble Company.

FIGURE 11.1

A name, symbol, term or sign which uniquely identifies the products or services of a seller or group of sellers.

Brand:

A strong brand is a valuable asset of the company. Branding is assigning a brand name to the products or services, developing and managing it.

Brand valuation is the process of estimating the total financial value of the brand. Brand equity is the positive differential effect on the customer response on knowing the brand name. Customer equity is the value of the customer relationships that the brand creates.

marketers have to position their brand on one of the three levels i.e. On the basis of attributes/features. On the basis of benefits. On the basis of beliefs and

Brand positioning:

Brand name selection

It should describe something about the product. It should be easy to pronounce. It should be distinctive. It should be extendible. It should translate easily into foreign languages. It should be capable of registration and protection.

Brand Sponsorship
i. Manufacturers brand: Selling
the output under the brand name of manufacturer e.g. IBM, Microsoft, Sony, etc. and owned by the reseller/retailer of the product or service e.g. Nike, Adidas, Rica Lewis, etc.

ii. Private brand: A brand created

Brand sponsorship, contd

iii. Licensing: Using the well-known
names or symbols previously created by other manufacturers or sellers e.g. childrens products companies licensing the Looney Tunes characters. iv. Co-branding: The practice of using the established brand names of two companies on the same product e.g. Apple worked with Sony to develop the i-pod.

Brand Development and Managing brands

By: Shazib Qamar (46)

Brand Development
Line extension Brand extension Multi-brands New brands

Line extension
Existing brand names extended to new forms, sizes and flavors of an existing product category. Low-cost, low-risk way to introduce new products. Meet customer desires for variety. Risks: Over-extended brand might lose its specific meaning.

Brand extension
Existing brand names extended to new product category. Instant recognition and acceptance. Saves high advertisements costs. Risks: extension may confuse the image of main brand. Harms consumers attitude towards main brand.

Multi-brands
New brand names introduced in the same product category. Establish different features and appeal to different buying motives. Lockup more shelf space. Risks: instead of getting big market share from one brand, profitability spreads into small market share.

New brands
New brand names in new product categories. Need of a new brand occurs when the existing brand name is not appropriate for the new product. Risk is same of multi-brand, company spreading resources too thin. Companies are now pursuing on megabranding strategies.

Managing Brands
Brand positioning must be continuously communicated to consumers. Through advertising campaigns. Brand experience. Setting of brand asset management team. Companies should audit their brands strengths and weaknesses.

SERVICES MARKETING
BY Qura-tul-ain Fatima Roll No=30

Statistics
Services account for 74% of U.S G.D.P 60% of personal consumption expenditures. Service jobs accounted for 55% of all U.S jobs in 1970. Today they are 82% of total employment. Services make quarter of the value of all international trade.

Services Industries
Governments Profit not-for-profit Organizations Business Organizations

Service Characteristics
Intangibility Inseparability

Services

Variability

Perishability

Service Intangibility
It means that services cannot be seen, tasted, felt, heard or smelled before they are bought.

Evidence Management
Service organization presents its customers with organized, honest evidence of its capabilities.

Service Inseparability
It means that services cannot be separated from their providers, whether the providers are people or machines.

Service Variability
It means that the quality of services depends on who provides them as, when, where and how they are provided. .

Service Perishability
It means that services cannot be stored for later sale or use.

Service-Profit Chain
It is the chain that links firm profits with employee and customer satisfaction.

THE SERVICE-PROFIT CHAIN

The chain consists of five links: Internal service quality Satisfied and productive service employees Greater service value Satisfied and loyal customers Healthy service profits and growth

Service-Profit Chain (cont.)

This chain consists of five links:
Internal service quality:
Superior employee selection and training, a quality work environment which results in

Satisfied and productive service employees:

More satisfied, loyal and hardworking employees which results in..

Service-Profit Chain (cont.)

Greater service value:
More efficient and effective customer value creation and service delivery which results in

Satisfied and loyal customers:

Satisfied customers who remain loyal, repeat purchase and refer other customers which results in

Healthy service profits and growth: Superior service firm performance.

Ritz-Carlton
Taking Care Of Those Who Take care of Others

Ritz-Carlton

Three Types Of Marketing In Service Industries

Company Internal Marketing External Marketing

Employees

Interactive Marketing

Customers

Internal Marketing
It means that the service firm must Effectively train and motivate Its Customer-contact employees and supporting service people to work as a team to provide customer satisfaction

Interactive marketing
It means that service quality depends heavily on the quality of the buyer-seller interaction during the service encounter.

External Marketing
Its all about positioning organizations. It involves 4 steps:

Analyzing the market opportunity Targeting your market Creating your strategy communicating

Three major Marketing Tasks

Managing Service Differentiation Managing Service Quality Managing Service Productivity

Managing Service Differentiation

By Developing a differentiated offer, delivery and image. Offer includes innovative features. Differentiate their service delivery by having more able and reliable customercontact people. Service companies can also differentiate their images through symbols and branding.

Managing service Quality

A firm can differentiate itself by delivering consistently higher quality than its customers. Customer retention is the best measure of quality. Service quality will always vary . Service Recovery.

Managing Service Productivity

Ways Of increasing productivity

Train current employees or hire new ones who will do work harder or more skillfully. Increase quantity of their service by giving up some quality. Provider can industrialize the service by adding equipment and standardizing production. Service provider can also harness the power of technology.

ADDITIONAL PRODUCT CONSIDERATIONS

Product decisions and social responsibility International Product and services Marketing

By: Shazib Qamar (46)

Product decisions and social responsibility

Product decisions have attracted much public attention. Marketers should consider carefully public policy issues, product quality, safety and product warranties. Companies dropping products must be aware that they have legal obligations, written or implied to their suppliers, dealers and customers who stake in the dropped product. Every country formulates some laws regarding customer product safety, which includes illegal copying competitors product, inspection of sanitary conditions etc. it may ban or seize potentially harmful products. In case of defective designed product they can sue manufacturer or dealers. E.g. Ford paid nearly $369 million to a women paralyzed in a rollover accident involving a Ford explorer. This phenomenon has resulted in a huge increase in product liability insurance premiums.

International Product and services Marketing

First companies should figure out what products and services to introduce and in which countries. Different buying behavior and cultures effects. Packaging also prevents new challenges for international markets. Service marketers also face special challenges when going global. E.g. German Deutsche bank serves more than 12 million customers in 74 countries. Retailers are among the latest service businesses to go global. E.g. every year since 1955, Wal-Mart has entered a new country. Service companies are not always welcomed with open arms. Whereas manufacturers usually face straightforward tariff, quota or currency restrictions when attempting to sell their products in other countries.

THANK YOU