Objectives • Be able to define product and know the major classifications of products and services. • Understand the decisions companies make regarding their individual products and services, product lines, and product mixes.
Objectives • Understand how firms build and manage their brands. • Know the four characteristics of services and the additional marketing considerations that services require.
Cosmetics companies sell billions of dollars worth of products Consumers buy more than just a particular smell The “promise”, image, company, name, package, and ingredients are all part of the product, as are the stores where it is sold. c Cosmetics Industry
What is a Product? • Anything that can be offered to a market for attention, acquisition, use or consumption. • Satisfies a want or a need. • Includes: • Physical Products • Services • Persons • Places • Organizations • Ideas • Combinations of the above
What is a Product? • Product and service classifications fall into two broad classes based on the types of buyers who use them: • Consumer products • Industrial products
Product ClassificationsConsumer Products • Convenience Products • Buy frequently & immediately • Low priced • Many purchase locations • Includes: • Staple goods • Impulse goods • Emergency goods • Shopping Products • Buy less frequently • Gather product information • Fewer purchase locations • Compare for: • Suitability & Quality • Price & Style • Specialty Products • Special purchase efforts • Unique characteristics • Brand identification • Few purchase locations • Unsought Products • New innovations • Products consumers don’t • want to think about • Require much advertising & • personal selling
Figure 9-1: Three Levels of Product
Discussion Question Describe the core benefit, actual product, and augmented product aspects of an automobile purchase.
Product ClassificationsIndustrial Products Materials and Parts Capital Items Supplies and Business Services
Industrial products also include business services, such as landscaping, technology, food services, or custodial.
Product ClassificationsOther Marketable Entities • Marketed to create, maintain, or change the attitudes or behavior toward the following: • Organizations - Profit (businesses) and nonprofit (schools and churches). • Person - Political and sports figures, entertainers, doctors and lawyers. • Place - Business sites and tourism. • Social - Reduce smoking, clean air, conservation.
Social marketing promotes ideas or causes for the purpose of improving an individual’s well-being or the well-being of society.
Individual Product Product Line Product Mix Product attributes Quality, features, style and design Branding Packaging Labeling Product support services Product & Service Decisions Key Decisions
Product Attributes Branding Individual Product Decisions Packaging Labeling Product Support Services
Product & Service Decisions • Innovative product design can help revitalize a company, such as with the Apple iMac.
Product & Service Decisions • Brand: • A name, term, sign, symbol, design, or a combination of these, that identifies the maker or sellers of a product or service.
Product & Service Decisions • Packaging involves designing a container or wrapper for a product
Product & Service Decisions • Many aspects of a food product’s label are dictated by law
Product & Service Decisions Support services via the web include FAQ files, email queries, live chat with customer service personnel, and software updates 1-800 Flowers
Product Line Decisions Product Line Length Number of Items in the Product Line Stretching Lengthen beyond current range Filling Lengthen within current range Downward Upward
Product Mix Decisions Width - number of different product lines Length - total number of items within the lines Product Mix - all the product lines offered Consistency Depth - number of versions of each product
Branding the Product Brand • helps consumers identify the product • includes: • name, term, symbol, sign, mark • trademark -- legal protection of name or sign
Brand Should Convey Meaning • Attributes • Polo Ralph Lauren = expensive • Benefits • what will the product do for you? • Values • what consumer values ? safety (Volvo) • Personality • Campbell’s Soup
Brand Equity • What is your good name worth? • Would you let others use it? • Brands may evoke • loyalty • preference • Super Brands • names that many people recognize • Coca Cola, Kodak, Sony, • What do you do to preserve your good name?
Brand Positioning Brand Name Selection Brand Sponsorship Brand Development Three levels of positioning: Product attributes Least effective Benefits Beliefs and values Taps into emotions Brand Strategy Key Decisions
Brand Positioning Brand Name Selection Brand Sponsorship Brand Development Good Brand Names: Suggest something about the product or its benefits Are easy to say, recognize and remember Are distinctive Are extendable Translate well into other languages Can be registered and legally protected Brand Strategy Key Decisions
Brand Positioning Brand Name Selection Brand Sponsorship Brand Development Manufacturer brands Brand Strategy Key Decisions
Brand Positioning Brand Name Selection Brand Sponsorship Brand Development Private (store) brands Costly to establish and promote Higher profit margins Brand Strategy Key Decisions
Brand Positioning Brand Name Selection Brand Sponsorship Brand Development Licensed brands Name and character licensing has grown Brand Strategy Key Decisions
Brand Positioning Brand Name Selection Brand Sponsorship Brand Development Co-branding Advantages Broader consumer appeal Greater brand equity Efficient means of expansion into new product categories Limitations Complex legal contracts Requires careful coordination of IMC Requires that partners trust one another Brand Strategy Key Decisions
Product Category Line Extension Dannon Yogurt Flavors Brand Extension Barbie Electronics Existing New Existing Multibrands Seiko Lasalle & Pulsar New Brands Windex (by acquisition) Brand Name New Four Brand Development Strategies
Services Marketing • Services • Account for 74% of U.S. gross domestic product. • Service industries include business organizations, government, and private not-for-profit organizations.
The Goods - Service Continuum “Pure” Goods easier to evaluate Clothing Furniture Houses Automobiles Restaurant Meals Vacations Hair Cuts TV Repair Legal Services Medical Diagnosis “Pure” Services difficult to evaluate
Continuum of Evaluation forDifferent Types of Products Most Services Most Goods High in Experience Qualities High in Credence Qualities High in Search Qualities
Figure 9-5: Four Services Characteristics
BusinessNow Site59 Video Clip The perishability of services such as airline seats creates special challenges for marketers Click the picture above to play video
Figure 9-6: Three Types of Marketing in Services Industries
Service Buying Behavior • Consumer Decision Making Process for Services • - Information Search • - Evaluation Criteria for Alternatives • - Perceived Risk • - Brand Loyalty
Services Marketing • Service Firm Marketing Strategies • The Service-Profit Chain • Internal Marketing: service firms train and effectively motivate their employees to work as a team to satisfy the customer • Interactive Marketing: recognizes that service quality depends heavily on the quality of buyer-seller interaction
Services Marketing • Service Firm Marketing Strategies • Managing Service Differentiation British Airways differentiates its service by offering first-class world travelers private “demi-cabins”
Service Quality • Elements of Service Quality • - Tangibles • - Reliability • - Responsiveness • - Assurance • - Empathy
Services Marketing • Service Firm Marketing Strategies • Managing Service Quality • One method of differentiation • Customer retention is often the best measure • Top service firms are “customer obsessed” • Service recovery and employment empowerment are key • Managing Service Productivity • Many methods of enhancing productivity • Key is to avoid reducing quality