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Marketing:AnIntroductionFifteenthEditionChapter07Products,Services,andBrands:BuildingCustomerValueCopyright©2023,2020,2017PearsonEducation,Inc.AllRightsReservedObjectivesOutline(1of2)7.1Defineproductanddescribethemajorclassificationsofproductsandservices.7.2

Describethedecisionscompaniesmakeregardingtheirindividualproductsandservices,productlines,andproductmixes.ObjectivesOutline(2of2)7.3Identifythefourcharacteristicsthataffectthemarketingofservicesandtheadditionalmarketingconsiderationsthatservicesrequire.7.4Discussbrandingstrategy—thedecisionscompaniesmakeinbuildingandmanagingtheirbrands.FirstStop:Starbucks:Deliveringthe“StarbucksExperience”Morethanjustcoffee,Starbuckssellsthe“StarbucksExperience,”onethatenrichespeople’slivesonemoment,onehumanbeing,oneextraordinarycupofcoffeeatatime.ObjectiveOutline7.1Defineproductanddescribethemajorclassificationsofproductsandservices.WhatIsaProduct?Aproductisanythingthatcanbeofferedtoamarketforattention,acquisition,use,orconsumptionthatmightsatisfyawantorneed.Aserviceisanactivity,benefit,orsatisfactionofferedforsale;itisintangibleanddoesnotresultinownershipofanything.Products,Services,andExperiences(1of2)Marketofferingsincludebothtangiblegoodsandservices.Companiescreateandmanagecustomerexperienceswiththeirbrandsorcompanies.TodifferentiatetheiroffersfromthatofthecompetitorsProducts,Services,andExperiences(2of2)Creatingcustomerexperiences:YourlocalBuffaloWildWingsrestaurantdoesn’tjustserveupwingsandbeer;itgivescustomerstheultimate“Wings.Beer.Sports.”fanexperience.Figure7.1ThreeLevelsofProductProductandServiceClassificationsConsumerproductsareboughtbyfinalconsumersforpersonalconsumption.Industrialproductsareboughtbyindividualsandorganizationsforfurtherprocessingorforuseinconductingabusiness.Materialsandparts,capitalitems,andsuppliesandservicesTable7.1(1of2)MarketingConsiderationsforConvenienceandShoppingProductsMarketingConsiderationsConvenienceShoppingCustomerbuyingbehaviorFrequentpurchase;littleplanning,littlecomparisonorshoppingeffort;lowcustomerinvolvementLessfrequentpurchase;muchplanningandshoppingeffort;comparisonofbrandsonprice,quality,andstylePriceLowpriceHigherpriceDistributionWidespreaddistribution;convenientlocationsSelectivedistributioninfeweroutletsPromotionMasspromotionbytheproducerAdvertisingandpersonalsellingbyboththeproducerandresellersExamplesToothpaste,magazines,andlaundrydetergentMajorappliances,televisions,furniture,andclothingTable7.1(2of2)MarketingConsiderationsforSpecialtyandUnsoughtProductsMarketingConsiderationsSpecialtyUnsoughtCustomerbuyingbehaviorStrongbrandpreferenceandloyalty;specialpurchaseeffort;littlecomparisonofbrands;lowpricesensitivityLittleproductawarenessorknowledge(or,ifaware,littleorevennegativeinterest)PriceHighestpriceVariesDistributionExclusivedistributioninonlyoneorafewoutletspermarketareaVariesPromotionMorecarefullytargetedpromotionbyboththeproducerandresellersAggressiveadvertisingandpersonalsellingbytheproducerandresellersExamplesLuxurygoods,suchasRolexwatchesorfinecrystalLifeinsuranceandRedCrossblooddonationsOtherMarketOfferingsOrganizationsPersonsPlacesIdeasObjectiveOutline7.1SummaryWhatisaproduct?—physicalproducts,services,andexperiencesActualandaugmentedproduct—corecustomervalueConsumerproducts—convenience,shopping,specialty,andunsoughtIndustrialproducts—materialsandparts,capitalitems,andsuppliesandservicesOrganization,person,place,andideamarketingObjectiveOutline7.2Describethedecisionscompaniesmakeregardingtheirindividualproductsandservices,productlines,andproductmixes.ProductandServiceDecisionsIndividualProductDecisionsProductLineDecisionsProductMixDecisionsFigure7.2IndividualProductDecisionsProductandServiceAttributesProductqualityisoneofthemarketer’smajorpositioningtools.Aproductcanbeofferedwithvaryingfeatures.Anotherwaytoaddcustomervalueisthroughdistinctiveproductstyleanddesign.BrandingAclassicstuntbyformerbargainfootwearretailerPaylessdramaticallyillustratedthepowerofbrandsinshapingperceptions.Fashioninfluencerspaidasmuchas$645for“Palessi”shoesforthatnormallysoldforlessthan$40.PackagingSmartpackaging:BritishdairybrandYeoValleyOrganicuses“alwayson”connectedpackagingdevelopedbyconnectedexperienceagencySharpEndacrossitsfullrangeof90organicproducts.ProductLineDecisions(1of2)Aproductlineiscloselyrelatedproductsthat:HavesimilarfunctionsandcustomergroupsAresoldthroughsimilaroutletsorfallwithingivenpricerangesProductlinelengthisthenumberofitemsintheproductline.ProductlinefillingProductlinestretchingProductLineDecisions(2of2)Productlinestretchingandfilling:RidesharingserviceUbertradedupwithUberBLACK(“high-endrideswithprofessionaldrivers”),andcompetitorLyftaddedLyftLux(“addalittleluxurytoyourrideandarriveinstyle”).ProductMix(orProductPortfolio)“Theproductmix:Colgate-Palmolive’snicelyconsistentproductmixcontainsdozensofbrandsthatconstitutethe“ColgateWorldofCare”—productsthat“everyday,peoplelikeyoutrusttocareforthemselvesandtheonestheylove.”ProductMixDecisionsWidthNumberofdifferentproductlinesthecompanycarriesLengthTotalnumberofitemsacompanycarrieswithinitsproductlinesDepthNumberofversionsofferedforeachproductinthelineConsistencyRelativityofthevariousproductlinesinenduse,productionrequirements,distributionchannels,orsomeotheraspectObjectiveOutline7.2SummaryProductattributedecisions—quality,features,andstyleanddesignBranding,packaging,andlabelingdecisionsProductsupportservices—enhancecustomerserviceandsatisfactionProductlineandproductmixdecisionsObjectiveOutline7.3Identifythefourcharacteristicsthataffectthemarketingofservicesandtheadditionalmarketingconsiderationsthatservicesrequire.Figure7.3FourServiceCharacteristicsServiceProfitChain(1of2)LinksservicefirmprofitswithemployeeandcustomersatisfactionThechainconsistsoffivelinks:InternalservicequalitySatisfiedandproductiveserviceemployeesGreaterservicevalueSatisfiedandloyalcustomersHealthyserviceprofitsandgrowthFigure7.4ThreeTypesofServicesMarketingServiceProfitChain(2of2)Theserviceprofitchain:PerennialcustomerservicechampionWegmansknowsthat“Inordertobeagreatplacetoshop,wemustfirstbeagreatplacetowork.”MarketingTasksforServiceCompaniesManagingservicedifferentiationDevelopingadifferentiatedoffer,delivery,andimageManagingservicequalityDeliveringconsistentlyhigherqualitythanthecompetitorsManagingserviceproductivityTrainingcurrentemployeesorhiringnewonesIncreasingthequantityofservicebygivingupsomequalityHarnessingthepoweroftechnologyObjectiveOutline7.3SummaryServicescharacteristics:intangible,inseparable,variable,andperishableServiceprofitchain—internalandinteractivemarketingCompetitivedifferentiation,servicequality,andserviceproductivityObjectiveOutline7.4Discussbrandingstrategy—thedecisionscompaniesmakeinbuildingandmanagingtheirbrands.BrandEquity(1of2)ThedifferentialeffectthatknowingthebrandnamehasoncustomerresponsetotheproductoritsmarketingWithpositivebrandequity,consumersreactmorefavorablytothebrandthantoanunbrandedversionofthesameproduct.BrandEquity(2of2)Consumerperceptiondimensions:DifferentiationRelevanceKnowledgeEsteemBrandvalueisthetotalfinancialvalueofabrand.Customerequityisthevalueofcustomerrelationshipsthatthebrandcreates.Figure7.5MajorBrandStrategyDecisionsMajorBrandStrategyDecisionsThe“Whatwedeliverbydelivering”campaignbyFedExshowsthatthebrandisaboutmorethanjustefficientpackagedeliveries;it’saboutwhatthosepackagedeliveriesmeantothepeoplereceivingthem.BrandPositioningandBrandNameSelectionMarketersshouldestablishamissionandvisionforthebrandwhenpositioningit.DesirablequalitiesforabrandnameshouldbeBasedontheproduct’sbenefitsandqualitiesEasytopronounce,recognize,andrememberDistinctiveandextendableEasilytranslatedintoforeignlanguagesCapableofregistrationandlegalprotectionBrandSponsorshipNationalbrandsMarketedunderthemanufacturer’sownnameStorebrandsCreatedandownedbyaresellerofaproductorserviceLicensingUsenamesandsymbolscreatedbyothercompaniesorwell-knownmoviecharactersorcelebritiesforafeeCo-brandingUsetheestablishedbrandnamesoftwodifferentcompaniesonthesameproductFigure7.6BrandDevelopmentStrategiesManagingBrands(1of2)Companiesmustmanagetheirbrandscarefully.Thebrand’spositioningmustbecontinuouslycommunicated.Majorbrandmarketersspendhugeamountsonadvertisingtocreatebrandawarenessandbuildpreferenceandloyalty.ManagingBrands(2of2)Communicatethebrand’spositioningManageallbrandtouch

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