What is a Product? Goods Places Services Properties Experiences Organizations Events Information Persons Ideas
What Is a Product? Products, Services, and ExperiencesProduct is anything that can be offered in a market for attention, acquisition, use, or consumption that might satisfy a need or want• Soap• Toothpaste 8-4
What Is a Product? Product and Service Classifications• Consumer products• Industrial products 8-9
What Is a Product? Product and Service ClassificationsConsumer products are products and services for personal consumption• Classified by how consumers buy them • Convenience product • Shopping products • Specialty products • Unsought products 8-10
What Is a Product? Product and Service ClassificationsConvenience products are consumer products and services that the customer usually buys frequently, immediately, and with a minimum comparison and buying effort• Newspapers• Candy• Fast food 8-11
What Is a Product? Product and Service ClassificationsShopping products are consumer products and services that the customer compares carefully on suitability, quality, price, and style• Furniture• Cars• Appliances 8-12
What Is a Product? Product and Service ClassificationsSpecialty products are consumer 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 8-13
What Is a Product? Product and Service ClassificationsUnsought products are consumer products that the consumer does not know about or knows about but does not normally think of buying• Life insurance• Funeral services• Blood donations 8-14
What Is a Product? Product and Service ClassificationsIndustrial products are products purchased for further processing or for use in conducting a businessClassified by the purpose for which the product is purchased• Raw Materials and parts• Capital• Supplies and services 8-15
What Is a Product? Product and Service ClassificationsMaterials and parts include raw materials and manufactured materials and parts usually sold directly to industrial users• Wheat• Lumber• Iron• Cement 8-16
What Is a Product? Product and Service ClassificationsCapital items are industrial products that aid in the buyer’s production or operations• Buildings• Elevators• Computers 8-17
What Is a Product? Organizations, Persons, Places, and IdeasOrganization marketing consists of activities undertaken to create, maintain, or change attitudes and behavior of target consumers toward an organization 8-18
What Is a Product? Organizations, Persons, Places, and IdeasPerson marketing consists of activities undertaken to create, maintain, or change attitudes and behavior of target consumers toward particular people• Rakhi’s swayamwar 8-19
What Is a Product? Organizations, Persons, Places, and IdeasPlace marketing consists of activities undertaken to create, maintain, or change attitudes and behavior of target consumers toward particular places• Tourism 8-20
What Is a Product? Organizations, Persons, Places, and IdeasSocial 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• Public health campaign• Tourism 8-21
What Is a Product? Products, Services, and ExperiencesExperiences represent what buying the product or service will do for the customer• Treasure Land• Disney land 8-6
What Is a Product? Products, Services, and ExperiencesService 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• Legal advice 8-5
The Product and Product Mix Potential customers judge product offerings according to three elements: Product features and quality Services mix and quality Value-based prices
The Product and Product Mix The customer value hierarchy: Core benefit Basic product Expected product Augmented product Potential product
What Is a Product? Levels of Product and Services• Core benefits• Actual product• Augmented product 8-7
What Is a Product? Levels of Product and ServicesCore benefits represent what the buyer is really buyingActual product represents the design, brand name, and packaging that delivers the core benefit to the customerAugmented product represents additional services or benefits of the actual product 8-8
Product and Service Decisions Product Mix DecisionsProduct mix consists of all the products and items that a particular seller offers for sale• Width• Length• Depth• Consistency 8-39
The Product and Product Mix Product mix dimensions: Width: number of product lines Length: total number of items in mix Depth: number of product variants Consistency: degree to which product lines are related
Product and Service Decisions Product Line DecisionsProduct 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 8-33
Product and Service Decisions Product Mix DecisionsProduct mix width is the number of different product lines the company carriesProduct mix length is the total number of items the company carries within its product lines 8-40
Product and Service Decisions Product Line DecisionsProduct line depth is the number of versions offered of each product in the lineConsistency is how closely the various product lines are in end use, production requirements, or distribution channels 8-41
Product and Service Decisions Product Line DecisionsProduct line length is the number of items in the product line• Line stretching• Line filling• Line pruning 8-34
Line stretching Down mkt stretch Up mkt stretch Two way stretch / combination line stretching
Product and Service Decisions Product Line DecisionsCombination line stretching is used by companies in the middle range of the market to achieve both goals of upward and downward line stretching 8-37
Product and Service Decisions Product Line DecisionsProduct line filling occurs when companies add more items within the present range of the line• More profits• Satisfying dealers• Excess capacity• Plugging holes to fend off competitors 8-38
Product and Service Decisions Individual Product and Service DecisionsBrand is the name, term, sign, or design, or a combination of these, that identifies the maker or seller of a product or service 8-29
Brand Decisions The AMA definition of a 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 the competition.”
Branding Strategy:Building Strong BrandsBrand represents the consumer’s perceptions and feelings about a product and its performance. It is the company’s promise to deliver a specific set of features, benefits, services, and experiences consistently to the buyers 8-42
Brand Decisions Brands can convey six levels of meaning: Attributes Benefits Values Culture Personality User
Brand Decisions Aaker identified five levels of customer attitudes toward brands: Will change brands, especially for price. No brand loyalty. Satisfied -- has no reason to change. Satisfied -- switching would incur costs. Values brand, sees it as a friend. Devoted to the brand.
Brand Decisions Brand identity decisions include: Name Logo Colors Tagline Symbol Consumer experiences create brand bonding, brand advertising does not.
Brand name decision Individual name – zen, esteem Blanket family name – GE,maruti, tata Separate family names- Pantaloons, Sears, Walmart Corporate+individual prod. Name – Maruti800, honda city
Branding Strategy:Building Strong Brands Brand Name SelectionDesirable qualities• Suggests benefits and qualities• Easy to pronounce, recognize, and remember• Distinctive• Extendable• Translatable for the global economy 8-48
Brand Decisions Marketers should attempt to create or facilitate awareness, acceptability, preference, and loyalty among consumers. Valuable and powerful brands enjoy high levels of brand loyalty.
Branding Strategy:Building Strong BrandsBrand equity is the positive differential effect that knowing the brand name has on customer response to the product or service 8-43
Brand Decisions Brand equity refers to the positive differential effect that a brand name has on customers. Brand equity: is related to many factors. allows for reduced marketing costs. is a major contributor to customer equity.
Branding Strategy:Building Strong BrandsCustomer equity is the value of the customer relationships that the brand createsBrand valuation is the process of estimating the total financial value of the brand 8-45
Brand Decisions Key Challenges Advantages of branding: Facilitates order processing Trademark protection To brand or not Aids in segmentation Brand sponsor Enhances corporate image Brand name Branded goods are desired by retailers and distributors Brand strategy Brand repositioning
Brand Decisions Key Challenges Options include: Manufacturer (national) To brand or not brand Brand sponsor Distributor (reseller, store, house, private) Brand name brand Brand strategy Licensing the brand Brand repositioning name
Brand Decisions Key Challenges Strong brand names: Suggest benefits Suggest product qualities To brand or not Are easy to say, recognize, Brand sponsor and remember Brand name Are distinctive Should not carry poor Brand strategy meanings in other Brand repositioning languages
Brand Decisions Key Challenges Varies by type of brand Functional brands – Maruti 800 ( fuel efficient) To brand or not Image brands – raymond Brand sponsor suitings Experiential brands-barista, Brand name disneyland Brand strategy Line extensions Brand repositioning Brand extensions Multibrands New brands Co-branding
Product category Existing New Existing Line ext. Brand extensionBrandName Multi-brands New Brands New
Branding Strategy:Building Strong Brands Brand DevelopmentLine extensions occur when a company extends existing brand names to new forms, colors, sizes, ingredients, or flavors of an existing product categoryBrand extensions extend a brand name to a new or modified product in a new category 8-52
Branding Strategy:Building Strong Brands Brand DevelopmentMultibrands are additional brands in the same categoryNew brands are used when existing brands are inappropriate for new products in new product categories or markets 8-53
Branding Strategy:Building Strong Brands Brand Development• Line extensions e.g: surf excel, excelmatic• Brand extensions e.g:nature fresh sunflower oil, fresh flour, honda motorcycle• Multibrands, e.g:Maruti zen, titan sonata• New brands• Co-brands e.g:TATA-IBM, Birla –AT&T etc. 8-51
Brand Decisions Key Challenges A brand report card can be used to audit a brand’s strengths and To brand or not weaknesses. Brand sponsor Changes in preferences or Brand name the presence of a new Brand strategy competitor may indicate a need for brand Brand repositioning repositioning.
Branding Strategy:Building Strong Brands Brand Sponsorship• Manufacturer’s brand-Merchandise bearing a manufacturers brand name, rather than a private label brand• Private brand - Product brands owned by a retailer or a wholesaler rather than the manufacturer; also called house brands. 8-49
Branding Strategy: Building Strong Brands Brand SponsorshipPrivate brands provide retailers with advantages• Product mix control• Slotting fees for manufacturers’ brands• Higher margins• Exclusivity 8-50
Brand Sponsorship• Licensed brand - A product or service using a registered brand name offered by the brand owner to a licensee for an agreed fee or royalty.• Co-branding is a process when two companies form an alliance to work together, creating marketing synergy.
Co-branding According to Prof.Chang there are three levels of co-branding: Level 1 includes joining with another company to penetrate the market Level 2 is working to extend the brand based on the companys current market share Level 3 tries to achieve a global strategy by combining the two brands
Types of co-branding Ingredient co-branding – This involves creating brand equity for materials, components or parts that are contained within other products. E.g: Pillsbury Brownies with Nestle Chocolate, Dell Computers with Intel Processors
Types of co-branding same-company co-branding This is when a company with more than one product promotes their own brands together simultaneously. E.g; cosmetics, shampoo+conditioner .
Types of co-branding Joint venture co-branding two or more companies going for a strategic alliance to present a product to the target audience. British Airways and Citibank formed a partnership offering a credit card where the card owner will automatically become a member of the British Airway’s Executive club
Types of co-branding multiple sponsor co-brandinginvolves two or more companies working together to form a strategic alliance in technology, promotions, sales, etc. e.g: Citibank/American Airlines/Visa credit card partnership
Product and Service Decisions Individual Product and Service DecisionsPackaging involves designing and producing the container or wrapper for a productLabel identifies the product or brand, describes attributes, and provides promotion 8-31
Packaging and Labeling Packaging includes: The primary package The secondary package The shipping package Many factors have influenced the increased use of packaging as a marketing tool.
Packaging and Labeling Developing an effective package: Determine the packaging concept Determine key package elements Testing: Engineering tests Visual tests Dealer tests Consumer tests
Packaging and Labeling Labeling functions: Identifies the product or brand May identify product grade May describe the product May promote the product Legal restrictions impact packaging for many products.
Services Marketing Nature and Characteristics of a Service• Intangibility• Inseparability• Variability• Perishability 8-56
Services Marketing Nature and Characteristics of a ServiceIntangibility refers to the fact that services cannot be seen, tasted, felt, heard, or smelled before they are purchasedInseparability refers to the fact that services cannot be separated from their providers 8-57
Services Marketing Nature and Characteristics of a ServiceVariability refers to the fact that service quality depends on who provides it as well as when, where, and how it is providedPerishability refers to the fact that services cannot be stored for later sale or use 8-58
Services Marketing Types of Service Industries• Government• Private not-for-profit organizations• Business services 8-55
Services Marketing Marketing Strategies for Service FirmsManaging service quality provides a competitive advantage by delivering consistently higher quality than its competitorsService quality always varies depending on interactions between employees and customers 8-64
Services Marketing Marketing Strategies for Service FirmsService recovery can turn disappointed customers into loyal customers• Empower employees • Responsibility • Authority • Incentive 8-65