Marketing:AnIntroductionThirteenthEditionChapter7Products,Services,andBrands:BuildingCustomervalueCopyright?2017,2015,2013PearsonEducation,Inc.AllRightsReservedLearningObjectives(1of4)7-1.Defineproductanddescribethemajorclassificationsofproductsandservices.7-2.Describethedecisionscompaniesmakeregardingtheirindividualproductsandservices,productlines,andproductmixes.LearningObjectives(2of4)7-3.Identifythefourcharacteristicsthataffectthemarketingofservicesandtheadditionalmarketingconsiderationsthatservicesrequire.7-4.Discussbrandingstrategy—thedecisionscompaniesmakeinbuildingandmanagingtheirbrands.FirstStopGoPro:BeaHeroGoPro’srunawaysuccesscomesfromunderstandingthatit’ssellingmuchmorethanwearablesports-actionvideocameras.LearningObjective7-1Defineproduct

anddescribethemajorclassificationsofproductsandservices.WhatIsaProduct?Aproductisanythingthatcanbeofferedtoamarketforattention,acquisition,use,orconsumptionthatmightsatisfyawantorneed.Aserviceisanactivity,benefit,orsatisfactionofferedforsale;itisintangibleanddoesnotresultinownershipofanything.Products,Services,andExperiences(1of2)MarketofferingsincludebothtangiblegoodsandservicesCompaniescreateandmanagecustomerexperienceswiththeirbrandsorcompanies.TodifferentiatetheiroffersfromthatofthecompetitorsProducts,Services,andExperiences(2of2)Verizon’sredesignedSmartStorescreatelifestyleexperiences.Figure7.1-ThreeLevelsofProductProductandServiceClassificationsConsumerproductsareboughtbyfinalconsumersforpersonalconsumption.Industrialproductsareboughtbyindividualsandorganizationsforfurtherprocessingorforuseinconductingabusiness.Materialsandparts,capitalitems,andsuppliesandservicesTable7.1-MarketingConsiderationsforConvenienceandShoppingProductsMarketingConsiderationsConvenienceShoppingCustomerbuyingbehaviorFrequentpurchase;littleplanning,littlecomparisonorshoppingeffort;lowcustomerinvolvementLessfrequentpurchase;muchplanningandshoppingeffort;comparisonofbrandsonprice,quality,andstylePriceLowpriceHigherpriceDistributionWidespreaddistribution;convenientlocationsSelectivedistributioninfeweroutletsPromotionMasspromotionbytheproducerAdvertisingandpersonalsellingbyboththeproducerandresellersExamplesToothpaste,magazines,andlaundrydetergentMajorappliances,televisions,furniture,andclothingTable7.1-MarketingConsiderationsforSpecialtyandUnsoughtProductsMarketingConsiderationsSpecialtyUnsoughtCustomerbuyingbehaviorStrongbrandpreferenceandloyalty;specialpurchaseeffort;littlecomparisonofbrands;lowpricesensitivityLittleproductawarenessorknowledge(or,ifaware,littleorevennegativeinterest)PriceHighpriceVariesDistributionExclusivedistributioninonlyoneorafewoutletspermarketareaVariesPromotionMorecarefullytargetedpromotionbyboththeproducerandresellersAggressiveadvertisingandpersonalsellingbytheproducerandresellersExamplesLuxurygoods,suchasRolexwatchesorfinecrystalLifeinsuranceandRedCrossblooddonationsOtherMarketOfferingsOrganizationsPersonsPlacesIdeasLearningObjective7-1SummaryWhatisaproduct?–physicalproducts,services,andexperiencesActualandaugmentedproduct–corecustomervalueConsumerproducts–convenience,shopping,specialty,andunsoughtIndustrialproducts–materialsandparts,capitalitems,andsuppliesandservicesOrganization,person,place,andideamarketingLearningObjective7-2Describethedecisionscompaniesmakeregardingtheirindividualproductsandservices,productlines,andproductmixes.ProductandServiceDecisionsIndividualProductDecisionsProductLineDecisionsProductMixDecisionsFigure7.2-IndividualProductandServiceDecisionsProductLineDecisions(1of2)Aproductlineiscloselyrelatedproductsthat:HavesimilarfunctionsandcustomergroupsAresoldthroughsimilaroutletsorfallwithingivenpricerangesProductlinelengthisthenumberofitemsintheproductline.ProductlinefillingProductlinestretchingProductLineDecisions(2of2)Samsung’sbulgingGalaxymobiledeviceslinenowoffersasizeforanyneedorpreference.ProductMix(orProductPortfolio)TheCloroxCompanyhasanicelycontainedproductmixconsistentwithitsmissionto“makeeverydaylifebetter,everyday.”ProductMixDecisionsWidthNumberofdifferentproductlinesthecompanycarriesLengthTotalnumberofitemsacompanycarrieswithinitsproductlinesDepthNumberofversionsofferedforeachproductinthelineConsistencyRelativityofthevariousproductlinesinenduse,productionrequirements,distributionchannels,orsomeotheraspectLearningObjective7-2SummaryProductattributedecisions–quality,features,andstyleanddesignBranding,packaging,andlabelingdecisionsProductsupportservices–enhancecustomerserviceandsatisfactionProductlineandproductmixdecisionsLearningObjective7-3Identifythefourcharacteristicsthataffectthemarketingofservicesandtheadditionalmarketingconsiderationsthatservicesrequire.Figure7.3-FourServiceCharacteristicsServiceProfitChain(1of2)LinksservicefirmprofitswithemployeeandcustomersatisfactionThechainconsistoffivelinks:InternalservicequalitySatisfiedandproductiveserviceemployeesGreaterservicevalueSatisfiedandloyalcustomersHealthyserviceprofitsandgrowthFigure7.4-ThreeTypesofServicesMarketingServiceProfitChain(2of2)Zapposknowsthatdeliveringcustomerhappinessbeginswithhappy,dedicated,energeticemployees.Zapposis“PoweredbyService.”MarketingTasksforServiceCompaniesManagingservicedifferentiationDevelopingadifferentiatedoffer,delivery,andimageManagingservicequalityDeliveringconsistentlyhigherqualitythanthecompetitorsManagingserviceproductivityTrainingcurrentemployeesorhiringnewonesIncreasingthequantityofservicebygivingupsomequalityHarnessingthepoweroftechnologyLearningObjective7-3SummaryServicescharacteristics:intangible,inseparable,variable,andperishableServiceprofitchain-internalandinteractivemarketingCompetitivedifferentiation,servicequality,andserviceproductivityLearningObjective7-4Discussbrandingstrategy—thedecisionscompaniesmakeinbuildingandmanagingtheirbrands.BrandEquity(1of2)ThedifferentialeffectthatknowingthebrandnamehasoncustomerresponsetotheproductoritsmarketingWithpositivebrandequity,consumersreactmorefavorablytothebrandthantoanunbrandedversionofthesameproduct.BrandEquity(2of2)Consumerperceptiondimensions:DifferentiationRelevanceKnowledgeEsteemBrandvalueisthetotalfinancialvalueofabrand.Customerequityisthevalueofcustomerrelationshipsthatthebrandcreates.MajorBrandStrategyDecisions(1of2)MajorBrandStrategyDecisions(2of2)Nickelodeonhasdevelopedastablefullofhugelypopularcharacters.BrandPositioningandBrandNameSelectionMarketersshouldestablishamissionandvisionforthebrandwhenpositioningit.DesirablequalitiesforabrandnameshouldbeBasedontheproduct’sbenefitsandqualitiesEasytopronounce,recognize,andrememberDistinctiveandextendableEasilytranslatedintoforeignlanguagesCapableofregistrationandlegalprotectionBrandSponsorshipNationalbrandsMarketedunderthemanufacturer’sownnameStorebrandsCreatedandownedbyaresellerofaproductorserviceLicensingUsenamesandsymbolscreatedbyothercompaniesorwell-knownmoviecharactersorcelebritiesforafeeCo-brandingUsetheestablishedbrandnamesoftwodifferentcompaniesonthesameproductFigure7.6-BrandDevelopmentStrategiesManagingBrands(1of2)Managingbrandsrequiresmanagingtouchpoints.ManagingBrands(2of2)Communicatethebrand’spositioning