Product, Services, and Brands:

Building Customer Value

Chapter 8
 Objective 8-1 Define product and describe the
major classifications of products and services

Objective 8-2 Describe the decisions companies

make regarding their individual products and
Learning services, product lines, and product mixes.

Objectives Objective 8-3 Identify the four characteristics that

affect the marketing of services and the additional
marketing considerations that services require.

Objective 8-4 Discuss branding strategy—the

decisions companies make in building and
managing their brands.
Learning
Objective 1
Objective 8-1 Define product and
describe the major classifications of
products and services
Products, Services, and Experiences

➢Product is anything that can be offered in a

market for attention, acquisition, use, or
consumption that might satisfy a need or
want
➢Service is a product that consists of
activities, benefits or satisfaction that is
essentially intangible and does not result in
the ownership of anything
➢Experiences represent what buying the
product or service will do for the customer
 What is a
Product?
Levels of
Product and
Services
 Levels of
Product in
Automobile
Industry
 Product and Service Classifications:
1. Consumer Products
1. Consumer product: A product bought by final consumers for
personal consumption.
a) Convenience product: A consumer product that customers
usually buy frequently, immediately, and with minimal
comparison and buying effort.
b) Shopping product: A consumer product that the customer, in
the process of selecting and purchasing, usually compares on
such attributes as suitability, quality, price, and style.
c) Specialty product: A consumer product with unique
characteristics or brand identification for which a significant
group of buyers is willing to make a special purchase effort.
d) Unsought product: A consumer product that the consumer
either does not know about or knows about but does not
normally consider buying.
Product and Service
Classifications:
2. Industrial Products
2. Industrial products
➢ Products purchased for further
processing or for use in
conducting a business
➢ Classified by the purpose for
which the product is purchased
• Materials and parts
• Capital
• Supplies and services
 Product and Service Classifications:
Organizations, Persons, Places, and Ideas

ORGANIZATION PERSON PLACE SOCIAL

MARKETING MARKETING MARKETING MARKETING
 Objective 8-2 Describe the decisions
companies make regarding their
individual products and services,
product lines, and product mixes.
Learning
Objective 2
 Product Individual Product and Service
Decisions:
and 1. Product Attributes
2. Branding
Service 3. Packaging
4. Labeling and Logos
Decisions 5. Product Support Services
1. Product Attributes

PRODUCT QUALITY PRODUCT FEATURES PRODUCT STYLE AND

DESIGN
 Individual Product Quality:
Product and a) Product Quality Level is the level of
quality that supports the product’s
Service positioning
Decisions: b) Product Conformance Quality is the
Product product’s freedom from defects and
consistency in delivering a targeted
Attributes level of performance
Individual Product and Service Decisions: Product Attributes
 Style describes the
appearance of the
Individual Product and
Service Decisions:
product
1. Product attributes

Design contributes to a
product’s usefulness as
well as to its looks
Individual Product and Service
Decisions: 2.Branding

Brand: A name, term, sign, symbol, or

design, or a combination of these, that
identifies the products or services of one
seller or group of sellers and
differentiates them from those of
competitors.
Individual Product and Service
Decisions: 3. Packaging

Packaging: The activities of

designing and producing the
container or wrapper for a product.
Individual Product and Service
Decisions: 4. Labeling and Logos

Labels identify the

product or brand,
describe attributes, and
provide promotion.
Individual Product and Service
Decisions:
5. Product Support Services

Customer service

After sale service

 What is Product line?

Product line: 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

Example: Nike produces several lines of athletic shoes and

apparel, and Marriott offers several lines of hotels.
 Product Line Decisions

Product line length is the number of items in the product line.

a) Product Line filling- occurs when companies add more items
within the present range of the line.
b) Product Line stretching-when a company lengthens its
product line beyond its current range. The company can
stretch its line
i. Downward e.g Launch of C- Class by Mercedes Benz
ii. Upward e.g Toyota with Lexus
iii. or both ways.
What is Product Mix?
Product mix (or product portfolio) :The set of
all product lines and items that a particular
seller offers for sale.

Example: Colgate divides its overall product mix

into four major lines: oral care, personal care,
home care, and pet nutrition. Each product line
consists of many brands and items.
 Product Mix Decisions

Product mix consists of all the products and items that a particular seller offers for sale

Product Mix Width: Product mix width refers to the number of different product lines
the company carries.
Product Mix Length: refers to the total number of items a company carries within its
product line.
Depth: refers to the number of versions offered of each product in the line.

Consistency: of the product mix refers to how closely related the various product lines
are in end use, production requirements, distribution channels, or some other way.
 Objective 8-3 Identify the four
characteristics that affect the
marketing of services and the
additional marketing
considerations that services
Learning require.
Objective 3
 Services
Marketing:
Characteristics
Services Marketing:
Marketing Strategies for Service Firms

In addition to traditional marketing strategies, service firms often

require additional strategies
1. Service-profit chain
2. Internal marketing
3. Interactive marketing
 1. Service profit chain, links service firm
profits with employee and customer
satisfaction. This chain consists of five links:
a)Internal service quality. Superior employee selection and
training, a quality work environment, and strong support
Marketing for those dealing with customers,
strategies for b)Satisfied and productive service employees. More
satisfied, loyal, and hardworking employees,
service firms c)Greater service value. More effective and efficient
customer value creation, engagement, and service
delivery,
d)Satisfied and loyal customers. Satisfied customers who
remain loyal, make repeat purchases, and refer other
customers,
e)Healthy service profits and growth. Superior service firm
performance
Three Types of Services Marketing
Services
Marketing: 2. Internal marketing means that the
Marketing service firm must orient and motivate its
Strategies for customer contact employees and
Service Firms supporting service people to work as a
team to provide customer satisfaction

➢ Internal marketing must precede external

marketing
Services Marketing:
Marketing Strategies for Service Firms

3. Interactive marketing means that service quality

depends heavily on the quality of the buyer-seller
interaction during the service encounter
a) Service differentiation
b) Service quality
c) Service productivity
 a. Managing Service
Differentiation
The solution to price competition is to
develop a differentiated offer, delivery, and
image.
• Offer can include distinctive features
• Delivery can include more able and
reliable customer contact people,
environment, or process
• Image can include symbols and
branding
 Service quality varies and depends on the
interaction of employees and customers.

b. Managing Emirates prides itself on providing a high level

of customer service and has won various
Service awards for its service quality, through
Quality customer feedback.
Turning a disgruntled customer into a loyal
one.
 c. Managing Service Productivity

• Companies must avoid pushing productivity so hard that doing so reduces

quality.
• Attempts to streamline a service or cut costs can make a service company more
efficient in the short run.
• But that can also reduce its longer-run ability to innovate, maintain service
quality, or respond to consumer needs and desires.
• Example: Passengers on most airlines now encounter “time-saving” check-in
kiosks rather than personal counter service. And most airlines have stopped
offering even the little things for free—such as in-flight snacks—and now
charge extra for everything from checked luggage to aisle seats. The result is a
plane full of disgruntled customers. In their attempts to improve productivity,
many airlines have mangled customer service.
 Objective 8-4 Discuss branding strategy—the
Learning decisions companies make in building and
managing their brands.
Objective 4
Branding Strategy: Building Strong Brands
• Brand equity: The differential effect that knowing the
brand name has on customer response to the product or
its marketing.
• Brands vary in the amount of power and value they hold in the
marketplace. Some brands—such as Coca-Cola, Nike, Disney, GE,
McDonald’s, Harley-Davidson, and others—become larger-than-life
icons that maintain their power in the market for years, even
generations. Other brands—such as Google, Uber, GoPro, Instagram,
and Wikipedia—create fresh consumer excitement and loyalty.
• These brands win in the marketplace not simply because they deliver
unique benefits or reliable service. Rather, they succeed because
they forge deep connections with customers. People really do have
relationships with brands.
 • Ad agency Young & Rubicam’s Brand Asset
Valuator measures brand strength along four
consumer perception dimensions:
• differentiation (what makes the brand stand
Branding out),
Strategy: • relevance (how consumers feel it meets
their needs),
Building • knowledge (how much consumers know
Strong about the brand)
• esteem (how highly consumers regard and
Brands respect the brand)

✓Brands with strong brand equity rate high

on all four dimensions.
 Brand value is the total financial value of a brand.
• Apple holds on to world’s most valuable brand title with record
valuation at more than US$355 billion, followed by Amazon and
Branding Google
• New entrant TikTok named world’s fastest-growing brand, up
Strategy: 215%, leading global revolution in media consumption
• Tech remains most valuable industry, while second-ranked retail
Building crosses US$1 trillion mark following 46% brand value growth
during COVID-19 pandemic
Strong Brands • Development of COVID-19 vaccines sees pharma named fastest-
growing industry, while tourism sector remains below pre-
pandemic valuation
• US and China continue to dominate claiming 2/3 of brand value
in ranking, while India sees fastest-growth over course of
pandemic among top nations, up 42%
(According to Brand Finance Brandirectory Global 500 rankings
2022)
Building Strong Brands
Branding Strategy: Building Strong Brands
Brand Positioning
Brand strategy decisions include:
• Product attributes: Washing Liquid Detergent (ability to clean
stains, rinsing power, etc.)
• Product benefits: FedEx (Guaranteed on-time delivery), Nike
(Performance), Lexus (Quality), Walmart (low prices)
• Product beliefs and values: e.g., Apple, Google, Disney, Coca-Cola,
Nike have achieved emotional connection with their customers.
Branding Strategy:
Building Strong Brands
Brand Name Selection

Desirable qualities
1. Suggest benefits and qualities
2. Easy to pronounce, recognize, and remember
3. Distinctive
4. Extendable
5. Translatable for the global economy
6. Capable of registration and legal protection
 Brand Sponsorship

• National or manufacturer's brand: Samsung or

Kellogg etc.
Branding • Private brand: Retailer’s brand e.g., Carrefour,
Strategy: • Licensed brand: e.g., Disney, Barbie, Hello Kitty, Star
Wars etc.
Building • Co-brand: For example, Nike and Apple co-branded
Strong the Nike+iPod Sport Kit, which lets runners link their
Nike shoes with their iPods to track and enhance
Brands running performance in real time. The Nike+iPod
arrangement gave Apple a presence in the sports
and fitness market. At the same time, it helps Nike
bring new value to its customers.
Branding Strategy:
Building Strong
Brands &
Brand
Development
Strategies
Branding Strategy: Building Strong Brands &
Brand Development Strategies

• Line extension: Extending an existing brand name to new forms,

colors, sizes, ingredients, or flavors of an existing product category.
E.g., Knorr soups
• Brand extension: Extending an existing brand name to new product
categories. E.g., Kellogg's and Special K cereals
• Multi-brands: Companies often market many different brands in each
product category to capture market share and to appeal to different
customer segments. E.g., PepsiCo drinks
• New Brands: A company might believe that the power of its existing
brand name is waning, so a new brand name is needed. Or it may
create a new brand name when it enters a new product category for
which none of its current brand names is appropriate. For example,
Toyota created the separate Lexus brand aimed at luxury car
consumers and the Scion brand targeted toward millennial consumers.