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FHBM1124 Marketing Chapter 7-Product and Service Decision Vij
FHBM1124 Marketing Chapter 7-Product and Service Decision Vij
CHAPTER 7
Products, Services, and Brands:
Building Customer Value
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Learning Outcomes
1. Explain the marketing concepts, theories
and strategies in making effective and
efficient marketing decisions.
2. Apply marketing strategies in relation to
consumer needs and the marketplace.
3. Analyse marketing mix elements strategies
to produce the desired response in a given
target market.
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Learning Objectives
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Product-Service
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What is Product?
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What is Service?
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Levels of product and services
⚫Product planners (or creator of the product) need
to think about products and services on three
levels.
⚫Three levels:
⚫Core customer value, which addresses the question,
What is the buyer really buying?
⚫Actual product, the design, functions, brand name
and etc.
⚫Augmented product, which is created around the
core benefit and actual product by offering additional
consumer services and benefits.
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When developing products, marketers first must identify the
core customer value that consumers seeks from the product.
They must then design the actual product and find ways to
augment it in order to create this customer value and the
most satisfying customer experience.
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Example : Apple iPad
⚫Core Benefits:
⚫ Entertainment, self-expression,
productivity and connectivity
⚫Actual Product:
⚫ Brand Name : Apple iPad
⚫ Features : 9.7inch screen, ipad
pencil, multi-touch display, high
fidelity speakers
⚫Augmented Products :
⚫ Product Support : customer enquiry
1800-My Apple
⚫ Warranty : issued by Apple store or
local reseller
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Mini Case
The Philips GC1421 Steam Iron is a uniquely designed
iron that makes household chores simple, fast and
effective. It comes with cutting edge features such as its
non-stick soleplate and specially designed steam holes
to enable easy gliding on all fabrics, self-clean to prevent
scale build up and continuous steam flow up to 17g/min
for better crease removal. The Philips Customer Care
team is ever ready to provide online support via
www.philips.com.my. It also comes with an extended
local warranty of 24 months.
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PRODUCT
&
SERVICE CLASSIFICATION
(A) CONSUMER PRODUCTS
(I)
(II) (III) (IV)
Convenien
Shopping Specialty Unsought
ce
Products Products Products
Products
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(I) Convenience Products
Convenience Products:
▪ Bought frequently and
immediately
▪ Low priced (inexpensive)
▪ Mass advertising
▪ Many purchase locations :
7-eleven
▪ Examples: candy, newspapers,
stationary, soap, cooking oil,
plasters, umbrella and etc.
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(II) Shopping Products
Shopping Products:
▪ Bought less frequently
▪ Higher price compare to
convenience products
▪ Consumer plan & compare
(suitability, quality, price and
style)
▪ Fewer purchase locations: IKEA,
Harvey Norman, KLCC, Mid
Valley, AEON
▪ Spend time & effort (gather info &
compare)
▪ Examples: furniture, appliances,
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clothing
(III) Specialty Products
Specialty Products:
▪ Special purchase efforts (plan the
purchase, know what they want & will
accept no substitutes)
▪ Do not compare the brands
▪ High price
▪ Unique characteristics& Brand
identification
▪ Few purchase locations : Starhill KL,
Pavillion
▪ Example: Rolex watches, Ferrari
car, High-end electronics & Harley
Davidson bikes
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(IV) Unsought Products
Unsought Products:
▪ Are often products consumers do
not want to think about
▪ New innovations are unsought until
consumer aware (advertising)
▪ Require a lot of persuasive
advertising and aggressive personal
selling
▪ Location : Hospital, clinic & etc.
▪ Examples: blood donations, life
insurance, investment, fitted kitchen
& encyclopedia
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Copyright 2007, Prentice-Hall Inc.
(B) Industrial Products
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(I) Product & Service Attributes
• Developing a product or service involves
defining the benefits that it will offer.
• These benefits are communicated and
delivered by product attributes such as
quality, features, and style and design.
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Product Quality Product Features Product Design
• Product quality is • Product features are • Product Style and
creating customer a competitive tool Design is another way
value and satisfaction. for differentiating the to add customer
company’s product value.
(a) Quality level from competitors’
(Performance quality): products.
the ability of a product • Style describes the
to perform its functions. • Feature’s value to appearance of a
consumer Versus product.
(b) Quality cost to company
consistency • Design contributes to
(Conformance • If highly valued in a product’s usefulness
quality): the freedom relation to cost as well as to its looks.
from defects, and feature should be
consistency in added to product.
delivering a targeted • E.g.: User friendly
level of performance. product (easy to hold,
safe and easy to
• E.g.: Rolls-Royce keep)
provide higher
performance quality but
Chevrolet gives similar
conformance quality.
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(II)Branding
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Brand Elements
⚫Brand name: Can be spoken. E.g.: Levi’s, Calvin
Klein, Hilton, & BMW
⚫Brand mark: symbol. E.g.: Yahoo! Graphic, Disney
Mickey character, Nike swoosh logo
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Advantages branding to buyers &
sellers
Buyers Sellers
∙ Brand names help consumers ∙ The brand name becomes the basis
identify products that might on which a whole story can be built
benefit them. about a product. (Basis for
product quality)
∙ Brands say something about
product quality and consistency. ∙ The brand name and trademark
provide legal protection for unique
∙ Loyal customer knows that they will product features.
get the same features, benefits
and quality each time they buy. ∙ The brand name helps the seller to
segment markets.
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(III) Packaging
⚫Packaging involves designing and producing the
container or wrapper for a product.
⚫ Developing a good packaging can:
⮚ Market the brand – to attract customers and compete
with rivals
⮚ Protect the elements – to avoid leakage (Milo)
⮚ Ensure product safety – to make sure the packaging is
free from contamination (facial product)
⮚ Address environmental concerns (recyclable materials)
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(IV) Labeling
⚫Labeling refers to visual labels, symbolic or
textual information (containing pictures, letters
and numbers) about a product for product
identification and recognize.
⚫Labels perform several functions (IDP).
⚫The label identifies the product or brand. (Logo or
brand name)
⚫The label describes several things about the
product. (Company details and ingredients)
⚫The label promotes the brand. (Company logo,
pictures or graphics)
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⚫Labeling has been affected in recent times by rules
and acts of a country:
⚫unit pricing (stating the price per unit of standard
measure),
⚫open dating (stating the expected shelf life of the
product), and
⚫nutritional labeling (stating the nutritional values in
the product).
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(V) Product Support Services
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Branding Strategy: Building Strong Brands
(Brand Equity)
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⚫Example of Brand Equity: Coca-Cola, Disney,
Harley Davidson, Google, and Colgate.
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(I) Brand Positioning
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(IV) Brand Development
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(IV) Brand Development
⚫ Line extension:
⚫ Occur when a company extends existing
brand names to new forms, colors, sizes,
ingredients, or flavors of an existing
product category.
⚫ E.g.: Head & Shoulders shampoo with
different ingredients & benefits.
⚫ Brand extension:
⚫ Extend a current brand name to new or
modified products in a new category.
⚫ When a brand name is successful,
marketers normally use the brand to extend
into new areas.
⚫ E.g.: Kimberly-Clark’s Huggies brand was
extended to toddlers’ toiletries.
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(IV) Brand Development
⚫Multi branding:
⚫Introduce more brands into an
already existing category.
⚫Offers a way to establish different
features and appeal to different
buying motives.
⚫E.g.: Unilever Multi brand company
⚫New brands:
⚫Decide to launch a new brand in
market.
⚫Something ‘new & fresh’ to compete
with other brand.
⚫Developed based on belief that the
power of its existing brand is
declining and a new brand name is
needed.
⚫E.g.: Toyota created Lexus under
43 luxury car category
Discussion Question
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Discussion Question
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Nature and Characteristics of a
Service
A company must consider four service
characteristics when designing marketing programs:
intangibility, inseparability, variability, and
perishability
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Discussion Question
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Discussion Question
Hotels and resorts charge lower prices in the off-
season to offset the ________ of service characteristic.
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3 types of service marketing
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STRUCTURED QUESTION
Q1. Ms Sahana is the owner of the “Best
Chocolate Company” in Perak which
introduced a new chocolate called the “Fruit
Chocolate”. As a marketing consultant, you
have been given the task to look into the
packaging of this new chocolate.
Recommend any THREE (3) relevant
factors that you would consider in
developing a good packaging for this new
product. (6 marks)
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YouTube
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Chapter7
The End
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