Product and Services Concepts

Product and Services Concepts
Chapter 8
Prepared by
Deborah Baker
Texas Christian University
Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 1

©2005 South-Western/Thomson Learning
Learning Objectives
1. Define the term product.
2. Classify consumer products.
3. Discuss the importance of services to the

economy.
4. Discuss the differences between services

and goods.

Learning Objectives (continued)
5. Define the terms product items, product

line, and product mix.
6. Describe marketing uses of branding
7. Describe marketing uses of packaging

and labeling.
8. Describe how and why product warranties

are important marketing tools.
1 Learning Objective
On
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http://www.coleman.com
http://www.coleman.com
Define the term

product.

1 Product
Everything, both favorable and

unfavorable, that
a person receives
in an exchange.

1 What Is a Product?
Product is the Product

“heart” of
Marketing Mix
Price Promotion
Place (Distribution)
Classify
consumer products.

2 Product Classifications
A
A product
product used
used toto manufacture
manufacture otherother
Business
Business goods
goods or
or services,
services, to
to facilitate
facilitate an
an
Product
Product organization’s
organization’s operations,
operations, or or to
to resell
resell
to
to other
other consumers.
consumers.
Consumer
Consumer Product
Product bought
bought to
to satisfy
satisfy an
an
Product
Product individual’s
individual’s personal
personal wants
wants

2 Types of Consumer Products
PRODUCTS
PRODUCTS
Consumer
Consumer Business
Business
Products
Products Products
Products
Convenience
Convenience Shopping
Shopping Specialty
Specialty Unsought
Unsought
Products
Products Products
Products Products
Products Products
Products

2 Types of Consumer Products
Convenience
Convenience AArelatively
relativelyinexpensive
inexpensiveitem
itemthat
that
Product merits
meritslittle
littleshopping
shoppingeffort.
effort.
Product
Shopping AAproduct
productthat
thatrequires
requirescomparison
comparison
Shopping shopping,
shopping,because
becauseititis
isusually
usuallymore
more
Product
Product expensive
expensiveand
andfound
foundininfewer
fewerstores.
stores.
Specialty AAparticular
particularitem
itemthat
thatconsumers
consumers
Specialty search
searchextensively
extensivelyfor
forand
andare
are
Product
Product reluctant
reluctantto
toaccept
acceptsubstitutes.
substitutes.
Unsought AAproduct
productunknown
unknowntotothe
thepotential
potential
Unsought buyer
buyeror
oraaknown
knownproduct
productthat
thatthe
the
Product
Product buyer
buyerdoes
doesnot
notactively
activelyseek.
seek.
Discuss the
importance of
services to the
economy.

3 Service
The result of applying human

or mechanical efforts to
people or objects.

3 The Importance of Services
79%
79% of
of workers
workers are
are in
in
service
service sector
sector
Services
Services account
account for
for
76%
76% of
of U.S.
U.S. GDP
GDP
Service
Service occupations
occupations willwill be
be
responsible
responsible for
for all
all net
net job
job
growth
growth through
through 2005
2005

Service-Producing Industries
3
and Job Growth

Discuss the
differences between
services and goods.

4 How Services Differ from Goods
On
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http://www.nationalamusements.com
http://www.nationalamusements.com
http://www.amctheatres.com
http://www.amctheatres.com
http://www.movietickets.com
http://www.movietickets.com
Services
Services
Are
AreIntangible
Intangible Performances
Performances
Services
ServicesAre
AreProduced
Producedand
and Consumed
Consumed
Simultaneously
Simultaneously
Services
ServicesHave
HaveGreater
Greater Variability
Variability
Services
Services Are
Are Perishable
Perishable
Define the terms

product item,
product line,
and product mix.

5 Product Items, Lines, and Mixes
A
A specific
specific version
version of
of aa product
product
that
that can
can be
be designated
designated as as aa
Product
Product Item
Item distinct
distinct offering
offering among
among anan
organization’s
organization’s products.
products.
A
A group
group of
of closely-related
closely-related
Product
Product Line
Line product
product items.
items.
All
All products
products that
that an
an
Product
Product Mix
Mix organization
organization sells.
sells.

5 Gillette’s Product Lines and Mix
Width of the product mix

Depth of the product lines
Blades and Writing

razors Toiletries instruments Lighters
Mach 3 Series Paper Mate Cricket

Sensor Adorn Flair S.T. Dupont
Trac II Toni
Atra Right Guard
Swivel Silkience
Double-Edge Soft and Dri
Lady Gillette Foamy
Super Speed Dry Look
Twin Injector Dry Idea
Techmatic Brush Plus

5 Benefits of Product Lines
Advertising
Advertising Economies
Economies
Package
Package Uniformity
Uniformity
Standardized
Standardized
Components
Components
Efficient
Efficient Sales
Sales and
and
Distribution
Distribution
Equivalent
Equivalent Quality
Quality
5 Product Mix Width
The number of product lines

an organization offers.
 Diversifies risk
 Capitalizes on
established reputations
5 Product Line Depth
The number of product items

in a product line.
 Attracts buyers with different
preferences
 Increases sales/profits by further
market segmentation
 Capitalizes on economies of scale
 Evens out seasonal sales patterns
5 Adjustments
On
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http://www.unilever.com
http://www.unilever.com
Adjustments
Adjustments toto
Product
ProductItems,
Items,
Lines,
Lines, and
andMixes
Mixes
Product
Product Line
Line
Product
Product Extension
Extension or
or
Modification
Modification Contraction
Contraction
Product
Product
Repositioning
Repositioning

5 Types of Product Modifications
Quality
Quality
Modification
Modification
Functional
Functional
Modification
Modification
Style
Style
Modification
Modification
5 Planned Obsolescence
The practice of modifying

products so those that
have already been sold
become obsolete before they
actually need replacement.

5 Repositioning
Why
Whyreposition
reposition
established
establishedbrands?
brands?
Changes
Changes in
in
Changing
Changing Social
Social
Demographics
Demographics Environment
Environment
Declining
Declining Sales
Sales

5 Product Line Extension
Adding additional products to

an existing product line in
order to compete more
broadly in the industry.

5 Product Line Contraction
Symptoms
Symptoms ofof
Product
Product Line
Line
Overextension
Overextension
 Some products have low sales or
cannibalize sales of other items
 Resources are disproportionately allocated
to slow-moving products
 Items have become obsolete because of
new product entries
Describe marketing
uses of branding.

6 Brand
A name, term, symbol,

design, or combination
thereof that identifies a
seller’s products and
differentiates them from
competitors’ products.

6 Branding
Brand
Brand That
That part
part of
of aa brand
brand that
that can
can be
be spoken,
spoken,
Name
Name including
including letters,
letters, words,
words, and
and numbers.
numbers.
Brand
Brand The
The elements
elements of
of aa brand
brand that
that
Mark
Mark cannot
cannot be
be spoken.
spoken.
Brand
Brand The
The value
value of
of company
company and
and brand
brand names.
names.
Equity
Equity

6 Benefits of Branding
On
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http://www.tide.com
http://www.tide.com
Product
Product New
New Product
Product
Repeat
Repeat Sales
Sales
Identification
Identification Sales
Sales

6 An Effective Brand Name
 Is easy to pronounce
 Is easy to recognize and remember
 Is short, distinctive, and unique
 Describes the product, use, and benefits
 Has a positive connotation
 Reinforces the product image
 Is legally protectable

6 The World’s Most Valuable Brands

6 Branding Strategies
Brand
Brand No
No Brand
Brand
Manufacturer’s
Manufacturer’s Private
Private Brand
Brand
Brand
Brand
Individual
Individual Family
Family Combi-
Combi- Individual
Individual Family
Family Combi-
Combi-
Brand
Brand Brand
Brand nation
nation Brand
Brand Brand
Brand nation
nation

6 Generic Brand
A no-frills, no-brand-name,
low-cost product that is simply
identified by its product
category.

Manufacturers’ Brands Versus
6
Private Brands
Manufacturers’
Manufacturers’ The
The brand
brand name
name of
of aa
Brand
Brand manufacturer.
manufacturer.
A
A brand
brand name
name owned
owned by by aa
Private
Private wholesaler
wholesaler or
or aa retailer.
retailer. Also
Also
Brand
Brand known
known as
as aa private
private label
label or
or store
store
brand.
brand.

Advantages of
6
Manufacturers’ Brands
 Develop customer loyalty

 Attract new customers
 Enhance prestige
 Offer rapid delivery, can carry less
inventory
 Ensure dealer loyalty

Advantages of
6
Private Brands
 Earn higher profits

 Less pressure to mark down prices
 Manufacturer may drop a brand or
become a direct competitor to dealers
 Ties customer to wholesaler or retailer
 No control over distribution of
manufacturers’ brands

Individual Brands Versus
6
Family Brands
Individual
Individual Using
Using different
different brand
brand names
names for
for
Brand
Brand different
different products.
products.
Marketing
Marketing several
several different
different
Family
Family products
products under
under the
the same
same
Brand
Brand brand
brand name.
name.

6 On
OnLine
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http://www.postcereal.com
http://www.postcereal.com
Cobranding
http://www.quakeroats.com
http://www.quakeroats.com
Types
Typesof
of Cobranding
Cobranding
Ingredient
Ingredient Complementary
Complementary
Branding
Branding Branding
Branding
Cooperative
Cooperative
Branding
Branding

6 Trademarks
A Trademark is the
exclusive right to
use a brand
 Many parts of a brand and associated

symbols qualify for trademark protection
 The mark has to be continuously

protected
 Rights continue for as long as it is used

Describe marketing
uses of packaging
and labeling.

7 Packaging
Contain
Contain and
and Protect
Protect
Promote
Promote
Functions
Functions
of
of
Facilitate
Facilitate Storage,
Storage, Use,
Use, Packaging
Packaging
and
and Convenience
Convenience
Facilitate
Facilitate Recycling
Recycling

7 Labeling
On
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Line
http://www.fda.gov
http://www.fda.gov
Persuasive
Persuasive Informational
Informational
 Focuses on  Helps make proper

promotional selections
theme
 Lowers cognitive
 Information is dissonance
secondary
 Includes use/care
7 Universal Product Codes
A series of thick and thin

vertical lines (bar codes),
readable by computerized
optical scanners, that
represent numbers used
to track products.

Describe how and

why product
warranties are
important marketing
tools.

8 Product Warranties
AAconfirmation
confirmationof
ofthe
thequality
qualityor
or
Warranty
Warranty performance
performanceofofaagood
goodororservice.
service.
Express
Express AAwritten
Warranty writtenguarantee.
guarantee.
Warranty
An
Anunwritten
unwrittenguarantee
guaranteethatthatthe
the
Implied
Implied good
goodor
orservice
serviceis
isfit
fitfor
forthe
thepurpose
purpose
Warranty
Warranty for
forwhich
whichititwas
wassold.
sold.(UCC)
(UCC)

8 Product Warranties
On
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Line
http://www.landsend.com
http://www.landsend.com
http://www.llbean.com
http://www.llbean.com
Express
Express Written Guarantee
Warranty
Warranty
Warranties
Warranties
Implied
Implied Unwritten Guarantee
Warranty
Warranty


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Product and Services Concepts

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 1

1. Define the term product.

2. Classify consumer products.

3. Discuss the importance of services to the

4. Discuss the differences between services

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 2

5. Define the terms product items, product

6. Describe marketing uses of branding

7. Describe marketing uses of packaging

8. Describe how and why product warranties

Define the term

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 4

Everything, both favorable and

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 5

Product is the Product

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 7

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 8

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 9

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 11

The result of applying human

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 12

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 13

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 14

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 15

Define the terms

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 17

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 18

Width of the product mix

Blades and Writing

Mach 3 Series Paper Mate Cricket

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 19

The number of product lines

The number of product items

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 23

The practice of modifying

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 25

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 26

Adding additional products to

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 27

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 29

A name, term, symbol,

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 30

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 31

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 32

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 33

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 34

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 35

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 36

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 37

 Develop customer loyalty

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 38

 Earn higher profits

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 39

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 40

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 41

 Many parts of a brand and associated

 The mark has to be continuously

 Rights continue for as long as it is used

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 42

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 43

Chapter 8 Essentials of Marketing 4e Lamb Hair McDaniel 44

 Focuses on  Helps make proper