Chapter 8

Products, services and brands: Building

Customer Value
 Products, services and experiences

 Product: anything that can be offered to market for

attention, acquisition, use or consumption that might
satisfy a want or need

 Service: any activity or benefit that one party can offer to

another that is essentially intangible and does not result in
the ownership of anything
Levels of product and services
 Organization, person, place and social
marketing

 Organization marketing: consists of activities undertaken to

create, maintain or change the attitudes and behavior of target
consumers toward an organization.
 Person marketing: consists of activities undertaken to create,
maintain or change the attitudes and behavior of target consumers
toward particular people.
 Place marketing: consists of activities undertaken to create,
maintain or change the attitudes and behavior of target consumers
toward particular places.
 Social marketing: the use of commercial marketing concepts and
tools in programs designed to influence individuals’ behavior to
improve their well being and that of society.
Product and service decisions

 Marketers make product and service decisions

at three levels:

1. Individual product decisions

2. Product line decisions
3. Product mix decisions
Individual Product decisions
 Product attributes
 Product quality: that characteristics of a product or service that bear
on its ability to satisfy stated or implied customer needs. Quality can
be defined as freedom from defects.
 Total quality management (TQM) is an approach in which all of a
company’s people are involved in constantly improving the quality of
products, services and business processes.
 Companies are taking a return on quality approach viewing quality
as an investment and holding quality efforts accountable for bottom
line results.
 Product quality means performance quality- the product's ability to
perform its functions.
 Conformance quality refers to freedom from defects and consistency
in delivering a targeted level of performance.
 Product attributes
 Product features: a product can be offered with varying features.
Features are competitive tool for differentiating the company’s
products from competitor’s products. Being the first producer to
introduce a valued new feature is one of the most effective ways to
compete.
 One way to add customer value is through distinctive product style
and design.
 Style simply describes the appearance of a product. Style can be eye
catching or boring.
 Design is a larger concept than style. Design goes to the very heart of
a product. Good design contributes to a product’s usefulness as well as
to its looks. Design begins with observing customers, deeply
understanding their needs, and shaping their product use experience.
 Branding

 Brand: a name, term, sign, symbol, design or a

combination of these that identifies the products or
services of one seller of group of sellers and
differentiates them from those of competitors.

 The most distinctive skill of professional marketers is

their ability to build and manage brands.
 Packaging

 Packaging: the activities of designing and producing the

container or wrapper for a product.

 Poorly designed packages can cause headaches for

consumers and lost sales for the company where as
innovative packaging can give a company an advantage
over competitors and boost sales.
Packaging

Old packaging New packaging

 Labeling
 The label identifies the product or brand.

 The label might also describe several things such as who made it, where it
was made, when it was made, its contents, how it is to be used, and how to
use it safely.

 It might help to promote brand, support its positioning, and connect with
customers. Labels have become an important element in broader marketing
campaigns.

 Labeling has been affected in recent times by unit pricing (stating the price
per unit of a standard measure), open dating (stating the expected shelf life of
product), and nutritional labeling (stating nutritional values in the product).
 Product support services

 Support services are an important part of the customer’s overall

brand experience.

 Keeping customers happy after sale is the key to building lasting

relationships. It is very important to take care of customers
before, during and after the sale.

 Many companies use a sophisticated support services with a

combination of phone, email, Internet, interactive voice and data
technologies to provide support services that were not possible
before.
 Product line decisions
 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.

 Product line expansion: A company can expand its product line in 2

ways:
1. Product line filling
2. Product line stretching
A company can stretch its line in the following ways:
 Upward
 Downward
 Both upward and downward
 Product mix decisions

 Product mix: the set of all product lines and items that a
particular seller offers for sale
A company’s product mix has four important dimensions:
 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 lines.
 Product mix depth: refers to the number of versions (styles,
sizes, colors, models) offered for each product in the line.
 Product mix consistency: refers to how closely related the
various product lines are in end use, production requirements,
distribution channels or some other way.
 Product mix of a
Men’s clothing store

Men’s Clothing store

Product mix
width

Shirts Pants Suits

Product mix
Casual Formal Sporty
length

6 sizes 6 sizes 8 sizes Product mix

depth

5 colors 5 colors 7 colors

Nature and Characteristics of a service
 Service profit chain
 The chain that links service firm profits with employee ad customer
satisfaction.
 Successful service companies focus their attention both on
employees and customers.

The chain consists of five links:

1. Internal service quality
2. Satisfied and productive service employees
3. Greater service value
4. Satisfied and loyal customers
5. Healthy service profits and growth
Types of service marketing
Building strong brands:
Major brand strategy decisions
 Brand positioning
 Brand positioning: can be done at any of three levels:
1. Companies can position the brand on product attributes.
2. A brand can better positioned by associating its name with a desirable benefit.
3. The strongest brands go beyond attribute or benefit positioning. They are positioned
on strong beliefs and values, engaging customers on a deep, emotional level.

 A brand is the company's promise to deliver a specific set of features, benefits,

services and experiences consistently to buyers.
 The brand promise must be simple and honest. For instance, Hotel Radisson
offers luxurious rooms and a truly memorable experience but do not promise low
price. On the other hand, Grand Prince Hotel in Mirpur offers decent rooms and
services at an affordable price and does not promise expensive furnishings or great
experience.
 Brand name selection
1. Should suggest products benefits and qualities

2. Easy to pronounce, recognize and remember

3. Name should be distinctive

4. Name should be extendable

5. Should easily translate into foreign language

6. Should be capable of registration and legal protection

 Brand protection

 Once the brand name is chosen, it must be protected.

Many firms try to build a brand that eventually gets
identified with the product category.
 For instance, Kleenex, Scotch tape, Ziploc, BAND-AID,
Jell-O etc.

 To protect brands, marketers present them carefully using

the word brand and the registered trademark symbol, as in,
BAND-AID brand adhesive bandages.
 Brand name can be lost if people misuse it.
 Brand sponsorship
A manufacturer has four sponsorship options:

 Manufacturer’s brand: when a product is launched as a national brand or

a manufacturer's brand. For instance, when Samsung sells its own
products under its own brand names (Samsung cell phones, refrigerators,
TVs etc.)
Store brand/distributor brand/private brand: when a brand is
created and owned by a reseller (a wholesaler or a retailer). The retailer
will market the product under its own brand name. Prices for private
brands are usually cheaper than competing brand names. For example,
Great Value Food products (by Walmart) etc.
 Licensing

 Licensing: involves contractual agreement whereby firms can use

logos of other brands, names of well known celebrities or
characters from popular movies and books to market their own
brands for some fixed fees.
 For example, a company using the logo and design of a popular
character, Mickey Mouse, on its products like t-shirts, mugs,
pencil boxes etc.

 Licensed characters range from Disney, Barbie, Star Wars,

Scooby Doo, Hello Kitty to the more recent Dora the Explorer,
Harry Potter etc.
 Currently a number of top selling retail toys are products based on
television shows and movies.
 Co -branding
 Co-branding: the practice of using the established brand names of
two different companies on the same product.

 Co-branding can take advantage of the complementary strengths of

two brands.
 It also allows a company to expand its existing brand into a
category it might otherwise have difficulty entering alone.
Brand development strategies
 Brand development strategies
1. Line extension: extending an existing brand name to new forms, colors, sizes,
ingredients, or flavors of an existing product category. Maggi introducing
Maggi soup of various flavors like creamy chicken, rich tomato, sweet corn,
mixed vegetable etc.

2. Brand extension: extending an existing brand name to new product

categories. For instance: Maggi introducing Maggi soup, Maggi tomato
ketchup, Maggi seasonings, Maggi chicken stocks beside Maggi noodles etc.

3. Multi-brands: extending an existing product category by adding new brand

to it. For example, Unilever soap brands of Lux, Rexona, Dove, Lifebuoy,
Dettol, Cinthol, Pears etc.

4. New brands: extending a product line by adding new product category and
new brand to the existing ones. For instance, Tata motors introducing Tata Ace
brand of pickup trucks.