Chapter 8

Products, Services, and Brand: Building Customer Value

Principles of Marketing _ Lai Vinh Phuc, MBA

 Learning Outcomes
• Define product and the major classifications of products and services
• Describe the decisions companies make regarding their individidual
products and services
• Identify four characteristics that affect the marketing of services and
the additional marketing considerations that services require
• Discuss branding strategy

Principles of Marketing _ Lai Vinh Phuc, MBA

 Content:
I. Product, Service and Experiences
Consumer Products & Industrial Products
II. Product and Services Decision
III. Services Marketing
IV. Branding Strategy: Building Strong Brands

Principles of Marketing _ Lai Vinh Phuc, MBA

I. Products, Services, & Experiences
1. Definition:
• 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

Principles of Marketing _ Lai Vinh Phuc, MBA

I. Products, Services, & Experiences
2. Level of Products & Services

Principles of Marketing _ Lai Vinh Phuc, MBA

Figure 1: Levels of Product and Services
I. Products, Services, & Experiences
3. Product & Service Classification:

Consumer
products
Industrial
products

Principles of Marketing _ Lai Vinh Phuc, MBA

I. Products, Services, & Experiences
3. Product & Service Classification:
A. Consumer products are products and services bought by final
consumers for personal consumption
• Classified by how consumers buy them
a. Convenience products
b. Shopping products
c. Specialty products
d. Unsought products

Principles of Marketing _ Lai Vinh Phuc, MBA

I. Products, Services, & Experiences
3. Product & Service Classification:
a. Convenience products
• Consumer products and services that the customer usually buys
frequently, immediately, and with a minimum comparison and buying
effort
• Usually low price and located in many areas
• E.g: Newspapers, Candy, Fast Food

Principles of Marketing _ Lai Vinh Phuc, MBA

I. Products, Services, & Experiences
3. Product & Service Classification:
b. Shopping Products
• Consumer products and services that the customer compares carefully on
suitability, quality, price, and style
• Distribute products through fewer outlets but provide deeper sales
support to help customers in their comparison efforts.
• E.g: Furniture, Cars, Appliances, Hotel, Airline Services.

Are clothes considered as shopping products?

Principles of Marketing _ Lai Vinh Phuc, MBA

I. Products, Services, & Experiences
3. Product & Service Classification:
c. Specialty Product
• Consumer products and services with unique characteristics or brand
identification for which a significant group of buyers is willing to make a
special purchase effort
• Buyers do not compare specialty products, but reach dealers carrying the
wanted products
• E.g: Medical services, Designer clothes, Medical Services & High-end electronics
(Audio, Video, Laptop)

Principles of Marketing _ Lai Vinh Phuc, MBA

I. Products, Services, & Experiences
3. Product & Service Classification:
d. Unsought product
• Consumer products that the consumer does not know about or knows
about but does not normally think of buying
• E.g: Life insurance, funeral services, blood donations & cosmetic surgery

Principles of Marketing _ Lai Vinh Phuc, MBA

 Discussion Question
• What is a product that could be convenience, shopping, and specialty?

ANSWER:
Depending on the purchasing situation => how consumers buy them?

Principles of Marketing _ Lai Vinh Phuc, MBA

I. Products, Services, & Experiences
3. Product & Service Classification:
B. 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
Raw materials

Principles of Marketing _ Lai Vinh Phuc, MBA

I. Products, Services, & Experiences
3. Product & Service Classification:
B. Industrial Products:
• Capital: items are industrial products that aid in the buyer’s production
or operations
• Materials and parts: include raw materials and manufactured materials
and parts usually sold directly to industrial users
• Supplies and services: include operating supplies, repair and
maintenance items, and business services

Principles of Marketing _ Lai Vinh Phuc, MBA

I. Products, Services, & Experiences
4. Organizations, Persons, Places, Ideas
a. Organization Marketing:
• Consist of activities undertaken to create, maintain, or change attitudes
and behavior of target consumers toward an organization
• Both profit and non-profit organizations
=> Sponsor public relations or corporate image marketing campaigns for
marketing purposes

Principles of Marketing _ Lai Vinh Phuc, MBA

I. Products, Services, & Experiences
4. Organizations, Persons, Places, Ideas
b. Person Marketing:
• Consists of activities undertaken to create, maintain, or change attitudes
and behavior of target consumers toward particular people
• People ranging from presidents, entertainers, and sports figures to
professionals such as doctors, lawyers, and architects use person
marketing to build their “reputations”

Principles of Marketing _ Lai Vinh Phuc, MBA

I. Products, Services, & Experiences
4. Organizations, Persons, Places, Ideas
b. Person Marketing:
• Consists of activities undertaken to create, maintain, or change attitudes
and behavior of target consumers toward particular people
• People ranging from presidents, entertainers, and sports figures to
professionals such as doctors, lawyers, and architects use person
marketing to build their “reputations”

Principles of Marketing _ Lai Vinh Phuc, MBA

I. Products, Services, & Experiences
4. Organizations, Persons, Places, Ideas
c. Place Marketing:
• Consists of activities undertaken to create, maintain, or change attitudes
and behavior of target consumers toward particular places.
• Cities, states, regions, and even entire nations compete to attract
tourists, new residents, conventions, and company offices and factories.
d. 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.
• Cover wide range of issues in society.
Principles of Marketing _ Lai Vinh Phuc, MBA
II. Product and Service Decisions

Figure 2: Individual Product & Service Decisions

Principles of Marketing _ Lai Vinh Phuc, MBA

II. Product and Service Decisions
1. Product or service attributes
• Communicate and deliver the benefits
a. Quality
b. Features
c. Style and Design

Principles of Marketing _ Lai Vinh Phuc, MBA

II. Product and Service Decisions
1. Product or service attributes
a. Quality:
• Product Quality Level is the level of quality that supports the product’s
positioning
=> Reflect the Performance Quality
• Product Conformance Quality is the product’s freedom from defects
and consistency in delivering a targeted level of performance
=> Reflect the Consistency in delivering the expected quality

Principles of Marketing _ Lai Vinh Phuc, MBA

II. Product and Service Decisions
1. Product or service attributes
b. Features:
• Are a competitive tool for differentiating a product from competitors’
products
• Are assessed based on the value to the customer versus the cost to the
company
• E.g: Adidas Boost
https://www.youtube.com/watch?v=hrXaFhkTsWo
https://www.youtube.com/watch?v=H9nlNnjRx9w

Principles of Marketing _ Lai Vinh Phuc, MBA

 Discussion Question
If the product is well-qualified, do manufacturer require to add more
features to it? How can they identify new features?
ANSWER:
• It should periodically survey buyers who have used the product and ask
these questions:
- How do you like the product?
- Which specific features of the product do you like most?
- Which features could we add to improve the product?
=> The answers to these questions provide the company with a rich list of
feature ideas.
Principles of Marketing _ Lai Vinh Phuc, MBA
II. Product and Service Decisions
1. Product or service attributes
c. Style and Design
• Style describes the appearance of the product
• Design contributes to a product’s usefulness as well as to its looks

Between style and design, which is more important?

https://www.youtube.com/watch?v=tUIeUi-zYro
https://www.youtube.com/watch?v=NAaW6GSVaCE

Principles of Marketing _ Lai Vinh Phuc, MBA

II. Product and Service Decisions
2. Branding
• Brand is the name, term, sign, or design—or a combination of these—that
identifies the maker or seller of a product or service.
• Enhancing quality & consistency (segmentation, positioning,
communication product features) => brand’s meaning > physical attributes
• Help consumers to identify brand name. Support sellers in legal protection
for unique product features
• How to come up with a brand name? https://www.youtube.com/watch?v=4CaB_dSMHcU

Principles of Marketing _ Lai Vinh Phuc, MBA

Principles of Marketing _ Lai Vinh Phuc, MBA
II. Product and Service Decisions
3. Packaging
• Packaging involves designing and producing the container or wrapper for a
product
• Past: function to protect the product
=> Now: becoming sale tasks
=> Create consumer recognition of a brand
=> Boosting Sales
• E.g:

Principles of Marketing _ Lai Vinh Phuc, MBA

 Packaging has its own purposes

Principles of Marketing _ Lai Vinh Phuc, MBA

II. Product and Service Decisions
4. Labelling
• Labels identify the product or brand, describe attributes, and provide
promotion.
• Supporting brand’s positioning and adding personality to the brand.
• “What are on the label?”
• Misleading labelling: https://www.youtube.com/watch?v=JXDo-73uaAI&t=94s

Principles of Marketing _ Lai Vinh Phuc, MBA

 Logo on label

Principles of Marketing _ Lai Vinh Phuc, MBA

II. Product and Service Decisions
5. Product Support Services
• Support services are an important part of the customer’s overall brand
experience.
• Using a sophisticated mix of phone, e-mail, Internet, and interactive voice
and data technologies to provide support services.
• Help companies to:
+ Assess the value of current services to obtain ideas for new ones.
+ Assess the costs of providing these services.
+ Develop a package of services to satisfy customers and provide profit to the
company
https://www.youtube.com/watch?v=6J5NFj1xuUw

Principles of Marketing _ Lai Vinh Phuc, MBA

II. Product and Service Decisions
5. Product Support Services
a. Product Line Decisions:
• Product line is 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.
=> Adding items to product line => Increasing profit

Principles of Marketing _ Lai Vinh Phuc, MBA

II. Product and Service Decisions
5. Product Support Services
b. Product Line Length:
• The number of items in the product line
• Line filling: adding more items within the present line
Pros: extra profits, satisfying dealers, utilize capacity
Cons: cannibalization & confusion
• Line stretching: occur when the line is beyond its current range
Stretching upward & downward

Principles of Marketing _ Lai Vinh Phuc, MBA

II. Product and Service Decisions
5. Product Support Services
c. Product Mix Decisions:
• Product mix width is the number of different product lines the company
carries.
• Product mix length is the total number of items the company carries
within its product lines.
• Product mix depth is the number of versions offered of each product in
the line.
• Consistency is how closely the various product lines are in end use,
production requirements, or distribution channels.
• E.g: Sony
Principles of Marketing _ Lai Vinh Phuc, MBA
III. Services Marketing
1. Types of Service Industries:
• Government: offer services through courts, employment services,
hospitals, military services, police and fire departments, the postal
service, and schools
• Private not-for-profit organizations: offer services through museums,
charities, churches, colleges, foundations, and hospitals
• Business services: offer services—airlines, banks, hotels, insurance
companies, consulting firms, medical and legal practices,
entertainment and telecommunications companies, real-estate firms,
retailers, and others

Principles of Marketing _ Lai Vinh Phuc, MBA

III. Services Marketing
2. The Nature and Characteristics of a Service:

Figure 3: The Nature & Characteristics of a Service

Principles of Marketing _ Lai Vinh Phuc, MBA
III. Services Marketing
3. Marketing Strategies for Service Firms:
• In addition to traditional marketing strategies, service firms often
require additional strategies; 4P+3P
a. Service-profit chain
b. Internal marketing
c. Interactive marketing

Principles of Marketing _ Lai Vinh Phuc, MBA

III. Services Marketing
3. Marketing Strategies for Service Firms
a. Service-profit chain:
• links service firm profits with frontline-employee and customer
satisfaction
• Internal service quality
• Satisfied and productive service employees:
• Greater service value:
• Satisfied and loyal customers:
• Healthy service profits and growth: superior service firm performance

Principles of Marketing _ Lai Vinh Phuc, MBA

III. Services Marketing
3. Marketing Strategies for Service Firms
b. Internal Marketing:
• Internal marketing means that the service firm must orient and
motivate its customer contact employees and supporting service
people to work as a team to provide customer satisfaction
• Internal marketing must precede external marketing

Principles of Marketing _ Lai Vinh Phuc, MBA

III. Services Marketing
3. Marketing Strategies for Service Firms
c. Interactive Marketing:
• Interactive marketing means that service quality depends heavily on the
quality of the buyer-seller interaction during the service encounter
• Service differentiation, Service quality & Service productivity

Principles of Marketing _ Lai Vinh Phuc, MBA

 Managing Service Differentiation
• Managing service differentiation creates a competitive advantage
from the offer, delivery, and image of the service.
• Offer can include distinctive features.
• Delivery can include more able and reliable customer contact people,
environment, or process.
• Image can include symbols and branding.

Principles of Marketing _ Lai Vinh Phuc, MBA

 Managing Service Quality
• Managing service quality provides a competitive advantage by
delivering consistently higher quality than its competitors
• Service quality always varies depending on interactions between
employees and customers
• E.g: Bamboo vs Vietjet (Proactive customer communication team)

Principles of Marketing _ Lai Vinh Phuc, MBA

 Managing Service Productivity
• Managing service productivity refers to manage the cost side of marketing
strategies for service firms
• Through employee recruiting, hiring, and training strategies
• Service quantity and quality strategies
• E.g: Check in kiosks vs Online checking vs Personal Counter Service
=> Improving Service quality -> Improving productivity

Principles of Marketing _ Lai Vinh Phuc, MBA

IV. Brand Strategy: Building Strong Brands
1. Brand Equity
• The differential effect that knowing the brand name has on customer
response to the product or its marketing.
• Dimensions of brand equity in consumer perception:
+ Differentiation (what makes the brand stand out),
+ Relevance (how consumers feel it meets their needs),
+ Knowledge (how much consumers know about the brand), and
+ Esteem (how highly consumers regard and respect the brand)
=> Competitive Advantages: brand awareness, loyalty, more leverage &
customer equity

Principles of Marketing _ Lai Vinh Phuc, MBA

IV. Brand Strategy: Building Strong Brands

Figure 4: Major Brand Strategy Decisions

Principles of Marketing _ Lai Vinh Phuc, MBA

IV. Brand Strategy: Building Strong Brands
2. Building Strong Brands
a. Brand Positioning:
• Position the brands clearly in target customers’ minds
• Positioning brands at 3 levels:
+ Product attributes: from product features (easy to copy by competitors)
+ Product benefits: customer service and support
+ Product beliefs and values: strong emotional connection with the brand.
=> Promise to deliver a specific set of features, benefits, services, and
experiences consistently to buyers -> “Lovemark”
E.g:
Principles of Marketing _ Lai Vinh Phuc, MBA
IV. Brand Strategy: Building Strong Brands
2. Building Strong Brands
b. Brand Name Selection:
• Providing “Desirable qualities”
o Suggest benefits and qualities
o Easy to pronounce, recognize, and remember
o Distinctive
o Extendable
o Translatable for the global economy
o Capable of registration and legal protection

Principles of Marketing _ Lai Vinh Phuc, MBA

IV. Brand Strategy: Building Strong Brands
2. Building Strong Brands
c. Brand Sponsorship:
• Manufacturer’s brand (National brand) vs Private brand (Store Brand)
- How these brands compete?
• Licensed brand: take years and spend millions to create their own brand
names
• Co-brand: occurs when two established brand names of different companies
are used on the same product
Pros: Taking strength from 2 brands, expanding category on both sides
Cons: Required legal contracts and licenses
https://www.youtube.com/watch?v=sl6Pebtcpz4
Principles of Marketing _ Lai Vinh Phuc, MBA
IV. Brand Strategy: Building Strong Brands
2. Building Strong Brands
c. Brand Development

Figure 5: Brand Development Strategies

Principles of Marketing _ Lai Vinh Phuc, MBA
 Recap
 Product, Service and Experiences
Consumer Products & Industrial Products
 Product and Services Decision
 Services Marketing
 Branding Strategy: Building Strong Brands

Principles of Marketing _ Lai Vinh Phuc, MBA

 Next Week
Chapter 10: Pricing – Understanding & Capturing Customer Value

Principles of Marketing _ Lai Vinh Phuc, MBA