Kotler13e - Crs - 08 Products Services and Brands Building Customer Value

CHAPTER 8
Chapter Eight
Products, Services, and Brands:

Building Customer Value
Copyright © 2009 Pearson Education, Inc.

Chapter 8 - slide 1
Publishing as Prentice Hall
LEARNING OBJECTIVES
1.Define product and the major distribution of
products and services.
2. Describe the decisions companies make regarding
their individual products and services, product lines,
and product mixes.
3. Discuss branding strategy- the decision
companies make in building and managing their
brands.
4. Identify the four characteristics that affect the
marketing of a service and the additional marketing
considerations that services require.
Copyright © 2010 Pearson Education, Inc. Chapter 8 - slide 2
Product, Services, and
Branding Strategy
Topic Outline
• What Is a Product?
• Product and Services
Decisions
• Branding Strategy:
Building Strong
Brands
• Services Marketing

Chapter 8 - slide 3
What Is a Product?
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
• Products include more than just tangible
objects such as cars, computers or cell
phones.

Chapter 8 - slide 4
What Is a Product?
Products, Services, and Experiences
• Broadly defined, “products” also include

service, events, persons , places ,
organizations , ideas , or mixes of these.
• Services are the form of product that
consists of activities, benefits or
satisfactions offered for sale that are
essentially intangible and don’t result in the
ownership of anything such as Banking
Chapter 8 - slide 5
What Is a Product?
Products , services and experiences
• Product is a key element in the overall

marketing offering, marketing mix planning
begins with building an offering that brings
value to target customers.
• This offering becomes the basis upon which
the company builds profitable customer
relationships
• A company’s market offering includes both
tangible goods and services
Chapter 8 - slide 6
What Is a Product?
• The offer may consist of a pure tangible

good such as soap, toothpaste or salt.
• At the other extreme are the pure services
for which the offer consists primarily of a
service.

Chapter 8 - slide 7
What Is a Product?
• Experiences represent what buying the
product or service will do for the customer
• Experiences have always been an important
part of marketing for some companies
• Companies that market experiences realize
that customers are really buying much more
than just products and services, they are
buying what those offers will do for them

Chapter 8 - slide 8
What Is a Product?
Levels of Product and Services
• Product planners need to think about products
and services on three levels, each level adds
more customer value. The most basic level is
the core customer value, which addresses the
question “ what is the buyer really buying ? “
• When designing products, marketers must first
define the core, problem solving benefits or
services that consumers seek

Chapter 8 - slide 9
What Is a Product?
• At the second level, product planners must

turn the core benefits into an actual product,
they need to develop product and service
features, design, a quality level or a brand
name and packaging.
• For Ex. The BlackBerry is an actual product. Its
name , parts, styling, features have all been
combined to deliver the core customer value
Chapter 8 - slide 10
What Is a Product?
• Finally , product planners must build an

augmented product around the core
benefit and actual product by offering
additional consumer services and benefits.
• For ex. The BlackBerry solution offers more
than just a communication device, it
provides customers with a complete
solution to mobile connectivity problems.
What Is a Product?

What Is a Product?
Product and Service Classifications

What Is a Product?
• Consumer products are products and

services for personal consumption
• Classified by how consumers buy them
– Convenience products
– Shopping products
– Specialty products
– Unsought products

What Is a Product?
• Convenience products are consumer products and

services that the customer usually buys frequently,
immediately, and with a minimum comparison and
buying effort
• Newspapers
• Candy
• Fast food
• They are usually low priced, and marketers place
them in many locations to make them available
when consumers need them
What Is a Product?
• Shopping products are consumer products and

services that the customer compares carefully on
suitability, quality, price, and style
• Furniture
• Cars
• Shopping products marketers distribute their
products through fewer outlets but provide
deeper sales support to help customers in their
comparison efforts.
What Is a Product?
• Specialty products are 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
• Medical services
• Designer clothes
• Buyers normally don’t compare specialty products,
they invest only the time needed to reach dealers
carrying the wanted products
What Is a Product?
• Unsought products are consumer products that

the consumer does not know about or knows
about but does not normally think of buying
• Life insurance
• Funeral services
• Blood donations
• Unsought products require a lot of advertising,
personal selling, and other marketing efforts

What Is a Product?
• Industrial products are 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

What Is a Product?
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

What Is a Product?
Organizations, Persons, Places, and Ideas
• Organization marketing consists of activities

undertaken to create, maintain, or change
attitudes and behavior of target consumers
toward an organization
• Both profit and non profit organization
practice organization marketing
• Business firms sponsor public relations or
corporate image advertising campaign to
market themselves and polish their images
What Is a Product?
• Person marketing
consists of activities
undertaken to create,
maintain, or change
attitudes and behavior of
target consumers toward
particular people.
• People use person
marketing to build their
reputation
What Is a Product
Place marketing consists of activities undertaken to

create, maintain, or change attitudes and
behavior of target consumers toward particular
places
Social marketing is the use of commercial marketing
concepts and tools in programs designed to
influence individuals’ behavior to improve their
well-being and that of society

What Is a Product
• Social marketing programs include public

health campaigns to reduce smoking ,
alcoholism, drug abuse, and obesity
• Other social marketing efforts include
environmental campaign to promote clean air
and conservation
• Still others address issues such as family
planning and human rights and racial equality
Product and Service Decisions
Individual Product and Service Decisions

Product attributes are the benefits of the product

or service
• Quality
• Features
• Style and design

• Quality has a direct impact on product or
service performance, thus , its closely linked to
customer value and satisfaction.
• Quality can be defined as “ freedom from
defects”
• The American society for quality defines quality
as the characteristics of a product or service
that bear on its ability to satisfy stated or
implied customer needs
Product quality includes level and consistency

• Quality level is the level of quality that supports
the product’s positioning
• Conformance quality is the product’s freedom
from defects and consistency in delivering a
targeted level of performance

Product features are a competitive tool for

differentiating a product from competitors’
products
Product features are assessed based on the value to

the customer versus the cost to the company

Style describes the

appearance of the product
Design contributes to a
product’s usefulness as
well as to its looks. It goes
to the very heart of a product

Brand is the name, term, sign, or design—or a

combination of these—that identifies the maker
or seller of a product or service
Brand equity is the differential effect that the brand
name has on customer response to the product
and its marketing

• Branding helps buyers in many ways. Brand

names help consumers identify products
that might benefit them. Brands also say
something about product quality and
consistency
• Buyers who always buy the same brands
know that they will get the same features ,
benefits and quality each time they buy.
Packaging involves designing and

producing the container or
wrapper for a product
The primary function of the
package was to hold and
protect the product

• Labels range from simple tags attached to

products to complex graphics that are part
of the package
• Labels identify the product or brand,
describe attributes, and provide promotion

Product support services augment actual products

• Customer service is another element of the

product strategy. A company’s offer usually
includes some support services, which can
be a minor or a major part of the total
offering.

Product Line Decisions
Product line length is the number of items in the

product line
• Line stretching
• Line filling

Product Mix Decisions
Product mix consists of all
the products and items
that a particular seller
offers for sale
• Width
• Length
• Depth
• Consistency

Branding Strategy: Building Strong Brands
Brand represents the consumer’s perceptions and

feelings about a product and its performance. It is
the company’s promise to deliver a specific set of
features, benefits, services, and experiences
consistently to the buyers

Branding Strategy: Building Strong
Brands
Brand Positioning
Brand strategy decisions

include:
• Product attributes
• Product benefits
• Product beliefs and values

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

Branding Strategy: Building Strong
Brands
Brand Sponsorship
Manufacturer’s brand
Private brand
Licensed brand
Co-brand

Brand Development Strategies

Services Marketing
Nature and Characteristics of a Service

Which of the following is not a special
characteristic of service?
1. Tangibility
2. Inseparability
3. Variability
4. Perishability

Services Marketing
Marketing Strategies for Service Firms
In addition to traditional
marketing strategies, service
firms often require
additional strategies
• Service-profit chain
• Internal marketing
• Interactive marketing

Services Marketing
Service-profit chain links service firm profits with employee

and customer satisfaction
• Internal service quality
• Satisfied and productive service employees
• Greater service value
• Satisfied and loyal customers
• Healthy service profits and growth

Services 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

Services 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

Services Marketing

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
Services Marketing
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
Services Marketing
Managing service productivity refers to the cost side

of marketing strategies for service firms
• Employee recruiting, hiring, and training
strategies
• Service quantity and quality strategies


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CHAPTER 8

Products, Services, and Brands:

Copyright © 2009 Pearson Education, Inc.

Copyright © 2010 Pearson Education, Inc.

• Product is anything that can be offered in a

Copyright © 2010 Pearson Education, Inc.

• Broadly defined, “products” also include

• Product is a key element in the overall

• The offer may consist of a pure tangible

Copyright © 2010 Pearson Education, Inc.

Copyright © 2010 Pearson Education, Inc.

Copyright © 2010 Pearson Education, Inc.

• At the second level, product planners must

• Finally , product planners must build an

Copyright © 2010 Pearson Education, Inc.

Copyright © 2010 Pearson Education, Inc.

• Consumer products are products and

Copyright © 2010 Pearson Education, Inc.

• Convenience products are consumer products and

• Shopping products are consumer products and

• Specialty products are consumer products and

• Unsought products are consumer products that

Copyright © 2010 Pearson Education, Inc.

• Industrial products are products purchased for

Copyright © 2010 Pearson Education, Inc.

Capital items are industrial products that aid in the

Copyright © 2010 Pearson Education, Inc.

• Organization marketing consists of activities

Place marketing consists of activities undertaken to

Copyright © 2010 Pearson Education, Inc.

• Social marketing programs include public

Copyright © 2010 Pearson Education, Inc.

Individual Product and Service Decisions

Product attributes are the benefits of the product

Copyright © 2010 Pearson Education, Inc.

Product quality includes level and consistency

Copyright © 2010 Pearson Education, Inc.

Product features are a competitive tool for

Product features are assessed based on the value to

Copyright © 2010 Pearson Education, Inc.

Style describes the

Copyright © 2010 Pearson Education, Inc.

Brand is the name, term, sign, or design—or a

Copyright © 2010 Pearson Education, Inc.

• Branding helps buyers in many ways. Brand

Individual Product and Service Decisions

Packaging involves designing and

Copyright © 2010 Pearson Education, Inc.

• Labels range from simple tags attached to

Copyright © 2010 Pearson Education, Inc.

Product support services augment actual products

Copyright © 2010 Pearson Education, Inc.

• Customer service is another element of the

Copyright © 2010 Pearson Education, Inc.

Product Line Decisions

Product line length is the number of items in the

Copyright © 2010 Pearson Education, Inc.

Copyright © 2010 Pearson Education, Inc.

Brand represents the consumer’s perceptions and

Copyright © 2010 Pearson Education, Inc.

Brand strategy decisions

Copyright © 2010 Pearson Education, Inc.

Copyright © 2010 Pearson Education, Inc.