Chapter No 8 Product Service and Brands

Chapter 8: Product, Services and Brands:
Building Customer Value

Principles of Marketing, 13th South Asian Edition, Kotler and Armstrong et al.
Lecturer: Ambreen Bashir

Institute of Business Managment
Karachi
What Is a Product?
Products, Services, and Experiences
 A product is anything that can be offered in a
market for attention, acquisition, use, or
consumption that might satisfy a need or want.
E.g. soap, toothpaste
It includes physical objects, services, persons,
places, organizations, and ideas.
What Is a Product?
 Service is a form of product that consists of
activities, benefits, or satisfactions offered for
sale that are essentially intangible and do not
result in ownership.
E.g., Doctor’s exam, legal advice
What Is a Product?
 Experiences represent what buying the
product or service will do for the customer.
 E.g., Disney, Lego, Toys “R” Us
© Audry Drapier
© Bradley Johnson
What Is a Product?
Levels of Products
and Services
• Core benefits
• Actual product
• Augmented
product
What Is a Product?
The core, actual, and augmented levels of Microsoft’s
Windows XP Professional operating software:
Core – A software application that enables a PC to function
Actual – A well-designed, high-quality, branded, and packaged
computer operating system that provides a variety of features that
are important to the user
Augmented – An operating system software application that offers a
series of channel and consumer services. The channel member can
obtain favorable pricing and credit terms, training, engineering
support, etc. The consumer can get online support, version updates,
access to forums and communities, etc.
What Is a Product?
Discussion: The core, actual, and augmented levels of an
automobile???
Core –
Actual –
Augmented –
What Is a Product?
Discussion: The core, actual, and augmented levels of an
automobile???
Core – Transportation, Carrying Cargo, Excitement, Image
Enhancement
Actual – Engine Size, Color, Interior design, Body size, Body
Style, Options Available, Model Name (Corolla, Honda
City), Workmanship
Augmented – 4-year, 80,000 km. bumper to bumper
warranty, Dealer Repair and repair department, Toll-free
customer complaint number, customer problem policies,
free oil change
What Is a Product?
Product and Service Classifications (Table 8.1)
 Consumer products
 Industrial products
What Is a Product?
Product and Service Classifications
 Consumer products are products and services
bought by final consumers 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
What Is a Product?
 Shopping products are consumer products and
services that the customer compares carefully on
suitability, quality, price, and style.
Furniture
Used cars
Appliances
Hotel and Airline services
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.
Designer watches
Branded fashion wear
High-end electronics
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,
until need arises
Life insurance
Funeral services
Blood donations
Retirement plans
What Is a Product?
Discussion: Classify the following consumer products
 A laptop computer
 A surgeon
 Automobile tires
What Is a Product?
 A laptop computer – shopping good: most people purchase a
laptop infrequently, and when they purchase it, they usually conduct
extensive research and comparison of brands and features
 A surgeon – Specialty good: There is usually little comparison
between doctors as most patients collect only a few names
 Automobile tires – it depends on the individual and the situation.
If a consumer has a luxury brand of car and will consider only
“designer” tires, this is a specialty good; for most consumers, tires are
a shopping good, and they will be heavily influenced by price and
brand name; in some situations, the tires could be an unsought
good.
If one was traveling and had a flat tire in an unknown area he would
probably be towed to a local station and with little product
knowledge, agree to a tire carried by the local station
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 items
Supplies and services
What Is a Product?
 Materials and parts include raw materials and
manufactured materials and parts usually sold
directly to industrial users.
Wheat
Lumber
Iron
Cement
What Is a Product?
 Capital items are industrial products that aid in
the buyer’s production or operations.
Buildings
Elevators
Computers
What Is a Product?
 Supplies and Services include operating
supplies, and repair and maintenance items, as
well as maintenance and repair services and
business advisory services.
Copy papers
Stationary
Training service
Market research/Advertising service
Product Classifications:
Marketable Entities
Organizations
Persons
Places
Business site
marketing
Tourism marketing
Ideas
Social marketing
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.
• Image Advertising
What Is a Product?
• Person marketing consists of activities
undertaken to create, maintain, or change
attitudes and behavior of target consumers
toward particular people.
• Politicians
• CEO’s
• Entertainers
• Sports figures
What Is a Product? © Jeff Christiansen
Organizations, Persons, Places,

and Ideas
 Place marketing consists of
activities undertaken to create,
maintain, or change attitudes
and behavior of target consumers
toward particular places.
Tourism, e.g. the Great Wall of
China, Walt Disney World,
Tourism Australia
What Is a Product?
 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.
Public health campaigns
Product and Service Decisions
Individual Product & Service Decisions – A single
product
Product Line Decisions - A group of related
products
Product Mix Decisions – The set of product lines and
items offered to customers by a particular seller
These tools helps the planner to properly view the
product so it can achieve competitive superiority
and better product strategy.
Individual Product and Service Decisions
 Product attributes
 Branding
 Packaging
 Labeling
 Product support services
 Product attributes are the benefits of the
product or service
Quality
Features
Style and design
 Define “Quality” in terms of the lack of defects or
creating customer value and satisfaction
 Quality level is the level of quality that supports the
product’s positioning.
– Performance quality is the ability of a product to
perform its functions.
– Conformance consistency is freedom of defects and
consistency in delivering a targeted level of
performance.
 Product features are a competitive tool for
differentiating a product from competitors’ products
Assessed based on the value to the customer versus the cost to the
company.
 Product style and design add value to customer value.
– Style describes the appearance of the product.
– Design contributes to a product’s usefulness as well as to its looks.
 Brand is the name, term, sign, or design, or a
combination of these, that identifies the
maker or seller of a product or service.
Branding
Buyer’s viewpoint Seller’s viewpoint
• Gives personality • Basis of product story
• Helps find products • Gives legal protection
with desired benefits • Helps in segmenting
• Aids repeat purchase markets
• Suggests quality of • Symbol of ongoing
product promise
 Packaging involves designing and producing the
container or wrapper for a product.
 Label identifies the product or brand, describes
attributes, and provides promotion.
 Product support services augment actual products.
Companies must continually:
– 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
Packaging:
Developing a Good Package
Reinforce positioning
• “The 5th P”
Competitive advantage
• Primary container
Packaging concept
• Secondary package
Product safety
“Green” packaging
• Shipping package
• Labelling
• Contains and protects
product
• As a marketing tool
Labelling:
Key Functions
• Identify product or brand
• Describe product characteristics
• Provide promotional and design elements
• Legal and ethical issues
– Avoid misleading or dangerous practices
– Consumer Packaging and Labelling Act
– Weights and Measures Act
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.
Selected Proctor and Gamble Products
Product Mix Width
Fabric Care Household Personal Deodorants
Care Cleaning
Ivory Snow Ivory Ivory Secret
Product Dryel Comet Camay Sure
Line Tide Mr. Clean Olay Old Spice
Length
Joy Swiffer Coast
Cheer Zest
Oxydol Safeguard
 Product line length is the number of items in
the product line.
 Product line can be lengthened in two ways:
– Line stretching (lengthen beyond its current range)
– Line filling (adding more items within the present
range of the line)
 Product line stretching is when a company
lengthens its product line beyond its current
range.
Downward
Upward
Combination of both
Line stretching
 Downward product line stretching is used by companies
at the upper end of the market to plug a market hole or
respond to a competitor’s attack.
 Upward product line stretching is by companies at the
lower end of the market to add prestige to their current
products.
 Combination line stretching is used by companies in the
middle range of the market to achieve both goals of upward
and downward line stretching.
 Product line filling occurs when companies
add more items within the present range of the
line.
More profits
Satisfying dealers
Excess capacity
Plugging holes to fend off competitors
Product Mix Decisions
 Product mix consists of all the product lines and
items that a particular seller offers for sale.
Width
Length
Depth
Consistency
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.
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:
• Brand equity is the positive differential effect
that knowing the brand name has on customer
response to the product or service. – The extent
to which customers are willing to pay more for the
brand
• Customer equity is the value of the customer
relationships that the brand creates. – A powerful
brand forms a basis for building strong and profitable
customer relationships
• Brand valuation is the process of estimating
the total financial value of the brand.
Branding Strategy:
 Brand strategy decisions include:

Brand positioning
Brand name selection
Brand sponsorship
Brand development
Branding Strategy:
Brand Positioning
 Position brands at any of three levels:
– Product attributes (Giordano is positioned by each season’s assortment
of styles, colors and low price)
– Product benefits (Giordano save your money through its great price and
time through its assortment of products for the whole family)
– Product beliefs and values (Giordano also positions itself as fun. Its ads
are somewhat silly at times and always show the models having a lot of fun
wearing Giordano clothes. This is different from other retailers who
advertise using model with intense, serious, and seductive facial
expressions)
Branding Strategy:
Brand Name Selection
 Desirable qualities
Suggests benefits and qualities
Easy to pronounce, recognize, and remember
Distinctive
Extendable
Translatable for the global economy
Capable of registration and legal protection
Branding Strategy:
Brand Sponsorship
 Manufacturer’s brand
 Private brand
 Licensed brand
 Co-brand
Co-Branded Differentiator
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Branding Strategy:
Brand Sponsorship
Private brands provide retailers with advantages.
 Product mix control
 Slotting fees for manufacturers’ brands
 Higher margins
 Exclusivity
Branding Strategy:
Brand Development
In terms of Brand name & Product category
 Line extensions
 Brand extensions
 Multibrands
 New brands
Branding Strategy:
Brand Development
 Line extensions occur when a company extends
existing brand names to new forms, colors, sizes,
ingredients, or flavors of an existing product
category.
Branding Strategy:
Brand Development
 Brand extensions extend a brand name to a
new or modified product in a new category.
Branding Strategy:
Brand Development
 Multibrands are additional brands in the same
category.
Branding Strategy:
Brand Development
 New brands are used when existing brands are
inappropriate for new products in new product
categories or markets.
© Ged Carroll
© Nate Grigg
1970s-1990s 2000 and beyond

Sony's Trinitron Color TV Sony’s BRAVIA widescreen LCD TV
Branding Strategy:
Managing Brands
 Requires:
Continuous brand communication
Customer-centered training
Brand audits
Services Marketing
Types of Service Industries
Service industries vary greatly:
 Government – courts, employment services, hospitals,
military services, police and fire department, postal
services, and schools
 Private not-for-profit organizations – Museums,
charities, churches, colleges, foundations, and hospitals
 Business services
Services Marketing
Nature and Characteristics of a Service
 Intangibility
 Inseparability
 Variability
 Perishability
Services Marketing
Nature and Characteristics of a Service
 Intangibility refers to the fact that services cannot be
seen, tasted, felt, heard, or smelled before they are
purchased.
 Inseparability refers to the fact that services cannot be
separated from their providers.
 Variability refers to the fact that service quality depends
on who provides it as well as when, where, and how it is
provided.
 Perishability refers to the fact that services cannot be
stored for later sale or use.
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.
 Three major marketing tasks
 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.
The first step is to empower employees Responsibility,
Authority and Incentives they need to recognize, care
about, and tend to customer needs
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 No 8 Product Service and Brands

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Chapter 8: Product, Services and Brands:

Building Customer Value

Lecturer: Ambreen Bashir

Organizations, Persons, Places,

 Product mix length is the total number of

 Consistency is how closely the various product

 Brand represents the consumer’s perceptions

 Brand strategy decisions include:

WestinWORKOUT powered by Reebok

1970s-1990s 2000 and beyond

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