Mgt 252
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Lecture 7 Product, Services, and Branding Strategies1. Product: anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a need or want.2. Service: a form of product that consists of activities, benefits, or satisfaction offered for sale that are essentially intangible and do not result in the ownership of anything.3. Experiences are used to differentiate offerings.In marketing, product=product + service4. Three levels of productCore benefit: e.g. Beer: enjoymentActual product: brand name, features, design, packaging, quality levelAugmented product: after sale service, financing, warranty, installation, delivery5. Types of Consumer ProductsConvenience: Frequent purchases bought with minimal buying effort and little comparison shoppinge.g. snack foods, milk, soapMarketing: -Low Price, -Widespread Distribution, -Readily availableShopping: Less frequent purchases; more comparison efforte.g. cars, furniture, clothesMarketing: -Higher Price, -Selective Distribution, -Personal Selling, advertisingSpecialty: Strong brand preference and loyalty, requires special purchase effort, little brand comparisons and low price sensitivitye.g. high-end luxury cars, designer clothesMarketing: -High Price, -Exclusive distribution, -Carefully targeted promotionsUnsought: Little product awareness and knowledge (or if aware, sometimes negative interest)e.g. life insurance, preplanned funeral services, donation, charityMarketing: -Aggressive advertising, -Personal selling6. Product and Service ClassificationsConsumer ProductsBusiness Products -Materials and parts-Capital items-Suppliers and servicesOrganizations, persons, places, and ideas-Organizational marketing makes use of corporate image advertising-Person marketing applies to political candidates, entertainment sports figures, and professionals-Place marketing relates to tourism-Social marketing promotes ideas7. Individual Product and Service Decisions (5 steps)Product and service attributes-QualityLined to customer value and satisfaction – The whole company needs to be involved (TQM)-FeaturesCompetitive tool for differentiating product; Should be valued by the customer as determined through market research
-Style and DesignGood design contributes to product’s usefulness as well as looksBrandingPackaging-Often includes primary, secondary and shipping packages-Functions of packaging: contain and protect; promote the product; differentiate the productLabellinga. Labelling serves to identify the product, b. describe the product, promote the productc. Must be careful not to: mislead customers, fail to describe ingredients, fail to include safety warningsd. Fine printsProduct support services-Survey customers regularly to assess current customer service-Companies use a mix of phone, email, fax, Internet and interactive voice and date technologies8. Product Lines: A broad group of products, intended for similar uses and having similar characteristicsProducts in the same product line often:-function in a similar manner-are sold to the same customer groups-marketed through the same types of outlets-fall within given price rangesexamples: Panasonic: TVs, DVD players, musical keyboards, telephones, audio equipment, etc.Why offer product line: a. better value b. additional customers c. more consumption d. allows for heterogeneity of demand within a category9. Product Line DecisionsProduct line length: the number of items in the product lineLine stretching: Adding products that lengthen a product line beyond its current range: higher or lower than the current products in the lineLine filling: Adding more items within the present rangeAdding more brands and/or adding more products within the current price (or other product attribute) range10. Product Mix DecisionsProduct mix/assortment-Consists of all the product lines and items that a particular seller offers for saleWidth (of a product assortment): number of product lines – P&G and Panasonic have wide product assortmentsLength of a line: number of products in a line – P&G markets 11 laundry detergent, 8 soaps, 7 hair care brandsDepth of a product: number of versions of each product carried- P&G sells 16 varieties of Crest toothpastesConsistency of a product assortment: how closely related the product lines are- Similar functions, production requirement, distribution channels11. Individual Product and Service DecisionsBrandingBrand: a name, term, sign, symbol, or design that identifies the productBranding can add value to a productBranding helps buyers identify products, determine qualityBranding helps sellers convey product quality, segment markets and provide legal protection12. Brand Equity: the positive differentiated effect that knowing the brand name has on customer response to the product or service