Chapter 8: Products, Services, and Brands: Building Customer Value
Business 346 with Danes at California State University - Polytechnic State University, San Luis Obispo
About this deck
By: Jimmy Noehren
Textbook:
Principles of Marketing (13th Edition)
Created: 2011-03-01
Size: 69 flashcards
Views: 342
Textbook:
Principles of Marketing (13th Edition)Created: 2011-03-01
Size: 69 flashcards
Views: 342
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Product
Anything that can be offered to a 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 (3)
Core Customer Value (What is the customer really buying?)
Actual Product (brand name, features, quality level, packaging, design)
Augmented Product (delivery and credit, after-sale service, warranty, product support)
Consumer Product
a product bought by final consumer for personal consumption
(includes: convenience products, shopping products, specialty products, unsought products)
Convenience Product
a consumer product that customers usually buy frequently, immediately, and with a minimum of comparison and buying effort
usually low priced, and in a lot of locations
(ex: laundry detergent, candy, magazines, fast food)
Shopping Product
a consumer product that the customer, in the process of selection and purchase, usually compares on such bases as suitability, quality, price and style
spend time and effort gathering information and making comparisons
(ex: furniture, clothing, used cars, major appliances, hotel and airline services)
Specialty Product
a consumer product with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort
usually don't compare, only invest time needed to get the specialty dealer
(ex: specific brands of cars, high-priced photographic equipment, designer clothes, servicces of medical or legal specialists)
Unsought Product
a consumer product that the consumer either does not know about or knows about but does not normally think of buying
most majore new innovations
require a lot of advertising, personal selling, and other marketing efforts
(ex: life insurance, preplanned funeral services, blood donations to the Red Cross)
Marketing Considerations for Consumer Products
Table 8.1 - pg. 227
Distinction between industrial product, and consumer product...
...is based on the purpose for which the produc
Industrial Product
a product bought by individuals and organizations for further processing or for use in conducting business
includes:
Materials and Parts
Capital Items
Supplies and Services
Materials and Parts (Industrial Product)
includes raw materials and manufactured materials and parts.
raw materials includes: farm products, and natural products
manufactured materials includes: component materials, and component parts
price and service are the major marketing factors
Capital Items (Industrial Product)
industrial products that aid in the buyer's production or operations, including installations and accessory equipment
installations include: major purchases, and fixed equipment.
accessor equipment includes: portable factory equipment and tools, and office equipment
Supplies and Services (Industrial Product)
include operating supplies, and repair and maintenance items.
supplies are convenience products
business services include: maintenance and repair services, and business advisory services (usually provided under contract)
Organization Marketing
activities undertaken to create, maintain, or change the attitudes and behavior of target consumers toward an organization.
ex: corporate image advertising
Person Marketing
activities undertaken to create, maintain, or change attitudes or behavior toward particular people
(ex: presidents, entertainers, professionals)
companies use well-known personalities to help sell their product
Place Marketing
activities undertaken to create, maintain, or change attitudes or behavior toward particular places.
(ex: cities, state, regions, entire nations)
Social Marketing
the use of commercial marketing concepts and tolls in programs designed to influence individuals' behavior to improve their well-being and that of society
Individual Product Decisions
Figure 8.2 - pg. 229
- Product Attributes (defining the benefits the product/service will offer)
- Branding
- Packaging
- Labeling
- Product Support Services
the focus of all these decisions is to create core customer value
Product Quality
the characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs
"freedom from defects"
"quality is when our customers come back and our products don't"
2 dimension : level, consistency
Total Quality Management (TQM)
an approach in which all the company's people are involved in constantly improving the quality of products, services, and business processes
Product Quality has 2 dimensions:
- Quality Level: performance quality: the ability to perform it's functions (most companies offer a quality level that matches target needs and quality levels of competing products
- Consistency: conformance quality: freedom from defects and consistency in delivering a targeted level of performance
Product Features
a company can create higher-level models by adding more features
features are a competitive tool for differentiating the company's product from competitors'
Product Style and Design
style: describes the appearance of a product
design: deeper; good design contributes to a product's usefulness as well as to its looks
Brand
a name, term, sign, symbol, design, or a combination of these that identifies the products or services of one seller or group of sellers and differentiates them from those of competitors
everything the product/service means to the customer
Packaging
the activities of designing and producing the container or wrapper for a product
Labeling
range from simple tags attached to products to complex graphics that are part of the package
serve to:
- identify the product/brand
- describe several things about the product
- promote the brand
can include:
- unit pricing
- open dating
- nutritional labeling
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 Length
the number of products in a product line
objectives:
- up-selling (series 3-models to series 5- or 7-models)
- cross selling (selling printers and ink cartridges)
- protect against economic swings (different stores for different price ranges)
Product Line Expansion
- Product Line Filling: adding more items within the present range of the line. overdone if it results in customer confusion. new items should be noticeably different from existing ones
- Product Line Stretching: company lengthens its product line beyond current range
Product Line Stretching
can stretch the product line:
- downward: if at the upper end of the market
- upward: sometimes to add prestige to current products
- both directions: if in the middle of the market. risk if customers trade-down to lower cost, but same service/product
Product Mix (Product Portfolio)
the set of all product lines and items that a particular seller offers for sale
4 important dimensions:
4 important dimensions:
- width
- length
- depth
- consistency
Product Mix, 4 Important Dimensions
Brand Equity
the differential effect that knowing the brand name has on customer response to the product or its marketing
measure of the brands ability to capture customer preference and loyalty
Positive: react more favorably to it than generic/competing brand
Negative: react less favorably
Consumer Perception Dimensions (4)
- differentiation: what makes the brand stand out
- relevance: how the consumers feel it meets their needs
- knowledge: how much consumers know about the brand
- esteem: how highly consumers regard and respect the brand
Brand Valuation
the process of estimating the total financial value of a brand
is difficult to measure, often don't know until the company is sold (because the price it's sold for is how much it's worth)
Customer Equity
the value of the customer relationships that the brand creates
proper focus of marketing is building customer equity, with brand management serving as a major marketing tool
Major Brand Strategy Decisions
Figure 8.3 - pg. 238
- Brand Positioning: attributes, benefits, beliefs and values
- Brand Name Selection: selection, protection
- Brand Sponsorship: manufacturer's brand, private brand, licensing, co-branding
- Brand Development: line extension, brand extensions, multibrands, new brands
Brand Positioning
position by:
- product attributes: least desirable option because competitors can copy attributes.
- product benefit: better
- beliefs and values: best, emotional wallop
Desirable Brand Name Qualities
- suggest something about product's benefits/qualities
- easy to pronounce, recognize and remember
- distinctive
- extendable
- translate easily
- capable of registration and legal protection
Manufacturer Sponsorship options (4)
- national brand (manufacturer's brand)
- private brand (store brand or distributor brand)
- licensed brands
- co-brand
Store Brand (Private Brand)
a brand created and owned by a reseller of a product or service
no longer "generic" or "no-name", now offer a lot more
Co-branding
the practice of using the established brand name of 2 different companies on the same product
Developing Brands (4)
- line extensions
- brand extensions
- multibrands
- new brands
Figure 8.4 - pg. 242
Line Extension
extending an existing brand name to new forms, colors, sizes, ingredients, or flavors of an existing product category
low risk, low cost way to introduce new products. may meet consumer desires for variety
risky when overextended brands lose meaning, or when extension comes at expense of other items in the line
Brand Extension
extending an existing brand name to new product categories
gives a new product instant recognition, faster acceptance
extension may confuse image of main brand
Multibrands
introduce additional brands in the same category
each brand may only capture a small percent of market, and may not be profitable
New Brand
when power of existing brand name is waning and a new brand name is needed, or when a new product category does not fit into any of the current brand names
too many new brands can have the company's resources spread too thin
Special Service Characteristics to consider when designing marketing programs for services (4)
- intangibility
- inseparability
- variability
- perishability
Figure 8.5 - pg. 245
Service Intangibility
a major characteristic of services--they cannot be seen, tasted felt, heard, or smelled before they are bought
Evidence Management
making the service tangible in one or more ways and to send the right signals about quality
Service Inseparability
a major characteristic of services--they are produced and consumed at the same time and cannot be separated from their providers
physical goods are produced, then sold, then consumed
services are first sold, then produced and consumed at the same time
Service Variability
a major characteristic of services--their quality may vary greatly, depending on who provides them and when, where, and how
Service Perishability
a major characteristic of services--they cannot be stored for later sale or use
Service-Profit Chain
the chain that links service from profits with employee and customer satisfaction
5 links:
- internal service quality
- satisfied and productive service employees
- greater service value
- satisfied and loyal customers
- healthy service profits and growth
Internal Service Quality
(Service-Profit Chain)
superior employee selection and training, a quality work environment, and strong support for those dealing with customers
results in: Satisfied and Productive Service Employees
Satisfied and Productive Service Employees
(Service-Profit Chain)
more satisfied, loyal and hardworking employees
results in: Greater Service Value
Greater Service Value
(Service-Profit Chain)
more effective and efficient customer value creation and service delivery
results in: Satisfied and Loyal Customers
Satisfied and Loyal Customers
(Service-Profit Chain)
satisfied customers who remain loyal, repeat purchase, and refer other customers
results in: Healthy Service Profits and Growth
Healthy Service Profits and Growth
(Service-Profit Chain)
superior service firm performance
Internal Marketing
orienting and motivating customer-contact employees and supporting service people to work as a team to provide customer satisfactionI
Interactive Marketing
training service employees in the fine art of interacting with customers to satisfy their needs
Figure 8.6 - pg. 247
Service Companies face 3 major marketing tasks
increase:
- service differentiation
- service quality
- service productivity
Managing Service Differentiation
develop a differentiated:
- offer: innovative features
- delivery: (ex: more able/reliable customer-contact people; superior physical environment; superior delivery process)
- images: symbols, branding
Managing Service Quality
customer retention = best measure
needs to be perfect
Managing Service Productivity
can increase quantity by giving up some quality
"industrialize the service" by adding equipment/standardized production
don't take the "service" out of service by reducing quality when standardizing
About this deck
By: Jimmy Noehren
Textbook: Principles of Marketing (13th Edition)
Created: 2011-03-01
Size: 69 flashcards
Views: 342
Textbook:
Principles of Marketing (13th Edition)Created: 2011-03-01
Size: 69 flashcards
Views: 342
About StudyBlue
STUDYBLUE makes things that make you better at school.
Things like online flashcards with photos and audio.
Things like personalized quizzes and friendly reminders about when (and what) to study next.
Think of it as a digital backpack™: access to all of your study materials online and on your phone.
STUDYBLUE exists to make studying efficient and effective for every student, for free. Join us.
“Simply amazing. The flash cards are smooth, there are many different types of studying tools, and there is a great search engine. I praise you on the awesomeness.”
Dennis
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