Slide 1ProductsWhat is a Product?ServicesThree Levels of ProductLevels of Product and ServicesProduct and Service ClassificationProduct and Service ClassificationTypes of Consumer GoodsTypes of Consumer GoodsTypes of Consumer GoodsTypes of Consumer GoodsTypes of Industrial GoodsOther Market OfferingsOther Market OfferingsIndividual Product DecisionsProduct DesignProduct LineProduct Line DecisionsBrandsBrandingBrand EquityMajor Brand Strategy DecisionsBrand SponsorshipBrand SponsorshipBrand Development DecisionsBrand DevelopmentBrand DevelopmentBrand DevelopmentServicesWhat is a Service?Four Service CharacteristicsProducts, Services, and Brands: Building Customer ValueChapter 77-2ProductsAnything that can be offered to a market for attention, acquisition, use, or consumption and that might satisfy a want or need.What is a Product?Products include physical objects, services, events, persons, places, organizations, ideas, or some combination thereof.It’s important to NOT limit your thinking about products to be only physical objects!7-4ServicesAny activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything.7-5Three Levels of ProductLevels of Product and ServicesCore customer value:What the consumer is really buying.Remember! Customers buy benefitsActual product:Includes the brand name, features , design, packaging, and quality level.Augmented product:Additional services and benefits such as delivery and credit, instructions, installation, warranty, and service.Product and Service ClassificationIndustrial Products:Those purchased for further processing or for use in conducting business.Distinction between consumer and industrial products is based on the purpose for which an item is bought.Product and Service ClassificationConsumer Products:Products and services bought by final consumers for personal consumption.Also included are other marketable entities.Classified by how consumers buy them.Types of Consumer Goods Convenience goods:Purchased frequently and immediately with little comparison shopping effort.Low customer involvment Low priced. mass advertising and promotionWidespread distribution with many convenient locations.E.g. candy, soda, newspapersTypes of Consumer Goods Shopping products:Bought less frequently, more planning and effort, brand comparisons on basis of price, quality, styleHigher priceSelective distribution in fewer purchase locationsAdvertising and personal selling is undertaken by both producer and resellerE.g., furniture, cars, appliancesTypes of Consumer GoodsSpecialty products:Strong brand preference and loyalty, special purchasing effort, little comparison shoppingHigh priceExclusive distribution in only one or a few outlets per market areaCarefully targeted promotion by both producer and resellerE.g., Lamborghini, Rolex watchesTypes of Consumer GoodsUnsought products:Little product awareness or knowledge of the brand, sometimes negative interestPricing strategies varyDistribution strategies varyRequire aggressive advertising and personal selling by both producer and resellerE.g., life insurance, cemetery plots, blood donationTypes of Industrial GoodsMaterials and parts:Raw materials, manufactured materials, and partsCapital items:Products that aid in buyer’s production or operationsSupplies and services:Operating supplies, maintenance, and repair itemsOther Market OfferingsOrganization: Profit (businesses) and nonprofit (schools and churches)Person: Politicians, entertainers, sports figures, real estate agents, doctors, and lawyersOther Market OfferingsPlace: Create, maintain, or change attitudes or behavior toward particular placesIdeas (social marketing): Public health campaigns, environmental campaigns, family planning, or human rights7-16Individual Product Decisions7-17Product DesignGood product design begins with an understanding of consumer needs. OXO successfully redisgns kitchen tools by focusing on the end user expirience desired by buyers7-1818Product LineA 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 DecisionsProduct line length:The number of items in a product lineAdjust line length by:FillingStretchingDownward, upward or in both directionsE.g., MarriottBrandsA brand is a name, term, sign, symbol, or 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.Branding involves building and managing brands.BrandingAdvantages to buyers:Helps identify productsCue to product quality and consistencyAdvantages to sellers:Basis for product’s quality storyProvides legal protectionHelps to segment marketsBrand EquityBrand equity:Measures the brand’s ability to capture consumer preference and loyalty.Is a valuable asset that offers many competitive advantages.Builds strong and profitable customer relationships that result in loyal customers.Major Brand Strategy DecisionsBrand SponsorshipBrand sponsorship options include:Manufacturer’s brandsAlso called national brandsEx whirlpoolStore brandsAlso called private brandsEx KenmoreBrand SponsorshipBrand sponsorship options include:Licensed brandsEx tennessee apparelCo-brandingEx Taco bell and doritos with doritos locos tacos7-26Brand Development DecisionsBrand DevelopmentLine extension: Introduction of additional items in a given product category under the same brand name (e.g., new flavors, forms, colors, ingredients, or package sizes).Brand extension: Using a successful brand name to launch a new or modified product in a new category.Brand DevelopmentMultibranding: Offers a way to establish different features and appeal to different buying motives.Brand DevelopmentNew brands: Developed based on belief that the power of its existing brand is waning and a new brand name is needed. Also used for products in new product categories for which none of the firm’s existing brands are appropriate.ServicesAny activity or benefit that one party can offer to another that is essentially
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