Marketing Textbook Chapter Notes Chapter 7 Products Services Brands Building Customer Value What is a Product o Product anything that can be offered to a market for attention acquisition use or consumption that might satisfy a want or a need o Service an activity benefit or satisfaction offered for sale that is essentially intangible and does not result in the ownership of anything o Products Services and Experiences Marketing mix planning begins with building an offering that brings value to target customers this offering becomes the basis on which the company builds profitable customer relationships and products are a key element in this Offerings could consist of a pure tangible good or pure services or any combination of the two Also creating customer experiences with their brands o Levels of Product and Services Three levels each adds more customer value Basic level is the Core Customer Value which addresses What is the buyer really buying When designing products marketers must first define the core problem solving benefits or services that consumers seek Second level the product planners must turn the core benefit into an actual product need to develop product and service features a design a quality level a brand name and packaging Finally product planners must build an augmented product around the core benefit and actual product by offering additional consumer services and benefits o Product and Service Classifications Consumer Products products and services bought by final consumers for personal consumption Convenience Products are consumer products and services that customers usually buy frequently immediately and with minimal comparison and buying effort laundry detergent candy magazines etc Shopping Products are less frequently purchased consumer products and services that customers compare carefully on suitability quality price and style furniture clothing used cars hotels etc 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 Lamborghini Unsought Products are consumer products that the consumer either does not know about or knows about but does not usually consider buying life insurance preplanned funeral services etc Industrial Products products purchased for further processing or for use in conducting a business The distinction between consumer and industrial products is based on the purpose for which the product is used If a consumer buys a lawn mower for his yard at home it is a consumer product If he buys the lawn mower for use in a landscaping business it is an industrial product Three groups of industrial products materials and parts capital items supplies and services Organizations Persons Places and Ideas Organization Marketing consists of activities undertaken to create maintain or change the attitudes and behavior of target consumers toward an organization Person Marketing consists of activities undertaken to create maintain or change attitudes or behavior toward particular people ranging from presidents entertainers and athletes to professionals like doctors and lawyers all use person marketing to build their reputations Place Marketing consists of activities undertaken to create maintain or change attitudes or behavior toward particular places Cities states regions etc compete to attract tourists residents companies and so on Ideas can also be marketed narrowed to social ideas 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 Product and Service Decisions Three levels o Individual Product and Service Decisions Product and Service Attributes Developing a product service involves defining the benefits that it will offer such as quality features and style design Product Quality is one of the major positioning tools which includes the characteristics of a product service that bear on its ability to satisfy stated implied customer needs o Today companies take a return on quality approach viewing quality as an investment and holding quality efforts accountable for bottom line results o Two dimensions level and consistency o Markets must choose a quality level that will support the product s positioning o Performance quality the product s ability to perform its functions o Conformance quality freedom from defects and consistency in delivering a targeted level or performance o A product can be offered with varying features o Start basic without any extras then create higher level models by adding more features o Features are a competitive tool for Product Features differentiation Product Style and Design o Another way to add value distinctive style design o Design is a larger concept than style style simply describes the appearance of a product but does not necessarily make it perform better o Design is more than skin deep as it contribute to a products usefulness as well as looks o Design begins with observing customers deeply understanding their needs and shaping their product use experience The most distinctive skill of prof marketers is their ability to build and manage brands A brand is a name term sign symbol design or combo of these that identifies the maker or seller of a product or service Customers attach meanings to brands and develop brand relationships Brand names help consumers identify products that might benefit them and also say something about the product quality and consistency Branding Packaging Packaging involves designing and producing the container or wrapper for a product Poorly designed packages can cause headaches for consumers and lost sales for the company Labeling Innovative packaging can give a company an advantage over competitors and boost sales pumping laundry detergent into cap instead of pouring it Product safety has become a recent concern tamper proof packaging is important and companies are trying to go green with their packaging materials Labels range from simple tags on products to complex graphics that are part of the packaging The label identifies the product or brand might also describe several things about the product who made it where it was made when it was made contents how to use it etc Label can promote the brand support its positioning and connect with customers The Federal Trade Commission Act of 1914 held that false misleading or deceptive labels