Chapter 7 Products, Services, and Brands “Building Customer Value”Rest Stop: Previewing the Concepts• Define product and the major classifications of products and services• Describe the decisions companies make regarding their individual products and services, product Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require• Discuss branding strategy—the decisions companies make in building and managing their brands lines, and product mixesProduct- Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or needService- An activity, benefit, or satisfaction offered for sale that is essentially intangible and does not result in the ownership of anythingWhat Is a Product?• Tangible objects, services, events, persons, organizations, places, ideas, or a mixture of these• Services are a form of product • Activities, benefits, or satisfactions offered for sale • Essentially intangible • Do not result in the ownership of anythingProducts, Services and Experiences• Market offerings often include both tangible goods and services• Pure tangible good• Pure service• Many companies now marketing experiences• Example• Olive Garden sells more than just Italian food—it serves up an idealized Italian family meal experience• General Idea• A company’s market offering often includes both tangible goods and services. At one extreme, the market offer may consist of a pure tangible good, such as soap, toothpaste, or salt; no services accompany the product. At the other extreme are pure services, for which the market offer consists primarily of a service. Examples include a doctor’s exam or financial services. Between these two extremes, however, many goods-and-services combinations are possible. Today, as products andservices become more commoditized, many companies aremoving to a new level in creating value for their customers. To differentiate their offers, beyond simply making products and delivering services, they are creating and managing customer experiences with their brands or company.Figure 7.1 - Three Levels of ProductsProduct planners need to think about products and services on three levels. When designing products, marketers must first define the core, problem-solving benefits or services that consumers seek. At the second level, product planners must turn thecore benefit into an actual product. They 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. At the most basic level, the company asks, “What is the customer really buying?” For example, people who buy a BlackBerry are buying more than a wireless communications device. They are buying freedom and on-the-go connectivity. Each additional product level helps to build this core value.Levels of Products and Services• Core customer value• What the consumer is really buying• Actual product• Brand name, service features, design, packaging, and quality level• Augmented product• Additional services and benefits such as delivery and credit, instructions, installation, warranty, and service• General Idea• Consumers see products as complex bundles of benefits that satisfy their needs. When developing products, marketers first must identify the core customer value that consumers seek from the product. They must then design the actual product and find ways to augment it to create this customer value and the most satisfying customer experience. Consumer Products• A product bought by final consumers for personal consumption• Classified by how consumers buy themConvenience Products• Consumer products that customers usually buy frequently, immediately, and with minimal comparison and buying effort• Low priced• Placed in many locations to make them readily available• E.g. Laundry detergent, candy, magazines, and fast foodConvenience productsShopping productsSpecialty productsUnsought productsShopping products• Consumer products that the customer, in the process of selecting and purchasing, usually compare on such attributes as suitability, quality, price, and style• Less frequently purchased• Distributed through fewer outlets• Greater sales support• E.g. Furniture, clothing, used carsSpecialty products• Consumer products with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort • Different brands are not usually compared• E.g. Specific brands of cars, high-priced photographic equipment, designer clothes, and the services of medical or legal specialistsUnsought Products• Consumer products that the consumer either does not know about or knows about but does not normally consider buying• Require a lot of advertising, personal selling, and other marketing efforts• New innovations are generally unsought till advertised• Known but unsought products and services are life insurance, preplanned funeral servicesIndustrial Products• Products bought by individuals and organizations for further processing or for use in conducting a business• Note to Instructor: The distinction between a consumer product and an industrial product is based on the purpose for which the product is purchased. If a consumer buys a lawn mower for use around home, the lawn mower is a consumer product. If the same consumer buys the same lawn mower for use in a landscaping business, the lawn mower is an industrial product.Materials and PartsCapital itemsSupplies and servicesOrganizations• Organization marketing consists of activities undertaken to create, maintain, or change the attitudes and behavior of target consumers toward an organization• Business firms sponsor public relations or corporate image marketing campaigns to market themselves and polish their imagesOrganization Marketing• IBM’s Smarter Planet campaign markets IBM as a company that helps improve the world’s IQ• This ad tells how IBM technologies are helping to create safer food supply chainsPersons• Person marketing consists of activities undertaken to create, maintain, or change attitudes or behavior toward particular people• Organizations use well-known personalities to help sell their