Chapter 7

Products, Services,
and
Brands:
Chapter 1

Building Customer
Value
Prentice Hall, Copyright 2009 7-1
 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 lines, and product mixes.
 Discuss branding strategy—the decisions firms
make in building and managing their brands.
 Identify the four characteristics that affect the
marketing of a service and the additional
marketing considerations that services require.
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 Case Study
Las Vegas – Building the Brand
Reinventing Las Vegas
 Background: Old-timers
think of Las Vegas as “Sin
City.” Yet casino gaming now
accounts for less than 50% of
the city’s revenues. Las Vegas
has been reinvented as a
luxury destination.
 How was it done? Extensive
consumer research studied the
brand experience. Findings
indicated that people were a
little naughtier when they
came to Las Vegas. People
associated Las Vegas with
adult freedom.
Prentice Hall, Copyright 2009
Promoting the Brand
 Advertising: The “Only Vegas—
What Happens Here, Stays Here”
$75 million ad campaign captured
the brand experience and promoted
the image that Las Vegas
represents freedom. Early ads were
based on real stories culled from
marketing research. Later ads
showed people returning to their
normal lives and using “alibis”
such as the Broadway style shows
to explain how they spent their
vacation.
 Results: Las Vegas is the #2 brand
behind Google and Las Vegas
tourism is booming.
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 What Is a Product?
 Products are:
►Anything that can be offered to a market for
attention, acquisition, use, or consumption
and that might satisfy a want or need.
• Includes physical objects, services, events,
persons, places, organizations, ideas, or some
combination thereof.

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 What Is a Service?
 Services are:
►Any activity or benefit that one party can
offer to another that is essentially intangible
and does not result in the ownership of
anything.
• E.g., banking, hotel, airline, retail, tax
preparation, home repairs.

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Products, Services and Experiences

 Marketing offerings:
►Includes both tangible goods and services, as
well as combinations of both.
• Pure good: Camay soap
• Pure service: Legal representation
• Combination: Restaurant meal
 Creating and managing customer
experiences differentiates marketing
offers from the competition.
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 Levels of Product and Services
 Core customer value:
► What the consumer is really buying
 Actual 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

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 Product and Service Classification
 Industrial 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.
 Consumer products:
► Products and services bought by final consumers
for personal consumption
► Also included are other marketable entities
► Classified by how consumers buy them

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 Types of Consumer Goods
 Convenience goods:
►Purchased frequently and immediately with
little comparison shopping
►Low priced
►Mass advertising and promotion
►Widespread distribution with many
convenient locations
►E.g., candy, soda, newspapers

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 Types of Consumer Goods
 Shopping products:
► Bought less frequently, more planning and effort,
brand comparisons on basis of price, quality, style
► Higher price

► Selective distribution in fewer purchase locations

► Advertising and personal selling is undertaken by

both producer and reseller
► E.g., furniture, clothing, cars, appliances

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 Types of Consumer Goods
 Specialty products:
► Strong brand preference and loyalty, special
purchasing effort, little comparison shopping
► High price

► Exclusive distribution in only one or a few outlets

per market area
► Carefully targeted promotion by both producer
and reseller
► E.g., Lamborghini, Rolex watches

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 Types of Consumer Goods
 Unsought products:
► Little product awareness or knowledge of the
brand, sometimes negative interest
► Pricing strategies vary

► Distribution strategies vary

► Require aggressive advertising and personal

selling by both producer and resellers
► E.g., life insurance, cemetery plots, blood donation

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 Types of Industrial Goods
 Materials and parts:
►Raw materials, manufactured materials, and
parts
 Capital items:
►Products that aid in buyer’s production or
operations
 Supplies and services:
►Operating supplies, maintenance, and repair
items
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 Other Market Offerings
 Organization:
► Profit (businesses) and nonprofit (schools and churches)
 Person:
► Politicians, entertainers, sports figures, doctors, and
lawyers
 Place:
► Create, maintain, or change attitudes or behavior toward
particular places (e.g., tourism)
 Ideas (social marketing):
► Public health campaigns, environmental campaigns, family
planning, or human rights
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 Individual Product Decisions
 Product attributes
 Branding
 Packaging
 Labeling
 Product support services

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 Product and Service Attributes

 Product quality dimensions:

►Performancequality
►Conformance quality

 Product feature considerations:

►Value to consumer
►Cost to company

 Product style and design:

►How will it influence the user experience?
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 Branding
 Branding involves building and
managing brands.
 A 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.
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 Branding
 Advantages to buyers:
►Helps identify products
►Cue to product quality and consistency

 Advantages to sellers:
►Basisfor product’s quality story
►Provides legal protection

►Helps to segment markets

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 Packaging
 Packaging:
► Involves designing and producing the container or
wrapper for a product
 Ideally, good packages should:
► Help to market the brand
► Protect the contents
► Provide convenience and ease of use
► Ensure product and user/child safety
► Address environmental concerns

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 Labeling
 Labeling refers to printed information
appearing on or with the package.
 Performs several functions:
►Identifies
product or brand
►Describes several things about the product

►Promotes the product through attractive

graphics

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 Product Support Services
 Monitoring of support services is key:
►Talk with customers to assess the value and
quality of current services and to obtain
ideas for new services.
►Fix problems and put together a package of
new services that delights the customers and
yields profits for the company.
►New technologies can often enhance many
support service offerings.
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 Product Line Decisions
 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 items in a product line
 Adjust line length by:
► Filling
► Stretching

• Downward, upward, or in both directions

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 Product Mix Decisions
 Product mix:
► The set of all of the product lines and items that a
particular seller offers for sale.
 Product mix dimensions include:
► Length: the number of items in a line.
► Width: the number of different product lines the
company carries.
► Depth: the number of versions offered of each
product in the line.
► Consistency: how closely related various lines are.

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 Brand Equity
 Brand equity:
►Is the positive differential effect that
knowing the brand name has on customer
response to the product or service.
►Is a valuable asset that offers many
competitive advantages.
►Builds strong and profitable customer
relationships that result in loyal customers.

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 Major Brand Strategy Decisions

 Brands are assets that must be

carefully developed and managed via:
►Brand positioning
►Brand name selections

►Brand sponsorship

►Brand development

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 Brand Positioning
 Marketers can position brands at any
of three levels:
►Product attributes
►Product benefits

►Beliefs and values

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 Brand Name Selection
 Desirable qualities for a brand name:
1. It should suggest the product’s benefits and
qualities.
2. It should be easy to pronounce, recognize, and
remember.
3. It should be distinctive.
4. It should be extendable.
5. It should translate easily into foreign languages.
6. It should be capable of registration and legal
protection.
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 Brand Sponsorship
 Brand sponsorship options include:
►Manufacturer’s brands
• Also called national brands
►Store brands
• Also called private brands
►Licensedbrands
►Co-branding

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 Brand Development
 Line 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.
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 Brand Development
 Multibranding:
►Offers a way to establish different features
and appeal to different buying motives.
 New 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 category.
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 Nature and Characteristics
of a Service
 Intangibility:  Variability:
► Services cannot be ► Quality of services
seen, tasted, felt, depends on who
heard, or smelled provides them and
before purchase. when, where, and how
they are delivered.
 Inseparability:
► Services cannot be
 Perishability:
► Services cannot be
separated from
their providers. stored for sale or use.
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 The Service-Profit Chain
 Internal service quality
 Satisfied and productive service
employees
 Great service value
 Satisfied and loyal customers
 Healthy service profits and growth

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 Services Marketing
 External marketing:
► Traditional marketing via the 4 “Ps.”
 Internal marketing:
► Orienting and motivating customer-contact
employees and the supporting service people to
work as a team to provide customer satisfaction.
 Interactive marketing:
► Training service employees in the fine art of
interacting with customers to satisfy their needs.

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 Major Service Marketing Tasks
 Managing service differentiation:
► Develop a differentiated offer, delivery, and image.
 Managing service quality:
► Set high service quality standards, have good service
recovery, empower front-line employees.
 Managing service productivity:
► Train current employees or hire new ones, increase
quantity and sacrifice quality, harness technology.

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 Rest Stop: Reviewing the Concepts

 Define product and the major classifications of

products and services.
 Describe the decisions companies make
regarding their individual products and
services, product lines, and product mixes.
 Discuss branding strategy—the decisions firms
make in building and managing their brands.
 Identify the four characteristics that affect the
marketing of a service and the additional
marketing considerations that services require.
Prentice Hall, Copyright 2009 7-35
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Copyright © 2009 Pearson Education, Inc.  

Publishing as Prentice Hall
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