Chapter 6

Principles of Marketing
Seventeenth Edition
Chapter 6
Products, Services, and Brands:

Building Customer Value
Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Learning Objectives
8-1 Define product and describe the major classifications of products and
services.
8-2 Describe the decisions companies make regarding their individual products
and services, product lines, and product mixes.
8-3 Identify the four characteristics that affect the marketing of services and
the additional marketing considerations that services require.
8-4 Discuss branding strategy—the decisions companies make in building and
managing their brands.

Learning Objective 1
Define product and describe the major classifications of products
and services.

What is a Product?
Product is anything that can be offered in a market for

attention, acquisition, use, or consumption that might
satisfy a need or want.
Service is a product that consists of activities, benefits,

or satisfactions and that is essentially intangible and does
not result in the ownership of anything.

What Is a Product?
Products, Services, and Experiences
Market offerings may consist of a combination of goods and services
Experiences are used to differentiate offerings : Companies are now

creating and managing customer experiences with their brands or
company. Experiences have always been an important part of
marketing for some companies. Companies that market experiences
realize that customers are really buying more than just products or
services. They are buying what those offers will do for them
Example : Nike « it’s not so much the shoes but where they take you »

What Is a Product?

What Is a Product?
Product and Service Classifications

What Is a Product?
Consumer products
Industrial products

Product Classifications Consumer Products
Consumer products are products and services bought by final consumers for personal consumption
Convenience Products Shopping Products

> Buy frequently & immediately > Buy less frequently
> Low priced > Higher price
> Mass advertising > Fewer purchase locations
> Many purchase locations > Comparison shop
Fast Food, Candy, Newspapers
Clothing, cars, appliances
Specialty Products Unsought Products
> Special purchase efforts > New innovations

> High price > Products consumers don’t
> Unique characteristics want to think about
> Brand identification > Require much advertising &
> Few purchase locations personal selling
Lamborghini, Rolex Life insurance, blood donation

What is a Product?

Product Classifications Consumer Products
Industrial product : A product bought by individuals or organizations for further processing

or for use in conducting a business
•Goods that enter the

product directly
Materials and parts •include raw materials
and manufactured
materials and parts
•Items used in the

Capital items production process
like equipment
•That support the

operations of
purchasing
organization.
Supplies and services •They as not
considered as a part
of the finished
products. Like oils,
pencils, financial Copyright © 2018 Pearson Education Ltd. All Rights Reserved.
11
service, legal service
• Organizations, persons, places, and ideas (a second classification)
• Organizational marketing makes use of corporate image

advertising
• Person marketing applies to political candidates, entertainment
sports figures, and professionals
• Place marketing relates to tourism like states, regions, cities ( I love
NY) usually used to attract tourists or new residents.
• Social marketing uses commercial marketing concepts to influence
individuals’ behavior to improve their well-being and that of society.
Like health care; education; environmental sustainability; human
rights; personal safety

Describe the decisions companies make regarding their individual products
and services, product lines, and product mixes.

Product and Service Decisions
Figure 8.2 Individual Product Decisions

Individual Product and Service Decisions
1. Product and Service Attributes
Communicate and deliver benefits by product and service attributes : quality, features, style and design .
Quality Features Style and Design

Refers to the characteristics of a • Competitive tool for differentiating Style describes the
product or service that bear on its a product from competitors’ appearance of the product.
ability to satisfy stated or implied products Design contributes to a
customer needs. • Should be valued by the customer product’s usefulness as well as
as determined through market to its looks.
Quality has two main dimensions : research
• Assessed based on the features’s
Quality level : means performance value to the customer versus its
quality : the ability of product to cost to the company
perform its fonctions • A stripped-down model, one
Consistency : means Conformance without any extras, is the starting
quality: freedom from defects point. The company can then
create higher-level models by
adding more features. Being the
first producer to introduce a
valued new feature is one of the
most effective ways to compete.
2. Branding
Brand is the name, term, sign, or design or a combination of these,

that identifies the maker or seller of a product or service.
• Branding can add value to a product

• Branding helps buyers
• Identify products
• Determine quality
• Branding helps sellers
• Convey product quality
• Provide legal protection
• Segment markets

Brand

3. Packaging and Labelling
Packaging involves designing and producing the container or wrapper for
a product.
Functions of packaging
• Contain and protect
• Promote the product
• Differentiate the product
Labels It is a printed information that is bonded to the product that is part

of the packaging.
Functions of labelling
•Identify the product or brand ( name),
•Describe different things ( who made it, where, when, how to be used, its contents),
•Help to promote the brand.
Packaging and Labelling

4. Product support services
Services that augment actual products and not as products in

themselves (it’s about everything that can help maximize the
customer’s after sale satisfaction like warranty, installation, ..)
Keeping customers happy after the sale is the key to build lasting
relationships. Nordstrom’s motto “take care of customers no matter
what it takes before, during and after the sales

Product Line Decisions
Product line is 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.

Examples of Product Line

Product Line Decisions
Product line length is the number of
items in the product line.
• Line stretching : Lengthen beyond
current range
• Line filling : Lengthen within current

range ( new flavor, color, size..)

Product Mix Decisions
Product mix consists of all the
product lines and items that a
particular seller offers for sale.
• Width
• Length
• Depth
• Consistency

Product Mix Decisions
It refers to how
closely related the
various product lines Width - number of
are in end users, different product lines a
production company carries
requirements, or
some others way.
Length - total number
Consistency
- Product Mix
of items a company
all the product
carries within its
lines & items
product lines
offered
Depth - number of
versions offered for
each product in the line

DOVE
Product Mix : Width = 3; Length = 10; Total Depth = 21
consistency : all lines have the same users and
distribution channels
Deodorants (line length : 4) Hair care ( line length : 3) Skin care ( line length : 3)
Spray Deodorant Dove damage shampoo therapy ( 2 Body wash ( 2 variants)

(2 variants) variants)
Gel Deodorant Dove Hair Fall Rescue Shampoo ( 3 Cream ( 3 variants)

(2 variants) variants)
Roll-On Deodorant. Dove Environmental Defence Facial foam ( 2 variants)

(1 variant) Shampoo
( 1 variant)
Solid Deodorant.
(3 variants)

Identify the four characteristics that affect the marketing of services and the
additional marketing considerations that services require.

Services Marketing
Types of Service Industries
• Government : through courts, employment services, hospitals,

military services, police and fire departments, the postal service, and
schools.
• Private not-for-profit organizations : through museums,
charities,…..
• Business organizations : trough services such as airlines, banks,
hotels, insurance companies, consulting firms, medical and legal
practices, entertainment and telecommunications companies, real
estate firms, retailers, and others.

Services Marketing
Figure 8.3 Four Service Characteristics

Services Marketing
Marketing Strategies for Service Firms
In addition to traditional marketing strategies, service firms

often require additional strategies.
•Service-profit chain
•Internal marketing
•Interactive marketing

Services Marketing
Service-profit chain
In a service business, the customer and the front-line service employee
interact to co-create the service.
Effective interaction depends :
on the skills of front-line service employees and
on the support processes backing these employees.
Thus, successful service companies focus their attention on both their

customers and their employees.
They understand the service profit chain, which links service firm
profits with employee and customer satisfaction.
Services Marketing
This chain consists of 5 links :
• Internal service quality; requires superior employee selection and training, a
quality work environment, and strong support for those dealing with customers
which results in ……
• Satisfied and productive service employees are more satisfied, loyal, and
hardworking employees which results in …..
• Greater service value relates to more effective and efficient customer value
creation and service delivery. which results in …..
• Satisfied and loyal customers make repeat purchases and refer other customers.
which results in …..
• Healthy service profits and growth relate to superior service firm performance.

Services Marketing
Services marketing requires more than just traditional external marketing using the
four Ps. Figure 8.4 shows that services marketing also requires internal marketing
and interactive marketing.

Services Marketing
Internal marketing means that the service firm

must orient and motivate its customer-contact
employees and supporting service people to work
as a team to provide customer satisfaction.
In fact, internal marketing must precede external
marketing.

Services Marketing
Interactive marketing means that service quality

depends heavily on the quality of the buyer-seller
interaction during the service encounter.
In services marketing, service quality depends on both
the service deliverer and the quality of delivery .
Service marketers have to master interactive marketing
skills.

Services Marketing
As competition and costs increase and as productivity

and quality decrease, more service marketing
sophistication is needed.
Service companies face three major marketing tasks :
❖Service differentiation
❖Service quality
❖Service productivity
Services Marketing
Service Differentiation Service Quality Service Productivity
Offer : can include innovative Enables a service firm to Refers to the cost side of
features that set one company’s differentiate itself by delivering marketing strategies for service
offer apart from competitors’ offers consistently higher quality than its firms.
Delivery : by having more able and competitors provide.
reliable customer-contact people, 1) Employee hiring and training :
developing a superior physical Service quality will always vary, train the current employees
environment in which the service depending on the interactions better or hire new ones who
product is delivered, or designing between employees and customers will work harder or more
a superior delivery process skillfully
Image : through symbols and 2) Service quantity and quality :
branding increase the quantity of service
by giving up some quality
3) A service provider can
harness the power of
technology to make service
workers more productive.
Discuss branding strategy—the decisions companies make in building and
managing their brands.

Brand Strategy: Building Strong Brands
Brand Equity and Brand Value
• Brand equity is the differential effect that knowing the brand

name has on customer response to the product or its
marketing.
It’s a measure of the brand’s ability to capture consumer

preference and loyalty.
A brand has positive brand equity when consumers react more

favorably to it than to generic or unbranded products
Brand Equity and Brand Value
Brand equity
High brand equity provides a company with many competitive
advantages:
•High level of consumer brand awareness and loyalty

•More leverage in bargaining with resellers
•Easier launch of line and brand extensions
•Defense against fierce price competition


Brand Name Selection
1. Suggests benefits and qualities

2. Easy to pronounce, recognize, and remember
3. Distinctive
4. Extendable
5. Translatable for the global economy
6. Capable of registration and legal protection

Brand Sponsorship
• Manufacturer’s brand
• Private brand : number of retailers and wholesalers have created
their own store brands (or private brands).
• Licensed brand is the process of leasing a trademarked or
copyrighted property for use in connection with a product,
service, or promotion.
• Co-branding occurs when two established brand names of
different companies are used on the same product.

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Principles of Marketing

Products, Services, and Brands:

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Product is anything that can be offered in a market for

Service is a product that consists of activities, benefits,

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Market offerings may consist of a combination of goods and services

Experiences are used to differentiate offerings : Companies are now

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Product and Service Classifications

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Convenience Products Shopping Products

Specialty Products Unsought Products

> Special purchase efforts > New innovations

Lamborghini, Rolex Life insurance, blood donation

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Industrial product : A product bought by individuals or organizations for further processing

•Goods that enter the

•Items used in the

•That support the

• Organizational marketing makes use of corporate image

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Figure 8.2 Individual Product Decisions

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Quality Features Style and Design

Brand is the name, term, sign, or design or a combination of these,

• Branding can add value to a product

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Labels It is a printed information that is bonded to the product that is part

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Services that augment actual products and not as products in

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Product line is a group of products that are closely related because

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

• Line filling : Lengthen within current

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Spray Deodorant Dove damage shampoo therapy ( 2 Body wash ( 2 variants)

Gel Deodorant Dove Hair Fall Rescue Shampoo ( 3 Cream ( 3 variants)

Roll-On Deodorant. Dove Environmental Defence Facial foam ( 2 variants)

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

• Government : through courts, employment services, hospitals,

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

In addition to traditional marketing strategies, service firms

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Thus, successful service companies focus their attention on both their

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Internal marketing means that the service firm

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

Interactive marketing means that service quality

Copyright © 2018 Pearson Education Ltd. All Rights Reserved.

As competition and costs increase and as productivity