Chapter 8 - Product, Service and Brand Decisions

Chapter Eight
Products, Services, and Brands:

Building Customer Value
Copyright © 2009 Pearson Education, Inc.

Chapter 8 - slide 1
Publishing as Prentice Hall
Product, Services, and
Branding Strategy
Topic Outline
• What Is a Product?
• Product and Services
Decisions
• Branding Strategy:
Building Strong
Brands
• Services Marketing

Chapter 8 - slide 2
What Is a Product?
Products, Services, and Experiences
Product is anything that can be offered in a market

for attention, acquisition, use, or consumption
that might satisfy a need or want.

Chapter 8 - slide 3
What Is a Product?
Product also includes services, events, persons,

place, ideas or a mixture of these.

Chapter 8 - slide 4
What Is a Product?
Service is a form of product that consists of

activities, benefits, or satisfaction offered for sale
and are essentially intangible and don’t result in
the ownership of anything.

Chapter 8 - slide 5
What Is a Product?
Products and services are becoming more commoditized.
Companies are now creating and managing customer

experiences with their brands or company.
Experiences represent what buying the product or service

will do for the customer.

Chapter 8 - slide 6
What Is a Product?
Levels of Product and Services
Consumers see products as complex bundles of benefits

that satisfy their needs
Chapter 8 - slide 7
What Is a Product?
Product and Service Classifications

Chapter 8 - slide 8
What Is a Product?
Consumer products are products and

services bought by final consumers for
personal consumption.
• Convenience products
• Shopping products
• Specialty products
• Unsought products

Chapter 8 - slide 9
What Is a Product?
Convenience products are consumer products and

services that the customer usually buys
frequently, immediately, and with a minimum
comparison and buying effort
• Newspapers
• Candy
• Fast food

Chapter 8 - slide 10
What Is a Product?
Shopping products are consumer products and

services that the customer compares carefully on
suitability, quality, price, and style
• Furniture
• Cars
• Appliances

What Is a Product?
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
• Medical services
• Designer clothes
• High-end electronics

What Is a Product?
Unsought products are consumer products that the

consumer does not know about or knows about
but does not normally think of buying
• Life insurance
• Funeral services
• Blood donations

What Is a Product?

What Is a Product?
Industrial products are products purchased for

further processing or for use in conducting a
business
• Classified by the purpose for which the product is
purchased
– Capital items
– Materials and parts
– Supplies and services

What Is a Product?
Capital items are industrial products that aid in the

buyer’s production or operations
Materials and parts include raw materials and
manufactured materials and parts usually sold
directly to industrial users
Supplies and services include operating
supplies, repair and maintenance items, and
business services

What Is a Product?
Organizations, Persons, Places, and Social
• Organization marketing
• Person marketing
• Place marketing
• Social marketing

What Is a Product?
Organization marketing consists of

activities undertaken to create,
maintain, or change the attitudes and
behavior of target consumers toward
an organization.
Marketing refers to activities undertaken by a company to promote the buying

or selling of a product or service. Marketing includes advertising, selling, and
delivering products to consumers.

What Is a Product?
Person marketing consists of

activities undertaken to
create, maintain, or
change attitudes and
behavior of target
consumers toward
particular people.
Sometimes used to build
reputation.

What Is a Product
Place marketing consists of activities undertaken

to create, maintain, or change attitudes and
behavior toward particular places.
Social marketing uses commercial marketing

concepts to influence individuals’ behavior to
improve their well-being and that of society.

Product and Service Decisions
Individual Product and Service Decisions

Communicate and deliver benefits by product

and service attributes.
– Quality
– Features
– Style and design

Product quality refers to the characteristics of a

product or service that bear on its ability to
satisfy stated or implied customer needs.
• Total quality management
• Performance quality
• Conformance quality

Product features are a competitive tool for

differentiating a product from competitors’
products
Product features are assessed based on the value to

the customer versus the cost to the company

Style describes the

appearance of the product.
Design contributes to a
product’s usefulness as
well as to its looks.

Brand is the name, term, sign, or design—or a

combination of these—that identifies the maker
or seller of a product or service


Product support
services augment
actual products.

Branding Strategy: Building Strong Brands
Brand represents the consumer’s perceptions and

feelings about a product and its performance. It is
the company’s promise to deliver a specific set of
features, benefits, services, and experiences
consistently to the buyers

Brand equity is the differential effect that knowing

the brand name has on customer response
to the product or its marketing.
Brand value is the total financial value of a brand.

Major Brand Strategy Decisions

Brand Positioning
Marketers can position brands at
any of three levels.
• Attributes
• Benefits
• Beliefs and values
Establish a mission for the brand and a
vision for what the brand must be and do. A
brand is the company’s promise to deliver a
specific set of features, benefits, services
and experiences consistently to buyers. The
promise must be simple and honest.
Brand Name Selection
Desirable qualities:
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 Name Selection
Nike: Name for the Greek Goddess

of Victory.
Coca-Cola: The two main

ingredients were Coca leaves and
Cola berries.
Pepsi: From the digestive enzyme

'pepsin'.
Brand Sponsorship
• Manufacturer’s brand
• Private brand
• Licensed brand
• Co-brand

Brand Development Strategies

Brand Development Strategies
Line extension refers to extending an existing brand name to new forms, sizes,
colours, ingredients or flavours of an existing product category. An example is when
Coca-Cola introduces a new flavour, such as diet cola with vanilla, under the existing
brand name.
Brand extension also assumes an existing brand name, but combines it with a new
product category. Thus, an existing brand name is extended to a new product category.
This gives the new product instant recognition and faster acceptance. For instance,
Kellog’s has extended its Special K healthy breakfast cereal brand into a complete line
of cereals plus a line of biscuits, snacks and nutrition bars.
Multibrands means marketing many different brands in a given product category. In

the USA, P&G sells six brands of laundry detergent, five brands of shampoo and four
brands of dishwashing detergent. Why? Multibranding offers a way to establish distinct
features that appeal to different customer segments. Thereby, the company can capture
a larger market share.
New brands are needed when the power of existing brand names is waning. Also, a
new brand name is appropriate when the company enters a new product category for
which none of its current brand names are appropriate.

Services Marketing
Types of Service Industries
• Government
• Private not-for-profit organizations
• Business organizations

Services Marketing
Nature and Characteristics of a Service
FIGURE | 8.3 Four Service Characteristics

Services Marketing
Marketing Strategies for Service Firms

Managing service differentiation
creates a competitive advantage
from the offer, delivery, and image
of the service
• Offer can include distinctive
features
• Delivery can include more able and
reliable customer contact people,
environment, or process
• Image can include symbols and
branding
Services Marketing
Managing service quality provides

a competitive advantage by
delivering consistently higher
quality than its competitors
Service quality always varies

depending on interactions
between employees and
customers
Services Marketing
Managing service productivity refers to the cost

side of marketing strategies for service firms
• Employee recruiting, hiring, and training
strategies
• Service quantity and quality strategies


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Chapter Eight

Products, Services, and Brands:

Copyright © 2009 Pearson Education, Inc.

Copyright © 2010 Pearson Education, Inc.

Product is anything that can be offered in a market

Copyright © 2010 Pearson Education, Inc.

Product also includes services, events, persons,

Copyright © 2010 Pearson Education, Inc.

Service is a form of product that consists of

Copyright © 2010 Pearson Education, Inc.

Products and services are becoming more commoditized.

Companies are now creating and managing customer

Experiences represent what buying the product or service

Copyright © 2010 Pearson Education, Inc.

Consumers see products as complex bundles of benefits

Copyright © 2010 Pearson Education, Inc.

Consumer products are products and

Copyright © 2010 Pearson Education, Inc.

Convenience products are consumer products and

Copyright © 2010 Pearson Education, Inc.

Shopping products are consumer products and

Copyright © 2010 Pearson Education, Inc.

Specialty products are consumer products and

Copyright © 2010 Pearson Education, Inc.

Unsought products are consumer products that the

Copyright © 2010 Pearson Education, Inc.

Copyright © 2010 Pearson Education, Inc.

Industrial products are products purchased for

Copyright © 2010 Pearson Education, Inc.

Capital items are industrial products that aid in the

Copyright © 2010 Pearson Education, Inc.

Copyright © 2010 Pearson Education, Inc.

Organization marketing consists of

Marketing refers to activities undertaken by a company to promote the buying

Copyright © 2010 Pearson Education, Inc.

Person marketing consists of

Copyright © 2010 Pearson Education, Inc.

Organizations, Persons, Places, and Social

Place marketing consists of activities undertaken

Social marketing uses commercial marketing

Copyright © 2010 Pearson Education, Inc.

Copyright © 2010 Pearson Education, Inc.

Individual Product and Service Decisions

Communicate and deliver benefits by product

Copyright © 2010 Pearson Education, Inc.

Product quality refers to the characteristics of a

Copyright © 2010 Pearson Education, Inc.

Individual Product and Service Decisions

Product features are a competitive tool for

Product features are assessed based on the value to

Copyright © 2010 Pearson Education, Inc.

Style describes the

Copyright © 2010 Pearson Education, Inc.

Brand is the name, term, sign, or design—or a

Copyright © 2010 Pearson Education, Inc.

Individual Product and Service Decisions

Copyright © 2010 Pearson Education, Inc.

Copyright © 2010 Pearson Education, Inc.

Brand represents the consumer’s perceptions and