Topic 5
Products and Brands:
Building Customer Value
© 2023, University of Cyberjaya. Please do not reproduce, redistribute or share without the prior express permission of the author.
IKEA: Building a Cult Brand
IKEA’S success comes from a deep IKEA stores are designed for the
understanding that it’s selling much customer to experience the
more than just home furnishing at whole store and be drawn by a
low prices—it offers customers a wide variety of items along the
lifestyle both affordable and way.
comprehensive.
Learning Objectives
5.1 Define product and describe the major classifications of
products and services.
5.2 Describe the decisions companies make regarding their
individual products and services, product lines, and
product mixes.
5.3 Identify the four characteristics that affect the
marketing of services and the additional marketing
considerations that services require.
5.4 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? (1 of 17)
Product is anything that can be offered in a market for
attention, acquisition, use, or consumption that might satisfy
a need or want.
Services are a form of 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? (2 of 17)
Products, Services, and Experiences
Products and services are becoming more commoditized.
Companies are now creating and managing customer
experiences with their brands or company.
What is a Product? (3 of 17)
Figure 8.1 Three Levels of Product
What is a Product? (4 of 17)
Products, Services, and Experiences
Creating customer experiences: Your local Buffalo Wild
Wings restaurant doesn’t just serve up wings and beer; it
gives customers the ultimate “Wings. Beer. Sports.” fan
experience.
What is a Product? (5 of 17)
Product and Service Classifications
Consumer products
Industrial products
What is a Product? (6 of 17)
Table 5.1 Marketing Considerations for Consumer Products
Type of Consumer Product
Marketing Convenience Shopping Specialty Unsought
Considerations
Customer buying Frequent purchase; Less frequent purchase; much planning and Strong brand preference Little product awareness
behavior little planning, little comparison or shopping effort; and loyalty; special or knowledge (or, if
shopping effort; low customer comparison of brands on price, quality, and purchase effort; little aware, little or even
involvement style comparison of brands; negative interest)
low price sensitivity
Price Low price Higher price Highest price Varies
Distribution Widespread distribution; Selective distribution in fewer outlets Exclusive distribution in only one or a Varies
convenient locations few outlets per market area
Promotion Mass promotion by the Advertising and personal selling by both the More carefully targeted promotion by Aggressive advertising
producer producer and resellers both the producer and resellers and personal selling
by the producer and
resellers
Examples Toothpaste, magazines, Major appliances, televisions, furniture, and Luxury goods, such as Life insurance and Red
and laundry detergent clothing Rolex watches or fine Cross blood donations
crystal
What is a Product? (7 of 17)
Product and Service Classifications
Consumer products are products and services bought by
final consumers for personal consumption.
Convenience products
Shopping products
Specialty products
Unsought products
What is a Product? (8 of 17)
Product and Service Classifications
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
What is a Product? (9 of 17)
Product and Service Classifications
Shopping products are less frequently purchased consumer
products and services that the customer compares carefully
on suitability, quality, price, and style.
Furniture
Cars
Appliances
What is a Product? (10 of 17)
Product and Service Classifications
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? (11 of 17)
Product and Service Classifications
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? (12 of 17)
Product and Service Classifications
Industrial products are those products purchased for further
processing or for use in conducting a business.
Materials and parts
Capital items
Supplies and services
What is a Product? (13 of 17)
Product and Service Classifications
Materials and parts include raw materials and manufactured
materials and parts.
Capital items are industrial products that aid in the buyer’s
production or operations.
Supplies and services include operating supplies, repair and
maintenance items, and business services.
What is a Product? (14 of 17)
Product and Service Classifications
Organizations, Persons, Places, and Ideas
• Organization marketing
• Person marketing
• Place marketing
• Social marketing
What is a Product? (15 of 17)
Product and Service Decisions
Organization marketing consists of activities undertaken to
create, maintain, or change the attitudes and behaviors of
target consumers toward an organization.
What is a Product? (16 of 17)
Product and Service Classifications
Person marketing consists of activities undertaken to create,
maintain, or change the attitudes or behavior of target
consumers toward particular people.
What is a Product? (17 of 17)
Product and Service Classifications
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.
Learning Objective 2
Describe the decisions companies make regarding their
individual products and services, product lines, and product
mixes.
Product and Service Decisions (1 of 11)
Figure 8.2 Individual Product Decisions
Product and Service Decisions (2 of 11)
Individual Product and Service Decisions
Communicate and deliver benefits by product and service
attributes.
Quality
Features
Style and design
Product and Service Decisions (3 of 11)
Individual Product and Service
Decisions Nike collaborated with Arab
Product quality refers to the athletes on the design and style
characteristics of a product or of its first sports hijab.
service that bear on its ability to
satisfy stated or implied customer
needs.
• Total quality management
• Return-on-quality
• Quality level
• Performance quality
• Conformance quality
Product and Service Decisions (4 of 11)
Individual Product and Service Decisions
Product Features
Competitive tool for differentiating a product from
competitors’ products
Assessed based on the value to the customer versus its cost
to the company
Product and Service Decisions (5 of 11)
Individual Product and Service Decisions
Style describes the appearance of the product.
Design contributes to a product’s usefulness as well as to its
looks.
Product and Service Decisions (6 of 11)
Individual Product and Service Decisions
Brand is the name, term, sign, or design or a combination of these, that
identifies the maker or seller of a product or service.
A classic stunt by former bargain footwear retailer Payless dramatically
illustrated the power of brands in shaping perceptions. Fashion
influencers paid as much as $645 for “Palessi” shoes that normally sell
for less than $40.
Product and Service Decisions (7 of 11)
Individual Product and Service Decisions
Packaging involves designing and producing the container or
wrapper for a product.
Labels identify the product or brand, describe attributes, and
provide promotion.
Product and Service Decisions (8 of 11)
Individual Product and Service Decisions
Product support services augment actual products.
Customer service: From the start, under the Lexus
Covenant, Lexus’s high-quality support services create an
unmatched car ownership experience and some of the
world’s most satisfied car owners.
Toyota Motor Sales, USA, Inc.
Product and Service Decisions (9 of 11)
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.
Product and Service Decisions (10 of 11)
Product Line Decisions
Product line length is the number of items in the product line.
Line stretching
Line filling
Product line stretching and filling: Through skillful line stretching and filling, B M
W now has brands and lines that successfully appeal to the rich, the super-rich,
and the hope-to-be-rich.
Product and Service Decisions (11 of 11)
Product Mix Decisions
Product mix consists of all the product lines and items that a particular seller
offers for sale.
Width
Length
Depth
Consistency
The product mix: Colgate-Palmolive’s nicely consistent product mix contains
many brands that constitute the “Colgate World of Care”— products that “every
day, people like you trust to care for themselves and the ones they love.”
Learning Objective 3
Identify the four characteristics that affect the marketing of
services and the additional marketing considerations that
services require.
Services Marketing (1 of 10)
Types of Service Industries
Government
Private not-for-profit organizations
Business organizations
Services Marketing (2 of 10)
Figure 8.3 Four Service Characteristics
Services Marketing (3 of 10)
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 (4 of 10)
Marketing Strategies for Service Firms
Service-profit chain links service firm profits with employee
and customer satisfaction.
Internal service quality
Satisfied and productive service employees
Greater service value
Satisfied and loyal customers
Healthy service profits and growth
Services Marketing (5 of 10)
Figure 8.4 Three Types of Services Marketing
Services Marketing (6 of 10)
Marketing Strategies for Service Firms
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.
Services Marketing (7 of 10)
Marketing Strategies for Service Firms
Interactive marketing means that service quality depends
heavily on the quality of the buyer-seller interaction during
the service encounter.
Service differentiation
Service quality
Service productivity
Services Marketing (8 of 10)
Marketing Strategies for Service Firms
Managing service differentiation creates a competitive advantage.
Offer
Delivery
Image
Service differentiation: Emirates offers first-class suites in its Boeing 777
airplanes featuring door-to-ceiling sliding doors, closets for hanging clothes,
wireless tablets with 2,500 channels, 32-inch TV screens, personal minibars, and
“inspiration kits” containing moisturizing pajamas and skin care kits.
Services Marketing (9 of 10)
Marketing Strategies for Service Firms
Managing service quality enables a service firm to
differentiate itself by delivering consistently higher quality
than its competitors provide.
Services Marketing (10 of 10)
Marketing Strategies for Service Firms
Managing service productivity refers to the cost side of
marketing strategies for service firms.
Employee hiring and training
Service quantity and quality
Learning Objective 4
Discuss branding strategy—the decisions companies make
in building and managing their brands.
Brand Strategy: Building Strong Brands (1 of 6)
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.
Brand value is the total financial value of a brand.
Brand Strategy: Building Strong Brands (2 of 6)
Figure 8.5 Major Brand Strategy Decisions
Brand Strategy: Building Strong Brands (3 of 6)
Building Strong Brands
Brand Positioning
Marketers can position brands at any of three levels.
Attributes
Benefits
Brand positioning: Brands like Beliefs
Disney and
formvalues
strong emotional connections with
customers. Says one Disney World Resort regular: ““I have a deep love and bond
to all things Disney.”
Brand Strategy: Building Strong Brands (4 of 6)
Building Strong Brands
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 Protecting the brand name: This ad
Manufacturer’s brand asks advertisers and others to always
Private brand add the registered trademark symbol
and the words “Brand Tissue” to the
Licensed brand
Kleenex name, helping to keep from
Co-brand
“erasing our coveted brand name that
we’ve worked so hard for all these
years.”
Brand Strategy: Building Strong Brands (6 of 6)
Figure 8.6 Brand Development Strategies
Q&A Session
© 2023, University of Cyberjaya. Please do not reproduce, redistribute or share without the prior express permission of the author.
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