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 Learning Objectives
7-1. Define product and describe the major
classifications of products and services.

7-2. Describe the decisions companies make

regarding their individual products and
services, product lines, and product mixes.

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 Learning Objectives
7-3. Identify the four characteristics that affect
the marketing of services and the
additional marketing considerations that
services require.
7-4. Discuss branding strategy—the decisions
companies make in building and managing
their brands.

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 Learning Objective 7-1
Define product and describe the major
classifications of products and services.

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 What Is a Product?
• A product is anything that can be offered to a
market for attention, acquisition, use, or
consumption that might satisfy a want or
need.
• A service is an activity, benefit, or satisfaction
offered for sale; it is intangible and does not
result in ownership of anything.

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 Products, Services,
and Experiences
• Market offerings include both tangible goods
and services.
• Companies create and manage customer
experiences with their brands or companies.
• To differentiate their offers from that of the
competitors

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Figure 7.1 - Three Levels of Product

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Product and Service Classifications
• Consumer products are bought by final
consumers for personal consumption.
• Industrial products are bought by individuals
and organizations for further processing or
for use in conducting a business.
• Materials and parts, capital items, and supplies
and services

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 Table 7.1 - Marketing Considerations for
Convenience and Shopping Products
Marketing Convenience Shopping
Considerations
Customer buying Frequent purchase; little Less frequent purchase; much
behavior planning, little comparison planning and shopping effort;
or shopping effort; low comparison of brands on
customer involvement price, quality, and style

Price Low price Higher price

Distribution Widespread distribution; Selective distribution in
convenient locations fewer outlets
Promotion Mass promotion by the Advertising and personal
producer selling by both the
producer and resellers
Examples Toothpaste, magazines, Major appliances, televisions,
and laundry detergent furniture, and clothing

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 Table 7.1 - Marketing Considerations for
Specialty and Unsought Products
Marketing Specialty Unsought
Considerations
Customer buying Strong brand preference and Little product awareness or
behavior loyalty; special purchase effort; knowledge (or, if aware,
little comparison of brands; low little or even negative
price sensitivity interest)
Price High price Varies
Distribution Exclusive distribution in only one or Varies
a few outlets per market area
Promotion More carefully targeted promotion Aggressive advertising and
by both the producer and resellers personal selling by the
producer and resellers
Examples Luxury goods, such as Rolex Life insurance and Red
watches or fine crystal Cross blood donations

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 Other Market Offerings

Organizations Persons

Places Ideas

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 Learning Objective 7-2
Describe the decisions companies make
regarding their individual products and services,
product lines, and product mixes.

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Product and Service Decisions

Individual
Product Line
Product
Decisions
Decisions

Product Mix
Decisions

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 Figure 7.2 - Individual
Product and Service Decisions

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 Product Line Decisions
• A product line is closely related products
that:
• Have similar functions and customer groups
• Are sold through similar outlets or fall within
given price ranges
• Product line length is the number of items in
the product line.
• Product line filling
• Product line stretching
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 Product Line Decisions

Samsung’s bulging
Galaxy mobile
devices line now
offers a size for any
need or preference.

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Product Mix (or Product Portfolio)

The Clorox Company has

a nicely contained
product mix consistent
with its mission to “make
everyday life better,
every day.”

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 Product Mix Decisions
Width
• Number of different product lines the company carries

Length
• Total number of items a company carries within its product lines

Depth
• Number of versions offered for each product in the line

Consistency
• Relativity of the various product lines in end use, production requirements,
distribution channels, or some other aspect
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 Learning Objective 7-3
Identify the four characteristics that affect
the marketing of services and the additional
marketing considerations that services require.

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 Figure 7.3 - Four
Service Characteristics

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 Service Profit Chain
• Links service firm profits with employee and
customer satisfaction
• The chain consist of five links:
• Internal service quality
• Satisfied and productive service employees
• Greater service value
• Satisfied and loyal customers
• Healthy service profits and growth

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Figure 7.4 - Three Types of
Services Marketing

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 Marketing Tasks for
Service Companies
Managing service differentiation

• Developing a differentiated offer, delivery, and image

Managing service quality

• Delivering consistently higher quality than the competitors

Managing service productivity

• Training current employees or hiring new ones
• Increasing the quantity of service by giving up some
quality
• Harnessing the power of technology
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 Learning Objective 7-4
Discuss branding strategy—the decisions
companies make in building and managing
their brands.

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 Brand Equity
• The differential effect that knowing the brand
name has on customer response to the
product or its marketing

• With positive brand equity, consumers react

more favorably to the brand than to an
unbranded version of the same product.

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 Brand Equity
• Consumer perception dimensions:
• Differentiation
• Relevance
• Knowledge
• Esteem
• Brand value is the total financial value of a
brand.
• Customer equity is the value of customer
relationships that the brand creates.
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 Major Brand Strategy Decisions
Brand positioning Brand name
• Attributes selection
• Benefits • Selection
• Beliefs and values • Protection

Brand sponsorship
• Manufacturer’s
brand
• Private brand
• Licensing
• Co-branding
Brand development
• Line extensions
• Brand extensions
• Multibrands
• New brands

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 Brand Positioning and
Brand Name Selection
• Marketers should establish a mission and
vision for the brand when positioning it.
• Desirable qualities for a brand name should be
• Based on the product’s benefits and qualities
• Easy to pronounce, recognize, and remember
• Distinctive and extendable
• Easily translated into foreign languages
• Capable of registration and legal protection

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 Brand Sponsorship
National brands
• Marketed under the manufacturer’s own name

Store brands

• Created and owned by a reseller of a product or service

Licensing
• Use names and symbols created by other companies or well-known movie
characters or celebrities for a fee
Co-branding
• Use the established brand names of two different companies on the same
product
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 Figure 7.6 - Brand
Development Strategies

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 Managing Brands
• Communicate the brand’s positioning
• Manage all brand touch points
• Train employees to be customer centered
• Audit the brand’s strengths and weaknesses

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