Chapter 9
Product, Services,
and Branding
Strategies
Copyright © 2008 Pearson Education Canada
Principles of Marketing, Seventh Canadian Edition
Learning Goals
1.
2.
3.
4.
5.
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 companies 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
Discuss two additional product issues: socially responsible
product decisions and international product and services
marketing
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Case Study
lululemon athletica
• Founded in 1998, in Kitsilano,
Vancouver, in response to the
growing number of females
taking up sports, specially yoga.
• Started as a design studio
surrounded by a retail store
providing yoga-inspired
clothing to females in Canada
and around the globe.
• To lululemon customers, the
gear isn’t just clothing. It is a
way of life. An experience. A
statement
• Thus, lululemon does much
more than just sell athletic
apparel. It creates an
unparalleled experience.
Copyright © 2008 Pearson Education Canada
• Originally design for athletes, the
lululemon clothing can be used by
almost anyone for any activity
• Although women were the
original target, lululemon
currently has a line of men’s
clothing.
• The brand is defined through the
store experience, superior-quality
garnments, and etincing retail
stores.
• The lululemon gear is not cheap.
And, yet, people flock to its stores.
• Customers are pasionate about the
brand, and they share this passion
with others.
9-3
Principles of Marketing, Seventh Canadian Edition
Learning Goals
1.
2.
3.
4.
5.
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 companies 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
Discuss two additional product issues: socially responsible
product decisions and international product and services
marketing
Copyright © 2008 Pearson Education Canada
9-4
Principles of Marketing, Seventh Canadian Edition
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 need or want.
• A service is a form of product that consists of
activities, benefits or satisfactions offered for sale
that are essentially intangible and do not result
in the ownership of anything.
Copyright © 2008 Pearson Education Canada
9-5
Principles of Marketing, Seventh Canadian Edition
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
– Core benefit, actual and augmented product
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
What Is a Product?
• Three levels of product
– Augmented product
– Actual product
– Core benefit
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Discussion Question
• Consider Starbucks
– What goods and
services do they offer?
– How do they
differentiate through
experience?
– What is their core,
actual and augmented
product offering?
Copyright © 2008 Pearson Education Canada
9-8
Principles of Marketing, Seventh Canadian Edition
What Is a Product?
• Types of Consumer
Products
–
–
–
–
• Frequent purchases
bought with minimal
buying effort and little
comparison shopping
• Low price
• Widespread distribution
• Mass promotion by
producer
Convenience
Shopping
Specialty
Unsought
– Snack foods, toiletries, food
products
Copyright © 2008 Pearson Education Canada
9-9
Principles of Marketing, Seventh Canadian Edition
What Is a Product?
• Types of Consumer
Products
–
–
–
–
• Less frequent purchases
• More shopping effort for
comparisons
• Higher than convenience
good pricing
• Selective distribution in
fewer outlets
• Advertising and personal
selling
Convenience
Shopping
Specialty
Unsought
Copyright © 2008 Pearson Education Canada
9-10
Principles of Marketing, Seventh Canadian Edition
What Is a Product?
• Types of Consumer
Products
–
–
–
–
• Strong brand preference
and loyalty, requires
special purchase effort,
little brand comparisons,
and low price sensitivity
• High price
• Exclusive distribution
• Carefully targeted
promotions
Convenience
Shopping
Specialty
Unsought
Copyright © 2008 Pearson Education Canada
9-11
Principles of Marketing, Seventh Canadian Edition
What Is a Product?
• Types of Consumer
Products
–
–
–
–
• Little product awareness
and knowledge (or if
aware, sometimes
negative interest)
• Pricing varies
• Distribution varies
• Aggressive advertising
and personal selling by
producers and resellers
Convenience
Shopping
Specialty
Unsought
Copyright © 2008 Pearson Education Canada
9-12
Principles of Marketing, Seventh Canadian Edition
Product and Service Classifications
• Consumer Products
• Business Products
– Materials and parts
– Capital items
– Supplies and services
Copyright © 2008 Pearson Education Canada
9-13
Principles of Marketing, Seventh Canadian Edition
Product and Service Classifications
• Organizations, persons, places, and ideas
– Organizational marketing makes use of corporate
image advertising
– Person marketing applies to political candidates,
entertainment sports figures, and professionals
– Place marketing relates to tourism
– Social marketing promotes ideas
Copyright © 2008 Pearson Education Canada
9-14
Principles of Marketing, Seventh Canadian Edition
Learning Goals
1.
2.
3.
4.
5.
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 companies 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
Discuss two additional product issues: socially responsible
product decisions and international product and services
marketing
Copyright © 2008 Pearson Education Canada
9-15
Principles of Marketing, Seventh Canadian Edition
Individual Product and
Service Decisions
• Product and Service Attributes
– Quality
• Lined to customer value and satisfaction
– The whole company needs to be involved (TQM)
– Features
• Competitive tool for differentiating product
• Should be valued by the customer as determined through
market research
– Style and Design
• Good design contributes to product’s usefulness as well as
looks
Copyright © 2008 Pearson Education Canada
9-16
Principles of Marketing, Seventh Canadian Edition
Individual Product and
Service Decisions
• Branding
– Brand: a name, term, sign, symbol, or design that
identifies the product
– 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
Copyright © 2008 Pearson Education Canada
9-17
Principles of Marketing, Seventh Canadian Edition
Individual Product and
Service Decisions
• Packaging
– Often includes primary, secondary and
shipping packages
– Functions of packaging
• Contain and protect
• Promote the product
• Differentiate the product
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Individual Product and
Service Decisions
• Labelling serves to identify the product
• Describes the product
• Promotes the product
• Must be careful not to:
– Mislead customers
– Fail to describe ingredients
– Fail to include safety warnings
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Individual Product and
Service Decisions
• Product support services
– Survey customers regularly to assess current
customer service
– Companies use a mix of phone, email, fax,
Internet and interactive voice and data
technologies
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Product Line Decisions
• Product line
– A group of products that are closely related because
they may…
•
•
•
•
function in a similar manner
are sold to the same customer groups
Market through the same types of outlets
fall within given price ranges
• Product line length
– Line stretching: adding products that are higher or
lower priced than the existing line
– Line filling: adding more items within the present
price range
Copyright © 2008 Pearson Education Canada
9-21
Principles of Marketing, Seventh Canadian Edition
Product Mix Decisions
• Product Mix
– Also known as product assortment
– Consists of all the product lines and items that
a particular seller offers for sale
• Width: # of product lines
• Length: # of products in lines
• Depth: # of versions of each product carried
• Consistency: how closely related the product lines
are
Copyright © 2008 Pearson Education Canada
9-22
Principles of Marketing, Seventh Canadian Edition
Learning Goals
1.
2.
3.
4.
5.
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 companies 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
Discuss two additional product issues: socially responsible
product decisions and international product and services
marketing
Copyright © 2008 Pearson Education Canada
9-23
Principles of Marketing, Seventh Canadian Edition
Branding Strategy
• Brand equity is the positive differential effect
that knowing the brand name has on customer
response to the product or service
• One measure of equity is the extent to which
customers are willing to pay more for the brand
• Brand valuation is the process of estimating the
total financial value of a brand
Copyright © 2008 Pearson Education Canada
9-24
Principles of Marketing, Seventh Canadian Edition
Branding Strategy
• Brands with strong equity have many
competitive advantages:
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–
–
–
High consumer awareness
Strong brand loyalty
Helps when introducing new products
Less susceptible to price competition
Copyright © 2008 Pearson Education Canada
9-25
Principles of Marketing, Seventh Canadian Edition
Building Strong Strategy
• Three levels of
positioning:
• Brand Positioning
• Brand Name Selection
• Brand Sponsorship
• Brand Development
– Product attributes
• Least effective
– Benefits
– Beliefs and values
• Taps into emotions
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Building Strong Strategy
•
•
•
•
• Good Brand Names:
Brand Positioning
Brand Name Selection
Brand Sponsorship
Brand Development
Copyright © 2008 Pearson Education Canada
– Suggest something about
the product or its benefits
– Are easy to say, recognize
and remember
– Are distinctive
– Are extendable
– Translate well into other
languages
– Can be registered and
legally protected
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Principles of Marketing, Seventh Canadian Edition
Building Strong Strategy
•
•
•
•
• Manufacturer brands
• Private (store) brands
Brand Positioning
Brand Name Selection
Brand Sponsorship
Brand Development
– Costly to establish and
promote
– Higher profit margins
• Licensed brands
– Name and character
licensing has grown
• Co-branding
– Advantages/ disadvantages
Copyright © 2008 Pearson Education Canada
9-28
Principles of Marketing, Seventh Canadian Edition
Building Strong Strategy
•
•
•
•
• Line extensions
Brand Positioning
Brand Name Selection
Brand Sponsorship
Brand Development
– Minor changes to existing
products
• Brand extensions
– Successful brand names
help introduce new
products
• Multibrands
– Multiple product entries in
a product category
• New brands
– New product category
Copyright © 2008 Pearson Education Canada
9-29
Principles of Marketing, Seventh Canadian Edition
Managing Brands
• Brands are known through advertising, personal
experience, word of mouth, the Internet
• Everyone in the company represents the brand
• Companies need to periodically run a brand
audit
Copyright © 2008 Pearson Education Canada
9-30
Principles of Marketing, Seventh Canadian Edition
Learning Goals
1.
2.
3.
4.
5.
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 companies 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
Discuss two additional product issues: socially responsible
product decisions and international product and services
marketing
Copyright © 2008 Pearson Education Canada
9-31
Principles of Marketing, Seventh Canadian Edition
Services Marketing
• Services
– Account for 68% of Canada’s GDP, almost 75%
of employment, and nearly 90% of new job
creation.
– Service industries include business
organizations, government, and private notfor-profit organizations
Copyright © 2008 Pearson Education Canada
9-32
Principles of Marketing, Seventh Canadian Edition
Characteristics of Services
• Intangibility
• Inseparability
• Variability
• Perishability
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Marketing Strategies for
Service Firms
• The Service-Profit Chain
– Internal Marketing
– External Marketing
– Interactive Marketing
Copyright © 2008 Pearson Education Canada
9-34
Principles of Marketing, Seventh Canadian Edition
Marketing Strategies for
Service Firms
• Managing Service Differentiation
• Managing Service Quality
• Managing Service Productivity
Copyright © 2008 Pearson Education Canada
9-35
Principles of Marketing, Seventh Canadian Edition
Learning Goals
1.
2.
3.
4.
5.
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 companies 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
Discuss two additional product issues: socially responsible
product decisions and international product and services
marketing
Copyright © 2008 Pearson Education Canada
9-36
Principles of Marketing, Seventh Canadian Edition
Additional Product Considerations
• Product Decisions and
Social Responsibility
• International Product and
Services Marketing
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–
–
–
Government regulation
Food and product safety
Pricing and advertising
Labelling, weights, and
measures
– Hazardous products
– Product liability
Copyright © 2008 Pearson Education Canada
– Standardization versus
local adaptation
– Electrical standards,
packaging
– Cultural differences in
meaning
– Barriers to trade
9-37
Principles of Marketing, Seventh Canadian Edition
Learning Goals
1.
2.
3.
4.
5.
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 companies 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
Discuss two additional product issues: socially responsible
product decisions and international product and services
marketing
Copyright © 2008 Pearson Education Canada
9-38
Principles of Marketing, Seventh Canadian Edition
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