Products, Services and Brands
The Product-Service Continuum
Sugar
Pure Tangible
Good
Restaurant
Education
Pure
Service
Offer another example of a pure service.
What Is a Product?
• Anything offered to a market that satisfies a want or need.
– Includes: physical objects, services, events, persons, places, organizations,
ideas, or some combination thereof.
What Is a Service?
• Activities, benefits, or satisfactions offered to a market that
are essentially intangible and do not result in the ownership
of anything.
– Examples: banking, hotel, airline, retail, tax preparation, home repairs.
Consumer Experiences
• In-store Theater is more
important than ever
• Consider ALL consumer
touch-points
• Eliminate shopping
drudgery
• Work fun into the shopping
experience, but don’t
overdo it
Knot Tying
Clinic
Art Gallery
Entrance
7-5
Three Levels of Product
Individual Product Decisions
Product Attributes
What is an attribute?
• Quality
– Performance vs. Conformance quality
• Benefits vs. Features
– Consumers generally value benefits,
not features
• Style and design
– Influences product choice and
experience
• Price
Branding
• A brand is a name, term,
sign, symbol, or design,
or a combination of
these that identifies the
maker or seller of a
product or service.
• Product = “Body”
• Brand = “Soul”
Branding - Advantages
• Advantages to buyers:
–
–
–
–
Eases product identification
Simplifies the purchase process (choice heuristic)
Signal of quality
“Repository of Trust” (- Jordan)
• Advantages to sellers:
– Drive loyalty to company and its products
– Provides legal protection
– Helps segment markets (i.e. “Branded Variants”)
How Branding Happens
Attributes of Strong Brands
• Excels at delivering
desired benefits
• Stays relevant
• Priced to meet
perceptions of value
• Positioned properly
• Communicates
consistent brand
messages
• Well-designed brand
hierarchy
• Uses multiple marketing
activities
• Understands consumerbrand relationship
• Supported by
organization
• Monitors sources of
brand equity
Marketing Advantages of Strong Brands
• Improved perceptions of
product performance
• Greater loyalty
• Less vulnerable to
competition
• Less vulnerable to crises
• Larger margins
• Inelastic consumer response
to price increases
• Elastic consumer
response to price
decreases
• Greater trade
cooperation
• Increase in
effectiveness of IMC
• Licensing opportunities
• Brand extension
opportunities
Packaging
• Container, wrapper or “external
face” for a product.
• Good packages
–
–
–
–
–
–
–
market the brand effectively
protect the internal elements
protect the external elements
are easy/straightforward to use
don’t become “stale” over time
ensure consumer’s safety
are responsive to local
environmental and social concerns
Innovative
Packaging
Dutch Boy’s packaging
innovation offers paint in
plastic containers with
twist-off tops. The paint
container is easy to carry,
doesn’t need a screwdriver
to pry open, doesn’t
dribble when poured, and
doesn’t take a hammer to
bang the lid shut.
Labeling
• Printed information appearing on or with the
package.
• Performs several functions:
– Identifies or reinforces identification of
product/brand
– Provides “valuable” information about product
contents or ingredients
– Co-promotes the product along with packaging
Labeling
The FDA now requires food
manufacturers to list trans
fat on the Nutrition Facts
portion of product labels.
The Ethics and Legality of Labeling
Product Line Decisions
• Product Line
– Group of products with variations (flavors/types/appeals).
• Product Line Stretching
• Downward
• Upward
• Both directions
• Product Line Filling
– Examples
• Ice Tea
• Pet Foods
Product Line Stretching - Marriott
Marriott offers a full line of hotel brands,
each aimed at a different market.
Product Mix Decisions
• Product mix:
– What combination of products do we carry?
• Product mix decisions:
– Product Line Length: the number of items in a line.
– Product Line Width: the number of different product lines
the company carries. (i.e. Wal-Mart has toys, food, cards,
clothes, music, etc.)
– Product Line Depth: the number of versions offered of each
product in the line. (i.e. 2 or 3 different sizes or sub-types)
Question du Jour
Is product variety a blessing or curse for consumers?
Brand Loyalty & Brand Equity
• Brand Loyalty
– Definition: Willingness to re-purchase due to favorable brand
impressions
– How measured?
• Brand Equity
– Definition: The positive effect that knowing the brand name has on
consumer response to the product.
– Psychological Value
– Financial Value
• The Link between Brand Loyalty & Brand Equity
Brand Loyalty Measurement Methods
•
•
•
•
•
Repeat Purchases
Reported Loyalty
Price Sensitivity Analysis
Brand Set “Squares” Method
Other Methods
Measuring Brand Equity
Brand Audits
Brand Tracking
Brand Valuation
Brand Values
Brand
Brand Value (Billions)
Coca-Cola
Microsoft
IBM
GE
$67.39
$61.37
$53.79
$44.11
Intel
Disney
McDonald’s
$33.50
$27.11
$25.00
Nokia
Toyota
Marlboro
$24.04
$22.67
$22.13
Interbrand’s Brand Equity Formula
Brand earnings
• Brand sales
• Costs of sales
• Marketing costs
• Overhead expenses
• Remuneration of
capital charge
• Taxation
Brand strength
• Leadership (25%)
• Stability (15%)
• Market (10%)
• Geographic spread
(25%)
• Trend (10%)
• Support (10%)
• Protection (5%)
Brand Equity Models
• Brand Asset Valuator
• Aaker Model
• BRANDZ
Brand Asset Valuator (BAV)
Brand Equity Factors
Knowledge
Esteem
Relevance
Differentiation
Aaker Model – Brand Identity
Brand-as-product
Brand-as-organization
Brand-as-person
Brand-as-symbol
Aaker Model – Brand Assets
Brand
loyalty
Brand
associations
Proprietary
assets
Brand
awareness
Perceived
quality
The BRANDZ Model
Bonding
Advantage
Performance
Relevance
Presence
Major Brand Strategy Decisions
Brand Elements
Brand
Names
Slogans
URLs
Elements
Logos
Characters
Symbols
Slogans
• Like a good neighbor,
State Farm is there
• Just do it
• Nothing runs like a
Deere
• Help is just around the
corner
• Save 15% or more in 15
minutes or less
•
•
•
•
•
•
•
•
We try harder
We’ll pick you up
Nextel – Done
Zoom Zoom
I’m lovin’ it
Innovation at work
This Bud’s for you
Always low prices
Brand Element Choice Criteria
• Memorable
• Meaningful
• Likeable
• Transferable
• Adaptable
• Protectible
Brand Positioning
• Brands can be positioned at
three levels:
– Product features/ attributes
• Least desirable
• Easily copied
– Brand benefits
– Beliefs and values
• Hits consumers on a deeper
level, tapping “universal”
emotions.
Brand Name Selection
• Good Brand Names:
1. Straightforwardly suggest the product’s benefits and
qualities.
2. Are easy to spell, pronounce and recognize.
3. Are distinctive and memorable.
4. Are extendable into different product lines (i.e. facilitate
brand extensions).
5. Translate easily into foreign languages.
6. Provide the maximum legal protection from infringement.
Brand Name Selection
Boudreaux’s Butt Paste is a real
product used in the treatment of
diaper rash.
Is this a good brand name?
Good Brand Names:
1.
2.
3.
4.
5.
6.
Straightforwardly suggest the product’s benefits and qualities.
Are easy to spell, pronounce, recognize, and remember.
Are distinctive and memorable.
Are extendable into different product lines (i.e. facilitate brand
extensions).
Translate easily into foreign languages.
Provide the maximum legal protection from infringement.
Brand Naming – Multi-brand strategies
Individual names/
“House of Brands”
Blanket family names/
”Branded House”
Parent/Sub-Brand
combination names
Crest Whitestrips
Brand Sponsorship
• Manufacturer’s brands
– Also called “National Brands” (Tide,
Coke, Pringles, etc.)
• Private-label brands
– Also called “Store” or “Distributor”
Brands (Stop & Shop’s “Mi Casa”,
Costco’s “Kirkland”)
• Store vs. Private Label Trends
• Co-branding – “Tag-team
Branding” (Waffle House and Minute
Maid OJ)
• Ingredient Branding (“Intel
Inside”)
Mi Casa brand products are only
available at Stop & Shop stores.
Brand Development Strategies
Line Extensions
Brand Extensions
Brand Development –
Multibranding & New Brands
• Multi-branding
– appeal to different buying motives and segments
– “branded variants”
– Cannibalization issues
• Example: Toyota sells Corolla, Camry, Scion, Yarris
• New Brands
– waning power of existing brands or product portfolio
– diversification advantages
– can develop (Black & Decker develops De Walt) or buy (i.e. Wendy’s
buys Baja Fresh)
Branding Terms
•
•
•
•
•
•
Brand line
Brand mix
Brand extension
Sub-brand
Parent brand
Family brand
•
•
•
•
•
•
Line extension
Category extension
Branded variants
Licensed product
Brand dilution
Brand portfolio
Services
Four Service Characteristics
Four Service Characteristics –
Restaurant Example
How do the service
characteristics of intangibility,
variability, inseparability, and
perishability relate to
restaurants?
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Products, Services and Brands