Principles of marketing BBUS - Session 5_ Chap 8

25/10/2023 1 CHAPTER 8 PRODUCTS, SERVICES, AND BRANDS: BUILDING CUSTOMER VALUE THU NGUYEN 1 LEARNING OBJECTIVES 1. Define product and describe the major classifications of products and services. 2. Describe the decisions companies make regarding their individual products and services, product lines, and product mixes. 3. Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. 4. Discuss branding strategy—the decisions companies make in building and managing their brands. 2 2 1 25/10/2023 SUMMARY LO1: Define product and describe the major classifications of products and services. • A product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. • Products include physical objects but also services, events, persons, places, organizations, ideas, or mixtures of these entities. • Services are products that consist of activities, benefits, or satisfactions offered for sale that are essentially intangible, such as banking, hotel, tax preparation, and home-repair services. • As products and services become more commoditized, many companies are moving to a new level in creating value for their customers. To differentiate their offers, beyond simply making products and delivering services, they are creating and managing customer experiences with their brands or companies. 3 3 SUMMARY LO1: Define product and describe the major classifications of products and services (cont.) the core, problem-solving benefits or services that consumers seek 4 4 2 25/10/2023 SUMMARY LO1: Define product and describe the major classifications of products and services (cont.) Product/service Consumer product A product bought by final consumers for personal consumption Industrial product A product bought by individuals and organizations for further processing or for use in conducting a business 5 5 SUMMARY LO1: Define product and describe the major classifications of products and services (cont.) • Consumer products 6 6 3 25/10/2023 SUMMARY LO1: Define product and describe the major classifications of products and services (cont.) • Industrial products Raw materials Materials and parts Industrial product Manufacture materials Installation Capital items Accessory equipment wheat, cotton, livestock, fruits, vegetables, fish, lumber, crude petroleum, iron ore iron, yarn, cement, wires, small motors, tires, castings factories, offices, generators, drill presses, large computer systems, elevators hand tools, lift trucks, computers, fax machines, desks Operating supplies lubricants, coal, paper, pencils Supplies Supplies and services Repair and maintenance items paint, nails, brooms Maintenance and repair services window cleaning, computer repair Service Business advisory services legal, management consulting, advertising 7 7 SUMMARY LO2: Describe the decisions companies make regarding their individual products and services, product lines, and product mixes • Product and Service Decisions: Three levels of product and service decisions Individual product decisions Product line decisions Product mix decisions 9 9 4 25/10/2023 SUMMARY LO2: Describe the decisions companies make regarding their individual products and services, product lines, and product mixes 1. Individual Product and Service Decisions: Product attributes • • • Product quality: • o Total quality management o Two dimensions: level (performance quality) and consistency (conformance quality) Product features Product style and design Branding Packaging Name, term, sign, • symbol, or a combination of these terms • • Design and produce container/wrapper for a product Protect the product, attract buyers, communicate brand positioning, close the sale Environmental concerns • • • • Labelling and logos Product support services Identify product/brand • Describe product Promote brand & engage customers Laws/labeling requirements Phone, email online, social media, mobile, interactive voice, data technologies 10 10 SUMMARY LO2: Describe the decisions companies make regarding their individual products and services, product lines, and product mixes (cont.) 2. Product line decisions: o A group of products that are: ▪ closely related because they function in a similar manner ▪ sold to the same customer groups ▪ marketed through the same types of outlets ▪ fall within given price ranges. o Product line length: Number of items in the product line. o Expand product line: 1. Line filling: add more items within the present range of the line (add more colours, more packaging type or size…). Line filling is overdone if it results in cannibalization (eating up sales of the company’s own existing products) and customer confusion 2. Line stretching: lengthens product line beyond current range (downward, upward, or both). E.g.: Samsung Note, Samsung Fold, Samsung A… 11 11 5