Chapter 7: Products, Services, and Brands — Building Customer Value Flashcards
Define product.
A product is anything that could be offered to the market to satisfy a need/want.
Discuss the major classifications of products and services.
Products could be classified into consumer and industrial product based on the purpose of buying: consumer - for personal consumption, industrial - for further processing.
For consumer products, it is further classified into
1) Convenience products - purchased frequently and immediately, low priced, widespread distribution e.g. candy, soda
2) Shopping products - bought less frequently, more planning and effort, brand comparisons, selective distribution e.g. furniture, clothing, cars, appliances
3) Specialty products - strong brand preference, little comparison shopping, special purchasing effort, exclusive distribution, carefully targeted promotion e.g. Lamborghinis, Rolex watches
4) Unsought products - little product awareness, or negative interest, requires aggressive advertising and personal selling e.g. life insurance, blood donation, coffin
For industrial products, it is further classified into
1) Materials and parts - used to produce a new product
2) Capital items - aids in buyer’s production or operations
3) Supplies and services - operating supplies, repair, and maintenance items
What are the two types of products categorized by tangibility?
1) Goods - tangible
2) Services - intangible
Define service and state some examples.
Service is anything that is intangible and does not result in the ownership of anything offered to the market to satisfy a need/want.
For example, tax preparation, hotel accommodations, banking.
Can market offerings be a combination of both goods and services? If so, state an example.
Yes, restaurant meal -> food as goods and waiters as service.
Describe the three levels of products.
The three levels of products are
1) core customer value - what customers are really buying
2) actual product - what is the product e.g. brand name, features, design, packaging, and quality level
3) augmented product - additional services and benefits e.g. delivery, credit, instructions, installation, and warranty
Describe the decisions companies make regarding their individual products and services.
There are five steps in making decisions regarding this:
1) Product attributes - product quality dimensions, product feature considerations (value to customer, cost to company), product style and design
2) Branding - name, term, or symbol that identifies a product/service and differentiates it from others; also includes logo
3) Packaging - designing and producing the container or wrapper for a product; should help communicate brand personality
4) Labeling - printed information appearing on or with the package, including the product name; describes several things about the product; is regulated by the government
5) Product support services - talk w/ customers to assess the value and to obtain ideas for new services; to fix problems
What is the difference between packaging and labeling?
Packaging a product is more towards the appearance of a product or the looks and feels of it, but for labeling, it is more towards providing the necessary information.
Describe the decisions companies make regarding their product lines.
Companies can 1) fill (adding more) and 2) stretch (downward, upward, or both ways) their product line, which is the group of closely related products.
Line filling is to add more variations of a product e.g. Mama instant noodles -> more flavors
Line stretching is to create new products within the same product category but with different positioning e.g. Singh -> Leo, MK -> MK Gold
Describe the decisions companies make regarding their product mixes.
Companies need to consider the product mix dimensions which include
1) width - the number of different product lines (category)
2) length - the number of items in a line
3) depth - the number of versions offered of each product in the line
4) consistency - how closely related various lines are
Identify the four characteristics that affect the marketing of services.
1) Intangibility - services cannot be seen, tasted, felt, heard, or smelled before purchase
2) Variability - quality of services depend on who provides them and when, where, and how
3) Inseparability - services cannot be separated from their providers
4) Perishability - services cannot be stored for later sale or use
Describe the links within the service-profit chain.
The service-profit chain links employee and customer satisfaction to firm profits, containing five links:
1) Internal service quality - good treatment for employees
2) Productive employees
3) Greater service value
4) Satisfied loyal customers
5) Growth and profit
Identify the additional marketing considerations that services require.
Instead of only external marketing whereas companies market to customers, they also need to consider two more marketings:
1) Internal marketing - sell the importance of delighting customers to customer-contact employees
2) Interactive marketing - must help employees to master the art of interacting with customers
Discuss brand equity.
Brand equity is the differential effect that knowing the brand name has on customer response; worth of a brand.
It measures the brand’s ability to capture consumer preference and loyalty.
It is a valuable asset that offers many competitive advantages.
Discuss branding strategy — the decisions companies make in building and managing their brands.
Brands are assets that must be carefully developed and managed. In branding strategy decisions, it involves four steps:
1) Brand positioning - based on
a) product attributes (least desirable; easily copied)
b) product benefits (Lexus - quality, Nike - performance)
c) beliefs and values (touches universal emotions e.g. Godiva)
In positioning, marketers should create a brand mission and vision of what the must be and do.
2) Brand name selection - desirable qualities include distinctive, extendable, suggests the product’s benefits and qualities.
3) Brand sponsorship - options include
a) national/manufacturer brands - name of manufacturer on the product; serves the interest of the manufacture first e.g. Apple, Nike, Nestle
b) store/private brands - manufactured and sold under the name of a specific retailer; serves the interest of the retailers first; growing rapidly e.g. Tesco, Walmart
c) licensed brands - name or character licensing
d) co-branding - creates broader appeal and brand equity e.g. Versace + H&M, Blackberry + Porsche, Nike + Apple
4) Brand development - four strategies include:
a) line extension - same brand, same category
b) brand extension - same brand, new category e.g. Roberto Cavalli
c) multibranding - new brand, same category; to establish different features and appeal to different customer segments
d) new brands - new brand, new category; new product category for which none of the firm’s existing brands are appropriate
