Chapter 8: Products, services and brands: building customer value Flashcards
What is a product
It’s anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need.
What do products include other than tangible objects.
Can include services, events, persons, places, organizations and ideas.
What are services?
They are a form of product that consists of activities, benefits, or satisfactions offered.
they are essentially intangible and do not result in a customer’s ownership of anything.
What are products a key element in?
In the overall market offering.
What does marketing mix planning begin with
It begins with building an offering that brings value to target customers.
What are customer experiences
Market offerings with a strong sensory or emotional component that play out over time.
Product planners need to think about products and services on 3 levels. what are they
- the core customer value
- actual product
- augmented product
What does the second level of thinking about products (Actual product) consist of
- Develop the product and service features
- a design
- a quality level
- a brand name
- packaging
What question does the core customer value (level) address
What is the buyer really buying
What does the third level of product that planners need to build (Augmented Product) consist of
- Delivery and credit
- After-sale service
- Warranty
- Product support
What two broad classes do products and service fall into (based on the type of consumers who use them
- Consumer products
- Industrial products
What are consumer products
Products and services bought by final consumers for personal consumption
What do consumer products include
- Convenience products
- Shopping products
- Specialty products
- unsought products
What are convenience products
Frequent purchases, little planning, little comparison or shopping effort, low customer involvement.
usually low price
Widespread distribution
There’s also Mass promotion by the producer
e.g toothpaste and laundry detergent
what are shopping products
less frequent purchases, much planning and shopping effort, comparison of brand on price, quality and style
usually higher price
Selective distribution
There’s advertising and personal selling by both the producer and resellers
e.g: major appliances, televisions, furniture and clothing
what are Specialty products
Strong brand preference and loyalty, special purchase effort, little comparison, low price sensitivity
usually highest price
Exclusive distribution
Promotion is more targeted
What are unsought products
Little product awareness or knowledge
or if aware, little or even negative interest
Price varies
Distribution varies
What are industrial products
Products purchased for further processing or use in conducting a business
What distinguishes a consumer product and an industrial product
The purpose for which the product is purchased
What are the three groups of industrial products
- Materials and parts
- Capital items (aid in production or operations) (used for many years)
- Supplies and services (operating supplies and repairs and maintenance etc)
What is Organization marketing
Activities undertaken to create, maintain or change the attitudes and behavior target customers have towards an organization.
What is Person marketing
Activities undertaken to create, maintain or change attitudes or behavior toward particular people.
What is social marketing
It consists of using traditional business marketing concepts and tools to encourage behavior that will individual and societal well-being
What are three levels marketers make product and service decisions
- Individual product decisions
- product line decisions
- product mix decisions
What does individual P and S decisions consist of
Product attributes -> Branding -> Packaging -> Labeling and logos -> Product support services
What is TQM
Total quality management = approach in which all the company’s people are involved in constantly improving the quality of products
What’s the return-on-quality approach ?
Viewing quality as an investment and holding quality efforts accountable for bottom-line results.
What are the 2 dimensions of product quality ?
Level and consistency
How can a company identify new features and decide which ones to add?
It should periodically survey buyers who have used the product and ask three questions:
- How do you like the product
- Which features could we add to improve the product?
- What specific features of the product do you like the most.
then the company can assess each features value to customers versus its cost to the company.
What’s a persistent challenge with asking customers what attributes they want?
It’s that they typically want a lot of everything, all at a low price.
What do company’s do because they can’t satisfy the demand that customers want a lot of features at a low price (it doesn’t make financial sense)
they often employ market research tools such as conjoint analysis to reveal what trade-offs customers are willing to make in terms of sacrificing some of one attribute for more of another and their willingness to pay more for higher performance on an attribute.
What is the style of a product
= describes the appearance of the product
but it doesn’t necessary make the product perform better
How does good design start
With observing customers, understanding their needs, and shaping their product-use experience.
Should focus on how customers will use and benefit from the product
What is a brand
A name, term, sign, symbol, or design or a combination that identifies the maker or seller
It’s the company’s promise to deliver a specific set of features, benefits, services, and experiences consistently to buyers.
Why do brands have meaning well beyond a product’s physical attributes
Because customers attach meanings to brands and develop brand relationships
Why is branding important
Helps consumers identify products that might benefit them.
Say something about product quality and consistency
Provides legal protection for unique product features
Helps seller segment markets
What is a product line
Group of products that are closely related because:
- function in a similar manner
- sold to similar customer groups
- serve similar customer needs
- marketed through same type of outlets
- fall within given price ranges
What does the major product line decision involve
It involve product line length (the number of items in the product line)
When is the product line too short
If the manager can increase total profits by adding items
When is the product line too long
If the manager can increase total profits by dropping items.
What are 2 ways a company can expand its product line
- Line filling
- Line stretching
What does product line filling involve
It involves adding more items within the present range of the line.
Give several reasons for line filling
- extra profits
- satisfying dealers
- using excess capacity
- being the leading full-line company
- plugging holes to keep out competitors (leave competitors from offering something the company doesn’t offer)
What are 2 situations where line filling can go wrong
- Cannibalization
= New products steals from existing products instead of attracting new customers => total sales don’t grow - Customer confusion
= Adding too many similar products can confuse customers
What is line stretching
It’s when a company lengthens its product line beyond its current range.
Can stretch it downward, upward, or both ways.
What is stretching upward
When a company adds a product to its line that is more expensive, to appeal to wealthier customers.
It’s usually done by budget-friendly brands
What is stretching downward
When a company adds cheaper options to attract more money cautious customers.
It’s usually done by companies located at the upper end of the market (expensive)
An organization with several product lines = …?
Has a Product mix (or a product portfolio)
What does a product mix/portfolio consist of
It consists of all the product lines and items that a particular seller offers for sale.
What are the 4 important dimensions of a product mix
Width, length, depth, consistency
What is streamlining the product mix?
Reducing or adjusting a company’s range of products to better match the market demand, customer preferences, or strategic goals.
What are the 4 things a company has to consider when designing marketing program for a service
intangibility
inseparability
variability
perishability
What is intangibility (service)
= Services can’t be seen, tasted, felt, heard, or smelled before they are bought
=> to reduce uncertainty, buyers look for signals of services
What is inseparability (service)
Services cannot be separated from their providers.
Services are sold, produced and used at the same time.
<-> customer-provider relationship affects the services quality and outcome.
What is variability (service)
The quality of the service depends on who provides it, when, where and how they are provided
What is perishability (service)
Services cannot be stored for later sale or use
p.s: it’s not usually a problem when the demand is steady
What is yield management
Adjusting prices or strategies to better match demand.
e.g lower prices in off seasons or more staff during busy times
What are the 3 types of services marketing
- External marketing
- Internal marketing
- Interactive marketing
What is internal marketing
Firm orient and motivates its customer-contact employees and support service people to work as a team to provide customer satisfaction.
What is brand equity
It’s a value assigned to a brand based on how much consumers like it, trust, and recognize it.
It’s how much extra value the brand gives to the company
In brand positioning, what are the levels of positioning
- lowest level: product or service attributes.
- then there’s associating its name with a desirable benefit
- The strongest: Position themselves on strong beliefs, values and feelings. (= engaging customers on a deep, emotional level)
What does it mean if a brand has a a ‘cold side’ and a ‘hot side’
The cold side targets the mind of the customer and emphasizes the rational aspects of the brand.
The hot side targets the heart of the customer and emphasizes the emotional aspects of the brand.
What are desirable qualities for a brand name
- Should suggest something about the product’s benefits and qualities
- Should be easy to pronounce, recognize and remember
- should be distinctive
- should be extendable
- should be translated easily into foreign languages
- should be capable of registration and legal protection (can’t infringe on existing brand names)
What are the four brand sponsorship options
National brands
Store brands
Co-brands
Licensed brands
What are the advantages of co-branding
- it can help a company expand its existing brand into markets it might otherwise have difficulty entering alone
Give one special type of co-branding
Brand swap
= each company shares its product to be integrated into
