Chapter 8: Products, Services, and Brands: Building Customer Value Flashcards
Product
- anything that can be offered to a market
- for attention, acquisition, use, or consumption
- might satisfy a want and need
Service
- an activity, benefit, or satisfaction offered for sale
- essentially intangible
- does not result in the ownership of anything
Customer product
bought by final consumers for personal consumption
Convenience product
- customers usually buy frequently, immediately
- with minimal comparison and buying effort
Shopping product
the customer in the process of selecting and purchasing
usually compares on such attributes: suitability, quality, price, style
Specialty product
unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort
- do not compare specialty products
- luxury goods: Rolex watches or fine crystal
Unsought product
consumer either does not know about or knows about but does not normally consider buying.
- require a lot of advertising, personal selling, other marketing efforts
Industrial product
a product bought by individuals and organizations for further processing or for use in conducting a business
- materials and parts
- capital items
- supplies and services
Social marketing
the use of commercial marketing concepts and tools in programs designed to influence individuals’ behavior to improve their well-being and that of society
Product quality
the characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs
Individual Product Decisions
Product attributes -> Branding -> Packaging -> Labelling -> Product support services
Total Quality Management (TQM)
an approach in which all of the company’s people are involved in constantly improving the quality of products, services, and business processes.
Performance quality
the product’s ability to perform its functions
Conformance quality
freedom from defects and consistency in delivering a targeted level of performance
Product features
competitive tool for differentiating the company’s product from competitors’ products
Brand
a name, term, sign, symbol, or design, or a combination of these
- identifies the products/ services of one seller or group of sellers and differentiates them from those of competitors
Product style and design
- design is a larger concept than style
- style can be eye catching or yawn producing
Packaging
the activities of designing and producing the container or wrapper for a product
Labelling
- range from simple tags attached to products to complex graphics that are part of the packaging
- identifies the product or brand
- promote the brand
- support the brand’s positioning and add personality to the brand
Product Support Services
- Customer service = element of product strategy
- important part of customer’s overall brand experience
Product line
a group of products
- 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
Product mix (or product portfolio)
the set of all product lines and items that a particular seller offers for sale
Four Service Characteristics
- Intangibility
- Inseparability
- Variability
- Perishability
- Intangibility
Services cannot be seen, tasted, felt, heard, or smelled before purchase
- Inseparability
Services cannot be separated from their providers
- Variability
Quality of services depends on who provides them and when, where, and how
- Perishability
Services cannot be stored for later sale or use
Service Profit chain
The chain that links service firm profits with employee and customer satisfaction
- if we are employees, we are happy, customers are happy, we make money :)
3 TYPES OF SERVICE MARKETING
Company - (EXTERNAL MARKETING) - Customers
Customers - (INTERACTIVE MARKETING) - Employees
Employees - (INTERNAL MARKETING) - Company
Internal marketing
Orienting and motivating customer-contact employees and supporting service employees to work as a team to provide customer satisfaction
- Orientation
- Training
- Motivation
Interactive marketing
training service employees in the fine art of interacting with customers to satisfy their needs
- service quality depends heavily on the quality of the buyer-seller interaction during the service encounter
- Service differentiation
- Service quality
- Service productivity
Brand equity
The differential effect that knowing the brand name has on customer response to the product or its marketing
- a powerful brand has high brand equity
Brand value
The total financial value of a brand
Major Brand Strategy Decisions
- Brand positioning: Attributes, Benefits, Beliefs and values
- Brand name selection: Selection, Protection
- Brand sponsorship: Manufacturer’s brand, Private brand, Licensing, Co-branding
- Brand development: Line extensions, Brand extensions, Multibrands, New brands
Store brand (or private brand)
A brand created and owned by a reseller of a product or service
Co-branding
The practice of using the established brand names of two companies on the same product
The Service Profit chain consists of five links
- Internal service quality
- Satisfied and productive service employees
- Greater service value
- Satisfied and loyal customers
- Healthy service profits and growth
Managing service differentiation
allows the firm to divert the focus on price, by developing a unique offer, delivery or image
Managing service quality
enables a service firm to differentiate itself by delivering consistently higher quality than its competitors provide
customer retention
service recovery
Managing service productivity
refers to the cost side of marketing strategies for service firms. the primary tools for impacting it are:
- employee hiring and training - people doing more and better
- service quantity and quality - adjusting the product
- adopt technology - new tools to help
Hospitality Challenge - Dynamic Marketplace
- Demand is always fluctuating
◦ General environment (economical, political influences)
◦ Segment behavior
◦ Seasonal, midweek, weekend
◦ Holidays, professional requirements, religions
◦ Changing demographics, psychographics - Variety of customers – multiple market segments
◦ Different personal experiences and knowledge
◦ Different expectations to satisfy
Hospitality Challenge - Dynamic Marketplace
- Demand is always fluctuating
◦ General environment (economical, political influences)
◦ Segment behavior
◦ Seasonal, midweek, weekend
◦ Holidays, professional requirements, religions
◦ Changing demographics, psychographics - Variety of customers – multiple market segments
◦ Different personal experiences and knowledge
◦ Different expectations to satisfy
External Marketing
just the beginning for service organizations
