MKTG 201-Fall 2024

Chapter 8
Products, Services, and Branding

Lecture 14
Sections 3-4-5
Lale Okyay Ata
 The Marketing Process

Marketing Marketing Branding

Environment Strategy / NPD
Pricing
Marketing Segmentation &
Information Targeting Marketing
Channels
Consumer Marketing
Positioning
Behaviour Communications
 Products and Services
Product

• Anything offered to a market for attention, acquisition, use, or

consumption that might satisfy a need or want.

Service

• A form of product that consists of activities, benefits or

satisfactions offered for sale that are essentially intangible and
do not result in the ownership of anything.

Experience

• Experiences represent what buying the product or service

will do for the customer.
 Product vs. Service

Service
Tangible with Pure
Good with Accompanying
Pure Service
Accompanying Hybrid Minor
Tangible
Services Offer Goods
Good
 Product & Services
Levels of Product & Services

Why you
buy
the
product
 Product & Services
Levels of a Product
e.g. Hotel

fun &
relaxation & clean bed, fresh
other towels, working
amenities, bathroom, helpful
status, self- staff, etc.
esteem

rest &
sleep
 Product & Services
Product & Service Classifications

Consumer-Goods Industrial Goods

Consumer products Industrial products are
are products and those products purchased
services bought by for further processing or
final consumers for for use in conducting a
personal consumption. business.

Organizations,
Persons, Places, and
Ideas
 Product and Service Classifications
Product & Service Classifications Consumer-Goods

Convenience goods Shopping

goods

Specialty goods
Unsought goods
 Types of Consumer Products
Convenience Products

• Frequent purchases
• Minimal buying effort and little comparison shopping
• Low price
• Widespread distribution
• Mass promotion by producer
 Types of Consumer Products
Shopping Products

• Less frequent purchases

• More shopping effort for comparisons
• Relatively high prices
• Selective distribution in fewer outlets
• Advertising and personal selling
 Types of Consumer Products
Speciality Products

• Strong brand preference and loyalty

• Special purchase effort
• Little brand comparisons
• Low price sensitivity
• High prices
• Exclusive distribution
• Carefully targeted promotions
 Types of Consumer Products
Unsought Products
• Little product awareness and knowledge (or if aware,
sometimes negative interest)
• Aggressive advertising and personal selling by
producers and resellers
 Product and Service Classifications
Product & Service Classifications Industrial-Goods
Capital Items
Equipment Installations

Materials and Parts

Manufactured Raw
Supplies and Business Services
Materials Materials
 Product and Service Classifications
Product & Service Organizations, Persons, Places, Ideas
Classifications
Organizations
Organization marketing consists of activities undertaken to create,
maintain, or change the attitudes and behaviors of target consumers
toward an organization.
 Product and Service Classifications
Organizations, Persons, Places, Ideas
People
Person marketing people ranging from presidents,
entertainers, and sports figures to professionals such as
doctors, lawyers, and architects use person marketing to
build their reputations.
Product and Service Classifications
Organizations, Persons, Places, Ideas
Places
Place marketing consists of activities undertaken to
create, maintain, or change attitudes and behavior
toward particular places.
 Product and Service Classifications
Organizations, Persons, Places, Ideas
Ideas/ Social Marketing
Social marketing uses commercial marketing concepts to
influence individuals’ behavior to improve their well-being
and that of society.
 Product and Services
Product & Service Decisions
1) Individual product decisions
2) Product line decisions
3) Product mix decisions

A name, term, • Assess value

• Quality • Contain and • Serves to of current
sign, symbol, or
• Features design that protect identify services
• Quality identifies • Promotes product
• Describes • Obtain ideas
and Design product product
product for new ones
• Differentiates • Promotes
product product
 Product & Service Decisions
Product / Service Attributes
Product Features /
Attributes
Help to
differentiate the
product from
competition.
Level of each
attribute (e.g.,
How many GBs
of memory)
 Product & Service Decisions
Product Quality, Style and Design
Product Quality – Ability of a product to perform its
functions and satisfy stated or implied customer needs.

• Quality Level (performance quality: Product’s ability

to perform its functions)

• Quality Consistency (conformance, freedom from

defects, consistency)
Total Quality Management-(continuous improvements to
quality of products, services and processes)
• Return-on-Quality-(quality as investment)

Style: appearance of the product.

Design: Good design contributes to product
usefulness.
 Product & Service Decisions
Branding
A name, term, sign, symbol, or design, or a combination, that
identifies the maker or seller of a product or service and
differentiates them from those of competitors.
 Product & Service Decisions
Branding - Why Brands?

For Buyers For Companies

• Identification, help in • Communication, image
comparison • Legal protection
• Memory aid • Basis for
• Informs about quality differentiation
• Value assurance • Help in segmentation
• Self-expression through • Help in new product
“brand personality” introduction
 Product & Service Decisions
Branding
Brands as Help create
important identity and
part of a trust, &
product give firms
strong market
opportunities

Add value to Consumer-

a consumer’s brand
purchase meanings &
relationships
 MKTG 201-Fall 2024
Chapter 8
Products, Services, and Branding-Part II

Lecture 15
Sections 3-4-5
Lale Okyay Ata
 Product & Service Decisions
Brand Equity
(Positive) differential effect of brand name on consumer
response to marketing actions

• The ‘value added’ to a product as a result of past marketing

activity for the brand.
• Reflects extent of willing to pay more for the brand.
• The added value of brand name BEYOND functional product
benefits

$ 30 000
 Product & Service Decisions
Brand Equity
Components of Brand Equity:
1) Brand knowledge / awareness
• Are consumers familiar with a brand?
• Generic brands: Brands synonymous with products
2) Brand associations:
• Consumers’ mental and emotional links to the brand
• “What comes to your mind when you think of …?”
• Brand personality (e.g. old-fashioned vs. modern)
= BRAND IMAGE
3) Perceived Value
• Relationship between costs and benefits
4) Brand Loyalty
• Attachment to the brand
 Product & Service Decisions
Benefits of Brand Equity
Marketing perspective: Financial perspective:
Differentiated image More predictable revenues
Added value Premium pricing
Greater loyalty More inelastic demand for
Less vulnerability to competitors price increases
Barrier to entry More elastic consumer
Channel leverage response to price decreases
Marketing communication A potentially sellable asset
effectiveness
Brand extension opportunities
Building Brands
 Building Brands
Three Levels of Brand Positioning

Product attributes

Product benefits
• “What’s in it for me?”
• “Is it a benefit? è Ask ”So?”
• Sell product’s benefits, not
its attributes

Product beliefs & values

• Deep, emotional consumer
engagement
 Building Brands
Three Levels of Brand Positioning

Product attributes Fluid absorption

(Lowest level) diaper fit
disposable

Fluid absorption & fit

è
Product benefits Dry babyè
Skin-health benefits

Happy babies,
Product beliefs & values happy parents,
(Highest level) è total baby care
 Building Brands
Brand Name Selection Desirable Qualities

Suggest benefits and qualities

Easy to pronounce, recognize

& remember

Distinctive

Extendable

Translatable for the global economy

Capable of registration and legal

protection
 Building Brands
Brand Sponsorship
National (Manufacturer’s) brand
• Owned and managed by the
manufacturer
• Retain more control over strategy
• Create own brand equity
Private brand (Private label)
• Manufacturer sells the brand under
the brand name of a wholesaler or
retailer.
• Consumer perception: “store brand
quality = / > national brands”
Licensed brand
• Instant & proven brand name for a fee
• Trademark or character extended onto
products of a different nature
 Building Brands
Brand Sponsorship
Co-brand
• Two established brand
names used on the same
product.
• Expanding existing brand
into a category difficult to
enter alone
• Synergy between co-brands

• Complex contracts &

licenses
• Coordination of marketing
efforts
• Reputation of one brand to
influences the co-brand as
well
Building Brands
Brand Development
 Line / Brand Extensions – Benefits and Risks

ADVANTAGES RISKS OF LINE EXTENSIONS:

+ Leveraging existing Brand name losing its meaning
Consumer confusion /
brand awareness
frustration
+ Reduced advertising Cannibalize other items in the
expenditure line
+ Lower risk for consumers
+ Enhancement of the core RISKS OF BRAND EXTENSIONS:
brand Dilute value of the brand
Confuse image/positioning of
the main brand
A failed extension harming
attitudes towards other
products of the same brand
Threaten associations with the
original brand
 Multi-brands /New Brands – Benefits and Risks
MULTI-BRAND BENEFITS
+ establish different features that appeal
to different customer segments
+ lock up more reseller shelf space
+ Capture a larger market share

MULTI-BRAND RISKS:
– Too many similar brands with no
meaningful differences between them
– Each brand might obtain only a small
market share, and none may be very
profitable.
– The company may end up spreading its
resources over many brands instead of
building a few brands to a highly profitable
level.
 New Brands – Benefits and Risks

NEW BRAND BENEFITS

+ May be appropriate if existing brand name is waning / not
appropriate when entering a new product category

NEW BRAND RISKS:

-Too expensive and timely
 Product and Services
Product & Service Decisions
1) Individual product decisions
2) Product line decisions
3) Product mix decisions

A name, term, • Assess value

• Quality • Contain and • Serves to of current
sign, symbol, or
• Features design that protect identify services
• Quality identifies • Promotes product
• Describes • Obtain ideas
and Design product product
product for new ones
• Differentiates • Promotes
product product
 Product & Service Decisions
Packaging

“Packaging involves designing and

producing the container or
wrapper for a product”
Sales task: attract buyers, close sale
Communication task:
• Communicate brand position
• Promote and differentiate product
 MKTG 201-Fall 2024
Chapter 8
Products, Services, and Branding-Part III

04.12.24- Lecture 16
Sections 3-4-5
Lale Okyay Ata
 Product and Services
Product & Service Decisions
1) Individual product decisions
2) Product line decisions
3) Product mix decisions

A name, term, • Assess value

• Quality • Contain and • Serves to of current
sign, symbol, or
• Features design that protect identify services
• Quality identifies • Promotes product
• Describes • Obtain ideas
and Design product product
product for new ones
• Differentiates • Promotes
product product
 Product & Service Decisions
Labeling
“Labels identify the product or brand, and describe attributes”
Product & Service Decisions
Product Support Services
Take care of customers and keep them happy,
before, during, and after the sale.
 Product and Services
Product & Service Decisions

1) Individual product decisions

2) Product line decisions
3) Product mix decisions
 Product Mix Decisions
Product Portfolio (Product Mix)

Product Mix (Product

Portfolio): Consists of all the
Product Mix products and items that a
seller offers for sale”
Product Line Product Line

p1 p2 p4 p5
Product Line: Group of closely
related products (function
p3
similarly, sold to same groups
of customers, marketed via
p7
p6
similar outlets, in similar price
ranges)
 Product Mix Decisions
Product Line
“Product line is a group of products that are closely related”
Major product
line decision:

Beauty, Hair & Health & Product line

Personal Care Grooming length=
the number of
items in the
product line

Baby, Feminine Fabric &

& Family Care Home Care

Product line too short: Product line too long:

Adding items increase profits Dropping items increase profits
 Product Mix Decisions
Product Portfolio (Mix) Width
The number of different product lines a company markets
Product Portfolio (Mix) Length
The number of brands within each product line
Product Portfolio (Mix) Depth
The number of versions offered for each product in the line.

Product Portfolio Consistency

How closely related the various product lines are.
 P&G’s Product Lines and Mix
Width of the product mix
Laundry Baby Care Deodorants Hair Care Household Oral Care Cosmetics ….
Cleaners
Length of the product lines
Product Mix Decisions
Help define company’s product mix strategy. Four options:
-Adding new product lines
-Lengthening existing product lines
-Deepening product mix
-Pursue more/ less product consistency
Product Line Decisions
• Stretching: Lengthen beyond current range

-Downward
-Upward
-Both ways

• Filling: Adding within current range

E.g. Varities of snacks.
Why?
èExtra profits, satisfying dealers, using excess capacity, be the
leader with full line, keep competitors out
 Product Mix Decisions
Benefits of Multiple Product Lines (Greater Width)

• Diversifies risk

• Capitalizes on established
reputations

• Protection from competition

• Increased growth and profits

• Greater market impact

• Economical resource usage

 Product Mix Decisions
Benefits of Line Extensions
(Greater Product Mix Length)

• Attracts buyers with different preferences

• Increases sales/profits by further market
segmentation
• Capitalizes on economies of scale

• Evens out seasonal sales patterns

 BEWARE OF CANNIBALIZATION!

Risks of Line Extensions:

• Brand name losing

its meaning
• Consumer confusion
/ frustration
• Cannibalize other
items in the line
 Services Marketing
Marketing Strategies for Service Firms
• Add tangibles/ Offer best
evidence provider-
• Signal quality customer
• WOM interaction

• Standardize • Operational
• Vs Customize excellence
• Pre-planning
 Services Marketing
Marketing Mix

• Price: difficult to
determine/compare

• Distribution: franchising,
agents/brokers, electronic
channels

• Promotion / Adverting: setting

customer expectations
 Services Marketing
Marketing Strategies for Service Firms

3 Major Services Marketing Tasks:

1) Service differentiation
2) Service quality Managing service quality provides a competitive
3) Service productivity advantage by delivering consistently higher
quality than its competitors
Customer retention as best measure of service
quality
 Marketing Strategies for Service Firms
Managing Service Quality as a Source of
Competitive Advantage
Higher quality
• TANGIBLES- facilities, equipment, than
personnel & communication materials competitors
• RELIABILITY-perform promised service Customer
dependably and accurately retention
• RESPONSIVENESS- help customers and
100% defect free
provide prompt service
• ASSURANCE-knowledge and courtesy of
Service recovery
employees & their ability to convey
trust & confidence
• EMPATHY-caring, individualized Empowering
attention to customers the front line
 Services Marketing
Marketing Strategies for Service Firms

Service differentiation
competitive advantage from the
offer, delivery, and image of the
service
Offer: distinctive features
Delivery: more able and reliable customer contact people,
environment, or process
Image: symbols and branding