Product, Services,

and Branding
Strategy
Chapter 8

Learning Goals
1. Understand products and the major
classifications of products and
services
2. Learn the decisions companies
make regarding their products and
services
3. Understand branding strategy
4. Identify the four characteristics that
affect the marketing of a service
5. Realize additional product issues
8-2

Definitions
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.
8-3

Goal 1: Understand products and their classifications

What is a Product?
Products, Services, and Experiences
Market offerings may consist of a
combination of goods and services
Experiences are used to differentiate
offerings

Levels of Product and Services

Core benefit, actual and augmented
product

Product and Service Classifications

Consumer products and industrial
products
8-4

Goal 1: Understand products and their classifications

What is a Product?
Types of Consumer
Products
Convenience
Shopping
Specialty
Unsought

Frequent purchases
bought with
minimal buying
effort and little
comparison
shopping
Low price
Widespread
distribution
Mass promotion by
8-5
producer

Goal 1: Understand products and their classifications

What is a Product?
Types of Consumer
Products
Convenience
Shopping
Specialty
Unsought

Less frequent
purchases
More shopping effort
for comparisons.
Higher than
convenience good
pricing
Selective distribution
in fewer outlets
Advertising and
personal selling

8-6

Goal 1: Understand products and their classifications

What is a Product?
Types of Consumer
Products

Shopping

Strong brand
preference and
loyalty, requires
special purchase
effort, little brand
comparisons, and
low price sensitivity

Specialty

High price

Unsought

Exclusive
distribution

Convenience

Carefully targeted 8 - 7
promotions
Goal 1: Understand products
and their classifications

What is a Product?
Types of Consumer
Products
Convenience
Shopping
Specialty
Unsought

Little product
awareness and
knowledge (or if
aware, sometimes
negative interest)
Pricing varies
Distribution varies
Aggressive
advertising
and personal selling
by producers and
8-8
resellers

Goal 1: Understand products and their classifications

Product and Service

Classifications
Consumer products
Industrial products
Materials and parts
Capital items
Supplies and services

8-9

Goal 1: Understand products and their classifications

Product and Service

Classifications
Organizations, persons, places,
and ideas
Organizational marketing makes
use of corporate image advertising
Person marketing applies to
political candidates, entertainment
sports figures, and professionals
Place marketing relates to tourism
Social marketing promotes ideas
8 - 10

Goal 1: Understand products and their classifications

Product and Service

Decisions
Key Decisions
Individual
Product
Product Line
Product Mix

Product attributes
Quality, features,
style and design

Branding
Packaging
Labeling
Product support
services
8 - 11

Goal 2: Learn decisions companies make regarding products

Product and Service

Decisions
Key Decisions
Individual
Product
Product Line
Product Mix

Product line
A group of
products that are
closely related
because they may:

function in a similar
manner
be sold to the same
customer groups,
be marketed
through the same
types of outlets
fall within given
price ranges
8 - 12

Goal 2: Learn decisions companies make regarding products

Product and Service

Decisions
Key Decisions
Individual
Product
Product Line
Product Mix

Product line length

Line stretching:
adding products
that are higher or
lower priced than
the existing line
Line filling:
adding more
items within the
present price
8 - 13
range

Goal 2: Learn decisions companies make regarding products

Product and Service

Decisions
Key Decisions
Individual
Product
Product Line
Product Mix

Product mix
Also known as
product
assortment
Consists of all
the product lines
and items that a
particular seller
offers for sale
8 - 14

Goal 2: Learn decisions companies make regarding products

Product and Service

Decisions
Key Decisions
Individual
Product
Product Line
Product Mix

Product mix width:

Number of different
product lines carried
by company

Product mix depth:

Number of different
versions of each
product in the line

Product mix
consistency
8 - 15

Goal 2: Learn decisions companies make regarding products

Branding Strategy
Brand equity is the positive
differential effect that knowing the
brand name has on customer
response to the product or service
One measure of equity is the
extent to which customers are
willing to pay more for the brand
Brand valuation is the process of
estimating the total financial value
of a brand
8 - 16

Goal 3: Understand branding strategy

Branding Strategy
Brands with strong equity have
many competitive advantages:
High consumer awareness
Strong brand loyalty
Helps when introducing new
products
Less susceptible to price
competition
8 - 17

Goal 3: Understand branding strategy

Brand Strategy
Key Decisions
Brand Positioning
Brand Name
Selection
Brand Sponsorship
Brand
Development

Three levels of
positioning:
Product attributes
Least effective
Benefits
Beliefs and values
Taps into
emotions
8 - 18

Goal 3: Understand branding strategy

Brand Strategy
Key Decisions
Brand Positioning
Brand Name
Selection
Brand Sponsorship
Brand
Development

Good Brand Names:

Suggest something
about the product or
its benefits
Are easy to say,
recognize and
remember
Are distinctive
Are extendable
Translate well into
other languages
Can be registered
and legally protected
8 - 19

Goal 3: Understand branding strategy

Brand Strategy
Key Decisions
Brand Positioning
Brand Name
Selection
Brand Sponsorship
Brand
Development

Manufacturer brands
Private (store)
brands
Costly to establish
and promote
Higher profit margins

Licensed brands
Name and character
licensing has grown

Co-branding
Advantages /
disadvantages

Goal 3: Understand branding strategy

8 - 20

Brand Strategy
Key Decisions
Brand Positioning
Brand Name
Selection

Line extensions
Minor changes to
existing products

Brand extensions
Successful brand
names help introduce
new products

Brand Sponsorship Multibrands

Multiple product
Brand
entries in a product
Development
category

New brands

8 - 21

New product category

Goal 3: Understand branding strategy

Managing Brands
Brands are known through
advertising, personal
experience, word of mouth, the
Internet
Everyone in the company
represents the brand
Companies need to periodically
run a brand audit
8 - 22

Goal 3: Understand branding strategy

Services Marketing
Services
Account for 74% of U.S.
gross domestic product.
Service industries include
business organizations,
government, and private
not-for-profit organizations.
8 - 23

Goal 3: Understand branding strategy

Characteristics of
Services
Intangibility
Consumers look for service quality signals

Inseparability
Services cant be separated from providers

Variability
Employees and other factors result in
variability

Perishability
Services cant be inventoried for later sale
8 - 24

Goal 3: Understand branding strategy

Service Firm Marketing

Strategies
The Service-Profit Chain
Internal Marketing
Interactive Marketing

Managing Service
Differentiation
Managing Service Quality
Managing Service Productivity
8 - 25

Goal 4: Identify 4 characteristics that affect marketing a servic

Product Decisions and

Social Responsibility
Acquiring and dropping
products
Patent protection
Product quality and safety
Product warranties
8 - 26

Goal 5: Realize additional product issues

International Product
and Services Marketing
Special challenges:
Which products should be
marketed internationally?
Should the products be
standardized or adapted for
world markets? Packaging?
8 - 27

Goal 5: Realize additional product issues