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Product, Services, and Branding Strategy. Chapter 8. Learning Goals. Understand products and the major classifications of products and services Learn the decisions companies make regarding their products and services Understand branding strategy

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learning goals
Learning Goals
  • Understand products and the major classifications of products and services
  • Learn the decisions companies make regarding their products and services
  • Understand branding strategy
  • Identify the four characteristics that affect the marketing of a service
  • Realize additional product issues
case study krispy kreme
Produce 7.5 million doughnuts each day

Sell more than doughnuts; they sell an experience

New store openings are eagerly anticipated in part due to extensive promotion

Case StudyKrispy Kreme
case study krispy kreme1
Krispy Kreme sells doughnuts. But what are customers really buying?

As Krispy Kreme expands, how important are the two dimensions of product quality?

Discuss the brand equity of Krispy Kreme versus that of Dunkin’ Donuts.

Krispy Kreme sells a product that is high in sugar. What is its social responsibility in offering such a product? What possible liability could they face?

Case StudyKrispy Kreme
definitions
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.

Goal 1: Understand products and their classifications

what is a product
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

Goal 1: Understand products and their classifications

what is a product1
What is a Product?

Goal 1: Understand products and their classifications

what is a product2
Convenience

Shopping

Specialty

Unsought

Frequent purchases bought with minimal buying effort and little comparison shopping

Low price

Widespread distribution

Mass promotion by producer

What is a Product?

Types of Consumer Products

Goal 1: Understand products and their classifications

what is a product3
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

What is a Product?

Types of Consumer Products

Goal 1: Understand products and their classifications

what is a product4
Convenience

Shopping

Specialty

Unsought

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

High price

Exclusive distribution

Carefully targeted promotions

What is a Product?

Types of Consumer Products

Goal 1: Understand products and their classifications

what is a product5
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 resellers

What is a Product?

Types of Consumer Products

Goal 1: Understand products and their classifications

product and service classifications
Product and Service Classifications
  • Consumer products
  • Industrial products
    • Materials and parts
    • Capital items
    • Supplies and services

Goal 1: Understand products and their classifications

product and service classifications1
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

Goal 1: Understand products and their classifications

product and service decisions
Individual Product

Product Line

Product Mix

Product attributes

Quality, features, style and design

Branding Kellogg’s

Packaging Starkist

Labeling

Product support services

Product and Service Decisions

Key Decisions

Goal 2: Learn decisions companies make regarding products

product and service decisions1
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

Special K

Individual Product

Product Line

Product Mix

Product and Service Decisions

Key Decisions

Goal 2: Learn decisions companies make regarding products

product and service decisions2
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 range

Product and Service Decisions

Key Decisions

Goal 2: Learn decisions companies make regarding products

product and service decisions3
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

Kellogg’s

Product and Service Decisions

Key Decisions

Goal 2: Learn decisions companies make regarding products

product and service decisions4
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

Product and Service Decisions

Key Decisions

Goal 2: Learn decisions companies make regarding products

branding strategy
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 Campbell’s
  • Brand valuation is the process of estimating the total financial value of a brand

Goal 3: Understand branding strategy

branding strategy1
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

Goal 3: Understand branding strategy

brand strategy
Brand Positioning

Brand Name Selection

Brand Sponsorship

Brand Development

Three levels of positioning:

Product attributes

Least effective

Benefits

Beliefs and values

Taps into emotions

Brand Strategy

Key Decisions

Goal 3: Understand branding strategy

brand strategy1
Brand Positioning

Brand Name Selection

Brand Sponsorship

Brand Development

Good Brand Names:

Suggest something about the product or its benefitsMr. Clean

Are easy to say, recognize and remember

Are distinctive

Are extendable

Translate well into other languages

Can be registered and legally protected

Brand Strategy

Key Decisions

Goal 3: Understand branding strategy

brand strategy2
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

Brand Strategy

Key Decisions

Goal 3: Understand branding strategy

brand strategy3
Brand Positioning

Brand Name Selection

Brand Sponsorship

Brand Development

Line extensions

Minor changes to existing products

Brand extensions

Successful brand names help introduce new products

Multibrands

Multiple product entries in a product category

New brands

New product category

Brand Strategy

Key Decisions

Goal 3: Understand branding strategy

managing brands
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

Goal 3: Understand branding strategy

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

Goal 3: Understand branding strategy

characteristics of services
Characteristics of Services
  • Intangibility
    • Consumers look for service quality signals
  • Inseparability
    • Services can’t be separated from providers
  • Variability
    • Employees and other factors result in variability
  • Perishability
    • Services can’t be inventoried for later sale

Goal 3: Understand branding strategy

service firm marketing strategies
Service Firm Marketing Strategies
  • The Service-Profit Chain
    • Internal Marketing
    • Interactive Marketing
  • Managing Service Differentiation
  • Managing Service Quality
  • Managing Service Productivity

Goal 4: Identify 4 characteristics that affect marketing a service

product decisions and social responsibility
Product Decisions and Social Responsibility
  • Acquiring and dropping products
  • Patent protection
  • Product quality and safety
  • Product warranties

Goal 5: Realize additional product issues

international product and services marketing
International Product and Services Marketing
  • Special challenges:
    • Which products should be marketed internationally?
    • Should the products be standardized or adapted for world markets? Packaging?

Goal 5: Realize additional product issues

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