Chapter Five

PRODUCT,
SERVICES
AND BRAND
OBJECTIVES
OBJECTIVES

Define product and the major classifications of

products and services.
Describe the roles of product and service branding,
packaging, labelling and product support services.
Explain the decisions companies make when
developing product lines and mixes.
Identify the four characteristics that affect the
marketing of a service.
Discuss the additional marketing considerations that
services require.
 Explain how companies
OBJECTIVES find and develop new-
product ideas.
List and define the steps
in the new-product
development process.
Describe the stages of
the product life cycle.
Describe how marketing
strategies change during
the products life cycle.
WHAT IS PRODUCT
WHAT IS PRODUCT
Anything
Anything that
that can
can be
be offered
offered to
to
market
market forfor attention,
attention, acquisition,
acquisition,
use
use or
or consumption
consumption thatthat might
might
satisfy
satisfy aa want
want or
or need.
need.

Includes:
Includes: physical
physical objects,
objects,
services,
services, events,
events, persons,
persons,
places,
places, organizations,
organizations, ideas
ideas or
or
some
some combination
combination thereof.
thereof.
It can be
be
tangible

Or
Intangible
Tangible Something that can
be felt, tasted, heard,
product
product smelled or seen
Often referred to as
a GOODS
Can be stored for
future used
E.g: Nokia mobile
phone
BMW car
DKNY watch
 Something that can not
Intangible be seen, tasted, smelled,
heard or touched
products Most products are
offered in form of
SERVICE
Can not be stored but
only available at the
time of usage.
E.g: lecturer giving
lecture, lawyer, artist
make a perfomance
 Products
Products also
also can
can be
be classified
classified based
based on
on its
its
natures,
natures, characteristics
characteristics and
and consumption
consumption

Durable product tangible

goods that get used
repetitively over a longer
period of time. E.g:
computers, cars, electrical
items

Non-durable product
tangible goods that are
normally consumed
relatively fast in one or a
few uses.
E.g: groceries, food,
stationeries
 A form of product that
What is a consists of activities,
benefits or
Service? satisfactions offered for
sale that are
essentially intangible
and do not result in the
ownership of anything.
Examples: banking,
hotel, airline, retail,
tax preparation, home
repairs.
Characteristic
of a Service
Discussion
Question
Illustrate how a
movie theater
can deal with
the intangibility,
inseparability,
variability, and
perishability of
the services it
provides.
 Level of Product Augmented Product

Delivery After
and Actual Product sale
credit service
Brand
Features
name Core
Benefit
(customer
Quality level value) Design E.g. Apple
iMac

Packaging
Installation Warranty
 Discussion Question

Describe the core

benefit, actual
product and
augmented product
aspects of an
automobile purchase.
 Consumer
Consumer & & Industrial
Industrial
Product
Product Classifications
Classifications

Supplies &
Convenience product Services

Shopping Product Capital Items

Consumer Industrial
Products Products
Specialty Product

Unsought Product Materials & Parts

 Product
Product Classifications:
Classifications: Consumer
Consumer

Convenience Products Shopping Products

Buy frequently & Buy less frequently
immediately Higher price
Low priced Fewer purchase
Mass advertising locations
Many purchase locations Comparison shop
i.e Candy, newspapers i.e Clothing, cars,
Specialty Products Unsought
appliances Products

Special purchase efforts New innovations

High price Products consumers dont
Unique characteristics want to think about
Brand identification Require much advertising &
Few purchase locations personal selling
i.e Lamborghini, Rolex i.e Life insurance, blood
donation
 Discussion Question

How can tropical fish

be a convenience
good, specialty good,
or shopping good to
different consumers?

Provide examples.
 Consumer
Consumer & & Industrial
Industrial
Product
Product Classifications
Classifications

Supplies &
Convenience product Services

Shopping Product Capital Items

Consumer Industrial
Products Products
Specialty Product

Unsought Product Materials & Parts

Industrial Those purchased for
use in conducting a
Products business or those
purchased as
ingredients or
components to be
used in manufacturing
Does not include
consumer products as
they move through a
distribution channel
title

Industrial
Industrial products
products also
also
include
include business
business
services,
services, such
such as
as
landscaping,
landscaping,
technology,
technology, food
food
services,
services, or
or custodial.
custodial.
 Product
Product Classifications:
Classifications: Industrial
Industrial

Materials
Materialsand
andParts
Parts
Raw
Rawmaterials,
materials,manufactured
manufactured
materials,
materials,and
andparts
parts

Capital
CapitalItems
Items
Industrial
Industrialproducts
productsthat
thataid
aidinin
buyers
buyersproduction
productionororoperations
operations

Supplies
Suppliesand
andServices
Services
Operating
Operatingsupplies,
supplies,repair/
repair/
maintenance
maintenanceitems
items
 Individual product
Product decisions
Decisions

Product attributes
Branding
Packaging
Labelling
Product support
services
Product line decisions
Product mix
Line filling
Line stretching
 Individual
Individual Product
Product Decision
Decision
Product
Product Attributes
Attributes

Developing a Product or Service Involves

Defining the Benefits that it Will Offer Such
as:
Ability
Ability of
of aa Product
Product to
to Perform
Perform Its
Its
Product
Product Quality
Quality Functions;
Functions; Includes
Includes Level
Level && Consistency
Consistency

Differentiates
Differentiates the
the Product
Product from
from
Product
Product Features
Features Competitors
Competitors Products
Products

Product
Product Style
Style Process
Process of
of Designing
Designing aa Products
Products Style
Style &
&
& Design
& Design Usefulness
Usefulness
 Individual Product Decision

Product
Branding Packaging
attributes

Product
support Labeling
service
Product Developing a product or
service involve defining the
attributes benefit that it will offer
These benefit are
communicated and delivered
by product attributes such as
quality, features and style and
design
 Brand is a NAME, TERM, SIGN,
Branding SYMBOL, DESIGN or
combination of these that
identifies the maker or seller of
a product or service and
differentiate them from others
and services
Creating, maintaining,
protecting and enhancing
products
The Role of Brands
Identify
Identify the
the maker
maker

Simplify
Simplify product
product handling
handling

Organize
Organize accounting
accounting

Offer
Offer legal
legal protection
protection
The Role of Brands
Signify
Signify quality
quality

Create
Create barriers
barriers to
to entry
entry

Serve
Serve as
as aa competitive
competitive
advantage
advantage

Secure
Secure price
price premium
premium
Advantages Advantages to buyers
Product
of Branding identification
Product quality
Advantages to sellers
Basis for products
quality story
Provides legal
protection
Helps to segment
markets
 Brand Element
A brand name is a
name/part of the brand that
can be spoken, e.g Levis,
Calvin Klein, Hilton and BMW

A brand mark is a design

element, such as symbol
(e.g. Nike Swoosh), logo
( Yahoo! graphic), a
character (e.g. Disney
Mickey), or even a sound
(e.g. Intel Inside sound)
Brand Elements

Companies often create product icons to develop an

identity for their products. Many made-up creatures and
personalities, such as elik, Sta nek and Yumo Ay,
are widely recognized figures in popular culture.
Brand Elements
Brand
names URLs

Slogans
Elements
Logos

Characters
Symbols
Example of brand mark
 Brand
Brand Element
Element Choice
Choice Criteria
Criteria
Memorable Transferable
Meaningful Adaptable
Likeability Protectable
 Brand 2007 Brand Value (Billions)
The
The 10
10 Most
Most Valuable
Valuable
Brands
Brands Google $86.06

(Source:
(Source: Millward
Millward Brown)
Brown) GE $71.38
Microsoft $70.89
CocaCola $58.21
China Mobile $57.23
IBM $55.33
Apple $55.21

McDonalds $49.50
Nokia $43.98
Marlboro $37.32
 We try ha
rder
Well pick
you up
Nextel
Done
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Im lovin
om
it
Innovatio
n at work
This Bud
s for you
Always lo
w prices
g o oo d
d n
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e ig
ig h
h bboor,
r, SS tatte
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Lik
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Fa
F rm is
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Ju
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Major Branding
Decisions
 It
It should
should suggest
suggest products
products benefits
benefits and
and qualities.
qualities.
It
It should
should be
be easy
easy to
to pronounce,
pronounce, recognize
recognize and
and remember.
remember.
It
It should
should be
be distinctive.
distinctive.
It
It should
should be
be extendable.
extendable.
It
It should
should translate
translate easily
easily into
into foreign
foreign languages.
languages.
It
It should
should be
be capable
capable ofof registration
registration and
and legal
legal protection.
protection.

Brand
Brand Name
Name
Selection
Selection
Brand Manufacturers brand
Brand sponsored and
Sponsorship promoted by the
producer of the good,
such as Kelloggs,
Maytag or IBM.
Private brand
Brand created and
owned by a reseller
of a product or
service such as
Presidents Choice.
Example
Example of
of Manufacturer
Manufacturer Brand
Brand
Example of Private Brand
 Licensing.
Brand Selling the use of
Sponsorship established brand
names or identities
to companies.
Co-branding.
Using the
established brand
names of two
different companies
on the same product.
Example of Co-branding
 New
New Brands Multibrands
Windex (by acquisition) Seiko Lasalle & Pulsar
Brand Name

Brand Extension Line Extension

Barbie Electronics Dannon Yogurt Flavors
Existing
New Existing
Product Category
Four Brand Strategies
Brand
Brand
Strategies
Strategies

Line
Line extension
extension
Introduction of additional items in a
given product category under the
same brand name (e.g., new flavors,
forms, colors, ingredients or
package sizes)
Brand
Brand extension
extension
Using a successful brand name to
launch
a new or modified product in a new
category
Brand
Brand
Strategies
Strategies
Multi-brands
Multi-brands
New
New brand
brand names
names introduced
introduced inin the
the same
same
product
product category
category
Offers
Offers a
a way
way to
to establish
establish different
different
features
features and
and appeal
appeal to
to different
different buying
buying
motives
motives
New
New brands
brands
New
New brand
brand names
names in in new
new product
product
categories
categories
Developed
Developed based
based onon belief
belief that
that the
the power
power
of
of its
its existing
existing brand
brand is
is waning
waning and
and aa new
new
brand
brand name
name is is needed.
needed. Also
Also used
used for
for
products
products in in new
new product
product category
category
Interactive
Interactive
Student
Student
Assignments
Assignments
Consider
Consider the
the following
following thought
thought questions,
questions, formulate
formulate an
an answer,
answer,
pair
pair with
with the
the student
student on
on your
your right,
right, share
share your
your thoughts
thoughts with
with one
one
another,
another, and
and respond
respond to
to questions
questions from
from your
your instructor.
instructor.
We can find Coke in six or more
varieties; Tide in Ultra, Liquid, and
Unscented versions; and Crest Gel
with sparkles for kids.
List some of the issues these brand
extensions raise for the
manufacturers, retailers, and
consumers.
 The activities of designing
Packaging and producing the
container or wrapper for a
product
Traditionally packaging for
hold and protect product
Nowadays it functioning as
attracting attention, to
describing the product, to
making sale
Packaging
Steps in developing a
good package:
Packaging concept,
Develop specific elements
of the package,
Elements must support
products position and
marketing strategy.
Packaging
Packaging has
has been
been influenced
influenced by
by
Self-service

Consumer affluence

Company/brand image

Innovation opportunity
Level of Packaging
Packaging that holds the actual product
1 e.g. perfume bottle

In some cases, the first level packaging is

2 protected by one or more package

This packaging is used to transport the

3 customer package through the supply chain
First Level Packaging
Second Level Packaging
Third Level
Packaging
Innovations in Packaging
 Packaging
Decision

Expensive
Expensive to
to create
create
Long-term
Long-term decision
decision
Environmental
Environmental or
or legal
legal issue
issue

Protection
Protection
Visibility
Visibility
Added
Added value
value
Distributor
Distributor acceptance
acceptance
Cost
Cost
 Appropriately designed for target market
e.g. McDonals meals for kids always come with
colorful cartoon character box and small toys as a
free gift

Effective
Effective
Packaging
Packaging
Effective Eye-catching
Packaging e.g Kit Kat
chocolates red-
colored wrapper
is easily
recognizable
from distant
 Effective Packaging
Suitable to product
e.g perfume are mostly bottled in
glass bottles rather than plastic
bottle due to the chemical reaction
Effective
Packaging

Compliant
Compliant with
with
retailers
retailers requirement
requirement
e.g
e.g Body
Body Shop
Shop
promote
promote their
their image
image
as
as recyclable
recyclable
packaging
packaging
 Promote image of
Effective enterprise
Packaging agricultural typically
feature plants, fruit,
flower image
Distinguishable from
competitors product
Strong, convenient,
well-designed
 Labeling
Printed information
appearing on or with the
package.
Performs several functions:
Identifies product or brand
Describes several things
about the product
Promotes the product
through attractive
graphics
Functions Identifies
Grades
of Labels Describes
Promotes
 Assess the value of
Product
Product Support
Support current services and
Services
Services obtain ideas for new
services
Assess the cost of
providing the services
Put together a package
of services that
delights the customers
and yields profits for
the company
Product
Product Support
Support
Services
Services

Companies use product support services as a major

tool in gaining competitive advantage.
How?
Step 1. Survey customers to assess the value of
current services and to obtain ideas for new services.
Step 2. Assess costs of providing desired services.
Step 3. Develop a package of services to delight
customers and yield profits to the company.
Product Line
Line Product line
Decisions Group of closely
related products
because they
function in a
similar manner
and are sold to
similar segments
with similar
marketing mixes
Product Line Decisions
Product
Product Line
Line Length
Length
Number
NumberofofItems
Itemsininthe
theProduct
ProductLine
Line

Stretching Filling
Lengthen beyond current range Lengthen within current range
Adding products to the line Adding more products within
outside of current range current range
Can stretch upwards, Customers must see a
downwards or both ways difference or they will get
confused by too many choices

Downward
Both
Directions

Upward
 Product
Product MixMix Decisions
Decisions
All
All of
of the
the product
product lines
lines and
and items
items that
that aa particular
particular seller
seller offers
offers for
for
sale
sale

Procter & Gamble's Product Mix

Baby Care Beauty Care Fabric & Home Food & Health Care
Care Beverage

Width number of different product lines the Six Toothpastes

company carries in Line

Length total number of items the company

Crest Multicare
carries within product lines
Depth number of versions offered of each
Crest Cavity
product in line Protection

Crest Tartar
Protection
 Discussion Question

Would you classify

Tides product line
as an example of
line stretching or
line filling?

Why?
Product
Product Life-
Life- The Product Life
Cycle
Cycle Strategies
Strategies Cycle (PLC) has
Five Stages
Product
Development,
Introduction,
Growth, Maturity,
Decline
 Product life cycle

Production
sales

Introduction Growth Maturity Decline

 title

Sales
Sales
and
and
Profits
Profits
Over
Over AA
Product
Product
s
s Life
Life
Product Example of product life
Product Life-
Life- cycle concept can be
Cycle
Cycle Strategies
Strategies applied to a:
Product
Product class
class (soft
(soft
drinks)
drinks)
Product
Product form
form (diet
(diet
colas)
colas)
Brand
Brand (Diet
(Diet Cola)
Cola)
Using
Using the
the PLC
PLC to
to
forecast
forecast brand
brand
performance
performance oror to
to
develop
develop marketing
marketing
strategies
strategies is
is
problematic
problematic
 Product Life-Cycle Strategies
Begins when the
company develops
a new-product idea
PLC Stages Sales are zero
Investment costs
Product development
are high
Profits are negative
No customers
Heavy spending
 Product Life-Cycle Strategies
Sales low.
Costs high cost per
customer.
Profits negative.

PLC Stages Innovators are targeted

Little competition
Marketing objectives -- create
product awareness and trial.
Introduction Product -- offer a basic
product.
Price -- use cost-plus. formula
Distribution build selection
distribution
Sales promotion -- heavy to
entice product trial
 Product Life-Cycle Strategies

Sales rapidly rising.

Costs average cost per customer.
PLC Stages Profits rising.
Early adopters are targeted
Growing competition
Marketing objectives maximize
Growth market share.
Product -- offer extension, service,
warranty.
Price penetration pricing strategy.
Distribution build intensive
distribution.
Advertising Build awareness and
interest in the mass market
Sales Promotion Reduce
expenditures to take advantage of
consumer demand
 Product Life-Cycle Strategies

Sales peak.
Costs low cost per customer.

PLC Stages Profits high.

Middle majority are targeted
Competition begins to decline
Marketing objectives maximize
Maturity profits while defending market share.
Product diversify brand and models.
Price set to match or beat
competitors. Distribution build more
intensive distribution.
Advertising Stress brand differences
and benefits
Sales Promotion Increase to
encourage brand switching
Maturity Modifying the market.
Maturity Stage
Stage Increase
Increase the
the
Strategy
Strategy consumption
consumption of
of the
the
current
current product.
product.
How?
Look
Look for
for new
new users
users and
and
market
market segments.
segments.
Reposition
Reposition thethe brand
brand to
to
appeal
appeal to
to larger
larger or
or
faster-growing
faster-growing
segment.
segment.
Look
Look for
for ways
ways toto
increase
increase usage
usage among
among
present
present customers.
customers.
Maturity
Maturity Stage
Stage
Strategy
Strategy

Modifying
Modifying the
the product.
product.
Changing characteristics such as
quality, features or style to attract
new users and to inspire more usage.
How?
How?
Improve durability, reliability, speed,
taste.
Improve styling and attractiveness.
Add new features.
Expand usefulness, safety,
convenience.
Modifying the marketing mix.
Improving sales by changing one or more
marketing mix elements.
How?
Cut prices.
Launch a better ad campaign.
Move into larger market channels.
Offer new or improved services to buyers.

Maturity
Maturity Stage
Stage
Strategy
Strategy
 Product Life-Cycle Strategies

Sales declining.
Costs low cost per customer.

PLC Stages Profits declining.

Laggards are targeted
Declining competition
Marketing objectives reduce
Decline expenditures and milk the brand.
Product phase out weak items.
Price cut price.
Distribution use selective
distribution and phase out
unprofitable outlets.
Advertising Reduce to level
needed to retain hard-core
loyalists
Sales Promotion Reduce to
minimal level
Looking
Looking Back
Back

Define product and the major classifications of

products and services.
Describe the roles of product and service branding,
packaging, labelling and product support services.
Explain the decisions companies make when
developing product lines and mixes.
Identify the four characteristics that affect the
marketing of a service.
Discuss the additional marketing considerations that
services require.
 Explain how companies
Looking Back find and develop new-
product ideas.
List and define the steps
in the new-product
development process.
Describe the stages of
the product life cycle.
Explain how marketing
strategies change during
the products life cycle.