8 PRODUCT, SERVICES AND BRANDING STRATEGY

PRODUCT, SERVICES AND BRANDING STRATEGY COLLEGE OF BUSINESS ADMINISTRATION CHUNGANG UNIVERSITY PROF HYUNSUK SUH PRODUCT, SERVICES AND BRANDING STRATEGY COLLEGE OF BUSINESS ADMINISTRATION CHUNGANG UNIVERSITY PROF HYUNSUK SUH PRODUCT, SERVICES AND BRANDING STRATEGY COLLEGE OF BUSINESS ADMINISTRATION CHUNGANG UNIVERSITY PROF HYUNSUK SUH

8. PRODUCT, SERVICES AND BRANDING STRATEGY Product — Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. COLLEGE OF BUSINESS ADMINISTRATION CHUNG-ANG UNIVERSITY PROF HYUNSUK SUH 2 What is the definition of “Product and Service? ” Product and Service  Product: Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. Products include more than tangible goods. It includes physical objects, services, events, persons, places, organizations, ideas, or mixes of these entities.  Service: It is a form of product that consist of activities, benefits, or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything. Kotler and Armstrong, 2008, 2013 3 What is the definition of “Product and Service? ” Definition: Product and Service  Product: Everything both favorable and unfavorable that an person received in an exchange. Lamb, Hair, McDaniel, 2009, 2011, 2013  Good: A good is a tangible product, something that we can see, touch, smell, hear, taste, or possess. In contrast, intangible product-services, ideas, people, places-are products that we can’t always see, touch, smell, taste, or possess. Solomon, Marshall, Stuart, 2009 Product Product Good Service Idea Good Service Idea 4 The objectives of the current chapter are described below. Objectives Define product and understand the major classifications of products and services Understand the decisions people make regarding their products and services Identify the four characteristics that affect the marketing of a service 0. Objectives 5 Product planners need to think about products and services on three(3) levels which each level adds more customer value. Three(3) Levels of Product  Core Product ( 핵심제품 ) The core benefit customers want from the product e.g.) convenience( 편편편편편편편편편편편편편편편 편편 편편편편편편편편편 편편편편편편 automobile – safety, convenience  Actual Product ( 유형제품 ) The tangible product that can actualize core benefit e.g.) package( 편편편편 design편 편편편편편편편편 automobile- 편편편편편편편 engine편편 편편편편편편편편편 편편편편편 power handle편편편 편편편편편편편편편 편편편편편편편편편편편편편편편편편편편 편편  Augmented Product ( 확장제품 ) Additional service or product that assists to purchase and use the product e.g.) 편편편편편 warranty편편편 편편 편 exchange편편 편편편편편편편편편편 편편편편편편편편편편편편편편편편편편 편편편편 편편편편편편편편편편편 편편편편편편편편편편편편 Operational Supported Adviser Channel Core Product Actual Product Augmented Product Brand Name Quality Level Packaging Design Features Delivery & Credit Installation Warranty After- Sale Service Exchange or Refund 1. Product Definition 6 DISCUSSIONS Consider Starbucks, 1. What is the core product that Starbucks offer? Actual and Augmented levels? Consider following Starbucks example. Starbucks 1. Product Definition In Class Exercise 7 Classification: Consumer Products Consumer products are products and services bought by final consumers for personal consumption. Customer buy frequently, immediately, and with minimum of comparison and buying effort: Low priced, and place them in many locations for ready availability (e.g. soap, candy, newspaper, shampoo, fast food, etc.) Convenience Goods Less frequently purchased products that customers compare carefully on suitability, quality, price, and style: Placed in fewer outlets but with deeper sales support (e.g. furniture, clothing, cars, hotel and airline services, etc.) Shopping Goods Unique characteristics or brand identification which significant group of buyers is willing to make special purchase efforts: They are usually not compared. Buyers only invest time needed to reach dealers who carry these items (e.g. high-priced photographic equipment, special design clothes, Lamborghini, etc.) Specialty Goods Products that the customer either does not know about, or know about but does not normally think of buying: Most major new innovations until customer becomes aware. They require lot of advertising and personal selling (e.g. life insurance, cemetery plots, blood donations, etc.) Unsought Goods 1. Product Definition 8 Convenience Shopping Specialty Unsought CONSUMER ATTITUDES PRODUCT soda, soft drinks, milk, toothpaste, soap, etc. clothing, computers, appliances, furniture, etc. luxury items: Rolex, Jaguar, etc. medical trauma services PLACE PRICE PROMOTION Let’s apply the classification of products to marketing mix considerations below. Classification and Marketing Mix Consideration for Consumer Products Low involvement, minimize time and effort Moderate to high involvement, balance between image and feature Very high involvement, image is more important than features Unaware, possibly avoiding learning about category Wide spread, convenient locations Large number of selective outlets Limited and exclusive few outlets More selective outlets from few to many - Varies Low price Moderate price High price Varies Focus on price, availability, and awareness Focus on features, and differentiation Focus on brand, and status Focus on awareness 1. Product Definition 9 Product Attributes Developing a product or service involves delivering the benefits of product attributes: quality, features, and style & design. Major positioning tool. Direct impact on P/S performance 1. Level: performance quality – ability of a product to perform its functions Companies choose a quality level that matches with target market needs and competing products 2. Consistency: conformance quality –freedom from defects and consistency in quality delivery to target markets QUALITY Style : simply describes the appearance (look and feel to the buyer) Design : more than skin deep. It contributes to products usefulness as well as to its looks (e.g. men’s wet shaving world) STYLE & DESIGN 2. Product Attribute 10 Product Line Decisions Beyond decisions about the individual products and services, product strategy also calls for building a product line. A group of products that are closely related because they may… -function in a similar manner -are sold to the same customer groups -market through the same types of outlets -fall within given price range Product line length is influenced by company objectives and resources PRODUCT LINE [...]... Difficult to standardize service and quality control Customization / Standardization 22 6 Service Perishability refers to the fact that services can not be saved, their unused capacity can not be reserved, and they can not be inventoried Perishability Marketing Problems Possible Solutions Higher demand than maximum available supply Demand strategy: Creative pricing Reservation systems Higher demand than... goods and services is not always perfectly clear In fact, providing an example of a pure good or a pure service is very difficult Goods and Services GOODS Objects, Devices, or things PRODUCTS SERVICES Deeds, efforts, or performances Scale of Market Entities: The Scale that displays a range of products along a continuum based on their tangibility 17 6 Service The following “Molecular Model” further expand... following “Molecular Model” further expand our understanding of the basic differences between goods and services The Molecular Model 18 6 Service The four characteristics of service is described below Four(4) Service Characteristics Intangibility: Services can not be seen, tasted, felt, heard, or smelled before they are bought Intangibility Perishability Services Meaning Variability: Quality of service... applies the concepts of product line width, length, and depth BMW: Product Width and Length Example 13 3 Brand Marketers need to position their brands clearly in target customers’ mind by adjusting any of the following three(3) levels Brand Positioning ATTRIBUTES - Product attributes (e.g Dove soap-one quarter cleaning cream) BENEFITS BELIEFS & VALUES - Brand can be better positioned by associating its... of the package Functions of Labeling Identifies It identifies the product or brand (e.g Sunkist stamped on an orange) Describes Describes several things (e.g where it was made, when it was made, contents, how it is to be used, and safey) Promotes Texts and graphics Label contains Unit price Stating the price per unit of standard measure Nutrition Nutritional value of the product (e.g calories, fats,... displaying or communicating services Creation of a strong organizational image Difficulty in pricing strategies 20 6 Service Service providers are often in constant contact with their customers and must construct their service operations with the customer’s physical presence in mind This interaction represent greatest opportunity for both gains and losses in regard to customer satisfaction and retention Inseparability... package necessary to store, identify, and ship the product (e.g a corrugated box carrying six(6) dozen tubes of Colgate) Packaging Facts • The power of good packaging create instant customer recognition of the company or brand • Innovative packaging can give a company an advantage over competitors • Packaging decision includes size, shape, materials, color, text, and brand mark • Recent years the “product... service depends on who provides them as well as when, where, and how they are provided Variability Inseparability: Inseparability Services cannot be separated from their providers, whether the providers are people or machines Perishability: Service cannot be stored for later sales or use 19 6 Service Intangibility is a distinguishing characteristic of services that makes them unable to be touched or sensed... show product width and length for Proctor & Gamble products Product Width and Length Example Product MIX WIDTH Detergents Product LINE LENGTH Toothpaste Disposable Bar Soap Diapers Paper Tissue Ivory Snow Dreft Tide Cheer Oxydol Dash Bold Gain Era Gleem Crest Ivory Kirk’s Lava Camay Zest Safeguard Coast Oil of Olay Pampers Luvs Charmin Puffs Banner Summit DEPTH Crest has 3 sizes and 2 formulations... desirable benefit (e.g Dove soap-softer skin) - The strongest brands that go beyond attribute or benefit positioning (e.g How those cleansing cream attributes and softer skin benefits will make you more attractive) 14 4 Packaging Companies are realizing the power of good packaging to create instant customer recognition of the company or brand Types of Packaging Primary container Product’s primary container . below. Objectives Define product and understand the major classifications of products and services Understand the decisions people make regarding their products and services Identify the four. 8. PRODUCT, SERVICES AND BRANDING STRATEGY Product — Anything that can be offered to a market for attention, acquisition,. further expand our understanding of the basic differences between goods and services. The Molecular Model 6. Service 19 Meaning Intangibility Inseparability Variability Perishability Services The