MARKETING
SUMMARY P (2)
Product is anything that can be offered to a market for
attention, acquisition, use or consumption that might satisfy
a want or need, including services, events, places, etc.
 Service is given special attention to as it is activity,
benefit or satisfaction offered for sale that is
essentially intangible and does not result in the
ownership of anything (e.g. banking, travel, retail,
etc.).
Products, Services, and Experiences: products are key part of
market offering as marketing mix planning starts with
creating an offering for customer value delivery which
becomes the basis for profitable relationships.
 Often the offering consists of both products and
services. Sometimes it includes pure tangible goods
or pure services.
Three levels of products and services: (each adds more value for
customer)
1. Core customer value: defining core benefits that
consumers seek.
2. Actual product: what the core value is turned to,
developing features, design, brand, packaging, etc.
3. Augmented product: additional service and benefits,
creating most value and brand experience (e.g.
aftersales service, warranty, product support, etc.).
Product and service classifications: (1) consumer products and (2)
industrialproducts.
1. Consumer products:
Bought by final consumers for a personal consumption,
classified based on based on how consumers buy them.
a) Convenience product - a consumer product that
customers usually buy frequently, immediately and
with minimal comparison and buying effort.
b) Shopping product - a consumer product that the
customer, in the process of selecting and
purchasing, usually compares in such attributes,
such as suitability, quality, price and style.
c) Specialty product - a consumer product with unique
characteristics or brand identification for which a
By: HeshaM HassaN
significant group of buyers is willing to make a
special purchasing effort.
d) Unsought product - a consumer product that the consumer
does not know about or knows about but does not
normallyconsiderbuying.
2. Industrial products:
bought by individuals and organizations for further
processing or for use in conducting a business; the distinction
between consumer and industrial is based upon their
purpose, the same product can be both depending on what
situation the customer decides to use it in.
i. Materials and parts – these consist of raw and
manufactured materials and parts sold directly to
industrial users with price and service as major
marketing factors.
ii. Capital items – assist buyers in production or
operations (e.g. installations and accessory
equipment).
iii. Supplies and services – such as operating supplies
and repair and maintenance items.
Organizations, Persons, Places, and Ideas: these are also
products included to broaden the concept. There are
marketing activities to ‘sell’ the organization such as:
a) Organization marketing – activities to create, maintain and
change attitudes and behaviours towards the
organizations of targeted consumers. Corporate image
marketing – is used to polish company images.
b) Person marketing - activities to create, maintain and
change attitudes and behaviours towards specific persons.
c) Place marketing - activities to create, maintain and change
attitudes and behaviours towards specific places.
d) Ideas can also be marketed; social marketing is using
commercial marketing concepts and tools in programs
designed to influence individuals’ behaviour to improve
their well-being and that of society, meaning marketing
social ideas.
-1-
CH (2) ..
 Product and service decisions
A. Individual product:
1) Product and service attributes: (these decisions define
benefits of the offering)
i. Product quality – is the major positioning tool
defining characteristics of product or service that
bear on its ability to satisfy stated or implied
customer needs.
 Some companies use total quality management,
constantly improving quality of products,
service and business processes, often taking a
return on quality approach viewing quality as
investment.
 Quality has 2 dimensions: level (performance
quality as ability to perform the functions) and
consistency (conformance quality as freedom
from defects and consistency of delivery).
ii. Product features – product can be offered to
customers with different features.
iii. Product style and design – is another way to add
customer value and make it distinct; style describes
appearance, design contributes to usefulness and
looks.
2) Branding: name, term, sign, symbol, design or a
combination of these that identifies the products or
services of one seller or group of sellers and
differentiates them from those of competitors,
customers add meaning to brands and develop
relationships with them.
3) Packaging: Activities of designing and producing the
container or wrapper for a product, and is an
important marketing tool to communicate position and
attract buyers apart from holding and protecting it.
Over packaging raises concern about the environment,
whereas innovative packaging can provide competitive
advantage.
4) Labeling: This includes tags attached to products as part
of packaging; they identify products, describe its
contents, and promote the brand; labels can become
01060202282
MARKETING
the essential element of brand-customer connection, as
well as cause legal concerns since sellers need to ensure
to include all the required info.
5) Product support service: Customer service is part of
brand experience, its value to customers’ needs to be
assessed and various digital technologies can be used to
provide the support.
B.Product line decisions: product line is a group of products
that are closely related because they function in a similar
manner, are sold to the same customer groups, are
marketed through the same types of outlets, or fall within
given price ranges. One of the most important product
line decisions is its length in terms of the number of items.
 The line can be expanded by filling (adding items
within the present range) or stretching (lengthening
beyond the current range).
 Companies can stretch lines downward (to plug a
market hole) and upward (to add prestige to current
products).
C. Product mix decisions: product mix (or portfolio) is the
set of all product lines and items that a particular seller
offers for sale. It has 4 dimensions that help define
product strategy and provide ways to increase business:
1) width (number of various product lines)
2) length (number of items within the product lines)
3) depth (number of versions of each product in the
line)
4) consistency (how closely related the product lines
are)
 Services marketing
Services are growing very fast and service industries vary from
governments to private non-profit organizations to business
organizations.
By: HeshaM HassaN
 Service characteristics:
A. Service intangibility - services cannot be seen, tasted,
felt, heard or smelled before they are bought. Buyers
search for signals of quality to reduce uncertainty.
B. Service inseparability - services are produced and
consumed at the same time and cannot be separated
from their providers, having employee being part of
the service making provider-customer interaction a
special feature of service marketing.
C. Service variability - the quality of services may vary
greatly depending on who provides them and when,
where and how.
D. Service perishability - services cannot be stored for later
sale or use, which may become a problem when
demand is fluctuating.
 Marketing strategies for service firms:
Service profit chain - the chain that links service firm profits
with employee and customer satisfaction. It consists of 5 links:
1. Internal service quality: (superior employees training
and selecting good work environment and support
leading to …)
2. Satisfied and productive service employees: (loyal
and hardworking employees leading to …)
3. Greater service value: (increased effectiveness and
efficiency of customer value creation resulting in…)
4. Satisfied and loyal customers: Satisfied customers,
who remain loyal, repeat purchase, refer other
customers, which results in……………
5. Healthy service profits and growth: (superior service
performance).
 Internal marketing - orienting and motivating
customer-contact employees and supporting
service people to work as a team to provide
customer satisfaction; it involves making
everyone customer-centred and comes before
external marketing.
-2-
CH (2) .. SUMMARY P (2)
 Interactive marketing - training service employees
in the fine art of interacting with customers to
satisfy their needs.
 Service companies marketing tasks:
A. Managing service differentiation: to become distinct
from competitors, a differentiated offer, image and
delivery should be developed. Offer includes feature
that will set company apart from competitors’
products. Differentiating by delivery includes having
more reliable customer-contact employees or designing
a superior delivery process. Images can be
differentiated through symbols and branding.
B. Managing service quality: service can be differentiated
by providing higher quality to consumers than
competitors, and most companies employ customer-
driven quality technique. However, this characteristic is
harder to define and judge, with customer retention as
perhaps the best measure.
 Service quality will always vary depending
on the interaction, leading to importance of
service recovery to win over angry
customers.
C. Managing service productivity: as costs rise, it is
important to increase service productivity, which can
be done in 3 ways:
i. By training current employees or hiring more
skillful ones
ii. By increasing quantity of service by giving up
some quality, which although efficient in the
short-run, can reduce ability innovate, maintain
quality and responsiveness to customer needs.
iii. By harnessing the power of technology
01060202282
MARKETING
 Branding strategy
Sometimes brands are defined as major enduring assets of
companies outliving specific products and services.
 Brand equity:
 Brands are key elements to customer relationships,
representing their emotions and perceptions about
products.
 Brand equity is the differential effect that knowing the
brand name has on customer response to the product
or its marketing; it is a measure of ability of capturing
preference and loyalty.
 Brand Asset valuator uses 4 dimensions to assess
brands’ strength:
 Differentiation (what makes brand distinct)
 Relevance (consumers perception on brand
fulfilling their needs)
 Knowledge (how much is known by consumers
about it)
 Esteem (whether consumers respect the brand)
 Positive equity increases connections with a brand and
can be a valuable asset. Brand valuation is a measure
which estimates the total financial value of a brand.
Powerful brands have many competitive advantages
such as high loyalty and awareness, more leverage
when negotiating with resellers, increased credibility,
and defence against price competition.
 Customer equity underlines brand equity. The former is
the value of the customer relationships created by the
brand, leading to companies thinking of themselves as
portfolios of customers.
By: HeshaM HassaN
 Building strong brands: this involves strategy decisions in
4 major areas:
1. Brand positioning: brands can be positioned on 3
levels: on product attributes (is dangerous, as
attributes can be copied and so not interest
consumers as such), on desirable benefit, and on
strong beliefs and values. Successful brands engage
customers on deep emotional level, establishing a
mission and vision for a brand.
2. Brand name selection: the process begins with
reviewing benefits, target customers and proposed
strategies. Desirable names should include the
following:
o Suggest something about the product’s benefits
o Be easy to pronounce, recognize and
remember
o Be distinctive
o Be extendable
o Be easily translated into different languages
o Be capable of registration and legal procedures
3. Brand sponsorship: products can be launched as
national or store bands. Store brands (or private
brands) are created and owned by a reseller of a
product or service. Nowadays store brands are
growing much faster than national brands; they offer
wide selection and high quality. Additionally,
retailers have advantages in this battle of brands as
they can choose which brands to stock and how to
price they own brands. National brands in turn
improve their value propositions and offer discounts
and promotions.
-3-
CH (2) .. SUMMARY P (2)
o Licensing is a practice of using names, symbols
such a celebrities to market the brands for a
fee.
o Co-branding is a practice of using the
established brand names of two different
companies on the same product allowing
expanding brands into directions which may be
otherwise hard to enter taking advantage of
complementary strengths of 2 brands. The
limitation of this practice is complex legal
agreements and need to trust the partners.
4. Brand development: the following are the major
strategies for development:
a) Line extension - extending an existing brand
name to new forms, colours, sizes, ingredients or
flavours of an existing product category. The
danger is that such development can cannibalize
existing items.
b) Brand extension - extending an existing brand
name to new product categories, giving the
product instant recognition and faster acceptance
saving some advertising costs. However, it the
extension fails, it may harm other products too
and existing brand names may not be fitting.
c) Multiband – this includes marketing many
different brands in a given product category and
offers ways to establish different features for
different segments, lock up more resellers and
gain more market share. The drawback is that
each product may obtain only a small market
share.
d) New brands – involves creating an entirely new
brand name, when for instance entering a new
product category.
01060202282
MARKETING CH (2) .. SUMMARY P (2)

By: HeshaM HassaN -4- 01060202282