Chapter 8

Product and Services Strategy

8-1
Road Map: Previewing the Concepts
Define product and the major classifications of
products and services.
Describe the roles of product and service
branding, packaging, labeling, 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 for services.
8-2
What is a Product?
A PRODUCT is anything that can be offered to a
market for attention, acquisition, use, or
consumption and that might satisfy a want or
need.
Includes:
Physical Objects
Services
Events
Persons
Places
Organizations
Ideas
Combinations of the above 8-3
What is a Service?
A SERVICE 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.
Examples include:
Banking
Hotels
Tax preparation
Home repair services

8-4
Products, Services, and Experiences
Tangible Service
Pure Good With Hybrid With Pure
Tangible Accompanyi Offer Accompanyi Service
Good ng Services ng Minor
Goods
Auto With Airline Trip
Soa Accompanyi Restauran With Doctor’s
p ng Repair t Accompanyi Exam
Services ng Snacks

8-5
Levels of Product (Fig. 8-1)

8-6
Product Classifications: 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 don’t
 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 8-7
 Product Classifications: Industrial
Materials
Materials and
and Parts
Parts
Raw
Rawmaterials,
materials,manufactured
manufactured
materials,
materials,and
andparts
parts

Capital
Capital Items
Items
Industrial
Industrialproducts
productsthat
thataid
aidinin
buyer’s
buyer’sproduction
productionororoperations
operations

Supplies
Supplies and
and Services
Services
Operating
Operatingsupplies,
supplies,repair/
repair/
maintenance
maintenanceitems
items
8-8
Product Classifications:
Other Marketable Entities
Activities undertaken to create, maintain, or
change the attitudes and behavior toward the
following:
Organizations - Profit (businesses) and nonprofit
(schools and churches).
Persons – Politicians, entertainers, sports figures,
doctors, and lawyers.
Places - Business sites, new residents, and tourism.
Ideas (social ideas marketing) – Public health
campaigns, environmental campaigns, and others
such as family planning, or human rights.
8-9
Individual Product Decisions
(Fig. 8-2)

8-10
Product 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
Product
Product Quality
Quality Its
Its Functions;
Functions; Includes
Includes Level
Level &
&
Consistency
Consistency
Differentiates
Differentiates the
the Product
Product
Product
Product Features
Features from
from Competitors’
Competitors’ Products
Products

Product
Product Style
Style Process
Process of
of Designing
Designing aa
&& Design
Design Product’s
Product’s Style
Style &
& Usefulness
Usefulness
8-11
Branding
Advantages to Brand Equity
Branding Higher brand loyalty
Buyers: Name awareness
• Identification Perceived quality
• Quality and value Strong brand
associations
Sellers Patents, trademarks,
• Tells a story channel relationships
• Provides legal
protection
• Helps segments
markets

8-12
Brands and Brand Symbols
(p. 292)
Powerful brands such
as these have brand
equity:
Coca-Cola brand - $69
billion
IBM brand - $53 billion
Offers defense
against fierce price
competition.

8-13
Major Branding Decisions
(Fig. 8-3)

8-14
 Four Brand Strategies (Fig. 8-4)
Product Category
Existing New

Existin
g Line Extension Brand Extension
Brand Name

Dannon Yogurt Flavors Barbie Electronics

New Multibrands New Brands

Seiko Lasalle & PulsarWindex (by acquisition)

8-15
Brand Strategy
Line Extension
Existing brand names extended to new forms,
sizes, and flavors of an existing product category.
Brand Extension
Existing brand names extended to new or
modified product categories.
Multibrands
New brand names introduced in the same product
category.
New Brands
New brand names in new product categories.

8-16
Consider the following thought questions,
formulate an answer, pair with the student on
your right, share your thoughts with one
another, and respond to questions from your
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.

8-17
Packaging
Designing and producing
the container or wrapper
for a product.
Steps in developing a
good package:
Packaging concept,
Develop specific elements
of the package,
Elements must support
product’s position and
marketing strategy.
8-18
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

8-19
Product Support 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
8-20
Product Line Decisions
Product Line Length
Number of Items in the Product Line

Stretching Filling
Lengthen beyond Lengthen within
current range current range

Downward
Both
Directions
Upward
8-21
Product Mix Decisions
Procter & Gamble's Product Mix
Baby Care Beauty Care Fabric & Home Food & Health Care
Care Beverage

 Width – number of different product Six Toothpastes

in Line
lines
Crest Multicare
 Length – total number of items the
company carries within product lines Crest Cavity
Protection
 Depth – number of versions offered
of each product in line Crest Tartar
Protection

8-22
Nature and Characteristic of a
Service (Fig. 8-5)

8-23
Illustrate how a movie theater can
deal with the intangibility,
inseparability, variability, and
perishability of the services it
provides.

8-24
The Service-Profit Chain
(Fig. 8-6)

8-25
Marketing Strategies for Service
Firms
Managing Service
Differentiation
Develop differentiated offer,
delivery, and image.
Managing Service Quality
Empower front-line employees,
Become “Customer obsessed,”
Set high service quality
standards,
Watch service performance
closely.
Managing Service
Productivity
Train current or new
employees better,
Work on quality as
well as quantity,
Utilize technology
Well-designed Web
site
8-26
International Product and
Services Marketing
Decide Which Products & Services to Introduce

Decide How Much to Standardize or Adapt

Packaging Presents New Challenges

Service Marketers Face Special Challenges

Trend Toward Global Service Companies Will Continue

8-27
Rest Stop: Reviewing the Concepts
Define product and the major classifications of
products and services.
Describe the roles of product and service
branding, packaging, labeling, 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 for services.
8-28