Chapter 8: Products, Services, and Brands - Building Customer Value

Service
A product that consists of activities, benefits, or satisfactions and that is essentially intangible and does not result in the ownership of anything

Brand

Customer Experience
A market offering with a strong sensory or emotional component that plays out for the customer over time

Types of service industries

Service Characteristics

Governments

Private not-for-profit organizations

Variability
Quality of services depends on who provides them and when, where, and how

Inseparability
Services cannot be separated from their providers

Intangibility
Services cannot be seen, tasted, felt, heard, or smelled before purchase

Perishability
Services cannot be stored for later sale or use

Business organizations

Product
Anything that can be offered in a market for attention, acquisition, use, or consumption that might satisfy a need or want.

Product Classifications

Specialty Products
Those with unique characteristics or brand identification for which buyers are willing to make a special purchase effort

Unsought Products
Those that consumers neither know about nor normally think of buying

Shopping Products
Bought less often and compared carefully on suitability, quality, price, and style

Convenience Products
Bought frequently, immediately, and with minimum comparison and buying effort

Industrial Products
Products purchased for further processing or for use in conducting a business

Consumer Products
Products and services bought by final consumers for personal consumption

Additional marketing strategies for service firms

Internal Marketing
The service firm must orient and motivate its customer-contact employees and supporting service people to work as a team to provide customer satisfaction

Interactive Marketing
Service quality depends heavily on the quality of the buyer-seller interaction during the service encounter. Service companies need to increase service differentiation, service quality, and service productivity

Service Profit Chain

Internal service quality

Satisfied and productive service employees

Greater service value

Satisfied and loyal customers

Healthy service profits and growth



Brand Equity
The differential effect that knowing the brand name has on customer response to the product or its marketing

Brand Value
Total financial value of a brand



Building Strong Brands
(Major Brand Strategy Decisions)

2. Brand Name Selection
Suggests benefits and qualities

3. Brand Sponsorship

1. Brand Positioning
Marketers can position brands at any of three levels:

4. Brand Development
Brands are powerful assets that must be developed
and managed. Building strong brands involves many
chalenging decisions

Benefits

Attributes

Belief and values

Easy to pronounce, recognize, and remember

Distinctive

Extendable

Translatable for the global economy

Capable of registration and legal protection



Private label (or store) brand

Licensing

Manufacturer's (or national) brand

Co-branding

Multibrands

New brands

Brand extensions

Line extensions

Service Management

Service Differentiation
Creates a competitive advantage by developing a differentiated offer, delivery, and image



Service Quality
Enables a service firm to differentiate itself by delivering consistently higher quality than its competitors do



Service Productivity
Refers to the cost side of marketing strategies for service firms, including investment decisions on employee hiring and training as well as service quantity and quality (ie airline industry)