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Products, Services and Brands

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The Product-Service Continuum Sugar Restaurant Education Pure Tangible Good Pure Service Offer another example of a pure service.

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What Is a Product? Anything offered to a market that satisfies a want or need. Includes: physical objects, services, events, persons, places, organizations, ideas, or some combination thereof.

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What Is a Service? Activities, benefits, or satisfactions offered to a market that are essentially intangible and do not result in the ownership of anything. Examples: banking, hotel, airline, retail, tax preparation, home repairs.

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7-5 Consumer Experiences In-store Theater is more important than ever Consider ALL consumer touch-points Eliminate shopping drudgery Work fun into the shopping experience, but dont overdo it Knot Tying Clinic Art Gallery Entrance

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Three Levels of Product

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Individual Product Decisions

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Product Attributes Quality Performance vs. Conformance quality Benefits vs. Features Consumers generally value benefits, not features Style and design Influences product choice and experience Price What is an attribute?

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Branding A brand is a name, term, sign, symbol, or design, or a combination of these that identifies the maker or seller of a product or service. Product = Body Brand = Soul

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Branding - Advantages Advantages to buyers: Eases product identification Simplifies the purchase process (choice heuristic) Signal of quality Repository of Trust (- Jordan) Advantages to sellers: Drive loyalty to company and its products Provides legal protection Helps segment markets (i.e. Branded Variants)

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How Branding Happens

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Attributes of Strong Brands Excels at delivering desired benefits Stays relevant Priced to meet perceptions of value Positioned properly Communicates consistent brand messages Well-designed brand hierarchy Uses multiple marketing activities Understands consumer- brand relationship Supported by organization Monitors sources of brand equity

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Marketing Advantages of Strong Brands Improved perceptions of product performance Greater loyalty Less vulnerable to competition Less vulnerable to crises Larger margins Inelastic consumer response to price increases Elastic consumer response to price decreases Greater trade cooperation Increase in effectiveness of IMC Licensing opportunities Brand extension opportunities

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Packaging Container, wrapper or external face for a product. Good packages market the brand effectively protect the internal elements protect the external elements are easy/straightforward to use dont become stale over time ensure consumers safety are responsive to local environmental and social concerns

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Dutch Boys packaging innovation offers paint in plastic containers with twist-off tops. The paint container is easy to carry, doesnt need a screwdriver to pry open, doesnt dribble when poured, and doesnt take a hammer to bang the lid shut. Innovative Packaging

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Labeling Printed information appearing on or with the package. Performs several functions: Identifies or reinforces identification of product/brand Provides valuable information about product contents or ingredients Co-promotes the product along with packaging

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The FDA now requires food manufacturers to list trans fat on the Nutrition Facts portion of product labels. Labeling

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The Ethics and Legality of Labeling

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Product Line Decisions Product Line Group of products with variations (flavors/types/appeals). Product Line Stretching Downward Upward Both directions Product Line Filling Examples Ice Tea Pet Foods

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Marriott offers a full line of hotel brands, each aimed at a different market. Product Line Stretching - Marriott

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Product Mix Decisions Product mix: What combination of products do we carry? Product mix decisions: Product Line Length: the number of items in a line. Product Line Width: the number of different product lines the company carries. (i.e. Wal-Mart has toys, food, cards, clothes, music, etc.) Product Line Depth: the number of versions offered of each product in the line. (i.e. 2 or 3 different sizes or sub-types)

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Question du Jour Is product variety a blessing or curse for consumers?

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Brand Loyalty & Brand Equity Brand Loyalty Definition: Willingness to re-purchase due to favorable brand impressions How measured? Brand Equity Definition: The positive effect that knowing the brand name has on consumer response to the product. Psychological Value Financial Value The Link between Brand Loyalty & Brand Equity

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Brand Loyalty Measurement Methods Repeat Purchases Reported Loyalty Price Sensitivity Analysis Brand Set Squares Method Other Methods

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Measuring Brand Equity Brand Audits Brand Tracking Brand Valuation

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Brand Values BrandBrand Value (Billions) Coca-Cola$67.39 Microsoft$61.37 IBM$53.79 GE$44.11 Intel$33.50 Disney$27.11 McDonalds$25.00 Nokia$24.04 Toyota$22.67 Marlboro$22.13

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Interbrands Brand Equity Formula Brand earnings Brand sales Costs of sales Marketing costs Overhead expenses Remuneration of capital charge Taxation Brand strength Leadership (25%) Stability (15%) Market (10%) Geographic spread (25%) Trend (10%) Support (10%) Protection (5%)

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Brand Equity Models Brand Asset Valuator Aaker Model BRANDZ

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Brand Asset Valuator (BAV) Differentiation Relevance Esteem Knowledge Brand Equity Factors

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Aaker Model Brand Identity Brand-as-product Brand-as-personBrand-as-symbol Brand-as-organization

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Aaker Model Brand Assets Brand loyalty Brand associations Perceived quality Brand awareness Proprietary assets

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The BRANDZ Model Presence Relevance Performance Advantage Bonding

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Major Brand Strategy Decisions

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Brand Elements Elements Slogans Brand Names URLs Logos Symbols Characters

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Slogans Like a good neighbor, State Farm is there Just do it Nothing runs like a Deere Help is just around the corner Save 15% or more in 15 minutes or less We try harder Well pick you up Nextel Done Zoom Zoom Im lovin it Innovation at work This Buds for you Always low prices

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Brand Element Choice Criteria Memorable Meaningful Likeable Transferable Adaptable Protectible

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Brand Positioning Brands can be positioned at three levels: Product features/ attributes Least desirable Easily copied Brand benefits Beliefs and values Hits consumers on a deeper level, tapping universal emotions.

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Brand Name Selection Good Brand Names: 1.Straightforwardly suggest the products benefits and qualities. 2.Are easy to spell, pronounce and recognize. 3.Are distinctive and memorable. 4.Are extendable into different product lines (i.e. facilitate brand extensions). 5.Translate easily into foreign languages. 6.Provide the maximum legal protection from infringement.

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Boudreauxs Butt Paste is a real product used in the treatment of diaper rash. Is this a good brand name? Brand Name Selection Good Brand Names: 1.Straightforwardly suggest the products benefits and qualities. 2.Are easy to spell, pronounce, recognize, and remember. 3.Are distinctive and memorable. 4.Are extendable into different product lines (i.e. facilitate brand extensions). 5.Translate easily into foreign languages. 6.Provide the maximum legal protection from infringement.

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Brand Naming Multi-brand strategies Individual names/ House of Brands Individual names/ House of Brands Blanket family names/ Branded House Blanket family names/ Branded House Parent/Sub-Brand combination names

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Crest Whitestrips

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Brand Sponsorship Manufacturers brands Also called National Brands (Tide, Coke, Pringles, etc.) Private-label brands Also called Store or Distributor Brands (Stop & Shops Mi Casa, Costcos Kirkland) Store vs. Private Label Trends Co-branding Tag-team Branding ( Waffle House and Minute Maid OJ) Ingredient Branding (Intel Inside) Mi Casa brand products are only available at Stop & Shop stores.

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Brand Development Strategies

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Line Extensions

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Brand Extensions

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Brand Development Multibranding & New Brands Multi-branding appeal to different buying motives and segments branded variants Cannibalization issues Example: Toyota sells Corolla, Camry, Scion, Yarris New Brands waning power of existing brands or product portfolio diversification advantages can develop (Black & Decker develops De Walt) or buy (i.e. Wendys buys Baja Fresh)

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Branding Terms Brand line Brand mix Brand extension Sub-brand Parent brand Family brand Line extension Category extension Branded variants Licensed product Brand dilution Brand portfolio

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Services

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Four Service Characteristics

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How do the service characteristics of intangibility, variability, inseparability, and perishability relate to restaurants? Four Service Characteristics Restaurant Example