Product, Services, and Branding Strategy

marketing fundamentals -- part 7 -- summary

A product is more than a simple set of tangible features. In fact, many marketing offers consist of a combination of tangible goods and services, ranging from pure tangible goods at one extreme to pure services at the other. Each product or service offered to customers can be viewed on three levels. The core product consists of the core problem-solving benefits that consumer seek when they buy a product. The actual product exists around the core and includes the quality level, features, design, branding, and packaging. The augmented product is the actual product plus the various services and benefits offered with it, such as warranty, free delivery, installation, and maintenance.

Products

Broadly defined, a product is anything that can be offered to the market for attention, acquisition, use, or consumption that might satisfy a want or need. Products include more than just physical objects. Products can include services, events, persons, places, organizations, ideas, or mixes of these entities. Services are products that consist of activities, benefits, or satisfactions offered for sale that are essentially intangible, such as banking, hotel, tax preparation, and home repair services.

Products and services fall into two broad classes based on the types of consumers that use them. Consumer products -- those bought by final consumers -- are usually classified according to consumer shopping habits (convenience products, shopping products, specialty products, and unsought products). Industrial products -- purchased for further processing or for use in conducting a business -- include materials, parts, capital items, supplies and services. Other marketable entities -- such as organizations, persons, places, and ideas -- can also be thought of as products.

Company product offerings

Individual product decisions involve product attributes, branding, packaging, labeling, and product support services. Product attributes decisions involve product quality, features, style and design. The branding decisions include selecting a brand name and developing a brand strategy. Packaging provides many key benefits, such as protection, economy, convenience, and promotion. Package decisions often include designing labels, which identify, described, and possibly promote the product. Companies also develop product support services that enhance customer service, satisfaction and safeguard against competitors.

Most companies produce a product line rather than a single product. A product line is a group of products that are related in function, customer purchase needs, or distribution channels.
Line stretching involves extending a line downward, upward, or in both directions to occupy a gap that might otherwise be filled by competitor. In contrast, line filling involves adding items within the present range of the line. This set of product lines and items offered to customers by a particular seller make up the product mix. The mix can be described by four dimensions: weight, blankets, and depth, inconsistency. These dimensions are the tools for developing the company's product strategy.

Branding strategy

Some analysts see brands as the major enduring asset of a company. Brands are more than just names and symbols -- they embody everything that the product or service means to consumers. Brand equity is the positive differential affect that knowing the brand-name has on customer response to the product or service. A brand with strong brand equity is very valuable asset.

In building brands, companies need to make decisions about brand positioning, brand-name selection, brand sponsorship, and brand development. The most powerful brand positioning builds around strong customer beliefs and values. Brand-name selection involves finding the best brand-name based on a careful review of product benefits, the target market, and proposed marketing strategies. A manufacturer has four brand sponsorship options: it can launch a manufacturer's brand (or national brand), sell to resellers to use as a private brand, market licensed brands, or join forces with another company to co-brand a product. The company also has four choices when it comes to developing brands. It can introduce line extensions, brand extensions, multibrand, or new brands (new brand names in new product categories).

Companies must build and manage the brands carefully. The brand positioning must be continuously communicated to consumers. Advertising can help, but brands are not maintained by advertising but by the brand experience. Customers come to know a brand through a wide range of contacts and interactions. The company must put as much care into managing these touch points as it does to producing its ads. Thus, managing a company's brand assets can no longer be left only to brand managers. Some companies are now setting up brand asset management teams to manage their major brands. Finally, companies must periodically audit their brand's strengths and weaknesses. In some cases, brands may need to be repositioned because of changing customer preferences or new competitors. Other cases may call for completely rebranding a product, service, or company.

Marketing services

Services are characterized by four key characteristics; they are intangible, inseparable, variable, and perishable. Each characteristic poses problems in marketing requirements. Marketers work to find ways to make their service more tangible, to increase the productivity of providers who are inseparable from their products, to standardize quality in the face of variability, and to improve demand moments and supply capacities in the face of service parishability.

Good service companies focus attention on both customers and employees. They understand the service profit chain, which links service and profits with employee and customer satisfaction. Service marketing strategy calls not only for external marketing but also for internal marketing to motivate employees and interactive marketing to create service delivery skills among service providers. To succeed, service marketers must create competitive differentiation, offer high service quality, and find ways to increase service productivity.

Product issues

Marketers must consider two additional product issues. The first is social responsibility. These include public policy issues and regulations involving acquiring or dropping products, patent protection, product quality and safety, and product warranties. The second involves special challenges facing international product and service marketers. International marketers must decide how much to standardize or adapt their offerings for world markets.