Chapter 7 Marketing

Marketers position brands at three levels

(1) at the lowest level, they can position the brand on product attributes. (2) at the next level, a brand can be better positioned associating its name with a desirable benefit. (3) In the final level, the strongest brands go beyond attribute or benefit positioning. They are positioned on strong beliefs and values and engage customers on a deep, emotional level.

Desirable qualities for a brand name

(1) based on the product's benefits and qualities (2) easy to pronounce, recognize, and remember, (3) distinctive and extendable, (4) easily translated into foreign languages, (5) capable of registration and legal protection

How can a company expand its product line?

(1) product line filling (2) product line stretching

What are the four special service characteristics a company must consider when designing marketing programs?

(1) service intangibility, (2) service inseparability, (3) service variability, (4) service perishability

Examples of service profit chain

(1) the supermarket chain Wegmans believes that happy, superbly trained employees create a superior customer experience. (2) Zappos knows that delivering customer happiness begins with happy, dedicated, energetic employees. Zappos is "Powered by Service."

What are the reasons for a company to stretch its line?

(1) to plug a market hole that would attract a potential competitor. (2) to add prestige to the current product.

managing (to improve) service productivity

(1) training current employees or hiring new ones (2) increasing the quantity of service by giving up some quality (3) harnessing the power of technology

Why are brands important to consumers?

- Consumers view a brand as an important part of a product, and branding can add value to a consumer's purchase. -Brand names help consumers identify products that might benefit them. -Brands also say something about product quality and consistency.

example of interactive marketing

All new hires at Zappos - at all levels of the company - complete a four-week customer-loyalty training regimen

Service

An activity, benefit, or satisfaction offered for sale; it is intangible and does not result in ownership of anything.

Product

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

Consumer products

Are bought by final consumers for personal consumption.

Core customer value, actual product, augmented product

At the most basic level, the company asks, "What is the customer really buying?" For example, people who buy an Apple iPad are buying more than just a tablet computer. They are buying entertainment, self-expression, productivity, and connectivity - a mobile and personal window to the world.

What do business firms do to market themselves and polish their images?

Business firms sponsor public relations or corporate image marketing campaigns to market themselves and polish their images.

Example of product mix (or product portfolio)

Colgate divides its overall product mix into four major lines: oral care, personal care, home care, and pet nutrition. Each product line consists of many brands and items. "Colgate World of Care" - products that "every day, people like you trust to care for themselves and the ones they love."

How do different types of consumer products differ?

Consumer products differ in the ways consumers buy them and, therefore, in how they are marketed.

Table 7.1 Marketing Considerations for ______________________ Products

Convenience and Shopping

Managing service differentiation

Developing a differentiated offer, delivery, and image, e.g. Roadrunner VIP program, Dick's Sporting Goods' golf simulation interactive screen

Examples of consumer products

Include convenience products, shopping products, specialty products, and unsought products.

What does the company do after assessing the quality of various support services?

It can take steps to fix problems and add new services that will both delight customers and yield profits to the company.

Brand equity

It is the differential effect that knowing the brand name has on customer response to the product or its marketing. It is a key element in a company's relationship with its customers.

Example of Major Brand Strategy Decisions

Kroger's store brands - from Private Selection, Heritage Farm, Simple Truth (natural and organic), etc. - account for 25 percent of the grocery retailer's sales or almost $23 billion annually. Kroger even offers a Kroger brand guarantee - "Try it, like it, or get the national brand free."

Service profit chain

Links service firm profits with employee and customer satisfaction. Successful service companies focus their attention on both their customers and their employees.

Table 7.1 Marketing Considerations for Specialty and Unsought Products

Marketing Considerations | Specialty Product | Unsought Product *Customer buying behavior* - strong brand preference and loyalty; special purchase effort; little comparison of brands; low price sensitivity - little product awareness or knowledge (or, if aware, little or even negative interest) *Price* - high price - varies *Distribution* - exclusive distribution in only one or few outlets per market area - varies *Promotion* - more carefully targeted promotion by both the producer and resellers - aggressive advertising and personal selling by the producer and resellers *Examples* - luxury goods, such as Rolex watches or fine crystal - life insurance and red cross blood donations

Social marketing

Marketing of social ideas has been called __________ _________________, which consists of using traditional business marketing concepts and tools to create behaviors that will create individual and societal well-being.

Depth

Number of versions offered for each product in the line, e.g. within the cola category, how many types of Cokes are there?

Example of a core customer value

People who buy an Apple iPad are buying much more than just a tablet computer.

Consistency

Relative closeness of various product lines in end use, production requirements, distribution channels, or some other aspect

What else does social marketing involve beyond advertising?

Social marketing involves much more than just advertising. It involves a broad range of marketing strategies and marketing mix tools designed to bring about beneficial social change.

What is the first step in designing product support services?

The first step in designing product support services is to survey customers periodically.

customer equity

The fundamental asset underling brand equity. This refers to the value of customer relationships that the brand creates.

Example of persons market offerings

The skillful use of marketing can turn a person's name into a powerhouse brand. For example, Rachel Ray, is a one-woman marketing phenomenon, with her own daytime talk show, cookware, and cutlery brands, dog food brand, and even her own brand of EVOO (Extra Virgin Olive OIl).

Why do companies create and manage customer experiences with their brands or companies?

To differentiate their offers from that of the competitors.

How do buyers use service intangibility?

To reduce uncertainty, buyers look for signals of service quality. They draw conclusions about quality from the place, people, price, equipment, and communications that they can see.

Example of service variability

Within a Marriott hotel, one registration-counter employee may be cheerful and efficient, whereas another standing just a few feet away may be grumpy and slow.

brand

a name, term, sign, symbol, or design or a combination of these that identifies the maker or seller of a product or service.

features

a product can be offered with varying _____________. another way to add customer value is through distinctive product style and design.

example of an augmented product

an iPad comes with warranty on parts and workmanship and other support services. *Other examples of an augmented product* - delivery and credit, product support, warranty, after-sale service

Industrial Products

are bought by individuals and organizations for further processing or for use in conducting a business.

example of brand positioning

attributes, benefits, beliefs and values

A powerful brand enjoys a high level of consumer __________ ______________ and ___________.

brand awareness, loyalty

More than just selling products, Apple's highly successful retail stores create engaging life-feels-good ____________ ____________________.

brand experiences

The proper focus of marketing is building customer equity, with ___________ _____________________ serving as a major marketing tool.

brand management.

Major Brand Strategy Decisions

brand positioning -> brand name selection -> brand sponsorship -> brand development

product line

closely related products that have similar functions and customer groups. Are sold through similar outlets or fall within give price ranges. E.g., Nike produces several lines of athletic shoes.

High brand equity provides a company with many ______________ _________________

competitive advantages

Companies create and manage ______________ _______________ with their brands or companies.

customer experiences

A powerful brand forms the basis for building strong and profitable _________ ______________.

customer relationships

core customer value

deals with what is brought by the customer.

individual product decisions

decisions in the development and marketing of individual products and services

managing service quality

delivering consistently higher quality than the competitors. Easier said than done but keep trying!

Brands are powerful assets that must be carefully __________ and __________.

developed, managed.

product attributes

developing a product or service involves defining the benefits that it will offer

Consumer perception dimensions

differentiation, relevance, knowledge, esteem

What are the directions that a company can stretch its line?

downward, upward, or both ways

example of internal marketing

for example, Zappos starts by hiring the right people and carefully orienting and inspring them to give unparalleled customer service.

Market offerings include both tangible _________ and ___________

goods, services

labels

help to identify and describe the product or brand as well as promote the brand, support its positioning and engage customers.

Idea

ideas can also be marketed

What are the three levels at which marketers make product and service decisions?

individual product decisions, product line decisions, and product mix decisions

Packaging Examples

innovative child guard safety packaging likely saved P&G's fast-growing Tide PODS and other unit-dose laundry detergent brands.

Services marketing requires more than just traditional external marketing using the four Ps, it also requires:

internal marketing, interactive marketing

What are the five links of the service profit chain?

internal service quality, satisfied and productive service employees, greater service value, satisfied and loyal customers, and healthy service profits and growth.

packaging

involves designing the container or wrapper for a product. increased competition means that packages must now perform many sales tasks - from attracting buyers to communicating brand positioning to closing the sale.

Total quality management (TQM)

is an approach in which all of the company's people are involved in constantly improving the quality of products, services, and business processes.

Persons

it consists of activities undertaken to create, maintain or change attitudes or behavior toward particular people

organizations

it consists of activities undertaken to create, maintain, or change the attitudes and behavior of target consumers toward an organization.

Places

it involves activities undertaken to create, maintain, or change attitudes or behavior toward particular places.

product line filling

it involves adding more items within the present range of the line, e.g. Cherry COke

brand development

line extensions, brand extensions, multibrands, new brands

Customer coproduction

makes provider-customer interaction a special feature of services marketing. Both the provider and the customer affect the service outcome.

brand sponsorship

manufacturer's brand, private brand, licensing, co-branding

national brands or manufacturer's brands

marketed under the manufacturer's own name, e.g., Kellogg's Corn FLakes

Examples of industrial products

materials and parts (raw materials and manufactured materials), capital items (machinery), and supplies and services (repair and maintenance items).

interactive marketing

means that service quality depends heavily on the quality of the buyer-seller interaction during the service encounter. In services marketing, service quality depends on both the service deliverer and the quality of delivery.

service intangibility

means that services cannot be seen, tasted, felt, heard, or smelled before they are bought

Service inseparability

means that services cannot be separated from their providers, whether the providers are people or machines.

service perishability

means that services cannot be stored for later sale or use.

Service variability

means that the quality of services depends on who provides them as well as when, where, and how they are provided.

Internal marketing

means that the service firm must orient and motivate its customer-contact employees and supporting service employees to work as a team to provide customer satisfaction.

Marketers should establish a ________ and _________ for the brand when positioning it.

mission, vision

Width

number of different product lines the company carries, e.g., Coca Cola, a soft drinks company, produces more than just cola.

Line stretching

occurs when a company lengthens its product line beyond its current range, e.g., BMW successfully appeal to the rich (7 series), the super-rich (Rolls-Royce), and the hope-to-be-rich (3 series).

Marketers need to _________ their brands clearly in target customers' minds.

position

With ________ brand equity (i.e., perceived higher quality), consumers react more favorably to the brand than to an unbranded version of the same product

positive

examples of individual product decisions

product attributes-> branding-> packaging-> labeling and logos-> product support services

augmented product

product developers must build an augmented product around the core benefit and actual product by offering additional consumer services and benefits.

Actual product

product developers must turn the core benefit into an actual product, i.e., they need to develop product and service features, a design, a quality level, a brand name, and packaging.

What are some possible reasons of product line filling?

reaching for extra profits, satisfying dealers, using excess capacity, being the leading full-line company, and plugging holes to keep out competitors

example of brand name selection

selection, protection

Broadly defined, products include ___________

services, events, persons, places, organizations, and ideas, or a mixture of these.

example of service perishability

some doctors charge patients for missed appointments because the service value existed only at the point and disappeared when the patient did not show up.

Brands with ________ ________ ______ rate high on all four dimensions.

strong brand equity

product quality

the characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs is known as ___________ ___________, one of the marketer's major positioning tools.

Example of an actual product

the iPad is an actual product. *Other examples of an actual product* - brand name, quality level, packaging, design, features

product line length

the major product line decision, which is the number of items in the product line

Finding the best brand name begins with a careful review of:

the product and its benefits, the target market, and proposed marketing strategies.

brand value

total financial value of a brand, e.g., est brand value of Google is $159 bil for Apple $148 billion.

Length

total number of items a company carries within its product lines, e.g. how many types of cola (or juice beverages) does it produce?

A brand with high brand equity is a very ____________________ __________.

valuable asset