products, services & brands

Ainiezean Awang Jual (Dec 2013) JP-PKK 1

CHAPTER 5

PRODUCT, SERVICES

&

BRANDS

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

2Ainiezean Awang Jual (Dec 2013) JP-PKK

Any activity or benefit that one party can offer to another that

is essentially intangible and does not result in the

ownership of anything


A name, term, sign, symbol, design or a combination of these

that identifies the products or services of one seller or group of sellers and differentiates them

from those of competitors


BRANDS


BRANDS

The use of slogan &

logo to identify a brand


Amongst the many brand names, list five brand names that you remember best and

explain why?


LEVELS OF PRODUCT


1) Core Product

2) Actual Product

3) Augmented Product

Three (3) levels of product

LEVELS OF PRODUCTS

1) Core Product

- Addresses the question “what is buyer really buying” and “what is the core benefit your product?”

- Marketers must first define the core, problem solving benefits or services that consumers seek

- The ultimate benefit that the customer will receive when they purchase your product

- E.g. People who buy a Blackberry smart phone are buying more than a cell phone, e-mail device or personal organizer. They are buying freedom and on-the-go connectivity to people and resources.


LEVELS OF PRODUCTS

2) Actual Product

- At this level, marketers must turn the core benefit into an actual product

- They need to develop product & service features, design, quality level, brand name & packaging.

- E.g. the Blackberry is an actual product.

- Its name, parts, styling, features, packaging & other attributes have all been carefully combined to deliver the core customer value of staying connected.


LEVELS OF PRODUCTS

3) Augmented Product

- Product planners must build augmented product around the core benefit & actual product by offering additional services & benefits

- This includes the personal attention, after – sales services, warranty, money, back guarantee, delivery, credit facilities, etc.

- E.g. The Blackberry solution offers more than just communication

services. It provides consumers with a complete solution to mobile

connectivity problems. Thus, when consumer buy Blackberry, the

company & its dealers also might give warranty on parts &

workmanship, instructions on how to use the device, quick repair, etc.


LEVELS OF PRODUCTS

Consumers see products as complex bundles of benefits that satisfy their needs. When developing products,

marketers must first identify the core customer value that consumers seek from the product. They must then

design the actual product and find ways to augment it in order to create this value and the most satisfying

customer experience


LEVELS OF PRODUCTS

Can you describe level of products for these items?

Pen Perfume

MPV car


Product and services fall

into two broad classes;

Consumer Products

and

Industrial Products


A product bought by final consumer for personal

consumption

Consumer products include convenience products,

shopping products, specialty products and

unsought products

These product differs in the way consumer buy

them and therefore, in how they are marketed



CONSUMER PRODUCTS

Convenience Products

Shopping Products

Specialty Products

Unsought Products

1. Convenience Product

A consumer product that customers usually buy frequently, immediately and with a minimum of comparison and buying effort

Usually low price and marketers place them in many locations to make them readily available when customers need them.

E.g. Newspapers, magazines, candies, snacks, etc.


2. Shopping Product

Less frequent purchased consumer product that customers carefully compare on stability, quality, price and style.

Consumers spend much time and effort in gathering information and making comparisons.

Marketers usually distribute their products through fewer outlets but provide deeper sales support to help customers in their comparison efforts

E.g. Furniture, TV set, electrical goods, cloths21Ainiezean Awang Jual (Dec 2013) JP-PKK

3. Specialty Product

Goods with unique and special characteristics or brand identification for which a significant group of buyers is habitually willing to make a special purchasing effort.

Buyer normally do not compare specialty products

Buyers usually are willing to spend time and more efforts to buy Specialty Product

E.g. Jewelries, high – end products23Ainiezean Awang Jual (Dec 2013) JP-PKK

4. Unsought Product

Goods that consumer either does not know about or knows about but does not normally think of buying

Most new and recently introduced products will fall into this class until the consumer becomes aware of them through advertising

Aggressive and continuous promotion is necessary for them

E.g. Life- insurance, funeral services, coffin, etc.


Marketing Considerations

Type of Consumer Product

Convenience Shopping Specialty Unsought

BuyingBehaviour

Frequent purchase, less concern on brand

Less frequent purchase, more concern on brand

Seldom purchase, strong brand preferences

Rare purchase, little product awareness

Price Low price Moderate price High price Varies

DistributionWidespread, convenient location

Selective distribution in fewer outlets

Exclusive distribution

Varies

Shopping Effort Low Moderate High Varies

PromotionMass promotion

Advertising & personal selling

Targeted promotion

Aggressiveadvertising 28Ainiezean Awang Jual (Dec 2013) JP-PKK

What is industrial product?

A product bought by individuals and organizations for further processing or for use in conducting a business

The distinction between consumer and industrial goods is based on the purpose for which the particular product was bought.

The three (3) groups of industrial products and services are: Material & parts, capital items & supplies & services



INDUSTRIAL PRODUCTS

Material & Parts

Capital Items

Supplies & Services

1. Materials & Parts

Include raw materials and manufactured material and parts

Raw materials consist of farm products (wheat, cotton, livestock, fruits and vegetables) and natural product (fish, lumber, iron, crude petroleum etc.)

Manufactured materials and parts consist of component material (iron, cement, wires) and component parts (small, motors, tires)

Most manufactured materials and parts are sold directly to industrial users


2. Capital Items

Industrial products that aids in the buyer’s production or operations, including installations and accessory equipment and form the main assets of production firms.

Installations consist of major purchase such as building (factories & offices) and fixed equipment (generators, elevators, computer system)

Accessory equipment include portable factory equipment and tools (lift trucks, hand tools) and office equipment (computers, fax)

They have a shorter life than installations and simply aid in the production process


3. Supplies and Services

Supplies include operating supplies (lubricants, paper, pencils) and repair and maintenance items (paint, nails).

Supplies are the convenience products of the industrial field because they are usually purchased with a minimum effort or comparison

Business services include maintenance and repair services and business advisory (window cleaning, computer repair)


The figure below shows the important decisions in the development and marketing of individual products and services.

We will focus on decisions about

a) product attributes,

b) branding,

c) packaging,

d) labeling and

e) product support services


Product Attributes

Branding Packaging Labeling Product support services


Product attributes can be explain in three aspects:

1) Product Quality, 2) Product features, 3) Product Style & Design


PRODUCT ATTRIBUTES

Product Quality

Product Features

Product Style& Design


A. PRODUCT QUALITY

The characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs

Quality is one of the marketer's major positioning tools

In the narrower sense, quality can be defined ad “freedom from defects”

B. PRODUCT FEATURES

A product can be offered with varying features The company can create higher-level models by adding more

features.

Features are a competitive tool for differentiating the company's product from competitors' products

E.g. Product features:

Mobile phone – larger built in memories, variety of colours Paint – anti rust Personal organizer – local & international public holidays info, hard

cover


C. PRODUCT STYLE & DESIGN

Another way to add customer value is through distinctive product style and design

Style simply describes the appearance of a product

A sensational style may grab attention and produce pleasing aesthetics, but it does not necessarily make the product perform better.

Design is more than skin deep—it goes to the very heart of a product

Good design contributes to a product's usefulness as well as to its looks.

Good style and design can attract attention, improve product performance, cut production costs, and give the product a strong competitive advantage in the target market 43Ainiezean Awang Jual (Dec 2013) JP-PKK

Good product design bring benefits to consumers


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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

Consumers view a brand as an important part of a product, and branding can add value to a product

For example, most consumers would perceive a bottle marked with DKNY Perfume as a high-quality, expensive product. But the same perfume in an unmarked bottle would likely be viewed as lower in quality, even if the fragrance were identical

Brand names help consumers identify products that might benefit them and also tell the buyer something about product quality



BRAND helps in

differentiating identical products

Malaysia Top 10 Brands 2011:

1) Google

2) 100 Plus

3) Gardenia

4) Sony

5) Air Asia

6) Panasonic

7) Milo

8) Shell

9) Maggi

10) Colgate

BRANDING STRATEGY – Building Strong Brands


Packaging involves designing and producing the container or wrapper for a product

Primary function of packaging is to hold & protect the product

However recently, packaging has become one of the important marketing tools as well

Attractive packaging may catch consumer’s attention to buy

Packaging can also be used as seasonal marketing tools55Ainiezean Awang Jual (Dec 2013) JP-PKK

Seasonal Packaging


Labels may range from simple tags attached to products to complex graphics that are part of the package

Labels perform several functions:

a. Label identifies the product (label on Sunkist orange)

b. Provide description of products (ingredients, manufacturer, manufacture & expiry date, etc.)


PRODUCT SUPPORT SERVICES

Customer service is another element of product strategy

Especially applied to technical products i.e. cars, computers, mobile phone, electrical appliances.


Usually known as PLC The course of a product’s sales and profits over its

lifetime.

It involves five (5) stages:

1) Product Development

2) Introduction

3) Growth

4) Maturity

5) Decline


1) Product Development

Begins when the company finds & develops a new-product idea.

During product development stage, sales are zero & the company’s investment cost mount


2) Introduction Stage

Period of slow sales growth as the product is introduced in the market

Profits are non existent in this stage because of heavy expenses of product introduction

E.g. HDTV, instant coffee & private colleges lingered for several years before they entered a stage of more rapid growth


3) Growth Stage

A period of rapid market acceptance and increasing profits

Product sales are climbing quickly

Profits increase as unit manufacturing cost fall

E.g. HDTV is on this stage currently


4) Maturity Stage

A period of slowdown in sales growth because the product has achieved acceptance by most potential buyers

Profits level off or decline because of increased marketing outlays to defend the product against competition

This stage normally last longer

Most products are in the maturity stage therefore most marketing management deals with the mature product

E.g. Maggi instant noodles, Kicap Cap Ayam, Ayam Brand’s canned foods


5) Decline Stage

Period when sales fall off and profits drop

The decline may be slow (e.g. oatmeal cereal) or rapid (e.g. cassette and VHS tapes)

Sales may plunge to zero or they may drop to a low level where they continue for many years


End of Chapter Five67Ainiezean Awang Jual (Dec 2013) JP-PKK

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