Student Course Notes: Marketing - Chapter 8

Products, Services, and Brands: Building Customer Value

1. What is a Product?

A product is anything that can be offered in a market for attention, acquisition, use, or
consumption to satisfy a need or want. Products can be tangible goods, services, events,
people, places, organizations, or ideas.

 Tangible Goods – Physical products that can be seen, touched, and stored. Examples
include cars, clothing, electronics, and food items.
 Services – Activities, benefits, or satisfactions that are essentially intangible and do
not result in ownership. Examples include banking, hotel services, airline travel, and
home-repair services.
 Experiences – A combination of products and services designed to create a unique
customer experience. Companies like Disney and Airbnb focus on selling experiences
rather than just products.

Levels of Product and Services

Product planners consider products at three levels:

1. Core Customer Value – The fundamental need or want that a product satisfies.
Example: A person buying a smartphone is not just purchasing a device but the ability
to communicate, browse the internet, and stay entertained.
2. Actual Product – The physical product with its brand name, design, packaging, and
features. Example: A smartphone’s brand, screen size, battery life, and camera quality.
3. Augmented Product – Additional benefits and services offered to enhance the
product experience. Example: Warranty, customer support, free software updates, and
accessories.

Example of Three Levels of Product

A camera can be categorized at different levels:

 Core Customer Value – Capturing and preserving memories.

 Actual Product – The camera brand, megapixel quality, design, and features.
 Augmented Product – Warranty, customer support, and additional accessories.

2. Product and Service Classifications

Consumer Products (Products bought for personal use):

1. Convenience Products – Frequently purchased, inexpensive, and require little effort

in decision-making. Examples: Newspapers, candy, fast food.
2. Shopping Products – Bought less often; consumers compare quality, price, and style
before purchasing. Examples: Furniture, cars, appliances.
 3. Specialty Products – Unique products that consumers make an extra effort to
purchase due to brand loyalty or specific features. Examples: Rolex watches, designer
clothes, luxury cars.
4. Unsought Products – Products that consumers do not normally think about buying.
They often require aggressive marketing. Examples: Life insurance, funeral services,
blood donations.

Industrial Products (Products used for business operations):

1. Materials and Parts – Raw materials and components used in production. Examples:
Cotton, steel, computer chips.
2. Capital Items – Machines, tools, and buildings used for production. Examples:
Factory machinery, office buildings, heavy equipment.
3. Supplies and Services – Office supplies, repair services, and maintenance services.
Examples: Printer ink, cleaning services, legal consulting.

3. Product and Service Decisions

Key Decisions in Product Development:

1. Product Attributes – Includes quality, features, style, and design. Higher quality
products lead to greater customer satisfaction.
2. Branding – The name, symbol, or design that makes a product unique. Example:
Apple’s logo and branding differentiate it from competitors.
3. Packaging – The container or wrapping used to protect and display the product. Good
packaging can attract customers and improve convenience.
4. Labeling – Information on the package that tells consumers about the product.
Includes details such as ingredients, usage instructions, and expiration dates.
5. Product Support Services – Additional customer services, such as warranties,
repairs, and customer support. Example: Samsung offers a 1-year warranty on
smartphones.

Examples of Branding Impact:

A discount shoe retailer named Payless tricked fashion influencers into buying its shoes at a
luxury price by rebranding as "Palessi." This showed how branding affects perceptions.

4. Product Line and Mix Decisions

Product Line Decisions

A product line is a group of closely related products.

 Product Line Length – The number of items in the product line. A company can add
or remove products based on profitability.
 Line Stretching – Expanding a product line to include more expensive or more
affordable versions. Example: A car manufacturer adding luxury and economy
models.
  Line Filling – Adding new variations to fill gaps in the product line. Example: A
toothpaste brand introducing a new flavor.

Product Mix Decisions

A product mix is all the products a company sells. It includes:

 Width – The number of product lines a company offers. Example: Apple offers
smartphones, laptops, and smartwatches.
 Length – The total number of products in all lines. Example: Nike sells multiple types
of athletic shoes.
 Depth – Variations of each product. Example: A shampoo brand offering different
sizes and scents.
 Consistency – How closely related the product lines are. Example: A company that
sells only dairy products has a high level of consistency.

5. Services Marketing

Characteristics of Services

1. Intangibility – Services cannot be seen or touched before purchase. Example: A spa

treatment.
2. Inseparability – Services are provided and consumed at the same time. Example: A
live concert.
3. Variability – The quality of service can change depending on the provider. Example:
Different hairstylists provide different haircuts.
4. Perishability – Services cannot be stored for later use. Example: A missed doctor’s
appointment cannot be resold.

Example of Service Marketing:

A hotel’s marketing may focus on friendly staff, comfortable rooms, and additional services
like free breakfast to attract customers.

Marketing Strategies for Service Firms:

 Internal Marketing – Training employees to provide excellent service.

 Interactive Marketing – Improving customer interactions with employees.
 Managing Service Quality – Ensuring services are consistent and high quality.
 Managing Service Productivity – Finding ways to improve efficiency without
reducing quality.

6. Brand Strategy: Building Strong Brands

Brand Equity and Value

 Brand Equity – The value a brand adds to a product based on customer recognition
and trust.
 Brand Value – The financial worth of a brand. Example: Apple, Coca-Cola.
Major Brand Strategy Decisions

1. Brand Positioning – Establishing a brand’s identity based on attributes, benefits, and

values.
2. Brand Name Selection – A good brand name is memorable, meaningful, and legally
protected.
3. Brand Sponsorship – Options include:
o Manufacturer’s Brands (Nike, Apple)
o Private Brands (AmazonBasics, Walmart’s Great Value)
o Licensed Brands (Disney characters on merchandise)
o Co-branding (Doritos and Taco Bell collaboration)
4. Brand Development – Expanding brands through:
o Line Extensions (Different flavors of the same product)
o Brand Extensions (Expanding a brand into new categories)
o Multibrands (Offering multiple brands in the same category)
o New Brands (Creating an entirely new brand for a different market)

Example of Brand Extensions:

Starbucks extended its brand from coffee shops to bottled coffee drinks and home coffee
machines.

Conclusion
Understanding products, services, and brands is essential in marketing. Businesses need to
create value for customers through innovation, branding strategies, and excellent customer
service. Companies that focus on experiences and strong brand positioning can build long-
term customer loyalty and success.