Lecture 6: Product, Service, and Branding Definition of products Layers of product Types of products Outline Product line and product mix Product portfolio managment decisions Service definition & characteristics Service Marketing Tasks Lectured by Khoa Nguyen What is a product? Lectured by Khoa Nguyen Definition of Product • A product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need • Broadly defined, “products” also include services, events, persons, places, organizations, ideas, or mixes of these An MSG company, i.e Ajinomoto, decided to sell coffee to the Vietnamese market Question: how Ajinomoto acquires attention from customers? Lectured by Khoa Nguyen Value-based prices Components of the Market Offering Attractiveness of the market offering Product features and quality Lectured by Khoa Nguyen Services mix and quality Five product levels Lectured by Khoa Nguyen Classfication Of Products Lectured by Khoa Nguyen Industrial products Types of Product? Consumer products Lectured by Khoa Nguyen Convenience Shopping Specialty Unsought Consumer Goods Classification Convenience Product • …Customers usually buy frequently, immediately, and with a minimum of comparison and buying effort Lectured by Khoa Nguyen Should a logo be changed? Lectured by Khoa Nguyen Jingles • Musical messages written around the brand • Have catchy hooks and choruses that become permanently registered in the minds of listeners • Enhance brand awareness by repeating the brand name in clever and amusing ways • E.g.: Hisamitsu Packaging • Activity of designing and producing containers or wrappers • From the perspective of both the firm and consumers, packaging must: • Identify the brand • Convey descriptive and persuasive information • Facilitate product transportation and protection • Assist in at-home storage • Aid product consumption Packaging sample research questions • Questions: • Q1: Would you have positive attitude if the packaging design (in terms of color, logo, graphics, size, etc.) of a snack item is beautiful? • Q2: Then if the design is more beautiful, would you think that item’s quality is more superior, or at least more guaranteed than others? • Q3: Then would you be more willing to purchase the item at higher price? Or would you feel acceptable if being charged higher? • Q4: Then would you conclude that the item is overally better others? Which one would you pick? Sometimes, new packaging designs not bring success Lectured by Khoa Nguyen Brand Equity – Giá trị thương hiệu • Principles of branding and brand equity • Differences in outcomes arise from the “added value” endowed to a product • The added value can be created for a brand in many different ways • Brand equity provides a common denominator for interpreting marketing strategies and assessing the value of a brand • There are many different ways in which the value of a brand can be exploited to benefit the firm Brand Equity • Aaker (1991) defines brand equity as brand assets and liabilities that add or detract value to the firm and/or its companies • High levels of brand equity will result in increased sales, price premium, customer loyalty, and purchase intention (Aaker, 1991; Keller, 1993; CobbWalgren, Beal, & Donthu, 1995) Brand Equity in Literature Defining Customer Based Brand Equity (CBBE) • Approaches brand equity from the perspective of the consumer • Stresses that the power of a brand lies in what resides in the minds and hearts of customers • “Brand is something that resides in the minds of consumers” (Keller, 2008) • Differential effect that brand knowledge has on consumer response to the marketing of that brand Marketing Advantages of Strong Brands • Hitachi and General Electric (GE) jointly owned a factory in England that made identical televisions for the two companies • The only difference was the brand name on the television Nevertheless, • the Hitachi televisions sold for a $75 premium over the GE televisions Moreover, Hitachi sold twice as many sets as GE despite the higher price • Improved perceptions of product performance • Greater loyalty Marketing Advantages of Strong Brands • Less vulnerability to competitive marketing actions • Less vulnerability to marketing crises • Larger margins • More inelastic consumer response to price increases • More elastic consumer response to price decreases • Greater trade cooperation and support • Increased marketing communication effectiveness • Possible licensing opportunities • Additional brand extension opportunities Brand Equity as a Bridge • Brand as a reflection of the past • Marketers should consider the money spent in brand building as an “ investment” • The quality of the investment in brand building is the most critical factor, not the quantity • Brand as a direction to the future • Brand knowledge that marketers create over time, which allows them to determine appropriate and inappropriate future directions for the brand • Brand equity offers focus and guidance, provides a means to interpret past marketing performance and design future marketing programs Branding Strategy: Building Strong Brands Lectured by Khoa Nguyen Lectured by Khoa Nguyen