“At the heart of a great brand is a great product.

”
Setting Product Strategy

Molded polyethylene
Water storage tank

Sensing the need

Dr. T. K. Chatterjee
Recommended Book : Chapter 13 & 14
Learning Objectives : : :

• Product Characteristics & Classifications

• Product Differentiation
• Product Design
• Luxury Products
• Product & Brand Relationships
• Product Mix Pricing
• Co-Branding & Ingredient Branding
• Packaging, Labeling, Warranties and Guarantees
Learning Objectives : : :

• The Nature of Services

• Achieving Excellence in Services
• Managing Service Quality
• Managing Product-Support Services
Toyota’s obsession with Quality
My experience in Bebbco Toyota

https://youtu.be/zMJA3A_Bq5I
Mr. Vikram Kirloskar, Vice Chairman of Toyota Kirloskar Motors
2004

J. D. Power & Associates has ranked Lexus the “most dependable "automotive brand
16 times since 1995 !! https://youtu.be/k4-eJsFdxaU
Components of the
Market Offering

Value Proposition
Canvas
Product Levels : The Customer-Value -Hierarchy
Product Classifications
Durability & Tangibility ( As basis)
Nondurable goods : Intensive distribution & Heavy Advertising

Durable goods : Require more personal selling and service

Services : Require more quality control, supplier credibility/adaptability

Consumer-Goods Classification
On the basis of shopping habits :
Convenience goods : Staple goods/ Impulse goods/Emergency goods

Shopping goods : Furniture/clothing/major appliances

Specialty goods : Cars/audio-video components/mens’ suits

Unsought goods : Smoke detector/ Coffins/life insurance

Consumer Goods
Classification
Convenience Products Shopping Products
Buy frequently & immediately Buy less frequently
> Low priced > Gather product information
> Many purchase locations > Fewer purchase locations
> Includes: > Compare for:
• Staple goods • Suitability & Quality
• Impulse goods • Price & Style
• Emergency goods

Specialty Products Unsought Products

Special purchase efforts New innovations
> Unique characteristics > Products consumers don’t
> Brand identification want to think about.
> Few purchase locations >Require much advertising &
personal selling

04/12/2020 13-12
Industrial- Goods Classification

Raw Materials & Parts :

Farm Products
Natural Products

Manufactured Materials & Parts :

Component Materials
Component Parts

Capital Items : Installations/Equipments

Supplies & Business Services : MRO goods/legal/consultancy

Differentiation
For Branding Products must be differentiated

Product Differentiation Bases :

Jaguar car
Form
Features
Performance Quality
Conformance Quality
Durability
Reliability
Repairability
Style
Customization
Design (discussed separately)
Style

Godiva chocolates Harley Davidson bike

Customization

Burberry trench coat

Services Differentiation
When physical products become
increasingly difficult to be differentiated, Ordering/Payment Ease
accompanying services offer themselves
for differentiation Delivery

20 minute Installation
window
Customer Training

Customer Consulting

Maintenance & Repair ( See next slide)

Returns
Goodyear’s TVTrack Programme

Goodyear announced it is launching an advanced tire

maintenance pilot program with STRATIM, a San Francisco-based
startup whose technology platform tracks, monitors and
oversees fleet maintenance for tens of thousands of vehicles
operated by more than 50 mobility services in more than 25
markets across North America.

The new program will leverage Goodyear's proprietary, artificial

intelligence technology to help STRATIM's clients predict when their
tires need service or replacement to improve overall tire
management and maximize uptime across the fleet.
Differentiation: Power of Design
With increase in ferocity of competition, DESIGN offers a potential way to
Differentiate Products and Services

Design is the totality of features that affect the way a product looks, feels, and
functions to a Consumer. It offers functional and aesthetic benefits and appeals
to both our rational and emotional sides.

Hawkins Futura
Approaches to Design

Design goes beyond mare creativity, and is just not a phase in creating a product, service,
or application. It is a way of thinking that can transform an entire organization. Design is
all pervasive in marketing programme.

Design thinking is a very data- driven approach with three phases : : :

observation
ideation
and implementation

Design thinking calls for intensive ethnographic studies of consumers, creative brainstorming
Sessions, and collaborative teamwork to decide how to bring the design idea to reality.
Design Thinking
Whirlpool used “design thinking” to develop the kitchenAid architect Series II kitchen
Appliances with a more harmonized look hitherto not seen in the category !!
Bang & Olufsen, a Danish company, received many kudos for the design of its stereos,
TV and telephones---------trusts the instincts of a handful of designers who rarely
Consult with consumers !!-------------Trust your instincts !!!!
Design
In a visually oriented culture, transmitting brand meaning and positioning through design
is critical. Virginia Postrel writes in “The Substance of Style”, “In a crowded marketplace,
aesthetics is often the only way to make a product stand out.”

Apple products Herman Miller chair Samsung

Design : Luxury Products
Design is an important aspect of luxury products.
Perhaps one of the purest examples of role of BRANDING since Brand and its
Image often play a key role in creating competitive advantages that create enormous
Value and wealth. [ Brand Equity concept at its best ]
Luxury products : $ 1.1 trillion industry !!
Characterizing Luxury Brand

Higher price than typical products in the category

Sub-Zero refrigerators
Common denominators : Quality & Uniqueness

Winning mantra : Craftsmanship

heritage
Mont Blanc watch
authenticity
history

Patron tequila
Growing Luxury Brands
Careful Brand Extension

Horizontal extension into new categories can be tricky : Bulgari, a jewelry maker, has
Diversified into hotels, fragrances, chocolate, and skin care prompting some
Branding experts to raise their eyebrow and look at the brand as overstretched.

Careful licensing of their brand names : Pierre Cardin brand was badly hurt.

Geographical growth should be explored : China has overtaken USA as the world’s
Largest luxury market !

Bulgari Hotel Bulgari chocolate

Marketing Luxury Brands
Maintaining a premium image

Many intangible brand associations and an aspirational image

Brand elements like logos, symbols, packaging and signage are crucial

Secondary associations from liked personalities, events, countries boost the image

Selective distribution strategy

Premium pricing strategy

Careful management of brand architecture

Competition should be broadly defined, competition may come from other categories

Must legally protect all trademarks and aggressively combat counterfeits

Product Hierarchy
Definition
Product hierarchy is the classification of a product into its
essential components. It is inevitable that a product is
related or connected to another. The hierarchy of the
products stretches from basic fundamental needs to
specific items that satiate the particular needs. Product
hierarchy is better understood by viewing the business as
a whole as opposed to looking at a specific product.
Product hierarchy is usually mentioned in the same
sentence with product classification and therefore can be
viewed as a way of product classification.
Product and Brand Relationship
The Product Hierarchy

Need Family

Product Family

Product Class : functional coherence

Product Line

Product Type

Item/SKU/Product Variant Toyota Etios

Product Systems and Product Mixes

A product system is a group of diverse but related items that function in a compatible
manner.

A product mix or product assortment is the set of all products and items a given seller
offers for sale.
Product Systems & Product Mixes
The Width of a Product Mix
The length of a Product Mix
The depth of a Product Mix
The consistency of a Product Mix
Width of product mix

Shriram Refrigeration Industries

The length of product mix
Depth of product mix

One ton window AC Two ton window AC

Product Line Analysis

Sales and Profits

Market Profile and Image

Product/Brand Mapping
Product Line Length
Line Stretching
Down-Market Stretch
Up-Market Stretch
Two-Way Stretch

Shriram launched sub one ton AC

Line Filling : Weber’s law : customers are

more attuned to relative rather an absolute
difference

Line Modernization, Featuring, And Pruning

Down-Market Stretch

Mercedes C -Class

Sabre from John Deere

Up-Market Stretch

Nissan Infinity
Two-Way Stretch

Titan

Edge

Sonata
Line Filling

BMW AG -------- in 4 years--------one- brand five-model carmaker----------3 brands----------

14 “Series”------------30 distinct models. Maruti is another example
Line Filling

Brand now of Godrej Sara Lee

Paper mats
Liquid vaporizer
Co-Branding
When two different companies pair their respective brands in an effort to synergize,
Such collaborative marketing effort is called as co-branding. It helps in enhancing the
Competitiveness of the two companies and also adds a communication dimension by
means of the image of the alliance. Each brand brings in part of its equity to the
other, reduces the total marketing cost and makes the extension more credible.
Co-branding, is a marketing strategy that involves strategic alliance of multiple brand
names jointly used on single product or service.[1]Co-branding, also called brand
partnership,[2] is when two companies form an alliance to work together, creating marketing
synergy. As described in Co-Branding: The Science of Alliance:[3] Co-branding is an
arrangement that associates a single product or service with more than one brand name,
or otherwise associates a product with someone other than the principal producer.
The typical co-branding agreement involves two or more companies acting in cooperation to
associate any of various logos, color schemes, or brand identifiers to a specific product that is
contractually designated for this purpose. The object for this is to combine the strength of two
brands, in order to increase the premium consumers are willing to pay, make the product or
service more resistant to copying by private label manufacturers, or to combine the different
perceived properties associated with these brands with a single product.
What is Co-Branding?
Tom Blackett and Nick Russell
For many companies in a hurry, the formation of alliances and joint ventures with
like-minded partners provides the way ahead, and co-branding is a common
manifestation of such enterprises. But the term ‘co-branding’ is relatively new to the
business vocabulary and is used to encompass a wide range of marketing activity
involving the use of two (and sometimes more) brands. Thus co-branding could be
considered to include sponsorship, where Marlboro lends its name to Ferrari or
accountants Ernst and Young support the Monet exhibition; retail promotion, where
BP and Disney get together; retailing itself, where BP forecourts ‘host’ Safeway mini-
stores; manufacturing collaborations – the Mercedes-Swatch car; or film-making,
where Miramax produces and Buena Vista distributes. The list of possibilities is
endless. But what precisely is co-branding? Why has it grown in popularity amongst –
and between – such a diverse range of businesses? And what does it signify as far as
the future of branding and marketing is concerned?
Co-Branding And Ingredient Branding

Carl Zeiss camera lenses

Co- Branding in action
Self-branded ingredients
Westin hotel advertises its own “heavenly beds”
Packaging/Labeling, Warranties and Guarantees

Packaging : Customer’s first encounter with the product

Factors contributing to growing use of Packaging as

a Marketing Tool : : :

Self-service

Consumer affluence

Company & Brand image

Innovation opportunity
Objectives of Packaging
• Identify the Brand
• Convey descriptive and persuasive information
• Facilitate product transportation and protection
• Assist at-home storage
• Aid Product consumption
Labeling
Warranties & Guarantees
What's the difference between warranty and guarantee?
A warranty is “a promise or guarantee given.” A warranty is
usually a written guarantee for a product, and it holds the maker
of the product responsible to repair or replace a defective
product or its parts
Designing and Managing Services
“A ‘service’ is any act or performance one party can offer to another that is essentially
intangible and does not result in the ownership of anything.”

With Physical Product and Brand differentiation blurring, Service has emerged as a major
tool for Differentiation.

Special nature of Services

Service Industries are everywhere

Categories of Service Mix
Service component can be a minor or major part of the total offering.

• Pure Tangible goods

• Tangible goods with accompanying Services

• A Hybrid offerings

• Major services with accompanying minor goods

• Pure Service
Continuum of Evaluation for Different Types of Products
Distinctive Characteristics of Services
• Intangibility Positioning Tools for Services
Place
People
• Inseparability
Equipment
Communication Material
Training
Symbols
• Heterogeneity SOPs
Satisfaction survey Price

“Tangibilizing the Intangible”

• Perishability
Dimensions of Brand Experience

Sensory : impression on senses

Affective : induces feelings

Behavioral : engage in behaviour

Intellectual : engage in thinking

Service Delivery Blueprint
Emerging Face of Service Realities
A Shifting Customer Relationship

Customer Empowerment

Customer Coproduction

Satisfying Employees as well as Customers

Singapore Airlines : 40-30-30 rule

40 % on training and motivating
30% on reviewing processes
30% on creating new products and ideas Video : Singapore Girl
Achieving Excellence in Services Marketing

Achieving Marketing Excellence

• External Marketing

• Internal Marketing

• Interactive Marketing
Achieving Excellence in Services Marketing
Technology & Service Delivery

BMW: Introduced Wi-Fi

to its dealerships
Best Practices of Top Service Companies
Strategic Concept

Top-Management Commitment

High Standards

Profit Tiers

Monitoring Systems

Satisfying Customer Complaints

Four seasons luxury hotel chains
Differentiating Services
Two great success stories

How Southwest Airlines built its culture

https://youtu.be/8_CeFiUkV7s
Managing Customer Expectations

Executive VP Jim Bush

https://youtu.be/bhUEQS3Wpbw See the video
Managing Service Quality
SERVQUAL Model
The Servqual model identifies 5 gaps that prevent successful service delivery : :

1. Gap between consumer expectation and management perception

2. Gap between management perception and service-quality specification

3. Gap between service quality specifications and service delivery

4. Gap between service delivery and external communications

5. Gap between perceived and expected service

SERVQUAL Attributes : RATER

Reliability

Assurance

Tangibles

Empathy

Responsiveness
Recommendations for Improving Service Quality
Related Links
https://youtu.be/Zb2cUBjPjtQ

https://youtu.be/11b2JdeHoGM

https://youtu.be/0OOTO3qnZpo

https://youtu.be/GhFpvXsmBXY

https://youtu.be/iGjl5S0tpYI
Conclusion
In today’s hypercompetitive market, managing Products and Services is critically
Important and must be handled with high degree of precision.

Important concepts learned : : :

Customer Value Hierarchy

Components of Market Offering
Product Classification
Product Differentiation
Managing Luxury Products & Brands
Product & Brand Relationship
Product Systems & Product Mixes
C0-Branding/Ingredient Branding
Packaging/Labeling /Warranties/Guarantees
Nuances of Managing Services as Products Dr. T. K. Chatterjee