Principles of Marketing An Asian Perspective Instructor Supplements

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Opening Case L’Oréal: Brand Building in India L’Oréal’s India strategy is explained as follows: “to recruit more faithful customers to our brands through innovative products and categories. Our aim is to continuously provide something new to our customers (while) helping each of our brands attain leadership positions in the respective segments. ” 5 © 2012 Principles of Marketing: An Asian Perspective

8. 1 What is a 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. 8 © 2012 Principles of Marketing: An Asian Perspective

8. 1 What is a Product? Services are a form of product that consists of activities, benefits, or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything. 10 © 2012 Principles of Marketing: An Asian Perspective

8. 1 What is a Product? Products, Services, and Experiences • A company’s market offering often includes both tangible goods and services. • At one extreme, the offer may consist of a pure tangible good, such as soap or toothpaste. 11 © 2012 Principles of Marketing: An Asian Perspective

8. 1 What is a Product? Products, Services, and Experiences • At the other extreme are pure services, for which the offer consists primarily of a service. • To differentiate their offers, marketers are creating and managing customer experiences with their brands or company. 12 © 2012 Principles of Marketing: An Asian Perspective

8. 1 What is a Product? The Product Experience When you buy an i. Pad, you are buying more than the physical product. You are also buying the experience of using it, as well as the emotion associated with it. 13 © 2012 Principles of Marketing: An Asian Perspective

8. 1 What is a Product? The Serving Experience Keeping in touch with changing trends, Mc. Donald’s in Malaysia differentiates itself from other fast-food restaurants by providing an atmosphere that encourages people, especially youngsters, to spend time there while enjoying the restaurant’s food. (www. mcdonalds. com. my) 14 © 2012 Principles of Marketing: An Asian Perspective

8. 1 What is a Product? Levels of Products • Product planners need to think about products and services on three levels. – Core customer value, which addresses the question, What is the buyer really buying? – Actual product. – Augmented product, which is created around the core benefit and actual product by offering additional consumer services and benefits. 16 © 2012 Principles of Marketing: An Asian Perspective

8. 1 What is a Product? Levels of Products People who buy an i. Phone are buying more than a wireless mobile phone, email and Webbrowsing device, or personal organizer. They are buying freedom and on-the-go connectivity to people and resources. 17 © 2012 Principles of Marketing: An Asian Perspective

8. 1 What is a Product? Levels of Products • When developing products, marketers first must identify the core customer value that consumers seeks from the product. • They must then design the actual product and find ways to augment it in order to create this customer value and the most satisfying customer experience. 18 © 2012 Principles of Marketing: An Asian Perspective

8. 1 What is a Product? Types of Products Consumer products Industrial products are those purchased for further processing or for use in conducting a business. Consumer products are products and services bought by final consumers for personal consumption. 19 © 2012 Principles of Marketing: An Asian Perspective

8. 1 What is a Product? Convenience Products Convenience products are consumer products and services that customers usually buy frequently, immediately, and with a minimum of comparison and buying effort. 20 © 2012 Principles of Marketing: An Asian Perspective

8. 1 What is a Product? Shopping Products Shopping products are less frequently purchased consumer products and services that customers compare carefully on suitability, quality, price, and style. 21 © 2012 Principles of Marketing: An Asian Perspective

8. 1 What is a Product? Specialty Products Specialty products are consumer products and services with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort. 22 © 2012 Principles of Marketing: An Asian Perspective

8. 1 What is a Product? Unsought Products Unsought products are consumer products that the consumer either does not know about or knows about but does not normally think of buying 23 © 2012 Principles of Marketing: An Asian Perspective

8. 1 What is a Product? Capital Items Capital items are industrial products that aid in the buyer’s production or operations, including installations and accessory equipment. 27 © 2012 Principles of Marketing: An Asian Perspective

8. 1 What is a Product? Organization Marketing Companies such as Tsingtao Beer and Speedo have used sports personalities like Kobe Bryant and Michael Phelps to endorse their products; drawing attention to their brands. . 29 © 2012 Principles of Marketing: An Asian Perspective

8. 1 What is a Product? Person Marketing Person marketing consists of activities undertaken to create, maintain, or change attitudes or behavior toward particular people. 31 © 2012 Principles of Marketing: An Asian Perspective

8. 1 What is a Product? Place Marketing Place marketing involves activities undertaken to create, maintain, or change attitudes or behavior toward particular places. 32 © 2012 Principles of Marketing: An Asian Perspective

8. 1 What is a Product? Social Marketing Social marketing is the use of commercial marketing concepts and tools in programs designed to bring about social change. 34 © 2012 Principles of Marketing: An Asian Perspective

8. 1 What is a Product? Social Marketing With smoking among female teens on the rise in Malaysia, its Ministry of Health started an antismoking campaign targeted at educating youths about the harms of smoking. (www. infosihat. gov. my/Tak. Nak. html) 35 © 2012 Principles of Marketing: An Asian Perspective

8. 2 Product Decisions Product and Service Attributes • Developing a product or service involves defining the benefits that it will offer. These benefits are communicated and delivered by product attributes such as quality, features, and style and design. 40 © 2012 Principles of Marketing: An Asian Perspective

8. 2 Product Decisions Product Quality • Product Quality is creating customer value and satisfaction. • Total quality management (TQM) is an approach in which all the company’s people are involved in constantly improving the quality of products, services, and business processes. 41 © 2012 Principles of Marketing: An Asian Perspective

8. 2 Product Decisions 2 Dimensions of Product Quality • Product quality has two dimensions: level and consistency. • The quality level means performance quality or the ability of a product to perform its functions. • Quality conformance means quality consistency, freedom from defects, and consistency in delivering a targeted level of performance. 42 © 2012 Principles of Marketing: An Asian Perspective

8. 2 Product Decisions Product Features • Product Features are a competitive tool for differentiating the company’s product from competitors’ products. • The company should periodically survey buyers who have used the product and ask these questions: How do you like the product? Which specific features of the product do you like most? Which features could we add to improve the product? 43 © 2012 Principles of Marketing: An Asian Perspective

8. 2 Product Decisions Product Features This green Tea–flavored Coke contains antioxidants called catechins, and targets healthconscious women in their 20 s and 30 s. 44 © 2012 Principles of Marketing: An Asian Perspective

8. 2 Product Decisions Product Style and Design is another way to add customer value. Style describes the appearance of a product. Design contributes to a product’s usefulness as well as to its looks. 45 © 2012 Principles of Marketing: An Asian Perspective

8. 2 Product Decisions Product Style and Design: Samsung versus LG Design is the battleground that Samsung and Lg are facing off on. Both are using design to keep them within the top three of the global mobile phone market. Formerly, Lg generally concentrated on originality, sometimes being quite eccentric, while Samsung focused on understated minimalism. However, of late, Samsung has been placing more emphasis on style and fashion. Its galaxy S and Tab have been lauded and met with success. This orientation towards design has extended to consumer durables. Lg revamped its frost-free refrigerators to include stylish diamond cuts, sleekly-designed handles, a dual-tone finish, and linear colors 46 © 2012 Principles of Marketing: An Asian Perspective

8. 2 Product Decisions Branding 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. 47 © 2012 Principles of Marketing: An Asian Perspective

8. 2 Product Decisions Benefits of Branding to Customers • Brand names help consumers identify products that might benefit them. • Brands say something about product quality and consistency. 48 © 2012 Principles of Marketing: An Asian Perspective

8. 2 Product Decisions Benefits of Branding to Sellers • The brand name becomes the basis on which a whole story can be built about a product. • The brand name and trademark provide legal protection for unique product features. • The brand name helps the seller to segment markets. 49 © 2012 Principles of Marketing: An Asian Perspective

8. 2 Product Decisions Improving Brand Image To improve its image, China launched a “Made in China, Made with the World” campaign to change perceptions that its products are unsafe. 52 © 2012 Principles of Marketing: An Asian Perspective

8. 2 Product Decisions Innovative Packaging This can give a company an advantage over competitors and boost sales. When Heinz inverted the good old ketchup bottle, sales grew at three times the industry rate the following year. 54 © 2012 Principles of Marketing: An Asian Perspective

8. 2 Product Decisions Labeling Labels perform several functions. • The label identifies the product or brand. • The label describes several things about the product. • The label promotes the brand. 55 © 2012 Principles of Marketing: An Asian Perspective

8. 2 Product Decisions Labeling I LOHAS stands for I Lifestyle of Health and Sustainability. This mineral water bottle by Coca-Cola promotes environmentalism. 56 © 2012 Principles of Marketing: An Asian Perspective

8. 2 Product Decisions Support services • Companies must continually assess the value of current services to obtain ideas for new ones. They also need to develop a package of services to satisfy customers and provide profit to the company. • Next, the company can take steps to fix problems and add new services that will both delight customers and yield profits to the company. 58 © 2012 Principles of Marketing: An Asian Perspective

8. 2 Product Decisions Support services Many companies are now using a sophisticated mix of interactive technologies to provide support services that were not possible before. For example, at the Scion Web site, clicking the Scion Chat button puts you in real-time touch with someone who can answer your questions or help you design your own personalized Scion. (www. scion. com) 60 © 2012 Principles of Marketing: An Asian Perspective

8. 2 Product Decisions Product Line/Mix A product line is a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges. 62 © 2012 Principles of Marketing: An Asian Perspective

8. 2 Product Decisions Product Lines • Product line length is the number of items in the product line. • Product line filling involves adding more items within the present range of the line. • Product line stretching occurs when a company lengthens its product line beyond its current range. 64 © 2012 Principles of Marketing: An Asian Perspective

8. 2 Product Decisions Product Lines Br. AND’S® has a long product line for different needs – Br. AND’S® essence of Chicken with Cordyceps for energy; Br. AND’S® essence of Chicken with ginseng for stamina; Br. AND’S® essence of Chicken with Lingzhi and Br. AND’S® essence of Chicken with Tangkwei for general well-being; Br. AND’S® Sesamin with Schisandra for liver health; Br. AND’S® Calcium Plus and Br. AND’S® glucosamine for bones and joints; among others. 65 © 2012 Principles of Marketing: An Asian Perspective

8. 2 Product Decisions Product Line Stretching • Companies located at the upper end of the market can stretch their lines downward. • Companies located at the lower end of the market can stretch their product lines upward. • Companies located in the middle range of the market can stretch their lines in both directions. 67 © 2012 Principles of Marketing: An Asian Perspective

8. 2 Product Decisions Product Line Filling Eversoft Infinite fills the needs of a young segment who wants anti -ageing products. To differentiate this from its existing products, eversoft used Charmaine Sheh, a mature but youthfullooking celebrity, to endorse the product. 69 © 2012 Principles of Marketing: An Asian Perspective

8. 2 Product Decisions Product Mix Decisions • Product mix (or product portfolio) consists of all the product lines and items that a particular seller offers for sale. • A company’s product mix has four dimensions: width, length, depth, and consistency. 70 © 2012 Principles of Marketing: An Asian Perspective

8. 2 Product Decisions Product Mix Dimensions 1. 2. 3. 4. Product mix width refers to the number of different product lines the company carries. Product mix length refers to the total number of items the company carries within its product lines. Product mix depth refers to the number of versions offered of each product in the line. Product mix consistency refers to how closely related the various product lines are in end use, production requirements, distribution channels, or some other way. 71 © 2012 Principles of Marketing: An Asian Perspective

8. 2 Product Decisions A company can increase its business in four ways in terms of its product mix: • It can add new product lines, widening its product mix. • It can lengthen its existing product lines. • It can add more versions of each product, deepening its product mix. • It can pursue more product line consistency. 73 © 2012 Principles of Marketing: An Asian Perspective

8. 2 Product Decisions Reviewing the Key Concepts Describe the decisions companies make regarding their individual products, product lines, and product mixes. 74 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands • Some analysts see brands as the major enduring asset of a company. • Brands are thus powerful assets that must be carefully developed and managed. 77 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Brand equity • Brands are more than just names and symbols. They are a key element in the company’s relationships with consumers. • Brands represent consumers’ perceptions and feelings about a product and its performance—everything that the product or service means to consumers. • The real value of a strong brand is its power to capture consumer preference and loyalty. 78 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Brand equity Brands vary in the amount of power and value they have in the marketplace. • Some brands—such as Apple, Nike, Harley-Davidson, and Disney— become larger-than-life icons that maintain their power in the market for years, even generations. • These brands win in the marketplace not simply because they deliver unique benefits or reliable service. • Rather, they succeed because they forge deep connections with customers. • 79 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Brand equity Brand Equity is the differential effect that knowing the brand name has on customer response to the product and its marketing 80 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Brand equity • A brand has positive brand equity when consumers react more favorably to it than to a generic version of the same product. It has negative brand equity if consumers react less favorably than to an unbranded version. • Brands vary in their power and value in the marketplace. Not only do strong brands like Coca-Cola, Google, You. Tube, Apple, and Wikipedia deliver unique benefits, they forge deep connections with customers. 81 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Brand equity • Consumers respond to the brand; they know about and understand it. • That familiarity leads to a strong, positive consumer–brand connection (see Real Marketing 8. 1). 82 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Brand evaluation Brand valuation is the process of estimating the total financial value of a brand. Samsung has shed its image as a low-quality brand to one with inspiring designs and high quality 85 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Competitive advantages of a strong brand equity: High brand equity provides a company with many competitive advantages. 1. 2. 3. 4. 5. High level of consumer brand awareness and loyalty More leverage in bargaining with resellers More easily launch line and brand extensions Defense against fierce price competition Forms the basis for building strong and profitable customer relationships 86 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Customer Equity The fundamental asset underlying brand equity is customer equity— the value of the customer relationships that the brand creates. • A powerful brand is important, but what it really represents is a profitable set of loyal customers. • The proper focus of marketing is building customer equity, with brand management serving as a major marketing tool. • Says one marketing expert, “Companies need to be thought of as portfolios of customers and not portfolios of products. ” • 87 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Brand Positioning Marketers can position brands at any of three levels. 1. 2. 3. They can position the brand on product attributes. They can position the brand with a desirable benefit. They can position the brand on beliefs and values. 90 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Brand Positioning The strongest brands go beyond attribute or benefit positioning. Nintendo’s Wii engages customers on a deeper level, touching universal emotions. 91 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Brand Positioning Procter & gamble understands that especially to Chinese parents, a baby’s brain development is important. Thus, it associated this concern with sleep, a benefit that its Pampers provide. Babies wearing Pampers sleep longer than babies who don’t. 92 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Brand positioning- mission, vision and promise • • When positioning a brand, the marketer should establish a mission for the brand a vision of what the brand must be and do. A brand is the company’s promise to deliver a specific set of features, benefits, services, and experiences consistently to the buyers. The brand promise must be simple and honest. A motel, for example, offers clean rooms, low prices, and good service but does not promise expensive furniture or large bathrooms. In contrast, The Grand Hyatt offers luxurious rooms and a truly memorable experience but does not promise low prices. 93 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Good Brand Name SUGGEST BENEFITS EASY TO SAY/SPELL/READ DISTINCTIVE EXTENDABLE WORKS WORLDWIDE CAN BE LEGALLY PROTECTED 94 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Good Brand Name Desirable qualities for a brand name include the following: 1. It should suggest something about the product’s benefits and qualities. 2. It should be easy to pronounce, recognize, and remember. 3. The brand name should be distinctive. 4. It should be extendable. 5. The name should translate easily into foreign languages. 6. It should be capable of registration and legal protection. 95 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Challenges of using global brands in foreign countries: • Suzuki sounds like “lose all your money” in Hokkien, a Chinese dialect. • Hyatt does not translate easily and confers no meaning in China. So the company used the name “Yue” (悦) which means “Imperial, ” an identification which many Chinese aspire to be aligned with. It then came up with courtly variations to match its sub-brands: “Kai Yue” (凯悦), “Jun Yue” (君悦), and “Bo Yue (柏悦) for the Regency, Grand, and Park Hyatt respectively 96 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Brand Name Selection The Modern Toilet restaurant in Hong Kong has a distinctive and arresting name. The restaurant has its chairs and cutlery in the form of toilet amenities. But what does one think of eating with sanitary wares? 97 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Brand Name Protection • Once chosen, the brand name must be protected. • A brand name cannot be registered if it infringes on existing brand names. • In China, Starbucks successfully won the copyright battle against a Chinese chain, Shanghai Xingbake Coffee Company (上海星巴克咖啡馆), which copied its logo and name. “Xing Ba Ke” sounded phonetically similar to the pronunciation of Starbucks in Chinese. • “Xing” means “star” in Chinese and “Ba Ke” is the phonetical equivalent of “bucks”. Shanghai Xingbake’s green-and-white logo was also very similar to the Starbucks design 99 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Brand Name Protection Because of lax brand name protection, some Indian vendors played on the name “google” to brand their ice candy “gogola. ” 100 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands becoming ‘generic’ • Many firms try to build a brand name that will eventually become identified with the product category. • Brand names such as Kleenex, Levi’s, Scotch Tape, and Ziploc have succeeded in this. • However, their very success may threaten the company’s rights to the name. 101 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands becoming ‘generic’ • Many originally protected brand names—such as cellophane, aspirin, nylon, kerosene, yo-yo, trampoline, escalator, and thermos—are now generic names that any seller can use. • To protect their brands, marketers present them carefully using the word “brand” and the registered trademark symbol, as in “BAND-AID Brand Adhesive Bandages. ” ® 102 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Care in naming brands in Asia • Previously, Citibank had two different Chinese names. In China and Taiwan, Citibank is 花旗银行, meaning Bank of Flower Flag. • This is the old name of the American flag because it has lots of stars, stripes, and colors, and looks like a flower. • In the 20 century, the American flag placed at each Citibank branch was recognized by the Chinese as the symbol of Citibank, and hence the name “Bank of Flower Flag. ” th 103 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Care in naming brands in Asia • • • In Hong Kong, Singapore, and other Chinese communities like greater New York, Citibank’s Chinese name was 万国宝通银行. This name is the direct translation of International Banking Corporation, one of the predecessors of Citibank. In 2001, Citibank unified its Chinese names to 花旗银行. 104 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Brand Sponsorship A manufacturer has four sponsorship options. 1. 2. 3. 4. The product may be launched as a manufacturer’s brand (or national brand). The manufacturer may sell to resellers who give it a private brand (also called a store brand or distributor brand). The manufacturer can market licensed brands. Two companies can join forces and co-brand a product. 106 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Manufacturer’s Brands versus Private Brands • Manufacturers’ brands have long dominated the retail scene. • In recent times, an increasing number of retailers and wholesalers have created their own store brands (or private brands). • Recent tougher economic times have created a store-brand boom. 107 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Private Brands Hong Kong’s Watsons convenience store chain has branded bottled water, swabs, tissue paper, and other sundries under its own name. 108 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands ‘Battle of the Brands’ In the battle of the brands between national and private brands, retailers have many advantages. a) b) c) Retailers often price their store brands lower than comparable national brands. Store brands yield higher profit margins for the reseller. Store brands give resellers exclusive products that cannot be bought from competitors. 109 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Licensing • Most manufacturers take years and spend millions to create their own brand names. • However, some companies license names or symbols previously created by other manufacturers, names of well-known celebrities, or characters from popular movies and books. For a fee, any of these can provide an instant and proven brand name. 110 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Co-branding occurs when established brand names of two different companies are used on the same product. • For example, American Express co-branded with Singapore Airlines to create a card for the latter’s Singapore-based PPS Club members. • In most co-branding situations, one company licenses another company’s well-known brand to use in combination with its own. • 111 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Advantages of Co-branding • The combined brands create broader consumer appeal and greater brand equity. • Co-branding also allows a company to expand its existing brand into a category it might otherwise have difficulty entering alone. 112 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Limitations of Co-branding • Such relationships involve complex legal contracts and licenses. • Co-branding partners must carefully coordinate their advertising, sales promotion, and other marketing efforts. • Each partner must trust the other will take good care of its brand. 113 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Brand Development Strategies 1. 2. 3. 4. Line extensions occur when a company extends existing brand names to new forms, colors, sizes, ingredients, or flavors of an existing product category. Brand extensions extend a current brand name to new or modified products in a new category. Multi-branding introduces additional brands in the same product category. New brands 115 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Line Extension Strategy There are many different types of Coca -Cola available. Visit www. virtualvender. coca-cola. com to find out which types are being sold in various regions around the world. 116 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Brand Extension Strategy Giorgio Armani has extended its brand to bookshops carrying children’s books, like this one located in Hong Kong. 117 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Multi-brands Companies often introduce additional brands in the same category. Thus, Procter & Gamble markets many different brands in each of its product categories. Multibranding offers a way to establish different features and appeal to different buying motives. It also allows a company to lock up more reseller shelf space. L’Oréal markets at least 14 different brands in China, grouping them in various pricing bands. 118 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Limitations of Multi-branding Strategy • A major drawback of multi-branding is that each brand might obtain only a small market share, and none may be very profitable. • The company may end up spreading its resources over many brands instead of building a few brands to a highly profitable level. • These companies should reduce the number of brands they sell in a given category and set up tighter screening procedures for new brands. 119 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Managing Brands- Positioning • Companies must manage their brands carefully. • The brand’s positioning must be continuously communicated to consumers. • Major brand marketers often spend huge amounts on advertising to create brand awareness and to build preference and loyalty. 120 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Managing Brands and Internal Staff • A brand’s positioning will not fully take hold unless everyone in the company “lives” the brand. • Therefore, the company needs to train its people to be customercentered. • Better yet, the company should carry on internal brand building to help employees understand be enthusiastic about the brand promise. 121 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Managing Brands and Internal Staff • Many companies go a step further by training and encouraging their distributors and dealers to serve their customers well. • Isetan and Singapore Airlines have succeeded in turning their employees into enthusiastic brand builders. 122 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Managing Brands – The Brand Audit • Companies need to periodically audit their brands’ strengths and weaknesses. They need to examine the following: – Does our brand excel at delivering benefits that consumers truly value? – Is the brand properly positioned? – Do all of our consumer touch points support the brand’s positioning? – Do the brand’s managers understand what the brand means to consumers? – Does the brand receive proper, sustained support? 123 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Managing Brands – The Brand Audit • The brand audit may reveal brands that need more support, brands that need to be dropped, or brands that must be rebranded or repositioned because of changing customer preferences or new competitors. 124 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Re-branding • Re-branding may also be required when major corporate developments such as mergers and acquisitions occur, as shown by the following example about Soft. Bank 125 © 2012 Principles of Marketing: An Asian Perspective

8. 3 Branding Strategy: Building Strong Brands Reviewing the Key Concepts Discuss branding strategy—the decisions companies make in building and managing their brands. 127 © 2012 Principles of Marketing: An Asian Perspective

8. 4 Services Marketing Service Characteristics 1. Service intangibility means that services cannot be seen, tasted, felt, heard, or smelled before they are bought. 2. Service inseparability means that services cannot be separated from their providers, whether the providers are people or machines. Because the customer is also present as the service is produced, provider-customer interaction is a special feature of services marketing 131 © 2012 Principles of Marketing: An Asian Perspective

8. 4 Services Marketing Service Characteristics 3. Service variability means that the quality of services depends on who provides them as well as when, where, and how they are provided. 4. Service perishability means that services cannot be stored for later sale or use. 132 © 2012 Principles of Marketing: An Asian Perspective

8. 4 Services Marketing Service-Profit Chain GROWTH AND PROFIT SATISFIED LOYAL CUSTOMERS GREATER SERVICE VALUE PRODUCTIVE EMPLOYEES INTERNAL SERVICE QUALITY 133 © 2012 Principles of Marketing: An Asian Perspective

8. 4 Services Marketing Service Profit Chain (consists of five links) 1. Internal service quality—superior employee selection and training, a quality work environment, and strong support for those dealing with customers, which results in. . . 2. Satisfied and productive service employees—more satisfied, loyal, and hardworking employees, which results in. . . 3. Greater service value—more effective and efficient customer value creation and service delivery, which results in. . . 134 © 2012 Principles of Marketing: An Asian Perspective

8. 4 Services Marketing Service Profit Chain (consists of five links) 4. Satisfied and loyal customers—satisfied customers who remain loyal, repeat purchase, and refer other customers, which results in. . . 5. Healthy service profits and growth—superior service 135 © 2012 Principles of Marketing: An Asian Perspective

8. 4 Services Marketing Service Profit Chain: Satisfied and productive service employees Four Seasons Hotel Amman prides itself on making its employees satisfied. It believes that happy employees make for happy customers. 136 © 2012 Principles of Marketing: An Asian Perspective

8. 4 Services Marketing Internal marketing means that the service firm must orient and motivate its customer-contact employees and supporting service people to work as a team to provide customer satisfaction. 138 © 2012 Principles of Marketing: An Asian Perspective

8. 4 Services Marketing Interactive marketing means that service quality depends heavily on the quality of the buyer-seller interaction during the service encounter. 139 © 2012 Principles of Marketing: An Asian Perspective

8. 4 Services Marketing Managing Service Differentiation • Service companies can differentiate their service delivery by having more able and reliable customer-contact people, by developing a superior physical environment in which the service product is delivered, or by designing a superior delivery process. • Service companies can work on differentiating their images through symbols and branding. 141 © 2012 Principles of Marketing: An Asian Perspective

8. 4 Services Marketing Service Differentiation The Westin Hotel in Kuala Lumpur offers complimentary refreshing drinks in its lobby as a courtesy to its guests. 142 © 2012 Principles of Marketing: An Asian Perspective

8. 4 Services Marketing Managing Service Quality • Service quality is harder to define and judge than product quality. • Service quality will always vary, depending on the interactions between employees and customers. • Good service recovery can turn angry customers into loyal ones. 143 © 2012 Principles of Marketing: An Asian Perspective

8. 4 Services Marketing Managing Service Productivity Service firms are under great pressure to increase service productivity. a) They can train current employees better or hire new ones who will work harder or more skillfully. b) They can increase the quantity of their service by giving up some quality. c) They can harness the power of technology. 144 © 2012 Principles of Marketing: An Asian Perspective

8. 4 Services Marketing Balancing Service Quality and Service Productivity It is important to strive for service quality without pushing productivity too hard. 145 © 2012 Principles of Marketing: An Asian Perspective

8. 4 Services Marketing Reviewing the Key Concepts Identify the four characteristics that affect the marketing of services and the additional marketing considerations that services require. 146 © 2012 Principles of Marketing: An Asian Perspective

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