PART 1: Defining Marketing and the Marketing Process (Chapters 1-2) Pre eee ea era) PART 4: Extending Marketing (Chapters 18-20) Products, Services, and Brands Building Customer Value ‘Atter examining customer value-driven marketing strategy, we now take @ deeper look at the marketing imix: the tactical tools that marketers use to imple ment their strategies, engage customers, and delver ‘superior customer value, In this and the next chapter, we wil study how companies develop and manage products, ssovvicas, and brands. Then, in the chaptors that folow, we look at pricing, cistrbution, and marketing communication tools. The product and brand are usually the frst ard most basic marketing consideration, We start with a seemingly simple question: What is a product? Asi tums out the answer is not so simple, PREVIEWING THE CONCEPTS GOPRO: Be a HERO rn ever-growing army of GoPro customers are now strapping amazing little GoPro cameras to their bodies or mounting them on anything from the front bumpers of race cars to the heels of skydiving. boots in order to capture the extreme moments of theit lives and lifestyles. Then they can’t wait to share those emotion- packed GoPro moments with friends. In fact, the chances are good that you've seen many GoPro-created videos on ‘YouTube, Facebook, and Instagram or even on TV. Maybe it’s the video shot by the skier who sets off ‘an avalanche in the Swiss Alps ‘and escapes by parachuting off 2 clif—that amateur video received 26 million YouTube views in nine ‘months. Or maybe you savy the one ‘where a seagull picks up a tourist's ‘camera and takes off with it, cap- turing a bird's-eye view of a castle Jn Cannes, France (3 million views in seven months). Or what about the video of the mountain biker in ‘Africa who is ambushed by a full-grown gazelle (more than 133 million views in four months)? One video in which a tech- challenged Irishman used his son’s GoPro to capture his entire Las Vegas vacation with the camera mistakenly pointed at him- self instead of the sights snared 6.9 million views in only six days. in their lives. Crete ee ee Ce orareer ne enue DUS Na Coe ke pean Cone C Rc aed Pee ee eon aa) CUCU ecacced ‘To aig a ite deeper into the question of what is @ product, we begin by looking at GoPro, You may never have heard of GoPro, the fast-growing company that makes tiny, wearable HD video cameras. Yet few brands can match the avid enthusiasm and loyalty that GoPro has created in the hearts and minds of Its customers. GoPro knows that, deep down, [is products are much more than just durable Ile cameras. More than that, it gives customers a way to share acton-charged moments and ‘omations with finds GoPro's avid customers have become evangelists for the brand, GoPro holds a 47.5 percent share of the action camera market. Its sales soared to more than $14 billion last year, a fivefold increase in only four years What makes GoPro so successful? Part of the formula is the physical product itsel GoPzo cameras are marvels of tech- nology, especially given theie affordable starting price of less than $200 for an entry-level model. A GoPro HD video camera looks like little more than a small gray box. But the lightweight, wearable or mountable GoPro is extremely versatile, and it packs amazing power for captur- ing stunning HD-quality video. A removable housing makes GoPro ‘cameras waterproof to depths of 130 feet, And GoPro cameras are rop-proof from 3,000 feet (50 Whatls a Product? Comment has avery GoPro story Whats product"? ‘We define a product as anything that ean be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. Products include more than just tangible objects, such as cars, clothing, or mobile phones. Broadly defined, products also include services, events, persons, places, organizations, and ideas or a mixture of these ‘Throughout this text, we use the term product broadly to include any or all of these entities. ‘Thus, an Apple iPhone, a Toyota Camry, and a Caffé Mocha at Starbucks are products. But Product soarea trip to Las Vegas, Schwab online investment services, your Instagram account, and Anything that can be otro to a advice from your family doctor. rmatket fr atetion,sequstion, use, Because of their importance in the world economy, we give special attention to ‘or consumation that might satisfy services. Services are a form of product that consist of activities, benefits, or satisfactions a want or need, offered for sale that are essentially intangible and do not result in the ownership of any- thing. Examples include banking, hotel, airline travel, retail, wireless communication, and service Jhome-repair services. We will look at services more closely later in this chapter. ‘An activity, benef. or satisfaction otfored ‘or sale thats essomtay inanglele Products, Services, and Experiences ‘and does not result inthe cxnershio of anytring Products are a key element in the overall market ofering. Marketing mix planning begins with building an offering that brings value to target customers, This offering becomes the basis on which the company builds profitable customer relationships ‘A company’s market offering often includes both tangible goods and services. At one ex- treme, the market offer may consist ofa pure tangible good, such as soap, toothpaste, or salt; no services accompany the product. At the other extreme are pure services, for which the market offer consists primarily of a service. Examples include a doctor's exam and financial services.experiences. onset helt ones @ FIGURE | 8.1 Three Levels of Product CHAPTER 8 | Products, Services, and Brands: Bullding Customer Value 245 [Between these two extremes, however, many goods and-services combinations are possible Today, as products and services become more ‘commoditized, many companies are moving to a new level in creating value for their customers. To differentiate their offers, beyond simply making products and delivering services, they are creat ing and managing customer experiences with their brands or companies. Experiences have always been an important part of marketing for some companies. Disney has long manufactured dreams and memories through its movies and theme parks—it wants theme park ‘east members to deliver a thousand "small wows” to every customer. And Nike has long declared, “1's not so much the shoes but where they take you.” Today, however, all kinds of firms are recasting their ‘traditional goods and services to create experiences, © For example, Apple's highly successful. retail stores don’t just sel the company’s products. They create an engaging Apple brand experience Apple's etal stores are wery eedictive places where “tie feel-good” experiences abound. The tore de- sign is dean, simple, and just oozing with style— tmsch like an Apple iPad or a fenthenweight MacBook Air The buetling storee feel more Like ‘community centers than retail outlets, with rows of customers sampling the goods and buzzing ‘excitedly about al things Apple The stores encourage alot of purchasing, tobe sure. But they alo ‘encourage lingering, with tables full of fully functioning Macs, iPods, Pads, and iPhones siting ‘ut for visitors to Uy and dozens of laid-back Apple employees clove at hand to newer questions land cater to every whim. The stores offer expert technical asistance atthe Genius Bat and a fll schedule of workshops where castomers at all experienc levels can lean about theit Apple devices land explore their ceaiv sides, You dont ust vist an Apple store—you experience it in way that no other consumer electronics company can match, As ane Apple retail executive explains, T don’t Want tobe sold to when Talk int a store. Don't sll! No! Because that's turtofl. Build an amaz- ing brand experience, and then [sles] will just naturally happen.” Levels of Product and Services Product planners need to think about products and services on three levels (see © Figure 8.1) Each level adds more customer valle. The most basic level is the core customer anu, which addresses the question: Wht is the buyer really buying? When design: ing products, marketers must first define the cote, problem-solving benefits or services that Design / Aap Pal are buy \\ pessoas 7 Sane aera ann Product ~~ _— ‘and persanal window othe worl. support Warrenty246 Pants | Designing a Customer value-Diven Statgy and Mix © core, actu than a land augmented product: Poople who buy an iPad are buying much mo blet computer. They are buying entertainment, self-express consumers seek. A woman buying lip- stick buys more than lip color. Charles Revson of Revlon saw this eaely: “In the factory, we make cosmetics in the store, we sell hope.” @ And people who buy an Apple iPad are buying much more than just a tablet computer. They are buying entertainment, self-expression, productivity, and connectivity with friends and family—a mobile and per- sonal window to the world, ‘At the second level, product plan- ners must fur the core benefit into an ‘actual product, They need to develop product and service features, a design, quality level, a brand name, and packaging, For example, the iPad is an actual product. Its name, parts, styling, operating system, features, packaging, and other attributes have all been care- fully combined to deliver the core eus- tomer value of staying connected. productivity, and Finally, product planners must ‘connectivity mobile and personal window to the world build an augriented product around the Bete dr erty noes Consumer product ‘Aprosuct bought by final consumers fer personal consumption Convenience product, ‘consumer produ’ that customers usualy uy frequently, immediately, and wit inal comparison and buying ator. Shopping product, ‘Acansurer product thatthe customer, the process of selecting and purchasing. usualy compares on such attributes as sutacity, qual, price, and sy. core benefit and actual product by of fering additional consumer services and benefits. The iPad is more than just 2 digital device. It provides consumers with a complete connectivity solution. Thus, when consum- ers buy an iPad, Apple and its resellers also might give buyers a warranty on parts and workmanship, quick repair services when needed, and web and mobile sites to use if they have problems or questions. Apple also provides access to a huge assortment of apps and accessories, along with an iCloud service that integrates buyers’ photos, music, documents, apps, calendars, contacts, and other content across all oftheir devices from any location, ‘Consumers see products as complex bundles of benefits that satisfy their needs. When, developing products, marketers first must identify the core customer value that consumers seek from the product, They must then design the aelual product and find ways to augment ito create customer value and a full and satisfying brand experience. Product and Service Classifications Products and services fall into two broad classes based on the types of consumers who use them: consumer preducts and industrial preducts. Broadly defined, products also include other marketable entities such as experiences, organizations, persons, places, and ideas. ‘Consumer Products Consumer products are products and services bought by final consumers for persona’ consumption. Marketers usually classify these products and services further based on how consumers go about buying them. Consumer products include convenience products, shop- ping products, specialty products, and unsought products. These products differ in the ways consumers buy them and, therefore, in how they are marketed (see ® Table 8.1) Convenience products are consumer produets and services that customers usually Duy frequently, immediately, and with minimal comparison and buying effort. Examples include laundry detergent, candy, magazines, and fast food, Convenience products are usually low priced, and marketers place them in many locations to make them readily available when customers need or want ther, ‘Shopping products are less frequently purchased consumer products and services that customers compare carefully on suitability, quality, price, and style. When buying shop- ping products and services, consumers spend much time and effort in gathering informa- tion and making comparisons. Examples include furniture, clothing, major appliances, and ‘hotel services. Shopping product marketers usually distribute their products through fewer cotlets but provide deeper sales support to help customers in their comparison effortsCHAPTER 8 | Products, Services, and Brands: Building Customer Value 247. © Table 8.1 | Marketing Considerations for Consumer Products Type of Consumer Product Marketing Considerations Convenience Specialty Unsought Customer buying Frequent purchase; Ittle Less frequent purchase; Strong brand preference Lite product awareness bohavio planning, litle com- much planning and an loyalty; special ——_or knowlodge fr, i pavison or shooping hoping etfort purchase offor litle aware, litle or even cffort; low customer comparison of brands on comoarison oftorands; negative itarest) rwolverent price, quay, and style low price sensitivity Price Low price Higher price High price Varies Distribution Widespread dstibution; Selective distribution Exclusive distbution in Varies convenient locations in fewer outlets ‘only one or a few out per market area Promation Mass promotion by Advertising and personal More carefully targotod Aggressive advortsing the producer saling by both the promotion by both the and parsonal seling producer and resallrs ptoducar and esolers by the producer and rasalars Examples foothpaste, magazines, Major applances, Luxury goods, such Lif insurance and Rec ‘and Inuncry detergent televisions, tumiture, as Rolex watches or Cross blood donations and clothing fine crystal Specialty product ‘A consumer product wth unique characterises or brand ientiiaton for which a sinitcant group of buyers is viling o make a special purchase efor. Unsought product ‘A consume prosict that he consumer titherdoas not know about or kows about but does nat normaly consi buying Industrial product A product bought by individuals ard oxganzatons fr futher processing or or use in conducting a business Specialty products are consumer products and services with unique characteristics cor brand identifications for which a significant group of buyers is willing to make a special purchase effort, Examples include specific brands of cars, high-priced photography equip- iment, designer clothes, gourmet foods, and the services of medical or legal specialists A Lamborghini automobile, for example, isa specialty product because buyers are usually willing fo travel great distances to buy one, Buyers normally do not compare specialty products. They invest only the time needed to reach dealers carrying the wanted brands. Unsought products are consumer products that a consumer either does not know about or knows about but does not normally consider buying, Most major new innovations are unsought until consumers become aware of them through marketing. Classic examples fof known but unsought products and services are life insurance, preplanned funeral services, and blood donations to the Red Cross. By their very nature, unsought products require alot of promoting, personal selling, and other marketing efforts Industrial Products Industrial products are those products purchased for further processing or for use in conducting a business, Thus, the distinction between a consumer product and an industrial product is based on the purpose for which the product is purchased. If a consumer buys a lawn mower for use around home, the lawn mower is a consumer product. Ifthe same consumer buys the same lawn mower for use in a landscaping business, the lawn mower is an industrial product ‘The three groups of industrial products and services are materials and parts, capi- tal items, and supplies and services. Materials and parts include raw materials as well as ‘manufactured materials and parts. Raw materials consist of farm products (wheat, cotton, livestock, fruits, vegetables) and natural products (fish, lumber, crude petroleum, iron ore). Manufactured materials and parts consist of component materials (iron, yarn, cement, ‘wires) and component parts (small motors, tres, castings). Most manufactured materials and paris are sold dizectly to industrial users. Price and service aze the major marketing factors; branding and advertising tend to be less important.248 pants | Designing a Customer Value-Driven Statgy and Mix Capital items are industrial products that aid in the buyer's production or operations, in cluding installations and accessory equipment. Installations consist of major purchases such as buildings (factories offices) and fixed equipment (generator, dri presses, large computer systems, elevators). Accessory equipment includes portable factory equipment and tools (hand tools lft trucks) and office equipment (computers, fax machines, desks). These types of equipment have shorter lives than do installations and simply ai in the production process. Te final group of industrial products is supplies end services. Supplies include opers ing supplies (lubricants, coal, paper, pencils) and repair and maintenance items (paint, nails, ‘brooms). Supplies are the convenience products ofthe industrial field because they are usually ‘purchased with a minimum of effort or comparison. Business services include maintenance and repair services (window cleaning, computer repair) and business advisory services (legal, ‘management consulting, advertising) Such services are usually supplied under contract. Organizations, Persons, Places, and Ideas In addition to tangible products andl services, marketers have broadened the concept of a product to include other market offerings: organizations, persons, places, and ideas Organizations often carry out activities to “sell” the organization itself. Organization marketing consists of activities undertaken to create, maintain, of change the attitudes and behavior of target consumers toward an organization. Both profit and not-for-profit organi- zations practice organization marketing, Busines firms sponsor public relations or corporate image marketing campaigns to market themselves and polish their images. For example, as noted in Chapter 6, GE's long-running “Imagination at Work” campaign marke the industrial giant asa company whose imaginative products and technologies are making 2 difference in the world. ® Consider one recent award- ‘winning TV spot, called “Childlike Imagination” The whimsical ad brings GE's products— from jet engines and diesel locomotives to giant wind turbines and hospital diagnos fics machines—to life through the eyes of 8 wideeyed young giel whose mom works atGE. GE is “Building, powering, moving, and curing the world,” says the company Not just imagining. Doing. GE works ”? People can also be thought of as products, Person marketing consists of ac- tivities undertaken to create, maintain, of change attitudes or behavior toward par- ticular people, People ranging from pres: dents, entertainers, and sports figures to professionals such as doctors, lawyers, and architects use person marketing to build their reputations. And businesses, charities, and other organizations use well-known personalities to help sell their products or causes. For examp! Nike spends almost $1 billion annually con endorsement deals with a stable of stars spanning almost every conceivable sport worldwide, including headliners such aster ris greats Maria Sharapova and Rodger Federer, world soccer superstars Cristiano Ronaldo and Neymar, and current and former NBA allstars Michael Jordan, Kobe Bryant, LeBron James, and Kevin Durant lace marketing involves activities undertaken to create, maintain, or change attudes or behavior toward particular places. Cities, states, regions, and even entie nations compete to attract tourists, new residents, conventions, and company offices and factories. The New Orleans city website shouts “Go NOLA” and markets annual events such as Mardi Gras festivities and the New Orleans Jazz and Heritage Festival. Tourism Australia advertises that, “There's Nothing Like Australia” and provides a website and smartphone app complete with videos, holiday ideas, destination information, and about anything else travelers might need toplan an Australian vacation? Ideas can also be marketed. In one sense, all marketing is the marketing of an idea, ‘whether itis the general dea of rushing your teth othe specific idea that Crest toothpastes © organization marketing: GE's long-running hi markets the intial giant as a company whose imaginative products and technologies are making iiference in the worldCHAPTER 8 | Products, Services, and Brands: Building Customer Value 249 create “healthy, beautiful smiles for life” Here, however, we narrow our focus to the mar- Social marketing keting of social ideas. This area has been called social marketing and consists of using ‘he use of vastionalbusiness mavestng traditional business marketing concepts and tools to encourage behaviors that will create concepts and ols ta encourage individual and societal well-being. Denavir that wll create ical and Social marketing programs cover a wide range of issues. The Ad Council of America social wel-bong, (wwwadcouncil org), for example, has developed dozens of social advertising campaigns involving issues ranging from health cate, education, and environmental sustainability to human rights and personal safety. But social marketing involves much more than just advertising. It involves a broad range of marketing strategies and marketing mix tools. designed to bring about beneficial social change* connest[oeitna'sapeaee | ~ Product and Service Dedsions essere ra companisrrasiake || sions, product ine decisions, and product mix decisions. We discuss each in turn when designing as marstng groauts Individual Product and Service Decisions © Figure 8,2 shows the important decisions in the development and marketing of indi- vidual products and services, We will fcus on decisions about product attributes, branding, packaging, labeling and logos, and product support services. Product and Service Attributes Developing a product or service involves defining the benefits that it will offer. These ben- efits are communicated and delivered by product attributes such as quality, features, and style and desig. Product quality Product Quality, Product quality is one of the marketer's major positioning tools “The charactors of product or sonice Quality affects product or service performance; thus, itis closely linked to customer value that beer ons abliyto sas staledor and satisfaction. In the narrowest sense, quality can be defined as “no defects.” But most Imples customer neods marketers go beyond this narrow definition. Instead, they define quality in terms of creat- ing customer value and satisfaction. The American Society for Quality defines quality as the characteristis ofa product or service that bear on its ability to satis’ stated or implied customer needs. Similarly, Siemens defines quality this way: "Quality is when our custom- cers come back and our products don’t”? Total quality management (TOM) is an approach in which all ofthe company's people are involved in constantly improving the quality of products, services, and business processes. For most top companies, customer-driven quality has become & way of doing business, Today, companies are taking a return-on-qualty approach, viewing quality as an investment and holding quality efforts accountable for bottom-line results Product quality has two dimensions: level and consistency. In developing a product, the marketer must frst choose a qualiy ce! that will support the produe’s positioning. Here, product quality means perfirmance qualiy—the product's ability to perform ss functions For example, a Rolls-Royce provides higher performance quality than a Chevrolet: thas a smoother ride, lasts longer, and provides more handeraftsmanship, custom design, ly, and “creature comforts.” Companies rarely try to fer the highest possible performance qual ity level few customers want or can afford the high levels of quality offered in products such 25a Rolls-Royce automobile, Viking range, ora Rolex watch Instezd, companies choose a {quality level hat matches target market needs andthe quality levels of competing products Beyond quality level, high qualty also can mean high levels of quality consistency. Here, product quality means conformance gualityfreedom from defects and consistency @ricure| 32 in delivering a targeted level of pecformance. All companies should steve for high levels Individual Product Decisions Destine Tenens Labetng Soe -| Peder ai | srarcina | mi | Pacacine | mie = >250 Pants | Designing a Customer Value-Driven Strategy and Mix of conformance quality In this sense, a Chevrolet can have just as much quality as a Rolls-Royce. Although a Chevy ‘doesn't perform at the same level as 4 Rolls-Royce, i can just as consistently deliver the quality that customers pay for and expect. (0/Five Guys isan American fast casual restaurant sll ing burgers, fries, hot dogs, and grilled sandwiches. Five Gays is famous for ruling the “better burger” category. Theit burgers are prepared in peanut oll, ae hand-crafted, and are rade of freshly ground beef. Five Guys says that it doesnot ‘compete on price with MeDonalds, Burger King, or Wendy's bbeeause thet product quality is beter and people wil pay 3 lite extra for food if t's worth it I evera customer questions their higher price they tll the customers to just take Ie and not pay for it And they say thatn the many years they have ddone this, every single customer has come back and paid for theis food and added big tp. The level of qualty of Five @rve Guys han opt a strong focus on making Gays burgers support its positioning and has created a cult, burgers, and tie has earned them aya following ef burger fens ——_following orits burgers around the world whe want superior qual and don mind paying ate extra for. Sek hl penny erate Product Features, product can be offered with varying features. A stripped-down model, one without any extras, is the starting point. The company can then create higher- level models by adding more features. Features are a competitive tool for differentiating the company’s product from competitors’ products. Bing the frst producer to introduce a Valued nev feature is one of the most effective ways to compete How can a company identity new features and decide which ones to add to its prod- uct It should periodically survey buyers who have used the product and ask these ques- tions: How do you like the produet? Which specific features of the product do you like most? Which features could we add to improve the product? The answers to these ques tions provide the company with a rich list of feature ideas. The company can then assess each feature’s salu to customers versus its cas to the company. Features that customers value highly in relation to costs should be added. Product Style and Design. Another way to add customer value is through distinctive product style and design. Design is a larger concept than style, Siyle simply describes the appearance of a product. Styles can be eye catching or yawn producing. A sensational style may grab attention and produce pleasing aesthetics, but it does not necessarily tak the produc eorm beter Unite ye, deg io mre than hin deep goes @ the very heart ofa product Good design conibutes ta produc’ usefulness a el OMe design does sat wit bratorming new ideas and making prlaypes Design begins wth ebserving customers understanding eed and Spine producrase cxperence, Product designe should thik less cout techie! produc Speicstions td re about how cstomers wl sean beef rom the pede rerenampl, ung unart design bse on consumer neds Sune ated wiles intern anabled Spear ste has ey tease and ila whale aus wih grea sound In the past, esting up a whole house entertainment or sound system required routing wires through walls, floors, and ceilings creating a big mess and lots of expense. And if you moved, you couldnt taketh you Enter Sone, which took home-audio and thentr systems toa new level worthy ofthe digital age. Te innovative company created a wireless speaker system that's not just stylish but also easy to setup, easy to use, and easy to move to meet changing needs ‘With Sonos, you can steam high-quality sound through a variety of stylish speakers anywhere Jn your home with just an app and a tap an your smartphone. Smart design has paid off hand- somely for Sonos. Founded in 2002 over jus the past two years the company’s sales have nearly tripled toan estimated $1 billion a year Brand eoconratar tec httenipes Branding trepoaicsorcovees ol oneselror—ethaps the most distinctive ski of professional marketers is their ability to build and (oun ot colt and eenatstnem manage brands, A brand isa name, term, sign, symbul, or design or a combination of ‘tom these of compas these that identifies the maker or seller of a product or service. Consumers view a brandCHAPTER 8 | Products, Services, and Brands: Building Customer Value 251 1nd “unbranded’” Joshua Bel. The premier musician packs concert halls at an average (0 $100 or more a seat but made only $32 as a street musician at a Washington, DC, metro station. et NBC ety mae: ae The Wasa Posty nape Packaging The activites of designing and producing ‘the container or wrapper for 3 produc! as an important part ofa product, and branding can add value to a consumer's purchase Customers attach meanings to brands and develop brand relationships. As a result, brands have meaning well beyond a product's physica attributes, Consider this tory” © One Tuesday evening in January, Joshua Bel, one of the world’s finest violinists, played at Boston's stately Symphony Hall before a packed audience who'd paid an average of $100 seat Based on the well-earned strength of the “Joshsa Bell brand,” the talented musician routinely drew standing-room-enly audiences stall of his performances around the world, Three days later, however, as part ofa Washington Post social experiment, Bell found himself standing in 3 ‘Washington, DC, meto station, dressed in jeans, a Fshit, and a Washington Nationals baseball ‘cap. As morning commuters streamed by, ell pulled out his 4 million Stradivarius violin, set the open ease at his fet, and began playing the same revered classes he'd played in Boston. During the next 45 minutes, some 1,100 people passed by but few stopped to listen. Bel eared | total of $32, No ane recognized the “unbranded” Bell so few appreciated his artistry. What does that tll you about the meaning of «strong brand? Branding has become so strong that today hardly anything goes unbranded. Salt is packaged in branded containers, common nuts and bolts are packaged with a distribu- {or's label, and automobile parts—spark plugs, tres, ilters—bear brand names that differ from those of the automakers. Even fruits, vegetables, dairy products, and poultry are branded—Cuties mandarin oranges, Dole Classic salads, Horizon Organic milk, Perdue chickens, and Eggland’s Best eggs Branding helps buyers in many ways, Brand names help consumers identify products that might benefit them, Brands also say something about product quality and consis- tency—buyers who always buy the same brand know that they will get the same features, benefits, and quality each time they buy. Branding also gives the seller several advantages. ‘The seller's brand name and trademark provide legal protection for unique product fea tures that otherwise might be copied by competitors. Branding helps the seller to segment markets. For example, rather than offering just one general product to all consumers, Toyota can offer the different Lexus, Toyota, and Scion brands, each with numerous sub-brands— such as Avalon, Camry, Corolla, Prius, Yaris, Tundra, and Land Cruiser. Finally, a brand name becomes the basis on which a whole story can be built about a product's special qualities. For example, the Cuties brand of pint-sized mandarins sets itself apart from ordinary oranges by promising "Kids love Cuties because Cuties aze made for kids.” They ate a healthy snack that's “perfect for little hands”: sweet, seedless, kid- sized, and easy to peel.” Building and managing brands are perhaps the marketer's most important tasks, We will discuss branding strategy in more detail later in the chapter Packaging Packaging involves designing and producing the container or wrapper for a product. ‘Traditionally, the primary function of the package was to hold and protect the product. In recent times, however, packaging has become an important marketing tool as wel.252 Pants | Designing a Customer Value Driven Statgy and Mix Increased competition and clutter on retail store shelves means that packages must now perform many sales tasks—from attracting buyers to communicating brand positioning to closing the sale, Not every customer will see a brand's advertising, social media pages, or other promotions, However all consumers who buy and use a product will interact regu- larly with its packaging. Thus, the humble package represents prime marketing space. ‘Companies realize the power of good packaging to create immediate consumer rec- ognition of a brand, For example, an average supermarket stocks about 42,000 items; the average Walmart supercenter carries 120,000 items, The typical shopper makes three out of four purchase decisions in stores and passes by some 300 items per minute. In this highly competitive environment, the package may be the seller's best and last chance to influence buyers, So the package itself hecomes an important promotional medium"! Innovative packaging can give a company an advantage over com- pptitors and boost sales. Distinctive packaging may even become an important part of a brand’s identity. ® For example, an otherwise plain ‘brown carton imprinted with the familiar curved arrow from the Amazon. com logo—variously interpreted as “a to 2" or even a smiley face—leaves no doubt as to who shipped the package sitting at your doorstep. And Tiffany's distinctive blue boxes have come to embody the exclusive jew- ely retailer's premium legacy and positioning. As the company puts it, “Glimpsed on a busy street or resting in the palm of a hand, Tiffany Blue Boxes make hearts beat faster and epitomize Tiffany's great heritage of elegance, exclusivity, and flawless eraftsmanship.””? Poorly designed packages can cause headaches for consumers and lost sales for the company. Think about all those hard-to-open packages, such as DVD cases sealed with impossibly sticky labels, packaging with finger-split- king wire twist-ties, or sealed plastic clamshell containers that cause “wrap rage” and send thousands of people to the hospital each year with lacera- tions and puncture wounds. Another packaging issue is overpackaging—as when a tiny USB flash drive in an oversized cardboard and plastic display package is delivered in a giant corrugated shipping carton. Overpackaging, (© Distinctive packaging may become an important creates an incredible amount of waste, frustrating those who care about the part of a brand's identity. An atherwise plain brown ‘arton imprinted with only the familiar curved arrow trom the Amazon.com logo—variously interpreted a= *'ato2" or even a smiley face leaves no doubt as to ‘who shipped the package siting at your deorstep, ‘environment, ‘Amazon offers Frustration ‘Free Packaging to alleviate both wrap rage and overpackaging. The online retailer works with more than 2,000 compa- nes, such as Fisher-Price, Mattel, Unilever, Microsoft, and others, to create ‘© ueiptcsany smaller, easy-to-open, recyclable packages that use less packaging material and no frustrating plastic clamshells or wiee tes. It currently offers more than, 200,000 such items and to date has shipped more than 75 milion of them to 175 countries. In the process, the initiative has eliminated nearly 60 million square feet of eardboard and 25, million pounds of packaging waste. In recent years, product safety has also become a major packaging concern. We have all learned to deal with hard-to-open “childproof” packaging. Due to the rash of prod~ uct tampering seares in the 1980, most drug producers and food makers now put their products in tamper-resistant packages. In making packaging decisions, the company also must heed growing environmental concerns. Fortunately, many companies have gone “ance” by reducing ther packaging and using environmental responsible packaging material Labeling and Logos Labels and logos range from simple tags attached to products to complex graphics that are part ofthe packaging. They perform several functions. At the very least, the label identifies the product or brand, such as the name Sunkist stamped on oranges. The label might also describe several things about the product—who made it, where it was made, when it was made, its contents, how i isto be used, and how to use it safely. Finally the label might help to promote the brand and engage customers, For many companies, labels have Become an important element in broader marketing campaigns Labels and brand logos can support the brand's positioning and add personality the ‘brand. In fact, they can become a crucial element in the brand-customer connection, Customers. eften become strongly attached to logos as symbols of the brands they represent, Consider theCHAPTER 8 | Products, Services, and Brands: Bullding Customer Value 253 feelings evoked by the logos of companies such a8 Google, Coca-Cola, Twitter, Apple, and Nike. Logos must be redesigned from time to time. For example, brands ranging from Yahoo!, eBay, and Southwest Airlines to Wendy's, Pizza Hut, Black+Decker, and Hershey have successfully adapted their logos to keep ‘hem contemporary and to meet the needs of new dig- ital devices and interactive platforms such as the mo: bile apps and social media (eee Real Marketing 8.1). However, companies must take care when changing such important brand symbols. Customers often form strong connections to the visual repre- sentations of their brands and may react strongly. to changes. @ The Starbucks logo has become one of the most recognizable icons across the globe. The Jogo has gone through many changes over time with, the increasing popularity of the Starbucks brand, However the company has been careful not to break away from its key design element, the iconic two- tailed mermaid ‘the Starbucks name from ts latest logo, but it ‘Along with the positives, there has been a long land white colors and the ims ‘of the mermaid history of legal concems about labels and packag- ing, The Federal Trade Commission Act of 1914 held that false, misleading, or deceptive labels or packages constitute unfair competition. Labels ‘can mislead customers, fal to describe important ingredients, or fail to include needed safety. ‘warnings. As a result, several federal and state laws regulate labeling. The most prominent is the Fair Packaging and Labeling Act of 1965, which set mandatory labeling requirements, encouraged voluntary industry packaging standards, and allowed federal agencies to set packaging regulations in specific industries. The Nutritional Labeling and Educational Act of 1990 requires sellers to provide detailed nuteitiona information on food products, and recent siveeping actions by the Food and Drug Administration (FDA) regulate the use of health related terms such a5 low ft, light, high fiber, and organic. Sellers must ensure that their labels contain all the required information. Product Support Services Customer service is another element of produ strategy. A company’s offer usually in- cludes some support services, which can be a minor part or a major part of the total of fering. Later in this chapter, we will discuss services as products in themselves. Here, we discuss services that augment actual products Support services are an important part of the customer's overall brand experience, Lexus knows that good marketing doesn’t end with making a sale. Keeping customers happy aftr the sale is the key to building lasting relationships. Lexus believes that if you delight the customer, and continue to delight the customer, you will have a customer for life, So Lexus dealers across the country will go to almost any lengths to take care of cus tomers and keep them coming back! ‘The typical Levus dealership is well, anything but typiesl. For example, in addition to its Starbucks coffee shop, one Florida Lexus dealership features four mastage chais, vo pu ting greens two customer lounges, and library. At another Lexie dealership in 3 nearby ty, "gocsts” leave their cars with a valet and are then guided by a concierge to 2 European syle colfee bar offering complimentary espresto, cappuccino, and selection of pastries prepared by 1 chef trained in Rome. But at Lexus, customer service goes mich deeper than just de amenities From the very start Lexus set out to revolutionize the suto ownership experience Of course, Lewus knows thatthe best dealership visit isthe one you never have to make So it builds customer-pleasing cas to tart with, @ In ste "Lexus Covenant,” the company ‘vows that it will make “the finest cars ever bult”—high-quality cars that need litle servicing. “However, the covenant alo vows to value customers as important individuale and “teat exch customer as we would a guest in our own home.” So, when 2 car does need servicing, Lexus [gots out of it way to make i easy and painless, Most dealers wll even pick up a car and then ret itwhen the maintenance is finished. And the car comes back spoles, thanks o a compl: mentary cleaning. You might even be surprised to find that they've touched up a door ding to help restore the art it fresh-fromethe-fatory luster254 pants | Designing a Customer Value Driven Suatgy and Mix It soams tke everyone Is doing it those days—aving thair logos maior makeovers, From Googh, Hershey, Pizza Hut, and American Aitines to Southwest and IHOP, t's fut with the ole and in with the new, ‘Such logo redesigns can oe risky. Customers often form stiong t= tachments to their favorte brands ‘and the logos that represent them. Brand logos can bo tke par of ld shoos—fa- riliar anc comforting—and customers often ‘on’ take kindly to changes. Given the risks, why ave so many companies reworking ther bogos? ‘Companies have always taken great care to erat simple, casly recognized logos that ‘auickly Identity anc) poston their brands ‘and tnggor posite consumer associations. Howover, in today’s cigtal word, brand logos are being asked to do more than ever, A logo |= no longer just a static symbol placed on 1 printed page, package, TV ad, billboard, ‘or store cisply, Instead, today’s logos must ‘also mest the demands of an ever-more- civerse set of digtal devices and media. A brand logo that looks great and communi- ‘cals wall on a package or in a magazine ad ‘might fall miserably in a social media seting ‘on a smariphone screen, Today's Ingos must stand out visually on scroens af all sizes, from big-screen TVs to tablets, mobile phones, and even smert- watcnes. Otten, thay must also function as in- tractive leans or animated actly inscators ‘on web, moble, and social media pages. As ‘a resul, companies are adapting ther logos to keoo thorn in syne with the rapidly evoking gital times, Most lago modifications focus an creat- ing simpler, brighter, more modern designs that present tatter on digtal screens and patios. For example, Hershey fipped ts Colors ftom light eters on a dark fel to dark bers on a whhte lek! while also replacing its long-standing image of a Hershey's Kiss wrapped in slver fil with a more centerypa- rary sihouette version. Pizza Hut's new logo ‘consists of a simple pizza-shaped medalion with the brand name and familar ro symbol reversed out in white. And Soutnwest went from black al- canal ators boncath a jumbo Jet mage to bright ble letters in tile format ‘accompanied by Its signature neart icon in rainbow cols Such redesigns have mutiple aims, but the primary objective is to make the logos Real Marketing more digital device trendly. For example, tho ol HOP Ingo had white lotters placed fon @ blue field with @ downwarc-curving red banner containing the word restaurant Now. IHOP’s betta are be on a white field, a design that stands out better against the white backgrounds on most web, mo= bile, and eocial media sites, The new logo also replaces the old frown-tke “restaurant” banner with an upward curving red tne un- dor tho © and the p, creating a smily face that adds a burst of happiness to the brand. Some logo redesigns go much, much doopor. For oxample, consider tho’ recant changes to Google's familar ble, red, ‘green, and yelow logo. At fest glance, the ‘changes soom minor—you might not evan have noticed them, The letter colors re- main largely the same, as doos the chika quality that wo've coma to associate with ‘the Google brand, The biggest ciference is the naw typaface—Google changed its old ‘sont typetace faith Ite Ines and squiggles at the ends of liters) to a sans serf type~ face (one tke this without the added lines and squiggles). The resuk 8.1 Brand Logo Makeovers for the Digital Age cof four animated dots (one in each cor) for Uso during intoractivo and transitional mo- ments to insicate activites such as wating, thinking, speaking, and replying, Al of the new Google logo elements ‘work seamlessly together. So, for example whan you pick up your phone and activats the Google microphone icon, “the Google logo will marph from ‘Google into the dos, Which undulate Fae water in anticipation of your query notes one reporter. A you talk, ‘the dots will become an equalizer, reacting to the sound of your vocalzatons. Then ‘when you're done taking, the wavetorm becomes dots again, which spin as Google looks up your results. Tren once the results ‘xo prosentod, tho dots retuin to good ale ‘Google’ again” Thus, the Google logo Is 1 longer just a elatic emblem thal sls atop ‘ay onkne search bar, I's a ful sot of dy- namic symbols that bring the brand and its many functions to Ife across today’s digital scroans ana platforms, Companies neod to tread carefully when making changes to their brand logos. Such is simpler, cleaner, more readable logo. According 10 Google, the logo chango was motivated mostly by mobile usage. The stroam- lined font shrinks down more legioly than fancier font, 50 t lansfors more readily ‘across all Knds of screens, Google chims that its new logo can be read just as well fon a 2.5-inch Androla Woar ‘watch as it can on a 50-inch TWecreen, But Google did't just ‘change the logo typeface, It created @ full kt of now brand logo tools befiting ‘the digtal age. For example, recognizing that sik letars are just 00 many for somo Uses, Googls also created 12 more compact one-lller version, a Gin the new sans HER ld logo A Ge Google New logo HEV - 5 J Southwest's IHOp ‘typeface, paritioned into tre four familar Google color. It ‘also fashioned contameo- rey four-color mcroohone icon that usere can tap to ‘speak into an Android de- vice, Finaly, it crated a set digital times. ‘st wih pers, Brand logo makeovers: Many companies are redesigning their logos to keep them in syne withthe rapidly evolving ‘The eae agay Po, Re: Sete es: eater ee Pcl LE Gog ete Groep aera ef Gog rechanges often requite 2 huge investment For example, Southwost’s soomngly simola logo redesign roquires sweeping changos that touch almost every aspect of the com- ppany’s operations. Just think of all tha placos ‘you S09 Southwest's logo—trom its acvors- ing, web, and social media actvtias to the graphics on is aiplanos and the design of its aiport gates to ts comorate letternend, Everything must be redone to rele the new logo look. Poihans more important, the old logos closely nk brands to the hearts and minds of consumers, Studies show that the etvon- 96° their attachments to a brand, the move Tesistant consumers ate to logo changes, For examole, athough most experts would agree that the new Hershey logo is a vas" improvement, some consumers balked, suggesting that tro slhouetto Kiss rosom- bles @ lump of poop. “All| can see is the 52S one perplexed observer ‘With apologies to Hersey: Your new logo kinda stinks.” And when American Airlines CHAPTER 8 | Product replaced its ‘arilar 46-year-old “AA eagle* logo with a more mocirn version, the now logo became a flashpoint for both brand fans and detractors. Athough tne redesign was probably overdue, fans lamented tho loss of the classic design, whereas do- tractors claimad that tha millions spent on repainting all of American's planes should hhave been invested in improving the atine’s customer servic Such examples highlight the power. ful connections people have to the visual representations of their orands. When fogo Services, and Brands: Building Customer Value 255 changes are raqured—as thay most certain wil be at some point—the best cours is to alert customers to the upcoming changes {and to explain why they are nesded. Google ddd that in a widaly cistibutod vidoo show: ing the evoktion ofits logo and the reasons behind the most recent radssign, That's one reason that its massive logo makeover wont so smoothy, As the video expkins, "We think we've taken the best of Google (simple, Unclitered, colortul tena), and recast not just for the Google of foray, but forthe Google of tom 2015, woe astcodeslan com/305068/goghs-owogo-s-bggestapdaten Tees. card Feb, “DS You Nctce That Theve 0 Camganes Crargee Ther Logos Tis Var” Buses isis, Cer 27,201, wn sinesnacomieonpore lgo-cranges-201510 Lauren Eni, hy West Logo Redesgrs” Entrepreneur, Septeroer 1, 2018 svaceteoeneucomiateh250559; Tach Cox “Logo Rentes Ae These 8g Brana ‘nese-bgtrand-ogechangeshis-omnssev’ “Goel, Shed” was youube com watch?OFEMMD sccenea sure 2016; and yiyajouubecomivalehnCPUTKXS2AM and wnasnoaay con/vdeos! 12698, accessed Sepombe 2076 wet/201809017 r _— Zeus Covenant ‘Lexis wl oer the most competitive, prestigious automobile race inte word ‘Over 50 years of Toyota automobile experience has culminated in the eration ‘of Lexus cas They wl be he ines eas ever bal. Les will win there because Lexus will do itright rm the sa. “Lets wil have the ines dealer atwork nthe indus. Lexus wil west ach customer as we woulda guestin ovr bone. yo think you cat you won you think you can, you wil! We ca, we wil > By all accounts, Lexus has lived up to its ambitious customersatisfstion promise. It has treated what appear tobe the world's moet satis fied car owners. Lexus regularly tops nat just the industry quality ratings but also customer satisfaction ratings in both the United Sates and flobally. “My wile will never buy another car } xcept a Lexus,” says one satisied Lexus owner “They come to our house, pick up the ear, do an cil change, spiffit up, and bring it back, She's sold for ie The first step in designing support services is to survey customers periodically to assess the value of current services and obtain ideas for new ‘ones. Once the company has assessed the quality of various support services to customers, it ean take steps to fix problems and add new services that will both delight customers and yield profits to the company, ol © Customer service: From the start, under the Lexus Covenant, Lexus's high- ‘quality support services create an unmatched car ownership experience and ‘most satisfied car owners some of the wor ta Mt as, SK he ‘Many companies now use a sophisticated mix of phone, email, online, social media, mobile, and interactive voice and data technologies to provide support services that were not possible before, For example, home-improvement store Lowe's offers a vigorous dase of customer service at both its store and online locations that makes shopping, ‘easier, answers customer questions, and handles problems. Customers ean access Lowe's ex tensive support by phone, email (CarcTWGlowes.com), website, mobile app, and Twitter via @LowesCares, The Lowe's website and mobile app link to a buying guide and how-to ibrary, Inits stores, Lowe's has equipped employees with 42,000 iPhones filed with custom apps and add-on hardware, leting them perform service tasks such as checking inventory at nearby stores, looking up specific customer purchase histories, sharing how-to videos, and checking competitor prices—all without leaving the customer's side. Lowe's is even experimenting, with putting interactive, talking, moving robots in ores that can greet customers as they en ter, answer even their most vexing questions, and guide them to whatever merchandise they are seeking ®256 Parts | Designing a Customer Value-Driven Strategy and Mix Product line ‘A group of products that are closely related because they functon in a sar manner, ae eld othe same customer ‘groups, ae marketed trough the samme types of cues, of fal thin ivan price ranges. Product mix (or product portfolio) The set al oroduet Ines an ems tha | particular slates forsale Product Line Decisions Beyond decisions about individual products and services, product strategy also calls for building a product line. A product line is a group of products that are closely related be- cause they function in a similar manner, are sold to the same customer groups, are mar- keted through the same types of outlets, or fall within given price ranges, For example, Nike produces several lines of athletic shoes and apparel, and Marriott offers several lines of hotels. The major product line decision involves product line length—the number of items in the product line. The line is too short if the manager can increase profits by adding items; the line is too long ifthe manager can increase profits by dropping items. Managers need to analyze their product lines periodically to assess each item’s sales and profits and under- stand how each item conteibutes tothe line's overall performance ‘A company can expand its product line in two ways: by line filing or line stretching. Product line filing involves adding more items within the present range of the line. There are several reasons for product line filling: reaching for extra profit, satisfying dealers, using excess capacity, being the leading full-line company, and plugging holes to keep out competitors. However, line filling is overdone if it results in cannibalization (cating up sales of the company’s own existing products) and customer confusion. The company. should ensure that new items are noticeably dilferent {com existing ones. Product line siretching oceurs when a company lengthens its product line beyond its current range. The company can stretch its line downward, upward, or both ways Companies located at the upper end of the market can stretch their lines doummard. For example, Mercedes has stretched downward with the CLA line to draw in younger, first time buyers. A company may stretch downward to plug a market hole that otherwise ‘would attract anew competitor or to respond to a competitor's attack on the upper end Or it may add low-end products because it finds faster growth taking place in the low-end segments. Companies can also stretch their product lines upward, Sometimes, companies stretch upward to add prestige to their current products or to reap higher margins. P&G did that with brands such as Cascade dishwashing detergent and Dawn dish soap by add- ing “Platinum” versions at higher price points, [As they grow and expand, many company both stretch and fill their product lines Consider BMW: (Over the years, BMW Group has transformed itself from a single-brand, five-model suto- maker into a powerhouse with thee brands, Id "Series," and dozens of dstinet models. The company has expanded downward with its MINI Cooper line and upwaed with Rolle Royce Ils BMW line brims with models from the low end tothe high end to everything in between, "© The brand's seven “Series” lines range from the — ct evel Series subcompact othe loary-com ee | Oe pact Series to the midsize 5Seties sedan fo the Ihoariows fullsize 7Seres. In between, BMW has filled the gaps with ite X1,X3, Xb, X3, and X6 SUVs; the i3 and s8 hybrids. Thus, through skillfal line stretching and filling, while staying within its pre ‘ium positioning, BMW now has brands ang Hines that successfully appeal tothe rich, the super-rich, and the hopesto-be-ich re) ME VS. THREE. MSSeries performance models; the Z4 roadster and Product Mix Decisions ‘An orgenization with several product lines has a product mix. A product mix (or product port- folio) consists of all the product lines and items that a particular seller offers for sale. For example, © Product ine stretching and filing: Th igh skilfl ine stretching and ting, Colgate-Palmolive is perhaps best known for its [BMW now has brands and lies that successfully appeal to the rich, the toothpaste and other oral care products. But, in ‘super-rich, and the hope-to-be-rich. fact, Colgate is a $173 billion consumer products company that makes and markets a full product mixCHAPTER 8 | Products, Services, and Brands: Building Customer Value 257 consisting of dozens of familiar lines and brands. Colgate divides its overall product mix into four major lines: oral caze, personal care, home care, and pet nutrition, Bach product line consists of ‘many brands and items.” ‘A company’s product mix has four important dimensions: width, length, depth, and consistency Product mix width refers to the number of different product lines the company carries. @/For example, Colgate markets a fairly wide product mix, consist- ing of dozens of brands that constitute the “Colgate World of Care’—products that “every day, people like you trust to care for themselves and the ones they love” By contrast, GE manufactures as many as 250,000 items across a broad range of categories, from lightbulbs to medical equipment, jet engines, and diesel locomotives Product mix length refers to the total number of items a company carries within its produet lines. ve's nicely consistent ‘of brands that constitute the “Colgate World of Care"— Colgate carries several brands within each line. For products that “every day, people lke you trust te care for themselves and the example, its personal care line includes Softsoap ‘ones they love” liquid soaps and body washes, Irish Spring bar Horta ages soaps, Speed Stick deodorants, and Skin Bracer, ‘Afta, and Colgate toiletries and shaving products, among others. The Colgate home care line ineludes Palmolive and AJAX dishwashing products, Suavitel fabric conditioners, and ‘AJAX and Murphy Oil Soap cleaners. The pet nutrition line houses the Ilills and Science Diet pet food brands. Product line depth refers to the number of versions offered of each product in the line, Colgate toothpastes come in numerous varieties, ranging from Colgate Total, Colgate Optic White, and Colgate Tartar Protection to Colgate Sensitive, Colgate Enamel Health, Colgate PreviDent, and Colgate Kids. Then each variety comes in its own special forms and formulations, For example, you can buy Colgate Total in regular, clean mint, ad- vanced whitening, deep clean, total daily repair, 2inl liquid gel, ot any of several other Finally, the consistency of the product mix refers to how closely related the various product lines are in end use, production requirements, distribution channels, or some other way. Colgate's product lines are consistent insofar as they are consumer products 20 through the same distribution channels, The lines aze less consistent insofar as they perform different functions for buyers. ‘These product mix dimensions provide the handles for defining the company’s product strategy. A company can increase its business in four ways. It can add new product lines, widening its product mix, In this way, its new lines build on the cor any’s reputation in its other lines. A company can lengthen its existing product lines to become a more full-line company. It can add more versions of each product and thus deepen its product mix. Finally, a company can pursue more product line consistency— or Iess—depending on whether it wants to have a strong reputation in a single fie sn several fields, Brom time to time, a company may also have to streamline its product mix to pare ‘out mazginally performing lines and to regain its focus. For example, P&G pursues a megabrand strategy built around 23 billion-dollar plas brands in the household care and beauty and grooming categories. During the past decade, the consumer products giant hhas sold off dozens of major brands that no longer fit either its evolving focus ot the billion-dollar threshold, ranging from Jif peanut butter, Crisco shortening, Folgers coffee, Pringles snack chips, and Sunny Delight drinks to Noxzema skin care products, Right Guard deodorant, Aleve pain reliever, Duracell bateries, CoverGirl and Max Factor cos- smetics, Wella and Clairol hair care products, and Iams and other pet food brands. These divestments allow P&G to focus investment and energy on the 70 to 80 core brands that yield $0 percent of its sales and more than 95 percent of profits. “Less [can] be much more,” says P&G's CEO."*258 Pant | Designing a Customer Value Driven Suatgy and Mix Author [As noted athe start of Comment |tns chap, sevices ae roticts”too-intangble ones. So al tne preduc epics we've discussed ‘0 far appyto io physeal oo onthe special Service intangibilty ‘Sonices cannot bo seen tasted, te, hear, or smeled beter they are bought @ FIGURE | 8.3, Four Service Characteristics [stro severe sea nape ‘rn rd he ge eens Cone sande tse ‘Steal irae ata hey ze Cros rt etn wh ster: ater age ‘nar Gre Sop, }- Services Marketing Services have grown dramatically in recent years, Services now account for almost 80 percent of the US. gross domestic product (GDP). Services are growing even faster in the ‘world economy, making up almost 63 percent of the gross world product.” Service industries vary greatly. Governments offer services through courts, employ- ment services, hospitals, military services, police and fire departments, the postal service, and schools. Private not for-profit organizations offer services through museums, charities, ‘churches, colleges, foundations, and hospitals. In addition, a large number of business or. _gmnizations offer services—airlines, banks, hotels, insurance companies, consulting firms, ‘medical and legal practices, entertainment and telecommunications companies, ral estate fiems, retailers, and others. The Nature and Characteristics of a Service A company must consider four special service characteristics when designing marketing programs: intangibility, inseparability, variability, and perishabilty (see © Figure 8.3). ‘Service intangibility means that services cannot be seen, tasted, felt, heard, or ‘smelled before they are bought. For example, people undergoing cosmetic surgery cannot ‘see the result before the purchase, Airline passengers have nothing but a ticket and a prom- Ise that they and their luggage will arrive safely at the intended destination, hopefully at the same time. To reduce uncertainty, buyers look for signals of service quality. They draw conclusions about quality from the place, people, price, equipment, and communications that they can see, Therefore, the service provider's task is to make the service tangible in one or more ‘ways and send the right signals about quality. The Mayo Clinic does this well” When it comes to hospitals, most patents can’t really judge “product quality” It's a very complex product that’s hard to understané, and you can’t ty it cut before buying it So when considering hospital, most people unconstiously seach fr evidence that the facility is caring, competent, and trustworthy The Mayo Clinic doesn't lave these things to chance, Rather, it of {ere patients organized and honest evidence of ite dedication to “providing the best are to every patient every day Incide, staff i trained to actin a way that cleaty signals Mayo Clinic's concern for pa- sient wellbeing. For example, doctors regulary follow up with patients at home to see hovt they are doing, and they work with patients to smoath out scheduling probleme, The clinic's physical facilites also send the right eignals,They’ve been carefully designed to offer a place of refuge, show caring and respect, and signal competence. Looking for external confirma- tion? Go online and hear directly from those who've been to the clinic oF work there. The Mayo Clinic uses social networking—everything from blogs to Facebook, Twitter, YouTube, Instagram, and Pinterest—to enhance the patient experience. @/For example, on the Sharing Mayo Clini blog (btp://sharing mayoclinic org), patients and their families retell their Mayo experiences, and Mayo employees offer behind-the-scenes views. The result? Highly loyal customers who willingly spread the good word io other, building one of the most pow erful brands in healthcare Intangibility Inseparability Services camot be 3 Lip] sspestestem providers Services cannot be seen, "tasted, felt heard, O° smelled before purcha Variability Perishability a Wy | sonics camot be stores Yor later sale or use |Qualty of services depends| ‘on who provides them and ‘when, where, and howCHAPTER 8 | Products, Services, and Brands: Building Customer Value 259 Physical goods are produced, then stored, then later sold, and then still later consumed. In contrast, services are first sold and then produced and consumed at the same time. Service inseparability means that serviees cannot be separated from their providers, whether the providers are people or machines. If» ser- ‘vice employee provides the service, then the employee becomes 3 Walking in Rhytima =a partof the service, And customers don’t just buy and use a service; amare — they play an active role in its delivery. Customer coproduction oasuncmatianecistoc’ os makes provider-customer interaction a special feature of services ‘marketing. Both the provider and the customer affect the service == outcome ‘Service variability means that the quality of services de- pends on who provides them as well as when, where, and how they are provided. For example, some hotels—say, Marriott— hhave reputations for providing better service than others. Stil, within a given Marriott hotel, one registration-counter employee may be cheerful and efficient, whereas another standing just a few feet away may be grumpy and slow. Even the quality of a single Marriott employee's service varies according to his fr her energy and frame of mind at the time of each customer encounter Service perishability means that services cannot be stored for later sale or use. Some doctors charge patients for missed ap- (©.8y providing customers with organized, honest evidence ointments because the service value existed only at that point and ofits capabilites, the Maye Clinic has built one of the most disappeared when the patient did not show up. The perishability, of services is not a problem when demand is steady. However, when demand fluctuates, service firms often have difficult prob- lems. For example, because of rush-hour demand, public transpor- tation companies have to own much more equipment than they ‘would if demand were even throughout the day. Thus, service firms often design strategies Service inseparabilty {for producing a better match between demand and supply. Hotels and resorts charge lower Senices are producad and consumed at prices in the off-season to attract more guests, And restaurants hire parttime employees to tho same time and camot be separated Serve during peak periods ‘rom the provers. Service varabilty | | ‘The quality of services may vary greaty Marketing Strategies for Service Firms pending on wh proves them anc Soren ons moves em Ist like manufacturing busineses, good service firms use marketing to postion them= selves strongly in chosen target markets. Enterprise Rent-A-Car gives you "Car rental Service perishabilty and much more"; Zipear offers “Wheels when you want them,” At CVS Pharmacy, Services carnet be stored frlater sole "Expect something extra"; Walgreens meets you “at the corner of happy & healthy.” And ors St Jude Children’s Hospital is “Finding cures. Saving children.” These and other service firms establish their positions through traditional marketing mix activities, However, because services differ from tangible products, they often require additional marketing. approaches. The Service Profit Chain Ina service business, the customer and the front-line service employee interact to co-create the service. Effective interaction, in turn, depends on the skills of frontline service employ~ fees and on the support processes backing these employees. Thus, successful service com- ppanies focus their attention on both their customers and their employees. They understand Service profit chain the service profit chain, which links service firm profits with employee and customer ‘chain thallns servce fim profts satisfaction. This chain consists of five links" with employee and customer satistacton, ery “omer sa + Internal service quality. Superior employee selection and training, a quality work environment, and strong support for those dealing with customers, which results + Satisfied and productive service employees. More satisfied, loyal, and hardworking ‘employees, which results in260 Pants | Designing a Customer value Driven Suatgy and Mix Internal marketing Crleming and motivating customer contact employees and sunporing service ercloyees to work as a team ta provide customer eaistacton, Interactive marketing Taining service employees in the fine art cof interacting wih customers to satisty ther needs @ FIGURE | 8.4 ‘Three Types of Services Marketing ‘tien mah ‘toner eget Sette mamranet ging sores. Slt exe ae aie oo eae seer + Greater service value. More effective and efficient customer value creation, engagement, and service delivery, which results in ‘+ Satisfied and loyal customers. Satisfied customers who remain loyal, make repeat pur- chases, and refer other customers, which results in 1+ Healt service profits end growth, Superior service frm performance. For example, customer-service allstar Zappos.com—the online shoes, clothing, and accessories retailers—knows that happy customers and profits begin with happy, dedicated, energetic employees. Similarly, at Four Seasons Hotels and Resorts, creating delighted customers involves much more than just crafting a lofty customer-focused marketing strategy and handing it down from the top. At Four Seasons, satisfying cus- tomers is everybody's business. And it all starts with satisfied employees.” Four Seasons has perfected the art of high-touch, carefully crafted service. Whether its at the topical island paradise at the Four Seasons Resort Mauritius or the hoxurious sub-Saharan “camp” at the Four Seasons Safari Lodge Serenget, guests paying $1,000 of more a night expect tohave their minds red, For these guests, Four Seasons doesn’t disappoint. As one Four Seasons “Maui guest once told a enanager, “If there's 2 heaven, [hope i's run by Four Seasons.” What takes Four Seasons so special I's realy no secre. I the quality ofthe Four Seasons staf. Four Seasons knows that happy, satisfied employees make for happy, satisfied customers. So just a it oes for customers, Four Seasons respects and pamper its employees. Four Seasons hires the best people, pay them wel orients them carefully instil in them a sense of pride, and rewards them for outstanding service deeds. [teats employees a¢ i would its most important guests, For example, ll employees—from the maids who make up the rooms to the general manager—dine together (fee of charge) in the hotel cafeteria, Perhaps bes of al, every employee receives fee stays at other Four Seasons resorts sh re nights per year after one year with the company. The room stays make employees fel as important and pampered asthe _zucsts they serve and motivate employees to achieve even higher levels of ervice in their own jobs, Says one Fou Season staffer, "You come back from those tps on fire. You want to do so ‘much for the guests,” Ara recut of such actions, the annal turnover for full-time employees at Four Seasons is only 18 percent, half the industry average. Four Seasons hasbeen inluded for 18 straight yeare on Forme magazine's list of 100 Best Companies to Work For. And that’s the big gest secret Four Seasons success. Services marketing requires more than just traditional external marketing using the four Ps. © Figure 8.4 shows that services marketing also requires infernal marketing and interactive 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, Marketers must get everyone in the organization to be customer centered. Infact, internal marketing must precede external marketing. For example, Zappos starts by hiring the right people and carefully orienting and inspiring them to give unparalleled customer service. The idea is to make certain that employees themselves believe in the brand so that they ean authentically deliver the brands prom- ise to customers. Interactive marketing means that service quality depends heavily on the quality of the buyer-seller interaction during the service encounter. In product marketing, product quality offen depends litle on how the product is obtained. But in services marketing, service quality depends on both the service deliverer and the quality of delivery: Service marketers, therefore, have to master interactive marketing skills, Thus, Zappos selects Company Internal Extern marketing marketing ‘Siatog umes meme aero, Sone atO am prot Emioyee CERT Customers Se cena by Interactive Estey marnedngCHAPTER 8 | Products, Services, and Brands: Building Customer Value 261 can be simply summarized in this slatement HSBC people are dependable and do te right ‘hing, a open to ferent ideas anc cutures, and are commectad to customers, commun ties, regulators and each other. To actualze ths a & 3 of the Customer = = (Headquartered in London, HSBC Sis the works fourhiagost ark = _ by assets, a total of $2.67 tion in TS 2014 Mw ostablshed nits ros QW ont form in London in 1991 by the (CE Hongkong and Shanghai Banking Corporation Limited fom whe it got the intial In te name) to act as a new ‘group holding company. HSBC has around 6,100 offices in 72 counties and tontorias across Africa, Asia, Europa, North Amarica, and Soutn America and around 48 millon customers Due to their intangble nature, provcing senvices as. a form of business is 9 great chalenge, but doing so in dynamic fnan- cial markets ig even mere challenging. Be about loans, mortgages, accounts, nsurance products, or other francal services, most bank customers are now battr informed anc more demanding than ever betore, Despite its global presence, the bank also works hard ‘to maintain a local presence and local know edge in eacn area, Is key operating svategy is to eman cloge to ie customers and offer xcallont and outstancing customar exper. fence, Succeeding inthe business of provide ing financial services requires move than a basic effort; a signiicant level of customer- entation isin order, especialy 28 compet- lion contnues to become stifer. This is one of the key areas where HSBC scores very hgh in the perceotion of financial services customers. Ii remarkable that as big as is in structure, fom the top to the bottom of ‘tho organizaton, the ‘oous of the ent work force Is predominantly and clearly cantored fon customer satsfacton, However, tho bank acknowledges an important factor thats para- ‘mount tots euocess ts employees. “The bank belies tha forthe customer to be satisfied, tis very mportant to take core of those who mast and infact wth customers regula and work toward giving them the ut- ‘mest satistacton in thelr various transactions Te company has emohasized thatthe talent and cvorsty of their poop i th foundation fits success, so they are commited to hep- Ing ther employees develop ther personal and professional skils in order to bring out ther respective strengths. The ressoning is that sound external marketing that ls focused fon customer satstacton shoul bo preceded by excelent intemal marketing. This fs evident In tho bank’s thre core group values, which phlasochy al mainian sucooss in tho mar keiclacs, HSBC i strongly committed to its internal marketing, which is Smply about idont- fying the noeds of ths employees and moeting them effectively to ensure thelr satisfaction. ‘Tho opportunities and motvaton for om Ployees we widevaging and attoctve, AS a large financial organczaton, the bank is in a postion to ofer its employeas thousands of tferent job opporunties and positons, ang- Ing trom customar sence and corporate and commorial banking to Tad human resourco management. Accordingly, the bank matches ‘hose with soveral benefits and rewards, such ‘as a compettve salary, a contrbutary pension scheme, employee assistance progr, and flaxble working palcies. For some robs, also Incontizas sta? members with performance telatod bonus schames, priate hesth care, ‘and Ife assurance and insurance Closaly robtod to ths aro tho bank's pro {grams fr taining and development that erro the staf’s work experience. The approach ad- opted for vaning and development of staff at uc KayunteFeanon cae 8.2 HSBC: Taking Care of Those Who Take Care HSBC is specific and special bacause it gives ‘ho omployoo contol over hs oF hor taining programs trough a poral the company cals "My Leaming”™ Using this platform, tho am ployoe can acoass al theleamng opportunties avalabe In this respect, the stategy for ain ing and development commits the respecte line managers to helo thei stat to senty potent opportunites andthe capabities thay wil need to be etfectve in thai rele, part of ‘he HSBO performance review process, tho managers. work closely with ther people to sel char carser develppmant goals anc pro: vide feedback and support to assist them in Achieving the objeotves. At the same tine, at staff wil be encouraged to take resconstlty ‘or ating thor own personal development ‘Tho bank has its own HSBC Business School, sshich provides aocess fo a comprahensive set fof tools and loaning matoils basod on tho ‘employees’ secite role and business area, as woll as courses that heb them ceveloo soft salle The communication, leadership, land presentation séls, The bark also has fan afclent leaning and davelopment team ‘composed of seascned trainng profession. als who work closely wih various unis inthe forganization for the traning and development progr of th staff members. Te tsailty262 pant | Designing a Customer Value-Driven Statgy and Mix associated with those programs makes ther ‘very popular among the stat. In this exist- ing arrangement, a stat! member can attend paper-based ‘rang programs, online trang ‘opportunities, acl video-based erograms, In 2013, HSBC employees cobectivaly received 2 otal of $88,009 days of onlin and faco-to- face vaning—exivalent to alnost four cys per fulime employee. ‘The ultimate alm of the bank ie to ensue ‘encuing jab satisfaction ameng the staf, as ‘he management soes this 2s @ worthwhia n- vostmont. tis not surprising that tho bank was named one of tre top employes in the United Kingdom for women in Tha Tes Top 60 Employes for Woman in 2016, Antonio Simoos, (Chet Executive of HSBC Bank plc, who heads the United Kingdom and Continental Europe ‘sno September 2018, emahaszae the bank's vies in elion to &S ofr of equal emplos- ment opportunities to diferent Kinds of men ‘and wieman, retbetve af the company’s wn wth clents and coleagues around the wold. They may also have the opportunity to ce- vebp ther sils and gain excerience in anctner country through one of HSCs international ‘assignments, which typealy range in length ‘tom three months to twee years. The HSBC International Managomont Programme offers ‘emplayoes the chance to pursue an intema- ‘tonaly mob career in a verety of roles and locations. Another key feature of the lank’s intemal rmarksting progam 's is axle benefit pack- ‘2905 for emoloyees. Besides the compative regular payments it ofes its staf, HSBC's ‘overtime payrnentis very attache n response to the views of empoyoes, the bank tals ts bonefs packages tothe spect neods of the afl For exampil, bansfs can be customized ‘euros “HSBC: About Us? nipuiwawnbe ca tao on HSBC hepsi ebe nate cock! ear. to employees intewests in providing for the future, breakciown coveraga, and childcare, ‘among other options, The cank simply cals ‘his “My Croce” Employaes may also make income tax and National Insurance savings ‘on certain benefits, So, 19 those who wondor why HS8C’s staf mambors are so customer- focused-—alvaye welcoming customers with smiles and courtesy, and strongly commited to the business of satisying customers—the key ansners le in the employaes’ motivation levels, morale, and career development paths fembadded in the Sank intemal marketing program, HSBC has provon that winning in a tough marketplace '$ not only about forms lating a sound marketing strategy, but also about takng care of those who tako caro of ts customers, rd You" hipvnniabs abo 8-0 ‘outaHS8C am "Manageg the Most othe Recrutmert Process” hnp./iwunebsrébe.ca.4/1 TT! gender balance Enobyee Harebooe” Mpsimnjeeshsc0.t/SP-STORAGEAI5/235.c, accessed November 2018: om tho outsot, tho bark’s staff Is able “Leung ard Oevebomer”hp/wwnhebeconveweenivtyhshelearing-arc-cevopment “The Tense Tee to develop ther own professional networks S0Errployrs fr Weman 2015” Busines nthe Community o:lopperunyrets argukAnarsTT3O20 ‘verso customer baso and its commiment to only people with an innate “passion to serve” and instructs them carefully in the fine art of interacting with customers to satisfy their every need. All new hires—atall levels of the company—complete a four-week customer-loyalty training regimen. “Today, as competition and costs increase and as productivity and quality decrease, more services marketing sophistication is needed. Service companies face three major marketing tasks: They want to increase ther sevice differentiation, serice quality, and service productivity Managing Service Differentiation In these days of intense price competition, service mar eters often complain about the difficulty of differentiat- ing their services from those of competitors. To the extent that customers view the services of different providers as similar, they care less about the provider than the price The solution to price competition is to develop a differen- tiated offer, delivery, and image. The offer can include innovative features that set fone company’s offer apart from competitors’ offers For example, some retailers differentiate themselves with offerings that take you well beyond the products they stock Apple's highly successful stores offer a Genius Bar for technical support and a host of free workshop: on everything from iPhone, iPad, and Mac basics to the intricacies of using iMovie to turn home movies into blockbusters. @ Similarly, at any of several large REI stores, consumers can get hands-on experience with merchandise before buying it via the store's mountain bike test trail, geartesting stations, 2 huge rock climbing wall, or an in-store simulated rain shower. Tee EQUIPMENT, INC. Sar tore rt) [At any of several large REI stores, consumers can get hands-on experience ‘with merchandise before buying It via the store's mountain bike test tal, ‘gear-testing stations, a huge rock climbing wall, or an in-store simulated fain shower Jess aeiony(© Managing service productivity: From CHAPTER 8 | Products, Services, and Brands: Building Customer Value 263 Service companies can differentiate their service delivery by having more able and reli able customer-contact people, developing a superior physical environment in which the service product is delivered, or designing a superior delivery process. For example, many grocery chains now offer online shopping and home delivery as a better way to shop than having to drive, park, waitin ine, and tote groceries home. And most banks offer mobile phone apps that allow you to more easily transfer money, check account balances, and make mobile check deposits. “Sign, snap a photo, and submit a check from anywhere,” says one Citibank ad, “T’s easier than running to the bank.” Finally, service companies also can work on differentiating their images through sym: bols and branding. Aflac adopted the duck as its advertising symbol, Today, the duck is immortalized through stuffed animals, golf club covers, and free ringtones and screensa\~ ers, The well-known Aflac duck helped make the big but previously unknown insurance company memorable and approachable. Other well-known service characters and sym- bols include the GEICO gecko, Progressive Insurance's Flo, McDonald's golden arches, Allstate's “good hands,” the Twitter bird, and the freckled, red-haired, pig tailed Wendy's girl. Progressive's Flo has amassed more the § million Facebook Likes. Managing Service Quality service firm can differentiate itself by delivering consistently higher quality than its com- petitors provide. Like manufacturers before them, most service industries have now joined the customer-driven quality movement. And like product marketers, service providers need to identify what target customers expect in rega to service quality Unfortunately, service quality is harder to define and judge than product quality: For instance, itis harder to agree on the quality of a haircut than on the quality of a hair dryer. ‘Customer retention is perhaps the best measure of quality; a service frm’s ability to hang. onto its customers depends on how consistently it delivers value to them. ‘Top serviee companies set high serviee-qualty standards. They watch service perfor mance closely, both their own and that of competitors. They do not setle for merely good service—they strive for 100 percent defect-ree service. A 98 percent performance standard may sound good, but using this standard, the US. Postal Service would lose oF misdirect 356,000 pieces of mail each hour, and US. pharmacies would ‘misfil more than 1.5 million prescriptions each week. Unlike product manufacturers who can adjust their machinery and inputs until everything is perfect, service quality will always vary, depending on the interactions between employees and customers. As hard as they may try, even the best companies will have an occasional late delivery, burned steak, or grampy employee. However, good serice recovery can turn angry customers into loyal tones. Infact, good recovery can win more customer purchasing and loyalty than if things had gone well in the first place Emirates prides itself on providing a high level of customer service and has won various awards for its serviee quality. ® To enhance its customer satisfaction, Emirates actively seeks customer feedback. It has a dedicated help center that encourages its customers to give feedback, make inquiries about fights, or make a complaint on any aspect ofits service that they do not find satisfactory. The eed: back collected through its help center is used to enhance customers’ experience across various stages of the service encounter, from flight booking to check-in, baggage drop, boarding, plane conditions, inlight services such as food and bev- erage, entertainment and shopping, to disembarkation and final baggage claim. “These days, socal media such as Facebook and Twitter can help companies root cout and remedy customer dissatisfaction with service. As discussed in Chapter 4, companies now monitor the digital space to spot customer issues quickly and respond in real ime. For example, Southwest has a dedicated team of 9 people who respond to roughly 80,000 Facebook and Twitter posts monthly: A quick and thoughtful re- sponse can turm a dissatisfied customer into a brand advocate baggage claim issues to handling complaints about in-ight service, the Emirates’ help Center enabes ts customers'te contactthe ‘Managing Service Productivity Sitine directly through online forms and by With thei costs rising rapidly, service firms are under great pressure to increase caling directly. service productivity: They can do so in several ways. They can tain current employees better or hire new ones who will work harder or more skilfully. Or264 Pants | Designing a Cu (—_Rathor [A brand renrecente Comment [everyting ‘hat aprosuct lor orice means to consumer, Ae rands ae valobleaese® company, For exam, winen you near somaane say “Coca-Col” what {do you tink, fel oF remember? Wht { avout “farget"? OF “Google Brand equity ‘The diferentl eat rat kxcwing the ‘brand name has on customer response to the product ots marketing, tomer Value-Driven Strategy and Mix they can increase the quantity of their service by giving up some quality. Finally, a service provider can harmess the power of technology. Although we often think of technology's ‘power to save time and costs in manufacturing companies, it also has great—and often luntapped—potential to make service workers more productive However, companies must avoid pushing productivity so hard that doing so reduces, quality. Attempts to streamline a service or cut costs can make a service company more ‘efficient in the short run, But that ean also reduce its longer-un ability to innovate, main- tain service quality, or respond to consumer needs and desires. @ For example, some airlines have learned this lesson the hard way as they attempt to economize in the face of rising costs. Passengers on most airlines new encounter “time-saving” check-in kiosks rather than personal counter service, And most airlines have stopped offering even the Little things for free—such as inflight snacks—and now charge extra for everything from checked luggage to aisle seats. The result is a plane full of disgruntled customers. In their attempts to improve productivity, many airlines have mangled customer service Thus, in attempting to improve service productivity, companies must be mindful of hhow they create and deliver customer value. They should be careful not to take service out of the service. Infact, a company may purposely lower service productivity in order to improve service quality, in turn allowing it to maintain higher prices and profit margins ‘= Branding Strategy: Building Strong Brands ‘Some analysts see brands as the major enduring asset of a company, oullasting the com- pany’s specific products and facilities. John Stewart, former CEO of Quaker Oats, once ‘sid, “If this business were split up, I would give you the land and bricks and mortar, and I would keep the brands and trademarks, and | would fare better than you.” A former CEO of MeDonalel’s declared, "If every asset we own, every building, and every piece of ‘equipment were destroyed in a terrible natural disaster, we would be able o borrow all the money to replace it very quickly because of the value of our brand.... The brand is more valuable than the totality of all these assets."2> ‘Thus, brands are powerful assets that must be carefully developed and managed: In this section, we examine the key strategies for building and managing product and service brands, Brand Equity and Brand Value Brands are more than just names and symbols. They are a tena een once said, “Products are created in the factory, but brands ate created inthe mind." ‘A powerful brand has high brand equity, Brand equity is the differential effet that knowing the brand name has on customer response to the product and its marketing. Its 1a measure of the brand's ability to capture consumer preference and loyalty. A brand has positive brand equity when consumers react more favorably to it than to a generic oF un- ‘branded version of the same product. It has negative brand equity if consumers react less favorably than to an unbranded version. Brands vary in the amount of power and value they hold in the marketplace. Some bbrands—such as Coca-Cola, Nike, Disney, GE, McDonald's, Harley-Davidson, and oth~ ers—become larger-than-life icons that maintain their power in the market for years, even generations. Other brands—such as Google, Zappos, Uber, GoPro, Instagram, and Wikipedia—ereate fresh consumer excitement and loyalty. These brands win in the mar ketplace not simply because they deliver unique benefits or reliable service. Rather, they ‘succeed because they forge deep connections with customers. People really do have rela- tionships with brands, ® For example, to devoted Nike fans around the world, the Nike brand stands for much more than just sneakers, apparel, and sports equipment, It stands for gritty sports inspiration, fitness, and achievement-a “Just doit” attitude, As Nike once stated, “It’s not so much the shoes but where they take you.” ‘Ad agency Young & Rubicam’s BrandAsset Valuator measures brand strength along four ‘consumer perception dimensions: diferentiation (what makes the brand stand out), releoance (how consumers feel it meets their needs), knowledge (how much consumers know about the