978-0134492513 Chapter 8 Lecture Notes Part 1

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Chapter 8

PRODUCTS, SERVICES, AND BRANDS: BUILDING

CUSTOMER VALUE

MARKETING STARTER: CHAPTER 8

GOPRO: Be a HERO

Synopsis

You likely have heard of GoPro, the small but fast-growing company that makes tiny, wearable HD video cameras.

Few brands can match the avid enthusiasm and intense loyalty that GoPro has created in the hearts and minds of its

customers. A growing army of GoPro customers—many of them extreme sports enthusiasts—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 their lives and lifestyles. Then, they can’t

wait to share those emotion-packed GoPro moments with friends. GoPro’s rich understanding of what makes its

customers tick is serving the young company well. Its enthusiastic customers are among the most loyal and engaged

of any brand. For example, GoPro’s Facebook fan base is more than 6.6 million and growing fast. All that customer

engagement and enthusiasm has made GoPro the fastest-growing camera company in the world. GoPro knows that

deep down, it offers customers much more than just durable little video cameras. It gives them a way to share

action-charged moments and emotions with friends.

Discussion Objective

A focused 10-minute discussion of the GoPro story will help students appreciate the many levels of factors that

affect how customers feel about, buy, and consume products. The goal is to explore the reasons why customers buy

GoPro cameras, and what the product adds to their lives. Beyond making a durable little video camera, GoPro has

fostered an almost fanatically loyal fan base by challenging customers to shoot the most extreme footage possible

and then share it with friends across social media channels. It is likely that some of your students will know about

GoPro cameras and a few may have their own stories to share with the class. You will want to capitalize on these

students’ testimonials as you explore the GoPro brand together.

Starting the Discussion

Start this discussion by asking students what GoPro is really selling its customers. Of course, the company makes

micro-sized video cameras that can survive almost anything. But what are the unique customer insights that have

fueled GoPro’s explosive growth? What does GoPro understand about its customers better than the competition?

Tour the GoPro website at www.gopro.com. Peruse the tabs across the top, concentrating on the extreme videos and

photos submitted by loyal fans. How does the company encourage its customers to “be a hero?” The goal is to show

that GoPro’s allure results from much more than just the functional attributes of its product—it’s all about the

customers and how the cameras help them capture their most exciting life experiences. As the discussion progresses,

search for GoPro on www.youtube.com and check out some of the more extreme applications that fans have

discovered for this device. Use the questions below to guide the discussion.

Discussion Questions

1. Beyond a small, durable video camera, what is GoPro really selling its customers? How does this

product enable users to highlight the best moments of their lives? (To start with, the camera is

extremely tough and versatile. It can capture high-quality video under almost any conditions. But

ultimately, the GoPro camera enables its fans to experience and document the adventures that touch

and thrill them. In turn, users deeply care about sharing these moments with friends and fellow

enthusiasts through social media channels, which has only intensified their passion for the GoPro

brand.)

2. GoPro’s company slogan is “Be a Hero.” How does GoPro encourage customers to do so? (Customers

become heroes through four essential steps in their storytelling and emotion-sharing journeys: capture,

creation, broadcast, and recognition. Capture is what the cameras do—shooting pictures and videos.

Creation is the editing and production process that turns raw footage into compelling videos.

Broadcast involves distributing the video content to an audience. Recognition is the payoff for the

content creator. Recognition might come in the form of YouTube views or LIKES and SHARES on

Facebook. More probably, it’s the enthusiastic oohs and ahs that their videos evoke from friends and

family. The company’s slogan accurately sums up the consumer’s deeper motivations: GoPro—Be a

Hero.)

3. One industry expert has noted, “Some of the most amazing companies of the coming few years will be

businesses that understand how to wrap technology beautifully around human needs so that it matters

to people.” How does this quote apply to GoPro? (This brand is all about what its cameras let

customers do. GoPro users don’t just want to take videos. More than that, they want to tell the stories

and share the adrenalin-pumped emotions of the extreme moments in their lifestyles. As GoPro notes,

“Enabling you to share your life through incredible photos and video is what we do. We help people

capture and share their lives’ most meaningful experiences with others—to celebrate them together.”)

4. What’s involved in managing a brand like GoPro? Is GoPro a well-managed brand? (Use this question

to transition into the concepts of Chapter 8. The chapter notes that brands are powerful assets that must

be carefully developed and managed. GoPro provides an excellent example of a well-managed,

powerfully positioned brand. Keep GoPro in mind as you move through the various product, service,

and branding topics discussed in the chapter.)

CHAPTER OVERVIEW

Use Power Point Slide 8-1 Here

In this and the next chapter, we look at how companies develop and manage products and

brands. The product is usually the first and most basic marketing consideration. This chapter

begins with a deceptively simple question: What is a product? After addressing this question, we

look at ways to classify products in consumer and business markets.

Then we discuss the important decisions that marketers make regarding individual products,

product lines, and product mixes. Next, we look into the critically important issue of how

marketers build and manage brands. Finally, we examine the characteristics and marketing

requirements of a special form of product—services.

CHAPTER OBJECTIVES

Use Power Point Slide 8-2 here

1. Define product and describe the major classifications of products and services.

2. Describe the decisions companies make regarding their individual products and

services, product lines, and product mixes.

3. Identify the four characteristics that affect the marketing of a service and the

additional marketing considerations that services require.

4. Discuss branding strategy—the decisions companies make in building and managing

their brands.

CHAPTER OUTLINE

p. 218 INTRODUCTION

You likely have heard of GoPro, the small but fast-growing

company that makes tiny, wearable HD video cameras.

Few brands can match the avid enthusiasm and intense

loyalty that GoPro has created in the hearts and minds of its

customers, many of whom are extreme sports hobbyists.

Its customers are among the most loyal and engaged of any

brand. Intense customer engagement and excitement has

made GoPro the fastest-growing camera company in the

world.

GoPro knows that deep down, it offers customers much more

than just durable little video cameras. It gives them a way to

share action-charged moments and emotions with friends.

p. 219

Photo: GoPro

Opening Vignette Questions

1. What “product” is GoPro really selling?

2. How does GoPro successfully promote bonding

between customers and its products?

3. How would you compare the GoPro “brand” to

that of other camera companies? Is comparing

GoPro only to camera companies appropriate?

What other kinds of companies should it be

compared to?

p. 220

PPT 8-3

p. 220

PPT 8-4

p. 220

Define product and describe the major classifications

of products and services.

WHAT IS A PRODUCT?

A product is anything that can be offered to a market for

attention, acquisition, use, or consumption that might satisfy

a want or need.

Broadly defined, “products” also include services, events,

persons, places, organizations, ideas, or mixes of these.

Services are a form of product that consists of activities,

benefits, or satisfactions offered for sale that are essentially

intangible and do not result in the ownership of anything.

Products, Services, and Experiences

A company’s market offering often includes both tangible

Learning Objective

p. 220

Key Term: Product

p. 220

Key Term: Service

p. 221

Photo: Apple

PPT 8-5

goods and services.

At one extreme, the offer may consist of a pure tangible

good, such as soap or toothpaste.

At the other extreme are pure services, for which the offer

consists primarily of a service.

As products and services are becoming more commoditized,

to differentiate their offers, marketers are creating and

managing customer experiences with their brands or

company.

Assignments, Resources

Use Discussion Question 8-1 here

Use Online, Mobile, and Social Media Marketing

here

Troubleshooting Tip

Students will most likely have difficulty under–

standing the levels of products exhibited in Figure

8.1; no one in class is likely to have thought of a

product in that level of detail before. This is a critical

piece of information the students will need; however,

it is worth going through several products and

services to get at the core benefit, actual product, and

augmented product in each so that they can see how

to apply this concept.

p. 221

PPT 8-6

p. 222

PPT 8-7

p. 222

PPT 8-8

Levels of Product and Services

Product planners need to think about products and services

on three levels.

1. Core customer value, which addresses the question:

What is the buyer really buying?

2. Actual product

3. Augmented product, which is created around the core

benefit and actual product by offering additional

consumer services and benefits

When developing products, marketers first must identify the

core customer value that consumers seek from the product.

They must then design the actual product and find ways to

augment it to create this customer value and the most

satisfying customer experience.

Product and Service Classifications

p. 221

Figure 8.1: Three

Levels of Product

p. 222

Photo: Shopping

p. 222

PPT 8-9

PPT 8-10

PPT 8-11

PPT 8-12

p. 223

PPT 8-13

PPT 8-14

PPT 8-15

PPT 8-16

p. 224

PPT 8-17

PPT 8-18

There are two main classifications of products: consumer

products and industrial products.

Consumer Products

Consumer products are products and services bought by

final consumers for personal consumption.

Consumer products include the following (see Table 8.1).

Convenience products are consumer products and

services that customers usually buy frequently,

immediately, and with a minimum of comparison and

buying effort.

Shopping products are less frequently purchased

consumer products and services that customers

compare carefully on suitability, quality, price, and

style.

Specialty products are consumer products and

services with unique characteristics or brand

identification for which a significant group of buyers

is willing to make a special purchase effort.

Unsought products are consumer products that the

consumer either does not know about or knows about

but does not normally think of buying.

Industrial Products

Industrial products are those purchased for further

processing or for use in conducting a business.

There are three groups of industrial products and services.

Materials and parts include raw materials and

manufactured materials and parts.

Capital items are industrial products that aid in the

buyer’s production or operations, including

installations and accessory equipment.

Supplies and services include operating supplies and

maintenance and repair services.

Organizations, Persons, Places, and Ideas

Organization marketing consists of activities undertaken to

create, maintain, or change the attitudes and behavior of

target consumers toward an organization.

p. 222

Key Terms:

Consumer product,

Convenience

product, Shopping

product

p. 223

Table 8.1:

Marketing

Considerations for

Consumer Products

p. 223

Key Terms:

Specialty product,

Unsought product,

Industrial product

p. 224

Ad: GE

PPT 8-19

PPT 8-20

p. 225

Person marketing consists of activities undertaken to create,

maintain, or change attitudes or behavior toward particular

people.

Place marketing involves activities undertaken to create,

maintain, or change attitudes or behavior toward particular

places.

Social marketing is the use of commercial marketing

concepts and tools in programs designed to bring about

social change.

Review Learning Objective 1: Define product and describe

the major classifications of products and services.

p. 225

Key Term: Social

marketing

Assignments, Resources

Use Discussion Question 8-2 here

Use Small Group Assignment 2 here

Use Think-Pair-Share 1, 2, 3, and 4 here

Use Outside Example 1 here