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- 1. Product and Distribution Strategies Chapter 13
- 2. Explain marketings definition of a product and list the
components of the product strategy. Describe the classification
system for consumer and business goods and services. Distinguish
between a product mix and a product line. Briefly describe each of
the four stages of the product life cycle. List the stages of the
new-product development process. Explain how firms identify their
products. Outline and briefly describe each of the major components
of an effective distribution strategy. Identify the various
categories of distribution channels and discus the factors that
influence channel selection. Learning Goals 1 2 3 4 5 6 7 8
- 3. Product Strategy
- Product - bundle of physical, service, and symbolic
attributes.
- Convenience products - items the consumer seeks to purchase
frequently, immediately, and with little effort.
- Shopping products - typically purchased only after the buyer
has compared competing products in competing stores.
- Specialty products - items that a purchaser is willing to make
a special effort to obtain.
- 4. Product Classification
- 5.
- Installations - major capital items, such as new factories,
heavy equipment and machinery, and custom-made equipment.
- Accessory equipment - includes less expensive and shorter-lived
capital items than installations and involves fewer decision
makers.
- Component parts and materials - become part of a final
product.
- Raw materials - farm and natural products used in producing
other final products.
- Supplies - expense items used in a firms daily operation that
do not become part of the final product.
Classifying Business Goods
- 6.
- In B2B, greater emphasis on personal selling for installations
and many component parts.
- May involve customers in new-product development .
- Advertising more commonly used to sell supplies and accessory
equipment.
- Also a greater emphasis on competitive pricing strategies.
Marketing Strategy Implications
- 7. Product Lines and Product Mix
- Product line - group of related products that are physically
similar or are intended for the same market.
Product mix a companys assortment of product lines and individual
offerings.
- 8. Product Life Cycle Product life - four basic
stagesintroduction, growth, maturity, and declinethrough which a
successful product progresses.
- 9.
- Introduction stage firm promotes demand for its new offering,
informs the market about it, gives free samples to entice consumers
to make a trial purchase, and explains its features, uses, and
benefits.
- Growth stage - sales climb quickly as new customers join early
users who are repurchasing the item. Company begins to earn profits
on the new product.
- Maturity stage - industry sales eventually reach a saturation
level at which further expansion is difficult.
- Decline stage - sales fall and profits decline.
Stages of the Product Life Cycle
- 10.
- Marketers objective is to extend the life cycle as long as
product is profitable. Marketers goals:
-
- I ncreasing customers frequency of use
-
- Finding new uses for product
-
- Changing package sizes, labels, and product designs
Implications of the Product Life Cycle
- 11.
- Expensive, time-consuming, and risky.
- Only 1/3 of new products become success stories.
- Each step requires a go or no-go decision.
Stages in New Product Development
- 12.
- Stage 1: Generating ideas for new offerings
- Stage 3: Concept development and business analysis phase
- Stage 4: Product development
- Stage 6: Commercialization
Product Development Stages
- 13. Product Failures
- 14.
- Brand - name, term, sign, symbol, design, or some combination
that identifies the products of one firm and differentiates them
from competitors offerings.
- Brand name - part of the brand consisting of words or letters
included in a name used to identify and distinguish the firms
offerings from those of competitors.
- Trademark - brand that has been given legal protection granted
solely to the brands owner.
Product Identification
- 15.
- Manufacturers brand - brand offered and promoted by a
manufacturer. Examples: Tide, Jockey, Gatorade, Swatch, and
Reebok.
- Private or store brand - brand that is not linked to the
manufacturer but instead carries a wholesalers or retailers label.
Examples: Sears DieHard batteries and Wal-Marts OlRoy dog food
& Members Mark brand
- Family branding strategy - a single brand name used for several
related products. Examples: KitchenAid, Johnson & Johnson,
Hewlett-Packard, and Dole
- Individual branding strategy - giving each product within a
line a different name. Examples: Procter & Gamble products
Tide, Cheer, and Dash.
Brand Categories
- 16. Brand Loyalty
- Brand recognition - consumer is aware of the brand but does not
have a preference for it over other brands.
- Brand preference - consumer chooses one firms brand over a
competitors.
- Brand insistence - consumer will seek out preferred brand and
accept no substitute for it.
- 17.
- Brand equity - added value that a respected and successful name
gives to a product.
- Brand awareness - product is the first one that comes to mind
when a product category is mentioned.
Brand Equity
- 18. Valuable Brands
- 19.
- Important in product identification and play an important role
in a firms overall product strategy.
- Choosing right package is especially important in international
marketing.
- Must meet legal requirements of all countries in which product
is sold.
- Universal Product Code - bar code read by optical scanner.
Packages and Labels
- 20. Distribution channel - path through which productsand legal
ownership of themflow from producer to consumers or business users.
Distribution Strategy Physical distribution - actual movement of
products from producer to consumers or business users.
- 21. Distribution Channels
- 22.
- Direct contact between producer and customer.
- Most common in B2B markets.
- Often found in the marketing of relatively expensive, complex
products that may require demonstrations.
- Internet is helping companies distribute directly to consumer
market.
- Distribution Channels Using Marketing Intermediaries
- Producers distribute products through wholesalers and retailers
.
- Inexpensive products sold to thousands of consumers in widely
scattered locations.
- Lowers costs of goods to consumers by creating market
utility.
Distribution Channels using Marketing Intermediaries
- 23. Marketing Intermediaries
- 24.
- Wholesaler - distribution channel member that sells primarily
to retailers, other wholesalers, or business users.
- Manufacturer-Owned Wholesaling Intermediaries
-
- Owned by the manufacturer of the good.
-
- Sales branch which stocks products and fills orders from
inventories.
-
- Sales office which takes orders but does not stock the
product.
Wholesaling
- 25.
- Retailer - channel member that sells goods and services to
individuals for their own use rather than for resale.
- Final link of the distribution channel.
- Two types: store and non-store.
Retailers
- 26. Non-Store Retailing
- Direct response retailing
- 27. Retail Stores
- 28. Wheel of Retailing
- 29.
- Identifying a Target Market
- Selecting a Product Strategy
- Selecting a Customer Service Strategy
- Selecting a Pricing Strategy
- Building a Promotional Strategy
- Creating a Store Atmosphere
How Retailers Compete
- 30. Retail Locations
- 31.
- What specific channel will it use?
- What will be the level of distribution intensity?
- Selecting Distribution Channels
- Complex, expensive, custom-made, or perishable products move
through shorter distribution channels involving fewor
nointermediaries.
- Standardized products or items with low unit values usually
pass through relatively long distribution channels.
- Start-up companies often use direct channels because they cant
persuade intermediaries to carry their products.
Distribution Channel Decisions and Logistics
- 32.
- Intensive distribution - firms products in nearly every
available outlet. Requires cooperation of many intermediaries.
- Selective distribution - limited number of retailers to
distribute its product lines.
- Exclusive distribution - limits market coverage in a specific
geographical region.
Distribution Intensity
- 33. Logistics and Physical Distribution
- Supply chain complete sequence of suppliers that contribute to
creating a good or service and delivering it to business users and
final consumers.
- Logistics the activities involved in controlling the flow of
goods, services, and information among members of the supply
chain.
- Physical Distribution the activities aimed at efficiently
moving finished goods from the production line to the consumer or
business buyer.
- 34. Comparison of Transportation Modes
- 35.
- Customer service standards measure the quality of service a
firm provides for its customers.
- Warranties are a firms promises to repair a defective product,
refund money paid, or replace a product if it proves
unsatisfactory.
- Internet retailers have worked to humanize their customer
interactions and deal with complaints more effectively.
Customer Service