Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-1 Marketing Management Chapter 13 Product and Distribution Strategies

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-2 Product Strategy ●Product—bundle of physical, service, and symbolic attributes designed to enhance buyers’ want satisfaction. –Included in this broad definition are considerations of package design, brand names, warranties, and product image

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-3 ●Marketing Impacts of Consumer Product Classifications

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-4 Product Strategy ●Product Lines and Product Mix –Product Line—group of related products that are physically similar or are intended for the same market. –Product Mix—company’s assortment of product lines and individual offerings. –Examples of each?

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-5 Product Life Cycle – Know this! ●Product Life Cycle—four basic stages through which a successful product progresses. –Introduction –Growth –Maturity –Decline

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-6 ●Stages in the Product Life Cycle Cash Cow

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-7 ●Marketing Strategy Implications of the Product Life Cycle

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-8 Product Identification ●Brand—name, term sign, symbol, design, or some combination that identifies the products of a firm and distinguishes them from competitive offerings. ●Brand name—the part of a brand consisting of words or letters that form a name that identifies and distinguishes an offering from those of competitors ●Trademark—brand with legal protection against another company’s use (can include pictorial designs, slogans, packaging elements, and product features) ●Examples? Oreo and TM licensing

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-9 Product Identification ●Brand Categories –Manufacturer’s (or national) brands— brand offered and promoted by a manufacturer or producer  e.g. Ferrari –Private (or store) brand—identifies a product that is not linked to the manufacturer, but instead carries the label of a retailer or wholesaler  e.g. Kenmore, Jaclyn Smith –Generic

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved Brand Loyalty ●Brand Recognition—brand acceptance strong enough that the consumer is aware of a brand, but not enough to cause a preference over competing brands ●Brand Preference—occurs when a consumer chooses one firm’s brand, when it is available, over a competitors ●Brand Insistence—when the consumer will accept no substitute for a preferred brand

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved Brand Equity ●Added value that a certain brand name gives to a product  Brand Awareness  Brand Association ●Added value means it is worth something –i.e. you can charge more

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved Distribution Strategy ●Distribution Channels –Distribution Channel—path through which products - and legal ownership of them - flow from producer to consumers or business users. –Physical Distribution—actual movement of products from producer to consumer or business users.

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved ●Alternative Distribution Channels

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Distribution Channels ●Different channels for the same product may compete with each other –“Channel conflict” ●How do manufacturers try to minimize channel conflict? 1-14

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved Distribution Channel Decisions and Physical Distribution ●Logistics and Physical Distribution –Warehousing—storing products as they move through the distribution channel  Storage warehouses  Distribution warehouses –Materials Handling –Order Processing (Fulfillment) –Vendor-Managed Inventory

Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved Discussion ●Select a retailer –what is good and bad about the store? –how does the retailer differentiate itself? ●Select a product (Coke, Ferrari, textbooks) –what is the distribution chain? –why does the distribution mechanism fit the type of product? ●Assume we develop a great new cookie –what would we do at each stage of product development? –how would we distribute it?