1 13. Product and Distribution Strategies

2 Topics Channels of distribution Roles of marketing intermediaries in distribution channel Channel & intermediary selection Partnering among channel members Retail

3 Products Marketing concept of product includes: –Item itself– Warranties –Brand– Image –Packaging– Label Products are goods & services used as basis of commerce Product identities created through: –Branding– Packaging– Labeling

4 Brands Used to identify & differentiate products –Brand name –Brand mark –Trademark May be owned by: –Wholesalers –Retailers –Manufacturers

5 Brands (Cont.) Brand strategies –Individual brand vs. family branding –Licensing Brand loyalty –Brand recognition  Brand preference  Brand insistence Brand equity –Brand-name awareness – Perceived brand quality –Brand associations – Brand loyalty

6 Packaging All activities involved in developing & providing a container for product Functions: –Protect product –Offer consumer convenience –Promote product Package design considerations –Cost– Intermediary needs –Multiple-unit vs. single-unit– Environmental –Family packaging responsibility

7 Labeling Presentation of information on product or packaging Federal regulations specify required information for specific products Also carries express warranty details

8 Classifications Consumer products: –Convenience products –Shopping products –Specialty products –Unsought products Business products: –Expense items Supplies Industrial process consumables –Capital items Installations, accessory equipment Business/industrial services

9 Product Lines & Product Mix Product line: –Group of similar products Product mix: –All products of the firm Three ways in which to improve product mix: –Change products –Delete products –Develop & add new products

10 Product Life Cycle Four stages: –Introduction stage –Growth stage –Maturity stage –Decline stage Awareness of life-cycle stage & estimated length of each life-cycle stage for each product affect marketing strategy decisions

11 New Product Development New products grouped into three categories: –Imitations –Adaptations –Innovations Stages of new product development process –Idea generation– Product development –Idea screening– Test marketing –Concept dev. & testing– Commercialization Business analysis

12 Channels of Distribution Direct channels Indirect channels –Marketing intermediary categories Merchant middlemen (take title to goods) –Full-function & limited-function Functional middlemen (don’t take title to goods) –Intermediary types Retailers Wholesalers Agents, brokers, etc. –Multiple channels for different segments

13 Roles of Marketing Intermediaries In Channel Provide services related to all marketing functions –Exchange functions Provide place utility Provide sales force Provide promotional support –Physical distribution functions Deliver product Carry stock –Facilitating functions Provide marketing info. Assume risks Sort, standardize, divide Provide financing

14 Channel & Intermediary Selection Factors influencing distribution strategy decisions: –Producer, market, product, competitive factors Intensity of market coverage –Intensive distribution –Selective distribution –Exclusive distribution

15 Partnering Among Channel Members Supply chain management –Logistics –Physical distribution Warehousing Materials handling Inventory control –Esp. through vendor-managed inventory Order processing Transportation –Setting customer service standards

16 Retail Nonstore retailing –Direct selling –Direct-response retailing –Internet retailing –Automatic vending In-store retailing –Classified by: No. of stores –Independent retailers vs. chain retailers Store size; type & quantity of merchandise carried –Department stores, discount stores, catalog & warehouse showrooms, etc. (see Table 13.2)

17 Retail (Cont.) Wheel of Retailing –Entry phase –Trading-up phase –Vulnerability phase Retail marketing strategy development –I.D. target market –Develop product strategy –Develop customer service strategy –Develop pricing strategy –Develop location strategy –Develop promotional strategy