Chapter 21 Product Development and Distribution 1 Chapter 21 Product Development and Distribution ©2008 Thomson/South-Western
Chapter 21 Product Development and Distribution 2 Lesson 21.1 Product Goals Explain how products, product lines, and product assortments are developed. Discuss how product selection, packaging, and branding improve product sales and customer satisfaction.
Chapter 21 Product Development and Distribution 3 Product Development Product design levels Product selection Packaging Branding
Chapter 21 Product Development and Distribution 4 Product Design Levels Basic product — physical product in its simplest form Enhanced product — product offering different features and options for the consumer Extended product — product offering additional features that are not part of the physical product but increase its usability
Chapter 21 Product Development and Distribution 5 Product Selection Product line — group of similar products with obvious variations in design and quality to meet the needs of distinct customer groups Product assortment — complete set of all products a business offers to a market
Chapter 21 Product Development and Distribution 6 Many products with limited variety Limited product choices and variety Large variety in few product choices Broad variety of many products PRODUCT BREADTH MoreLess PRODUCT DEPTH More Less Product Assortment
Chapter 21 Product Development and Distribution 7 Lesson 21.2 Distribution Goals Discuss the important factors to be considered when selecting channels of distribution. Describe the different channels of distribution.
Chapter 21 Product Development and Distribution 8 Channels of Distribution Direct distribution —producers sell directly to the ultimate consumer Indirect distribution —distribution takes place through channel members Integrated marketing channels — one business owns the organizations at other levels of the channel
Chapter 21 Product Development and Distribution 9 Distribution Channels for Consumer Products
Chapter 21 Product Development and Distribution 10 Lesson 21.3 Channel Design Goals Discuss the factors that affect a producer’s choice of distribution channel. Describe the characteristics of major forms of transportation used to distribute products. Give examples of product-handling procedures that improve product distribution.
Chapter 21 Product Development and Distribution 11 Selecting a Channel of Distribution Perishability of the product Geographic distance between producer and consumer Need for special handling of the product Number of users Number of types of products manufactured Financial strength and interests of the producer
Chapter 21 Product Development and Distribution 12 Transportation Decisions Common transportation methods – Railways – Trucks – Airplanes Other transportation methods – Waterways – Pipelines – Containerization
Chapter 21 Product Development and Distribution 13 Product Handling Tracking products – Bar codes Product storage – Warehouses – Distribution center Order processing