Product & Distribution Strategies Chapter 12 Sections 12.4 – 12.7

Product Strategy Product Life Cycle Production Identification 1 Section Titles Distribution Strategy Wholesaling Retailing Distribution Channel Decisions & Logistics

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 consumers or business users – this includes customer service, transportation, inventory control, materials processing, order processing, and warehousing Distribution Strategy

Distribution Channels Page 349

Direct Distribution Direct contact between producer and customer. 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. Distribution Channels Using Marketing Intermediaries Page 350

Wholesaler- distribution channel member that sells primarily to retailers, other wholesalers, or business users – 2/3 in the US have few than 20 employees Manufacturer-Owned Wholesaling Intermediaries Owned by the manufacturer of the goods or products to control distribution or customer service Sales branch that stocks products and fills orders from inventories Sales office that takes orders but does not stock the product Wholesaling

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 nonstore Retailers

Non-Store Retailing Page 352

Retail Stores Page 353

Location determines success and failure in retailing. Location depends on the retailer’s: Size, financial resources, product offerings, competition, and target market. Traffic patterns, parking, store visibility, location of competition. Planned Shopping Center Lifestyle Mall Choosing a Location

Store atmospherics are the physical characteristics of a store and its amenities which influence a consumer’s perceptions of the shopping experience. Architecture, signage, store layout, merchandise presentation, lighting, color, sound, cleanliness Retailers should align merchandising, pricing, and promotion strategies with store atmospherics. Creating a Store Atmosphere

Supply chain– complete sequence of suppliers that contribute to creating a good or service and delivering it to business users and final consumers Logistics– process of coordinating 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 Distribution Channel Decisions and Logistics

Comparison of Transportation Modes Page 360

Physical Distribution Warehousing: physical distribution activity that involves the storage of products. Materials handling: moving items within factories, warehouses, stores, etc. Inventory control: managing inventory costs, like storage facilities, insurance, etc. Radio-frequency identification (RFID): computer chip that emits a low-frequency radio signal Vendor-managed inventory: producer and retailer agree that the producer will determine needed inventory

Customer Service Customer Service Standards – guidelines the company sets – response or processing times Warranties – promises to correct issues when something goes wrong – such as repairs for defects

Chapter 12 Assignment Review Questions #7 & 8 on page 364 Type the questions and the answers Read and answer the questions for any one of the three cases: 12.1, 12.2, or 12.3 on pages Type up the answers to the questions. Make sure to indicate which case you have selected.