1. Chapter 10
Product Issues in
Channel Management

2. Marketing Mix Resources
Objective 1: 10
Marketing Mix Resources
By understanding how the other marketing
mix variables interface with the channel
variable, and the implications of such,
the channel manager could coordinate all
strategic components to create the synergy needed to meet customers’ needs.

3. Product-Channel Management Interfaces
Objective 2:
Product-Channel Management Interfaces 10
New product planning
& development
The product life cycle
3 Major
areas of
product
management
Strategic product
management

4. Objective 3:
New Product Planning 10
What input, if any, can channel members provide into new product planning?
What has been done to assure that new products will be acceptable to the channel members?
Do the new products fit into the present channel members’ assortments?
Will any special education or training be necessary to prepare the channel members to sell the new products effectively?
Will the product cause the channel members any special problems?

5. Encouraging Member Input10
Solicit ideas for
new products.
Gather feedback
on product size
or on packaging.
Solicit feedback
during the test-marketing
or commercialization stage.

6. Member Acceptance of New Products10
Member Acceptance of New Products
Determining Factors
How the product will sell
Whether the product is easy to stock & display
Whether the product will be profitable

7. Adding Products to the Assortment10
Key Considerations:
Will existing channel members view the new product as appropriate to add to their assortments?
Will channel members feel competent
to handle the new product?

8. Educating Channel Members10
Manufacturer
goal:
To sell new products
successfully
Educate or train
channel members in the
product’s use and the
special features to
emphasize in sales
presentations
Method:

9. Trouble-Free New Products10
Care in new product planning =
New product problems

10. Product Life Cycle 10 Sales ($) Sales curve Introduction Profit curve
Objective 4:
Product Life Cycle 10
Sales
($)
Sales curve
Introduction
Profit curve
Time
Growth
Maturity
Decline

11. Introduction 10 Assure sufficient number of channel
members for adequate market coverage
Assure adequate supply on channel
members’ shelves

12. Growth 10 Assure sufficient number of channel member
inventories for adequate market coverage
Monitor the effects of competitive products
on channel member support

13. Maturity 10 Extra emphasis on motivating channel members
to mitigate competitive impact
Investigate possibility for changes in channel
structure to extend maturity stage & possibly
foster new growth stage

14. Decline 10 Phase out marginal channel members
Investigate impact of product deletion
on channel members

15. Strategic Product Management
Objective 5:
Strategic Product Management 10
Successful product strategies depend on:
Product quality, innovativeness, or technological sophistication
Capabilities of managers overseeing product line
Firm’s financial capacity & willingness to provide promotional support
Channel members’ role in implementing product strategies

16. Product Strategies 10 Product differentiation Product positioning
Objective 6:
Product Strategies 10
Product differentiation
Product positioning
Product line expansion & contraction
Trading up & trading down
Product brand strategy

17. Product Differentiation10
Creating a differential product involves getting
consumers to perceive a difference.
Implications for channel management:
• Channel managers should try to select & help develop members who fit the product image when product differentiation strategy is affected by who will be selling the product.
• Channel managers should provide retailers with the kind of support needed to properly present the product when this strategy is influenced by how the product is sold at retail.

18. Product Positioning 10
The manufacturer’s attempt to have consumers perceive the product in a particular way relative to competitive products
Implications for channel management:
• Possible interfaces between the product positioning strategy and where the product will be displayed and sold to consumers should be considered before the strategy is implemented.
• Elicit retailer support before attempting to implement strategy.
• Maintain backup supply of retailer incentives

19. Product Line Expansion & Contraction10
Manufacturers often engage in both expansion and contraction simultaneously.
Implications for channel management:
• Difficult to balance channel member satisfaction &
Support for reshaped product lines
• Channel members are making increasing demands on
Manufacturers to have the right mix of products

20. Trading Down, Trading Up10
Adding lower-priced products or product lines,
or higher-priced products or product lines,
to a product mix
Implications for channel management:
• Whether existing channel members provide adequate
coverage of high-end or low-end market segments to
which trade-up or trade-down product is aimed
• Whether the channel members have confidence in
the manufacturer’s ability to successfully market the
trade-up or trade-down product

21. Product Brand Strategy10
When manufacturers sell under both national and
private brands, direct competition with channel members
may result
Implications for channel management:
• Do not sell both national & private brand versions of
products to the same channel members.
• Sell national and private brand versions in different
geographical territories.
• Physically vary products enough to minimize
direct competition.

22. Product Service Strategy
Objective 6: 10
It is the role of the marketing channel to provide
necessary service along with the product
to the final user
Manufacturers should provide after-sale service
• by offering it directly at the factory
• through their own network of service centers
• through channel members
• through authorized independent service centers
• by some combination of the above