1. McGraw-Hill/Irwin  The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 14-1 Chapter Thirteen Product and Distribution Strategies

2. McGraw-Hill/Irwin  The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 14-2 Product Development & Value Package  Value- Total Product Offer  Product Line  Product Mix  Product Differentiation

3. McGraw-Hill/Irwin  The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 14-3 Marketing Classes of Goods & Services  Consumer -Convenience -Shopping -Specialty -Unsought  Industrial

4. McGraw-Hill/Irwin  The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 14-4 Mickey Mouse’s Product Mix  Theme parks & resorts  ABC Television Network  TV & radio stations  Film studios & production  Video programs & licensing  Consumer products  Publishing

5. McGraw-Hill/Irwin  The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 14-5 Packaging 1)Protect 2)Attract 3)Describe 4)Explain 5)Warranties 6)Price, Value, Uses

6. McGraw-Hill/Irwin  The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 14-6 Seals & Deals  American Heart Association seal to Frito-Lay Heartzel in 2004.  American Dental Association, 1960s, seal to Crest.  American Academy of Pediatric Dentistry seal to Dasani flouridated water.  AAPD has a Coca Cola Foundation Grant

7. McGraw-Hill/Irwin  The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 14-7 Tomato Soup Pop Art  Andy Warhol Foundation licensing  Dividing line between art & commerce  Exclusively at Giant Eagle markets  2004 -- 1 st red-&-white label diversion since 1898  Run of 300,000

8. McGraw-Hill/Irwin  The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 14-8 Branding  Brand & Trademark   Categories -Manufacturers’/ -National -Knockoff -Dealer/Private -Generic  Equity  Loyalty  Awareness  Association

9. McGraw-Hill/Irwin  The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 14-9 World’s 10 Most Valuable Brands - 2002  1. Coca-Cola  2. Microsoft  3. IBM  4. GE  5. Intel  6. Nokia  7. Disney  8. McDonald’s  9. Marlboro  10. Mercedes

10. McGraw-Hill/Irwin  The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 14-10 Brand Names for Drugs  No unfair claim  Be clear & different (for safety)  Elegant – end in vowel (Godiva vs. Hershey)  3 syllable maximum (4-5 for generics)  Z & X being overused  Not offensive in any language

11. McGraw-Hill/Irwin  The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 14-11 Market Value of A Brand Name Source: Source: Interbrand Group Billions of Dollars

12. McGraw-Hill/Irwin  The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 14-12 A Good Brand Name...  Speaks directly to product’s target customers  Easy to pronounce  Attracts/motivates consumers to try it  Is memorable/sticks in customers’ minds  Is distinctive enough to protect it legally  Speaks directly to product’s target customers  Easy to pronounce  Attracts/motivates consumers to try it  Is memorable/sticks in customers’ minds  Is distinctive enough to protect it legally

13. McGraw-Hill/Irwin  The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 14-13 Aflack’s Duck American Family Life Assurance Co.  Since year 2000, sales up 20% & consumer awareness from 12% to 90%  (Q score higher than Energizer bunny & Ronald McDonald)  $45 M on yearly advertising  McDonald’s $680 M  Energizer bunny $1 B  Guerilla PR  Ben Affleck on Regis with Aflack Hollyducks with sunglasses  Quack attack team of 15 armed with plush ducks on Today Show Plaza

14. McGraw-Hill/Irwin  The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 14-14 It’s a Faux World in 2003  Gucci shoes  $150 vs 300-400  Heel is molded plastic vs stacked leather.  Tommy kids jeans  $9 vs 35  Size on label ins written in felt tip pen.  Bulgari Chronograph watch  $135 vs 4300  Black dial (Bulgari only makes it in white) yet had a sweeping second hand.  Vuitton luggage  $400 vs 1260  Shoddy trim peeled right off.  Burberry scarf  $40 vs 60  Poorly finished edges had begun to fray.  Dior saddle bag  $200 vs 660  Missed the logo on the inside.

15. McGraw-Hill/Irwin  The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 14-15 Sales and Profits During the PLC

16. McGraw-Hill/Irwin  The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 14-16 First Products Produced by Five Major Companies Hershey Caramels Amway No-rinse car wash Heinz Horseradish Avon Little Dot perfume set 3M Sandpaper Source: World Features Syndicate

17. McGraw-Hill/Irwin  The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 14-17 Consumer Choices of Best Product Innovation of ALL Time Source: American Demographics

18. McGraw-Hill/Irwin  The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 14-18 Classic Product Failures Failure CompanyLoss EdselCorfamVideoDiscPCjr New Coke Premier Ford Motor Co. DuPontRCAIBMCoca-Cola R. J. Reynolds $250 M $100 M $500 M $ 40 M No $ Number

19. McGraw-Hill/Irwin  The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 14-19 The Supply Chain

20. McGraw-Hill/Irwin  The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 14-20 Channel of Distribution  Marketing Intermediaries  Wholesaler  Retailer  Brokers  Role of Intermediaries  Create Efficiency  Value vs. Cost

21. McGraw-Hill/Irwin  The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 14-21 Wholesale Intermediaries  Merchant Wholesalers  Rack Jobbers  Cash-and-Carry  Drop Shippers  Business to Business (B2B) XYZ Warehouse

22. McGraw-Hill/Irwin  The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 14-22 Retail Competition  Price  Service  Location  Selection  Entertainment

23. McGraw-Hill/Irwin  The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 14-23 Retail Store Distribution  Intensive  Selective  Exclusive

24. McGraw-Hill/Irwin  The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 14-24 The Wheel of Retailing PassageofTime 2. Retail Outlet 1. Retail Outlet Starts 3. Retail Outlet 4. New Outlet Enters  Adds Service  Raises Prices  Better Location  Adds Service  Raises Prices  Better Location  Low Price  Limited Service  Out-of-way Location  Low Price  Limited Service  Out-of-way Location  Higher Prices  Higher Status  Higher Prices  Higher Status  Low Price  Limited Service  Low Price  Limited Service

25. McGraw-Hill/Irwin  The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 14-25 Signs of a Shopaholic  Shopping causes emotional distress or impairs you.  You need a shopping “fix” and it’s constantly on your mind.  It results in debt.  It results in family or marital discord.  You often buy things that go unused.  You like to shop at least once a week.

26. McGraw-Hill/Irwin  The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 14-26 Unusual Distribution Channels  Gas at Home Depot – 9/05  Underwear at Publix  IPod Vending Machine at Macy’s Dadeland

27. McGraw-Hill/Irwin  The McGraw-Hill Companies, Inc., 2002 All Rights Reserved. 14-27 Distribution/Storage Mode  Railroad  Motor Vehicles  Water  Pipeline  Air  Intermodal  Storage  Materials Handling