International contemporay business chapter13

> > > > > > > > Chapter 13 Product and Distribution Strategies g n i n r a Le Goals Explain marketing’s definition of a product and list the components of the product strategy Describe the classification system List the stages of the new-product development process Explain how firms identify their products for consumer and business goods and services Distinguish between a product mix Outline and briefly describe each of the major components of an effective distribution strategy and a product line Briefly describe each of the four stages of the product life cycle Identify the various categories of distribution channels and discus the factors that influence channel selection t c u d P ro y g e t Stra • Product - bundle of physical, service, and symbolic attributes • Convenience products - items the consumer seeks to purchase frequently, immediately, and with little effort • Shopping products - typically purchased only after the buyer has compared competing products in competing stores • Specialty products - items that a purchaser is willing to make a special effort to obtain t c u d o r P n o i t a c f i Class g n i y f i s s Cla s d o o G s Busines • Installations - major capital items, such as new factories, heavy equipment and machinery, and custom-made equipment • Accessory equipment - includes less expensive and shorterlived capital items than installations and involves fewer decision makers • Component parts and materials - become part of a final product • Raw materials - farm and natural products used in producing other final products • Supplies - expense items used in a firm’s daily operation that not become part of the final product g n i t e k r a M S t r a t e gy s n o i t a c i Impl  In B2B, greater emphasis on personal selling for installations and many component parts  May involve customers in new-product development  Advertising more commonly used to sell supplies and accessory equipment  Also a greater emphasis on competitive pricing strategies s e n i L t c u d Pro x i M t c u d o r P an d Product line - group of related products that are physically similar or are intended for the same market Product mix – a company’s assortment of product lines and individual offerings e f i L t c u Prod Cycle Product life - four basic stages—introduction, growth, maturity, and decline—through which a successful product progresses e h t f o s e S t ag e f i L t c u Prod Cycle • Introduction stage – firm promotes demand for its new offering, informs the market about it, gives free samples to entice consumers to make a trial purchase, and explains its features, uses, and benefits • Growth stage - sales climb quickly as new customers join early users who are repurchasing the item Company begins to earn profits on the new product • Maturity stage - industry sales eventually reach a saturation level at which further expansion is difficult • Decline stage - sales fall and profits decline f o s n o i t Implica e f i L t c u the Prod Cycle • Marketer’s objective is to extend the life cycle as long as product is profitable Marketers’ goals: – Increasing customers’ frequency of use – Adding customers – Finding new uses for product – Changing package sizes, labels, and product designs n o i t u b i r t Dis C h a n n e ls ls e n n a h C n Distributio g n i t e k r a M using s e i r a i d e m r Inte Direct Distribution • • • Direct contact between producer and customer Most common in B2B markets 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 • Lowers costs of goods to consumers by creating market utility g n i t e k r a M s e i r a i d Interme g n i l a s e l Who • Wholesaler - distribution channel member that sells primarily to retailers, other wholesalers, or business users • Manufacturer-Owned Wholesaling Intermediaries – Owned by the manufacturer of the good – Sales branch which stocks products and fills orders from inventories – Sales office which takes orders but does not stock the product s r e l i a t Re • 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 non-store e r o t S Non g n i l i a t Re • Direct response retailing • Internet retailing • Automatic merchandising • Direct selling s e r o t S Retail Wheel of g n i l i a t e R s r e l i a t e R How e t e p m o C 1) 1) Identifying Identifying aaTarget TargetMarket Market 2) 2) Selecting Selectingaa Product ProductStrategy Strategy 3) 3) Selecting Selectingaa Customer Customer Service Service Strategy Strategy 4) 4) Selecting Selectingaa Pricing PricingStrategy Strategy 5) 5) Choosing ChoosingaaLocation Location 6) 6) Building BuildingaaPromotional PromotionalStrategy Strategy 7) 7) Creating Creating aaStore StoreAtmosphere Atmosphere Retail s n o i t a Lo c     Planned Shopping Center Shopping Mall Regional Mall Lifestyle Mall n o i t u b i r t s i D s n o i s i c e D Channel s c i t s i g o L and • What specific channel will it use? • What will be the level of distribution intensity? Selecting Distribution Channels  Complex, expensive, custom-made, or perishable products move through shorter distribution channels involving few—or no —intermediaries  Standardized products or items with low unit values usually pass through relatively long distribution channels  Start-up companies often use direct channels because they can’t persuade intermediaries to carry their products n o i t u b i r Dist y t i s n e t In • Intensive distribution - firm’s products in nearly every available outlet Requires cooperation of many intermediaries • Selective distribution - limited number of retailers to distribute its product lines • Exclusive distribution - limits market coverage in a specific geographical region • d n a s c i t s i Log Physical n o i t u b i r t s i – complete sequence of suppliers that Dchain Supply contribute to creating a good or service and delivering it to business users and final consumers • Logistics – the activities involved in controlling 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 f o n o s i r Compa n o i t a t r o p Trans Modes e c i v r e S r e m o t s u C • Customer service standards measure the quality of service a firm provides for its customers • Warranties are a firm’s promises to repair a defective product, refund money paid, or replace a product if it proves unsatisfactory • Internet retailers have worked to humanize their customer interactions and deal with complaints more effectively ... ownership of them—flow from producer to consumers or business users Physical distribution -actual movement of products from producer to consumers or business users n o i t u b i r t Dis C h a n n... Stage 1: Generating ideas for new offerings  Stage 2: Screening  Stage 3: Concept development and business analysis phase  Stage 4: Product development  Stage 5: Test marketing  Stage 6: Commercialization... important role in a firm’s overall product strategy  Choosing right package is especially important in international marketing  Must meet legal requirements of all countries in which product is sold