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![Page 1: Options for Organizing Small and Large Businessesserkanada.weebly.com/uploads/1/1/0/9/11093687/chapter_12-13.pdf · Product and Distribution Strategies Chapter 12 . ... Sales climb](https://reader030.fdocuments.in/reader030/viewer/2022020214/5aabebe67f8b9ac55c8c773b/html5/thumbnails/1.jpg)
Product and Distribution Strategies
Chapter 12
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Product- a bundle of physical, service, and symbolic
characteristics designed to satisfy consumer wants.
• Product strategy involves more than just producing a
good or service. It focuses on benefits.
• The marketing conception of a product includes
decisions about package design, brand name,
trademarks, warranties, product image, new-product
development, and customer service.
Product Strategy
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• Think about your favorite soft drink. Do you like it for its
taste alone?
• Or do other attributes, such as clever ads, attractive
packaging, ease of purchase from vending machines
and other convenient locations, and overall image, also
attract you?
Product Strategy
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Product Categories:
Convenience products- items the consumer seeks
to purchase frequently, immediately, and with little
effort
Product Classification
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Product Categories:
Shopping products- typically purchased only after
the buyer has compared competing products in
competing stores
Product Classification
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Product Categories:
Specialty products-
items a purchaser is
willing to make a
special effort to obtain
Product Classification
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Product Classification
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• A shopping product for one person may be a
convenience item for someone else.
• Each item’s product classification is based on
buying patterns of the majority of people who
purchase it.
Product Classification
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Product line– a group of related products
marked by physical similarities or intended for a
similar market
Product mix– assortment of product lines and
individual goods and services a firm offers to
consumers and business users
Product Lines and Product Mix
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Product Lines and Product Mix
PepsiCo Product Line & Product Mix
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Product life cycle- four basic stages—
introduction, growth, maturity, and decline—
through which a successful product progresses
Product Life Cycle
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Product life cycle
Introduction stage:
The firm tries to promote demand,
inform the market,
give free samples,
explain the features and benefits
Product Life Cycle
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Product life cycle
Growth stage:
Sales climb quickly as new customers join early
users who now are repurchasing the item.
The firm begins to earn profits.
Competitors enter the field. Price competition
develops.
Product Life Cycle
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Product life cycle
Maturity stage:
İndustry sales eventually reach a saturation level
• Competition intensifies
• Firms try to capture competitors’ customers by
often dropping prices
Product Life Cycle
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Product life cycle
Decline stage:
Profits decline and may become losses as
further price-cutting occurs.
Competitors gradually exit, making some profits
possible for the remaining firms in the shrinking
market.
The decline stage usually is caused by a product
innovation or a shift in consumer preferences.
Sometimes technology change can hasten the
decline stage for a product.
Product Life Cycle
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Marketer’s objective is to extend the life
cycle as long as product is profitable.
Marketers’ goals: Increasing customers’ frequency of use
Adding new users
Finding new uses for product
Changing package sizes, labels, and product designs
Implications of the Product Life Cycle
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Expensive, time-
consuming, and risky.
Only 1/3 of new
products become
success stories.
Each step requires a
“go or no-go” decision.
Stages in New Product Development
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• A brand is a name, term, sign, symbol, design, or some
combination that identifies the products of one firm and
differentiates them from competitors’ offerings.
Exp: Tropicana, Pepsi, and Gatorade are all made by
PepsiCo, but a unique combination of name, symbol,
and package design distinguishes each brand from the
others.
Brand
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Manufacturer’s brand- brand offered and promoted by
a manufacturer. Examples: Tide, Cheerios, Windex,
Fossil, and Nike.
Private or store brand- brand that is not linked to the
manufacturer but instead carries a wholesaler’s or
retailer’s label.
Family branding strategy- a single brand name used
for several related products. Examples: KitchenAid,
Johnson & Johnson, Hewlett-Packard, and Arm &
Hammer.
Individual branding strategy- giving each product
within a line a different name.
Brand Categories
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Distribution channel: path through which
products—and legal ownership of them—flow
from producer to consumers or business users
Distribution Strategy
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Distribution Channels
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Wholesaler- distribution channel member that
sells primarily to retailers, other wholesalers, or
business users
Retailer- channel member that sells goods and
services to individuals for their own use rather
than for resale
Two types: store and nonstore
Wholesaler - Retailer
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Non-Store Retailing
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Non-Store Retailing
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Retail Stores
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Promotion and Pricing Strategies
Chapter 13
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Promotion is the function of informing, persuading,
and influencing a purchase decision.
Promotion
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Components of the Marketing Mix
Promotion is the function of informing, persuading,
and influencing a purchase decision.
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Objectives of Promotional Strategies
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Advertising- paid nonpersonal communication
usually targeted at large numbers of potential
buyers.
Firms need to be more and more creative and
efficient at getting consumers’ attention.
Advertising
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Product advertising- messages designed to sell a
particular good or service
Institutional advertising- messages that promote
concepts, ideas, philosophies, or goodwill for
industries, companies, organizations, or government
entities
Cause advertising- institutional messaging that
promotes a specific viewpoint on a public issue as a
way to influence public opinion and the legislative
process about the issues such as literacy, hunger and
poverty, etc.
Types of Advertising
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Advertising and the Product Life Cycle
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Informative advertising- used to build initial
demand for a product in the introductory phase
Persuasive advertising- attempts to improve the
competitive status of a product, institution, or
concept, usually in the growth and maturity stages
Reminder-oriented advertising - appears in the
late maturity or decline stages to maintain
awareness of the importance and usefulness of a
product
Advertising and the Product Life Cycle
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Advertising Media Pie
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Sales promotion
consists of forms of
promotion such as
coupons, product
samples, and rebates
that support
advertising and
personal selling.
Sales Promotion
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Pricing
- The price is the exchange value of a good or service.
- It is a major factor in consumer buying decisions.
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Pricing Objectives in the Marketing Mix
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Skimming pricing Setting an intentionally high price relative to the prices of competing
products
Penetration pricing Setting a low price as a major marketing weapon
Everyday low pricing and discount pricing Maintaining continuous low prices rather than relying on short-term
price-cutting tactics such as cents-off coupons, rebates, and special
sales
Competitive pricing Reducing the emphasis on price competition by matching other firms’
prices
Concentrating marketing efforts on the product, distribution, and
promotional elements of the marketing mix
Alternative Pricing Objectives
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Price-quality relationships
Consumers’ perceptions of quality closely tied to price
High price = prestige and higher quality
Low price = less prestige and lower quality
Odd pricing
Setting prices in uneven amounts or amounts that
sound less than they really are
Example: $1.99 or $299
Consumer Perceptions of Price