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New Product Marketing Letters Samples document sample
New Product Marketing Letters Samples document sample
> > > > > > > > Chapter 13 Product and Distribution Strategies 1 Explain marketing’s definition of a 5 List the stages of the new-product product and list the components of development process. the product strategy. Explain how firms identify their Describe the classification system 6 products. 2 for consumer and business goods and services. Outline and briefly describe each 7 of the major components of an Distinguish between a product mix effective distribution strategy. 3 and a product line. Identify the various categories of Briefly describe each of the four 8 distribution channels and discus 4 stages of the product life cycle. the factors that influence channel selection. • 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. • Installations - major capital items, such as new factories, heavy equipment and machinery, and custom-made equipment. • Accessory equipment - includes less expensive and shorter- lived 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 do not become part of the final product. 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. 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. Product life - four basic stages—introduction, growth, maturity, and decline—through which a successful product progresses. • 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. • 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 • Expensive, time-consuming, and risky. • Only 1/3 of new products become success stories. • Each step requires a ―go or no-go‖ decision. 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 • Brand - name, term, sign, symbol, design, or some combination that identifies the products of one firm and differentiates them from competitors’ offerings. • Brand name - part of the brand consisting of words or letters included in a name used to identify and distinguish the firm’s offerings from those of competitors. • Trademark - brand that has been given legal protection granted solely to the brand’s owner. • Manufacturer’s brand - brand offered and promoted by a manufacturer. Examples: Tide, Jockey, Gatorade, Swatch, and Reebok. • Private or store brand - brand that is not linked to the manufacturer but instead carries a wholesaler’s or retailer’s label. Examples: Sears’ DieHard batteries and Wal-Mart’s Ol’Roy dog food & Member’s Mark brand • Family branding strategy - a single brand name used for several related products. Examples: KitchenAid, Johnson & Johnson, Hewlett-Packard, and Dole • Individual branding strategy - giving each product within a line a different name. Examples: Procter & Gamble products Tide, Cheer, and Dash. • Brand recognition - consumer is aware of the brand but does not have a preference for it over other brands. • Brand preference - consumer chooses one firm’s brand over a competitor’s. • Brand insistence - consumer will seek out preferred brand and accept no substitute for it. • Brand equity - added value that a respected and successful name gives to a product. • Brand awareness - product is the first one that comes to mind when a product category is mentioned. Important in product identification and play an 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. Universal Product Code - bar code read by optical scanner. Distribution channel - path through which products—and legal ownership of them—flow from producer to Physical distribution - consumers or business actual movement of users. products from producer to consumers or business users. 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. • 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. • 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. • Direct response retailing • Internet retailing • Automatic merchandising • Direct selling 1) Identifying a Target Market 2) Selecting a Product Strategy 3) Selecting a Customer Service Strategy 4) Selecting a Pricing Strategy 5) Choosing a Location 6) Building a Promotional Strategy 7) Creating a Store Atmosphere Planned Shopping Center Shopping Mall Regional Mall Lifestyle Mall • 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. • 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. • Supply chain – complete sequence of suppliers that 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. • 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.
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