product issues in channel management
TRANSCRIPT
Chapter 10Chapter 10
Product Issues in Channel Management
Marketing Mix ResourcesMarketing Mix Resources 1100
Objective 1:
By understanding how the other marketingmix variables interface with the channelvariable, and the implications of such,
the channel manager could coordinate allstrategic components to create the synergy
needed to meet customers’ needs.
By understanding how the other marketingmix variables interface with the channelvariable, and the implications of such,
the channel manager could coordinate allstrategic components to create the synergy
needed to meet customers’ needs.
1010Product-ChannelProduct-ChannelManagement InterfacesManagement Interfaces
Objective 2:
New product planning & development
The product life cycle
Strategic product management
3 Majorareas ofproductmanagement
1010New Product PlanningNew Product Planning
Objective 3:
1. What input, if any, can channel members provide into new product planning?
2. What has been done to assure that new products will be acceptable to the channel members?
3. Do the new products fit into the present channel members’ assortments?
4. Will any special education or training be necessary to prepare the channel members to sell the new products effectively?
5. Will the product cause the channel members any special problems?
1. What input, if any, can channel members provide into new product planning?
2. What has been done to assure that new products will be acceptable to the channel members?
3. Do the new products fit into the present channel members’ assortments?
4. Will any special education or training be necessary to prepare the channel members to sell the new products effectively?
5. Will the product cause the channel members any special problems?
1010Encouraging Member InputEncouraging Member Input
Solicit ideas fornew products.
Solicit feedbackduring the test-marketing
or commercialization stage.
Gather feedbackon product sizeor on packaging.
1010Member Acceptance ofMember Acceptance ofNew ProductsNew Products
Determining Factors
• How the product will sell• Whether the product is easy to stock & display• Whether the product will be profitable
• How the product will sell• Whether the product is easy to stock & display• Whether the product will be profitable
1100
Adding Products to the Adding Products to the AssortmentAssortment
Will existing channel members view the new product as appropriate to add to their
assortments?
Will existing channel members view the new product as appropriate to add to their
assortments?
Key Considerations:
Will channel members feel competent to handle the new product?
Will channel members feel competent to handle the new product?
1010Educating Channel MembersEducating Channel Members
Manufacturer goal:
To sell new productssuccessfully
Method:Educate or train
channel members in theproduct’s use and the
special features to emphasize in sales
presentations
Trouble-Free New ProductsTrouble-Free New Products 1010
New product problems
Care in new product planning
=
1100Product Life CycleProduct Life Cycle
Objective 4:
Introduction
Growth
Sales($)
Sales curve
Maturity
Profit curve
TimeDecline
1010IntroductionIntroduction
1. Assure sufficient number of channelmembers for adequate market coverage
2. Assure adequate supply on channel members’ shelves
GrowthGrowth 1010
1. Assure sufficient number of channel member inventories for adequate market coverage
2. Monitor the effects of competitive productson channel member support
1010MaturityMaturity
1. Extra emphasis on motivating channel membersto mitigate competitive impact
2. Investigate possibility for changes in channelstructure to extend maturity stage & possiblyfoster new growth stage
1010DeclineDecline
1. Phase out marginal channel members
2. Investigate impact of product deletion on channel members
Strategic Product ManagementStrategic Product Management1010
• 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
• 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
Successful product strategies depend on:
Objective 5:
Objective 6: 1010Product StrategiesProduct Strategies
Product differentiation
Product positioning
Product line expansion & contraction
Trading up & trading down
Product brand strategy
Product DifferentiationProduct Differentiation 1010
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.
Creating a differential product involves gettingconsumers to perceive a difference.
Product PositioningProduct Positioning 1010
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
1010Product Line Expansion & Product Line Expansion & ContractionContraction
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
1010Trading Down, Trading UpTrading Down, Trading Up
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 adequatecoverage 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 thetrade-up or trade-down product
1010
When manufacturers sell under both national andprivate 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.
Product Brand StrategyProduct Brand Strategy
1010Product Service StrategyProduct Service Strategy
Objective 6:
It is the role of the marketing channel to providenecessary 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