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Adeyl Khan, Faculty, BBA, NSU
IOA-C1228-29-30 July
C12 Customer-Driven Marketing
Adeyl Khan, Faculty, BBA, NSU
Product and Distribution Strategies
Buffalo Wild Wings knows what sports fans want: tasty, sometimes
spicy, dishes with the right beverage to wash it all down
and a clear view of the nearest big-screen TV.
Adeyl Khan, Faculty, BBA, NSU
BWWStarted with a single idea: to serve the best
food to college kids and local sports fans on game day.
Smith (owner) streamlined the company’s name to Buffalo Wild Wings because no one outside of Buffalo knew what a “weck” was.
New logo for the restaurants. Menu prices are generally lower than rival
sports bars and restaurants
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Adeyl Khan, Faculty, BBA, NSU
Product Strategy- product classification• 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.
Adeyl Khan, Faculty, BBA, NSU
Adeyl Khan, Faculty, BBA, NSU
Classifying Business GoodsWhile consumer products are classified by
buying habits, business products are classified based on how they are used and by their basic characteristics
e.g. paycheck service
Installations•major capital items, such as new factories, heavy equipment and machinery, and custom-made equipment.
Accessory equipment•Less expensive and/or shorter-lived capital items than installations and involves fewer decision makers. E.g. hand tools and fax machines
Component parts and materials•become part of a final product.
Raw materials•farm and natural products used in producing other final products.
Adeyl Khan, Faculty, BBA, NSU
Marketing Strategy Implications 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.
Adeyl Khan, Faculty, BBA, NSU
Product Lines and Product Mix
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.
Adeyl Khan, Faculty, BBA, NSU
Product life - four basic stages—introduction, growth, maturity, and decline—through which a successful product progresses.
Adeyl Khan, Faculty, BBA, NSU
Stages of the Product Life 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.
Adeyl Khan, Faculty, BBA, NSU
Implications of the Product Life 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
Adeyl Khan, Faculty, BBA, NSU12
Adeyl Khan, Faculty, BBA, NSU
Stages in New Product DevelopmentExpensive, time-consuming, and risky.Only 1/3 of new products become success
stories.Each step requires a “go or no-go”
decision.
Adeyl Khan, Faculty, BBA, NSU
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/ product launch
Adeyl Khan, Faculty, BBA, NSU
Product Identification• 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.
• design logos, slogans, packaging elements, and product features such as color and shape.
Adeyl Khan, Faculty, BBA, NSU
Brand Categories• 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.
Adeyl Khan, Faculty, BBA, NSU
Brand LoyaltyBrand 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.
Adeyl Khan, Faculty, BBA, NSU
Brand Equity• 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.
Adeyl Khan, Faculty, BBA, NSU19
Adeyl Khan, Faculty, BBA, NSU
Adeyl Khan, Faculty, BBA, NSU
Packages and Labels 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.
Adeyl Khan, Faculty, BBA, NSU
Distribution StrategyDistribution channel - path through which products—
and legal ownership of them—flow from producer to consumers or business users.
Physical distribution -actual movement of products from producer to consumers or business users.
Adeyl Khan, Faculty, BBA, NSU
Adeyl Khan, Faculty, BBA, NSU
Distribution Channels using Marketing Intermediaries 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.
Adeyl Khan, Faculty, BBA, NSU
Adeyl Khan, Faculty, BBA, NSU
Wholesaling• 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.
Adeyl Khan, Faculty, BBA, NSU
Retailers• 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.
Adeyl Khan, Faculty, BBA, NSU
Non-Store RetailingDirect response
retailingInternet retailingAutomatic
merchandisingDirect selling
Adeyl Khan, Faculty, BBA, NSU
Retail Stores
Adeyl Khan, Faculty, BBA, NSU
Wheel of Retailing
Adeyl Khan, Faculty, BBA, NSU
How Retailers Compete1) 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
Adeyl Khan, Faculty, BBA, NSU
Retail Locations
Planned Shopping CenterShopping MallRegional MallLifestyle Mall
Adeyl Khan, Faculty, BBA, NSU
• 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.
Distribution Channel Decisions and Logistics
Adeyl Khan, Faculty, BBA, NSU
• 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.
Distribution Intensity
Adeyl Khan, Faculty, BBA, NSU
• 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.
Logistics and Physical Distribution
Adeyl Khan, Faculty, BBA, NSU
Comparison of Transportation Modes
Adeyl Khan, Faculty, BBA, NSU
Customer Service• 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.
Adeyl Khan, Faculty, BBA, NSU38
Adeyl Khan, Faculty, BBA, NSU
Explain marketing’s definition of a product and list the components of the product strategy.
Describe the classification system for consumer and business goods and services.
Distinguish between a product mix and a product line.
Briefly describe each of the four stages of the product life cycle.
List the stages of the new-product development process.
Explain how firms identify their products.
Outline and briefly describe each of the major components of an effective distribution strategy.
Identify the various categories of distribution channels and discus the factors that influence channel selection.
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Learning Goals