Marketing - Prep2

Product and Brand Management

Product is

• anything that can be offered to a market for attention,acquisition,use or consumption.
• Satisfies a want or need
• Includes
  Physical Products
  Services
  Persons
  Places
  Organizations
  Ideas
  Combinations of the above

There are three levels of product

• Core product - Core benefit or service
• Actual product - Quality level, Brand name, Packaging, Features, Design
• Augmented product - Installation, Delivery&Credit, Warranty, After Sale service

EXAMPLE SONY CAMCORDER:
Core--the ability to take video pictures conveniently
Actual--Sony Handycam (brand name), packaged, convenient design so you can hold it, play back features etc. that provide the desired benefits, high quality etc.
Augmented--receive more than just the camcorder. Give buyers a warranty on parts and workmanship, free lessons on how to use the camcorder, quick repair service when needed and toll free telephone number when needed.

Distribution

The contents below are referred from http://www.udel.edu/alex/chapt15.html#type

Distribution-activities that make products available to customers when and where they need them.

A channel of distribution or marketing channel is a group of individuals and organizations that directs the flow of products from producers and customers.

Marketing Intermediaries link producers to other intermediaries or to the ultimate users of the product. Operate between the producer and the final buyer.

Number of channel transactions are reduced with the involvement of distributor

A Vertical Marketing System (VMS) is a marketing channel that a single channel member coordinates. The channel member manages channel activities to achieve efficient, low cost distribution aimed at satisfying the target market customers. There are three types of Vertical Marketing Systems, Corporate, Administered and Contractual

Corporate VMS
More than one stage of the distribution channel under one ownership, IE supermarket chains that own processing plants and large retailers that purchase wholesaling and production facilities.

Administered VMS
Channel members are independent with a high level of interorganizational management by informal coordination. Agree to adopt uniform accounting policies etc., and promotional activities.One Channel member dominates, has a channel leader.

Contractual VMS
Most popular VMS, interorganizational relationships formalized through contracts that spell out each members rights and obligations. IE McDonald's and KFC. Franchise organizations 1/3 retail sales and 500,000 outlets.
Wholesaler sponsored, IGA stores-independent retailers band together under contractual leadership of a wholesaler.Supervalue Stores, largest food wholesaler in the US, offers a broad package of services to 2800 independent food retailers that voluntarily enter into a buying contract.Retailer sponsored cooperatives which set up, own and operate their own wholesalers.

Horizontal marketing system : Two or more organizations at the same level join together to take the advantage of a new opprotunity example a bank and a supermarket agree to set up a ATM machine at various location of the supermarket

Hybrid marketing system : One firm establishes two or more marketing channels to serve its customers.


Channel Conflict
Channel members may disagree on the best methods to attain goals. Inevitable when individual short run goals are not compatible. Can occur between firms at the same level, or between firms at different levels. Want to maximize profits and autonomy.Channel members belong to different channel systems, creating potential conflicts. Producers may try to circumvent intermediaries.

Channel conflicts can be horizontal or vertical


Functions of distribuor channel

Information
Transfer
Payments
Physical distribution
Risk Taking
Financing
Ordering
Negotiation
Communication

There are three types of channel membership

1. Intensive distribution- Where the majority of resellers stock the product (with convenience products,for example,and particularly the brand leaders in consumer goods markets) price competition may be evident
2. Selective distribution - This is the normal pattern (in both consumer and industrial markets) where `suitable' resellers stock the product.
3. Exclusive distribution - Only specially selected resellers or authorized dealers (typically only one per geographical area) are allowed to sell the `product'.

Functions of intermediaries

Match Supply and Demand

Assuming risk

Information flow

Financing

Payment and title flow

negotiation

contacts

Promotion