Chapter 10Ch. 10: Major TopicsThe Marketing MixThe Product Ingredient of Marketing MixFusion of AttributesValue SatisfactionProduct EvolutionLevels of ProductProduct-Channel Management Interfaces*I. New Product Planning*1. Encouraging Channel Member Input2. Member Acceptance of New Products3.Adding Products to the Reseller’s Product Assortment4. Trouble-Free New ProductsII. Product Life Cycle and Marketing Channel*Introduction Stage and Marketing ChannelGrowth Stage and Marketing ChannelMaturity Stage and Marketing ChannelDecline Stage and Marketing ChannelIII. Strategic Product ManagementProduct Strategy Issues*Product Differentiation*Product PositioningProduct Line Expansion & ContractionTrading Down, Trading UpProduct Brand StrategyChapter 10Chapter 10Product Issues in Marketing Channel Management1010Ch. 10: Major Topics1. Marketing Mix in Channels2. Product3. Interface between Marketing Channel and Product**1. New Product Launch2. Product Life Cycle3. Strategic Product Management- Product Strategies**1. Marketing Mix in Channels2. Product3. Interface between Marketing Channel and Product**1. New Product Launch2. Product Life Cycle3. Strategic Product Management- Product Strategies**3The Marketing MixThe means by which product, price, promotion and place variables can be assembled to meet channel needs.4The Product Ingredient of Marketing Mix•Product:a unique bundle of tangible and intangible attributes offered en masse to customers.1. Fusion of attributes2. Value satisfaction3. Product evolution5Fusion of Attributes•Tangible attributes•Intangible attributes–Often more important–Marketing Channels6Value Satisfaction•Perception of benefits derived from owning or consuming a product.–Assess customer value–Provide customer value–Communicate customer value•Ex) VARs in computer industry7Product Evolution•Core Product  Actual Product  Augmented Product*•Product EvolutionChannel EvolutionEx) PC industry; Movie industryLevels of ProductLevels of ProductBrandNameQualityLevelPackagingDesignFeaturesDelivery& CreditInstallationWarrantyAfter-SaleServiceCoreBenefitorServiceCoreBenefitorServiceActualProductActualProductCoreProductCoreProductAugmentedProductAugmentedProduct1010Product-ChannelProduct-ChannelManagement Interfaces*Management Interfaces*1. New product planning & development2. The product life cycle3. Strategic product management3 Majorareas ofProduct-channelmanagement1010I. New Product Planning*I. New Product Planning*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 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 the product cause the channel members any special problems?10101. Encouraging Channel Member Input1. Encouraging Channel Member InputSolicit ideas fornew products.Solicit feedbackduring the test-marketingor commercialization stage.Gather feedbackon product sizeor on packaging.10102. Member Acceptance of2. Member Acceptance ofNew ProductsNew ProductsDetermining 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*Ex) How to increase reseller acceptance?10103.Adding Products to 3.Adding Products to the Reseller’s Product Assortmentthe Reseller’s Product AssortmentWill 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?Ex) Vitamin Water Case4. Trouble-Free New Products4. Trouble-Free New Products1010New product problemsCare in new product planning=1010II. Product Life Cycle and II. Product Life Cycle and Marketing Channel*Marketing Channel*IntroductionGrowthSales($)Sales curveMaturityProfit curveTimeDecline1010Introduction Stage and Introduction Stage and Marketing ChannelMarketing Channel1. Recruit sufficient number of channelmembers for adequate market coverage2. Assure adequate supply on channel members’ shelvesGrowth Stage and Marketing ChannelGrowth Stage and Marketing Channel10101. Assure sufficient number of channel member inventories for adequate market coverage2. Monitor the effects of competitive productson channel member support1010Maturity Stage and Marketing ChannelMaturity Stage and Marketing Channel1. Extra emphasis on motivating channel membersto mitigate competitive impact2. Investigate possibility for changes in channelstructure to extend maturity stage & possiblyfoster new growth stage1010Decline Stage and Marketing ChannelDecline Stage and Marketing Channel1. Phase out marginal channel members2. Investigate impact of product deletion on channel membersIII. Strategic Product ManagementIII. Strategic 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:1010Product Strategy Issues*Product Strategy Issues*1. Product differentiation2. Product positioning3. Product line expansion & contraction4. Trading up & trading down5. Product brand strategy*Product Differentiation*Product Differentiation*1010Implications for channel management:• Select & help develop members who fit the product image when product differentiation strategy is affected by who will be selling the product.• Provide retailers with the kind of support needed to properly present the product when this strategy is