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Chapter 10. Product Issues in Marketing Channel Management. 10. Ch. 10: Major Topics. Marketing Mix in Channels Meaning of a Product Interface between Marketing Channel and Product** New Product Launch (ex: Vitamin Water article) Product Life Cycle (ex: Movie marketing channel video)

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Chapter 10
Chapter 10

Product Issues in

Marketing Channel Management

Ch 10 major topics


Ch. 10: Major Topics

  • Marketing Mix in Channels

  • Meaning of a Product

  • Interface between Marketing Channel and Product**

    • New Product Launch (ex: Vitamin Water article)

    • Product Life Cycle (ex: Movie marketing channel video)

    • Strategic Product Management

      - Product Strategies**

The marketing mix
The Marketing Mix

The means by which product, price, promotion and place variables can be assembled to meet channel needs.

The product ingredient of marketing mix
The Product Ingredient of Marketing Mix

  • Product:a unique bundle of tangible and intangible attributes offered en masse to customers.

    • Fusion of attributes

    • Value satisfaction

    • Product evolution

Fusion of attributes
Fusion of Attributes

  • Tangible attributes

  • Intangible attributes

    • Often more important

    • Marketing Channels (When is this important?)

    • Ex) LG vs. Samsung

Value satisfaction
Value Satisfaction

  • Perception of benefits derived from owning and consuming a product.

    • Assess customer value

    • Provide customer value

    • Communicate customer value

    • Dividing up the benefit

  • Ex) VARs in computer industry

Product evolution
Product Evolution

  • Core Product

     Actual Product

     Augmented Product*

  • Product Evolution

  • Channel Evolution

    Ex) PC industry; Movie industry

Levels of product




Levels of Product






& Credit
















Product channel management interfaces
Product-ChannelManagement Interfaces*


1. New product planning

& development

2. The product life cycle

3 Major

Areas of



3. Strategic product


I new product planning


I. New Product Planning*

  • What input, if any, can channel members provide into new product planning?

  • What has been done to assure that new products will be acceptable to thechannel members?*

  • Do the new products fit into the present channel members’ assortments?*

  • Will the product cause the channel members any special problems?

1 encouraging channel member input
1. Encouraging Channel Member Input


Solicit ideas for

new products.

Gather feedback

on product size

or on packaging.

Solicit feedback

during the test-marketing

or commercialization stage.

2 member acceptance of new products


2. Member Acceptance ofNew Products

Determining Factors

  • How the product will sell  Turnover

  • Whether the product is easy to stock & display

  • Whether the product will be profitable*  Margin

Ex) How to increase reseller acceptance?

3 adding products to the reseller s product assortment
3.Adding Products to the Reseller’s Product Assortment


Key Considerations:

Will existing channel members view the new product as appropriate to add to their assortments?

Will channel members feel competent

to handle the new product?

Ex) Vitamin Water Case  New product category

4 trouble free new products
4. Trouble-Free New Products


Care in new product planning


New product problems

Ii product life cycle and marketing channel
II. Product Life Cycle and Marketing Channel*




Sales curve

Profit curve






Introduction stage and marketing channel
Introduction Stage and Marketing Channel


Recruit sufficient number of channel

members for adequate market coverage

Assure adequate supply on channel

members’ shelves

Growth stage and marketing channel
Growth Stage and Marketing Channel


Assure sufficient number of channel member

inventories for adequate market coverage

Monitor the effects of competitive products

on channel member support

Maturity stage and marketing channel
Maturity Stage and Marketing Channel


Extra emphasis on motivating channel members

to mitigate competitive impact

Investigate possibility for changes in channel

structure to extend maturity stage & possibly

foster new growth stage

Decline stage and marketing channel
Decline Stage and Marketing Channel


Phase out marginal channel members

Investigate impact of product deletion

on channel members

Iii strategic product management


III. Strategic Product Management

Successful product strategies depend on:

  • 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 strategy issues
Product Strategy Issues*


1. Product differentiation

2. Product positioning

3. Product line expansion & contraction

4. Trading up & trading down

5. Product brand strategy*

Product differentiation
Product Differentiation*


Creating a differential product involves getting

consumers to perceive a difference.

Implications 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 influenced by how the product is sold at retail.

Ex) Fashion Apparel industry in Japan; Nike

Product positioning
Product Positioning


The manufacturer’s attempt to have consumers perceive the product in a particular way relative to competitive products

Implications for channel management:

•Consider interfaces between the product positioning strategy and where the product will be displayed and soldbefore the strategy is implemented.

• Elicit retailer support before attempting to implement strategy.

• ex) Vitaminwater positioning; NES positioning

Product line expansion contraction
Product Line Expansion & Contraction


Manufacturers often engage in both expansion and contraction simultaneously.

Implications for channel management:

• Difficult to balance between channel members’

Satisfaction with current product line & channel member

support for reshaped product lines

• Channel members are making increasing demands on

Manufacturers to have the right mix of products

 Retailer Power & Category Management

Trading down trading up
Trading 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:

• Can existing channel members provide adequate

coverage of high-end or low-end market segments?

Ex) Lexus of Toyota; Apple Stores

• Do channel members have confidence in

the manufacturer’s ability to successfully market the

trade-up or trade-down product?

Product brand strategy
Product Brand Strategy


When manufacturers sell under both national and

private 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 or physically vary products.

  • Dealing with Private Brand issue*

Product service strategy
Product Service Strategy


It is the role of the marketing channel to provide necessary 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