©2013 cengage learning. all rights reserved. business management, 13e product development and...

©2013 Cengage Learning. All Rights Reserved.

Business Management, 13e

Product Development and Distribution21.1 Product Management21.2 Distribution Management21.3 Channel Design

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CHAPTER 21

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21.1 Product Management

DLTs● Explain how products, product lines, and

product assortments are developed.● Discuss how product selection, packaging, and

branding improve product sales and customer satisfaction.



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Product Development

● The product – consists of all attributes, both tangible and intangible, that customers receive in exchange for the purchase price.

● Coordination with other elements of the marketing mix



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Product Design Levels

● Basic product – physical product in simplest form

● Enhanced product – product includes different features and options

● Extended product – includes additional features that aren’t part of the product but increase its usability



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Product Selection

● Product line – group of similar products with obvious variations in design/quality to meet needs of distinct customer groups.

● Product assortment – complete set of all products a business offers to a market.

● Packaging – provides protection, information, accessibility, promotion

● Branding – name, symbol, word, or design that identifies a product, service or company




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CHAPTER 21

Product Assortment Matrix



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21.2 Distribution

DLTs● Discuss the important factors to be considered

when selecting channels of distribution.● Describe the different channels of distribution.



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Purposes of Distribution

● Economic discrepancies● Differences between types of products produced and types consumers

want.● Differences between the time of production and the time consumers

want the products● Differences between the location where products are produced and the

location where consumers want them● Differences between the quantities produced and the quantities

consumers want.● Economic utility – amount of satisfaction received from using a

product or service.● Time utility – customers can purchase a product when they need it● Place utility – products are available at a convenient location



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Channels of Distribution

● Channel members – Businesses that participate in activities that transfer goods and services from producer to users.

● Types of distribution channels● Direct distribution – producer sells directly to

consumer● Indirect distribution – producer sells to a chain of

channel members before it reaches consumer● Integrated marketing channels – one business owns

the organizations at other levels of the channel




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CHAPTER 21

Distribution Channels for Consumer Products

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21.3 Channel Design

DLTs● Discuss the factors that affect a producer’s

choice of distribution channel.● Describe the characteristics of major forms of

transportation used to distribute products.● Give examples of product-handling procedures

that improve product distribution.



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Selecting a Channel of Distribution

● Different types of consumers require different channels of distribution

● Factors to consider● Perishability of the product● Geographic distance between producer and consumer● Need for special handling of the product● Number of users● Number of types of products manufactured● Financial strength and interests of the producer




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CHAPTER 21

Four Possible Channels for the Distribution of Computer Games



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Transportation Decisions

● Common transportation methods● Railways● Trucks● Piggyback service● Airplanes

● Other transportation methods● Waterways● Pipelines● Containerization



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Product Handling

● Tracking products● Bar codes

● Product storage● Warehouses● Distribution center

● Order processing

©2013 cengage learning. all rights reserved. business management, 13e product development and...

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