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PART 3: MANAGEMENT THE MARKETING CHANNEL

Product Issues in
Channel Management
Han, Tran Ngoc Gia
Thien, Hoang Thi Ngoc
Nhan, Vo Thuy Thanh
Uyen, Phan Vu Phuong

CONTENTS
New
The

product planning and Channel management

product life cycle and Channel management

Strategic
Trading

product management and Channel management

down, Trading up and Channel management

Product-Channel
Management Interfaces
New product planning
& development

The Product Life Cycle


3
Major
areas of
product
Management

Strategic Product
Management

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 the channel members?

Do

the new products fit into the present channel members


assortments?

Will

any special education or training be necessary to prepare


the channel members to sell the new products effectively?

Will

the product cause the channel members any special


problems?

6 roles of retailer

Interpreting customer
demand

6 roles of
wholesalers

Tremendous sells
and profit.

Ne
of w
pr lin
od es
uc
t

He
re nk
ta el
ile s
Cu
r
s
fe to
ed m
ba er
ck

Henkel Consumer
Adhesives

Encouraging Member Input


Solicit ideas
for
new products.

Gather feedback
on product size
or on packaging.

Solicit feedback
during the test-marketing
or commercialization
stage.

Member Acceptance of
New Products
Factors that pre-determine acceptance of new
products by channel partners:
How

the product will sell Turnover

Whether
Whether

the product is easy to stock & display

the product will be profitable


Margins

Adding Products to the


Assortment
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?

Educating Channel Members


Manufacturer goal:

Method:

To sell new products


successfully

Educate or train
channel members in the
products use and the
special features to
emphasize in sales
presentations

Trouble-Free New Products

Products problem can happen anytime. During displays or post


purchase.

Care in new product


planning

New products problems

Product Life Cycle


Sales
($)
Sales curve

Introductory

Growth

Profit curve

Maturity

Decline

Time

Introductory

1. Assure sufficient number of channel


members for adequate market coverage
2. Assure adequate supply on channel
members shelves

Growth

1. Assure sufficient number of channel member


inventories for adequate market coverage
2. Monitor the effects of competitive products
on channel member support

Maturity

1. Extra emphasis on motivating channel members


to mitigate competitive impact
2. Investigate possibility for changes in channel
structure to extend maturity stage & possibly
foster new growth stage

Decline

1. Phase out marginal channel members


2. Investigate impact of product deletion
on channel members

Strategic Product Management


Successful Product Strategies:

Product quality, innovativeness, or technological


sophistication

Capabilities of managers overseeing product line

Firms financial capacity & willingness to provide


promotional support

Channel members role in implementing product


strategies

Product Strategy
Product

differentiation

Product

positioning

Product

line expansion & contraction

Trading

up & trading down

Product

brand strategy

Product Differentiation
Creating a differential product involves getting
consumers to perceive a difference.

Product Differentiation
Implications for channel management:
Channel

managers should try to select & help


develop members who fit the product image
when product differentiation strategy is
affected by who will be selling the product.

Channel

managers should 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.

Product Differentiation

Product Positioning
The manufacturers attempt to have consumers perceive the
product in a particular way relative to competitive products

Product Line Expansion &


Contraction
Manufacturers often engage in both expansion and
contraction simultaneously.
Implications for channel management:

Difficult to balance channel member satisfaction &


support for reshaped product lines

Channel members are making increasing demands on


manufacturers to have the right mix of products

Product Line Expansion

Product Line Contraction

Trading up, Trading down


Adding lower-priced products or product lines,or
higher-priced products or product lines, to a product
mix
Implications for channel management:
Whether existing channel members provide adequate coverage of highend or low-end market segments to which trade-up or trade-down product
is aimed
Whether the channel members have confidence in the manufacturers
ability to successfully market the trade-up or trade-down product.

PNJ & PNJ Silver

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.

Physically vary products enough to minimize direct

Product Service Strategy


It is the role of the marketing channel to provide necessary
service along with the product to the final user

Thank
you!