UNIT-3: Product Mix and Distribution
Product Mix
- Definition: The product mix, also known as the product assortment, is the total range of products that a company offers for sale.
Components of Product Mix:
Width: The number of different product lines a company offers.Length: The total number of items within the product lines.Depth: The number of versions offered for each product.Consistency: How closely related the various product lines are.
New Product Development
Steps in New Product Development:
- 1. Idea Generation: Gathering new product ideas from internal and external sources.
- 2. Idea Screening: Filtering out unfeasible or inappropriate ideas.
- 3. Concept Development and Testing: Developing product concepts and testing them.
- 4. Business Analysis: Evaluating the product's potential profitability.
- 5. Product Development: Creating prototypes or samples.
- 6. Test Marketing: Introducing the product in a limited market.
- 7. Commercialization: Launching the product on a full scale.
Levels of Product:
Core Product: The fundamental benefit or service that the customer is buying.
Actual Product: The tangible, physical product with its specific features.
Augmented Product: Additional services and benefits that enhance the product's value.
Product Life Cycle (PLC)
Introduction: Create awareness, encourage trial, selective distribution, and intensive promotion.
Growth: Build brand preference, expand distribution, competitive pricing, and product improvements.
Maturity: Defend market share, maximize profits, diversify product line, competitive pricing.
Decline: Minimize costs, manage product discontinuation, price cuts, reduced promotion.
Branding and Packaging
Branding: The process of creating a unique identity for a product through a name, symbol, or design that sets it apart from competitors.
Key Elements of Branding:
Brand Name: A crucial identifier that should be memorable and reflective of the brand's essence.
Brand Logo: A visual symbol representing the brand.
Brand Slogan: A catchy phrase that encapsulates the brand's promise.
Brand Identity: All visual and verbal elements that represent the brand.
Brand Image: The perception of the brand in consumers' minds.
Brand Equity: The value that a brand adds to a product.
Importance of Branding:
Differentiation: Helps a product stand out in a crowded market.
Customer Loyalty: Creates emotional connections with consumers.
Trust and Credibility: Well-established brands are perceived as more reliable.
Marketing Efficiency: Simplifies marketing efforts and reduces costs.
Packaging: An essential component in the marketing mix, serving multiple functions beyond containing a product.
Functions:
Protection: Safeguards the product from damage and contamination.
Convenience: Makes the product easy to use, handle, and store.
Promotion: Communicates brand message and influences purchasing.
Information: Provides necessary product and legal information.
Sustainability: Reduces environmental impact through eco-friendly materials.
Types of Packaging:
Primary Packaging: First layer that directly encloses the product.
Secondary Packaging: Provides additional protection and branding.
Tertiary Packaging: Used for bulk handling and transportation.
Distribution
Concept: Distribution involves the logistics of getting a product from the manufacturer to the consumer, ensuring product availability at the right place and time.
Importance:
- • Ensures product availability, enhancing customer satisfaction.
- • Influences sales volume and market coverage.
- • Facilitates the flow of goods from producers to consumers.
- • Reduces costs through efficient logistics and supply chain management.
Different Types of Distribution Channels:
Direct Channels:
- The manufacturer sells directly to the consumer without intermediaries.
- Examples: Online stores, company-owned retail stores.
Indirect Channels:
- Involves one or more intermediaries between manufacturer and consumer.
- Examples: Traditional retail stores, supermarkets.
Types of Intermediaries:
Wholesalers: Buy in bulk from manufacturers and sell to retailers.
Retailers: Sell products directly to end consumers.
Agents/Brokers: Facilitate the sale without taking title to goods.
Distribution Strategies:
Intensive Distribution: Stocked in as many outlets as possible.
Selective Distribution: Available through a limited number of outlets.
Exclusive Distribution: Available through very few outlets.
