Term
| Three major areas of product management |
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Definition
1. New Product planning and development
2. The Product Life Cycle
3. Strategic product management |
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Term
| 1. New Product Planning and Development - 5 aspects |
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Definition
1. Encouraging Channel Member Input into New Product Planning
2. Fostering Channel Member Acceptance of New Products
3. Fitting the New Product into Channel Member Assortments
4. Educating Channel Members about New Products
5. Making Sure New Products are Trouble Free |
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Term
| Four stages of the Product Life Cycle Model |
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Definition
- Introduction
- Growth
- Maturity
- Decline |
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Term
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Definition
| – slow growth; low or non-existent profits due to high cost of introducing product to the market |
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Term
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Definition
| – marked by rapid acceptance and relatively high profits |
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Term
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Definition
| – profits tend to peak and then decline as market becomes highly saturated. |
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Term
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Definition
| – when sales decrease absolutely and profits plummet to the zero point. |
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Term
| The Introductory Stage and Channel Management |
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Definition
- Management should assure sufficient numbers of channel members for adequate market coverage
- Assure adequate supply on channel members’ shelves
- Breakdowns in planning and coordination are common |
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Term
| The Growth Stage and Channel Management |
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Definition
Management is challenged:
- to ensure that product availability provided to the market by channel members is adequate so as not to inhibit growth
Approach to dealing with this challenge is through monitoring the product flow as it flows through the channel. Formal and systematic reporting procedures are necessary for effective monitoring.
- to carefully monitor channel member actions with respect to competitive products already handled by them and keep an eye out for potential competitors who are attempting to “break into” the channel. |
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Term
| The Maturity Stage and Channel Management |
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Definition
- Extra emphasis should be put on making sure the product is more desirable for channel members.
- At the same time, possible changes in channel structure, particularly the selection of different types of intermediaries, should be investigated to forestall the decline stage and possibly create a new growth stage. |
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Term
| The Decline Stage and Channel Management |
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Definition
Two final channel implications:
- Can marginal outlets be phased out quickly to avoid further profit erosion?
- Will dropping the product cause an adverse reaction on the part of existing channel members? |
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Term
| 3. Strategic Product Management and Channel Management |
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Definition
| The success of the manufacturer’s product strategies is, to some extent, depends upon the effectiveness of the channel members in carrying out the manufacturer’s product strategies. |
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Term
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Definition
| The attempt to get the consumer to perceive a significant difference in the product. |
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Term
| Two channel management implications for product differentiation strategy: |
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Definition
1. When product differentiation strategy is affected by who will be selling the product, the channel manager should try to select and help develop channel members who “fit” the product’s image.
2. When product differentiation strategy is influenced by how the product is sold at retail, the channel manager should provide retailers with the kind of support and assistance needed to properly present the product. |
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Term
| Product Positioning and Channel Management |
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Definition
| The manufacturer’s attempt to have consumers perceive the products in a particular way relative to competitive products. If this is accomplished, then the product is “positioned” in consumers’ minds as an alternative to other products that they currently use. |
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Term
| 3 Channel Management implications of product positioning: |
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Definition
1. The possible interfaces between the product positioning strategy and where the product will be displayed and sold to consumers should be considered before the positioning strategy is implemented.
2. If possible, retailer support in the form of proper merchandise presentation and display should be elicited before attempting to implement the positioning strategy
3. A sufficient “war chest” should be available to provide retailers with attractive incentives in the form of cooperative advertising, promotional allowances, and special merchandising deals needed to gain strong retailer acceptance in support of the positioning strategy. |
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Term
| Product Line Expansion/Contraction and Channel Management |
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Definition
| Product line expansion and pruning strategies can create problems in dealing with channel members because it is difficult to find a “perfect” blend of products in the line that will satisfy all channel members. |
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Term
| Product line expansion - Points worth considering: |
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Definition
1. Although a manufacturer must be the master of its own product line and be free to change it in what is believed to be its best interests, it makes good sense to incorporate channel member views whenever possible.
2. The manufacturer should attempt to explain to channel members the rationale underlying product line expansion or deletion strategies
3. The manufacturer should try to provide adequate advance notice of significant product line changes to channel members to allow them sufficient time to prepare for such changes. |
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Term
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Definition
| Term that refers to adding products to the line that are substantially more expensive than other products in the line |
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Term
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Definition
| Adding lower-priced products to the line than is typical |
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Term
| Trading up or down strategies |
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Definition
| These can be high-risk strategies because they may reflect profound departures from the company’s normal base of operations. The manufacturer may now face (1) new markets about which it may know very little, (2) new competitors it has not faced before, and (3) quite possibly new channel members and/or new problems with existing channel members. |
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Term
| Product Brand Strategy and Channel Management |
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Definition
| Most manufacturers have several options available when considering product brand strategies. They might sell their products (1) under one national brand, (2) under several national brands (a “family” of brands, (3) under private brands, or (4) under both national and private brands. |
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Term
| Problems with selling a product under both national and private brands. |
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Definition
| This presents the most difficult channel management problems, because when the manufacturer sells under both national and private brands, direct competition between channel members may result. Example: Whirlpool (national brand) also sells as Kenmore for Sears (private brand). |
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Term
| Product Service Strategy and Channel Management |
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Definition
| - Many products in both the consumer and the industrial spheres require service after the sale. Thus, manufacturers of these products should make some provisions for after-sale service either by offering it directly at the factory, through their own network of service centers, through channel members, through authorized independent service centers, or by some combination of these organizations. |
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Term
| - Providing product service |
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Definition
| An area that has too often been overlooked by manufacturers as a strategic issue in product management, especially among consumer goods manufacturers. If good product service is to be provided by the channel, the manufacturer must view the issue of product service as a basic strategic issue in product management and channel management. |
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Term
| - Product service strategies |
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Definition
| Strategies which require channel member support if they are to work well. The manufacturer who expects strong cooperation from channel members in providing service must make it clear to channel members that service is an important part of the overall product strategy, and incentives must be provided for the channel members to cooperate in the service program. |
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