Chapter 13

Chapter 13 - Chapter 13: Product and Distribution...

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Chapter 13: Product and Distribution Strategies I. Product Strategy a. Definitions i. Product: a bundle of physical, service, and symbolic attributes designed to satisfy consumer wants ii. Product Strategy: focuses on more than just producing a good/service, focuses on the benefits iii. i.e. It includes package design, brand name, trademarks, warranties, product image, new product development, and customer service. b. Classifying Goods and Services i. Classifying Consumer Goods and Services (Classified by Buying habits) 1. Convenience Products: items the consumer seeks to purchase frequently, immediately, and with little effort a. i.e. Items from 7-Eleven stores and vending machines, including newspapers, chewing gum, etc. 2. Shopping Products: purchased after buyer has compared competing products in competing stores a. i.e. Person searching for a sofa, may spend days examining several pieces of furniture before the purchase of it. 3. Specialty Products: purchaser is willing to make a special effort to obtain, purchaser Is familiar with item and considers it to have no reasonable substitute a. i.e. Nearest Jaguar dealer is 40 miles away, you want one/can afford it so you make the trip. ii. Classifying Business Goods (Classified based on how they are used and by their basic characteristics) 1. Business Products: goods/services like cell phones/personal computers used in operating an organization a. i.e. Includes machinery, tools, raw materials, components, and buildings used to produce other products for resale 2. Capital Items: Long-lived and relatively expensive 3. Expense Items: Less costly products that are consumed within a year 4. 5 Basic Categories of B2B products a. Installations: major capital items, expensive, buyer/ seller negotiation may last for more than a year before purchase is made (purchase involves approval from production specialists, representatives from purchasing department, and members of top management)
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i. i.e. New Factories, Heavy Equipment/Machinery, & Custom made Equipment b. Accessory Equipment: includes less expensive/shorter-lived capital items; involve fewer decision makers i. i.e. Hand tools, Fax Machines c. Component Parts and Materials: finished business goods that become part of a final product i. i.e. Disk drives that are sold to computer manufacturers or batteries purchased by automakers d. Raw Materials: farm/natural products used in producing other final producs i. i.e. Milk, iron ore, leather, and soybeans e. Supplies: expense items used in a firm’s daily operation, don’t become part of final product (a.k.a. MRO; Maintenance, Repair, and Operating Supplies) i. i.e. Paper clips, light bulbs, and copy paper iii. Classifying Services (Classified as either B2B or B2C) 1. Examples of B2B and B2C Services a. Child- and Elder-Care Centers & Auto Detail Shops provide consumer services (B2C) b. Security Patrol at a factory & Kelly Service’s temporary office workers provide business services
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This note was uploaded on 11/28/2010 for the course BUS 101 taught by Professor Hunter during the Spring '08 term at Bryant.

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Chapter 13 - Chapter 13: Product and Distribution...

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