Product, Brand, and Distribution
The Product
What is a Product?
– A material item that companies offer their customers in the market.
– Is something more than a set of physical features, a package, and a brand.
– Warranty: after-sales service, conditions of payment, satisfaction, and benefits they provide to the customer are also key elements in the success of a product.
The Idea
– Behind each product lies an idea.
– Did you know? That 9% of new food products fail.
What is a Product Range?
– The product range refers to all the different products sold by a company.
– Many companies have just one product or one single service. However, others provide more than one product.
Catalogue
Distance selling needs to design a good catalogue that shows the advantages of the product.
Objectives of a Catalogue
- Attract the attention of the customer.
- Provide clear information on product features: image of the product, reference number, price, technical specifications, etc.
- Attract interest in the product or service. It has to persuade and convince.
- Facilitate purchasing a product / include an order form.
Catalogue Format
When deciding on the catalogue format, we must consider the following factors:
Most Regularly Used Formats
- Paper format:
Pros: Cheaper, accessible to all people, easy distribution.
Cons: Is a static format so you can’t make changes. - Digital format:
Pros: Changes can be introduced at any time, modern image, cheap.
Cons: Not everyone has access to a computer.
The Product: Depending on the Final Customer
- Product for the private customer: They satisfy individual needs or wishes: food, etc.
- Product for industrial markets: The customer is a company: raw materials, etc.
The Product: Depending on Their Durability
- Long-lasting products: Cars, furniture, etc.
- Products for immediate use: Fresh products, etc.
The Product: Depending on Frequency of Purchase
- Basic goods: Bread, water, milk, etc.
- Regularly purchased products: Clothes, shoes, etc.
- Occasionally purchased products: Cars, travel, game consoles, etc.
Product Life Cycle
– Every product has a life cycle.
– Every single product goes through a sequence of stages known as the product lifecycle.
What is Seasonality?
– The variation in sales of a given product through the year: ice creams in summer, etc.
Don’t Forget
That the catalogue should consider: cost, distribution, and target market.
The Brand
– Is a set of elements by which a product or service is known.
– Elements: Name, logotype, package, labels, style, sound, scents, colors, etc. All this and much more may form part of a product’s brand.
Did You Know?
– The triangular shape of Toblerone chocolate is a registered trademark.
What is the Purpose of the Brand?
- To identify the product.
- To distinguish the product from other similar products.
- To represent the image and reputation of the company.
– A company may have several registered trademarks.
Second Brands
– These are brands launched by companies that already have other brands on the market with a view to reaching a new type of customer or combating pressure from the competition.
– Examples: Toyota—Lexus, Renault—Dacia.
The Package and the Label
– The importance of the package is greater than ever.
– Certain products are instantly recognizable by the size, shape, and color of their package.
Container Functions
- To preserve and protect the product.
- To differentiate it.
- To facilitate transport, storage, and handling.
- To generate sales.
Materials and Innovation
– The packaging industry has clearly evolved with the development of new materials.
– The most commonly used materials are glass, plastic, metal, paper, and cardboard.
– Innovation can also be applied to opening systems.
Recyclable and Recycled
– Two similar words but they don’t have the same meaning.
– A recycled package is manufactured from recycled materials.
– Recyclable means it can be recycled afterward.
PET
– The material made of plastic bottles.
Labels
– A well-designed label makes the container more noticeable.
A Label Must:
- Provide information.
- Differentiate.
- Make people buy.
– Although the designs are very important, labels must also include specific information on the product:
- The brand.
- The manufacturer.
- Weight, measurements, and code.
- Warning symbols and icons.
Purchase Decision
– Good packaging and labels will attract the attention of consumers and may lead to an impulse buy.
– Loyal consumers always buy a product from a given brand if they like it.
Price
– Production, quality, costs, price, and market surveys are all interconnected.
Production
The three main steps in defining the price of a product are:
- Calculate costs.
- Know the minimum number of units that have to be produced and sold to break even (sales equal cost).
- Establish the price of the product.
The production process comprises several activities that lead to the final product.
Production Factors
– Materials + Workforce + Installations + Machinery + Energy + Others = Product/Services
Materials
- Raw materials: These are the materials required for the production process.
- Auxiliary materials: Materials that do not require transformation.
- Merchandise: Materials that are not transformed but sold as received from suppliers.
Quality
When should quality be controlled?
Throughout the entire process: select suppliers carefully, production, storage, subcontractors, sales, and customer service.
Cost
Knowing the costs is the first step in establishing the price of a product.
- Fixed costs: They always remain constant regardless of the number of units manufactured. Examples: rent, insurance, wages.
- Variable costs: They change depending on the number of units produced. Examples: buying raw materials, water, etc.
Total cost: Fixed cost + variable cost
– The cost is not the only factor influencing purchase decisions.
– Other factors such as design, image, brand, quality, and competition also play a role.
The Basic Formula
Price = Cost + Desired Profit
Influence Factors
– Knowing the cost is a necessary condition but not sufficient to establish the price of a product.
- Costs: Production, distribution, sales, profits.
- Demand: Market, consumer, consumption habits, reference price, quality, ecological concerns.
- Competition: Competitors’ prices, image, etc.
Distribution
– One of the recommendations to reduce environmental damage is to consume local, fresh, and seasonal products as much as possible.
Transport
Aspects to be considered: Goods (weight), destination, safety, type of service.
Available Distribution Channels
- Company ———————————————— Consumer
- Company ——————— Wholesale ———————— Consumer
- Company ——————— Retailer ———————— Consumer
- Company —— Wholesale —— Retailer —— Consumer