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MB0046 set 2

MB0046 set 2

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Published by Piyush Varshney

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Published by: Piyush Varshney on May 04, 2011
Copyright:Attribution Non-commercial


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Q.1 What is product mix? What are the strategies involved in product mixand product line? (10 marks)
Answer Product mixThe number of individual products produced or sold by an organization. Themix is defined by the industry and manufacturing environment, andmanagement strategies that position the company as a specialty, niche or broad- based supplier of goods and services. Instances where the product mix varieswidely from period to period often requires more investment in facilities andinventory, and may result in lower levels of customer service.It is extremely important for any organization to have a well-managed productmix. Most organizations break down managing the product mix, product line,and actual product into three different levels.Strategies involved in product mix and product lineProduct-mix decisions are concerned with the combination of product linesoffered by the company. Management of the companies' product mix is theresponsibility of top management.Some basic product-mix decisions include:1.reviewing the mix of existing product lines;2.adding new lines to and deleting existing lines from the product mix;3.determining the relative emphasis on new versus existing product lines in themix;4.determining the appropriate emphasis on internal development versus externalacquisition in the product mix;5.gauging the effects of adding or deleting a product line in relationship to other lines in the product mix; and6.forecasting the effects of future external change on the company's productmix.Product-line decisions are concerned with the combination of individual products offered within a given line. The product-line manager supervisesseveral product managers who are responsible for individual products in theline. Decisions about a product line are usually incorporated into a marketing plan at the divisional level. Such a plan specifies changes in the product linesand allocations to products in each line.
Generally, product-line managers have the following responsibilities:1.considering expansion of a given product line;2.considering candidates for deletion from the product line;3.evaluating the effects of product additions and deletions on the profitability of other items in the line; and4.allocating resources to individual products in the line on the basis of marketing strategies recommended by product managers.Decisions at the first level of product management involve the marketing mixfor an individual brand/product. These decisions are the responsibility of a brand manager (sometimes called a product manager). Decisions regarding themarketing mix for a brand are represented in the product's marketing plan. The plan for a new brand would specify price level, advertising expenditures for thecoming year, coupons, trade discounts, distribution facilities, and a five-year statement of projected sales and earnings. The plan for an existing productwould focus on any changes in the marketing strategy. Some of these changesmight include the product's target market, advertising and promotionalexpenditures, product characteristics, price level, and recommended distributionstrategyManaging the product mix for a company is very demanding and requiresconstant attention. Top management must provide accurate and timely analysis(BCG) of their company's product mix so the appropriate adjustments can bemade to the product line and individual products.
Q.2 What is a distribution channel? Explain the factors to be consideredwhile setting up a distribution channel. (10 marks)
Answer Distribution channelA path through which goods and services flow in one direction (from vendor tothe consumer), and the payments generated by them that flow in the oppositedirection (from consumer to the vendor).A marketing channel can be as short as being direct from the vendor to theconsumer or may include several interconnected intermediaries such aswholesalers, distributors, agents, retailers. Each intermediary receives the itemat one pricing point and moves it to the next higher pricing point until it reachesthe final buyer. Also called channel of distribution or marketing channel.
Distribution is also a very important component of Logistics & Supply chainmanagement. Distribution in supply chain management refers to the distributionof a good from one business to another. It can be factory to supplier, supplier toretailer, or retailer to end customer. It is defined as a chain of intermediaries,each passing the product down the chain to the next organization, before itfinally reaches the consumer or end-user. This process is known as the'distribution chain' or the 'channel.' Each of the elements in these chains willhave their own specific needs, which the producer must take into account, alongwith those of the all-important end-user.Factors to be considered for setting up Distribution channelThe selection of distribution is affected by many of factors, which playsignificant role while choosing the channel for distribution. It may include the buying pattern of consumer, type of the product is perishable, or auto mobile,weight and bulk and it also depends on the company's resources.The main affecting factors are following..Organization objectives - If company objective is to have mass appeal and rapidmarket penetration.type of product - Perishable products should have a short distribution channel,FMCG goods should have a wide reaching, intensive distribution channel.nature and extent of market- Distribution to consumer market or industrialmarkets would be different channel structures.existing channel for comparable product- company may chose it's existingchannel of distribution for relative product. buying habit of customers- Understanding consumer needs and criteria for  buyingChannel Availability - Channels may not be availableand other factors likeCustomer CharacteristicsProduct AttributesType of OrganizationCompetitionMarketing Environmental Forces and Characteristics of IntermediariesChannelsA number of alternate 'channels' of distribution may be available:

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