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Table 2.1 Summary of Characteristic, Objectives and Strategy of Product Life Cycle Stage

Table 2.1 Summary of Characteristic, Objectives and Strategy of Product Life Cycle Stage

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Product Research

Product strategies are effective ways of doing business, based on

guaranteed to satisfy the needs of the market and customer tastes in each period

of the enterprise business.

Strategic commodities have an important part to be considered the

backbone of the strategy of selling. The higher production level, increasingly

fierce competition, the vital role of commodity products become increasingly

important. Product strategy not only guarantees production and business

activities in the right direction but also inextricably linked to the stages of the

process of reproduction of business expansion to implement the objectives of the

marketing strategy.

Pricing Research

Pricing strategy is to offer the kind of price for a commodity type of

product, corresponding to the market, corresponding to each period to sell the

most and highest rates. Business rates are given to ensure profit maximization

but consistent with consumers and consumer acceptable. Rates will vary

according to the product life cycle, so businesses need to realize precisely to

change the most reasonable.

Although currently on the market, price competition has ceded the

position to compete on quality and service but the prices are still certain

important roles. Price is still important in determining the economic benefit

between the seller and the buyer. If the product strategy that will guide the

production, pricing strategies oriented to consumption.

Pricing strategies have intimate relationships with strategic commodities.

Product strategy is very important though, and has built a thoughtful way will

not provide high efficiency without the price strategy or price strategy carries

many shortcomings.

New businesses established or new market penetration typically applied

pricing strategies to attract customers towards themselves to occupy a market



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share. For Vietnam market, low-income residents, requirements are not highquality products are competitive in pricing strategy is still effective weapon. But

do not be too abusive to compete on price because it can be counterproductive to

harm the business.

2.2.3 Research of distribution channels

What is categorized as a channel of distribution is generally the route

which goods are shipped from the manufacturers and then ultimately to the

consumers (Tybout, A., Calder, B. 2010). In a distribution network system, the

producer places his product directly in the hands of actual users. The cycle of

distribution involves the initial producer, the eventual buyer, and any

intermediaries - to include a wholesaler or retailer (Kotler, P., G. Armstrong, J.

Saunders & V. Wong, 2007).

A middleman is a term that refers to any company or individual in the cycle

which either acquires rights to the goods, deals with price negotiations, or sells

in the same capacity as an agent or broker (Tybout, A., Calder, B. 2010).

Facilitating agencies that assist in functions concerning marketing are not

classified as middlemen in the cycle of distribution.

Intermediaries are used by producers in order to distribute their products to

any given market (Meffert, H., C. Burmann, M. Kirchgeorg, 2008).

The intent of the producer is to establish a cycle of distribution, or often

referred to as a distribution channel, in order to accomplish this goal.

The decision that a company makes, in regards to its proper selection of a

channel, weighs heavily on the outcome of any and all other marketing decisions

made. The strategies, pricing objectives, and distribution processes of a

marketer, who deals with mass producing companies, as apposed to product

distribution to a novelty shop, would reflect stark contrasts. The decision of

which retailers to select, along with certain intermediaries, depends mainly upon

the actual product. The role of the mass merchandiser is to sell middle-priced



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products and simultaneously distribute high-end products to novelty shops, like

a furniture store for example.

The true effectiveness of a firm’s communication and sales prowess falls

largely on the amount of training and motivation is required from the support

channel (Crawens, David W., Nigel F. Piercy, 2009). Acquiring a particular

product may also have a direct correlation to the capabilities of the channel

members themselves. Many companies have often made the mistake of paying

not enough attention to their channels; in the meantime, other companies such as

Apple Inc., UPS, and Merrill Lynch flourish.

Distribution strategies can classify into various categories:

+ Based on sales forms:

Distribution strategy in the form of retail distribution strategy is for goods

and services to final consumers. This strategy by the producer or reseller did.

Distribution strategy in the form of wholesale: the strategic distribution of

goods and services to the buyer for resale.

+ Based on the contact between businesses and final consumers

Direct distribution strategy: the distribution strategy which producers sell

their products won the final consumer without going through any intermediate

stages.

Indirect distribution strategy: the strategy is carried out through some

intermediaries.



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We can be found through the following diagram:



Channel 0



Channe

Channe



Channel 1

Retailers

Channel 2

Wholesalers



Retailers



Consumers



Producers

Agents



Wholesalers



Retailers



Figure 2.3 Types of distribution channels

l3

Source:Channe

http://www.grin.com/

Channel 1: Direct channel



Channel 2, 3, 4: Indirect channel



The content of the distribution channel

Identify strategic objectives of distribution: distribution strategy has many

different purposes, but there are four main objectives; ensuring rapid distribution;

consume large quantities of products and services, ensuring the quality of goods;

low cost. Depending on the overall goal of the strategy of selling the businesses can

choose one of the primary targets to build distribution strategy.

Selection based distribution strategic:

- Based on the characteristics of the goods can be divided into three

groups: goods involved to preserve damaged roots require direct market access;

single goods; engineering goods have special needs made by direct sale; goods

to sell in bulk through intermediaries.

- Based on customer characteristics: East or sporadic customers,

concentrated or dispersed, stable levels of consumption.



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Identify distribution channels: the important content distribution strategy

is to select the appropriate distribution channel for the characteristics of the

product and customer characteristics so that enterprises achieve strategic goals

distribution.

2.2.4 Promotion policy

It is the primary tool of the marketing mix that enterprise can use to impact

on the target market to achieve the business objectives. The nature of these

activities promote dissemination of products information to convince customers

to buy, so it calls marketing communications activities.

Some types of promotion policy:

Advertisement: Includes all forms of long introduction and promotion of

ideas, goods or services to be performed at the request of the subject advertising

Sales promotion: short-term measure impact on encouraging the purchase

of products or services.

Propagation: the stimulus indirectly to increase the demand for goods and

services or increase the prestige of a business unit by providing meaningful

information about our trade publications in a convenient and free the mass

media.

Personal Sales: the oral introduction of the goods and services seller

through dialogue with one or more potential customers for the purpose of sale.

Enterprises will choose appropriate media and actually by the analysis of

the characteristics of the recipient believe the level of awareness, standards

living, purchasing power .., and enterprise should consider costing of doing

business for this activity after confirming media objectives.

2.2.5 Implementing product sales plan

In fact, the goods are not sold is not only due to the quality and price but

also weakness organizations to consume products. In order to streamline the

activities of consumption, enterprise should follow:

Sellers is the straight person who contacts and communicate with

customers. They have an important role in determining the success of



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consumption process. Besides the distinctive features of the product, the service

style of sellers will make up the company's image, in particular for the products

that are highly competitive with the products of easy replacement. Therefore, the

enterprise should arrange labors who have high qualified professional, skillful

and sensitive to customer psychology. They must have a clear understanding of

the product and attract customers to the unique properties of the product

compared to other products.

Trading and contracting activities: When enterprise sale products in this

form, it help them sell a large volume and build the long-term business

relationship at the same time. Therefore, in the process of signing a contract, the

enterprise need dexterity, agreement flexibility terms that create a relaxed

atmosphere, trust and try to collect more information about the future demand of

customers.

Organization of the distribution network: In essence, the organizational

forms of distribution channels them. The enterprise base on product

characteristics, market conditions to choose the form of a logical channel, low

cost, quick information, and control goods are distributed.

2.2.6 Customer service

The pre-sales services include information services, referrals, introduction,

advertising, join the Expo. It introduces the use of products and services in order

to attach to consumers demand. Therefore enterprise persuades them to buy and

use their products.

The service while selling: the communication services between customers

and enterprise. It includes the introduction of the products, guiding the selection

of products, payment contracting and transportation of the products... Services

impact on the consumer behavior about sentiment the credibility of the

company, the quality, and price of products.

After-sales service: The activities include the installation, repair, warranty,

consumer consultant, former procurement, replacement, and maintenance ...This



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work enhances the reputation of the enterprise, raise the confidence of

consumers when buying and using goods produced by the enterprise.

2.2.7 Assessing the product consumption process

The criteria to assess the effectiveness of consumption product activities of

the enterprise shown by the indicators reflecting the situation of consumption

products. It measures by the volume of product and price.

Analysis of the component to analyze indicator changes not only in

absolute terms but also in structure between the actual parts of the plan, and the

integration of the transformation structure research.

According to the method of consumption, there are many different ways:

Enterprise self-consumption, provided directly to consumers Through the

venture, association, and agent Commercial Affairs for the State. Sold to private

businesses.

2.3 Factors affecting the products consumption of craft villages

2.3.1 External factors

 Political factors

If political and laws clear and stable, it will ensure favorable conditions and

equality for the enterprise to participate in the market competition in a healthy

manner, with high efficiency. Political and law influence directly or indirectly to

the operation of the consumption. There are some types of political factors affect

product consumption such as financial policies, the protectionist policies of free

trade, the views in the field of import, the national program, the regime wages,

benefits and allowances for labors

 Factors on science and technology

Competitiveness in the market or the ability to consume products decides

by quality and price. Science and Technology decided to 2 factors. It applies in



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production contribute to rising the quality of goods and services, minimize

production costs

 The economic factor

The economic factor plays a critical role now, it decided to complete the

formation and business environment and affect the competitiveness of enterprise

in the market. Including the following factors:

- Economic Policy of the State: State Policy support effects or a substantial

barrier to business operations of enterprise

- The economic growth: If the economy is stable and high growth, it will make

income increased. Thereby the purchasing power of goods and services increase too.

- Exchange rate: Local currency decrease prices lead to increased exports. It is

the opportunity for production and higher competitiveness in the domestic

market and internationally. Because of the decreasing in price domestic goods

sold, it compared to foreign competitors

- Inflation: business risk occurs when inflation is very high. When inflation is

high, self-defense business by myself: do not invest in production and business

investment as remanufactured expansion and technological renovation of

production.

 Consumer behavior

Products produced to suit the tastes of consumers; there is such a new

satisfies the needs of new customers eager to speed up consumption. It is also

significant factors to affect demand in the market. Consumers will buy more if

the goods with the tastes and essential to them.

 Competition

Competitive research is to study the competition and set orientation,

remedial measures in accordance with its business.

In general, all businesses are faced with different competitors. Considering

competing viewpoints on 4 levels:



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- Competition desired with the same amount of income they can use in

various purposes, procurement of equipment for family, travel… when this

purpose can be used not only used for other purpose, for many purposes this will

limit other purpose. Detailed structure may reflect trend consumers, thereby

creating opportunities or threats consumption activities.

- Competition between various types of products to satisfy the same desire.

The desire of vehicles or expectations can cause the same competition.

- Competition products of the same type

- Competition between brands

4 categories on the level of competition are fierce gradually from 1 to 4.

When considering competing manufacturers must take into account the 4 levels

to determine the operational plan for its consumption, to determine anticipate

problems and what will happened during the competition to find manufactures

compete period. If the manufacture’s potential was low, not competitive enough,

the manufactures must find the market gaps to avoid cross-eyed, which is to find

products that rival skip to manufacture and the market development objectives

to maximize the revenue for themselves.

2.3.2 Internal factors

Price product sale

Commodity prices are one of the key factors affecting consumer activity Commodity prices can stimulate or restrict the supply and demand in the market

and thus affect consumption. Determining the right price to attract customers to

ensure ability highest profit or avoid stagnant water and limit losses. Depending

on the environment, the market segments that businesses should set high or low

prices to attract customers, and will, therefore, sell more goods and increase

sales for your business. Moreover, the price to be adjusted flexibly in every

phase of business, each period of development or business cycle to attract

customers and stimulate their consumption, increase the speed of product sales

enterprise products.



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Prices have significantly influenced consumer activity so it can also

use as a weapon in the most competitive regarding people's income is low.

So be very careful to compete on price, directions, proper planning

regarding price is a necessary condition for increasing the speed of the

goods consumed by enterprises today.

Product quality

When it comes to product quality goods, refers to the intrinsic

characteristics of the product is determined by the parameters that can be

measured or comparable suit current conditions and meets the current needs of

particular societies.

When consumers buy something, they think about the possibility of goods

to satisfy their needs, to the quality it has. In the current conditions of quality is

the most important factor that large companies are often used in competition

because it offers the potential for "substantial victory". It is also the way that

businesses attract customers and build, preserve the best reputation. Any product

that is selling goods on the market contain a certain use value, but fellow human

products manufactured from various businesses will have different quality

products businesses which have the higher quality will attract your customers.

When customers know the quality of goods and products of the business and

believe in quality, they will purchase the business. Enterprises sell maintain not

only traditional markets but also expand new markets, strengthen the position of

enterprises in the market.

The highest goal of business is profit targets but to achieve profitability; the

enterprises need to sell goods and collect money for customers, i.e., be accepted.

For this external price factors now have to focus on the quality factor, the quality

of products can make a solid position in the market of the product. At the same

time, the quality will attract long-term customers, sustainability and make loyal

customers with products of the business goods.

Advertising



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Regarding today's fiercely competitive advertising plays a huge role in

promoting the consumption of goods and products. Advertising to introduce

products to consumers and stimulate their needs.

Because the ads are very expensive so to ensure effective advertising need

to hire advertising agencies to advertise the program editor, hired analysts,

stimulate consumption to build advertising programs, promotion to create the

image of the enterprise. Businesses can advertise in newspapers, television,

radio and more sales letters used to advertise their products to match the best.

The fact that so many businesses thanks to good advertising sales have

grown rapidly, and there are now spending a lot of money on advertising, but

advertising content not reasonably lead to consumers buy not only products but

also the opposition. So when developing advertising programs must now be very

careful to promotional activities to accelerate the consumption of the business.

Distribution channel and after-sale service

Well-organized distribution channels and after-sales service will increase

the speed of the goods consumed by enterprises; distribution channels include

wholesale networks, retailers, agents organized. It will occupy the market space,

create conditions for consumers and further stimulate their needs.

Establish a network marketing channel strategy should base on

consumption which is now pursued, the resources of the enterprise, in the

characteristics of customers, consumer habits and channels of competitors.

To do well in distributed enterprises should ensure civilized politeness,

punctuality in the transactions, create the most favorable conditions for

customers to purchase. More flexibility to flexibility in payment methods,

delivery of goods to ensure mutually beneficial to avoid causing problems for

customers. In addition to the after-sales services also assist in ensuring

customers when shopping for goods and make customers more confidence and

peace of mind when deciding consumer products businesses and will, therefore,

sell goods more stable and increase the consumption of corporate products.



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