Most producers use middlemen to bring their products to market. They try to forge a distribution channel. A distribution channel is a set of interdependent organisations involved in the process of making a product or service available for use or consumption by the consumer or industrial user.
The price the company charges will be between one that is too low to produce a profit and one that is too high to produce any demand. Product costs set a floor to the price; consumer perception of the product’s value sets the ceiling.
A company’s pricing decisions are affected by many internal company factors and external environmental factors. Internal factors include the company’s marketing objectives, marketing mix strategy, costs, and organisation.
These four dimensions of the product mix provide the handles for defining the company’s product strategy. The company can increase its business in four ways.
Product Assortment (also called product mix) is the set of all product lines and items that a particular seller offers for sale. An organisation with several product lines has a product mix. A company’s product mix can be described as having a certain breadth, length, depth, and consistency.
We now look at decisions relating to the development and marketing of individual products — the actual product. Developing a product involves defining the benefits that the product will offer.
In seeking marketing strategies for individual products, marketers have developed several product classification schemes based on product characteristics.
A tennis racquet, a haircut, a Broadway play, a Hawaiian vacation, and a telephone answering service are all products. We define the word «product» as follows: «A product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need.»
The E company has no clear strategy. It can be strong in some areas, however, not due to the implementation of one of the mentioned four basic competition strategies. The company has more or less chosen to spread over the four strategies.
The D company has chosen the two following strategies: To obtain differentiation of its product by identifying special needs which the customer consider useful and valuable and integrating the corresponding characteristics in the product/services
