Product Planning Distribution And Management

PRODUCT PLANNING DISTRIBUTION AND MANAGEMENT (A CASE STUDY OF THE NIGERIA BOTTLING COMPANY’S PLC, ENUGU.

The attempt to undertake a study of product planning is beneficial by booking into the books of many intelligent personnel who had done some of work on this topic the following re the views of these learner human beings.

A product has been defined by the American Marketing association as anything than can be offered to a market for attention, acquisition or consumption, including physical objects services, personalities, organization and desires”

`Product is something that is viewed as being capable of satisfying a need or want. A product is any thing than can be offered to a market for attention acquisition used of consumption that input satisfy a need. It includes physical objects, services, persons, places organization and ideas. It may also be a set of tangible and intangible manufacturing prestige and manufacturers accept as offering wants satisfaction product as defined by Stanton in fundamentals of marketing “A product is a set of tangible attributes that leads to customer satisfaction”.

Product according to Nonyelu G. Nwokoye markets buyers and it is of central importance in the marketing effects “A product may be defined as a bundle of physical and psychological satisfactions that a buyer receivers from a purchase. It includes not only the tangible object but also such supportive elements as packaging convenience of purchase, post-sale services and others that buyers value”.

According to pride/feared: A product is everything (both favourable and unfavourable) that on receives in an exchange. It is a complex of tangible and intangible attributes including functional, social and psychological utilities or benefits. A product can be idea, a services, a good or any combination of the three.

2.2 PRODUCT CLASSIFICATION

“One result of taking this broad view of product is that there are literally millions of products to be marketed. A new products are identified developed, discovered, invented or born every day. While each of this product demand a unique marketing mix” We have two broad types of product:

The consumer product and
Industrial product.

Consumer s products: In this type of products, not all consumers product are the same. Rather they can be subdivided on the basis of how people buy them. Since the purpose of marketing is to satisfy wants and needs. It is only logical to classify products on the basis of consumer behaviour. Thus consumer product can be divided into four subgroups.

Convenience products.
Slopping products
Specially product and
Unsought products.

Industrial products: This type of product is make up of goods or services used in the production of other products. Industrial goods encompass suppliers, accessories, services and even plant and equipment.

This many raw materials and subassemblies that go into a finished can are all industrial products. They are market to automobile manufacturers, not to ultimate consumers. Buyers of industrial products are different frame the buyers of consumer products.

In terms of this write up, I do not have to go into detail of industrial products. My concern is on consumer product.

TYPES OF CONSUMER PRODUCTS

CONVENIENCE PRODUCTS- Are items that consumers want to buy with the least possible shopping effort. Their selection is characterized by routing buying behaviour.

Through these product are bought often, consumers do not seek information about them. Examples are milk, eggs, cigarettes, chewing gum, chariots.

There are three types of convenience products.

Staples
Impulse items and
Emergency goods
STAPLES- Items are convenience products for which consumers usually do some planning. Food items are good examples. For instance though consumers don’t seek such information about milk, they do buy it often and they plan to buy it when preparing to go to grocery stock banking is an example of service that is staples with staple items, the brand or trademark can be very important in buyers minds. And buyers want staples items to be located conveniently.
IMPULSE ITEMS- Are not purchased because of planning, but because of strongly it immediate needs. Thus distribution is an important factor in marketing impulse products.

If they are not located conveniently exchange will not take place. That is why items like novelties, and expensive pans are placed near the cash register in many stores.

EMERGENCY PRODUCTS- Are items that are needed to solve an immediate crisis time and place utilities are the major ingredients of satisfaction, price and quality are less important, although the product obviously has to be of sufficient quality to meet to meet the emergency.

SHOPPING PRODUCTS- In shopping product, consumer visits several stores to compare price and quality before buying. Even before going into the store to buy or examine such products, consumer may study magazines like consumer reports or ask friends for their opinions about certain products or study, advertisement. In order words, before buying shopping products consumer seek information that will allow them to compare two or more brands or substitute products.

Shopping products can thus be divided into two:

Homogeneous product and
Heterogeneous product.
SPECIALTY PRODUCTS– Are items for which there are no acceptable substitutes in the consumers mind. Consumers are ready to s each long and hand until they find them.
UNSOUGHT PRODUCTS- Are items that consumers do not readily realize they want or need. They are those products which the consumers do not readily realize they want or need.

2.3 PRODUCT PLANNING AND PRODUCT DEVELOPMENT

According to Stanton- “product planning embraces all activities that enable a company to determine what product it will market.

Product development encompasses the technical activities of product research, engineering and design. More specifically the combined scope of product planning and product development includes making decisions in the areas named below.

2.4 DESIGN AREAS IN PRODUCT PLANNING

1`. Which product should the firm make?

Should the company market more or fewer products?
What new uses are there for each product.
What brand, package and label should be used for each product?
How should the product be styled and designed and in what sizes, colours and materials should it be produced.
In what quantities should each item be product.
How should the product be priced.

According to Grolier in modern business (marketing) “The evolution of scientific product planning in business, designed to reduce the risk of failure and to avoid the enormous waste that failures cause, has led to the formalizing of the various activities involved in product planning.

2.5 THE FUNCTION OF PRODUCT PLANNING

Can be summarized in general in the following ten points.

Evaluation of the idea- Does the product belong in our line? Is the time right for it now? Does this seem like a good idea for us to make this item?
Evaluation of the potential market: Does the consumer want or need this product. Is the market big enough to w arrant our investing the necessary time, manpower and money to make it what influences consumer buying of this type of product?
Evaluating the product: Is the new idea sufficiently different and superior to existing products competitive product gives the consumer substantially more for his money?
Evaluating company resources: Is our company set up to make this new product? What additional equipment of manpower will we need to make and market it? Can we make and sell it economically against the price the consumer is willing to pay? How long will it take our company with its present or potential resources to recoup investment and start making a profit from its operation.

Approximately where is the break-even point? (The point at which marginal revenue equals margarita cost, at this point there is not profit or loss).

Preparing customer specifications- If preliminary evaluation is favorable just what is it that the consumer would like in a product of this kind what could the consumer not like?

What assurance do we have that a product meeting those specifications will find a ready market? What should our new product be like? What should it do to meet customer specifications?

Developing the product- Armed with this information, which marketing research has developed for us, we can turn to the engineering or laboratory department for the, development of a [product which meets those specifications as nearly as possible.
Pre-testing the product- The sample model product, as designed and enveloped by engineering has to be tested in the market against competition. If there is nothing like it on the market now. It must be tested against consumer apathy or resistance. Generally at this stage some modification are indicated as consumer lasted change, or as our model fails to meet customer specifications.
Producing the product: Once was have tested the model and have confirmed customer desire to buy. We can return it to engineering for last minute modifications and then turn it over to manufacturing for production for the market. Careful sales, advertising and promotion department to prepare their programmes for proper market coverage and market introduction.
Marketing the product- If all necessary planning and programming have been accomplished, marketing the product should begin as son as production has turned out enough unit to meet the initial plan. It is important that dealers and distribution as well as the company’s own sales force, shall have full knowledge before hand.
Control and evaluation- After new product has been introduced into the market, it has to be controlled and continuously evaluated. Does it meet a real need? Is there sufficient repeat business to keep it in the line?

Does it carry its own weight (Volume of sales, volume of profit addition to company prestige etc)

2.6 NEW PRODUCT

What is a “New” product? Must an inter be totally new in concept before we can class it as a new product? Each marketing category may requires quite different marketing programme to ensure a reasonable probability of market success.

Three recognizable categories of new products are as following.

Products that are really innovative- Truly unique. Example would be a hair-restorer or a cancer cure-products for which there is a real need but for which no existing substitutes are considered satisfactory. In this category we can also include products but satisfy the same needs. Thus television to a great extent replaced radio and movies.
Replacement for existing products that are significantly different from he existing foods. Instant coffee replaced ground coffee and coffee bean in many markets, then freeze dried inkstand replaced instant coffee. Annual model changes in autos and new fashions in clothing belongs to this category.
Initiative product that are new to a particular company but not new to the market. The company simple wants to capture pant of an existing market with a mention product.

Perhaps the key criterion as to whether a given product is new is how the intended market perceive it. If buyers perceive that a given item is significantly different (from competitive goods being replaced) in some characteristic appearance, performance) then it is a new product.

3.7 PLANNING FOR NEW PRODUCTS

It is now clear that modern business takes the matter of new product very seriously. The well known management consultant, Peter Druck, refers to it as the management in innovation.

Basically, business consider that new product pose three major challenges to management .

The uncertainty of new-product results the rate of failure, even with better organizations, is great until recently eighty to night present of all new products failed. In some companies now, the rate of failure is down as low as 25 percent. But in industry as a while, a new product has no more than a 50-50 chance of success.
Shortage of the technically- Trained technically trained personnel, capable of taking change of new product development are scare. As new product multiply, the burden on the technically trained grows. Further more, as technology progresses, the technological proficiency of the individual has to increase. This is often a slow process of conation and experience gained on the job and it cannot be developed over night.
Difficulty of organizing and controlling the new-product development process. We have seen how companies are all empting to meet the problems of organizing and controlling the new product development process. It is largely a human rather than a technical problem involving such decision as how we use the skill s available, where to place the product manager, to whom he should report. And what functions will be assigned to him.

Before ever emphasis, is to be laid on functions of product manager, first of all I have to emphasis on management. Management and administration are interchangeable.

Management defined broadly as getting things done through other people. This include lower strata and top management. Management deals with “All those who have supervisory responsibility ranging from the chief executive down to the first line. Supervisor in this case management is regarded to as a Box and that is those who direct the work of others and their work through their own efforts and effort of others.

Management generally has three basic task.

To set up a general plan or strategy for the business.
To direct the execution of this plan
To evaluate , analysis, and control the plan in actual operation.

Management is usually defined in term of function performed management is what management does. This means that management is both the executive personnel (boss) and a body of knowledge, a practice a discipline or a process. A widely accepted listing of management functions includes.

Planning
Organizing
Directing
Coordinating and
Controlling

2.8 THE EXPANDING DUTIES OF THE PRODUCT MANAGER

There is a growing need of a product manager, a single individual in the product division who coordinates the developments of new products. The product manager because, in effect a product specialist who meets the special problems posed by the rapidly growing number of products, the growing importance of new product.

The product manager has the responsibility of making sure that each new product has the necessary effort behind it to make it a success.

He is more than a mere coordinator. Typically he is charge with the following duties and functions.

He recommend additions to the line (base on research reports of market needs).
He forecasts sales (based on sales potentials established by research).
He supervises the preparations of sales promotion to achieve sales goals.
He determines new product specification based on reports fromn the research department.
He participates in the preparation sales programmes
He assists in selling big accounts.
He councils and advises regional and distribute sales managers.
He participates in the preparation of advertising plans and programs.
He prepares product-development budgets (including the budgets for marketing the product).
He makes pricing recommendations.
He coordinates the development of new product from idea through commercial marketing.

It is important to be aware that the situation with regard to the product manager is in most cases, quite fluid and it is constantly changing. Some companies have used a production manager for years. While many others have adopted the system only recently. The position of product manager, is in neither standard nor settled.

In general, there are three main types of product manager set ups emerging in business.

One type of product manager places the emphasis on product, another on sals service and the third on decentralization.

2.9 PRODUCT ATTRIBUTES.

“A firm might elect to product a product based on specific attributes. But these attributes can never be catalogued. The alternatives of product form are infinite. In fact, this great range in alternatives is the reason product development is such a challenging management problem, while we can look at all of the potential features of products, we can look at all of the potential features of products, we can look at certain attributes that historically have command considerable management attention.

PRODUCT DIFFERENTIATION

Regardless of the form a new product takes a company most make a decision on the degree of product differentiation to incorporate in the product, A firm seeks the maximum degree of product differentiation, since this large profits. The demand curve for such a product is more elastic, and the firm more nearly approximates a monopoly position.

But every product differentiation is subject to coping by competitors, and a firms competitive advantage is gradually erodes.

The goal of product differentiation is universal, there are occasions when it is loss important as objective. In some situations, it can readily be accomplished. Further more, there is always a large segment of industry that tasks a product follower” Position seeking to duplicate the offerings of product leaders.

PATENTABILITY

For many firms, an essential feature of product development and product competition is the degree of which a candidate product can be protected through patents (or literary work). A tight patent which perpetuates a product is a comparative advantage. And for most firm this potential is deemed essential if they are to invest large sums in product research.

But caution should be urged when it comes to relying havily on potent protection. Even the best of patents can be circumvented by developing new materials and processed.

PRODUCT KNOW-HOW

Equally as significant as palatability is production know-how in seeking competitive product advantages companies with high research and development investments, substantial capital vested in production facilities, or a skilled work-force may be able to distinguish their offerings in the market place through lower cost or product improvement.

QUALITY

The level of product quality requires management action. A decision on a candidate product is frequently made on the basis of the company’s ability to make the product and maintain it reputation for quality, lack of materials, inadequate labour skills or the stage of the products development may be compelling reason for concluding that the product cannot be made commensurate with past quality standards.

STYLE

We think of style as a distinctive artistic expression in s product. as such it is a permanent thing. This is in contrast to a fashion-a style currently popular. Thousand of styles and created. A fed in contrast to a fashion, is considered to be short-lived and les predictable as to interpolation

COLOUR

Problems of colour selection for product are allied in those of style selection. For they, too encompass artistic expression. Colour as a variable product feature would seem to warrant special comment, however, for it has become such a significant form of product competition in the consumer goods field.

Colour consciousness has compounded production and inventory control problems but correct prediction of consumer colour preferences has again led to competitive advantage.

SIZE

For some products, a decision is not necessary on product size. But for most of industry size is a product variable. It may tasks the form of varying the size of the product or the amount of the product sold in particular package. Regardless of its form, varying product size calls for a careful analysis of such factors as family size rates of consumption and storage facilities.

PACKAGING

Packaging is also a product attributes of considerable importance to some firms. Its advantages are quite memories. Packaging the product facilities protecting it form it from spoilage, evaporation and spilling it protects the product from changes in the weather and from damage from handling by the customer package products are also easier for both consumer and the retail dealer to handle. Consumers find correct packaging an aid to taking products home, in storing them and dispensing the contents dealers’ find that well-packaged product are easier to display, easier to handle at check-out counters and more adaptable to inventory control.

A major function of packaging is to aid in product identification, both for dealer and consumer. Well displayed package products represent a principal means of communicating to consumer buyers at a critical stage in the buying process. The point of purchase, in recent years products like been soft drinks etc. has appeared in forms of multiple package. This increases the quality bought by the consumer as a product quality.

BRANDING

A brand name is a variable product attribute. It is part of the product and part of what consumer buys. Brand name it is seemed also to be a phase of promotional policy since it is an aid to communication.

Brand policy issues center around the question of whether to use individual product brands of a family” or “blanket” brand. The same brand for all the product in the line.

There exist a problem of whether to sell private brand.

ADVANTAGES OF BRAND IDENTIFICATION

“It enables the sellers o build a consumer following and identify a diven level of quality with a product.

It facilities differentiating a product from competitions.

It expedites the process of communicating to buyers not at the point of purchase nut through the medium of advertising and occasionally through the publicity. Finally, brand may enable the firm to communicate psychological as well as material values. These psychological values and developed through promotional efforts and they hinge on the connotations that can be associated with the brand name.

In some firms there exist a product director often such a product director is called a brand manager.

The purpose of a brand manager is to ensure adequate attention and push behind each product. “A brand manager is responsible for drawing up complete promotional (advertising) programs for him product or a single brand.

2.10 PRODUCT POSITIONING

Management ability to position a product appropriately in the market is a major determinant of company profit. In according to William J. Stanton. A product position is the image that product projects is relations to competitive products and to other products marketer by the company in question.

William Stanton goes on saying that the more to product positioning is an attempt by business to increase its creditability, build a reputation for reliabilities and generally satisfy a boarder market spectrum over the long run.

Again E. Jerome Mc Cathy said product positioning should where proposed and/ on present brands are located in a market it requires some formal market research.

2.11 PHYSICAL DISTRIBUTION

Physical distribution is the part of marketing that addressed how products are moved and stored. A physical distribution channel includes intermediate often not considered to be part of marketing channel, such as transportation companies, public were houses and insurances companies that participates and the movement and a storage of products, these agents ho do not take title to (actually own) the goods they handle, are referred to as facilitators because their main function is to facilitate the movement of goods.

TWO VIEW OF PHYSICAL DISTRIBUTION

Marketing mangers have different view on what physical distribution really is. Some see physical distribution only as the flow of furnished goods to the consumers, whereas others se it as including activities that occur earlier in the process, such as procuring and moving raw materials.

A traditional marketing view of physical distributions looks at only the outward consideration and ignores the physical supply and processing or manufacturing activities. The view or typically referred to as simply distributors management.

A more comprehensive term for all these physical movement and storage activities is business logistics, which involves the coordination of movements or raw materials, parts, and finished goods to achieve a give service level while minimizing total cost. The concepts contains four element and includes both physical supply and physical distribution that is both inbound and outbound activities, we shall concentrate on three important logistics problems storage, inventory control and transportation.

Move recently, several development have viewed physical distribution or logistics as getting goods to buyers, as a supportive subsidiary activity. Managements, interest has now been awakened in the logistics problem.

One alerting factors is the stand climb in the bill for physical distribution services as freight, warehousing, and inventory. Freight warehousing bills are rising as a result of increased labour, energy and equipment costs. The inventory bill is rising because buyers are tending to place smaller order more frequently, and manufacturers are tending to expand the with and depth of their product lines. According to Nonyelu G. Nwokoye, Physical distribution or logistics is concerned with the efficient movement or raw materials from supplier and finished goods from the end of the production line to the customers.

Series of activities must be performed which grouped under four main categories called physical distribution activity center namely.

Transport
Inventory
Warehousing and
Communications.

In the design of a physical I distribution system starting point by the producer is to set customer service standard. This has a number of dimension of which the most important is the time it takes to get the merchandise to the customer, that is delivery time.

The decision that lead to cost reduction in one activity area such as transportation, may lead to a cost increase in another area like inventory.

Therefore, an appropriate strategy in logistics design, is to arrange al the required activities so as to minimize the total cost of providing a desired level of customer service. Now the physical distribution activity areas are to be taken one after the other.

TRANSPORT

There is availability of wide range of transportation modes to move products to mark rail, highway, water, pipeline, and air, each of this is having different cost and service 9speed) characteristics. Decision must be made on the type of mode of transportation to use for each type of shipment, coordinates movement using more than one mode might be possible.

In considering the activity area in transportation order processing is also inclusive. This include checking prices and shipping documents.

INVENTORY

Inventory is of central importance in physical distribution system design since actual demand (in the form or orders) is rarely exactly the same as forecast demand, inventories or goods must be established and maintained.

There are other reasons for carrying inventories.

To ensure against risks of various kind (strikes in the factory supplier failure).
Accommodation of production runs before sales and.
Seasonality of product and/or seasonality of demand, also need are raw material inventories to support production.

Inventory carrying cost is high and procedures for proper inventory management must be installed. Over stocking leads excessive inventory carrying cost, while under stocking leads to cost sale and poor customer service.

WAREHOUSING

Warehousing (for depots) store inventories decision must be made on number of warehouses that are required where they should be located and what products should stocked in what quantities. Storage may be emphasized in a warehouse for a long time that is the product remaining in one place for a long time. Seasonal products of agriculture in processed from require long-term storage before sale, temporary storage and through out volume may however, be emphasized in which case the warehouse becomes a distribution center.

A distribution center receives large loads of homogenous goods, which are mixed and consolidated into out bound shipment to end markets. The emphasis is on moving goods through the facility and not on storage per see material handling is the movement of goods within the plants and warehouses. In this case, suitable equipment must be available to permit economical handling of goods.

Unit loads refers to the possible economic to be gained by handling products as a unit load, unit load are form a train load of coal to a master carton containing the individual product units purchased by the final buyer. proper design of unit loads minimizes handling cost.

COMMUNICATION

Information is vital for the effective management and control of physical distribution., this information and related to action and performance within the areas of inventory, warehousing and unit. loading transportation, eg a good communication system should be able to make available on demand the present stock position of each item at each stock..

1.12 PHYSICAL DISTRIBUTION OBJECTIVE

Many companies state their physical distribution objective as getting the right goods to the right places at the right time for the least cost. Unfortunately this provides little actual guidance. No physical distribution system can simultaneously maximize customer services and minimize distribution cost maximum customer service implies such policies as large inventories premium transportation and many warehouses, all of which raise distribution cost. Minimum distribution cost implies such policies as slow and ship transportation, low stock, and few warehouses.

LEVEL OF SERVICE (OUTPUT)

Basic output of a physical distribution system is the level of customer service. Customer services represents one of the key competitive benefits that a company can offer potential customers in order to attract their business.

Philip Kotler view as regard to the level of service from the customers view point, customers service means several things.

The speed of filling and delivering normal orders.
The supplier’s willingness to meet emergency merchandise needs of the customer.
The care with which merchandise is delivered do that it arrives in good condition.
The supplier’s readiness to take back detective goods and resupply quickly.
The availability of installation and repair service and parts from the supplier.
The number of options of shipment load and carries.
The supplier willingness to carry inventory for the customer.
The service changes, that it whether the services are free or separately prices.

2.13. DISTRIBUTION CHANNELS

Modern producers do not all their goods directly to the final users. There is a clink between them and the final users such as the intermediaries, which are performing variety of functions and bearing a variety of naries. Some intermediaries-such as wholesalers and retailers-buys, take title to and resell the merchandise. They are called merchant middleman.

Others such as brokers manufacturers representatives and sales agents search for customers, and may negotiate on behalf of the producer but do not take title to the goods. Skill others such as transportation companies, independents warehouses, banks and advertising agencies-assist in the performance of distribution but neither take title to goods non negotiate purchases of sales. They are called facilitators.

Buck lines definition of marketing channel.

A channel of distribution shall be considered to comprise a set of institution, which performs all of the activities (functions) utilized to move a product and its title from production to consumption.

2.14 SELECTION CHANNELS OF DISTRIBUTION

Distribution of consumer goods five channels are widely used in the marketing off consumer products.

In each of the channels the manufacturers also has the alternative of using sales branches or sale office. According to William J. Stanton five channel of distribution are.

Producer consumer this channel is the shorter simplest channel of distribution for consumer products is from the producer id from the producer to the consumer, with no middle men involves the producer may sell from house to house or by mail.
Producer retailer- consumer. May large retailer buy directly from manufacturers and agricultural producers.
Producer-wholesaler-retailer-consumer. If there is a traditional channel for consumer goods this is it. Small retailer. And small manufacturers by the thousands find this channel the only economically feasible choice.
Producer-agent-retailer-consumer instead to use a manufacturers agent, a broker or some other agent middlemen to re ach the retail market, especially large scale retailers. For example, a manufacturers or a glass clearer selected a food broker to reach the grocery store market, including the large chains.
Producer-agent-wholesaler-retailer-consumer. To reach small retailers the producers mentioned in the proceeding paragraph often used agent middlemen, who in turn call on the wholesaler who sell to small stores. Distribution of industrial goods, four types of channels is widely used in reaching industrial users”.

Again a manufacturer may use a sales branch or a sales office to reach to next institution in the channel, or two levels of wholesalers may be used in some cases see 9fig. 2.1).for some reason it is not feasible to sell through agent directly to the industrial user. The unit sale may be too small for direct selling or decentralized inventory may be needed to supply users rapidly, in which case the storage service of an industrial distributor are required

Product Planning Distribution And Management