Product Strategy Addresses Issues of Term Paper

  • Length: 8 pages
  • Subject: Business - Advertising
  • Type: Term Paper
  • Paper: #63820063

Excerpt from Term Paper :

Thus, all content will be designed to avoid such data collection (no signups or memberships, for example) (Aftab, 2005).

The company will also engage in a public relations strategy. The company will actively seek appearances on talk shows and other media to spread the word about our new squeezable colored peanut butter. The public relations program will emphasize the dual messages of fun and nutrition with which we want to associate Wow Butter. The public relations program will largely be targeted during the launch -- by the end of the calendar year (four months after the school year has begun) the public relations program will draw to a close.

Direct marketing and personal selling will be focused on the school lunch program administrators. At first, this element of the marketing program will be focused on direct marketing rather than personal selling. The cost of maintaining a traveling sales force is likely to be prohibitive for this market. It is felt that this market has potential but has yet to prove itself. if, however, school lunch programs prove sufficiently lucrative, plans are in place for the development of a personal selling program in high density areas of the country. For now, however, direct selling will be the main way these customers are reached.

Personal selling, however, will be used to reach customers such as Wal-Mart, Costco and other major retailers. These retailers are price setters as well, which changes the bargaining dynamic. The CEO will be required to engage in negotiations with these firms -- if the terms are unsatisfactory then the CEO will be required to walk away from the table. Overall, however, personal selling will be limited to only such major potential customers and only involving senior executives. A direct sales force will not exist and the product will flow through wholesalers.

The distribution will be conducted through major food service wholesalers that have strong regional or national networks. The use of existing systems will reduce the cost associated with the company having to set up its own system. Such distributors are able to reach major and minor retail customers and are willing to service a product that has significant marketing support. Whether one national distributor or a series of regional distributors will be chosen depends primarily on the service and cost offered by each distributor with whom Wow Butter enters into negotiations.

The use of distributors will also allow Wow Butter to focus on the two tasks that the Wow Butter performs well -- making and marketing peanut butter. Wow Butter can focus on product improvements and its marketing campaigns, leaving day-to-day distribution management up to the distributor. The use of multiple channels is appropriate because often companies fail to do so out of fear for cross-channel cannibalization. For Wow Butter, however gaining market exposure is a necessary part of growing the business so having multiple distribution channels facilitates this increased exposure.

The company will need to have an officer to oversee the distributors and ensure that value is being derived from the different distributor relationships that are established. Such an officer will help to alleviate this strategy's biggest weakness, that the company will lack sufficient oversight of getting the product to market. If the distributor is not working hard enough to get the product into stores, then creating demand at the consumer level will be fruitless. This is why oversight of distributors is required.

The other major con of this distribution strategy is that it will be difficult to oversee consistency between regions with respect to the service level offered to the stores, and with respect to pricing policies. Given that product line pricing is the chosen pricing strategy, it is important that this strategy by maintained and with the chosen distribution strategy some of this oversight will be lacking.

However, the use of already-established distributors is much more affordable than building a proprietary distribution network. It allows for the company to distribute Wow Butter on a nationwide scale and even into Canada very early in the company's life. Thus, the distribution strategy supports our desire to build a nationwide footprint quickly, in order to establish the Wow Butter brand and ward off competitors from moving into the colored peanut butter space that Wow Butter is creating.

The target market is broad-based. By taking distribution nationwide and into multiple types of retailers, this target market can be reached. Once desire is created in the consumer, the consumer will look for Wow Butter in their grocery store -- we want that consumer to find it. The product offering itself is a variation of a classic, staple foodstuff. While it is differentiated, it is also mainstream. Such products perform best with nationwide distribution as this supports economies of scale in both production and marketing. Therefore, the chosen distribution strategy helps to support the overall marketing objectives for Wow Butter.

Works Cited:

NetMBA.com. (2007). Pricing strategy. NetMBA.com. Retrieved May 25, 2010 from http://www.netmba.com/marketing/pricing/

Bovay, K. (2008). When to use a product line pricing strategy. EZine Articles. Retrieved May 25, 2010 from http://ezinearticles.com/?When-to-Use-a-Product-Line-Pricing-Strategy&id=1341523

Aftab, P. (2005). The Children's Online Privacy Protection Act of 1998 (COPPA). Aftab.com. Retrieved May 25, 2010 from http://www.aftab.com/coppainanutshell.htm

Infotrends.com (2010). Distribution strategies. Infotrends.com. Retrieved May 25, 2010 from http://www.capv.com/public/Content/MRD/Projectdescriptions/distributionstrategies.html

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