Social Ethical and Legal Implemantation

Price and Channel Strategy

Price and Channel Strategy

The pricing decision is considered the most important decision that can affect any kind of the firm profitability because the company not only has to cover its cost also has to look after the profit upon each product or service they sell. The price of the product should not either be designed that competitors win the market game. Pricing decision has to look after the quality of a product, cost it includes, a psychology of the customer, competition, and economy of the people where it will be placed for selling. This paper will explore the relationship between price setting, market, profitability, and growth of business.

Dynamic Pricing strategy

The Dynamic Pricing Strategy price of the product or services remains dynamic as per the changing circumstance product or service faces. The change in price is settled because the customers are willing to pay higher prices due social status, when there is shortage of product, surplus amount is added to the price when a firm is able to provide faster service according their goods or services provided.

Static Pricing

In this strategy, business maintains the same range of price annually. The price is not affected if the demand goes high or low, even if there is a shortage or any other financial crisis. In essence, the firm will not change the price. Procter & Gamble Co. uses dynamic pricing strategy when either it launches the product for the first time, or in a new location, the main goal is to maintain its prices comparatively low. After it is well, establish it will increase their prices by adding some more benefits with products (Johnston, & Beaton, 1998).

Channel Based Pricing

Pricing of the product is defined by keeping the taxes, overhead, conditions, and local geographical dissimilarities in mind. When the product is sold out via the internet carries a less price as compared to the regular brick-and-mortar store.

Mass Coverage

This level is also known as the intensive coverage. At this level, saturation of the market is covered through using all available outlets. This strategy is used when consumers have many choices between the many brands and can easily switch to another. Any outlet where the consumer is expected to visit becomes company’s selection for making their product available there. Procter & Gamble Co. takes advantage of mass coverage by distributing their products worldwide and its brand name is well known.

Selective Coverage

Procter & Gamble Co. apply this strategy by distribution or making their products available at selected locations where targeted consumers are expected to visit the most. Here also producer has to conduct the research whether the outlet is famous in the locality or not. Such strategy is also used by the producers because when consumers do not find their product, they may not switch the brand but here they will switch their buying habits.

Exclusive Coverage

This coverage is the radical form of the selected distribution. Here at the specific geographical location one wholesaler or retailer is selected for the placements of the products. This is done when wholesaler or retailer exclusively deals in only one brand of that company (Jo Black, Lockett, Ennew, Winklhofer, & McKechnie, 2002; Chu, Chintagunta, & Vilcassim, 2007).

Daily Pricing

This is the strategy usually used in stock exchange, or petroleum, or even for the oil seller they can change the price when government or company allows doing so.

Promotional Pricing

A price of the product is promoted for selling the product as discounts and buy one get one free is offered.

Line Pricing

This is done by the retailer through keeping the different prices for the same kind of product for the different quality it offers (Ba, & Pavlou, 2002).

Distribution Strategies

Making product available to the relevant consumers requires extensive company research. Any company may not like to launch its product in places where it has to pay the cost despite earning. Selecting the following types of distribution strategy is the key element in our global market.

• Indirect distribution: the product is sold through the intermediary party to the ultimate consumer. Procter & Gamble Co. do business through intermediary channels due to the various dissimilar products it distributes.

• Direct distribution: when a company is opening its own retail shop to distribute with its customer is said to be the direct distribution strategy. This saves overhead costs and consumer perception can be understood directly.

There mainly four step through which every producer has to go through:

1. First, amongst all producer have to determine the performance expectations of the reseller.

2. Value of the reseller is assessed through offering elements.

3. Value proposition and channel offering of reseller is crafted.

4. When all above three steps are done the value proposition of reseller is communicated (McNamara, Deephouse, & Luce, 2002). Conclusion?

References

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Channels: An Application to the Personal Computer Industry. Journal Of Marketing

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consumer choice of distribution channels: an illustration from financial services.

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