Business Management

Running head: PRICE AND CHANNEL STRATEGY 0

Price and Channel Strategy

Victor J. Ayala

University of Phoenix

MKT/571

Patricia Estabrooks

May 22, 2017

Pricing and Distribution Aspects

Marketing requires consideration of pricing as a critical tool for swaying the perception of consumers. It is on this basis that a company must formulate a plan that resonates to the expectation of the consumers in traditional markets of a brand. However, when targeting new consumers, the exploitation of a customized approach to marketing is critical (Cravens & Piercy, 2006). In the case of Ikea, the utilization of a marketing mix model will facilitate the process. The company will commence with the generalist strategy before the formulation of a plan that addresses the variation in different niche target markets. The consideration will include place, product, and distribution.

In a bid to capture the attention of consumers in the international market, the management will use slight variations from those exploited by the established brands in the market. In some areas, the company will modify the plan, but throughout the process, the team must ensure that the plan corroborates with the expectation of the management as well as the desires of the consumers. The premise is that without a balance in the interest, an organization cannot accomplish its objectives.

Pricing

According to the plan, the marketing team will consider the logistical aspects such as distribution in pricing the commodities of the company. The prevailing economic situation such as inflations in prices of commodities will also influence the range for adoption. The products targeting consumers in far-flung regions will fetch higher prices in comparison to commodities targeting consumers within the environs of the company. The basis for the decision is that logistical undertakings affect profitability (Maglaras & Meissner, 2006). Hence, in the case of Ikea, the marketers will adopt segmentation strategies after coordination with the management and the accountants at the company. The selective approach will ensure that the business exploits the available opportunities in the markets without discriminating a section of the population.

When marketing to loyal customers, the organization will rely on dynamics techniques that encourage the use of discounts in luring consumers to make more purchases for its products. The approach is equally critical in ensuring loyalty by pricing commodities in a manner that resonate with the expectation of consumers. According to the model, products targeting high-end shoppers will fetch slightly higher prices in comparison to merchandises targeting price-sensitive shoppers. The pricings will also consider the shift in market dynamics that can affect negatively on the sale of the company’s products.

When striving to attract new consumers, the company will exploit tactics such as daily pricing in areas where the management is unsure of the implication of the use of pricing in influencing sales. The methodology together with the promotion pricing and listing pricing will help the company identify the glitches in the use of one single approach to enticing consumers to make purchases. When opting to use the listing tactics, for instance, the management will aim at luring shoppers who are unsure of the value derived from the use of the commodity in making purchase (Cravens & Piercy, 2006). The advantage in the application of the strategy is that it is short-term thus limiting the possibility of organization incurring losses in implementing ineffective plans.

Marketing Mix Pricing

The consideration when pricing is the product’s nature, place, and promotion. The first consideration is that the unique components of the product of which the organization will communicate about when pricing. The management will ensure that the model guarantees profitability and consumers obtain value from the decision. The exploitation of place will consider the expenses in distributing the commodities to the consumers (Goi, 2009). The promotion aspect of a marketing mix concept will affect the value based on the amount spends in advertising the product. The aim will be ensuring that expenses do not compromise on profitability.

Pricing

The use of value-based technique will create an impression of the company offering value for the customer to both niches. In the new marketers, the approach will create a quick impression that marketers can capitalize on when striving to create a lasting relationship. It utilization together with cost-based model can work for Ikea. However, its effects are short lasting since combining the two is affected by prevailing markets situation that affects cost. Hence, businesses should exploit the technique with much caution in markets of uncertainties.

To ensure objectivity in the process of enticing undecided shoppers, the company can exploit price-segmenting strategies that consider psychographic elements in consumer decision. Afterward, the perception created can aid entice customers to make more purchases. The premise for the decision to consider pricing is that at times, the tools exploited affects the image of a brand. According to Goi, 2009, the model for exploitation must create an impression that the company prioritizes customer wants before focusing on profitability.

In a bid to lure traditional customers to make more purchase, the company should downplay the significance of pricing. However, it should exploit customer retention strategies such as value addition. The provision of after sales service is a common trick that can benefit Ikea. The firm also has the alternative of increasing the demand by presenting discount at times when the purchases are low. Maglaras & Meissner (2006) suggest that conceptualization of the needs of consumers when exploiting pricing, as a tool at times is difficult; hence, the need for companies to engage marketers in communicating to consumers the motive for the choice of the model used.

References

Cravens, D. W., & Piercy, N. (2006). Strategic marketing (Vol. 7). New York: McGraw-Hill.

Goi, C. L. (2009). A review of marketing mix: 4Ps or more?. International journal of marketing studies, 1(1), 2.

Maglaras, C., & Meissner, J. (2006). Dynamic pricing strategies for multiproduct revenue management problems. Manufacturing & Service Operations Management, 8(2), 136-148.