Mkt 571 price and channel strategy

MKT 571 Week 4 (750 Words Excluding Reference)

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Price and Channel Strategy

Price and Channel Strategy
Price is not just a number on a tag. It comes in many forms and performs many functions. Rent, tuition, fares, fees, rates, tolls, retainers, wages, and commissions are all the price you pay for some good or service. (Kotler, P.T. & Keller, K.L. 2016). A pricing strategy takes into account segments, ability to pay, market conditions, competitor actions, trade margins and input costs, amongst others. It is targeted at the defined customers and against competitors. (Pricing Strategies, n.d.). On the other hand, a channel strategy is a vendor's plan for moving a product or a service through the chain of commerce to the end customer. (Rouse, M. n.d.). This paper will address three elements from the Price and Place/Distribution section of the marketing plan; they are Distribution Strategies, Positioning within channels, and Dynamic/Static Pricing Strategies.

Distribution Strategies

Distribution Strategy is a strategy or a plan to make a product or a service available to the target customers through its supply chain. Distribution strategy designs the entire approach for availability of the offering starting taking inputs from what the company communicated in marketing campaigns to what target audience is to be served. A company can decide whether it wants to serve the product and service through their own channels or partner with other companies to use their distribution channels to do the same. Some companies can use their own exclusive stores for their own products or can use available retail chains to sell their products or a combination of both. (“Distribution Strategy, n.d.”). Apple Inc. is a multinational company having its origin in US. It manufactures and markets consumer electronics, computer software and personal computer. Apple Inc. carries out its operations in 10 countries and operates through its 301 retail outlets and an online business portal from where customers can buy the requisite products. Apple Inc. has evolved as one of the largest companies across the globe and producer of most innovative technology. Apple Inc. wanted to control the entire distribution of products by itself; however, (gradually) they started adding channel partners like AT&T, Wal-Mart and Best Buy which are large scale retailers. (Goyal, P. 2012).

Positioning Within Channels

Positioning is where my product or service stands in relation to other products and services in the market place; and how do I stand out in the consumers mind. In reference to positioning my product (the IPhone), through marketing, advertising, and promotion I will stress the importance of its unique features that is different from all the other smartphones on the market. Because of its unique features the IPhone has the ability to be charged a higher price and deflect or ward-off competition; which makes it a makes a good position in the marketplace and helps the company ride out rough economic times. Additionally, having a good position allows flexibility to the brand or product (in this case the IPhone), in extensions, changes, distribution and advertising. (“Positioning, n.d.).

Dynamic/Static Pricing Strategies. In dynamic/static pricing strategies the price is not firmly set instead it changes based on changing circumstances, such as increases in demand at certain times; type of customer being targeted or; change marketing conditions. The types of businesses that commonly use this type of pricing are organizations that provide service (or service oriented type businesses). This pricing can also be used with product. The types of pricing that are involved in this type of pricing strategies are Segmented Pricing, Peak User Pricing, and Service Time, In segmented pricing, some customers are charged more based on their willingness to pay more for a given service or product. For example (with the IPhone), some customers are willing to pay more for faster service, higher quality or more features. Peak user pricing is a strategy common in transportation businesses. For example, airlines and train companies often charge a higher price to travel during rush hour on Monday through Friday than at other times and on weekends. Another dynamic pricing strategy is to charge more for faster service (time). For example in service time, same-day dry cleaning would cost more than overnight cleaning. (Magloff, L. n.d.). Just to name a few.

Conclusion

By having an understanding of price and channel strategy a business and its channel partners can be very be successful in its fight against it competitors and their channel partners (and what they have to offer). By analyzing and monitoring each step as it relates to the process of price and channel strategy will not only impact sales and or revenue of the company, but its consumers as well. The underline goal is to have affordable pricing and at the same time move products and services through channels or chain of commerce to the end customer, not only now but in the future.

References

Goyal. P. (2012). Apple Inc.’s product distribution system in US and UK. Retrieved from https://www.projectguru.in/publications/apple-inc-s-product-distribution-system-in-us-and-uk/

Kotler, P.T. & Keller, K.L. (2016). Marketing management (15th ed). Upper Saddle River, NJ: Pearson/Prentice Hall

Magloff, L. (n.d.). Dynamic Pricing Strategy. Retrieved from https://smallbusiness.chron.com/dynamic-pricing-strategy-5117.html

Mbaskool. (n.d.). Distribution Strategy. Retrieved from https://www.mbaskool.com/business-concepts/marketing-and-strategy-terms/7048-distribution-strategy.html

Rouse, M. (n.d.). Channel Strategy. Retrieved from https://searchitchannel.techtarget.com/definition/channel-strategy

The Economic Times. (n.d.). Definition of 'Pricing Strategies'. Retrieved from https://economictimes.indiatimes.com/definition/pricing-strategies

The Economic Times. (n.d.). Definition of 'Positioning.’ Retrieved from https://economictimes.indiatimes.com/definition/positioning