...Frogs: Pricing Strategies for a Manufacturer Adding a Direct Channel that Competes with the Traditional Channel Kyle Cattani1 Wendell Gilland1 Hans Sebastian Heese2 Jayashankar Swaminathan1 1The Kenan-Flagler Business School, The University of North Carolina at Chapel Hill 2Kelley School of Business, Indiana University January, 2005 1 Boiling Frogs: Pricing Strategies for a Manufacturer Adding a Direct Channel that Competes with the Traditional Channel Abstract In this paper, we analyze a scenario where a manufacturer with a traditional channel partner (i.e., a retailer) opens up a direct Internet channel that is in competition with the traditional channel partner. We first consider that in order to mitigate channel conflict the manufacturer, who chooses wholesale prices as a Stackelberg leader, commits to setting a direct channel retail price that matches the retailer’s price in the traditional channel. Under this general equal-pricing strategy, we determine the effect of more specific pricing strategies on prices and profits of the manufacturer and the retailer. These specific strategies are: (1) keep wholesale prices as they were before, (2) keep retail prices as they were before, or (3) select wholesale and retail prices that optimize profits for the manufacturer. Within these strategies we identify and summarize cases when the resulting prices are lower than the pre-Internet prices, and when they are higher, relating them to the respective channel costs...
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...Channel and Pricing Strategies Majesty Anderson, Yvonne Davis, Benjamin Holbert & Shawn Hicks Marketing 571 Judy Allen December 17, 2011 Kathy Kudler recently had a business meeting with a top distribution company in Italy that is well known for leading grocery value in sales. Selex a well known grocery distribution company would like to get into the franchising business. Selex is impressed with Kudler’s dominant positioning in Brazil and would like to market and franchise a café known for gourmet cuisines. Selex believes that an upscale café would cater to the market looking for more than just great coffee. According to Country Report on Grocery Retailers in Italy, consumers are likely to remain value-focused and will look to channels and retailers which can provide them with high quality and low-cost products in grocery and household essentials that can be easily obtained. Consumers are faced with shopping in more than one store to provide all items and services needed. Selex feels that with the Café and all the accommodations that Kudler will provide for customers that the Italian market will embrace a one stop grocery store. Pricing Pricing is vital to a company’s growth because it is the only element in the marketing mix that produces revenue. Determining the correct price of a product or service is a complex and difficult task, especially when conducting business in foreign countries. Kudler Foods has decided to accept Selex...
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...Channel and Pricing Strategies MKT/571 November 22, 2011 Abstract In week two’s learning team assignment, Team A discussed that Kudler Fine Foods (KFF) planned to bring Swiss chocolates to the Atlanta, Georgia market similar to the one currently in three California markets. This week’s team paper will introduce the product to the international market in the United Kingdom (UK) that include channel and pricing strategies and justify the selection of the market selected. Why the United Kingdom? The entire worth of the chocolate marketplace in Great Britain and the United Kingdom (UK) is presumed to be more than five billion dollars in 2010, as stated by a 2011 article in Marketing Week magazine titled “Appetite for Indulgence Will Sweeten Bitter Pill” (www.marketing.co.uk). Following that, data on the UK chocolate marketplace gets complex, specifically with owners and manufacturers. For instance, the UK natural chocolate marketplace is believed to be the biggest in Europe. Green and Black’s organic chocolate company maintains that they are the Britain’s top organic maker of chocolate. It was created in 1991 and acquired by Cadbury in 2005. Cadbury has been making chocolate since 1824, and was acquired by Kraft foods in the early part of 2010. Nestle, based in Switzerland, and Mars, a private United States company, also lead Great Britain’s massive chocolate marketplace. Other chocolate manufacturers’ products are also accessible...
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...#3 Pricing Strategy and Channel Distribution Marketing Management – MKT 500 February 15, 2012 Pricing Strategy and Channel Distribution Determine and discuss a pricing strategy (Skimming and Penetration). One of the four major elements of the marketing mix is price. Pricing is very important strategic element. The pricing strategies impinge on featuring products, channel decisions, and promotions. This strategy helps marketers set prices. (Pride, Hughes, & Kapoor, 2011) There are many ways to price a product. Two commonly known pricing strategies are skimming and penetration. Lavishness Hair Studio is likely to use one or both of them over a calculated period of time. Price skimming involves charging the highest price possible for a short time where a new, innovative, or much-improved product is launched onto a market. The objective with skimming is to “skim the cream” off customers who are willing to pay more to have the product sooner. Prices are usually lowered once demand falls. Penetration pricing is the opposite; it involves the setting of lower, rather than higher price for a new product. The seller wants to discourage competitors from entering the market by building a large market share quickly. The plan is to raise prices as soon as the introductory offer is over (Pride, Hughes, & Kapoor, 2011). Lavishness Hair Studio will use price penetration during the initial opening phase of the business. Penetration pricing is the strategy of entering...
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...discuss a pricing strategy (Penetration or Skimming). Pricing is very important strategic element. The pricing strategies impinge on featuring products, channel decisions, and promotions. The researcher realizes there is no real determine pricing, following a life cycle for developing the pricing of Destini’s Closet product. First, develop market strategy – which the researcher evaluated and conducted a marketing analysis to identify the market segments, target market, SWOT analysis, and the market positioning. Second, marketing mix decisions – the researcher defined the product (Clothing), contacted manufactures for distribution, and decided promotional tactics. Now the researcher is focusing on the cost productions, price of substitute products, and prices offered by the competition. The researcher notices that competitors change their prices often. Case scenario, competitors are always looking for a competitive match, this can be an advantage and a disadvantage for the business. Competitors may strategize a different packaging of their product; this can be good for Destini’s Closet by reducing their price. It’s all up to the customer wants and needs. The demographic crowd the researcher is focusing on would rather price reduction then a new look to a product. What if production price are rising? If production price is rising it’s up to the Destini’s Closet to determine the price increase without turning the customers to their competitors Two commonly known pricing strategies...
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...Pricing strategy and Channel Distribution Anthony McKenzie MKT 500 Marketing Management Prof. Deidre Guion November 13, 2011 Determine and discuss a pricing strategy (Penetration or Skimming). The marketing penetration strategy its intention is to raise market shares of any product or services that is still prevailing in the consumer market. This particular pricing strategy was adopted by companies and business in order to increase their sales revenue merely because there wasn’t really a need to make any need to make any needless changes that could affect their products or services The other side of market penetration points out that there are other existing businesses or company that selling their products and services to the consumer. However, they can foresee their existing sales figures can change by using the marketing penetration strategy (Market Penetration Strategy, n.d.). Determine and discuss pricing tactics (Product line pricing) Value pricing, Differential pricing, or Competing against private brands) to be used for your product. The pricing tactic choosing to help promote the sales of products for the Alpha & Omega Medical Supply Company is Differential Pricing, the particular reason why this particular pricing tactic was selected. A company or business uses this type of pricing of their products and services. There are individuals who are living below or near the poverty level. What the company or business will do is that they will sale...
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...Pricing Strategy and Channel Distribution Stacy Allen MKT 500 -Marketing Management Dr. Adina Scruggs February 12th, 2012 Penetration entails giving most of the value to the customer and keeping a small margin. The objective is to gain as much market share as possible. It is often used as part of an entry strategy for a new product and is particular useful for preventing completive entry. The opposite of penetration pricing is skimming. Skimming gives more of the cost-value cap to you than to the customer. This strategy is appropriate in a variety of situation. For example, if there is a strong price-perceived quality relationship and the value proposition includes a position of the product at the high end of the market, then this objective makes sense. Financial Objectives * Reach profitability by year two. * Reduce store overhead by 5% each year. * Have a double digit growth rate for the first few years. The product-line approach involves offering both a high-priced and a low-priced brand. For example, this is a classic strategy that Procter & Gamble use. Just for Women Shoes strategy would be running and work out sneakers at the premium level and everyday work pumps (black, navy, brown) at the low end. Value pricing is related to customer expectations: It gives more value than they expect for the price paid. Just for Women Shoes Differential pricing or competing against private brands is to reduce the price gap to the point where consumers...
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...PATIENT INFORMATION Date Last Name Date of Birth Address Home Phone Number Employer First Name Middle Initial Age Social Security Number City State Zip Other Phone Number Work Phone YES NO A. Are you pregnant? If yes, please stop and return to the front desk. B. Are you on ANY type of steroids (oral, inhaler, injections or creams)? Have you been on steroids within the past 3 weeks? C. Have you had an organ transplant? D. Have you had cancer? Are you in remission? E. Do you have any implanted electronic devices? YES YES YES YES YES YES NO NO NO NO NO NO Can we leave a message on your answering machine? YES NO May we contact you at work? YES NO May we give results at this address? YES NO Would you like to receive occasional informational notifications? If so please provide address: Email Authorization to release information to and relation. Your Primary Care Physician Is: Have you ever filed legal actions against a healthcare provider? YES NO EMERGENCY CONTACT INFORMATION Last Name First Name Phone Number(s): Nearest Relative/Friend Not Living With You: Phone Number(s): Middle Initial Above information will be used for verification and emergency purposes only. How Did You Hear About Laser Med Center? Patient Signature: _____ INITIAL CONSULTATION AND PATIENT HISTORY Circle any of the following which apply: - Arthritis - Compression Fracture - Diabetes - Kidney Failure/Dysfunction - Liver Failure/Dysfunction - High Blood Pressure - Irregular Heart Beat - Light Sensitivity...
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...o Discuss how households have changed over the past 20 years and the implications of these changes on the purchase of consumer goods. Over the past 20 years, the traditional household dynamic has drastically changed. In the early 1900’s families consisted of a husband, wife and children. Most people were married at a young age and were focused on family rather than their careers. In today’s society people are getting married later, households sometimes consist of two husbands or two wives and people are career focused. With modern technology allowing for households to have interactive programs, internet and even phones consumers are focused on speed. Consumers want things faster, cheaper and better. Manufacturers must now find better faster and better ways to reach consumers. With Social Media outlets such as Facebook and Twitter quickly taking over, manufactures have adapted a new way to reach consumers. o How would Procter & Gamble market shampoo to Young Transitionals differently than Start-up families? Proctor and Gamble can market shampoo to different segments of the population by taking to social media and adapting new marketing methods. Many manufactures have taken to sites such as Groupon and Living Social to market new products. In a turbulent market consumers tend to use coupons more and to seek specials. Groupon and Living Social provide a discount to consumers for trying a new product or service. Consumers pay twenty dollars and receive 40 dollars towards...
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...New Product Launch: SONO Filter February 12, 2012 Determine and discuss a pricing strategy (Penetration or Skimming). SONO water filter is a new product in the market with limited resources and finance. I will choose penetration pricing strategy for this new product to gain market share and lure consumers away from the current competitors. This pricing strategy will sets product price low for a specific time period, but once SONO filter develop a strong clientele base, I will raise product price to the normal level. Once product’s extra features and value will be recognized by the consumer, it will create its own place in the market and among other competitors. Rather than choosing Skimming strategy, Penetration strategy would fit better in this product because the product does have other competitors, such as BRITA or PUR. Determine and discuss pricing tactics (product line pricing, value pricing, differential pricing, or competing against private brands) to be used for your product. To ensure the firm’s pricing objectives such as to achieve a target return, maximize profit, increase sales volume and to meet competition, I will have to determine a strong pricing tactics through analyzing product line pricing, value pricing, differential pricing, or competing against private brands. SONO filter will offer competitive pricing scale to its product line: including stylish water filter jugs, filtered cartridges and filtered water dispensers. While SONO products are not...
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...marketing plan. It provides a description of the pricing strategy that Toyota will use when establishing product prices. The report further gives a detailed explanation of two distribution channels that Toyota will use to supply products to customers. These channels include the dealership and retail channel. Toyota will also use a promotional strategy that will use various components of the marketing mix: Advertising, public relations, personal selling and sales promotions. The marketing implementation plan of Toyota covers various concepts, which include, structural issues and tactical marketing activities. The final part of the marketing plan is an evaluation and controls. It covers formal and informal controls, marketing implementation schedule and an explanation of a market audit. Pricing Strategy The pricing strategy that the Toyota company applies should fit the financial preferences of their target emerging markets such as the Asian countries and other potential international markets. The pricing objectives of the company will be: * To increase the profit margin by 50% in the next one 12 months * To increase sales volumes by 20% in the next two years Toyota will apply various pricing methods, in order to achieve the above pricing objectives. According to Shefer (2007), marketing managers use various pricing methods to achieve their pricing objectives. Besides using the price methods, they may also design innovative pricing methods that fit the needs of both the organization...
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...Title of Paper Your Name Course/Number Date Instructor Name (Doctoral students must include the following on the title page instead: title, author’s name, and institution name) Title of Paper ||AbstractThe company chosen and used for this paper is a mobile transport company that caters specifically to senior citizens. This particular paper will explain in detail domestic and global product branding strategy, optimum pricing strategy and a distribution channel analysis that identifies the wholesaler, distributor, and retailer relationships including e-Commerce. Discussions within the paper will also include the use of a push or pull strategy, a distribution channel analysis and supporting references.Domestic and Global BrandingA brand is the likeness, idea or image of a specific product or service that buyers connect with, by identifying the name, logo, slogan, or design of the entity that owns the idea or image. When the idea or image is marketed so that it is recognizable by more and more people, and identified with a certain service or product when there are many other companies offering the same service or product, it is then considered branding. Advertising professionals work on branding not only to build brand recognition, but also to build good reputations and a set of principles to which the company should strive to maintain or exceed. Branding is an important part of Internet commerce because it companies to build their reputations as well as expand...
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...Pricing Strategies and Marketing Channels Introduction Pricing Strategies and Marketing Channels are essential to the success of the health care system today. The role of pricing is to give the product or service its image. A health care facility that has quality products and services has to make sure that they also have a good pricing mix to attract new customers and to appeal to its customers loyalty. In today's society, customers are beginning to be sensitive to pricing of products and services because of the economic change. With the rise in prices, loss of employment and the health insurances issues on the minds of citizens in the United States, many are now searching for the best service or product that they can obtain for less. This paper will display the importance of pricing strategies and the use of intermediaries in the health care system. It. will explore the concepts of pricing strategies and marketing channels and their relevance to the health care system. Explain at least four of the seven steps for setting an initial price for a product or service, In the past, many physicians, customers and health care professionals thought it to be unethical and unprofessional to market the sales of health care products and services (Kreidler, 2008). The following will addresses how the health care facility can be successful in marketing its products and services. :These next four steps will show the importance of price setting. Selecting the Pricing Objective...
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... 1 Featha’s Closet, Top Quality Clothing and Accessories for Men, Women and Children Justin L. McKnight Marketing Management 500, Monday 6:00 Dr. McCue Strayer University FEATHA’S CLOSET 2 Domestic and Global Product Branding Strategy At Featha’s closet, our product and branding strategy will be used to help build brand awareness that’s sets us apart from the competitors. It will be used to remind current and prospective customers why they should purchase our products over the others and try to convince them to buy our products based on emotion. We would like consumers to think of our products as inexpensive with similar quality of our competitors. In order for us to give consumers a positive association with our brand we could conduct clothing drives and sponsor positive activities for inner city youth and other activities to reinforce our brand association with our target market which consist of single parent mothers and African American men. In addition to that we could create online blogs or customer feedback cards that would allow customers to give us their opinions which could be used to our advantage. Optimum Pricing Strategy This company’s optimum pricing has a mixture of low pricing and medium pricing characteristics. It penetrates the market through providing low prices to attract volume and some of the prices of the products are nearly predatory because they are low enough to discourage competitors. For example, the Air Jordan sneakers that inner...
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...Product, Pricing, and Channels Paper Learning Team A - MKT/421 Professor Luis Product, Pricing, and Channels Paper The following paper discusses how the Grayl, a water filtration equipment manufacturer offers its personal water filtration device to a number of target markets such as those who are health conscientious, environmentally focused, outdoor enthusiast and travelers. The discussion covers a number of topics such as the product features and benefits, the phases of the product lifecycle, the packaging of the product, the pricing strategy, and the channels of distribution. Product Features and Benefits The Grayl is a water filtration cup that functions much like a French Press. Filtered, good tasting water is as convenient as ever with the Grayl. Simply fill the outer cup with water, press the inner cup in the outer cup, and in as little as 15 seconds the Grayl filters the water by isolating it in the inner cup. During the filtration, the Grayl removes, chemicals, metals, and most of the bacteria commonly found in unfiltered water. The Grayl thoroughly filters water using technology that features a triple-charged ion mesh that pulls germs and viruses out of the water with magnet-like force. It also features an anti-microbial agent that ensures freshness every time. Though convenient at home, school, or office, the Grayl will also eliminate worries about finding clean water when on-the-go for a number of reasons such as day-to-day mobility; outdoor and...
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