Price and Channel Strategy (original) (raw)
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Handbook of Pricing Research in Marketing, 2009
This chapter provides a critical review of research on pricing within a channel environment. We fi rst describe the literature in terms of increasing time horizons of decision-making in a channel setting: (1) retail pass-through (2) pricing contracts and (3) channel design, all of which occur within a given market environment. We then describe the emerging empirical literature on structural econometric models of channels and its use in (1) inferring channel participant behavior and (2) policy simulations in a channel setting. We also discuss potential areas for future research in each area. * We thank the editor Vithala Rao and Jiwoong Shin for comments and suggestions on the chapter.
FACTORS AFFECTING MARKETING STRATEGIES: PRICING, CHANNEL STRUCTURE AND ADVERTISING STRATEGIES
The world economy is changing, this is a fact. New technology, new communication possibilities have reduced the physical boundaries and have made customers more knowledgeable and with more requirements. Overcoming those challenges, companies (in specific SMEs) are striving to develop new strategies to respond to new requirements and working conditions in their market environments, are facing different challenges that needs to be overcome through developing proper marketing strategies. There are many factors that may seem to be important. As reviled by this study, the most common strategies that firms implement, on their path toward economic growth, are based on Pricing, Channel Structure and Advertising Strategies, which are seen as the most effective tools to reach customers and to develop a sustainable firm’s strategy. Additionally, there are differences between firms implementing standardized strategies form those that are focused more on localized advertising strategies.
Pricing Strategies in Marketing
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Price is one of the marketing mix elements which can mean many things to the consumer about a product. These include many concepts such as quality, prestige, performance, and durability. This study examines pricing strategies that can be applied in the market conceptually.
Distribution Channels in Marketing
Every consumer’s choice is driven by the desire to get value for their money; this means that the choice of a particular channel over another depends to a large extent on the value that would be received. On the other hand, organizations would also adopt a channel that would suit their profit maximization aim...
Exploiting the opportunities of internet and multi-channel pricing: an exploratory research
Journal of Product & Brand …, 2004
Smart firms are not worried about the impact of the Internet on pricing, but realise that they have the unique opportunity to exploit new options and improve their marketing performance. Multi-channel pricing is one of the most interesting opportunities firms can exploit in the digital economy. Reviews the existing literature on pricing on the Internet and on multi-channel pricing. Presents the results of an exploratory research on price opportunities perceived by firms. Offers a picture of the possible multi-channel options available to firms and highlights the importance of the value for and of the customer.
Production and …, 2006
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 and to the relative convenience to the consumer of the Internet channel. We find that Strategy 3-the specific equal-pricing strategy that optimizes profits for the manufacturer-often is also preferred by the retailer and customers (through lower prices) over the other equal-pricing strategies. We next consider the implications of the equal-pricing constraint through a numerical experiment that indicates that the equal-pricing strategy is appropriate as long as the Internet channel is significantly less convenient than the traditional channel. If the Internet channel is of comparable convenience to the traditional channel, then the manufacturer has tremendous incentive to abandon the equal-pricing policy-at great peril to the traditional retailer.
Designing Channels of Distribution
This note addresses the issues that arise and the complexities that must be addressed when designing a channel of distribution. Content includes the definition of a distribution channel, the steps in its design, functional discounting and margin allocation, the role channels play in branding, and recent trends.
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 and to the relative convenience to the consumer of the Internet channel. We find that Strategy 3-the specific equal-pricing strategy that optimizes profits for the manufacturer-often is also preferred by the retailer and customers (through lower prices) over the other equal-pricing strategies. We next consider the implications of the equal-pricing constraint through a numerical experiment that indicates that the equal-pricing strategy is appropriate as long as the Internet channel is significantly less convenient than the traditional channel. If the Internet channel is of comparable convenience to the traditional channel, then the manufacturer has tremendous incentive to abandon the equal-pricing policy-at great peril to the traditional retailer.