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With a totally new product, competition either doesn’t exist or is minimal, and there’s no market data about customer demand. How should the price be set in such a case? There are two common pricing strategies that organizations use for new products: skim pric...

Let’s return to our discussion of Amazon Prime pricing in the context of the pricing concepts we’ve discussed. It might be helpful to review the key facts: In 2005, Amazon introduced Amazon Prime for an annual membership fee of $79 The service initially ...

Introduction While the retail channel is most familiar to students, wholesalers play an important role as intermediaries. Intermediaries act as a link in the distribution process, but the roles they fill are broader than simply connecting the different chan...

While channels can be very complex, there is a common set of channel structures that can be identified in most transactions. Each channel structure includes different organizations. Generally, the organizations that collectively support the distribution channe...

Introduction The distribution strategy supports company-level objectives, as well as marketing objectives. Typically, distribution approaches support company-level objectives related to growth, as in the example of Monster Energy, or profitability, since di...

Evolution of Channels of Distribution As consumers, we take for granted that when we go to a supermarket the shelves will be filled with the products we want; when we are thirsty there will be a Coke machine or bar around the corner, and we count on being a...

What you’ll learn to do: explain what channels of distribution are and why organizations use them Monster Energy drink is a dominant player in the growing market for drinks enhanced with stimulants to give consumers extra energy. Monster promises to deliver “...

Why evaluate how to use distribution channels to market an organization’s products and services effectively? More Than Just Another P Of the elements in the marketing mix, product and price are perhaps the easiest to understand. We see products all around us...

Instructions Write a post for the Discussion on this topic, addressing the questions below. You may use either written paragraph or bullet-point format. Part 1 should be 2–3 paragraphs in length or an equivalent amount of content in bullet-point form. Respons...

What role does the price play in the competitive bid process? The answer to this question can vary significantly, but in every case, the marketer has a specific goal: to minimize the role of price in the proposal. To understand what this means, let’s conside...

What Is Penetration Pricing? Penetration pricing is a pricing strategy in which the price of a product is initially set low to rapidly reach a wide fraction of the market and initiate word of mouth.[1] The strategy works on the assumption that customers wil...

When we discussed buyer behavior, we identified the stages that organizations go through to make a purchase decision. When it comes to pricing consideration, two of these stages are especially relevant: proposal solicitation and supplier selection. You will...

What you’ll learn to do: explain the use of competitive bidding for B2B pricing Generally in business-to-consumer sales there is a standard price structure for all customers. That doesn’t necessarily mean that every customer will pay exactly the same price. T...

Now that you’ve had some practice calculating the value of elasticity, let’s turn to some of the factors that play a role in whether a product is likely to have elastic or inelastic demand. The following factors can have an effect on elasticity: Substitutes...

Introduction With a good understanding of what elasticity means and how it is calculated, we can now investigate its impact on pricing strategies. In order to do this, we’ll look at a couple of examples and answer the following questions: How much of an im...

The following video is a little long to watch, but it provides an excellent overview of elasticity and explains both the concept and the calculations in a simple, easy-to-follow way. You can view the transcript for “Episode 16: Elasticity of Demand” here (o...

What you’ll learn to do: explain price elasticity and its impact on price Now that you understand different pricing strategies, we’re going to tackle one more concept that helps when selecting the right strategy: price elasticity. Elasticity helps us understa...

In addition to deciding about the base price of products and services, marketing managers must also set policies regarding the use of discounts and allowances. There are many different types of price reductions–each designed to accomplish a specific purpose. T...

Cost-Plus Pricing Cost-plus pricing, sometimes called gross margin pricing, is perhaps the most widely used pricing method. The manager selects as a goal a particular gross margin that will produce a desirable profit level. Gross margin is the difference betw...

What Is a Supply Chain? We have discussed the channel partners, the roles they fill, and the structures they create. Marketers have long recognized the importance of managing distribution channel partners. As channels have become more complex and the flow o...