Define Channels of Distribution LEARNING OBJECTIVES Explain what channels of distribution are and why organizations use them 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 able to get online and find… Read More »Define Channels of Distribution

Introduction to Using Channels of Distribution 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 “a big, bad buzz.” The company sponsors the X Games and a broad range of high-adrenaline sports. The company boasts that it puts all its marketing dollars into supporting… Read More »what channels of distribution are and why organizations use them

Why It Matters: Place: Distribution Channels Why learn about distribution channels? 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, and we understand that we need to pay a specific price to buy them. Promotion is sometimes a little more difficult to grasp, but if we begin with the concept of advertising… Read More »Why It Matters: Place: Distribution Channels

Putting It Together: Pricing Strategies 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 included unlimited 2-day shipping on orders Over the next 8 years, Amazon augmented Prime with a host of new features without changing… Read More »Putting It Together: Pricing Strategies

Introduction to Competitive Bidding 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. The company may provide discounts—such as “loyalty” discounts, for instance—to a particular group of customers, but overall, the pricing is fairly uniform. This is not at all the case in business-to-business… Read More »use of competitive bidding for B2B pricing

Products with Elastic and Inelastic Demand LEARNING OBJECTIVES Identify examples of products with elastic and inelastic demand 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: If it’s easy to choose a different product when prices change, the… Read More »Products with Elastic and Inelastic Demand

Elasticity and Price Changes LEARNING OBJECTIVES Define elasticity Explain the impact of elasticity on price changes Elasticity of Demand 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. In review: Price elasticity measures the responsiveness of quantity demanded to a change in the product price The calculation for price… Read More »Elasticity and Price Changes

Introduction to Price Elasticity 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 understand how much a change in price will affect market behaviors. If we make a small change in price, will the change have a dramatic impact on the demand for the product or only a small… Read More »Introduction to Price Elasticity

Discounting Strategies LEARNING OBJECTIVES Explain how price discounting is used and why it can be effective 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. The major types are described below. Quantity Discounts Quantity discounts are reductions in base price given as the… Read More »Discounting Strategies

Cost-Oriented Pricing LEARNING OBJECTIVES Explain why a company would use cost-oriented pricing 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 between how much the goods cost and the actual price for which it sells. This gross margin is designated by a… Read More »Cost-Oriented Pricing