- Consideration evaluated in the development of distribution strategy
Successful distribution is only possible through the use of a comprehensive strategy that has taken into consideration the market dynamics. The organization needs to examine the nature of the customers and tailor the distribution in line with the customer preferences. In addition, the organization must take into consideration the cost implication. Often, the cost is examined relative with the willingness of the customer to absorb additional costs. In cases where the customer can easily incur additional costs, the distribution strategy would be insensitive to costs. The converse holds for customers that are in preference of low costs. In addition, the nature of the product also informs the distribution strategy embraced. To this extent, the organization would want to give preference to speed and quality for perishables while for bulky goods, they are more concerned with a distribution system that can handle large volumes with adequate space and lower costs.
In the long run, the distribution strategy in application often looks into addressing the key priority issues in marketing. These are speed, quality, dependability, cost and flexibility. The organization would want to entertain a distribution strategy that reflects the mentioned strategies. It would want to consider the priorities for their overall contribution to the business success is fundamental. In addition, the level of success of the business would be evaluated through an independent analysis of the processes. The distribution process must play its role in the overall operations of the business. For the effective delivery of the distribution roles, strategies would entertain differentiation in line with the tastes and preferences of the diverse client base.
- Social and economic influences considered in development of the product pricing model
The development of the product pricing model is always influenced by social and economic factors. This is often in realisation of the essential place of economic and social undercurrents in the overall success of sales of a product. Some of the influences considered shall be briefly discussed. Economic abilities of the target market top the list. This refers to the disposal income often determined by factors such the gross domestic product. The economic abilities determine the demand of a product. Consequently, prices must be a reflection of the economic abilities of the targeted consumers. Societal attitude and perception of pricing is also considered. There is a segment of society that associates high prices with high quality and otherwise for low prices. For this segment, the prices must not be too low as to rubberstamp that assertion.
On the other hand, there is a segment that associates high prices with exploitation. For this segment, prices must not be too high as to exclude them from purchase yet they inform the targeted market base. Another influence that is economic in nature is the type of good. For necessaries, pricing models could afford to be insensitive to economic conditions as the consumers would be compelled to buy anyway given that they fall under necessities. For luxuries, prices must be high to meet the expectation of the high end consumers who often like expensive products. On the other hand, for goods with substitutes, pricing must be cognizant that consumers could resort to the cheaper substitute if the prices are too high.
Finally, pricing models are influenced by the social aspect of culture. The cultural notions of prices ordinarily affect pricing models. Some cultures associate products with low prices while others associate with high priced products even without any empirical or philosophical backing. For the producers of such products, their pricing models must reflect these believes and notions.
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