Assignment 7: Distribution and Pricing Decisions
1. State your product idea and target market.
The product we decided to display at the trade show will be an environmentally friend called Envopan. The target market for Envopan would include individuals and families who like to travel, hike and camp.
2. Distribution strategy - Answer the following questions.
The target market wants to purchase Envopan online at popular websites as well as in appliance stores. Availability of Envopan at supermarkets would also be a plus.
When does your customer want to purchase your product?
The customers would want to purchase Envopan during their vacations when they want to go on the mountains or riverside for camping or visit places of natural beauty or historical significance as tourists.
In what quantities and how often does your customer want to purchase your product?
A small group of families or friends would purchase one or two quantities of the product. The purchased product will last longer as it is durable and of superior quality.
What is your estimated weekly/monthly turnover based upon your target market?
The estimated weekly/monthly turnover would be around eight to ten thousand dollars depending upon the effectiveness of marketing campaign for the product.
What payment method(s) does your customer want to use?
If the customers make an online purchase, they would want to make payment via PayPal or their debit card/visa/master card whereas if they purchase Envopan, they would prefer to pay via their credit cards and rarely make cash payment.
What service support is wanted from your customers?
The customers would want after sales service from the company so that if they face any issues with the functioning or have positive feedback to share, they can avail the service conveniently.
How will you get your product to the final consumer?
The customers would be allowed to purchase the final product from online retailers, appliance stores as well as camping stores depending upon their convenience.
Given the answers to these questions, what intermediaries should you use? – online/offline
We will make use of both offline and online intermediaries as Envopan would be available to final consumers through both channels.
3. What level of distribution intensity should you use and why? (intensive, selective, exclusive).
We would make use of selective distribution strategy for our product. This is because the Envopan is not for the mass market but for those who are seeking adventure and traveling. Moreover, the pan is not only for a small and specific segment so exclusive distribution can be ruled out easily. Marketing channels and advertisements will be focusing on the convenience of carrying and portability of Envopan for the target market and selective distribution strategy perfectly fits the requirements. In selective distribution, the intermediaries are limited (Fulton, Furman, & Finlay, 2014). If the intermediaries are provided discounts and a guarantee of fair and long-term relationship with the organization, they will stay loyal and work effectively.
4. Explain what pricing objectives best fit your product and why?
The pricing objective which best fit our product Envopan is based on gaining profits as well as acquiring customer satisfaction from the target market.
5. Explain which new product pricing strategy best fits your product idea. Since you are unable to calculate production costs for your product idea, pricing strategies based on customers’ needs should be used.
We will be making use of value pricing since we are not able to calculate production costs for Envopan. So value pricing is the best option since this pricing will deliver to the customer what the company desires. Moreover, the value derived from the product will meet the expectations of the customers. In value pricing, the prices are set as per the prices of competitors.
6. Write down your closest 3 competitors and find out their price, product (and features), and distribution strategies. Put this on a table. What are the implications of your findings?
Although many competitors exist which offer products and gadgets suitable for tourists and campers but none has been able to come up with a product with similar features as of Envopan. So we can say that Envopan has no direct competitors.
Reference
Fulton, D., Furman, D., & Finlay, N. (2014). A longitudinal study of the middle class: Growth, size, and marketing strategies. Research in Business and Economics Journal, 10, 1.
