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strategic pricing and distribution decisions, differentiatin

1. How do the strategic pricing and distribution decisions made by management impact the overall image and positioning of a brand? Explain your answer.

2. What are three lessons learned relative to the importance and effectiveness of differentiating based on service? What concepts and analytic tools will you be able to use in the development of a marketing audit?

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1. How do the strategic pricing and distribution decisions made by management impact the overall image and positioning of a brand? Explain your answer.

Strategic pricing and distribution decisions made by management are an inherent part of the overall strategic plan and heavily impact the overall image and positioning of a brand. Strategic pricing of a company's product determines the positioning of the company vis-a-vis its competitors. For example, if the company choses to price its products higher as compared to the competitive products available in the industry, it aiming to position itself in the high price-high quality segment in the industry. Such pricing decisions have to be complemented with value added features in the product such as premium quality and host of other features to justify the product's strategic positioning in the industry. Strategic pricing directly impacts the company's position as perceived by the consumers, which can be easily depicted by tools such as perceptual mapping. The brand image of the company directly commensurates by the pricing charged by the company as compared to competitive products. It is precisely for this reason that a Mercedes Benz commands much higher price than a similar model offered by companies such as Ford or General Motor. The manufacturers of companies like BMW and Mercedes Benz tend to keep their prices strategically higher than their competitors in the similar automobile segment because they know that the perception among the consumers will allow them to charge higher prices.

Similarly, Walmart's low price strategy positions its brands and products in a differentiated manner as compared to products offered by other retailers. Due to its pricing strategy, whenever we think of Walmart, we think of low priced products.

Selection of a distribution channel also has manifold impact on the brand image and positioning of a product. For example, premium products and luxury products like Rolex Watches and Ferrari Cars are distributed via select outlets. The strategy behind such distribution channel for luxury products is that luxury goods manufacturers want to cater to a very select clientele and do not want to make their products easily available to everybody. Similarly, the selection of the kind of stores to display a manufacturer's product is also crucial in developing the strategic positioning and brand image of the product. For example, costlier clothing brands tend to select outlets in upmarket areas whereas discount brands tend to distribute their products via large number of outlets located in all types of markets. Some companies have tried to reposition their brands and positioning in the industry by selecting only online distribution channel, such as Dell computers which prefers to stick to this medium only to eliminate middleman and reach consumers ...

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strategic pricing and distribution decisions, differentiating

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