Pricing and Distribution in marketing
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Contrast the pricing and distribution strategies of these two products of Timex and Rolex.
(1) What is the pricing strategy used by Timex and Rolex? What are the reasons for and/or against a price reduction for this particular product?
(2) How is this product distributed, i.e., how do customers and clients find it? How does each product's distribution fit (or fail to fit) its target market?
(3) Why would this product be (or not be) a good candidate for online distribution?
Do not summarize the principles of pricing and distribution strategies that you have learned about; only apply them to the products discussed.
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Solution Summary
Pricing and distribution in marketing are examined. Timex versus Rolex Pricing and distribution strategies are examined.
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Timex Vs Rolex Pricing and distribution strategies:
Pricing and distribution strategies are the methods an organization utilizes to allocate cost for their goods and service. The pricing and distribution strategy for Rolex is the creaming or skimming. In this strategy the cost of the watches are set a high monetary value. The reason why the cost of Rolex is stipulated at high prices is that although the sale of the product is relatively low, it aims to increase its profits through the sale of a few of its products. In addition to this the Rolex manufacturers and distributors use this strategy so as to easily break even. The other reason why the pricing of the Rolex is against pricing reduction is that, the product aims to satisfy the needs of a certain group of consumers who want to be associated with class and affluence (Marketing - Pricing, 2011).
The pricing and distribution strategy for Timex watches is the market oriented pricing. This method involves setting the cost of products at value based on the information derived from research and analysis of the behavior of the consumer in the economy. The manufacturers and distributors of Timex watches stipulate the prices of the watches at a relatively lower cost as compared to the Rolex products. The reason for the price reduction is to improve the profits generated by the product through increasing the sale and the distribution of the product. In addition to this, the Timex watch is ...
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