Provide Customer Convenience-Btechnd
Explain how distribution is arranged to provide customer convenience
Distribution can be referred as spreading the products thought the marketplace for the use by the customers. Distribution makes it very convenient for the customer to get access to the product of the company. Distribution Implies to channeling the product to all the places and making it available to all the areas where the customer expect it. The product should be available in the adequate quantity so that it can fulfill all the need of the customer. The management of the company tries to keep the cost of management as low as it can be. The cost involved in the distribution is making the inventory, cost of transportation and the storage of inventory.
B2B marketing is the market transaction among the various businesses and not directly to the end consumer. It helps in analyzing the requirement of the company and increasing the sales of the products. B2C marketing refers to the sale of the products directly to the consumer or the end user involving no middleman in between. Technology have made the availability of the product easier to the consumer.
On the basis of the nature of the product their distribution channel is characterized. There are three kinds of the categories for the product such as intensive distribution, selective distribution and the exclusive distribution. The management has to decide whether the product will be distributed by the wholesaler or the individual dealer. On choosing the right combination of the above factors the company can gain the competitive advantage over the other. A product which is not very costly and consumed by the customer on a daily basis will be distributed intensively to make them available on the daily basis. Such products are made available to as many outlets as possible even in the remote areas. If the company will not make the products so intensely available then the people will buy other substitute which is widely available.
The marketing strategy of the company can also be divided into the categories. One is push which includes the taking the product to the customer end directly. Pull strategy involves motivating the customers to do the branding of the products and services of the company.
The products which are not daily purchased such as washing machine, television or the air-conditioner. For these products the customer doesn’t mind travelling to the far off places if the company gives them good value for the money. For very expensive and high end products such as cars, jewelry and the other accessories such as watches and the belts people can visit some of the selected store at far off places if they get the good dealership. They do not care if there are just one or two stores in the entire city. This is the example of exclusive distribution. (Sujai, 2010)
The strategic management is the process which help in the proper implementation of the important decisions of the company.
- Horizontal integration
It deals with integrating the infrastructure and the assets of the company of the same industry. It helps in expansion of the similar services.
- Vertical integration
It involves integration of the company with the new processes or with the company of the other industry. (Tanver, 2015)
The price of the product is the value assigned to the product by calculating all the cost involved. The pricing strategy is of following type:
- Price skimming
In this type of the strategy the organization keep the price of the commodity high on a regular basis. The price fall according to the normal demand and the supply of the product. There are many laws pertaining to the pricing strategy of the product.
- Premium price
In this type of pricing the company provides the high quality products at the higher prices. The price charged for the product is higher than the normal as the company charges the higher price for the premium quality. This is very beneficial when the company targets the new customer or enters into the new market.
- Economy price
In this strategy the price and the quality of the product are kept low because it targets the medium quality of the customer. The prices are kept as low as possible. This is also called as the minimum pricing.
- Penetration pricing
In the penetrative market the company tries to keep the price of the product low to gain the competitive advantage over the other competitors. In this condition the company tries to make the customers aware of the products and deliver them the products in as low prices as possible.
- Psychological Pricing
This type of pricing strategy is adopted when the business is well-known for their products. For example the price of 499 dollars seems less that the 500 dollar, these small differences can sometimes contribute to major differences.
- Luxury pricing
These pricing is attached to the reputation of the people. For example Rolex and Mercedes.
- Competitive pricing
It deals with making the product exist in the market and set the rate in accordance with the other competitors.
- Pricing based on rate
These type of pricing strategy is followed in freelancing or consulting where people can be paid on the hourly basis.
- Tiered pricing
In this of pricing strategy the customer have a liberty of modifying their products and choose between the different versions of products.
Sainsbury’s follows the two pricing strategies those are penetrative as well as the premium pricing strategies. When any new product is introduced by the company they follow the premium pricing strategy. After the product is bit old and all the competitors have also introduced the same product then the company follows penetrative strategy. The quality of the product of the Sainsbury’s is of very high quality and the price of the products is kept lower than the competitors to attract more and more customers. The cost of the products is kept low by managing the cost of the raw materials, labor cost and the other costs involved. The main objective of the Sainsbury’s is to provide high quality goods at the minimum possible prices. This helps the company in gaining the competitive advantage over the other. They also gain the loyal customers by providing the goods at reasonable prices. (Gill, 2016)
The factors that affect the pricing decisions are as follows:
- Cost and quality
This factor determine the relationship between the price and quality of the product.
- Pricing of a particular product line
Each product line have a different range of price. When a new product is launched then the price of existing product is reduced.
The company should justify the price they are taking for the product.
The company should be prepared for giving all the answers to the consumers.
- Negotiation with middlemen
The customer expect the lower prices if they are taking order in bulk.
- Distribution and retailing
These affect when the product is distributed through a channel or involves a lot of middlemen
- Legal and political factors
The political framework of the country also control the pricing as there can be a lot of political pressure.
- High profit
It is not good for a company to charge unreasonable prices as it would give the other companies competitive advantage.
- Taking low prices
Even very low prices will not be good for the company as the customers may form the opinion that the products are not of good quality. (Chand, 2016). Order Now