Branding, Pricing, and Distribution Free Essays

Branding, Pricing, and Distribution Gary D. Tate Strayer University Marketing-500 Instructor: Brett Jordon 5/17/2012 Branding, pricing, and distribution are all integral parts of a strategic marketing plan. Each segment of the plan needs to be developed individually with the entire culmination of the plan in mind. We will write a custom essay sample on Branding, Pricing, and Distribution or any similar topic only for you Order Now In other words, each segment should be a link in the chain to a completed marketing strategy. The ultimate goal is to reach a successful culmination of all three tiers that will have a successful impact in introducing the brand, pricing it correctly, and forming a distribution model that will maximize the competitive advantage to the company or service in question. This report will outline the steps in developing a local branding outline as well as an international branding strategy . The idea behind branding is to differentiate your product, value, quality or service from your competitors, and make it more readily identifiable to the end user. There are at least four questions that need to be asked before implementing a branding strategy. The first of course is whether to brand the product vs, a no brand decision. The second decision would be to use a manufacturers brand vs. a private label strategy. The third question entails whether to go with a single brand vs. multiple brands. The final decision is to decide whether to brand in a local market or a global market or a combination of both. Branding in a global market is much more complicated than branding in a local market. When branding in a global market. Culture becomes a major consideration. It is generally wise to chose countries that have similar or closely related cultures and, or language skills to expand your brand globally. International marketing is the last frontier of the marketing discipline. International marketing is yet to be fully explored but is being increasingly tested to reach an ever growing sea of future consumers. The Lanham Trade-Mark Act of 1947 defines a trademark as â€Å"any work, name, symbol, or device, or any combination thereof adopted and used by a manufacture or merchant to identify his goods and distinguish them from those manufactured or sold by others. Preoccupation with the marketing aspect of branding without giving due consideration to the legal aspect may easily defeat the main purpose of a trademark and protection of the owners valuable property. Onkpisit (2001). The legal rights to a registered trademark do not necessarily prevent others from illegally using it from counterfeiting in other countries. Branding in the host country (United States) is protected by law but this does not extend to foreign entities. A brand is an idea or image of a specific that customers can identify with. It can be associated to the product or service by name, slogan, or image portrayed by the initiating company. Branding is when the idea or image is recognized by more and more people. Branding is especially important in e-business. People will naturally search for brands or names they can quickly associate with. The foundation of your brand is your logo. Branding is developed through your website, packaging, and all promotional materials. Your brand strategy consist of how, what, where,, when, and to whom you are to communicate your brand message to. Branding is a continuous marketing strategy that may continue through numerous generations of existing and potential customers. The brand should add intrinsic value in the form of perceived quality or emotional attachment. The brand, slogan or logo should be placed on every aspect of your business. The brand is what helps to differentiate your product from all others. The significance of branding is important whether you are involved in a domestic market or a global campaign. One of the most difficult is to decide how much to charge for your product or service. There is no single or right way to determine the correct price for your product. There are several considerations that may be considered when pricing your product or service. How do want to position your product or service. Do you want to be perceived as a discount outlet? If this is the case, you will want to keep your prices low. On the other hand, If you want to be perceived as a limited edition or luxury product or service, you will command a higher price structure. People really do equate price with quality. Other criteria for pricing would be to estimate what the demand will be for your product or service. The price will normally affect the demand curve. The higher the price, the less the demand in most cases for the product or service. In order to get the best possible price, a marketer might do some test marketing in several similar markets using a different price for each. Generally, the best price will be the one that provides the maximum amount of profit to the company. Example: 100 widgets for $1. 00 get 78 sales. 100 widgets for $2. 00 get 49 sales. 100 widgets for $3. 00 get 14 sales. The middle price would constitute the biggest profit for the company. The first example provides 78 dollars in revenue, the second 98, and the third 42. The $2. 00 price would be the most appropriate. Another consideration concerning pricing involves the costs associated with the manufacture and distribution of the product or service. All costs fixed or variable must be considered in pricing the product to maximize profit. The main consideration for any business is to maximize profit. Profit margins can vary drastically from industry to industry, but no matter the margin, a profit must be maintained to sustain the company. Environmental considerations must also be taken into account. Certain regulations place constraints on the price the company can charge. Lowering your price to low might trigger price wars from your competitors. A company needs to examine what external factors might affect the price charged. The next step is to determine what pricing strategy should be used in implementing your price. Short-term profit maximization might be considered for optimal cash flow for a cash strapped company, but may be a hindrance to long term profits. Short-term revenue maximization may be the approach used to lowering costs through economies of scale. This approach is frequently used when trying to lure investors. The company realizes little profit but builds market share. Maximizing quantity can be used in lowering long term cost or to maximize market penetration. A company may chose to maximize profit margin. This strategy is used when sales are lower than expected or sporadic in nature. Differentiation is another extreme that sets the company up as different from other competitors and generally commands a higher price. The perceived differentiation is one created by the marketer to command a psychological benefit to the customer. No matter what pricing strategy you may chose, the price must seem fair to the consumer, or they will not buy. Strategic distribution channels lead to a competitive advantage from the configuration network. The company must determine what type of distribution channels will be used to supply the product or service to the end user. Two basic methods are basically used to channel goods or services to the customer, direct and the use of subsidiaries. If you will be dealing directly with the customer, a simplified warehousing and shipping department should suffice. If you are using intermediaries to deliver the product or service, it is crucial to select partners who will be excellent stewards for delivering the product or service to the customer or end user in a timely manner. The distribution strategy should be defined on the number and types of customer interface. Much of the decisions will depend on the order entry points and how fulfillment to the customer is handled. Careful thought must be given to the cost factor when establishing a distribution network. Consumer products fall into two basic categories, remote access( web or catalog sales or local access( typically brick and mortar operations. Remote access is generally made by phone, mail, e-mail, or from a website. Fulfillment of an order is generally shipped directly to the end user by Fed-Ex, UPS, or Postal carriers. Local access is still the most prevalent form of distribution. Sales from the web have been increasing and according to news reports have reached a staggering six percent of all sales. In many cases the distribution strategy has led to a cooperative mingling of both remote access and brick and mortar retail or wholesale outlets. This trend should continue to grow with the increased ease of shopping through advanced technical means. Shopping by phone is becoming increasingly popular. The downside of this type of transaction lies in the security issues that abound. References Distribution Strategy retrieved May 19th from Faculty. msb. edu/homak/homahelpsite//WebHelp/Distribution_Strategy. htm Onkpisit (2012). , What is Branding? Retrieved from Entrepreneur Media, Inc. on may 20th, 2012 from www. entrepreneur. com Allen, Scott, Pricing Strategy How much should you Charge? Retrieved on May 21st, 2012 from http://entrepreneurs. about. com/od/salesmarketing/a/pricingstrategy. htm How to cite Branding, Pricing, and Distribution, Papers Branding, Pricing, and Distribution Free Essays Abstract This assignment focuses on branding, pricing, and distribution of Clear-Springs, Inc.’s product and service. In this assignment, a domestic and global product branding strategy was created and the optimum pricing strategy was determined and discussed in detail. We will write a custom essay sample on Branding, Pricing, and Distribution or any similar topic only for you Order Now An examination on how the company’s pricing strategy supports its branding strategy was compelled and discussed in detail. A distribution channel analysis identifying the wholesaler, distributor, and retailer relationships; which included any e-Commerce was prepared. A justification of whether or not a push or pull strategy will be used was explained in detail. How the distribution strategy fits the product / service, target market, and overall marketing strategy for the company was also discussed. Introduction Global branding aids to improve boundaries by driving down unit costs through economies of scale associated by examining agencies, ad copies, and marketing messages. Brands streamline decisions for consumers, who are demanding, more skeptical; and face a wider array of choices in a progressively cluttered world. By maintaining a reliable and consistent brand image, Clear-Springs, Inc. reduces consumer confusion and reinforces the message in a cluttered market. Clear-Springs, Inc.’s mission is to provide customers with the best specialized, effectual and dependable water treatment service available. The company’s motto is â€Å"– to benefit and replenish everyone it reaches.† Product Branding Strategy By building a strong, consistent brand culture, Clear-Springs had become the  number one leading brand in water treatment and purification systems throughout the United States; and eventually the world. The company’s brand remains familiar to consumers wherever it is in the United States and now throughout the rural areas in Kenya. Part of Clear-Springs, Inc.’s branding strategy was to become borderless in its marketing. The company adopted a more unified marketing approach to avoid the risk of becoming marginalized. By adopting this approach, Clear-Springs, Inc. had distanced itself from its competitors by not becoming a multinational brand, but by becoming a transnational brand without any boundaries; that’s truly global. Optimum Pricing Strategy One of the most difficult decisions managers ever make is setting the optimum price for a product and/or service. Pricing represents a strategy to increase sales volume at a profit while incorporating and communicating critical messages about the value the offering delivers to the customer . Clear-Springs, Inc. determined its optimum pricing strategy by considering and/or incorporating a few different core ideas. Clear-Springs, Inc. conducted a competitive analysis by taking a look at its competitor’s pricing and the entire package that they were offering. The company wanted to consider if its competitors were offering any value-added services or not. Clear-Springs, Inc. considered a ceiling price in which the company initially surveyed experts and consumers to determine the pricing limits. The company estimated the demand curve by performing experiments at prices above and below the current price in order to determine the price elasticity of demand. Clear-Springs, Inc. then calculated the costs involved. The unit cost of one of the company’s water treatment and purification systems set the lower limit of what the company might have charged which, in turn, determined the profit margin of higher prices. Clear-Springs, Inc. took into account the competitive and legal environment in which the company operates. Competitively, the company didn’t want to set the price too low and risk a price war; nor did the company want to set the price too high and attract a large amount of competitors who wanted to share in the profits. Legally,  Clear-Springs, Inc. didn’t want to violate any laws to include, but not limited to, predatory pricing or dumping; price discrimination, and/or collusion. Lastly, the company offered promotional discounts to help stimulate sales. How the Pricing Strategy Supports the Branding Strategy Being that Clear-Springs, Inc. had built a strong, consistent brand culture; the company wanted to makes sure that the pricing strategy complimented its branding strategy. As the number one leading brand in water treatment and purification systems, Clear-Springs, Inc. didn’t want to set the price for its product or service too high or too low. With such a reliable and consistent brand image, Clear-Springs, Inc. had to complete an extensive competitive analysis to strategically price its product or service. Knowing what other competitors are offering is very essential and plays a major part in optimum pricing strategy. By estimating the demand curve for the company’s product or service, the company was able to project future profits and sales in regards to the market becoming more elastic or inelastic. With all the considerations in play, Clear-Springs, Inc. was able to set an ideal price for the perfect brand product. Distribution Channel Analysis Conducting an overall market analysis helps determine the target demographic and demand for your products, as well as your competitors and their distribution channels . Because Clear-Springs, Inc. wanted to maximize its profits, it operates strictly using E-Commerce. An online channel is disruptive to the traditional ways of marketing and distribution. Online selling features the removal of intermediaries, while still reaching large groups of potential customers. Basically, Clear-Springs, Inc. cuts out the middle man while retaining the ability to sell to a broadly-based market. Harnessing social networks, online ad campaigns and message boards to spread the word, you can achieve substantial sales volumes quickly . By creating an e-commerce website for the company, Clear-Springs, Inc. was able to take orders online, receive payments by use of debit/credit card transactions, and send confirmation all at once. Clear-Springs, Inc. stocked its own inventory in company-owned warehouses and fulfilled all of its own orders to keep from spending funds using other companies to do the work for  them. The company also packages and distributes all of its products using its own company-owned distribution centers located throughout the United States. This was just another way of cutting out the middle man. Clear-Springs, Inc. digital marketing tactics included: Company websites Social media applications such as Facebook or Twitter Blogging YouTube E-commerce Push or Pull Strategy Clear-Springs, Inc. used the pull strategy to motivate its customers to seek out its brand in an active process. Some of the tactics used included: Customer relationship management Word of mouth referrals Advertising and mass media promotion Sales promotions and discounts This strategy required a highly visible brand, such as Clear-Springs, Inc.’s brand, which was developed through mass media advertising or similar tactics. Create the demand, and the supply channels will almost look after themselves . Distribution Strategy Because of Clear-Springs, Inc.’s company-owned distribution centers located throughout the United States, it was able to package and distribute the company’s product to all of its customers and consumers directly, regardless of where they were located. This also included international customers and consumers as well. The company was able to cut spending costs tremendously by storing, packaging, and distributing its own products and/or services itself. Works Cited Fontelera, J. (2013). Distribution Channels and Marketing Analysis. Retrieved from Chron: Small Business Web site: http://smallbusiness.chron.com/distribution-channels-marketing-analysis-60985.html KuTenk 2000. (2009, May 28). Four Pricing Strategies for Setting the Optimum Price. Price to Cover Costs. Pricing to Meet the Market. How to cite Branding, Pricing, and Distribution, Papers