Price and Channel Strategy
Tiffany Benson
Marketing 571
Dr. John Kautenberg
1/13/2020
Price and Channel Strategy
The price and channel strategy is an ideal approach that organizations can focus price to ensure longevity and profitability. The strategy involves paying close attention to the factor of pricing and determining the best available option depending on the needs of a company. The following discussion depends on the price and channel strategy for Nintendo.
Price and Place/Distribution Strategies
The place/distribution strategy of a market mix entails the methods that are used to make the products of an organization available to the consumers. It has a great impact on the price of the products. A complex distribution strategy that involves a lot of third parties will increase the price of a product (Garrant, n.d). Nintendo has various options as its distribution strategies. Mass or Intensive distribution is mostly applicable to low priced products. The selective distribution involves the use of a small number of retail outlets that are selected by a company. This can be a recommendable strategy for Nintendo because products can be distributed over a wide geographic area. It is applicable to highly valued goods like household appliances and computerized devices like video games. The other available strategy is the exclusive distribution that involves reducing the distribution to a single retail store.
Positioning within Channels
Positioning entails the strategies that a business should adopt to market its products and services to potential customers. It involves the creation of an image for the products depending on the intended audience. Positioning within the channel relates to the valuation of the seller by the suppliers and the significance of their partnership (Lauren, 2019). This process is necessary for developing a working partnership between the two parties based on mutual trust and self-interest. The result is the satisfaction of the customers as well as the partners. In positioning of products, high prices are associated with higher quality and vice versa. Nintendo, therefore, needs to conduct through marketing research to identify the price of competitors and before pricing the products.
Dynamic/ Static Pricing Strategies
Dynamic pricing implies a model that updates prices frequently, depending on the changes in market forces of demand and supply (Wang & Sun, 2019). This approach aims at balancing the utilization of capacity and production patterns. Organizations can use this marketing strategy to modify prices in inefficient ways without experiencing significant market shocks. Nintendo can use this strategy to set the price of its products based on the shifts in demand and supply in the market.
The static pricing strategy can be referred to as fixed pricing in simple terms. It can include the component of price per unit charge and a fixed charge (Wang & Sun, 2019). An example is the price of the fixed price of renting a car and an additional charge per mile driven. Consumers that purchase more units pay less per unit in comparison to the ones that buy fewer units. Nintendo can use this pricing strategy to attract bulk purchases from wholesalers.
Channel Tactic Pricing
The channel tactic of pricing focuses on the distribution channel as a determinant of pricing. It is common in firms that offer different prices depending on the place where a product is purchased. This translates to price discrimination, where consumers are treated differently based on a combination of factors such as location, age, and their levels of income (Garrant, n.d). Penetration channel entails setting low prices of products to gain popularity in new markets. This can be an ideal pricing tactic for Nintendo to attract new customers in its efforts of venturing into new markets. Another tactic is the cost pricing, which involves charging a price higher than the cost that is used in producing a product to gain a specific amount of profit.
Daily Pricing, Promotion Pricing, and List Pricing
Daily pricing implies the practice of sustaining a regular price. Consumers do not need to wait for special sales events or discounts to make their purchases. Promotional pricing is applicable when a seller reduces the price of a product to attract customers (McCormick, 2016). It involves discounts such as “Save 20% off today” and buy one get one free. The list pricing strategy is similar to the marked price of a product. It is commonly used in e-commerce and stores where prices are printed on catalogs. It is free from factors such as trade discounts and sales. It is developed to create a perception of saving that customers will receive. Nintendo can adopt this pricing strategy to sell its products through online platforms.
References
Garrant C. (n.d). Pricing strategies and methods for better retail execution. Retrieved from https://www.repsly.com/blog/consumer-goods/retail-pricing-strategies-to-perfect-retail-execution
Lauren, L. (2019). What is positioning in marketing plan? Retrieved from https://smallbusiness.chron.com/positioning-marketing-plan-22983.html
McCormick, M. (2016). Why use promotional pricing? Retrieved from https://blog.blackcurve.com/why-use-promotional-pricing
Wang, Y & Sun, X. (2019). Dynamic vs. static wholesale pricing strategies in a dual-channel green supply chain. Retrieved from https://www.hindawi.com/journals/complexity/2019/8497070/
Michelle_Michy
20200124164539price_and_channel_strategy.docx
