Benefits of Dynamic Pricing Advantages Real time pricing adjust based on demand

Benefits of dynamic pricing advantages real time

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Benefits of Dynamic Pricing Advantages • Real-time pricing: adjust based on demand, competitor • Reap profit in high demand, increase sales in low demand • Reap more profit by addressing unmet demands or those willing to pay more • Data analytics reveal valuable insights into customer needs Disadvantages • Requires complex algorithm which may not always work • Consumers perceive it as unfair • Although it offers a customer a choice in service 3.6 Geographical Pricing : Setting prices for customers located in different parts of the country or world. 3.7 International Pricing • Companies marketing products internationally must decide what prices to charge in different countries . eg: Gucci $140 (Italy) vs. $240 (USA) • Prices vary depending on many factors - Economic conditions - Competitive situation - Laws / regulations - Distribution system - Consumer perceptions/behaviors - Operational & Selling costs, shipping, tariffs & taxes, exchange rate Common Pricing Mistakes • Determine costs and take traditional industry margins (too cost-oriented) • Failure to revise price to capitalize on market changes • Setting price independently of the rest of the marketing mix • Failure to vary price by product item, market segment, distribution channels, and purchase occasion
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Distribution & Place Distribution components = moving a product from producers to consumers Component = channel + logistic Channel = Intermediaries = middleman Function of Marketing Channel 1. Transactional Buying: buy for resale Selling: contact customers, promote products, seek orders Risk taking: hold the inventory obsolete 2. Logistical Assorting: create product assortment Storing: protect product at a convenient location Sorting: purchase in large quantities and break into smaller amount Transporting 3. Facilitating Financing: extend credit to customers Grading: judge & grade quality Marketing information & research: provide info to customers & suppliers Benefits of Distribution Channel 1 Specialization Firms can’t perform all tasks Shipping and handling capabilities Dealing with a large number of customers (lend the credit, provide service) Channels help sell the products better than a producer works alone Specialized expertise and economy of scale of channel members Perform better (Enhance the overall performance) With lower costs (Creates greater efficiency) 2 Overcoming Discrepancies
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3 Providing contact efficiency Reducing the number of required transaction Type of marketing channel 1. Wholesaler: buy large quantities of product from producers store and break them down to smaller units 2. Retailers: buy products from wholesalers, agents, or distributors and sell to consumer. a. Store: shopping mall, supermarket b. Non-store: direct selling (insurance), direct marketing (TV direct, mail catalogue) Channel Trend Offline Online Disintermediation Try to reduce role of intermediaries in the supply chain Manufacturers sell directly to consumers ex. Apple has their own store and sell online.
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