Free Custom «Pricing Strategies and Distribution Channels» Essay Paper

There are numerous shaving cream brands that have shaped the men’s grooming industry. Assuming that Gillette wants to introduce a new brand of shaving cream in India, the company has to target sub-urban middle class and urban citizens because this group forms a significant part of Indian population. Research indicates that sub-urban middle-class and urban rich Indian men are more likely to buy imported and affordable products, which are of high quality. Attracting consumers from this target group will not be a big problem considering that there is a growing interest in health, fitness and appearance among a majority of Indian men.

Based on these factors, value pricing strategy would be best for Gillette considering that the grooming industry is a low price stimulus as we as a high price sensitive growth industry. As Nagle, Hogan, & Zale (2010) maintain, this pricing strategy is aimed at winning and maintaining loyal consumers by charging fairly low prices for high-quality products. It is imperative to understand that this is not a matter of simply setting low process; it is a matter of reengineering the product to become better without sacrificing quality. This is aimed at attracting a huge number of value-conscious consumers.

 

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It has been established that continuous sales has both short-term and long-term benefits to all stakeholders in a company. A better return on investment is a long-term benefit to all stakeholders in any company.  Nagle, Hogan & Zale (2010) contend that for consumers, continuous sales means improved product and service quality. For the company, continuous sales means increased accuracy of targeting.

Distribution channels

It is undeniable that establishing the right distribution channel for food products is challenging to most managers considering the fact that most products have shorter shelf lives. Therefore, managers must ensure that products are sold in the shortest time possible to prevent losses. As a brand manager, I believe that using a direct-marketing channel for a new food product is the best option. This will ensure that the new products are sold directly to the consumers after production. It is my recommendation that the company sets up an outlet store where consumers can purchase the new products.

Until 2003, Zappo relied on vendors to distribute its products. After evaluating its customer’s feedback, Zappo established customers served by the company’s warehouse were much happier than those whose orders were delivered by vendors. Therefore, the company decided to shift to a direct-marketing channel so as to provide exceptional services to its customers (Marks, Lee & Hoyt, 2009). Zappo achieved this by developing its own distribution center in Shepherdsville, Kentucky.

There are several weaknesses that are associated with this distribution channel. First of all, the cost of selling products directly to consumers is higher as compared to using intermediaries. This emanates from the cost of hiring and training staff, postage and telephone costs, transportation and travel costs. Moreover, this distribution channel limits the coverage area for Zappo. This emanates from the constraints associated with personnel as well as licenses and funds to enter some territories (Dent, 2011). Additionally, this distribution channel is associated with limited consumer choice.  It has been established that if Zappa decides to sell directly to its clients, they will have limited choice on the kind of products to purchase. In this regard, Zappo has to incorporate other distribution channels in order to strengthen the weaknesses associated with this channel of distribution.