Introduction
When developing a marketing plan, a company must consider “the 4 P’s” – product, price, promotion, and placement. How they approach their promotional strategy, their pricing strategy, and their distribution strategy can all have a major affect on the initial phase of their products’ life cycle. Most organizations aim to set off a chain of events that will lead to a very fast rise in consumer demand for their products.
Promotional Strategy
An organization’s promotional strategy’s objective should be to inform their target audience of their existence and availability. Based upon the various target audiences, they will need to do this in a few different ways. Television, radio, magazines, coupons, etc. can all be used to thrust the product through the beginning stage of its life cycle. Businesses would need to ensure that their advertising is on the channels and stations which both young and middle-aged adults direct their attention to. Coupons would be more directed at middle-aged adults as they are more thrifty-savvy. This would be an example of a pull strategy, where the business is creating a consumer demand and the consumers are going to pull the product through the distribution conduit, compelling the wholesaler and retailer to stock it. (Promotion, n.d.)
Unlike the pull strategy, there is the push strategy which involves the organization concentrating a portion of their marketing efforts directly to promoting the product to retailers to convince them to stock the product. They can implement personal selling and direct mailings to execute their push strategy. It would be in their best interest to focus on carrying out both strategies. (Promotion, n.d.)
Pricing Strategy
An organization’s pricing strategy should begin with penetration pricing, where they are trying to pursue higher demand through offering lower pricing as compared to their competitors. Unlike electronics, where consumers are willing to pay a higher price to have the product now and prices later stabilize, with products such as furniture, customers are more price sensitive and the quantity demanded will increase significantly as price declines. In addition, penetration pricing is perfect for products such as furniture and accessories, which are of the nature of something that can achieve mass appeal fairly rapidly. Further, penetration pricing is to be utilized when there is a danger of looming competition. (Pricing, 2007)
A company’s pricing strategy should involve trying to beat their competitors’ prices in their respective cities and online. If they offer a small “convenience” increase for offering their products locally, then this can offset their distribution costs. They can offer local discounts, holiday specials, and new and creative products to ensure their customers constantly feel they are getting a good value, while keeping them intrigued. Further, if they offer quantity discounts to their wholesalers and consumers, they can increase demand. In addition, if they offer a discount when their wholesalers pay their bill within ten days versus the net 30 days, then they can increase their revenues faster.
Distribution Strategy
A business’ distribution strategy should include providing products to wholesalers which can then provide the product to larger retailers, directly to retailers, in the business’ online store, and via catalog. They should make it easy for their wholesalers and retailers to log on to their website, enter in their unique ID, and place their orders for more products. They should seek to form strategic partnerships with local, regional, and possibly even national businesses. (Strategy, n.d.)
Conclusion
In a company’s promotion strategy, they should ensure that they are implementing both a pull and a push strategy. This will help increase demand rapidly. Their pricing strategy should aim to undercut their competition in pricing, offer promotional and bulk quantity discount, and seek to drive up consumer demand as quickly as possible. Their objective in their distribution strategy should be to make it easy for their clients and customers to place orders, to build long-lasting strategic partnerships, and to ensure they are offering plenty of ways in which orders can be fulfilled.
References
Pricing strategy. (2007) Retrieved January 29, 2009, from http://www.netmba.com/marketing/pricing/
Promotion strategies. (n.d.) Retrieved January 29, 2009, from http://www.learnmarketing.net/promotion.htm
Strategy and implementation summary. (n.d.) Gourmet food store business plan. Retrieved January 29, 2009, from http://www.bplans.com/gourmet_food_store_business_plan/strategy_and_implementation_summary_fc.cfm
