Pricing Strategy and Channel Distribution

Topics: Marketing, Pricing, Marketing plan Pages: 4 (1461 words) Published: April 25, 2012
Pricing Strategy and Channel Distribution
Senior Concierge Services
Kelly Spino
Strayer University
Dr. Robert Badowski
Determine and discuss a pricing strategy (penetration or skimming). Determine and discuss pricing tactics (product line pricing, value pricing, differential pricing, or competing against private brands) to be used for your product. Identify any legal and ethical issues related to the pricing tactics. Prepare a marketing distribution channel analysis identifying the wholesaler, distributor, and retailer relationships. Discuss how the distribution strategy fits the product/service, target market, and overall marketing objectives for the company. As a service business, Senior Concierge Service will offer non medical care and maintenance for senior citizens and their families. This type of service business does not have many competitors, and pricing is consistent among the senior care industry. The pricing strategy for Senior Concierge Service will be to stay within the normal range for its services. Consumers will choose Senior Concierge Service over the competition not by cost, but by the quality of services offered. Price skimming is a pricing strategy in which a marketer sets a relatively high price for a product or service at first, and then the price is lowered over time. This is a version of price discrimination. Price skimming allows a business to recover its resources quickly before a competitor moves in and lowers their prices, lowering the market price. The objective of a price skimming strategy is to capture the consumer surplus. There are several potential problems with this strategy. It is effective only when a business is facing an inelastic demand curve (demand that is not very sensitive to a change in price). Skimming encourages the entry of competitors. Penetration pricing is a more suitable strategy in this case. This strategy is a pricing technique of setting a relatively low...

References: Iacobucci, Dawn (2009). Marketing Management: 2010 custom edition (12th ed.). Mason, OH: South-Western Cengage Learning.
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