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Pricing & Distribution


Production is just the first step taken by a firm. After the production main challenge starts. Goods are produced on basis of the survey done by the firm. Here comes the second barrier. To make the product marketable pricing & distribution have a good role to play. More often firms have to go for bank loans for their production. To repay the loan sales number should be on the better side.


Pricing:

Pricing is one of the other important segments of marketing. It enables firms to maximise their sales and profit to achieve goals.
To make a large profit & meet their objectives firms take different pricing strategies of their product.
Here are some pricing strategies adopted by the production sectors.

Premium Pricing:

When a product comes with a higher price than the competitors, it is termed as Premium Pricing. This strategy is taken in order to make initial revenue in absence of competitor in the market. But very harmful for ongoing products which still have existing producer in the market, unless there are some unique features added in it.

Penetration Pricing:

Penetrating Pricing strategy is considered to get a foothold in the saturated market. In this strategy, goods are sold at lower price than the competitors, so that new product can make a mark in the market. As the firm is running on loss from the very beginning, tries to make up the loss by raising awareness about the product.

Economy Pricing:

Economy pricing strategy is a section focused strategy. The firms take simple steps to cut down production cost. Take low-cost approaches to target price-sensitive section of the market. As marginal profit is available in this strategy, companies rely on consumption by the market to make a profit.

Psychological Pricing:

Psychological pricing is made to make the psychological difference. It may not be a huge gap in price tag but can attract customers to buy them. It can make a huge difference in yearly turnover.

Price skimming:

Companies with greater business advantage usually take Price Skimming strategy to maximise revenue. This strategy is helpful to outplay future products.

Distribution:

It is very important to distribute the product after production & pricing. Everything will be in the song when distribution will sound, efficient and timely.
Companies take various strategies to distribute their product. Sometimes companies sell product on their own but often they turn to marketing intermediaries. Their only job is to pick the product from the manufacturer and supply them to end users.
There are four marketing intermediaries. They are:

Agent:

Agents are the first distributing arms of manufacturers. These independent intermediaries take possession of products & distribute to users. In meantime make profits from commissions or fees paid by the manufacturers & users.

Wholesaler:

Wholesalers are the owner of the product they sell. They buy the product and sell them in bulk to other intermediaries.

Distributors:

Distributors are more close to wholesalers. The only noticeable difference is wholesalers can carry the various competing product, but distributors have to carry any particular product. They usually keep in healthy touch with both suppliers and customers.

Retailers:

Retailers are the end arms of a distribution system. They buy the product from the earlier intermediaries and sell them to the users keeping their own profit. They are directly linked with the users and receive all sorts of the reaction of the market.
Pricing & Distributions are two most important parts of Marketing. These are the primary source of earnings of the manufacturers. Most of the businesses rely on these parts. Promotions to play a good role in businesses.

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