+1443 776-2705 panelessays@gmail.com

 

Respond to the assigned questions using the lessons and vocabulary found in the reading.

Support your answers with examples and research and cite your research using the APA format.

Start reviewing and responding to the postings of your classmates as early in the week as possible.

Distribution Strategies

According to the intensive distribution strategy, a consumer should not have to go beyond the nearest store to buy the product.

  • Create a 300- to 400-word response to any two of the following bullet points: Which products are best suited for an intensive distribution strategy and why?
  • Which products are best suited for an exclusive distribution strategy and why?
  • Which products are best suited for a selective distribution strategy and why?
  • Provide an example of a product you buy that is always available, including how availability influences your brand loyalty toward the product.
  • Discuss a situation when you went out of your way to buy a particular product. Why did you make such an effort to buy it? What are the lessons for marketing managers who sell products that consumers consider special?

Be sure to properly cite your sources using APA; include your references and in-text citations. 

Pricing Methods and Price Determination

The economic function of price is to create possession utility. This means when consumers pay the price on a
product, they gain possession of the product or the right to bene�t from its use. The foundation of pricing is to �rst
recover the cost of producing a product and delivering it to the customer. Pricing also has a psychological element.
Customers tend to assume a higher price indicates higher-quality products. If the products fail to provide the
expected quality, customers will not buy them again. Two factors commonly affect pricing decisions. Usually, the
decision to select a posted price versus a bargaining price is based on what is traditional for that product category.
The second factor in developing a pricing strategy takes into account the psychological aspects of pricing. The most
common pricing strategies are going-rate pricing, target-return pricing, standard markup pricing, perceived-value
pricing, and value pricing. The selection of a pricing strategy depends on what is traditional in the target market.

Going-Rate Pricing -Set your price at the same level as your competitor’s price/ used with products that sell in mass
market.

Target-Return Pricing – Base the price on the average cost of the product plus a percentage to cover the rate of
return they require for their investment /used most commonly in regulated markets.

Standard Markup Pricing – Sell at a price that is a standard percentage added to the price they pay to the
manufacturers / based on tradition.

Perceived-Value Pricing – Known as prestige pricing, is based on the value of the product as perceived by the
customers / mainly premium and luxury goods.

Value Pricing – Requires solid research on the target market and the need the product meets / requires knowledge
of the value of the product to the target market.

Of all the elements of the marketing mix, price is the only one that allows the organization to generate immediate
revenues. All the other elements—product, place, and distribution—are considered either investments or
expenditures for the organization. Regardless of the nature of a product, its price and demand are closely related.
The value of a product and the quantity demanded are strongly correlated. This is so because the value attached to
a product in�uences the consumer’s willingness to buy the product. So a consumer’s perception of the value of a
product is a viable predictor of the quantity of the product that will be in demand.

Additional Materials

View a Pdf Transcript of Pricing Methods and Determination
(media/transcripts/Week_1/SUO_MKT3010%20W4%20L1.pdf?
_&d2lSessionVal=YzlcjEFFEmH3BeMoJVuecqFOY&ou=83096)

Types of Distribution Strategies and Marketing Channels

When deciding on a distribution strategy, marketing managers must decide whether it should be intensive,
selective, or exclusive.

Intensive Distribution Strategy – An intensive distribution strategy is one where a product is made available to any
retailer willing to sell it.

This strategy is often used for soft drinks, which are sold in any outlet that will keep them, even in vending machines.

Selective Distribution Strategy – A selective distribution strategy, instead, is more restrictive by requiring that
retail outlets be suitable for selling a product—for example, television sets sold through electronic and mass
merchandisers.

Exclusive Strategy – The last strategy is an exclusive strategy, in which a product is sold only through a dealer.
Automobiles are a classic example of an exclusive strategy—each brand has its own dealer network.

Marketing Channels

There are two basic types of marketing channels, conventional channel systems and vertical marketing systems.
Vertical marketing systems are further subdivided into three types: the corporate vertical marketing system, the
administered vertical marketing system, and the contractual vertical marketing system.

Conventional channel systems form the traditional model of distribution channels. Each member of a marketing
channel acts independently, depending on his or her self-interest, and there is little cooperation between channel
members.

Conventional marketing systems work well with intensive and selective distribution strategies.

Vertical marketing systems are governed by cooperative relationships. They, therefore, have an advantage over
conventional systems in that the members coordinate their distribution strategy in order to achieve higher results.

Vertical marketing systems are used most often for selective and exclusive distribution strategies:

An organization’s strategy is a road map that guides the direction of the organization. In the military, the lack of a
strategy leads to a defeat in war; in business, the lack of a strategy leads to corporate defeat. A good corporate
strategy is as important to the success of an organization as a good military strategy is to the battle�eld commander.
It is an organization’s core competency and strategy that will determine how the organization will position itself.

An organization’s core competency includes the things that the organization does better than any other
organization. Part of the strategy development process is a strengths, weaknesses, opportunities, and threats
(SWOT) analysis. A SWOT analysis is a careful study of an organization’s strengths and weaknesses (internal
assessments) and its opportunities and threats (external assessments).

Additional Materials

View a Pdf Transcript of Types of Distribution Strategies and Marketing Channels
(media/transcripts/Week_1/SUO_MKT3010%20W4%20L2.pdf?
_&d2lSessionVal=YzlcjEFFEmH3BeMoJVuecqFOY&ou=83096)

Integrated Marketing Communications

The integrated marketing communication approach is the latest strategy used by marketing managers to promote
their brand in the target market. The strategy basically combines the different elements of the promotion mix under
a common theme, which is focused on a speci�c market. When all the elements of the promotion mix send the same
message, they reinforce each other and the message in the minds of the target market.

The goals of the integrated marketing communication strategy should be based on the goals of the marketing plan. A
successful and integrated marketing communication strategy weaves the different elements of the promotion mix
together in a way to enable the elements to support the marketing plan by communicating the attributes of the
brand to the target market. Another element of an integrated marketing communication strategy is interactive
marketing. Today, all integrated marketing communication campaigns have Web sites that serve as an anchor for the
campaign. Advertisements on the Internet link directly to these Web sites, which provide a vast depth of
information on the brand. Often, consumers can purchase the goods or services directly through this source.

Public relations should be integrated into the strategy to reinforce the message. Direct mail offerings need to
include advertisements consistent with the advertising campaign. Moreover, when the organization’s sales people
are making their pitch, they too need to remind their customers of the main theme of the campaign. Finally, the
integrated marketing communication strategy should include a sales promotion element. Coupons, special offers,
and sales should all be used in connection with the integrated marketing communication campaign.

Failure to create an effective IMC strategy may result in the derailment of other strategies in the marketing mix. For
example, if the IMC message does not successfully convey the right core strategy—value proposition and
positioning—to the target market, diminishing perceptions of the value of the product will creep into consumers’
minds. This situation will render the already established price ineffective in pulling customers toward the brand. As
a result, distribution costs will be affected because the intermediaries will demand higher slotting fees to carry the
product, not to mention the higher inventory and warehousing costs because of unful�lled sales projections.

Additional Materials

View a Pdf Transcript of Integrated Marketing Communications
(media/transcripts/Week_1/SUO_MKT3010%20W4%20L3.pdf?
_&d2lSessionVal=YzlcjEFFEmH3BeMoJVuecqFOY&ou=83096)

Pricing and Methods of Price
Determination

© 2016 South University

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Marketing Management

©2016 South University

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Pricing and Methods of Price Determination

Week 4 L1

Pricing and Methods of Price Determination

Price is the second element of the marketing mix. The economic
function of price is to create possession utility. This means when
consumers pay the price on a product, they gain possession of the
product or the right to benefit from its use. Price is an important
element for marketing managers to remember when crafting a
marketing strategy.

The foundation of pricing is to first recover the cost of producing a
product and delivering it to the customer. The ability of a firm to
survive is based on its ability, over the long term, to recover the
costs of delivering a product to its target market. Products that
don’t cover their production and logistics costs will not last long in a
competitive marketplace.

Beyond simple cost recovery, pricing also has a psychological
element. Customers tend to assume a higher price indicates
higher-quality products. If the products fail to provide the expected
quality, customers will not buy them again.

Over the years, many different pricing methods have been
developed in marketing, and these may be broadly divided into two
categories, posted pricing and individual bargaining pricing.

First, let’s learn about posted pricing.

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Week 4 L1

Posted pricing is the most common type of pricing. It is used as the
most efficient means of accommodating a large number of buyers
of standardized products, which have a known value.

Now, let’s learn about individual bargaining pricing.

Individual bargaining pricing is the opposite of posted pricing.
Traditionally, it is used with nonstandardized products, such as
automobiles or antiques, because of the variance in the attributes
of the products as well as the needs of the individual consumer.

Two factors commonly affect pricing decisions. Usually, the
decision to select a posted price versus a bargaining price is based
on what is traditional for that product category. The second factor
in developing a pricing strategy takes into account the
psychological aspects of pricing.

Bargaining pricing is traditional in the automobile industry. In fact,
attempts to develop a posted-pricing strategy for automobiles have
been unsuccessful. In contrast to bargaining pricing, common in
the automobile industry, posted pricing is traditional or standard for
products such as soda pop.

Starbucks coffee has successfully made use of the psychological
aspects of pricing. By setting a price higher than the competition’s
price, Starbucks is sending a message to its target market that its
product is of a higher quality. The strategy used by McDonald’s
coffee is, in essence, aimed at attracting those who like coffee but
don’t want to pay the premium price of Starbucks. McDonald’s

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Pricing and Methods of Price Determination

Week 4 L1

uses its product cost advantages to offer a more affordable
product.

Common Pricing Strategies

There are several pricing strategies that marketing managers can
select when creating their marketing mix. The most common
pricing strategies are going-rate pricing, target-return pricing,
standard markup pricing, perceived-value pricing, and value
pricing. The selection of a pricing strategy depends on what is
traditional in the target market.

Going-Rate Pricing

In this strategy, you set your price at the same level as your
competitor’s price. This strategy is generally used with products
that sell in mass markets, such as candy bars. It is also used with
commodities for which prices are established by the markets in
those commodities. This is one of the most common strategies
used in marketing because it is the easiest.

Target-Return Pricing

In this strategy, marketing managers base the price on the average
cost of the product plus a percentage to cover the rate of return
they require for their investment. This pricing is used most
commonly in regulated markets—for example, by utilities and by
contractors selling goods to the government.

Standard Markup Pricing

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Week 4 L1

In this strategy, retailers sell at a price that is a standard
percentage added to the price they pay to the manufacturers. The
markup is generally based on tradition, and it needs to cover the
costs of the retail operation. This is a common practice because,
like going-rate pricing, it is easy to implement.

Perceived-Value Pricing

This strategy, also known as prestige pricing, is based on the value
of the product as perceived by the customers. It is a strategy used
for premium and luxury goods, where the price is part of the
attraction and is used to signal product quality.

Value Pricing

A successful value-pricing strategy requires solid research on the
target market and the need the product meets. This is a difficult
strategy to implement since it requires knowledge of the value of
the product to the target market.

Integrated Marketing Communications

© 2016 South University

Page 2 of 2

Marketing Management

©2016 South University

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Integrated Marketing Communications

Week 4 L3

The integrated marketing communication approach is the latest
strategy used by marketing managers to promote their brand in the
target market. The strategy basically combines the different
elements of the promotion mix under a common theme, which is
focused on a specific market. When all the elements of the
promotion mix send the same message, they reinforce each other
and the message in the minds of the target market. Check out the
Case Study Below

Case Study: Wells Fargo

The goals of the integrated marketing communication strategy
should be based on the goals of the marketing plan. A successful
and integrated marketing communication strategy weaves the
different elements of the promotion mix together in a way to enable
the elements to support the marketing plan by communicating the
attributes of the brand to the target market.

Advertising is the element of the promotion mix that usually has the
greatest reach, so it should set the pace for the integrated
marketing communication strategy and the message it sends.

Wells Fargo wanted to send its target market a message
emphasizing the security and stability the bank provides its
customers. So it used a stagecoach as its corporate symbol in its
advertisements, which reminds the market of the fact that the bank
has been in business since 1852, when it transported money in
strongboxes on stagecoaches. This sends a message of security
and stability, which is especially important, considering the recent
economic problems.

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Integrated Marketing Communications

Week 4 L3

Another element of an integrated marketing communication
strategy is interactive marketing. Today, all integrated marketing
communication campaigns have Web sites that serve as an anchor
for the campaign. Advertisements on the Internet link directly to
these Web sites, which provide a vast depth of information on the
brand. Often, consumers can purchase the goods or services
directly through this source.

Consider the Wells Fargo Web site, which enables the consumer
to open banking accounts and purchase other banking services.
Wells Fargo’s advertisements in press releases and other forms of
communication carry or display the Web site clearly. In fact, Wells
Fargo has a number of billboards showing only its stagecoach and
Web address.

Public relations should be integrated into the strategy to reinforce
the message.

Press releases made by Wells Fargo remind the public of its long
history and strength as a bank. This serves to complement the
message sent by its advertisement. Wells Fargo also has replica
stagecoaches from the 1850s, which it sends around to fairs and
other public events to promote its brand by letting people take
pictures next to them or even ride in them.

Direct mail offerings need to include advertisements consistent
with the advertising campaign. Moreover, when the organization’s
sales people are making their pitch, they too need to remind their
customers of the main theme of the campaign.

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Integrated Marketing Communications

Week 4 L3

Finally, the integrated marketing communication strategy should
include a sales promotion element. Coupons, special offers, and
sales should all be used in connection with the integrated
marketing communication campaign.

Often, Wells Fargo offers giveaways to people opening new
accounts or when they do their banking online.

SUO Discussion Rubric (80 Points) – Version 1.2
Course: MKT3010-Marketing Management SU01

Response
No Submission
0 points

Emerging (F-D: 1-27)
27 points

Satisfactory (C: 28-
31)
31 points

Proficient (B: 32-35)
35 points

Exemplary (A: 36-40)
40 points

Criterion Score

Quality of Initial

Posting

/ 40
No initial posting exists

to evaluate.

The information

provided is inaccurate,

not focused on the

assignment’s topic,

and/or does not

answer the question(s)

fully. Response

demonstrates

incomplete

understanding of the

topic and/or

inadequate

preparation.

The information

provided is accurate,

giving a basic

understanding of the

topic(s) covered. A

basic understanding is

when you are able to

describe the terms and

concepts covered.

Despite this basic

understanding, initial

posting may not

include complete

development of all

aspects of the

assignment.

The information

provided is accurate,

displaying a good

understanding of the

topic(s) covered. A

good understanding is

when you are able to

explain the terms and

topics covered. Initial

posting demonstrates

sincere reflection and

addresses most

aspects of the

assignment, although

all concepts may not

be fully developed.

The information

provided is accurate,

providing an in-depth,

well thought-out

understanding of the

topic(s) covered. An in-

depth understanding

provides an analysis of

the information,

synthesizing what is

learned from the

course/assigned

readings.

Participation
No Submission
0 points

Emerging (F-D: 1-13)
13 points

Satisfactory (C: 14-
16)
16 points

Proficient (B: 17-18)
18 points

Exemplary (A: 19-20)
20 points

Criterion Score

Participation
No Submission
0 points

Emerging (F-D: 1-13)
13 points

Satisfactory (C: 14-
16)
16 points

Proficient (B: 17-18)
18 points

Exemplary (A: 19-20)
20 points

Criterion Score

Participation in

Discussion

/ 20
No responses to other

classmates were

posted in this

discussion forum.

May include one or

more of the following:

*Comments to only

one other student’s

post.

*Comments are not

substantive, such as

just one line or saying,

“Good job” or “I agree.

*Comments are off

topic.

Comments to two or

more classmates’ initial

posts but only on one

day of the week.

Comments are

substantive, meaning

they reflect and

expand on what the

other student wrote.

Comments to two or

more classmates’ initial

posts on more than

one day. Comments

are substantive,

meaning they reflect

and expand on what

the other student

wrote.

Comments to two or

more classmates’ initial

posts and to the

instructor’s comment

(if applicable) on two

or more days.

Responses

demonstrate an

analysis of peers’

comments, building on

previous posts.

Comments extend and

deepen meaningful

conversation and may

include a follow-up

question.

Writing
No Submission
0 points

Emerging (F-D: 1-13)
13 points

Satisfaction (C: 14-
16)
16 points

Proficient (B: 17-18)
18 points

Exemplary (A: 19-20)
20 points

Criterion Score

Total / 80

Writing
No Submission
0 points

Emerging (F-D: 1-13)
13 points

Satisfaction (C: 14-
16)
16 points

Proficient (B: 17-18)
18 points

Exemplary (A: 19-20)
20 points

Criterion Score

Writing Mechanics

(Spelling,

Grammar, Citation

Style) and

Information

Literacy

/ 20
No postings for which

to evaluate language

and grammar exist.

Numerous issues in

any of the following:

grammar, mechanics,

spelling, use of slang,

and incomplete or

missing citations and

references. If required

for the assignment, did

not use course, text,

and/or outside

readings (where

relevant) to support

work.

Some spelling,

grammatical, and/or

structural errors are

present. Some errors in

formatting citations

and references are

present. If required for

the assignment, utilizes

sources to support

work for initial post

but not comments to

other students.

Sources include

course/text readings

but outside sources

(when relevant) include

non-

academic/authoritative

, such as Wikis and

.com resources.

Minor errors in

grammar, mechanics,

or spelling in the initial

posting are present.

Minor errors in

formatting citations

and references may

exist. If required for

the assignment, utilizes

sources to support

work for both the

initial post and some of

the comments to other

students. Sources

include course and text

readings as well as

outside sources (when

relevant) that are

academic and

authoritative (e.g.,

journal articles, other

text books, .gov Web

sites, professional

organization Web sites,

cases, statutes, or

administrative rules).

Minor to no errors

exist in grammar,

mechanics, or spelling

in both the initial post

and comments to

others. Formatting of

citations and

references is correct. If

required for the

assignment, utilizes

sources to support

work for both the

initial post and the

comments to other

students. Sources

include course and text

readings as well as

outside sources (when

relevant) that are

academic and

authoritative (e.g.,

journal articles, other

text books, .gov Web

sites, professional

organization Web sites,

cases, statutes, or

administrative rules).

Overall Score

No Submission
0 points minimum

There was no

submission for this

assignment.

Emerging (F to D Range)
1 point minimum

Satisfactory progress has not been

met on the competencies for this

assignment.

Satisfactory (C Range)
56 points minimum

Satisfactory progress has been

achieved on the competencies for

this assignment.

Proficient (B Range)
64 points minimum

Proficiency has been achieved

on the competencies for this

assignment.

Exemplary (A Range)
72 points minimum

The competencies for this

assignment have been

mastered.

Types of Distribution Strategies and
Marketing Channels

© 2016 South University

Page 2 of 2

Marketing Management

©2016 South University

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Types of Distribution Strategies and Marketing Channels

Week 4 L2

Distribution is the process of ensuring that a product is available for
the consumer to buy. Distribution channels describe the flow of
products from the manufacturer to the consumer. You can better
appreciate this with an analogy of a river channel in which products
are flowing to retail outlets and then to consumers. A distribution
channel creates the economic utility of place. This means having
the right product at the right place at the right time.

Types of Distribution Strategies

The first decision marketing managers need to make is related to
their distribution strategy— whether it should be intensive,
selective, or exclusive.

Intensive Distribution Strategy

An intensive distribution strategy is one where a product is made
available to any retailer willing to sell it. This strategy is often used
for soft drinks, which are sold in any outlet that will keep them,
even in vending machines.

Selective Distribution Strategy

A selective distribution strategy, instead, is more restrictive by
requiring that retail outlets be suitable for selling a product—for
example, television sets sold through electronic and mass
merchandisers.

Exclusive Strategy

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Types of Distribution Strategies and Marketing Channels

Week 4 L2

The last strategy is an exclusive strategy, in which a product is sold
only through a dealer. Automobiles are a classic example of an
exclusive strategy—each brand has its own dealer network.

Marketing Channels

There are two basic types of marketing channels, conventional
channel systems and vertical marketing systems.

Vertical marketing systems are further subdivided into three types:
the corporate vertical marketing system, the administered vertical
marketing system, and the contractual vertical marketing system.
Let’s discuss these channels in detail:

Conventional channel systems form the traditional model of
distribution channels. Each member of a marketing channel acts
independently, depending on his or her self-interest, and there is
little cooperation between channel members. Conventional
marketing systems work well with intensive and selective
distribution strategies.

Vertical marketing systems are governed by cooperative
relationships. They, therefore, have an advantage over
conventional systems in that the members coordinate their
distribution strategy in order to achieve higher results. Vertical
marketing systems are used most often for selective and exclusive
distribution strategies:

A corporate vertical marketing system is the most extreme form of
a vertical marketing system. Here, a single firm owns all levels of

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Types of Distribution Strategies and Marketing Channels

Week 4 L2

the distribution channel. A corporate vertical marketing system is
used only with an exclusive distribution strategy because the
producer is also the retail outlet for the products.

An administered vertical marketing system is the weakest form of
a vertical marketing system. There are no contracts governing it
but just an informal agreement that the different members of the
marketing channel will work together to implement their strategy to
distribute goods to the target markets.

A contractual vertical marketing system is similar to a more formal
vertical marketing system with contractual agreements between
the different members. The contracts spell out the duties of each of
the members of the marketing channel.