PRICING AND DISTRIBUTION

Pricing and Distribution



Pricing and Distribution

Pricing Strategy

Penetration

The strategy of penetration, by contrast, is to set low prices in order to capture a greater market share.  Wal-Mart has been using this strategy for a multitude of years by keeping the prices at a lower level. It requires Wal-Mart to a system of extensive marketing technique, and a simulative interest in the market through active promotional activities and above all relevant production capabilities (Daly, 2002). This is a strategy designed for the large initial investments, such as Wal-Mart, that are not promptly returned.  This strategy has become a USP for Wal-Mart.

Pricing Tactics

Product- line Pricing

In some cases, the specific strategies the firm will use are not based on the firm's position in the market, but they primarily focus on relationships among products in the product line.

This strategy refers to the offering of merchandise at a number of specific predetermined prices. By offering ecological benefits at various price points, the marketer grants the consumer the flexibility to engage in green consumption action that is consistent with the consumer's budget. For example, the carbon offset programs offered by Sustainable travel enable consumers to select from among several plans. These plans vary in price based on the level and location of the offset carbon activity.

Value-based Pricing

This strategy is not that much relevant to Wal-Mart, as most of the strategy's part is based on making the prices lower. This pricing strategy uses the consumers' perceived value of a good to establish price. In contrast to the preceding strategies that focus on the cost to determine the price, this strategy addresses the relative value of the product to the consumer. The firm begins by identifying the desired benefits and relative costs of a product; then the value assessment can he determined (Sandhusen, 2000). Thus, the various ...