Price and distribution are one of the fundamental elements of a market mix that should be considered by any business organization in order to realize high turnovers. There is usually a general cost incurred in the production, designing, distributing, and promoting a product. Therefore, pricing has ...
Price and distribution are one of the fundamental elements of a market mix that should be
considered by any business organization in order to realize high turnovers. There is usually a
general cost incurred in the production, designing, distributing, and promoting a product.
Therefore, pricing has to support all of these elements of the market mix and also, reflect supply
and demand relationship. Pricing of a company’s product should therefore, not be too high or too
low as this may lead to losses through reduction of sales to a company (Li, Cheng, & Cheong,
2017). Under quoting the price of a product would raise questions on quality factors, which may
be prejudge by buyers as low and this automatically leads to a reduction in demand of this
particular product. Similarly, over quoting the price would reduce the demand of a product since;
buyers would prefer various cheaper substitute of the products. Therefore, any company wishing
to maintain a high demand for its products should consider various price and distribution sections
such as distribution strategies, channel tactics (pricings), and dynamic/static pricing strategies.
Distribution Strategies
Distribution strategy used by affirm depends on the choice of the firm on either to reach
their consumers directly or through intermediaries. The choice on this depends on the nature of
product produced by the company, bulkiness of a product, or the cost of production of that
particular product. Bulky goods would require the role of intermediaries in distribution to help in
bulk breaking and other activities such as packaging in smaller sizes that are readily consumable
by the customers. Similar, goods whose production cost are high may also need the role of
intermediaries who reduce the cost by purchasing the goods in bulk thereby creating economies
of scales to the company. On the other hand, nature of the product in question may also
determine the number of distribution channels to be used by company.
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