Pricing and Distribution
Channels, Mass, Selective, Exclusive
Traditionally, there were three channels. The first, Mass or Intensive Distribution, aimed at providing saturation coverage of the market by taking advantage of all available outlets. It was chosen in a wide majority of the cases because, for many products, the amount in total sales is usually linked to the number of outlets used in the distribution of goods (Pride & Ferrell, 2016). Selective Distribution, on the other hand, entailed a producer taking advantage of a limited number of outlets in a geographical area to sell products, meaning that the producer could settle on the most appropriate or high-performing outlet and focus their efforts on it. For its part, Exclusive Distribution is an extreme form of Selective Distribution since only one retailer, wholesaler, or distributor is tasked with plying a specific geographical area (Pride & Ferrell, 2016). When the internet went mainstream, it served to undercut the effectiveness of all three levels of distribution coverage. Everything sold on the internet was effectively distributed by Mass Distribution Coverage, rendering the three traditional levels a vestige for distributing physical products (Rowley, 2016). Blackberry’s IOT arm would thus have to rely on the Mass Distribution. It is especially well suited for the IOT business because it is a segment of the industry where customers have a whole range of acceptable brands to choose from, and when one brand is not available, the customer will simply choose another. By adopting the Mass Distribution strategy, Blackberry can make the most of its position in the market. More than that, it can challenge other operators already in the market for a piece of the pie.
Dynamic/Static Pricing Strategies
In today’s highly competitive marketplaces, pricing is one of the most important decisions that a firm has to reach. More than just setting the price and forgetting about it, a good pricing strategy involves being sensitive to market trends. That is the reason why astute leaders adopt a dynamic pricing strategy, especially when they face stiff competition in their segment. Dynamic pricing is an integral part of today’s market economy because the demand and supply are driven by price (Kort, Taboubi, & Zaccour, 2018). It is a strategy that is steeped in the recognition of the fact that value of any product changes constantly, resulting in a change in the price, which means that firms that adjust their prices accordingly are less likely to lose market share. In essence, a dynamic pricing strategy entails changing the price periodically as dictated by market forces. By adopting the strategy as it enters the market, Blackberry can maintain profitability in the segment and increase company turnover. Blackberry could also take advantage of the competition price tracking in their strategic marketing efforts to ensure that their pricing policy helps them to get and keep business even as it ventures into new territory.
Daily pricing, promotion pricing, List pricing
When it comes to the 4Ps of the Marketing Mix, Price is often thought of as the least attractive element. What this means, in simple terms, is that companies should strive to generate as high a margin as possible without changing the price. Product, Place, or Promotion should be adjusted accordingly before an attempt is made to change the Price. Saying that Price is the least attractive element does not mean that it cannot, or should not, be changed. A good way for Blackberry to take advantage of pricing to gain an advantage in the market is through adopting a penetration pricing strategy. Penetration pricing resembles promotional pricing in that it is meant to attract customers by setting an artificially low price to gain market share (Lancaster & Massingham, 2017). Once the feat is achieved, the price is increased to the regular Retail Price that matches the dictates of the market. Since Blackberry is a new entrant into the IOT space, having a penetration pricing strategy would be an astute strategy. Equally effective is having a Promotional Pricing which offers the customers savings on the List Price. If Blackberry normally sells its IOT services at a certain price, it could lower the price temporarily to enhance the success of product sales efforts and appeal to cost-sensitive consumers.
Kort, P. M., Taboubi, S., & Zaccour, G. (2018). Pricing decisions in marketing channels in the presence of optional contingent products. Central European Journal of Operations Research, 1-26.
Lancaster, G., & Massingham, L. (2017). Pricing strategies. In Essentials of Marketing Management (pp. 136-161). Routledge.
Pride, W. M., & Ferrell, O. C. (2016). Foundations of marketing. Cengage Learning.
Rowley, J. (2016). Information marketing. Routledge.
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