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Pricing and Distribution: As an Extremely Important Essay
Pricing and Distribution:
As an extremely important decision for a company, pricing is the only element of the marketing mix that generates revenue. The positioning of a product in the market is dependent on its pricing since customers tend to greatly resist attempts to change price once it has been set up. As compared to other elements in the marketing mix, price is the variable with which a competitive response can be quickly implemented. On the contrary, distribution basically involves the process of getting the product from the manufacturer to the intended consumer.
How Pricing and Distribution Complement each other at Costco:
Costco is a company that has itself as a means with which brides and grooms can create an unforgettable wedding day through reasonable prices. In the past few years, the warehouse store sells all wedding-related accessories including engagement rings, invitations, flowers, and trips for honeymoon. While it's difficult to quantify the actual size of the company's bridal business, Costco has been mainly been growing through its retailer website that enable customers to choose invitations and flowers.
The success of Costco's business is also attributed to the way pricing and distribution complements each other, particularly when gowns are available at the retail store. Through its distribution channels, Costco ensures that wedding dresses are available to customers in several locations. For instance, the company entered into partnership with Kirstie Kelly, Los Angeles designer to provide a wide range of wedding dresses at in-store trunk shows (Berk, 2011). The partnership has enabled the firm to provide gowns to customers at convenient locations through the trunk shows tour across the country.
On the other hand, the firm has a pricing strategy that enables it to offer the designer gowns to customers at reasonable prices. According to its pricing policy, Costco provides wedding-related products at prices that make it easier for customers to have a remarkable wedding without busting their banking accounts. As a result of this pricing strategy and distribution channel that promotes the availability of the firm's products to customers at convenient locations, these variables enable Costco to maintain its profitability.
Implications for Targeting and Positioning:
Targeting is the selection of the actual segment of the target market or group of people that the firm's product is designed to meet their needs. On the other hand positioning is the use of marketing strategies to help people to create a mental image regarding the product. As important aspects of market segmentation, these elements play a critical role and have huge implications on the success of a business. The major implication for targeting and positioning is that it helps in developing the right relationships with the right customers.
For Costco's bridal business, product positioning and targeting have a huge implication for the firm's competitiveness in the bridal industry that was hugely impacted by the recent economic downturn. This…
Sample Source(s) Used
References:
Berk, C.C. (2011, March 7). Here Comes the Bride, All Dressed by Costco. Retrieved January
17, 2012, from http://www.cnbc.com/id/41950692
Bertini, M. & Wathieu, L. (2010, May). How to Stop Consumers from Fixating on Price.
Harvard Business Review, 88. 48-91.
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