Find a company whose strategy is value based pricing. Is this an effective pricing strategy? Discuss. Find a company with a different pricing strategy. Identify the strategy and its success or failure in your own opinion. Discuss partnerships in marketing channels using an example. Provide an example of disintermediation and how this could be a threat. Discuss 3 trends and developments in retailing and wholesaling.

QUESTION

Respond to the following questions:

1. Find a company whose strategy is value based pricing. Is this an effective pricing strategy? Discuss.
2. Find a company with a different pricing strategy. Identify the strategy and its success or failure in your own opinion.
3. Discuss partnerships in marketing channels using an example.
4. Provide an example of disintermediation and how this could be a threat.
5. Discuss 3 trends and developments in retailing and wholesaling.

Use quotes and sources for any source used (a minimum of two citations for all discussions).

ANSWER

Find a company whose strategy is value-based pricing. Is this an effective pricing strategy? Discuss.

One example of a company that adopts a value-based pricing strategy is Apple Inc. Apple prices its products, such as iPhones and MacBooks, based on the perceived value they offer to customers. Their pricing strategy focuses on aligning the price with the unique features, design, and user experience of their products, rather than solely on production costs or competitor pricing.

Value-based pricing can be an effective strategy for several reasons. Firstly, it allows companies to capture a larger portion of the value they create for customers. By pricing based on perceived value, companies can charge higher prices for products that are differentiated and offer superior customer experiences. This approach enables higher profit margins and improved financial performance (Hinterhuber 2008).

Secondly, value-based pricing allows companies to differentiate themselves from competitors. By focusing on the unique value proposition of their products or services, companies can position themselves as premium providers in the market. This strategy helps to create a perception of exclusivity and quality, attracting customers willing to pay a premium for the perceived value they receive.

However, it’s important to note that value-based pricing may not be suitable for all businesses or industries. Companies must carefully assess the market demand, competitive landscape, and customer preferences before implementing this strategy. Additionally, accurately determining and communicating the value proposition to customers is crucial for the success of value-based pricing.

Overall, value-based pricing can be an effective strategy for companies that can differentiate their products or services based on unique value propositions and create a perception of premium quality. It allows them to capture higher profits and establish themselves as market leaders.

Find a company with a different pricing strategy. Identify the strategy and its success or failure in your own opinion.

One example of a company with a different pricing strategy is Walmart Inc., which utilizes an everyday low pricing (EDLP) strategy. Walmart aims to offer consistently low prices to its customers across a wide range of products. Their strategy involves negotiating lower prices from suppliers, optimizing operational efficiencies, and passing on cost savings to customers.

The success of Walmart’s EDLP strategy is evident in its position as one of the world’s largest retailers. By focusing on low prices, Walmart has been able to attract a large customer base, particularly price-sensitive consumers. Their strategy has allowed them to compete effectively with other retailers and capture a significant market share.

In my opinion, Walmart’s EDLP strategy has been successful. It has positioned Walmart as a go-to destination for customers looking for affordable prices (Hinterhuber 2012). The strategy has created a perception of value and has been instrumental in building customer loyalty. However, there are challenges associated with this pricing strategy, such as maintaining profit margins and effectively managing costs. Walmart’s ability to optimize its operations and negotiate favorable terms with suppliers has been crucial to the success of its EDLP strategy.

Discuss partnerships in marketing channels using an example.

Partnerships in marketing channels play a crucial role in expanding reach, improving distribution, and enhancing the overall customer experience. A notable example of a successful partnership in marketing channels is the collaboration between Starbucks and Nestlé.

In 2018, Starbucks and Nestlé entered into a global coffee alliance. As part of the partnership, Nestlé obtained the rights to market, sell, and distribute Starbucks’ packaged coffee and tea products worldwide (Hamann et al., 2014). This partnership allowed Starbucks to leverage Nestlé’s extensive distribution network and expertise in retail and grocery channels, enabling them to reach a wider consumer base.

The partnership between Starbucks and Nestlé demonstrates the benefits of collaboration in marketing channels. By leveraging each other’s strengths, they were able to expand their market presence and enhance their product offerings. Starbucks gained access to Nestlé’s global distribution channels, which helped increase the availability of their products beyond their own coffee shops. On the other hand, Nestlé benefited from the association with the Starbucks brand and gained access to a portfolio of highly recognized and popular coffee products.

Overall, partnerships in marketing channels can be highly effective in driving growth and expanding market reach. By combining resources, expertise, and distribution networks, companies can tap into new customer segments, improve their distribution capabilities, and create mutually beneficial relationships.

References

Hamann, L., Luschnat, K., Niemuth, S., Smolarz, P., & Golombek, S. (2014). CSR in the coffee industry: Sustainability issues at Nestlé-Nespresso and Starbucks. Journal of European Management & Public Affairs Studies, 2(1), 31-35.https://opus4.kobv.de/opus4-th-wildau/frontdoor/index/index/docId/368 

Hinterhuber, A., & Liozu, S. (2012). Is it time to rethink your pricing strategy?. MIT Sloan management review.https://sloanreview.mit.edu/article/is-it-time-to-rethink-your-pricing-strategy/ 

Hinterhuber, A. (2008). Customer value‐based pricing strategies: why companies resist. Journal of business strategy, 29(4), 41-50.https://www.emerald.com/insight/content/doi/10.1108/02756660810887079/full/html?fullSc=1