Marketing and Distribution Management Essay Example | Topics and Well Written Essays - 1500 words

Marketing and Distribution Management - Essay ExampleThis is because it will be easier to determine price floors and ceiling so that adjustments be done within this range depending on the opposition trend. The main disadvantage of the set policy is that it ignores the frequent image and the market position of the company. Value-based pricing policy can prove to be very profitable if the company is sure that what they charge is consistent with the place offered to the clients (Mohr, Sanjit, and Stanley 34-45). The disadvantage of this technique is that it can scare off potential customers who are price driven, and it can every bit clear more competitors. Microsoft has adopted set-based pricing due to the outstanding performance of its new product Windows 8 on various gadgets including mobile phones, tablets, and other portable electronics. This is the best technique for this company since it has to manage its public image by offering quality products for sustained competitive advantage. Skimming is one of the traditional pricing concepts applied to a new innovative product that has just been launched in the market (Ferrell and Michael 56-61). It is suitable when the clients are price-insensitive and simply driven by the value of the product. On the other hand, penetration price is able to attract customers and gain market share and rise steadily after capturing clients. Customers tend to be very antiphonal to the price. In respect to Microsofts new innovation of Windows 8, it is imperative to underline that at its introduction what mattered was its value to the people and, hence, skimming technique application by the company. It is important to note that Microsoft operates in an oligopolistic market structure, and its survival, therefore, hangs on its ability to employ power-pricing model due to the uncertainty of the long-term price dynamics. Vertical marketing frame involves mechanisms through which firms that supply a given product or service chain work in co-operation with the goal of all of them maximizing benefit.