Pricing and Distribution in Marketing Decisions Research Paper

Pricing and Distribution in Marketing Decisions - Research Paper ExampleIn name to Blue push-down storage coffee tree Company and Starbucks Coffee, pricing and distribution strategies will help them acquire these helpful utilities for their efficient functioning. This paper aims at contrasting the pricing and distribution strategies of these two products. Though the two companies urinate the same products, they be not competitors because they serve different markets. Pricing Strategies The worst mistake that sight good collapse a company lies in decision making that concerns pricing strategies. Wrong pricing decisions are almost a guarantee on damaging the company as well as eroding services tot the community and customers (Florissen, et. al, 2001). In many cases, managers cut-off expenses so as to deal off new market rivals and then, they launch price wars that are full fledged hoping to compete attackers and and then emerging victorious. At any rate, this is just hope b ecause reality is normally very different. For example, Blue Mountain Coffee Company that mainly specializes in exporting its products bases its decisions on pricing in reference to worldwide market prices. In pricing, companies should take into account the competitors prices, cost to serve, switching rates, and customer revalue in order to assure profitability. By evaluating these four factors, the two companies can make more reasonable decisions on their pricing decisions in increased competition faces. Instead of blindly undercutting attackers, the companies can safely foment commercial accounts and private customers a premium that will secure their business, do away with costly price wars, as well as preserve the market. To compete against its rivals, the company has established high gearer prices for its products because they are high in quality and hence, they have won consumer loyalty and captured a wide market in Japan. On the other hand, Starbucks Coffee, that mainly targets the local market, sets prices that will help it acquire a larger market dowry in the local market than its competitors. Price reduction for its products is however profitable only in the victimize run but in the long run, they lead to heavy losses. Good pricing strategy should ensure that the company gets enough profits and is also able to meet its costs. Therefore, though price reduction is important in trying to capture the market or compete out rivals, such decisions should be guardedly sought. As Bertini & Luc explains, reducing prices below the cost of production is very risky to the company as it can easily collapse the entire business. Cutting prices means that a company will have to stool harder for less because you have to sell more units of the product for the same revenue. However, cutting prices only increases profits when you green groceries more units and increase sales (Bertini & Luc). Product Distribution Starbucks distributes its products to local consu mers while Blue Mountain Coffee Company distributes its products to an international market in Japan. Anonymous explains different modes of product distribution. For Starbucks Coffee, which distributes its products locally, the coffee can be sold to large scale of measurement wholesalers, who then sell it to Retailers. The retailers sell it directly to consumers or to small scale retailers who then sell it to consumers (Anonymous). However, the distribution mode for Blue Mountain Cof