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Showing posts from June, 2010

Channel of Distribution

Channel of distribution are the intermediaries which transfer goods from producers to consumers. Thus marketing channel are useful for proper distribution of goods and services. Following are main principles which apply on the channel of distribution.

1. The principle of minimum total cost of transaction :

Suppose, if goods are transferred to direct, the cost of transferring goods is Rs. 10.

But if it is purchased by channel of distribution, its cost is Rs. 2, it will be useful to reduce the cost of producers.

2. The principle of smoothness gap in assortment and sorting :

The intermediaries takes the goods and save it in store and sells it when consumer needs the goods. So, manufacturing needs intermediaries.

3. The principle of searching :

Channel of distribution creates the market of specific goods where consumer can search and buy.

4. Personal Touch

The channel of distribution close to the consumer, so they can know the needs of consumer and solve the problems of consumers.

Price Setting Process

When  a company develops a product, it is very necessary to set its specific price. But there are many factors which affect its setting which we can show following steps of its process.

1st Step : Selecting the Price Objectives :

We all know the price setting is the major part of marketing policy and one of P4 of marketing mix. So, it is the first in which you have to select the price object for setting it. It may be

a) Survival the product in market :

Company thinks that his product is new and for creating its position in market, company should take minimum price from its customers.

b) Maximum profit objective :

If company wants to earn maximum profit, the company can set high price under price skimming. Company thinks that if it will fix high price, no competitor faces it.

c)  High market share objective :

Company's object is to increase sale. So, it will determine low price than competitors.

2nd Step : Determining the Demand :

Main aim of taking second step is to check whether o…