How do the strategic pricing and distribution decisions made by management impact the overall image and positioning of a brand?
I think cars are a great example.
A Kia is a great car. It is a very affordable brand with mass distribution across the country (and world).
A Bentley is also a great car. However, as you know, they are much more expensive and harder to find.
Think about how the pricing and distribution affects the images of these two car brands which are on opposite ends of the pricing spectrum.
The strategic pricing and distribution decisions made by management can have a significant impact on the overall image and positioning of a brand. Let's consider the example of Kia and Bentley to understand this.
1. Pricing: The pricing of a product is a reflection of its perceived value and quality. Kia positions itself as an affordable brand, targeting a broader customer base by offering competitive prices. On the other hand, Bentley positions itself as a luxury brand with higher price points. This pricing strategy conveys exclusivity and a sense of prestige.
To evaluate the impact of pricing on brand image, management must consider factors such as target market, competition, production costs, and desired brand positioning. The pricing decisions should align with the brand's value proposition and customer perception to maintain an appropriate brand image.
2. Distribution: Distribution refers to the availability and accessibility of the product to customers. Kia adopts a mass distribution strategy, making its cars widely available through a network of dealerships across various regions. This allows Kia to reach a larger customer base, including those who prioritize affordability and convenience.
On the other hand, Bentley follows a selective distribution strategy, making its cars available through a limited number of exclusive dealerships. This creates a perception of rarity and exclusivity, appealing to customers seeking a unique brand experience.
The distribution decisions impact the brand image by influencing customer perception. Wider distribution may enhance accessibility and brand familiarity, whereas selective distribution can create an aura of luxury and desirability.
In summary, the strategic pricing and distribution decisions made by management influence the image and positioning of a brand. Pricing reflects the product's value proposition and quality perception, while distribution affects accessibility and exclusivity. By aligning these decisions with the brand's target market and desired positioning, management can create a strong and consistent brand image.