Discussion Peer Feedback: I Like Your Pricing Strategy ✓ Solved

Discussion Peer feedback: I like your pricing strategy, but I

Recommend that JGJ use distribution through supplier/wholesaler and distributors instead of direct customer supply. I think distribution direct to consumers based on your product line will be costly as JGJ needs to build a complete distribution system in their portfolio. This includes trucks' fuel costs and distributors we can supply in different markets as their channels are already built up. Further, distributors and suppliers can also contribute new product ideas. The idea of distributors and suppliers usually is beneficial for new product development because they work very closely with the market.

They are responsible for supplying all needs for other companies. Automatically they will know the market trends can include the consumer problem and their condition. Distributors and suppliers can give information regarding the customer's material, the technique that can be used to produce the product and the concept relevant to the current market. Competitors are one of the important external sources for idea generation. Companies can analyze their competitors by watching competitor’s ads to get clues about their product.

They also can purchase competing products, reviewing the product ingredient, and analyze their sales. From complete analysis of competitors, it will give information regarding competitor weakness and strength. From that, it will provide us with an idea of which part should be improved. In business, we cannot see the competitor as a bad thing. The competitor is one of the mediums of improvement to strengthen our new product.

Companies can evaluate the competitive product on the market, resulting in new and more market-appealing products. JGJ Inc. is an international company that deals in a variety of products and services. JGJ has its headquarters located in Claxton, GA, United States. Products produced by JGJ include household items, electronics, durable and non-durable goods, and recycled clothing, amongst many other products and services. Biodegradable bags are bags that decompose when acted upon by tiny living organisms known as bacteria. They reduce the impact of plastic waste on the environment. Thus, they are environmentally friendly and cost-effective (Huang et al., 1990).

In this proposal, I will be analyzing the current models of pricing, promotional models, and distribution channels models in the market, and I will also give recommendations on the strategy to be used as far as pricing, promotion, and distribution are concerned to JGJ.

Analysis of the Current Pricing Model in the Environment

A pricing model refers to a method used to determine the prices of a particular product or service. A good pricing model helps the producer achieve the best price that is affordable for potential customers. A producer should look into several factors before coming up with a pricing model. Such factors include the size of the market, competitive landscape, and market demand.

Various models available in the market are fixed price model, cost-plus, and competitive-based. There is a fixed pricing model available in the market, which entails having a set price for all customers. For example, if these goods are made available to the retailers, the retailer fixes one price for the item, and customers purchase at that price without bargaining. Cost-plus pricing model analyzes the total cost of producing a product compared to the value placed on the product for purchase. The price of a product should be higher than the cost of production to cover the expenses but not so high that the customers cannot afford it.

For example, if the price of producing one biodegradable plastic bag was $3.00, then the cost for purchase should be slightly higher than the $3.00. A competitive-based model is another pricing model that involves coming up with a price for a particular product after comparing the cost with other market prices. If your competitors charge $5.00 for a specific price, your price should be slightly below to gain a competitive advantage over other companies in the same industry.

This section is not about providing definitions. It is supposed to inform JGJ of current prices or current pricing models being used in the market today. In other words, what prices are the competitors charging, or what pricing strategy are they using?

Analysis of Current Promotional Models in the Market

Promotion of a product refers to making a particular product known to the consumers to increase demand for that specific service or product. A promotional model is a medium used to sell products and services. Promotional models available in the market currently involve advertising, direct marketing, personal selling, public relations activities, and sales promotions.

Advertising is a paid form of communication about a particular product or service through televisions, magazines, newspapers, the internet, and YouTube. Sales promotions include short-term activities to stimulate demands and increase sales of products. These activities include coupons, discounts, giveaways, and incentives.

The public relations model is also used to promote a product or service through PR events, news releases, and media introductions. The personal selling model involves using salespeople, showrooms, tradeshows, and exhibitions to promote a particular product or service. The direct marketing model consists of using the internet, sales on display, company websites, emails, and blogging.

This section is not about providing definitions. It is supposed to inform JGJ of current promotion strategies being used in the market today. In other words, how are the competitors promoting their bio bags?

Analysis of the Current Distribution Models in the Market

A distribution channel refers to the method through which products flow from the producer to the consumer (Karash & Khomenko, 2019). Various distribution models, such as the direct/exclusive distribution model, involve delivering products and services directly to the consumers by using your salespersons. At JGJ, you can choose to provide your products directly to the consumers without selling them to retailers and wholesalers such as Wal-Mart. It’s not their choice — what is your recommendation?

The interactive distribution model involves three intermediaries: the producer, wholesaler, and retailer. Goods flow from the company producing to the wholesalers who buy products in large quantities and finally to the retailers who buy them in small portions and then finally to the consumers.

A selective distribution model involves few levels: selling your products to the retailer who later sells them to the customers. In this case, there is no wholesale buying of goods. This method helps reduce extra costs that the wholesalers would have added.

This section is not about providing definitions. It is supposed to inform JGJ of current distribution strategies being used in the market today. In other words, how are the competitors distributing their bio bags?

Recommended Pricing Strategy for JGJ Inc.

I would recommend a competitive-based pricing model to be used by JGJ Inc. to gain a competitive advantage over its competitors such as Albertsons Company, Kroger Company, and Lift Hero Company. When you come up with a price according to prices in the market, it enables you to attract numerous customers if your prices are affordable. Customers compare prices available in the market and settle on the price that is more affordable to them.

Recommended Promotional Strategy for JGJ Inc.

I would recommend using websites as a method of promoting a particular product or service in JGJ. The use of the internet has grown, and so many people browse through the internet daily, making it easier to access a particular company website. It is not costly to set up a website, hence saving on costs. It is also readily available since one can access the internet at any time.

What about a demo on YouTube of the biodegradable in action? What about discussing the company’s sustainability strategy on Twitter? What about showing photos of customers using the bags on Instagram? What about a blog on the environment? What about Pinterest?

Recommended Distribution Strategy for JGJ Inc.

I would recommend a direct distribution method to be used by JGJ to facilitate products from the producer to the consumers. This model saves time used in delivering goods to the consumers since goods are delivered directly to those in need of them. It also cuts extra costs that will be added by either the retailer or the wholesaler.

In your previous submission, you state, “The key target customers for the biodegradable plastic bags include food processing and packaging firms, hotels, groceries, other eateries, and individual shoppers.” So, have you decided to only sell to the consumers, which is individual shoppers? What would JGJ need in order to ship direct? What’s the process and resources they need to accomplish this?

Conclusion

In conclusion, the success of the marketing of your company depends on the pricing, promotion, and distribution strategy adopted. You need to analyze and weigh between several factors to develop the best plan to be implemented. Companies need to do market assessments to help them keep up with the changes in the market.

References

• Huang, J. C., Shetty, A. S., & Wang, M. S. (1990). Biodegradable plastics: a review. Advances in Polymer Technology, 10(1), 23-30.
• Kardash, A., & Khomenko, S. (2019). Marketing distribution techniques in the digital medium. Journal of Marketing Research.
• Strategies every business should be using. Retrieved from [insert URL]
• [Additional references will be formatted in accordance with APA style]