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Mgt301 Assignment No. 2 solution

Saturday, January 15, 2011 Posted In Edit This
Assignment No. 02 Marks: 15

“Pricing and Distribution Strategy”



Being a marketing manager in a washing soap and detergent manufacturing company, you were assigned a task by the senior marketing executive to prepare a report and revise some marketing strategies for increase the sales of recently introduced new detergent brand in the market, such as:.


1) Pricing Strategy

2) Distribution Strategy




Keeping in mind the above task you have to answer following questions.



A) Describe any two options that will be adopted by your competitor if you have decided to reduce detergent’s price? (5 + 5 = 10)



B) Which distribution strategy will be appropriated for detergent either intensive distribution or exclusive distribution? Elaborate your answer by providing logical reasons. (5)
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SOLUTION:






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Mgt 301 assignment # 2 Solution

A) Describe any two options that will be adopted by your competitor if you have decided
to reduce detergent’s price? (5 + 5 = 10)

Solution:-

Responding to competitors’ price changes
Maintain price
Maintain price and add value
Reduce price
Increase price and improve quality
Launch a low-price fighter line

Reduce price: The most obvious, and most popular, reaction is to match the competitor's
move. This maintains the status quo (but reduces profits pro rata). If this route is to be
chosen it is as well to make the move rapidly and obviously - not least to send signals to
the competitor of your intention to fight.

If we have decided to reduce detergent’s price our competitors will also lower its price to
match prices with us. Penetration pricing is also one the causes of this because we are
new in market with new brand and we try to offer lower prices detergents then our
competitor will also try to cut its price to match with our price. As in penetration pricing
market is highly price sensitive lower prices will attract more customers and they will
buy more and more.

Maintain price: Another reaction is to hope that the competitor has made a mistake, but
if the competitor's action does make inroads into a merchant's share, this can soon mean
customers lose confidence and a subsequent a loss of sales.

B) Which distribution strategy will be appropriated for detergent either intensive
distribution or exclusive distribution? Elaborate your answer by providing logical
reasons. (5)

Solution:-

Being a market manager I will adopt the method of intensive distribution for detergent
because the target market of this product is segmented for washing cloths using any
method.

The customer want to purchase this product from nearest shop as this is convenience
product.

Following are the reasons

At present Consumer prefer detergent on the base of quality.

Pakistani Peoples are moving from rural areas to urban areas as life style is
changing.

Advertising is promoting the detergents by comparing the functionality of
different detergents and laundry Soaps.

Increase awareness of usage benefit of detergent.

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