1.Pricing strategy Figure 1 (Kotler & Armstrong, 2018, p. 309) Major pricing strategies As the figure 1 suggests there are 3 variables that affect the price of a product. Firstly, the customer perceived value sets the ceiling price as there will be no demand above that price. Secondly, the product costs set the price floor as there will be no profit selling below this price. Lastly, the variable between the two extremes has several sub-variables that affect the pricing like competitors. These variables suggest the 3 major pricing strategies: customer value-based pricing, cost-based pricing, and competitive pricing (Kotler & Armstrong, 2018, p. 309). To begin with, Customer value-based pricing is a pricing method where the enterprise first examines the necessities and perceived value of the client, sets the target price to reflect that value, and then calculates the cost that can be incurred and designs the product to meet the target price. Second, cost-based pricing employs the reverse procedure; the company first designs the product, ascertains the cost, and then establishes the price based on that cost. Last but not least, a competitor's pricing strategy is based on the tactics, prices, and products they are providing to the market in contrast to the firm (Kotler & Armstrong, 2018, p. 309). Pricing strategies are crucial to the firms marketing mix. As a firm can extract many important details about the product. First of all, the firm can measure the cost of production and use that cost in order to set the prices, which will ensure the company will not incur loses and can insure its profits. Furthermore, using the pricing strategies a firm can gain a competitive advantage by setting its prices lower than the competitors in a price sensitive market. Moreover, using the price strategies a firm can analyze the needs of the consumers and manufacture the product based on those needs and set the prices depending on the quality of the product a consumer is wishing to purchase (Gartenstein, 2018). At Bright Meds, the major pricing strategy used is a cost-based pricing strategy specifically cost-plus pricing. Because it allows the firm to calculate their cost and charge a markup price where it will be certain to cover its costs and not incur losses. In addition, many consumers feel that cost-plus pricing is fair to both buyers and sellers. New product strategy A new product's debut will be successful if the cost is suitable. The aim is to increase profitability and client retention over the long run. Here comes the market penetration pricing strategy which is used by Bright Meds. This pricing strategy allows the firm to build a large customer base. In addition, this pricing strategy allows the firm to attract consumers from the competitor as the market for the electronic product is highly price sensitive (Dolgui & Proth, 2010). Product mix strategy The H2PO is part of a product mix so the firm will be required to use a product mix pricing strategy. The most suitable pricing strategy will be the optional-product pricing strategy as the product mix is made up of the sensor itself with the light indicator, and charger and there are optional straps that can be purchased and custom designed. The products that will be included in the base price of the product are the sensor with a simple strap with the light indicator and with a charger. As per the extra straps or the customized straps they will be optional and sold separately with their separate price tags. Planed price adjustment strategy Companies usually adjust their prices to account for various price differences. The most appropriate price adjustment strategy for Bright Meds will be segmented pricing. In this pricing strategy, the company will sell the product to different segments at different prices. The current target market for bright meds is 20 to 30-year-old males who can afford a higher price. In the future, the company will be targeting people with certain diseases and the firm will need to adjust and lower their prices as this segment might not be able to support these prices compared to the other segment. 2. distribution strategy Marketing channel Building ties with important suppliers and resellers in the company's supply chain is essential for creating a good or service and making it available to customers. Partners in the supply chain are located both upstream and downstream (Kotler & Armstrong, 2018, p. 361). The marketing channels are the downstream partners. Moreover, a marketing channel is defined as a group of people, organizations, and activities that operate together to transfer goods (products and services) from the point of origin to the place of consumption. The fundamental objective of a marketing channel is to create a connection between the business that manufactures a good or service and potential customers who might be interested in purchasing it (Pelton et al., 2002). Instead of using traditional resellers or wholesalers as the marketing channels, Bright Meds will be using the direct marketing channel via using the social media as way to sell the products and reaching the customers. Because social media is almost used by everyone these days, so reaching the highest number of audiences is easier using social media. Moreover, it is less costly to use social media to sell the products to the consumer directly instead of distributing the product to retailers or wholesalers. Social media also allows the firm to have better engagement with the consumer and it also allows the firm to control the supply based on the consumer response towards the product. By using social media, the organization can sell its product directly to consumers. Channel design & organization With recent advances in technology, businesses are relying more on the latest tech to do most of their work with. Bright Meds choose the disintermediation channel design. Using this channel design, the organizations depend fully on the latest technology in order to reach the maximum number of audiences possible. This allows the firm to reach the consumers directly without the need for assigning tasks to any intermediaries. As the organization eliminates the intermediaries, it will be able to reduce its costs and may use the resources in tasks of greater importance like research or the organization can reduce the price of the products which will increase sales. In addition, disintermediation increases the transparency between the firm and its customer, allowing a stronger bond between them which increases customer loyalty towards the brand (Landsman, 2021). Add in conclusion: But for future uses, the organization may need to work with intermediaries like hospitals and clinics as the firm will be targeting people with certain diseases. References: Kotler, P., & Armstrong, G. (2018). Principles of Marketing, 17th Edition, Pearson Education Limited, UK. Dolgui, A., & Proth, J.-M. (2010). Pricing strategies and Models. Annual Reviews in Control, 34(1), 101–110. https://doi.org/10.1016/j.arcontrol.2010.02.005 Pelton, L. E., Strutton, D., & Lumpkin, J. R. (2002). Marketing channels: A relationship management approach. McGraw-Hill. Gartenstein, D. (2018, October 29). Advantages and disadvantages of pricing strategies. Retrieved December 21, 2022, from https://smallbusiness.chron.com/advantagesdisadvantages-pricing-strategies-22271.html Landsman, I. (2021, February 12). The importance of customer contact. Retrieved December 21, 2022, from https://www.helpspot.com/blog/customer-contact
