Selecting the right distribution channel helps businesses to accomplish this important task

Any business needs to ensure that it serves its consumers. Selecting the right distribution
channel helps businesses to accomplish this important task. The right distribution channel and
pricing strategy can help MM achieve a competitive advantage over its competitors. The right
distribution channel will ensure that consumers in different locations buy the products (Popescu
& Wu, 2007). The right channel will ensure important functions such as transport, storage, and
sales are carried out in an efficient manner. The selection of the right channel is a step in the right
direction towards ensuring that the company remains profitable. On the other hand, pricing is
also an important aspect. The right pricing strategy will ensure that MM maximizes its profits
(Hinterhuber, 2008). Consumers greatly rely on the pricing strategy employed by various
companies when making their purchase decisions. The pricing strategy thus defines the sales
volume and market share. With the right pricing strategy, MM can maximize its market share by
appealing to more consumers.

Outline for Two Different Pricing Strategies

UNIT 4 IP 3

1. Competitive pricing strategy
2. Cost-based pricing strategy

Recommendation for Competitive Pricing

The mobile phone industry is highly competitive, with many players actively engaged in
a tough competition. To this end, competitive based pricing is effective because it ensures that
MM will keep up with the competition. Research of what various competitors are charging for
similar products can help ensure that MM captures the market (Hinterhuber, 2008). While there
are complexities in attempting to determine the prices of competitors, competitive pricing offers
better positioning. The strategy will help MM take charge of the competition and ensure that it
does not lose customers to competitors. The pricing strategy will also ensure that MM maximizes
profits (Hinterhuber, 2008). With many competitors in the market, the strategy will ensure that
the demand for MM’s product remains high. The demand for mobile phones is highly responsive
to prices. An increase in price may result in consumers switching to the products of rivals.
However, competitive based pricing works by ensuring that the price is responsive to prices set
by consumers. The success of MM’s products is hinged on competing effectively in the market.

PART 2

An Outline of the Distribution Plan
The distribution plan will feature both direct and indirect distribution channels. The direct
channel that will be adopted is the use of online sales. In the digital era, most consumers shop
conveniently from their homes using online channels. Distributing the products online will
eliminate the number of intermediaries, and this will work towards ensuring that the company

UNIT 4 IP 4
achieves the goals set (Weitz & Jap, 1995). The channel is also in line with the firm’s mission
and vision. With a direct distribution channel, the price will not be raised significantly.
Consumers can thus enjoy cheap products, and this will ensure that the company remains
competitive. The indirect channel chosen is distributing the products through retailers. A
partnership with retailers will ensure that the company’s products are distributed in various parts
of the country (Weitz & Jap, 1995). It will also ensure that consumers who do not prefer
shopping online can get access to the company’s products and services.

UNIT 4 IP 5

References

Hinterhuber, A. (2008). Customer value‐based pricing strategies: why companies resist. Journal
of business strategy.
Popescu, I., & Wu, Y. (2007). Dynamic pricing strategies with reference effects. Operations
research, 55(3), 413-429.
Weitz, B. A., & Jap, S. D. (1995). Relationship marketing and distribution channels. Journal of
the academy of Marketing Science, 23(4), 305-320.