Pricing Strategy and Channel Distribution

Another key factor in oligopolies is that there are significant barriers to entry in the industry. These barriers are constructed by factors such as high fixed costs, availability of resources, and brand loyalty. Smaller firms that wish to enter the market will not have the necessary resources to compete with these large firms. Also in the oligopoly structure, market shares generally change very little from year to year. Many of the gains made in market share are through acquisitions of smaller competitors in the industry which are then consolidated into the parent firm.

Over the decades there were tremendous amount of challenges for every business. Customers have more knowledge, they have more options, and they have higher expectations. Customers are more informed with the humungous development in technology. Having more options in front of them, expectations has surpassed in retail industry. Loyalty is a customer having faith that your organization’s product or services offered is the best for them. It is the process of tapping the buying pattern of customers in a store based on their preferences. Customer loyalty is significant because it is economical to retain the old customers rather than acquiring new customers. So, organizations employ loyalty programs which reward customers for their repeat business.

In order to maximize profits or shareholder wealth, managers must use the information that they have relating to demand and costs in order to determine strategy regarding price and output, and other variables. However, managers must also be aware of the type of market structure in which they operate, since this has important implications for strategy; this applies both to short-run decision making and to long-run

Another key feature of oligopolistic markets is that firms may attempt to collude, rather than compete. If colluding, participants act like a monopoly and can enjoy the benefits of higher profits over the long term.

This is where all of your conceptual discussion comes true in the marketplace. What does your product look like? Where are you selling it? How are you communicating with your consumers? What price signals are you sending? How do you service the customer through the decision process and post purchase?

For some brands, my loyalty grew from happenstance and remains so because of switching costs. United Airline’s frequent flyer program, called Premiere is one example, more so, since their spreader effect enticed me into a United branded credit card that awards flight miles for every purchase. I didn’t set out to join United’s loyalty program because I thought their service was better, or they had lower airfares, it’s because they have a hub in San Francisco that offers the most flight options when I’m traveling by air for business.

An example of how less competition is a negative would be HARP (The Home Affordable Refinancing Program). In 2009 this program was enforced and the government gave two companies the project. The idea of the program is as follows, “The government instructed the mortgage finance companies Fannie Mae and Freddie Mac to guarantee loans

Competitive markets provide the economy with opportunity for entrepreneurship and innovation. Competitive markets allow the small business environment to compete with other small businesses. With a competitive market, American consumers gain more innovative products, better quality goods and services and lower prices. Having more innovative products is a positive effect of the competitive market because innovation allows new businesses to enter the marketplace with the demand of new products at competing prices. Competitive markets seek out innovation, because without innovation from competing small businesses competitive markets would have nothing to compete against. The Antitrust Division makes sure that the economy and the competitive market are protected by an enforcement program that pursues illegal cartels, anticompetitive mergers, monopolizations, and competition advocacy (Barnett, 2008 page 2). The Antitrust Division makes sure that cartels do not control the price or the availability of the critical inputs small businesses need to manage business and to create the products. The Division actively ensures that mergers do not harm the local market of competition and encourages businesses to stay competitive with other small businesses. In the small business sector, monopolizations can harm the

4. Firm’s Marketing Strategy: A Firm may change its marketing strategy which may require price changes. Such strategies may include re-positioning,

U.S. consumers hold 3.3 billion memberships in customer loyalty programs, the 2015 COLLOQUY Loyalty Census shows, a 26% increase over the number of memberships reported in COLLOQUY’s last census study in 2013 (Colloquy, 2015) With loyalty programs established this helps to generate a repeat customers which drives profits and promises future revenue. Consumers need an incentive to purchase a product at a certain place. When Loyalty programs are in place it helps the consumer relate to the product and funnels them towards the product in which they feel that they are apart of. They can build exclusive points and incentives when products are purchased and are then able to use those rewards points at a later time to purchase more goods or even get a portion of the cash back.

The term ‘Viral Marketing’ describes the phenomenon by which a marketing technique that uses preexisting social networking services and induces websites to pass on marketing message to other users and sites that creates a potential exponential growth in brand awareness and to achieve marketing objectives. It is a marketing strategy that focuses on broadcasting brand image and awareness hence motivating a buyer to purchase a product even though it might be more costly than other products. Kaplan and Heinlein (2011) further define it as an ‘electronic word of mouth’ whereby a form of marketing message is related to the company brand or product which is conveyed in an exponential growing way, mainly by the use of social media and websites.

Loyalty programs are the schemes designed with an intention to retain existing customers and attract new customers by rewarding a customer with both hard and soft benefits for his loyalty and patronage.

2. Prestige pricing. This pricing method has two purposes: First, improve the image of the product to the price that its famous brand name; Second, to meet the status of buyers desire to adapt to the consumer's consumer psychology.

In marketing terms, a loyalty card is a plastic or paper card, which is quite similar to the other financial cards in visibility and that, identifies the card holder as a member in a loyalty program. Loyalty Cards typically have a barcode or magnetic stripe that can be easily scanned when it is swiped at the particular stores. Loyalty cards can be in the form of small key ring cards which are often used for convenience in carrying and ease of access for the consumers. Loyalty programs are predominantly run by retailers and the service industry. Companies typically have several goals when launching loyalty programs, all of which are focused on generating greater profits from the program’s

Originally coined by Bernhard London (1932) in the context of the Great Depression, up to this date there is no generally accepted definition of planned obsolescence. According to a common definition by Tim Cooper, planned obsolescence is “the outcome of a deliberate decision by suppliers that a product should no longer be functional or desirable after a predetermined period” (Cooper, 2010, p. 4). Another frequently cited definition was formulated by industrial designer Brooks Stevens: “Instilling in the buyer the desire to own something a little newer, a little better, a little sooner than is necessary” (cit. in Adamson, 2003, p. 4). Whereas the former definition emphasises the planning involved in designing products, the latter foregrounds the manipulation of consumer desires and implicitly argues that these desires have become detached from 'actual ' human needs.