Marketing plan development and strategy

Marketing Plan

Determine and discuss a pricing strategy (Penetration or Skimming).

Penetration pricing is when a business is pricing new products or services lower than competitors. The idea is that by having the product sell at a lower price, you can be able to build brand recognition and establish a market for it. In general, this kind of strategy is used for products that have been introduced that are of good quality. Yet, they may have trouble standing out against competitors. Skimming is when you are introducing a new product or service at a higher price and then will lower the cost later on. In most cases, this kind of strategy is used when introducing products that are considered to be must have or in demand items. ("Penetration Pricing," 2010) the best strategy that would work for Brocade's introduction of the MLX router, is to use a penetration pricing strategy. The reason why is because: the product is not in high demand, there are lots of competitors and it is of superior quality. Given these different factors, penetration would be the most appropriate strategy. As it will help to introduce the MLX router to the market and build a reputation for superior quality. Over the course of time, this will allow the company to gradually build brand recognition based upon these elements.

Determine and discuss pricing tactics (Product line pricing, Value pricing, Differential pricing, or Competing against private brands) to be used for your product.

The best pricing tactics that Brocade should use is competing against private brands. This is where, the MLX router will be introduced at a lower price. At which point, it will be able to offer customers better quality and value in comparison with name brand products. This is important, because given the fact that the company is introducing a product where there are numerous competitors and costs are a major factor, means that this kind of strategy must be utilized. As it will help Brocade, be able to build a new market based upon superior quality and lower prices in comparison with its competitors. (O'Brien, 2010)

Identify any legal and ethical issues related to the pricing tactics.

The biggest legal / ethical issue that the company could be wrestling with would include: maintaining a balance between the selling pricing and supporting the company's profit margin. When you look at these two elements, it is clear that this is very challenging for Brocade. As they want to be able to maintain some kind of balance, in offering the customer good value and quality. Yet, there is a limit, due to the fact that there are costs and the profit margins must be maintained at all times. This is problematic, because if you do not maintain this kind of balance when marketing the MLX router. You could be titling the focus in one direction or the other, which would have a negative impact upon the MLX. Given the fact that this is new product, means that that this issue must be taken into account when introducing any kind of pricing strategy. ("Marketing -- Pricing," 2010)

Prepare a marketing distribution channel analysis identifying the wholesaler, distributor, and retailer relationships.

As far as the distribution channel is concerned, there is an interconnected relationship between: the wholesaler, distributor and retailer. What is happening is the all three parts of the channel are dependent upon the product being successful. The reason why is because the whole seller (Brocade) wants to be able to have the MLX redefine the router market. As a result, they will have to work with the distributors and retailers to understand the advantages of this product. At the same time, they have to make sure that it is priced low enough to ensure that the customers are receiving good quality. To achieve the objective, the wholesaler will offer suggested retail prices and marketing strategies to increase the success of the MLX. This will take place with both distributors and retailers, as they will have a vested interested in helping the product to be as successful as possible. When you put these different elements together, this means that the wholesaler will have to take the lead in helping to define and establish the market. As their actions will have ripple effects upon the entire distribution channel, having an impact upon the success of the product.

Discuss how the distribution strategy fits the product/service, target market, and overall marketing objectives for the company.

The distribution strategy that is being utilized will help to identify a target market for the MLX and allow the company to achieve its different marketing objectives. What is happening is the competition for routers is so intense; that many companies are claiming they have the best products. At the same time, the primary customers for this kind merchandise are businesses. Where, they will more than likely purchase routers in bulk and at a time when they need to be replaced. When you put these different elements together, this means that customers will more than likely comparison shop and will evaluate the underlying strengths as well as weakness of each product. For Brocade, this means that a strategy must be utilized that will address these underlying issues. While at the same time; being able to create a positive impression in the minds of customers.

As a result, the distribution strategy that we are utilizing: will introduce the product at a lower price in comparison to competitors and it is creating a substitute. These elements are important, because they will help to provide an alternative for customers to choose from. However, in order for any kind of distribution strategy to be successful, means that we must be able to have the product stand out against competitors. The reason why is because price is often associated with quality. Given the fact that the MLX is going to be introduced at a lower price, means that this could be viewed as a generic router (hence it is of inferior quality). To mitigate these kinds of effects requires, emphasizing the overall quality of the product and how it is superior to competitors. When you put these two factors together, this will help the customer to see the MLX as the next generation of routers that is selling at a superior value. Once this takes place, it will create a new market for the MLX and will address the issues that are of concern to the customer.