Pricing and distribution strategies for the Eleftria build-to-order netbook

Pricing Strategy and Distribution

Build-to-Order Netbook Marketing Plan

Pricing and Channel Distribution Strategies

The two most critical aspects of any marketing strategy are the pricing and distribution strategies, as they both underscore the branding, unique value proposition and position of products. Both have an immediate and multiplicative effect on the profitability and revenue growth of a product line and long-term, to an entire business. The intent of these sections of the marketing plan is to define the pricing and distribution channel strategies for the build-to-order netbook called Eleftria, which is the Greek word for freedom. In discussing the pricing strategy, the tactics, legal and ethical issues, and implications on brand value are discussed. In addition, the distribution channel analysis of the build-to-order netbooks is also provided. Included in this analysis is a description of how the distribution strategy fits the product and service, target market and overall marketing objectives of the company. As pricing strategies are often heavily relied on as a means to gain greater distribution and cooperation of resellers (Al-Obaidi, Gabrielsson, 2002) this specific strategy is also discussed.

Distribution Channel Analysis

There will be a multichannel distribution channel strategy developed for the Eleftria netbook, as the build-to-order strategy can scale across indirect channel partners, online product configurators, and value-added resellers. The customization capability of the Eleftria netbook is ideally suited for a multichannel strategy as well. The following is an overview of the Eleftria Netbook distribution channel strategy. This channel strategy is deliberately designed to support multiple channels while also creating the opportunity to sell the Eleftria netbook to small businesses and consumers. There is also the inclusion of dealers, e-commerce hubs and retailers and Value-Added Resellers (VARs) each of who have the potential to increase their gross margin per sale by concentrating on customization needs of their long-standing customers. Dealers and VARs who sell into small businesses often have long-standing relationships with these small businesses, and can quickly gain sales of new systems by presenting the new Eleftria model to their best customers. The development of a multichannel distribution network is crucial for achieving critical mass during any new product introduction (Al-Obaidi, Gabrielsson, 2002). Figure 1 shows the proposed Eleftria Netbook distribution network. What makes this distribution network unique is the support for e-commerce selling as part of the multichannel structure.

Figure 1: Eleftria Netbook distribution network

This multichannel distribution strategy for the Eleftria netbook is also ideally suited for the target markets the company operates in. Small businesses and consumers both rely on dealers to make their computer purchases, and the same holds true for netbooks, especially when customization is involved. There is also the need of small businesses to get assistance with setting up their wireless and Wi-Fi enabled networks as well. The value-add that VARs provide is another reason why the multichannel model works well for the Eleftria netbook. The reliance on e-commerce hubs and retailers is also critically important, as the company will need to create product configurator websites that these channel partners can easily re-brand. The focus on ease of selling and service across all these channels also needs to pervade the underlying IT systems that the Eleftria netbook will need in order to succeed as a product. The reliance on the distribution channel is also going to be critical for the Eleftria netbook reach its full sales potential. Without a multichannel strategy, the sales would only be through direct channels, which would be much more expensive and difficult to scale over time. The selection of distribution channels will also make the ongoing promotion of the Eleftria through social networking more effective as well

(Bernoff, Li, 2008). This specific structure of a channel must align to the specific goals of the product strategy and its margin-producing potential if pricing, product and service are all to succeed in conjunction with each other (Al-Obaidi, Gabrielsson, 2002). The distribution channels must also become so effective in forecasting demand that the supply chain integration for orders eventually becomes real-time in performance, optimizing inventory turns in the process (Xia, 2011).