Assignment 3: Branding, Pricing, and Distribution
MKT: 500 Marketing Management
December 20, 2013
Domestic and Global Product Branding Strategy
Branding is a necessary strategy in which Organic Vita-Hair must use to create product awareness and recognition. This is especially the case since the company has chosen global markets as its target market due to its e-commerce structure. In order to complete this branding strategy, the company will use the following logo on all of its products, websites, and other related material:
The goal of the company is to create a strong sense of recognition for this logo so that consumers recognize it when browsing through products on other websites such as Amazon and E-Bay. These distribution channels will be discussed later on, but it is important for brand recognition to be established before companies such as Organic Vita-Hair expands its products to other areas.
Author S. V. Gelder (2005) explains that the overall business strategy has a large impact on the branding strategy. “This means that proper understanding of the business strategy is imperative to any brand development to work” (Pg. 16). Organic Vita-Hair operates in an online market and uses social networking and online marketing to spread awareness about the product. The business strategy is to appeal to those looking for organic and healthy alternatives to traditional hair care. Therefore, the branding of the product must reflect this. The above logo uses colors and an image which seem to portray this strategy.
Optimum Pricing Strategy
The pricing method in which Organic Vita-Hair will use is cost-plus pricing, which determines the price based on the costs associated with production plus a certain profit margin. The price will also be based on a return on pricing value which was determined by analyzing fixed costs plus variable costs. For example, if it costs Organic Vita-Hair $5 in fixed costs (such as infrastructure, overhead, and salaries) and $3 in variable costs to produce each product, the actual cost of the product is $8. To make a profit, the company plans to increase the price to $28 in order to make $20 profit on each product. $28 is quite reasonable within the hair care industry as many salon grade shampoos cost at least that much. Organic Vita-Hair has therefore determined that in order to compete with those companies, they must keep the price reasonable for consumers.
In Addition, the company has considered various pricing psychology strategies since their target audience includes health conscious individuals who are focused on quality. A customer who focuses on quality may expect a product to be priced slightly higher. In addition, if the product is priced lower, pricing psychology predicts that the customer will assume the product is of low quality. Since the company’s overall objective is to provide organic, high quality shampoo they must keep the price...