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Pricing and Distribution in Marketing Decisions - Essay Example

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Pricing and Distribution in Marketing Decisions

On the other hand, Lexus is regarded as a luxury car. It is manufactured by Toyota Motor Corporation. Currently, Lexus features as Japan’s largest-selling model of premium cars. OrlandoSentinel (2011) reveals that for many years, the Ford Escort was among the top selling auto mobiles in America. The Ford Motor company uses the value pricing strategy to gain a market share in the global market. This strategy has been used as an initial step of eliminating the common costly customer returns. This initiative seeks enhance the customer’s buying experience with a view of curbing the distrust in relation to the sale of retail cars. It is for this reason that the Ford Motor Company has at one time tried low-pricing on its vehicle models including the Ford Escort (Batra and David Sheperds Associates, 1999). Such moves are meant to increase the profit margins of the company. As a result, the scantly equipped models were eliminated. They were then replaced with fairly loaded automobiles which had comparable prices. The company eventually witnessed increased sales. A true account is that production of vehicles with similar options increases manufacturing efficiency. A number of models irrespective of the model style were sold for the same price. As much as many consumers around the world found it hard to believe the existence of such an offer, they still went ahead to purchase the products. Ford has also used price discrimination for instance in Great Britain and Belgium to maximize its profits. This

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pricing strategy makes economic sense in light of imposing different charges for different countries (Marcbowles.com, 2010). The Toyota Motor company also used the price discrimination strategy. The Lexus Es was therefore sold for different prices for instance in the US as compared to the European countries. Toyota has also employed the predatory pricing strategy to market the Lexus Es as a luxury car. This strategy has been very common with Japanese companies. Toyota takes advantage of its profitable position in Japan. Toyota has since used its strong profit position in Japan to subsidize the aggressive pricing in other markets across the world. Predatory pricing has since received sharp criticisms from market shareholders across the globe. The fact that Toyota Motor Company has a world presence means that it has a rather easy system of distribution of its products; Lexus Es. This can be attributed to the many outlets established around the world (Narod.ru, 2011). The distribution of products, for instance, in the US is through a separate subsidiary; Toyota Motor Sales, U.S.A., Inc. The Lexus model has a dedicated and functional website through which customers can make inquiries, reservations and even purchases. The website facilitates online transactions such that it can be accessed by anyone anytime. The well documented customer satisfaction shows that the distribution fits the target market. Batra and David Sheperds Associates (1999) reveal that the Ford Motor Company capitalizes on its joint ventures for vehicle assembly in countries such as China, Thailand, India and Vietnam. This initiative forms the basis of the company’s distribution network. The company has since used these wise joint ventures to establish its presence across the world. It follows that the company’s method of distribution fits its target market. The official Ford’s website also plays an important role in terms of distributing its products. The two products, Ford Escort and Lexus Compact

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Instructor: Pricing and Distribution in Marketing Decisions This paper seeks to draw a comparison between the Ford Escort and Lexus Compact (Lexus ES) in relation to their pricing and distribution in marketing decisions…
Author : kklocko
Pricing and Distribution in Marketing Decisions essay example
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