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Introduction to case
Ambassador torchlights were the second largest in the market of dry cell batteries and allied products. Having a good distribution network, the company want to utilize this strength by taking over the distribution of some consumer items. They approached Central, company manufacturing blades and also having two own brands. Ambassador has the option to take over distribution of Centrals brands or go for their own brand.
Problems
Problems in the way of Ambassador Torchlight; whether to opt for their own private brand or to take over distributions of splash and awake? If they took up the distribution then under an agreement Mr. Patel has the right to terminate Ambassador Torchlight as selling agents if he is not satisfied with their performance. If they preferred to market their own brand,own should the product be poist positioned ?should they go for a carbon steel or stainless steel balde ? What segment of the population should they catrer to ?What should the pricebe ?What should be the advertising and promotionmal strategy ? and If they opted for Centrals brands Splash and Awake they needed to know why the repurchase rate was low ? What advertising and promotional strategy was called for? To know these things they have to research in the market. This could be costly for ambassadors. Brands Loyalty amongst blade users is very low. This is the big reason for low repurchase rate for Centrals brands.
There are some considerable benefits of Value pricing strategy for Ambassador Torchlight;
It takes into account industry structure, segmentation, competitor pricing practices, and substitutes and alternatives, all of which can make pricing more coherent and complex. Value-based pricing can be the only way to price new products or "breakthrough" products. Pricing can be based on several customer-focused methods: expert opinion, customer surveys, price experiments and analysis of past, present and expected market data and conditions.