International Marketing Report: Price, Product, Distribution Analysis

This report, prepared for an international marketing assignment, provides a comprehensive analysis of marketing strategies for a caravan company. It begins by outlining a six-step model for setting prices, including selecting pricing objectives, determining demand, estimating costs, analyzing competitors, selecting a pricing method, and determining the final price. The report justifies the selected pricing strategy, focusing on survival as a short-term objective. Next, it identifies and discusses the five layers of the product, including the core, basic, expected, augmented, and potential product layers, emphasizing the importance of the augmented product for competitive advantage. Finally, the report details the distribution channels, specifically recommending direct selling through multi-level marketing, explaining the reasons for this approach, including the nature of the product, the target market, and the benefits of direct customer interaction. The report concludes by highlighting the advantages of this distribution method for building brand trust and facilitating sales.

Running head: INTERNATIONAL MARKETING 1
INTERNATIONAL MARKETING
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INTERNATIONAL MARKETING 2
Price Strategies
1. Selecting The Pricing Objective
Price strategies are where companies initially decide their market offering target position (Patterson,
Pegg & Mahadevan, 2015). The company’s objectives are clear thus it is easy to set the caravan price.
The company can pursue different strategies for selecting the pricing objectives including product-quality
leadership, maximum market skimming, maximum market share, maximum current profit and survival.
The company’s pricing objective is the survival strategy. Survival has been widely used by many
organizations which are afflicted by changing consumer needs, intense competition or overcapacity.
When an organization’s variable costs and some of the fixed costs are covered by objectives, the
organization will do well in staying in the caravan business.
2. Determining Demand
Determining the demand while setting prices is important as it gives organizations knowledge of how
a change in the price of the product would affect the quality demanded (Caldicott, 2011). The demand for
a product may be categorized into elastic and inelastic demand. Inelastic demand is where the increase in
price does not highly affect the quantity demanded while elastic demand is where a slight increase in
price leads to a great fall in the quantity demanded. The organization faces elastic demand thereby
increasing the price of caravans will lead to a great decline in the quantity demanded.
3. Estimating Costs
The organization should consider estimating its fixed and variable costs so as to set the best possible
price for the caravans. Fixed costs should be highly considered as they do not vary with time hence
should be prioritized. Fixed costs may include fixed bills like salaries or rent regardless of output. The
cost of raw materials for manufacturing the caravan should also be considered.

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4. Analyzing Competitors’ Costs, Prices and Offers
The sale of recreational vehicles is booming in Australia with many caravans being manufactured
each day which has increased by 15% in the last four years on low-interest rates and swelling domestic
tourism. Competitors of the organization include Jurgens Caravans Australia, Elite Caravans Australia
Pty Limited and New Age Caravans among other companies. The prices include £26,000 for some
mainstream brands and also around £13,000 (Holloway, 2009).
5. Selecting A Pricing Method
The organization will use markup pricing to determine the final product of the caravans. Mark up
pricing involves estimating the target return price multiplying the desired return by the invested capital
and dividing with the unit sales, then adding the unit cost.
6. Selecting the Final Price
The company will select the final price of caravans by determining the impact of other activities of
marketing, the pricing policies of the company, the gain-and-risk-sharing pricing and the impact of the
price to other parties. The final price of caravans selected must consider the advertising and quality of the
brand relative to its competitors.

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Question 2
Discuss and Justify Your Price Strategies
The pricing strategies will be of assistance to the organization as it will be able to set the best
possible price of caravans in consideration to market demand and competition. In addition, the survival
technique is the best pricing objective of the company in consideration to competition. However, survival
will not be a long-term objective for the organization. The organization will treat survival as a short-term
emergency objective and find ways of adding business value to reduce the risk of closure.
Product Strategies
1. Core Product
The organization’s core product is the caravan which is the main product it manufactures and is the
fundamental product that solves the problems of customers. Caravans assist customers in saving finances
while traveling which would otherwise be lost due to expensive check-ins in hotels.
2. Basic Product
In addition to saving money, caravans enable travelers to pack what they want, stay where they want
and always have a roof above their heads throughout their travel. Furthermore, traveling by caravan
creates sweet memories which are associated with holidaying in caravans.

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3. Expected Product
Expected products layer defines a set of characteristics or attributes that potential customer expects
and agrees when they purchase a product. The customers expect the canvases to provide effective
transportation services that guarantee safeness of the properties and their lives.
4. Augmented Product
Augmented products are defined as the inclusion of additional attributes, features, and benefits or
any other related services that differentiate the products from competitors (Oksman, Siltanen & Ainasoja
2012). The company produces caravans that have a high brand identity because of its quality and ability
to sustain the harsh geographical area. The products come with two years warranty, after sales services,
demonstrations of the product to their customers and good value for money. Therefore, the desires of
customers are translated into reality.
5. Potential Product
Potential products layer is about the transformations and augmentations in which a product undergoes in
the near future. To ensure the canvas company has future brand trust and customer loyalty it has
continued delighting and surprising customers in the future by continuing augmenting the existing
products. For example, the company’s customers have continues received the latest canvas upgrades
with more useful and new features that are sorting out the rising demands of customers.

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Question 2
Discuss and Justify Your Product Strategies of the Product You Propose
The caravan company focuses on the distinctiveness of the augmented product. The layers
provide the company with a competitive advantage as they enhance perceptions of consumer experiences
when using the company’s services and products. Furthermore, competition is about what companies add
to the products in terms of services, delivery, advertising and anything that can add value to consumers.
Furthermore, the company must deliver products in an upward trend from core product to augmented
product so that it can have a possibility of growing into the potential product. I would recommend the
company to focus on the latter category as it will gain more customers from its good reputations and
repetitive purchases that have been established in the core product, basic product and expected product
layers. Each layer of the products adds value to the customers of the company. The more the company
sustains in every layer, the more it is likely it becomes distinctive. At the layer of augmented product, the
competition arises so that the company may copy certain appearances, tricks, and techniques from other
successful companies. For the company to overcome the competition, it has focused on factors that
extract values to the consumer like affordable payments terms and customer-oriented service.
Furthermore, the company is not only satisfying customers but also exceeding their expectations.
Distribution Channels
Discuss In Detail How You Will Distribute Your Product or Service to Chosen Markets
Question 1
Direct selling is an ideal distribution channel for the caravans. According to Jaramillo & Grisaffe
(2009) direct selling involves selling and marketing products directly to consumers without the

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involvement of intermediaries like retailers and wholesalers. The caravans direct selling sales will
include the one-one demonstrations, party plans, and internet sales and contacts arrangement. With
consideration of the nature of company and products, the company will use multi-level marketing in their
direct selling. Multi-level marketing is a situation whereby salesperson is paid for all sells made by the
other sales representatives they sponsor or recruit. Therefore, multi-level marketing will reach many
target buyers in the market. In addition, the salesperson will recruit several sales representatives from the
chosen markets who will be demonstrating the products to customers and made sales to them.
Question 2
Explain Your Reasons for Your Chosen Approach
Location and number of buyers and are convenient for direct selling distribution channel. The
markets are located in a limited area and a number of potential customers are small. Therefore, the
distribution channel is economical and easy. The technical nature of the caravan also needs
demonstrations and therefore through direct selling the brand trust will be built.
Direct selling approach leads to high sales and facilitates repetitive purchases. Consumers will
enjoy benefits from convenience and service benefits provided by the company such as generous
satisfaction guaranteed, deep explanation of the use of the caravans and personal demonstration of how
caravans work. Furthermore, the approach is the simplest and shortest. It cuts the company’s distribution
costs because it has sufficient facilities to sale directly to the target audiences.

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References
Caldicott, R. W. (2011). Supply-side evolution of caravanning in Australia: An historical analysis of
caravan manufacturing and caravan parks. School of Tourism and Hospitality Management
Southern Cross University. https://doi.org/10.1080/00049182.2013.765348
Holloway, D. J. (2009). Grey nomads: retirement, leisure and travel in the Australian context (Doctoral
dissertation, Edith Cowan University).
Jaramillo, F., & Grisaffe, D. B. (2009). Does customer orientation impact objective sales performance?
Insights from a longitudinal model in direct selling. Journal of Personal Selling & Sales
Management, 29(2), 167-178. doi.org/10.2753/PSS0885-3134290205
Oksman, V., Siltanen, S., & Ainasoja, M. (2012, October). User participation in co-creative services:
developing virtual and augmented reality tools for do-it-yourself home design. In Proceeding of
the 16th International Academic MindTrek Conference (pp. 229-230). ACM. Doi
>10.1145/2393132.2393181
Patterson, I., Pegg, S., & Mahadevan, R. (2015). The benefits of short stay caravan travel based on the
lived experiences of grey caravanners in Australia. Tourism Analysis, 20(5), 539-549. DOI:
https://doi.org/10.3727/108354215X14411980111497