Strategic Distribution and Pricing Strategies for Canon Products

SELPHY: Agents are the distributors who buy the manufacture's goods and re-sell them at a profit. What's more they do not purchase the manufacture's goods, but earn a commission on whatever sales they make. Multiple stores buy goods for retailing direct from the producer, many of them under their 'own label' brand name (BPP, 2004, p.241). Therefore, Canon should use agents and multiple stores to sell the product to customers.

Because, SELPHY is products line - a new lab smart compact printer for easy home and office photo printing jobs.

The ES series of compact photo printers have always been champions of creativity with a full range of innovative print options built into the printer. SELPHY focuses on the customers who have high income, like travel, dynamic, etc. The target is young customers and family. There are many multiple stores in Hanoi like Pico Plaza, Media mark, Vincom, Trang Tien Plaza, etc. Each day, these stores attract thousands of people. These are best place to introduce modern and new product like SELPHY.

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Laser Printer: Distributors ; Dealers are organization which contract to buy a manufacturer's goods and sell them to customers. Their function is similar to that of wholesalers, but they usually offer a narrower product range, sometimes the products of a single manufacture. In addition to selling on the manufacturer's product, distributors often promote the products and provide after-sales service (BPP, 2004, p.240).

The segments of laser printer are for home and small offices. So, the best distribution channels for these printers are distributors and retailers, because the target customers are both individual customers and organizations.

Besides, retailers are the stores were allocated in each location. Therefore, they can understand the demand of customers in there, and give the best way to service and sell the product.

The logistic is very important, it includes: transportation, location of warehouses and logistic management. Nowadays, Canon has more than 300 authorized service partners in the whole country. Each distribution has own warehouses to keep the product. Any ways, the transportation of Canon has many advantages. The main factory of Canon in Vietnam is allocated in Hanoi, the capital of Vietnam, at the same time, it is the centre of North. So, the transportation to other city is better. In the South, Ho Chi Minh is secondary representative offices. There are many ways to transport in Vietnam that Canon can use such as road, rail, water or air transport.

In there, road transport has a major advantage in its ability to deliver directly from the manufacturer to the customer's premises. In the water rail transportation, Canon can carry much larger quantities over long distances (BPP, 2004, p.251). However, Canon should choose road transportation in Vietnam, because save cost, save time, suitable with situation transport of Vietnam. Moreover, the selection area will depend on the potential market. For this reason, Canon should build warehouse in the new development city like Hai Duong, Hung Yen, etc. On the other hand, Canon Vietnam has the part to support the distributions, Canon should care about customer benefits, and the cost savings.

In 2009, the company expects a severe global economic environment. To reduce the impact of declining printer prices and strengthen Canon's presence in the global market, it will further strengthen sales structure. Moreover, it will further differentiate products by enhancing image quality and speed through FINE technology as well as by improving operability and design. Besides in January 2010, the CPI (Consuming Price Index) in the whole country increased by 1.36% in comparison with December last year and increased by 7.62% year on year (Vnmedia, 2010). Therefore, Canon must control the price of product to suit with Vietnam economic situation.

CIM (Chartered Institute of Marketing) major definition of marketing is the management process which identifies, anticipates and supplies customer requirement efficiently and profitably (BPP, 2004, p.8). This definition emphasized the whole marketing. It means company must have the management about marketing to manage the process of marketing activities to get the effective. On the other hand, the process must concentrate on customer's satisfaction, because without customers, business cannot survive.

The cost is the amount of resources, usually quantified in monetary terms, which is allocated to preparing a product for offer to a market. In order words, everything we spend on making an offering before we add the element of profits Profit is the excess over costs in revenue. In other words, when we receive a sum of money from a sale whatever is left over when we have paid all our costs, is profit.

In general, cost has three main elements includes: Material, labour cost and other expenses. It can be classified as direct costs or as indirect costs. Direct cost is expenditure that can be economically identified with a specific saleable cost unit. Compared with indirect cost is expenditure on labour, materials or services which cannot be economically identified with a specific saleable cost unit (BPP, 2004, p.264). Material cost is the amount of money that company must pay in making product. This is one of the most important costs, because the raw material is very important, a good material can make a good product.

So, Canon must choose the suitable material for the production. For example, glasses, plastic, metal, etc. Moreover, the labour costs are the cost that Canon must pay for employees include direct or indirect labour such wages, salaries. In 2009, the impacts of economic crisis to Vietnam make the salary of Canon employees increase, therefore the labour cost increase too. The other expenses include the expense around the products such as the electricity, water, factory, etc. Canon must promote the selling of new product, so the expenses will high. Canon should use for PR, advertising to introduce new product to customers. However, when the product is completed and come onto the market, the price of product includes the cost of material, labour costs and other expenses, customers also must pay when they buy the product.

Pricing issues and pricing as a strategic tools. A selling price is an amount of money which describes a point in a process of exchange in which two or more parties achieve satisfaction (BPP, 2004, p.271). The price that Canon gives to the SELPHY and laser must suit with organizational and market issues. Because if they set maximum price, the customers won't buy, and if it is minimum price, supplier won't sell it. Therefore, Canon must make an appropriate profit considering the opportunity cost and investment to achieve satisfaction. Price plays an important role in marketing and business activities. When the price of product increase, it means the company will have more profit, however, they will lose a lot of customers. Canon must use the price as the strategic tools, controlling the price to compete with other competitors and get more customers.

Canon can set high price for new product when these product begin to appear on market. However, company should choose rapid penetration, because in Vietnam market Canon still focuses on encouraging current customers to buy the product frequently. Besides, implicating competitor's customers move to buy their product, furthermore, encouraging people who never buy their product to start buying. In general, the income of Vietnamese isn't high than other country, set the low price to attractive customer is best solution for Canon in this market. Market penetration is enhanced by the combination of low price and high levels of promotion (BPP, 2004, p.275).

Price strategy and the marketing mix Marketing mixes are segment-specific. The product may be designed for a given segment (BPP, 2004, p.275). Perfect for home and small offices, Canon introduced the Laser Printer LBP3250 and the colour laser printer LBP5050 lead the market, SEPHY for easy home and office photo printing jobs. Besides, the price plays an important role in the marketing mix . Canon can set high price with SEPHY, because this product is not only for printing, but also for decorative, easy to bring, and suitable with plentiful people or working. Alternatively, laser printer can be set lower price.

Pricing and competitive edge Price has invisible power in marketing mix, besides there is many ways to price a product. These products of Canon are in introduction stage, so they must reduce the price to attract customer. However, when Canon has new product, the competitors will introduce new product too. It will be conflict and the price war will be happened. The price of product reduces and the customers have more advantages to choose best product to buy. To win in the price war and reduction of competition, Canon should keep the current price and affirm the quality of product and the after sales services. Besides, applying the mass media to introduce new product and give more promotion.