Pricing and distribution for Juul e-cigarette

The use of JUUL e-cigarettes has developed rapidly, especially among teenagers. Teenagers' proposals for e-cigarette devices have evolved significantly over time (Tan et al. 2019). This paper considers the pricing and distribution or placement strategies employed to market Juul e-cigarettes.

Place (Distribution)

Distribution is all about the spread or profit margin between the manufacturing price or the purchase price and the selling price. The amount charged for the product should cover all the factors of production and the cost of transporting the product to the consumers. To allow for a higher consumption of Juul e-cigarettes, the distribution method to be employed is online sales and concession with other business partners (Cantrell et al. 2017. Distribution of the e-cigarettes using intermediaries ensures that the product reaches the consumers on time. The method is efficient since Juul would be dispensed in small quantities, allowing fast distribution. The online platform, however, offers a more magnificent avenue for consumers to interact with producers, and customers directly can shop online at their convenience.

Channels of distribution

Channels are well-organized structures of buyers and sellers that bridge the gap of time and space between the seller and consumer. A selling or marketing channel is a system where products and information are passed to the final user (Skarmeas, Zeriti, & Baltas 2016). The selling channel deals with aspects such as negotiation, placing, and order and transfer of goods in the distribution system. Jull should ensure that it creates a viable environment where the customers can negotiate or place their orders.

High-end concession stores

Using high-end concession stores would enhance e-cigarette distribution because the company would partner with existing stores. The department stores provide a ready distribution channel where the consumers can get their e-cigarettes. Some of the consumers visiting the store would develop brand loyalty they have been holding for the store. The existing customer can taste a new product from their trustworthy and recognized store.

Online Marketing

New customers would also be attracted to the store following online marketing. It is easy and efficient for individuals to shop in the comfort of their homes or offices. With a hectic schedule and lack of adequate time to do window shopping, customers would prefer to make an online purchase. This would ensure the product is delivered to their office or home doorsteps. This saves the customers time and energy of leaving the office and going to the marketplace to purchase a product. Rahayu & Day (2015) assert that SMEs are adopting e-commerce, especially in developing countries, due to its effectiveness. The distribution channel performance can be improved by devoting resources to channel management to ensure that the product reaches the market at the right time.

Physical distribution

On the other hand, physical distribution is the coordination of information and goods between the seller and the consumer. It ensures that the product is available at the right place, at the right time, in the right quantity and in a cost-efficient way. Physical distribution of products entails aspects such as moving the products from the manufacturer, transporting them to the seller, and storing them. Since Juul sells its products in the local and international markets, it is essential to build a channel that ensures the customer reaches the customers at the right time, quantity, and price.

Direct selling channel

A direct selling channel is vital to a company because it enables it to exploit the market and control it actively. It also ensures that the customers give their feedback about the product and eliminates middlemen. International companies are forced by market forces to use at least middlemen in their distribution channels. Juul would appoint foreign distributors who would, in turn, sell the product to retailers or end-users. It could also enter into a trade agreement with an overseas retailer to sell the product to the final customers. The company can also opt to sell the product through export brokers, sales representatives, or export distributors.

Pricing

Pricing a commodity is not an easy exercise because it entails researching the market, calculations, and understanding the market. The price of a commodity is a pivotal factor in determining the ability of consumers to purchase a given product. Overpricing the product will cause the company to move to the competitors, while underpricing would lead to losses. It is, therefore, critical to determine the most viable price that would ensure profit is maximized. Prices of JUUL varies on depending on location, although they tend to promote at a premium compared with other e-cigarettes aligned with this plan of JUUL, JUUL helps its auto-ship contribution buy strategy for its pods.

Economy Pricing

Economy pricing strategy is the approaches that require minimizing marketing and product expense. The economy pricing strategy is employed for a certain period where the entity does not spend money on promoting the good or service. The entity should, however, keep promotion and marketing cost at a minimum (Kerin, & Hartley, 2015). JUUL e-cigarette uses the pricing economy because they aim to engage the customers with price-conscious to win the competition. Due to the low cost of JUUL e-cigarettes, it turns to a slight profit.

Promotional Pricing

Pricing for promotion is a pricing method that seeks to gain new customers by offering the commodity at a low price. It may also take the form of a discount offer, buy one get one free, or a gift that is intended to attract new customers. This method is useful for both existing and new products because consumers consider purchasing the product for the offer given (Olbrich, Jansen, & Hundt, 2017). JUUL e-cigarettes are giving promotional pricing that involves in delivering discounts on products to the customer. In terms of price, the customers are also getting on good terms whereby when they buy one, they get another one free. JUUL e-cigarettes give promotional pricing campaigns in short-term offers. For example, one can choose a promotional pricing strategy over enlarged holidays such as Memorial Day Weekend.

Pricing for market penetration

Penetration pricing or pricing to gain market share is employed when an entity intends to set up a new customer base. This is the most effective pricing strategy when entering a new market. The company keeps the product cheaply to attract customers and build a client base. When they are offering these short-term offers, they are generating buzz and emotion about the product. JUUL e-cigarette sets the price based on what the competition charges. The amount of JUUL e-cigarette charge for the product is vital because it is the salary source. It is essential because it regulates how much profit is being made. JUUL e-cigarettes have practised on penetration price that sets a comparatively low initial opening price, more economical than the intentional future price. This encourages the customers who are new so that they are attending the place daily. This promotes word-of-mouth advice because of the attractive pricing. The cost-based price strategy employed to sell JUUL e-cigarettes should factor in all costs associated with the product. However, the company should consider other aspects, like the market situation, when setting prices. The setting of JUUL e-cigarettes serves the customers with the available price range.

Cost-based pricing

The cost-based pricing ensures that every cost is covered before profits are factored in. This method attracts larger customers to attend the place and get the products. This procedure allows the business to create the profits that are considered in the opening phase of the product (Töytäri, Keränen, & Rajala, 2017). The excellent price that the JUUL e-cigarette has promotes the business to the next level. Although JUUL e-cigarette has many customers who buy the products, it does not sell them for a ridiculously low price because it cannot make a profit. For the JUUL, e-cigarettes introduce the products through the internet at a premium price to get more customers.

Conclusion

JUUL is the first leading retail e-cigarette brand that relies heavily on social media to market and encourages its products with a price that is considered to customers. The excellent pricing of the JUUL e-cigarettes keeps customers an eye on the maximum willingness to pay for products. The e-cigarettes keep a close eye on the competition and price, confirming what is accepted in the new market situation.

References

Cantrell, J., Ganz, O., Emelle, B., Moore, R., Rath, J., Hair, E. C., & Vallone, D. (2017). Mobile marketing: an emerging strategy to promote electronic nicotine delivery systems. Tobacco control, 26(e2), e1-e3.

Kerin, R., & Hartley, S. (2015). Marketing: the core. McGraw-Hill.

Olbrich, R., Jansen, H. C., & Hundt, M. (2017). Effects of pricing strategies and product quality on private label and national brand performance. Journal of Retailing and Consumer Services, 34, 294-301.

Rahayu, R., & Day, J. (2015). Determinant factors of e-commerce adoption by SMEs in developing country: evidence from Indonesia. Procedia-Social and Behavioral Sciences, 195, 142-150.

Skarmeas, D., Zeriti, A., & Baltas, G. (2016). Relationship value: Drivers and outcomes in international marketing channels. Journal of International Marketing, 24(1), 22-40.

Tan, A. S., Soneji, S. S., Choi, K., & Moran, M. B. (2019). Prevalence of using pod-based vaping devices by brand among youth and young adults. Tobacco control, tobaccocontrol-2019.

Töytäri, P., Keränen, J., & Rajala, R. (2017). Barriers to implementing value-based pricing in industrial markets: A micro-foundations perspective. Journal of Business Research, 76, 237-246.