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In: Operations Management

When Pearl Soft Shampoo was released by Clary Laboratories Inc. in the late 1970s, it was...

When Pearl Soft Shampoo was released by Clary Laboratories Inc. in the late 1970s, it was an innovative hair care concept because it repaired split ends. Even though the new product was an improved version of the previous ones, Clary Laboratories entered the market with low prices and dealer incentives. Discuss the possible reasons for this marketing strategy.

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answer-

Clary laboratories used this marketing strategy of entering the market with low prices and dealer incentives having following reasons-

The first reason could be to gain competitive advantage over competitors. We learned porter's generic strategy in which company offer their product at low cost to gain competitive advantage over rival companies. This is why Clary laboratories offer low prices shampoo to market.

The second reason could be to increase demand for its shampoo. Marketing and promotion always focus on creating demand and brand awareness. Having a low price shampoo in the market will create demand and awareness of the brand.

The third reason could be to make good relationship with intermediaries like dealers who would try to increase their sales in order to get incentives from the Clary laboratories. This will help to have good and healthy relationship in supply chain.

The fourth reason is to increase profitability and customer base because when there are products with attractive price then customers will buy more and profit will increase.

so, these are some not limited to possible reasons for adopting this marketing strategy.

keosha answered 7 months ago
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