We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What Is the Connection between Pricing Strategy and Channel Distribution?

Esther Ejim
By
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

The relationship between pricing strategy and channel distribution can be drawn from the fact that proper pricing strategy is one of the business strategies utilized by an organization, and the effective control or monitoring of the distribution channels helps ensure that the prices of products remain within the price limits set by an organization. Pricing strategy and channel distribution are also connected in the sense that the close monitoring of the distribution channels also helps ensure that the prices do not conflict with each other since different distributers might be tempted to tag on their own extra prices, leading to differing prices and a perception of price inconsistency. Another connection is the fact that a well-balanced external distribution channel can help a company that lacks the resources to internally distribute its products, further reducing the price of its products since the company would not be obliged to spend money in order to set up and maintain a sales team who would engage in direct sales and other considerations.

One of the links between pricing strategy and channel distribution is derived from the effect that a lack of control over prices has on the manufacturer or importer of the product. Companies usually utilize pricing as one of their methods of effective strategizing. As such, any deviation from the determined price range will undermine the efforts of the business toward the implementation of the predetermined price. For example, a manufacturer of candles could set a maximum price for a box of 50 individual candles at a determined price that takes into consideration an allowance for a margin of profit by distributors and retailers. When the distributors and retailers tag on extra amounts in excess of the maximum price set by the candle manufacturer, it defeats the aim of the company, making it necessary for such a company to put measures in place that will curtail these actions.

Pricing strategy and channel distribution are also connected by the fact that the availability of good distribution channels means that a company will not have to spend any money on setting up its own internal distribution channel. Setting up a private distribution channel will involve hiring, training and paying the remuneration of a sales team, providing logistics to the sales team to enable them to effectively carry out their duties, and setting up outlets for the further distribution of the product. Where the company does not need to do this, the money that would have been saved will allow it to further reduce the price of the product.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Esther Ejim
By Esther Ejim
Esther Ejim, a visionary leader and humanitarian, uses her writing to promote positive change. As the founder and executive director of a charitable organization, she actively encourages the well-being of vulnerable populations through her compelling storytelling. Esther's writing draws from her diverse leadership roles, business experiences, and educational background, helping her to create impactful content.
Discussion Comments
Esther Ejim
Esther Ejim
Esther Ejim, a visionary leader and humanitarian, uses her writing to promote positive change. As the founder and...
Learn more
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.