Congestion Pricing

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An online retailer in Cranbury has a 40 feet tall-1.2 million-ft2 wide warehouse that stores a range of inventory, from beds to teakettles on its shelf. It offers free shipping to consumers in different parts of the country (Granville and Taggart).

 Retail Channel Structure Issues

The company performs the retailing function on the channel. It takes both the wholesaler and retailer functions because it buys the products from manufacturers and sells to the end-user. Therefore, it follows a three level structure.

Distribution Intensity Chosen by Brand

The distribution intensity is the availability of the product or service to the final consumer (Hurd, Robert and John 177). The company uses intensive distribution since its principle focus is to distribute the product to attain mass-market selling. It attracts consumers by running promotions and advertisements on its ecommerce website.

Benefits of their Retail Strategy for Consumers

Consumers enjoy cheaper products due to the reduced cost of managing the supply chain. Further, due to the efficiency and experience of the company in managing its distribution channel, customers will enjoy reduced time of product delivery (Jyoti 83). 

Is there a Potential for Omnichannel Marketing?

The company is already providing omnichannel marketing. Its online platform provides an integrated and unique customer experience by allowing consumers to shop freely and easily using their smartphones or computers. Singh asserts that this particular approach is effective because through holistic and direct engagements, enterprises are able to build better relationships with their customers (p. 101). Fairchild supports this statement by affirming that the omnichannel approach combines the benefits of brick-and-mortar stores with the online experience to offer customers a unique experience (p. 448).

Question 2: The as Applied to Congestion Pricing

What are the objectives of congestion pricing?

Urban centers can use congestion pricing to increase the amount of revenues collected from public transport systems. In addition, the method decongests streets for the benefit of motorists and pedestrians who inhale excessive smoke that is harmful to their health (The New York Times).


Typically, the concept of elasticity of demand is the higher the price, the lesser the demand and vice versa is true. However, Zhou indicates that congestion pricing is designed to reduce the number and type of vehicles entering a specific area of an urban center in a given time, which depends on a variety of factors. The author affirms that traffic sensitivity to pricing depends on the “availability of alternatives for re-routing and retiming of the trip.” Nonetheless, if such options are unavailable, then the traffic in the given location will reduce (p. 77).


Managers need to consider competitor prices before setting prices to avoid losing potential and existing customers (Zboja, Ronald and Diana 807). However, congestion pricing does not involve any form of competition since the government collects the tax from drivers using specific locations. 

Channel Members

In an industrial competition, involving same products and services offered by distinct companies, there is a higher likelihood of the emergence of gray markets. However, if it occurs, it would be a bad thing because the principle objectives of decongesting a given region will not be achieved. For that reason, enacting policies and procedures that minimize the development of gray markets will ensure the goals are met.


The cost of enforcing the decision might be higher or lower than the revenues obtained. However, with congestion pricing, the taxes collected add revenues to the state and minimize the costs of air pollution (Zboja 807).  


Works Cited

Fairchild, Alea M. ”Extending the network: Defining product delivery partnering preferences for omni-channel commerce.” Procedia Technology 16 (2014): 447-451.

Granville, Kevin, and Taggart, John. ”From‘Zombie Malls’ to Bonobos: What America’s Retail Transformation Looks Like.” The New York Times

Hurd, Amy R., Robert J. Barcelona, and John T. Meldrum. Leisure services management. Human Kinetics, 2008.

Jyoti, Amar. Marketing management. Gyan Publishing House, 2010.

Singh, Navneet Kumar. ”Designing Distribution Centres for Omni-Channel Fulfilment: In Indian Context.” Supply Chain Management Strategies and Risk Assessment in Retail Environments. IGI Global, 2018. 119-137.

The New York Times. ”A Solution to New York City’s Gridlock.” (2017)

Zboja, James J., Ronald A. Clark, and Diana L. Haytko. ”An offer you can’t refuse: consumer perceptions of sales pressure.” Journal of the Academy of Marketing Science 44.6 (2016): 806-821.

Zhou, Bojian, et al. ”A trial-and-error congestion pricing scheme for networks with elastic demand and link capacity constraints.” Transportation Research Part B: Methodological72 (2015): 77-92.

September 18, 2023

Business Economics Life

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