ENT670 – Distribution Channels and Pricing Assumptions

Stronghold Armory Indoor Gun Range Distribution Channels and Pricing Assumptions

• Business Overview

Stronghold Armory is to be a full-service gun range offering state-of-the-art shooting experience and Federal Firearms License (FFL) brokering. Stronghold Armory will have ten fully automated and well-ventilated firing lanes that will accommodate almost all handguns, rifles, and shotguns. Stronghold armory carries a wide selection of ammunition and gun-related accessories in a variety of models, types, and calibers. The lobby and rest area offer customers, that want to spectate, a view of the firing lanes with ample seating and flatscreen TVs.

• Distribution Channels

Stronghold Armory will be using two distribution channels, Direct, and Retail.

The direct distribution channel will be the service portion of the business in which the customers will be paying for services of using the firing lanes, classes, and coaching. The retail distribution channel is the resale of goods that aid in the use of the gun range. The service portion of the business is the focus that Stronghold Armory has centered around because that is what sets us apart from the competition. Some customers will not utilize the retail portion of the business, such as ammo or targets, as they can bring their own for use in the range. The vastness of how many brands of ammunition there are, and which ammo works best for different firearms would make it impossible to restrict outside goods.

• Pricing Assumptions

When looking at Stronghold Armory’s two distribution channels there are two separate pricing assumptions. In the direct distribution channel, the price compared to the competition might appear to be higher, but that is only in appearance. There is no local competition that has indoor firing capabilities, and that sets us apart, yet raises the price compared to outdoor firing ranges. The added expense of comfort and safety when shooting will deter a customer segment that is not in our target market and does not warrant lowering the price point to be equal to the local competition. When looking at a true comparison to another indoor firing range that is an hour drive away, the price is the same without the added cost of time and fuel for travel. The retail distribution is more complex in pricing assumptions. Some products to be sold will be lower than the local competition, firing ranges, yet will be higher than other retail or online stores. Goods sold at Stronghold Armory are about convenience. For example, a customer doesn’t have to leave the range if they expend all their ammunition and need more.

• Conclusion

The direct and retail distribution channels of Stronghold Armory are the best way to maximize sales and revenue. There is little cause for changing the channels for the foreseeable future. The pricing assumptions for both channels are fairly set due to costs and proper price points. There are discounts offered through club membership that help offset a portion of the price for the direct distribution channel, which we hope will encourage people to be repeat customers.

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