Coca Cola Pricing Strategies

Designing an appropriate pricing strategy is always a challenging task for most corporations, because price is a determinative factor of operating profits. Meanwhile, price can affect customer perceptions and product development. According to the basic economic theory, pricing policy should reflect the product’s costs and the relationship between supply and demand. In addition to the fundamental framework, price settle mechanism should take into consideration the underlying industry environment. For example, pricing in manufacturing is heavily cost-based with the certainty that the costs are fully covered. And conversely, in some particular sectors, there are downsides when price setting relies solely on the variable costs because of the high fixed cost. Based on this judgment, product providers should carry different pricing mechanism under different market conditions. Accordingly, pricing evolves from a purely academic topic related to the economic theories to a profits-maximising instrument involved with marketing practices. All these issues make the price setting problem more

CVS needs to think through numerous elements impacting its’ business. Pricing strategies, rivals and their current products, consumer demands and suppliers are examples of these elements. For pricing strategies, CVS should consider closeouts, discounts, product bundle pricing, penetration pricing, geographical pricing, and membership or trade pricing.   For non-pricing strategies, options comprise: enhanced service quality, longer opening hours, advertising, and extended warranties (Kimmons, n.d.). By pricing similar products in a different way they must focus on regional demographics because geographic pricing enables the maximization of profit. For promoting unique or new products at provisional price drops, penetration pricing is the most effective.   Finally, bundle pricing and closeouts can be engaged when several

The industry is predominantly led by three companies; Coca Cola, Pepsi, and Dr. Pepper Snapple Group (also commonly referred to as RC or 7 UP by consumers). Each of these companies has strong players in multiple beverage categories. Furthermore, there is numerous other store, local, and regional owned brands depending on where you are. This creates a high number of substitute products throughout the beverage industry in all its categories. For example, in a typical carbonated soft drink aisle at Walmart you might find up to nine different brands of each beverage flavor. Interestingly, at Walmart each brand will tend to have a different price point. However, if you go to Target you may only find three brands per flavor and typically they are priced in line with one another. The high number of available substitutes often leads to a pricing war. When companies compete on price, often the consumer wins. The result of interpreting that competition is a learned behavior by consumers to be sensitive to temporary promotional pricing. Ultimately, the high number of available substitutes makes the beverage industry elastic in short bursts throughout the

The Coca-Cola Company attempts to satisfy the wants and needs of many different types of people. They carry beverages that target different age groups, sexes, and lifestyles. Their most popular product, as many know, is Coca-Cola and it is popular in multiple different nations. The Coca-Cola Company took note on their success with Coke, so they produce many similar products that would then fit the lifestyle of everyone, such as Coke Zero, Diet Coke, Caffeine Free Coke, Cherry Coke, Vanilla Coke, and so many more. This way the target market for Coca-Cola is much broader than

Price is the one element of the marketing mix that generates revenue; all the others are costs. Customers obviously like a bargain and may be attracted to buy a product even if they had never considered purchasing the product before. Prices could be artificially reduced to attract customers to a new product and to discourage

Headquartered in Atlanta, Georgia, the USA, the Coca-Cola Company is the largest beverage company in the world, owning, manufacturing, distributing, and marketing of more than 500 non-alcoholic beverage brands, mainly sparkling beverages and more than 3,500 beverage products like waters, enhanced waters, energy and sports drinks, ready-to-drink teas and coffees, and juices and juice drinks (Coca-Cola, 2014). The company owns and markets 4 of the globe’s top 5 non-alcoholic sparkling beverage brands, such as Coca-Cola (or Coke), Diet Coke, Fanta, and Sprite. The company’s finished beverage products bearing its trademarks, sold in the USA since 1886, are now consumed in more than two hundred countries (Coca-Cola, 2014). According to Coca-Cola (2014), the company makes its branded beverage products available to its

Coca-Cola is known as one of the largest soft drink companies in the world. The company has sold their beverage products in the United State since 1886, and in more than 200 countries/territories. A Pharmacist named John Pemberton developed the company and product with the original intent of this company producing a patented medicine. Businessman, Asa Griggs Candler, saw a different possibility for the corporation as a soft drink company and bought out the company. Coca-Cola sells approximately 50 different beverage brands and products. Some of those products are Coke, Sprite, PowerAde, Minute Maid, Dasani, NOS Energy Drink and many more.

The pricing technique of Coca-Cola has supported the firm to compete and grow in the soft drink effectively. The volume discount and pricing penetration are the vital aspects to provide the firm generates its sales in the market. For instance, Coca-Cola partners with large supply chains such as Costco, Sam’s Club, and Walmart to provide great discount pricing in order to generate its sales substantially in the U.S and the global market. Equally, the firm also distributes its

Price is unquestionably one of the most significant market variables (Bauer, Klieger & Koper,2004). It turn out to be apparent from the text that there are plentiful ways of price framing. Particularly, price framing is defined as how the price offered is corresponded to the customer (Briesch, Krishna, Lehman & Yuan, 2002). Some retailers intentionally price certain goods low to get the notice of consumers to whom they anticipate to sell other more pricey products. But consumers

The Coca-Cola Company is well being in over the world as the biggest beverage company which heading company is located in America. Pharmacist John Styth Pemberton invented its lead product Coca-Cola in Columbus, Georgia in 1886. Today, the company owes or licenses and markets more than 500 non-alcoholic drink brands, including sparkling beverages and a range of still beverages, for example, such as waters, enhanced waters, juices and juice drinks, instant teas and coffees, and energy and sports drinks (see Appendix 6 for all the brands). Coca-Cola, Diet Coke, Fanta and Sprite are four of the world’s top five non-alcoholic sparkling beverage brands, which are also marketed by Coca-Cola company.

Examples above provide ample evidence about the importance of pricing in marketing strategies. However, pricing strategies have some limitations too. An Article by Arnold Anderson suggests that pricing strategies offer many disadvantages to the product and eventually distracts consumers from making purchases. If a company uses low prices to attract consumers, it can affect credibility of the company and perception of quality on consumer’s mind.

In 1886, John Pemberton invented what is now known as the most popular soda beverage in the world, Coca Cola (Journey). This fountain beverage has become a favorite among not just the United States but the entire world. Its “refreshing, thirst quenching taste” has consumers wanting more. Coca Cola has twenty-three main brands but over 3,000 products (Journey). Different types of Coca-Cola products are: fountain beverages, bottled water, energy drinks, Juices, alcoholic beverages, and Teas. A

The price of a product is a key element that produces revenue and is the most flexible because price changes can occur quickly if needed. The decision to place a price on a product can be complex thus, warranting marketers to consider a number of elements; the company, its marketing strategy, target markets and brand positioning, the customer, and the competition and the marketing environment. Companies generally set prices according to the geographical demand and cost, market segment requirements, purchase timing, order levels, delivery frequency, guarantees, and other factors (Armstrong & Kotler, 2009).

Coca-Cola and Pepsi companies are the dominant players in the soft drinks industry (Yoffie, 2011). The two companies manufacture drinks whose contents are relatively the same. The two companies leverage price and package to achieve differentiation. Consumers exhibit a low level of loyalty to the products of the two companies largely because their core product is similar. When soft drinks from the two companies are freely available in the market, consumers consider the price and packaging of the products when making their purchasing decision. The costs of switching products between the two companies were considerably high during the last century, but today the costs of switching products

The prices a company sets for its product and services must strike a balance between gaining acceptance with the target customers and making a profit for the organisation.