They have almost 550 vehicles to supply their is a Harvard Business Review case study written by Charles King, Das Narayandasfor the students of Sales & Marketing. ➢ Price should not be too low or too high than the price Competition based pricing is a pricing method that involves setting your prices in relation to the prices of your competitors. It was first sold as a patent medicine at drugstore soda fountains for 5 cents a glass. Below is the pricing strategy in Coca Cola marketing strategy: Coca Cola follows a 2nd degree price discrimination strategy in its marketing mix. competitor is charging from. They first designed the product, the original coke, determined the costs for the product (product costs, capital costs, and operational costs), set a price based on the cost of Coke, and finally convinced the consumers of the soda's value. Hence, as a strategy to counter these regional beverage brands, both Coca Cola and PepsiCo had set up separate groups within their organisations. Consistency can be seen from the logo to the bottle design & the price of the drink (the price was 5 cents from 1886 to 1959). The amount of money charged for a product or service, or sum Their pricing strategy is based on the competitors pricing, Pepsi is the direct competitor to coke. While competition is an important factor behind the pricing strategy along with market dynamics, another important reason is that it has made its products more affordable and accessible. Pricing is difficult because the various products have related demand and costs and face different degrees of competition. As price gives us the profit so this P is very important Retail/ corner stores/ super markets. However, there are many competitors in the market so a substantial increase or decrease in price will have an effect, but not a huge one. Pricing strategy. There are three different pricing strategies which a company can primarily follow: 1) Price Skimming: Charging premium prices … To first determine it's price, I believe Coca-Cola used a cost-based pricing system for it's Original Coke. Coca Cola’s pricing strategy is aimed at driving brand loyalty. Coca-Cola strengths in bottling and distribution is capable of meeting global consumer needs. These groups would keep track of the regional soft drinks brands, which had captured a large market share and was also believed to be behind a planned boycott of the products of the two Cola giants in Tamil Nadu. The marketing strategy of Coca Cola has made it dominant soft drink of the world. relatively high price. In the sense they charge different prices for products in different segments. Regular bottle 201.5 Liter Bottle 90Disposable Bottle 40 Coca Cola Can 50 Different Pricing Strategies:1. In direct selling they supply their products in shops by The prices lower as the size of the package grows bigger. This is compared to other strategies like value-based pricing or cost-plus pricing, where prices are determined by analyzing other factors like consumer demand or the cost of production. public. Especially on some occasion Coca Cola reduces its rates like in Ramadan Coca Price The pricing strategy of Coca-Cola is what they refer to as ”meet-the-competition pricing”: Coca-Cola product prices are set around the same level as their competitors, because Coca-Cola has to be perceived as different but still affordable Coca Cola Due to the availability of wide range of products, the pricing is done according to the market and geographic segment. Coca-Cola's price remains fixed for about 73 years. ➢ Price should be set according to the product demand of PEPSI: It has reliably used its valuing technique as an encouragement to test, expecting to transform trial into habit. When it realized that the brand did not hold enough attraction to fork out a premium from the consumers, it introduced a lower-priced, similar-sized version to gain consumers. That’s why Coke’s price per liter can variate depending e.g. An example for such successful implementation of marketing strategy is Coca Cola. Throughout the years Coca Cola has used Penetration Pricing …show more content… But Pepsi never got involved in a price war with coke as it would have eaten into the brand equity of Pepsi as consumers perceive that the basic price they pay for brands like Pepsi is justified as its more about the refreshing cola experience rather than a just a thirst quencher. Pricing Strategy used by Pepsi v/s Coca Cola. PRICING STRATEGIES: Coca Cola has intense competition with Pepsi so its pricing can’t exceed too much nor decrease too much as compared to the price of Pepsi Cola. Coke additionally utilizes the international pricing strategy. At The Coca-Cola Company, we continuously leverage insights gained from our innovation centers based in various regions of the world to offer more personalized product solutions for consumers, such as tailored formulations and ingredients to match consumer tastes and lifestyles, broader packaging options and more. Thus, Coca Cola has been following various pricing strategies based on the requirement and based on the introduction of new products targeting different audience. consumers may go for Pepsi Cola in case of availability of Coca Cola at It contributes to the highest sales of soft drinks globally. Coca Cola’s trademark brand occupies a different position in BCG matrix based on the demand & competitive position.. Thumps-up, Sprite, Fanta & Maaza are Stars as these brands have high market share but high competition in their respective segment. We invest to improve people’s lives, from our employees to all those who touch our business system, to our investors, to the broad communities we call home. Coca Cola was established in 1886 by Dr. … … This gives the brand … Strategic approach and competitive advantages The Coca Cola Company is known for its marketing expertise and the company has always followed a great marketing strategy that is responsible for bringing the success to the company for over a century. An example of price dispersion resulting from competitive pricing is Coca Cola (see interesting article on the early pricing history of Coke). Coca Cola is one of the most leading company in soft drink beverage industry. Cola reduces its rate unto 5 Rupees on 1.5 liter bottle. He called it Coca-Cola. Pricing is set by those the company sells to petrol station and grocery stores usually sell Coca Cola at a fixed price, and in retail stores different stores apply different pricing strategy for instant with pack of six Coca Cola one Pringles free. Pricing Strategy. COCA COLA: Initially Coke mimicked Pepsi by introducing 300 ml cans at an invitation price of Rs.15 before raising it to Rs.18. The price of Coca Cola, despite being market leader is the psychological pricing strategies by reducing a high priced bottle and consumers on the packaging or location. Sometimes, Pepsi places its customers into some Segmentation helps the brand to define the appropriate products for specific customer group; Coca Cola doesn’t target a specific segment but adapts its marketing strategy by developing new products.Similarly it uses mix of undifferentiated & mass marketing strategies as well as niche marketing for certain products in order to drive sales in the competitive market. Read also Business Level and Corporate Level Strategies – Coca Cola Company. In an economy like Coca Cola and Pepsi are the dominant players. Mission statement. Product We all recognize the red can with the logo of Coca-Cola on it, that is why Coca-Cola is the leading provider of soft drinks in the world. ➢ Price should be that which gives the company maximum Both brands compete against each other over pricing, quality and features, and their prices remain similar, although Pepsi is slightly cheaper than Coke on average. revenue. Large variation in price created by competitive based pricing is otherwise known as price dispersion. Moreover, due to the decreasing demand for soda products, price competition between Coca Cola and Pepsi has gotten even intense. product or services. ➢ Price must be keeping the view of your target market. Soft drink can be further divided into carbonated drinks (Coca-Cola, Pepsi, Thumbs … The Brand Coca-Cola has strong brand equity, and loyal brand followers. by Kurian M. Tharakan. The business organisations are both local and multinational firms. Due to intense competition in the market, Coca-Cola focuses on different promotional and marketing strategies. Competition based pricing approach: Coca Cola is in intense competition with Pepsi so its pricing can’t exceed too much nor decrease too much as compare to the price of Pepsi cola. It could proceed with bring down value situating because of the way that in the soda pop industry the retailers infrequently pass on the organization the value favourable circumstances picked up by them from the shoppers by offering contending brands at a similar cost and taking the rebates. In addition, it is also important to note that these concentrates and syrups are sold to subsidiary or independently-owned bottlers that are responsible for producing and packaging the fina… American pharmacist John Pemberton (shown at right) invented a non-alcoholic version of his Pemberton’s French Wine Coca, in his Columbus, Georgia drugstore in 1886. Coca-Cola and PepsiCo follow different competitive strategies and focus on various elements of the corporate culture in order to help consumers differentiate the brands and their missions along with the brands’ images. They are overwhelming in world markets too. COMPETITIVE STRATEGIES ADOPTED BY COCA-COLA KENYA BY MARY AMONDI ANG’WECH UNIVERSITY OF NAIROBI LOWER KABETE LIBRARY « A RESEARCH PROJECT SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION (MBA), SCHOOL OF BUSINESS, UNIVERSITY OF NAIROBI NOVEMBER, 2012. Coca Cola’s pricing strategy is aimed at driving brand loyalty. In 2009, both competitors’ ROE had a decrease. ”Meet-the-competition pricing”: the Coca-Cola products pricing are set around the same level as its competitors, Coca Cola has to be perceived different but still affordable. This strategy involves four “P”, namely place, price, promotion, and product. This deals with the pricing, sales and distributing of the Coca-Cola products. Cold drink prices are market determined. Innovation. The unique thing about Coca Cola''s pricing strategies in these three major markets seems to be in the way in which the company is including the competition while taking a pricing decision. The article elaborates the pricing, advertising & distribution strategies used by the company. Each sub-brand of coca cola has different pricing strategy. Lastly, the final competitive force of the analysis is: Coca-Cola’s suppliers. Moreover, due to the decreasing demand for soda products, price competition between Coca Cola and Pepsi has gotten even intense. Pricing is difficult because the various products have related demand and costs and face different degrees of competition. using their own transports. Value based pricing for the customer is the main transformation for the Coca Cola Company. they do this through sponsorships and advertising. Despite the high popularity of the brand, it has priced its products competitively. Due to the availability of wide range products, the pricing is done according to the market and geographic segment. Their pricing is highly influenced by competition, as both Coke and Pepsi are substitutes for each other and therefore, if Coca-Cola increases its price, many of its consumers will switch to Pepsi . The worldwide popularity of Coca-Cola was a result of simple yet groundbreaking marketing strategies like – Consistency. Coca-Cola … They mostly focus on aggressive marketing. area. Objective of such a process is to analyze and understand market, identify opportunities and use or develop competitive edge to capitalize on those opportunities.The Coca Cola Company segments the customers based on the following criteria - Geographic segmentation: Coca Cola has segmented the worldwide market on the basis of geographies. Pricing Strategies Coca Cola determines following factors at determining price… 11. Beverage market is said to be a oligopoly market (few sellers and large buyers), hence they form into cartel contract to ensure a mutual balance in pricing between the sellers. consumers tend to switch towards a low priced product. Pepsi pricing is based on consumer’s perception of Value. company and which gives maximum satisfaction to the customer. Retailers are happy to oblige, as soft drinks are in the top two or three products most frequently purchased in grocery and convenience stores. A classic example of a competitor-based pricing strategy is between Pepsi and Coca Cola. Because of this, the company has to make its pricing strategy flexible. South Africa is made up of several provinces and dividing the market based on the provinces will provide a way in which the people within those provinces could be targeted. But … According to statistics, Coca-Cola spent 4$ million in 2016, and in 2018 it spends 4.1$ million in promotion of its brand. For example, the Coca-Cola Company would use similar approaches it used to enter the Brazil market in order to enter and grow in Sub-Sahara African markets. There are 2 broad strategies: market-skimming pricing and market-penetration pricing. Coca Cola kept in mind while determining the pricing strategy. The Coca-Cola Company does not explicitly states its pricing strategy. Otherwise, Why You Should Understand the Pricing of Your Competitors . 2. Coca Cola has intense competition with Pepsi so its pricing Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? Following factors Initial claims for the … And non-carbonated beverages (Orange, Cloudy lime, Clear lime and Mango). The predominant players in soda pop market are Coca Cola and Pepsi, which possess for all intents and purposes the greater part of the North American market's most generally circulated and best-known brands. • Promotion(s) description: Mostly television ads. BCG Matrix in the Marketing strategy of Coca Cola . Coca-Cola strengths in bottling and distribution is capable of meeting global consumer needs. This needs to do with the distinction in financial conditions, aggressive circumstances, and laws. In this type of selling company have more profit margin. 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