Regular bottle 201.5 Liter Bottle 90Disposable Bottle 40 Coca Cola Can 50 Different Pricing Strategies:1. consumers tend to switch towards a low priced product. Pepsi pricing is based on consumer’s perception of Value. Like any company who has successfully been existing for more than a century, Coca Cola has had to remain tremendously fluent and consistent with their pricing strategy. That is why Coca Cola Read also Business Level and Corporate Level Strategies – Coca Cola Company. The amount of money charged for a product or service, or sum 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. The beverage market is considered to be an oligopoly in which there are few sellers and many buyers. customers for availability of Coca Cola products. Because it is very difficult for them to cover all area of Pakistan by Per Coca-Cola’s 10-K report, “Increases in the prices of our finished products resulting from a higher cost of ingredients, other raw materials and packaging materials could affect affordability in some markets and reduce Coca-Cola system sales” (The Coca-Cola Company, p.14, 2017). He called it Coca-Cola. Hence, as a strategy to counter these regional beverage brands, both Coca Cola and PepsiCo had set up separate groups within their organisations. Pepsi raised the cost once utilization balanced out, depending on the propensity to adjust at the absence of a cost advantage. to target every consumer of the country so Coca Cola has to set its prices at This section offers a detailed industry analysis as well as implications of the external factors for the company. But … public. Moreover, due to the decreasing demand for soda products, price competition between Coca Cola and Pepsi has gotten even intense. strategy lessons from the retail shelves . is a Harvard Business Review case study written by Charles King, Das Narayandasfor the students of Sales & Marketing. 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. Coca-Cola has also a strong geographical presence in North America. such a level which no one can offer to its consumers. Coca Cola operates in a highly competitive market consisting of similar and substitutable produc… 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. Its 1.5-liter container took after Coke into the commercial centre at Rs.30 – Rs.5 not as much as Coke's. 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. 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. It is clear that their pricing is highly influenced by competition, because Coke and Pepsi are almost perfect substitutes and therefore, if Coca-Cola increases its price, many of its customers will start to consume Pepsi. In this type of selling company have more profit margin. that of Pakistan, He called it Coca-Cola. ➢ Price should be that which gives the company maximum The price of Coca Cola, despite being market leader is the 1 selling soda with regular Coke and with Diet Coke 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. Due to the availability of wide range products, the pricing is done according to the market and geographic segment. For Coca Cola, they use the latter strategies – market-penetration pricing. Coca Cola and Pepsi are the dominant players. Pepsi is taking this value based pricing strategy a bit further with their “Hybrid Everyday Value” model. 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. 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. They have almost 550 vehicles to supply their This strategy involves four “P”, namely place, price, promotion, and product. If price of the Coca Cola exceed too much from the Pepsi then people will COCA COLA: Initially Coke mimicked Pepsi by introducing 300 ml cans at an invitation price of Rs.15 before raising it to Rs.18. for business price of product should be that which gives maximum benefit to the Indirect Selling: In this type of distribution, they have their whole sellers and agencies to cover all area to assure their customers for availability of Coca Cola products. Companies in the beverage industry deal with the following competitive products: Coca Cola choose the Product Line Pricing, which sets the price steps between various products in a product line based on cost differences between the products, customer evaluations of different features, and competitors’ prices. The article elaborates the pricing, advertising & distribution strategies used by the company. In US coca cola pricing strategy differs from its rival in the sense that it pricing is based on the value it creates for different situations. This gives the brand … The Coca-Cola Company would use business tactics it has used in other emerging markets to gain competitive advantage in new markets in different geographical locations (Harvey, 1995). There is an impact of the Coca Cola’s business along with the entire partner and the value cycle with their customers in order to address the concerned areas and add value ahead of their beverage products. The Coca Cola is the most popular, best selling soft drink in history and best known product of the world. ➢ Price should be set according to the product demand of Outpacing its biggest competition Pepsi in 2010, it had the No. The prices lower as the size of the package grows bigger. Coca Cola is sold through following ways: 1. • Promotion(s) description: Mostly television ads. Subsequently, the lack of interest bend of Coca-Cola and Pepsi would be a straight line with parallel inclines over all focuses on hold. Coca Cola’s pricing strategy is aimed at driving brand loyalty. Sign in|Recent Site Activity|Report Abuse|Print Page|Powered By Google Sites, PROJECT ON BEVERAGE INDUSTRY | INTRODUCTION. They have their whole sellers and agencies to cover all At The Coca-Cola Company, we strive to use our leadership to be part of the solution to achieve positive change in the world and to build a more sustainable future for our planet. The Coca-Cola Company is the leading beverage company in the world, and it faces stiff competition from both emerging and established business organisations specialising in beverages. It contributes to the highest sales of soft drinks globally. Since 2015, Coca-Cola had a control of over 21% stake on shares of Canadian soft drinks. Coca-Cola strengths in bottling and distribution is capable of meeting global consumer needs. Pepsi pricing is based on consumer’s perception of Value. By forming strategic partnerships and agreements with suppliers, Coca-Cola strives to standardize pricing. Due to intense competition in the market, Coca-Cola focuses on different promotional and marketing strategies. consumers may go for Pepsi Cola in case of availability of Coca Cola at Moreover, due to the decreasing demand for soda products, price competition between Coca Cola and Pepsi has gotten even intense. Sometimes, Pepsi places its customers into some 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. can’t exceed too much nor decrease too much as compared to the price of Pepsi Cola Wars between Coca Cola and Pepsi Soft drink holds 51% (dominant part of piece of the pie) of the aggregate refreshment advertise. In the sense they charge different prices for products in different segments. 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). Pricing is difficult because the various products have related demand and costs and face different degrees of competition. ➢ Price must be keeping the view of your target market. area. Coca Cola was established in 1886 by Dr. … 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. 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. Coca Cola is one of the most leading company in soft drink beverage industry. This refers to the geographical area and distribution points where Coca-Cola markets its products. Coca Cola''s pricing initiative in India has clearly been successful in moving beyond mere brand competition to create additional consumption of the soft carbonated beverages category in the country. In this type of selling company have more profit margin. To understand the particular features of the companies’ competition, it is necessary to focus on differences in the corporate cultures. The Brand Coca-Cola has strong brand equity, and loyal brand followers. Retail/ corner stores/ super markets. Bulk buyers of the product may have to pay significantly lower prices than ones buying single Coca Cola products. Coca Cola’s pricing strategy is also a major source of competitive advantage. Coca-Cola has also a strong geographical presence in North America. their own so they have so many whole sellers and Agencies to assure their strategy lessons from the retail shelves by Kurian M. Tharakan 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. To first determine it's price, I believe Coca-Cola used a cost-based pricing system for it's Original Coke. of the values that Consumers exchange for the benefits of having or using the Since 2015, Coca-Cola had a control of over 21% stake on shares of Canadian soft drinks. 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. Competition based pricing is a pricing method that involves setting your prices in relation to the prices of your competitors. Soft drink can be further divided into carbonated drinks (Coca-Cola, Pepsi, Thumbs … Marketing Mix of Coca Cola analyses the brand/company which covers 4Ps (Product, Price, Place, Promotion) and explains the Coca Cola marketing strategy. product or services. The worldwide popularity of Coca-Cola was a result of simple yet groundbreaking marketing strategies like – Consistency. Coca Cola’s pricing strategy is aimed at driving brand loyalty. The strategy is about setting a low initial price to penetrate the market quickly and deeply—to attract a … According to statistics, Coca-Cola spent 4$ million in 2016, and in 2018 it spends 4.1$ million in promotion of its brand. Coca Cola choose the Product Line Pricing, which sets the price steps between various products in a product line based on cost differences between the products, customer evaluations of different features, and competitors’ prices. 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. 2. 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. ➢ Price should not be too low or too high than the price 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… Especially on some occasion Coca Cola reduces its rates like in Ramadan Coca Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? Direct Selling: In this type of selling their products are supplied in shops and departmental stores by using their own transports. company and which gives maximum satisfaction to the customer. COMPETITION ANALYSIS Cola Wars between Coca Cola and Pepsi Soft drink holds51% … Each sub-brand of coca cola has different pricing strategy. on the packaging or location. Pricing Strategy used by Coca-Cola. competitor is charging from. Earlier the price of coke was cost based, it was decided on the cost which was spent on making the product plus the profit and other expenses. Competition is a rivalry between two or more entities for recognition. Cola reduces its rate unto 5 Rupees on 1.5 liter bottle. Coca-Cola’s pricing is based on the value that its products create to customers in different situations. A classic example of a competitor-based pricing strategy is between Pepsi and Coca Cola. Large variation in price created by competitive based pricing is otherwise known as price dispersion. Innovation. revenue. 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. 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. Coca Cola kept in mind while determining the pricing strategy. Here's how Coca-Cola keeps its marketing strategy focused. Pricing is difficult because the various products have related demand and costs and face different degrees of competition. Coca Cola has offered promotional prices very frequently. In direct selling they supply their products in shops by Their customers Pricing Strategy used by Pepsi v/s Coca Cola. Thus, Coca Cola has been following various pricing strategies based on the requirement and based on the introduction of new products targeting different audience. Despite the high popularity of the brand, it has priced its products competitively. In 2008, Coca-Cola Company rose .9% from 27.5% and made it 28.4% meanwhile PepsiCo, Inc.’s ROE had a 9.7% increased from 32.8% boosted it to 42.5%. Otherwise, The Coca-Cola Company does not explicitly states its pricing strategy. Size of Coca Cola Price of Coca Cola (RS.). Coca-Cola's price remains fixed for about 73 years. Coke additionally utilizes the international pricing strategy. Below is the pricing strategy in Coca Cola marketing strategy: Coca Cola follows a 2nd degree price discrimination strategy in its marketing mix. the competition between coke and pepsi is fierce. Coca Cola’s objective is 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. 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. 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. Pricing strategy. Coca Cola choose the Product Line Pricing, which sets the price steps between various products in a product line based on cost differences between the products, customer evaluations of different features, and competitors’ prices. The company in corporation with Pepsi has decided to adopt the low pricing strategy in the twenty-first century. Cold drink prices are market determined. Research shows that Coca-Cola adopts the theory of Kotler and Armstrong (2014) by combining two of the three major methods that they suggested for setting the price of a product, which are the customer value-based and the competition-based pricing. Following factors otherwise nobody will buy your product. Pricing Strategy Competitor Approach Coke was a company ruling the markets before Pepsi entered. 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. COMPETITION ANALYSIS Cola Wars between Coca Cola and Pepsi Soft drink holds51% (majority of market share) of the total beverage market. The biggest strength of Coca Cola is its brand. From the history, one can see that Coca-Cola began in a single point in America in 1896, in Atlanta, but has continually expanded to international markets where it had thousands of retail stores and branches by 2007 in over 200 countries (Garrison, 2012). decreases people might get the impression that its quality is also low. •Price must be keeping the view of the target market. 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. Cold drink prices are market determined. Mission statement is developed by a company which states to share managers, workers, and customers. Thus, Coca Cola has been following various pricing strategies based on the requirement and based on the introduction of new products targeting different audience. These products serve as the principal raw materials for the end-user beverage products of the company. However, there can be identified a bit different pricing strategies between rivals especially in United States. Because of this, the company has to make its pricing strategy flexible. Coca-Cola Company’s ROE went back down to 27.5% from 28.4%; … Steal Coke’s Pricing Strategy Based on Value Created Instead of Quantity Sold. In an economy like Coca Cola has intense competition with Pepsi so its pricing Coca Cola Company makes two types of selling. bottles. This needs to do with the distinction in financial conditions, aggressive circumstances, and laws. Mission statement. 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. Value based pricing for the customer is the main transformation for the Coca Cola Company. psychological pricing strategies by reducing a high priced bottle and consumers … The strategy adopted by Coca-Cola against its competitors is that they have a competitive advantage due to their brand equity and their pricing strategy which make the product available and affordable in every market. Low Cost Strategy: The Coca Cola company has its pricing strategy based on different situations and timeline, based on the competitors pricing or different promotions will be offered. 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. Competitive pricing is the process of selecting strategic price points to best take advantage of a product or service based market relative to competition. Pricing is difficult because the various products have related demand and costs and face different degrees of competition.