However, there can be identified a bit different pricing strategies between rivals especially in United States. Subsequently, the lack of interest bend of Coca-Cola and Pepsi would be a straight line with parallel inclines over all focuses on hold. An example for such successful implementation of marketing strategy is Coca Cola. on the packaging or location. Today you can find Coca Cola in any part of the world. consumers may go for Pepsi Cola in case of availability of Coca Cola at Below is the pricing strategy in Coca Cola marketing strategy: Coca Cola follows a 2nd degree price discrimination strategy in its marketing mix. Coca-Cola has also a strong geographical presence in North America. The Coca-Cola Company does not explicitly states its pricing strategy. The strategy is about setting a low initial price to penetrate the market quickly and deeply—to attract a … ➢ Price should not be too low or too high than the price The beverage market is considered to be an oligopoly in which there are few sellers and many buyers. Thus, Coca Cola has been following various pricing strategies based on the requirement and based on the introduction of new products targeting different audience. 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. bottles. Pricing Strategy. To first determine it's price, I believe Coca-Cola used a cost-based pricing system for it's Original Coke. To understand the particular features of the companies’ competition, it is necessary to focus on differences in the corporate cultures. Coca-Cola's New Vending Machine (A): Pricing to Capture Value, or Not? 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. Coca Cola’s objective is Cola reduces its rate unto 5 Rupees on 1.5 liter bottle. Coca Cola’s pricing strategy is also a major source of competitive advantage. They have their whole sellers and agencies to cover all using their own transports. company and which gives maximum satisfaction to the customer. The biggest strength of Coca Cola is its brand. 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. In this type of selling company have more profit margin. charges the same prices as are being charged by its competitors. product or services. 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). When your annual global marketing budget approaches $4 billion, your marketing strategy should be flawless. 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). The prices lower as the size of the package grows bigger. There are 5 important pricing strategies available to business: Market skimming pricing, Penetration pricing, Loss leaders, Price Points and Discounts. Especially on some occasion Coca Cola reduces its rates like in Ramadan Coca 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. consumers tend to switch towards a low priced product. 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. Coca-Cola Company’s ROE went back down to 27.5% from 28.4%; … The Coca Cola is the most popular, best selling soft drink in history and best known product of the world. 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. 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. ➢ Price must be keeping the view of your target market. In this type of selling company have more profit margin. Moreover, due to the decreasing demand for soda products, price competition between Coca Cola and Pepsi has gotten even intense. COCA COLA: Initially Coke mimicked Pepsi by introducing 300 ml cans at an invitation price of Rs.15 before raising it to Rs.18. Pepsi pricing is based on consumer’s perception of Value. Despite the high popularity of the brand, it has priced its products competitively. competitor is charging from. He called it Coca-Cola. Pricing is difficult because the various products have related demand and costs and face different degrees of competition. Pricing: To first determine it's price, I believe Coca-Cola used a cost-based pricing system for it's Original Coke. They are overwhelming in world markets too. Competition is a rivalry between two or more entities for recognition. 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. PEPSI: It has reliably used its valuing technique as an encouragement to test, expecting to transform trial into habit. 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. Promotion: Due to the … Because it is very difficult for them to cover all area of Pakistan by 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. Pepsi pricing is based on consumer’s perception of Value. 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. Coca Cola is one of the most leading company in soft drink beverage industry. to target every consumer of the country so Coca Cola has to set its prices at The price of Coca-Cola is quite inelastic to demand as there is a large degree of consumer sovereignty towards the product. that of Pakistan, they do this through sponsorships and advertising. 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. Otherwise, Direct Selling: In this type of selling their products are supplied in shops and departmental stores by using their own transports. The further accentuation of differences can guarantee the successful competition within the market and industry which is based on sharing various beliefs, norms, and values. They mostly focus on aggressive marketing. such a level which no one can offer to its consumers. Coca-Cola strengths in bottling and distribution is capable of meeting global consumer needs. is a Harvard Business Review case study written by Charles King, Das Narayandasfor the students of Sales & Marketing. Value based pricing for the customer is the main transformation for the Coca Cola Company. 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. 2. Despite the high popularity of the brand, it has priced its products competitively. Coca-Cola strengths in bottling and distribution is capable of meeting global consumer needs. Why You Should Understand the Pricing of Your Competitors . This needs to do with the distinction in financial conditions, aggressive circumstances, and laws. Marketing Mix of Coca Cola analyses the brand/company which covers 4Ps (Product, Price, Place, Promotion) and explains the Coca Cola marketing strategy. 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. Coca Cola’s pricing strategy is aimed at driving brand loyalty. ➢ Price should be set according to the product demand of Pricing Strategy Competitor Approach Coke was a company ruling the markets before Pepsi entered. ➢ Price should be that which gives the company maximum 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. Mission statement. An example of price dispersion resulting from competitive pricing is Coca Cola (see interesting article on the early pricing history of Coke). In direct selling they supply their products in shops by There are 2 broad strategies: market-skimming pricing and market-penetration pricing. 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. If price of the Coca Cola exceed too much from the Pepsi then people will This refers to the geographical area and distribution points where Coca-Cola markets its products. They have almost 550 vehicles to supply their The article elaborates the pricing, advertising & distribution strategies used by the company. 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. 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. BCG Matrix in the Marketing strategy of Coca Cola . •Price must be keeping the view of the target market. Due to the availability of wide range products, the pricing is done according to the market and geographic segment. • Pricing description: A pricing strategy based on the basis of competition. Cold drink prices are market determined. According to statistics, Coca-Cola spent 4$ million in 2016, and in 2018 it spends 4.1$ million in promotion of its brand. Size of Coca Cola Price of Coca Cola (RS.). Following factors can’t exceed too much nor decrease too much as compared to the price of Pepsi 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. by Kurian M. Tharakan. He called it Coca-Cola. 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. 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. COMPETITION ANALYSIS Cola Wars between Coca Cola and Pepsi Soft drink holds51% (majority of market share) of the total beverage market. Each sub-brand of coca cola has different 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 amount of money charged for a product or service, or sum Pricing Strategy used by Coca-Cola. 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. 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 … 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. 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 . I believe the competition with pricing occurs through trade deals-they work with big retail chains to obtain more space, cooler presence, etc. of the values that Consumers exchange for the benefits of having or using the area. much of the strategy involves trying to attract new (young) consumers to their brand where they are likely to establish lifelong customers (as you know, there are coke people and pepsi people-almost everybody has a preference). Coca Cola has intense competition with Pepsi so its pricing 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 kept in mind while determining the pricing strategy. Soda can be additionally isolated into carbonated beverages (Coca-Cola, Pepsi, Thumbs up, Diet coke, Diet Pepsi and so on.) In 2009, both competitors’ ROE had a decrease. In a highly competitive market, it is often the case that when you start the competitive based pricing process you will find multiple prices for an item product or service. The Coca Cola Company and the New Product Offering The Coca Cola Company is one of the leading multinationals, with operations in more than 200 countries, producing over 500 brands to its customers.Founded in 1886 in Atlanta, U.S, Coca Cola has grown and expanded beyond the United States and its product portfolio includes Coca Cola Zero, Sprite, Fanta, Dasani water, Coke diet, Fuze tea, … As price gives us the profit so this P is very important Companies in the beverage industry deal with the following competitive products: It propelled the 500-ml bottle in 1994 at Rs.8 versus ThumsUp's Rs.9. 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). 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. But … in exchange for lower prices. The marketing strategy for “You Gum” in South Africa will adopt geographical segmentation. In the sense they charge different prices for products in different segments. Pricing strategy: Coca Cola’s pricing strategy is also a major source of competitive advantage. The Brand Coca-Cola has strong brand equity, and loyal brand followers. By forming strategic partnerships and agreements with suppliers, Coca-Cola strives to standardize pricing. Moreover, due to the decreasing demand for soda products, price competition between Coca Cola and Pepsi has gotten even intense. same as that of its competitor. For example, the cost of a 2-liter container of Coke in the United States is unique in relation to the cost of a similar item in China. 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. Cola. Coke additionally utilizes the international pricing strategy. Coca-Cola's price remains fixed for about 73 years. 1 selling soda with regular Coke and with Diet Coke Coca Cola is sold through following ways: 1. 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. Initial claims for the … • Promotion(s) description: Mostly television ads. Retail/ corner stores/ super markets. Hence, as a strategy to counter these regional beverage brands, both Coca Cola and PepsiCo had set up separate groups within their organisations. 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. 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. It contributes to the highest sales of soft drinks globally. However, Coca-Cola’s usage of commodities in manufacturing such as orange and fruit juice concentrates, sugar, and additional derivatives prices can fluctuate. Coca-Cola’s pricing is based on the value that its products create to customers in different situations. This gives the brand … 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. Competitive pricing is the process of selecting strategic price points to best take advantage of a product or service based market relative to competition. 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