Coca soda pricing technique coca cola does not

Red Half truths, Drink, Growth Strategy, Competition

Excerpt from Essay:

Coca Soda Pricing Technique

Coca-Cola does not have one price all over the world as well as the reason behind this pricing technique can be encapsulated in two main fights:

Not all countries in the world have a flourishing economy

The currency exchange rate can make a lot of difference

Let us now understand what these arguments indicate. If India ever followed the homogeneous pricing approach all over the world, it could not only drop a large chunk of customers but also lose away seriously to its competitors in individuals local market segments. Every region, regardless of their size and economy, has local manufacturers offering an enormous or limited variety of refreshment drinks. These kinds of drinks are normally priced low since they are every-day drinks and need to be used often , sometimes more than once every day. If the neighborhood producers disregard the per capita income from the country, they might never manage to use a smart pricing strategy and hence the income of its target market is highly important factor in determining price pertaining to local drinks.

When Pepsi enters these kinds of markets, excellent very lots of competition to think with. On the other hand, it must keep in mind the prices of similar drinks in the market, and the other, it must not really ignore elements like every capita cash flow, economic potential, recent industry growth and so forth Coca-Cola could thus modify its price according to these factors and charge a different sort of price in each area that it enters. While the price might look more or less precisely the same in european countries because of their higher financial power, this kind of change drastically as Coca-Cola enters expanding markets.

Take those case of India such as. The country contains a huge market and no company in its proper mind would like to lose out in the revenues that can come from a market as rapidly growing as India’s. The market isn’t just growing in terms of economic power nevertheless also when it comes to sheer number of men and women. When Pepsi sets a pricing technique in this nation, it cannot ignore the reality more than 70 percent of it is people still live in rural areas where even a 5 rupee drink is not always a reasonable option. In this market, when ever Coca-Cola comes out with a higher priced merchandise, it becomes a luxury drink that cannot compete with local main competitors just like Thumps-up or perhaps Limca.

That is why, Coca=cola must alter its pricing strategy and instead of changing the price of the totally normal bottle from Rs. 10 to anything lower, it came out with a smaller bottle that was designed for Rs. a few. This allowed the company to compete not merely with neighborhood competitors although also with local homemade refreshment