Introduction
Coca-Cola Company is an international brand that leads in the beverage industry. It has for a long time dominated the soft drinks market to outshine its rivals. Some of the major products include Sprite, Fanta, 5 Alive, Schweppes and many others. Due to competitive forces in the market, it is paramount for the management to outline a global marketing plan to safeguard the company’s current and prospective customers.
What price adaptations should Coca Cola include in its marketing plan?
Pricing of Coca-cola products should be motivated by the assessment of the entire market. This would involve physical and virtual research by the marketing department to evaluate price elasticity of different products among the approximate 300 brands in its name. With a significant market share, Coca-Cola company should re-evaluate its price based on the market force exerted by emerging rivals e.g. Pepsi.
I would recommend the following price strategies that would help the company maintain current consumers and attract new consumers to consume their beverages.
Geographical pricing
This strategy involves pricing products differently in different locations in the local market and international markets. This strategy is necessary to accommodate different economic levels in different regions and countries. This strategy also accommodates duty tariffs offered across borders .For instance, following integration of East African nations and establishment of a common trading bloc, the company should consider reducing its prices for east African market
Promotional pricing
This strategy induces early purchasing. It includes cash rebates for dead stock, loss leader pricing, longer payment terms and special event pricing. For instance, the company should sell Coke brand at a lower price than other products due to its high demand.
Discriminatory pricing
This strategy entails selling a product at different prices. It includes customer-segment pricing, time pricing, image pricing and customer form pricing. For instance, if Coke demand is inelastic in the east African market, the company should increase its price to cater for the discount pricing practiced in lo-responsive areas.
Product- mix pricing
This strategy should be adopted alongside the company’s innovation to introduce a beverage dispenser. Development of a refillable beverage will supplement this strategy. The company could sell different beverages at different prices depending on the level of demand
Price discounts and allowances
This strategy is essential especially when the company plans to introduce a new product in the market. For instance, the company could offer discounts to its refillable beverage bottle to attract customers. To supplement these discounts, leading products in demand could be charged high prices to cater for the discounts.
Describe and discuss any changes that should be made in the Pricing of Coca-Cola
Competition-based pricing
This strategy has been hampered by the increased competition in the market. Uptake of substitutes of beverages is a threat to the company and, therefore, the strategy is not cost-efficient. For instance, production of natural beverages and coffee has compounded the pricing strategy of the company.Instead; the company should first overhaul its production process to reduce the additive content in its products to enhance a healthy competition ground.
Penetration pricing
This strategy will involve setting prices at lower price than the usual .The company should use the strategy to boost consumption of price-sensitive products. For instance, Coke zero has responded poorly in the market and could be improved by setting its price lower than the usual to attract new customers in its market.
Psychological pricing
In this strategy, Coca-Cola has been its highly demanded products at a slightly lower price if bought in bulk. For instance, an 18-pack crate of 375ml bottles is priced at $9.98 instead of $10.However, this strategy may not be long-term especially if rivals use it as a marketing tool to attract its customers. Therefore, the company should instead offer a slight discount on a single product and cash in on the turnover. For instance, Coke could be sold at a 3% discount due to its high demand and, therefore, cater for the cost through customer turnover.
Meet the competition pricing
The company uses this approach to counter its competitors by setting the price of its products at almost equal level with its rivals. Instead, the company could use the elasticity of demand approach to evaluate the responsiveness of rival products in different areas. For example, if Pepsi performs well in Europe and poorly in Africa, the company could invest in dominating in African market by charging higher prices and lowering prices in Europe to maintain the current market.
References
Schindler, R. (2012). Pricing strategies: A marketing approach. Thousand Oaks, Calif: Sage Publications, Inc.
Curd, M. (2005). Marketing plan: Coca-Cola in 2015 (5).
Chunawalla, S. A. (2009). Product management. Mumbai: Himalaya Pub. House.
