Pricing Strategy of Coca-Cola Research Paper Example | Topics and Well Written Essays - 500 words - 1

Pricing Strategy of Coca-Cola - Research Paper Example In this pricing strategy, prices are kept low in order to penetrate more into the target market (Armstrong, Marketing). As a part of this strategy, prices of most of the products that are currently in the market will be lowered by 1-2 units. Furthermore, the quantity of the content can also be increased keeping the price range unchanged. In case of the brands that are about to be introduced, prices will be maintained at the lowest possible range so that competitive advantage can be gained. Prices of those brands that have sufficient market share in most of the major markets can be brought down by 5-10%. However, the price of the sports drinks brand which has been struggling to gain enough popularity would not be made lowered more than 2-3%. Penetration pricing strategy is likely to be more effective in the developing countries like India where people are significantly concerned about the prices of the product. In developed countries, direct cut in price may not work and hence in thes e markets, more features can be added in terms of content and packaging without changing the price. In some cases, prices can be reduced slightly. The main reason behind choosing penetration pricing strategy is increasing the sales by penetrating deeper into the markets. In most of developing countries, the volume of the target market is increasing significantly. Almost everyday a new market is getting created. In order to, gain enough market share in these markets it is very important to keep the price at a lower level for the initial period. The sports drinks sector in the emerging markets is becoming bigger. However, it is dominated by the competitor’s brand. As a result, bringing down the price without the changing the quality is likely to be an appropriate strategy for Coca-Cola. The situation is quite different in the developed markets where consumers have become more health conscious.