Coca Cola Pricing Strategies
0. Preface
1. New-Product Pricing Strategies
2. Product Mix Pricing Strategies
- In a relationship with cost and customers’ demand
- In a relationship with competitors
3. Price Adjustment Strategies
a. Discount and Allowance Pricing
b. Psychological Pricing
c. Geographical Pricing
When marketers talk about what they do as part of their responsibilities for marketing products, the tasks associated with setting price are often not at the top of the list. Marketers are much more likely to discuss their activities related to promotion, product development, market research and other tasks that are viewed as the more interesting and exciting parts of the job.
Yet pricing decisions can have important consequences for the marketing organization and the attention given by the marketer to pricing is just as important as the attention given to more recognizable marketing activities. Here, we will talk about how Coca Cola manage to set the price for their products using different strategies.
1. New-Product Pricing Strategies
Setting prices for the first time is one of the most difficulties companies have to face at the introductory stage of the product.There are 2 broad strategies: market-skimming pricing and market-penetration pricing.
For Coca Cola, they use the latter strategies – market-penetration pricing. The strategy is about setting a low initial price to penetrate the market quickly and deeply—to attract a large number of buyers quickly and win a large market share. The high sales volume results in falling costs, allowing companies to cut their prices even further.
And this is how Coca Cola applied the strategy to their plan:
- At first, Coca Cola was free. Then it was sold in a soda fountain for 5 cents.
- Coca Cola still kept the price at 5 cents for many years.
- In the early 1980’s the price of two-liter bottles of Coca-Cola were on sale for 88 cents and was kept at that price in the next 70 years until 1930 despite the inflation and the
1. New-Product Pricing Strategies
2. Product Mix Pricing Strategies
- In a relationship with cost and customers’ demand
- In a relationship with competitors
3. Price Adjustment Strategies
a. Discount and Allowance Pricing
b. Psychological Pricing
c. Geographical Pricing
When marketers talk about what they do as part of their responsibilities for marketing products, the tasks associated with setting price are often not at the top of the list. Marketers are much more likely to discuss their activities related to promotion, product development, market research and other tasks that are viewed as the more interesting and exciting parts of the job.
Yet pricing decisions can have important consequences for the marketing organization and the attention given by the marketer to pricing is just as important as the attention given to more recognizable marketing activities. Here, we will talk about how Coca Cola manage to set the price for their products using different strategies.
1. New-Product Pricing Strategies
Setting prices for the first time is one of the most difficulties companies have to face at the introductory stage of the product.There are 2 broad strategies: market-skimming pricing and market-penetration pricing.
For Coca Cola, they use the latter strategies – market-penetration pricing. The strategy is about setting a low initial price to penetrate the market quickly and deeply—to attract a large number of buyers quickly and win a large market share. The high sales volume results in falling costs, allowing companies to cut their prices even further.
And this is how Coca Cola applied the strategy to their plan:
- At first, Coca Cola was free. Then it was sold in a soda fountain for 5 cents.
- Coca Cola still kept the price at 5 cents for many years.
- In the early 1980’s the price of two-liter bottles of Coca-Cola were on sale for 88 cents and was kept at that price in the next 70 years until 1930 despite the inflation and the