Effective Strategies for Pricing a New Cola Drink

This report proposes effective marketing strategies for pricing a newly launched cola drink. It discusses competitive pricing, premium pricing, penetration pricing, and the importance of segmentation, targeting, and positioning.

MARKETING
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Marketing is referred as a managerial process in which the administrative bodies of
respective organisations are required to work in a profitable manner with a significant goal of
satisfying their consumers. It mainly comprises with certain requisite number of activities where
the concerned firms are primarily accountable to identify the need based demand of their users
with a subsequent measure of anticipating them in their routine functionalities. The below report
is with a similar consideration of proposing an impelling plan of marketing to a soft drink
manufacturer (Belch and et. al., 2014). It is however based on some fine strategies of pricing a
newly launched product of cola drink. Pricing is basically referred to be a sophisticated
consideration of each and every organisation where they are certainly required to acquire their
operational and production expenditure by earning a liable amount of profit and revenues from
the clients and satisfying their assumptive preferential needs.
Pricing of goods and services by the firms exists with a dual factor of sales and marketing
where a considerable ratio of selling the products will eventually lead to higher the rate of
profitability. It is thence considered to work with a relative aspect where the Cola Company is
too advisable opting from some effectual strategies of pricing its new cola drink. There are
numerous accessible actions plans for prominently costing the goods and services with a
succeeding approach towards the consumers (Luther, 2011). It fundamentally means that the
enterprises are required to win the heart of the users by together generating a liable amount of
income from their selling. This requires applying an apt strategic plan of costing the products by
using some proficiently inbuilt reformations of this ensuing world. It precisely matters in case
the Cola Company is upcoming with a new product for its customers that will be significantly
impacted by their previous brand image as well.
With a precise reference to the same, Competitive pricing of goods is suggested as the
most effective strategy of pricing the new cola drink by the Cola Company. This means to fix the
cost of goods in comparison to the prevailing number of competitors in the active number of
market (Fillis, 2010). It is also known as market based pricing of goods where mostly a similar
natured product exists with a different dimension of servicing it to the clients and customers.
This however depends upon the differential nature of businesses where on referring to the
present status of Cola Company, it is willing to launch a new cola product. It is where this Cola
enterprise is therefore required to deal with some of its biggest contenders like Pepsi and Coca-
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Cola, etc. Such competitive strategy of costing its new cola drink will hereby require it to make a
primary evaluation of the prices that are often being charged by its ascertained number of
competitors into the industry.
Competitive pricing is considered to be one of the best strategies in order to become the
leader of the actively associated markets. It subsequently gives three more alternatives to the
solicitous firms where they can either refer to sell their goods at a same price range, or with a
slightly low or high rate of costing (Kennedy, 2006). It is however referred to be the most
effective strategies for small retailers who are first time presenting with a similar sort of product
into the market that is already running from a quite long time. The new cola drink also represents
an alike situation of the Cola Company who is coming up into a battling ground of huge
competition with some equivalently strong rivals like Pepsi and Coca- Cola enterprise. This
method of pricing is together associated with a tenuous risk of diminishing the margins of profit.
It is mostly in case when the vendor is opting for an action plan of low pricing as a vital mean of
gaining a competitive advantage from the existing number of contenders.
This gives rise to yet another accordant strategy of premium pricing into which the
present Cola Company will mainly refer to set a price that is higher than its ascertained number
of rivals (Kotler and Armstrong, 2005). It is however referred to be a less effective strategy for
the companies who are working with highly proportioned industries. On contrary to which, it is
often referred to be an efficacious strategy in case this Cola Company is featuring some different
sort of attributes into its new cola drink that is beyond imagination. It can play as a big
competitive advantage for the designated Cola Company where for example, it has manufactured
its drink by using less chemical content in it. Also, for instance, it has used a major proportion of
some healthy content like fruits in it to give it a black colour of cola, rather than using any
general content of colour chemical into it like other analogous industries. Such unique
characteristic of products are proven to given some early resultants of profits with high number
of shares and revenues in the market.
Premium pricing is vitally known as prestige or image pricing where the companies
which are considering to pursue it mainly refers to inculcate something best into their products
that is unique in comparison to their leading challengers (Luther, 2011). Due to which, such
strategies are assured to give some prominent outcomes where the executing firms are together
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required to maintain the inherited image of their brand with a succeeding future prospect. It
hereby exists with a counter formulation of penetration pricing of goods and services that is often
referred by the firms who are entering the market with a common agenda of selling some
correspondent products that are already being sold by the other similarly natured entities. It
sometime relates to a kindred association of promotional pricing as a primitive mean of fetching
a liable interest of the clients and users. It is basically done with a considerable thought of
distracting them from the procedures of the existing number of contenders into a perfectly
competitive market.
Penetration pricing is often considered to be a switching approach by the sellers where
they primarily initiate with a low pricing of goods and services (Madsen and Pedersen, 2013).
This works as a prime source of attracting new customers towards a newly introduced product
into the market. It is with a fundamental sense of raising awareness in consumers where the
designated Cola Company may hereby incur an initial loss at the commencement of their low
pricing strategy (Park, 2004). However, it is also considered to be an ensured strategy for
entering into a prevalent market by simultaneously up-beating the predominant nature of other
affiliated industries. Promotion is however a comparative transition of pricing as a vital mean of
drawing a sensible attention of the users with variedly supportive means of advertising. This is
mainly to broadcast the active existence of a new cola product into the industry with some
profound acknowledging means for the users. A likeable activity of promotion is mainly done
through some considerable measures of advertised via print methods by posting the ad in famed
magazines and newspapers.
Advertisement via online methods is also referred to match with the advance cogitation
of the users where they largely prefer to be progressive into the activities of social media. Sales
promotion is one of the best suited method to attract the potential number of users for buying a
product (Rust and Verhoef, 2005). It is often referred to be a short term tactic for boosting up the
sales of new goods and services which are already exiting into the market. It has another vital
advantage of encouraging the users to try the products from a newer brand by significantly
making a switch. Such short term technique often leads to build a long term relationship with the
consumers where market fragmentation is also referred to work with a relative approach of sales
and marketing. It is where the Cola Company is also required to focus upon some other prior
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enforcement of segmenting the targeted set of market by together placing the product at a proper
location via some factual measures of positioning.
Segmentation is hereby considered to be the primary step of marketing by dividing huge
market in small number of segments. It further exists with certain distinct methods to focus on all
components of both these marketing forms. A demographic segmentation is however referred as
one of the most effectual forms of bifurcating market by significantly aiming at age, gender,
income level and socio-economic class of individuals (Zimmerman and Blythe, 2013). For
example, here, the soft drink manufacturer may refer to two leading segments of youngsters and
old age people for commencing the subsequent tactics of marketing. It is mainly due to its fine
assistance in the pricing of goods and services with an ease of concluding an efficacious decision
of pricing strategy for each of its targeted segments. Targeting is referred as the next subsequent
procedure in which soft drink manufacturer is required to assess the potent factors of all its
intended segments of market.
It will aid the quoted entity to cognize about an apt strategy of investing the marketing
resources in a correct manner. Positioning is referred to yet another major formulation of market
fragmentation into which the Cola Company is required to make a precise placement of its
product and services in order to reach the extent of all its potent number of users. Distribution is
a relative factor of it where the designated enterprise should prefer to sale its goods via both
impelling measures of direct and indirect selling (Organizsational capability, 2015). On
concluding the entire summations of a perfect marketing tact for the Cola Company for its new
cola drink, competitive pricing is hereby recommended being the most preferential strategy. It is
mainly due to its further alternatives where it can precisely refer to adapt the other relative
aspects of selling the price at a considerable price in order to attain a liable income from its sale.
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REFERENCES
Books and Journals
Belch, G. E., et. al., 2014. Advertising: An integrated marketing communication perspective.
McGraw-Hill Education.
Christopher, M., Payne, A. and Ballantyne, D., 2013. Relationship Marketing. Routledge.
Fillis, I., 2010. The art of the entrepreneurial marketer. Journal of Research in Marketing and
Entrepreneurship. 12(2).pp.87–107.
Kennedy, D. S., 2006. The Ultimate Marketing Plan: Find Your Hook. Communicate Your
Message. Make Your Mark. 4th ed. Adams Media.
Kotler, P. and Armstrong, G., 2005. Principles of Marketing. 11th ed. New York: McGraw-Hill
Publishing.
Luther, W. M., 2011. The Marketing Plan: How to Prepare and Implement it. AMACOM Div
American Mgmt Assn.
Madsen, E. K. and Pedersen, K., 2013. From price theory to marketing management: Danish
contributions 1930-1960. Journal of Historical Research in Marketing. 5(2). pp. 172–191.
Park, H., 2004. US retailers' cooperation with manufacturer promotional support. Journal of
Fashion Marketing and Management. 8(4). pp.412–424
Rust, R. and Verhoef, P., 2005. Optimizing the Marketing Interventions Mix in Intermediate-
Term CRM. Marketing Science. 24(3). pp.477-489.
Zimmerman, A. and Blythe, J., 2013. Business to Business Marketing Management: A Global
Perspective. Routledge.
Online
Organizsational capability. 2015. [PDF]. Available through:
<http://www.jma.or.jp/keikakusin/pdf/english_report.pdf>. [Accessed on 28th July 2016].
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