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Kinder Surprise Pricing_Notes

Course: H ADM 241, Fall 2008
School: Cornell
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The #7. Kinder Egg pricing strategy is one that evokes the mission of the chocolate maker in making the product; we have a special, unique chocolate. The chocolate eggs made by Kinder are ones they consider to be a unique aspect of the European marketing mix. The chocolate is significant in its popularity, and thus the company capitalizes by having a more expensive product. Kinder surprise eggs come in bags of 12....

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The #7. Kinder Egg pricing strategy is one that evokes the mission of the chocolate maker in making the product; we have a special, unique chocolate. The chocolate eggs made by Kinder are ones they consider to be a unique aspect of the European marketing mix. The chocolate is significant in its popularity, and thus the company capitalizes by having a more expensive product. Kinder surprise eggs come in bags of 12. Because Kinder surprise eggs can not be legally sold in the US, one must have them shipped in order to receive them. Yes, this act would technically be illegal. But to get a feel for their prices, one can look at the prices in other markets geographically. In Europe, the price of 12 Kinder eggs is 10.90 euros. This comes out to be about $13 US. Nestle, a world famous chocolate manufacturer, makes a fifty ounce bag of Nestle Chcolate Easter Eggs. This bag contains many more, smaller chocolates, and is priced at $19.50. It is hard to compare Kinder eggs to other chocolate Easter eggs because it is a bigger egg, and is not sold by weight of the bag but by quantities of the egg. The average price of $1 per egg, though, is certainly higher than in Nestles 50 ounce bag. Thus Kinder Surprise is stating that each individual egg is special, and that these carefully crafted eggs, not mass produced. The pricing strategy also builds on Kinders vision that each egg has its own significance. Similarly, in a line to be produced in India, Kinder was going to price the egg at 25 Indian rupees, which equals about .50$. According to Marketing Practice: The Worlds largest Online Resource on Indian Brands, Kinder Surprise is priced at around Rs 25, which I consider too for premium a chocolate brand. The writer goes on to say, I feel that the brand has got its initial pricing wrong. Indians are too choosy to spend Rs 30 on a chocolate as small as an egg. 1 First of all, it should be noted that the prices in India are different than the prices in Europe. Thus Kinder Surprise is segmenting its prices geographically. The price for an egg in India is lower than that of one in Europe. The company may have lowered their prices in India because the economic market there is not as strong. In terms of price sensitivity, the product is very popular in Europe, and it seems that as long as the egg does not become absurdly priced it will be sold well. It is a more expensive Easter egg, but one that comes with exclusive benefits. Obviously, according to the statement made about the Indian market, its popularity is not the same worldwide. As the article goes on to say, Although the brand has established its position in global market, it is in for a certain surprise in the Indian market.With this high price and little surprise will Kinder Surprise can make it big in Indian market will be an exciting story to watch. 1 But its price strategy between Europe and India, based on that quote, has stayed the same. Kinder understands that its a specialized, premium chocolate. The customers are not paying for mass production, but specialization within each egg. The customer is paying for the chocolate, the instructions, the toy, and hopefully for Kinder the culture. 1. Marketing Practice: Worlds Largest Online Resource on Indian Brands. 20 Aug. 2007. Marketing Practice. 27, November, 2008. <http://owl.english.purdue.edu/owl/resource/557/09/>
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