UNIT 3 COCA COLA - MKTG 300 - COCA COLA Alyssa Davis...

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COCA COLA Alyssa Davis December 2, 2012 I. Pricing Strategy
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The different aspects of pricing can be broken down into five different groups: company objectives, customers, costs, competition, and channel members. Using these categories when assessing pricing strategies will help a company be successful in reaching their target market. 1) Company objectives: Coca-Cola company’s vision states that they want to “maximize long-term return to shareowners while being mindful of our overall responsibilities” (The Coca-Cola Company), making them a profit-oriented business. By definition, this means they focus on target profit pricing, maximizing profits, or target return pricing. Since they directly state that they want to maximize profits they focus primarily on economic theory, using mathematics to create a model that observes factors to predict and explain profits and sales. 2) Customers: After they choose which company objective to roll with, Coca-Cola needs to anticipate how customers will react in the market to their pricing layout. To accomplish this, they must first look at the demand for the product from the consumer standpoint. In this case, the demand for soda is still relatively high. With a high demand, prices tend to drop. With this information, the price for Coca-Cola products will tend to stay relatively low. 3) Costs: To price products effectively, firms must also look at the costs they will incur during production.
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