Pricing Concepts, Effects and Decisions

Pricing is the process of determining what monetary benefit a company will receive in exchange for its products. Factors that affect pricing of any product are as follows:

·       Manufacturing cost

·       Market places

·       Competition market condition

·       Quality of product

Pricing is the revenue generating element among the 4 P’s of the marketing and is considered to be one of the major determinants of a consumers buying decision process.

Pricing strategy of products change due to factors like

·        Income level

·        Standard of living

·        Competition in the market.

Red Bull follows a pricing policy that does not differentiate its prices around the world. Even though it is not one of the cheaper priced drinks in the Indian market, they associate a certain amount of luxury to their drink which the consumers relate to while paying that extra bit. Even though it is prices almost double of its close competitors in India, it still leads the market in the sector.

A comparative pricing chart for Red Bull and its major competitors in the Indian market is as follows:

Name of the Drink	Quantity (in ml)	Cost (in Rupees)
Red Bull	250	95
Cloud 9	250	75
Gatorade	500	35
KS energy drink	250	95
Tzinga	200	25
Monster	250	80
Rockstar	500	95

Hence we observe that even though Red bull is priced at more than a lot of its competitors, it still enjoys the luxury of being the highest seller of energy drinks in the world.