Essay: Rejuvenating Pricing Strategy of Pepsi
Pepsi has always been introduced in very competitive prices. With the outburst of World War I, recession and inflation engulfed the activity of many businesses drastically. Fluctuation in sugar prices and a decline in per capita, urged the company to reduce its prices to sustain in the problematic situation. It came up with a rejuvenating pricing strategy; a 12 ounce bottle for just a nickel (replacing 6 ounce bottle for 5 cents).
This strategy earned huge profits for the company. Pepsi continued to beat the competitors on its price. However with the introduction of coke, and the instance of both companies being engaged in cola wars, company had to face severe competition and the prices of both companies are almost same in every country they operate. (PepsiCo, n.d)
Pepsi’s distribution network and product placement is extremely strong. Its foundation was setup by Caleb who built a strong franchise system for delivery of Pepsi. PepsiCo was one of the first companies in USA which introduced a motor vehicle distribution system and replaced the old horse wagon system. Pepsi continued its sales and growth by the use of various marketing strategies, even in hard and slack times and by 1976 Pepsi’s sales were largest in America’s super markets (PepsiCo, n.d).
Today Pepsi is found in every grocery shop, departmental store, retail store, super markets, canteens of educational institutes, tuck shops of offices, everywhere. Given its huge global expansion, Pepsi is sold in a large number of countries with a specialized marketing strategy to cater the needs of a particular society.