The Impacts Of Pricing In Marketing Of Coke Drinks In Enugu State


Price can be as a sacrifices made to acquire a given product, which may be monetary or non monetary. Kelechi (2004 : p 77)

But if you have good product, don’t spoil it by trying to sell it too cheap, in other words give the customer the price which he wants and remember that it is no necessary that the cheapest price will not give him the greatest satisfaction (Gabor 1980).

Berkowitze et al (2003 pg 344) sees price as the money or other consideration (including other goods and services) exchanged for the ownership or use of goods and services.

Adirika (1996 pg 59) price is monetary expression of value. That value is created in utility, utility is an expression of usefulness while usefulness is based on the potential for need and satisfaction. Value and utility culturally based while needs and wants have cultural, psychological, sociological and physiological bases. Therefore price as an ultimate expression of need and want satisfying potential of an item of product or service has cultural, psychological, sociological and economic implication in marketing.

Chukwu (2009 pg 179) defined price as the monetary value or worth of a product. The higher the value the higher the price of a product in relation to other product. it is part of the bundle of satisfaction which the buyers buy and it comes in various forms, fees, bill etc. in other word, price is the amount for which product, services, idea is exchanged for sale regardless of its value or worth to the potential purchases. Also that price can take number of assumed names, the rent pay, the NITEL, EED bills. In its broadens

Sense, price include tine frustration and anything else that the buyer has to give up to obtain and use a product.

Stanton (1994 pg 296) also sees price as the amount of money and/or other items with utility needed to acquire a product.

Kotler and Amstrong (2013 p9 211) defined money as the amount of money charged for a product or service. Also that price is the sum of all values that customers give up to gain the benefit having or using a product or service.

Moreover that price, will still remain one of the most important element that determines a firm market share and profitability. Also they went ahead to describe price as the only elements in the marketing mix that produces revenue to all other element represent cost, finally price pays a key role in creating customer’s value and building customer’ relationship’



The objectives of the company must be put into consideration before selling price of a product should be fixed. Also given the different pricing situations and constraint of pricing environment, marketer’s price to achieve given objective in both the short and long run. Therefore the following are the objectives which pricing is expected to achieve in a company firm;

A     Profit Maximization: the general objectives of company/ firm are to maximize profit. However profit maximization may be hard to attain given the possible reaction of existing competitors new entrants into the business and government.

B      Stabilize market price: an objective to stabilize price means that the marketing manager attempt to keep prices stable in the market place and to complete on non-price consideration. Stabilization of margin is basically a cost plus approach in which the manager attempts to maintain the same margin regardless of changes of cost.

C      increase sales : sales-oriented pricing objective seek to boost volume and market share. A volume increases is measured against a company’s own sales across specific time period. A company’s market share measures its sales against the sales of other companies in the industry

D      To prevent competitors Entry: sometimes it is important for a manufacturer to prevent the possible entry of a competitors that earning profit in the short run , this is done by lowering his price of the product, companies try to discourage the competitor. From the profit the manufactures adjust the price of product.

F      To survive: this happens when a company faces lack or demand for its product over a capacity of facing stiff competition. Its objective may be to survive in the business. In such circumstances a company may set low prices so that it can stay in the business for the time being



The pricing of a product or service is a key element in determining the profitability of the business; however it is not always too easy to get it right.

Furthermore pricing of a product has some benefits, importances which are;

  1. Pricing helps to determine the acceptance of the product, the market thereby, will determine the future of the product in the market.
  2. Also it is important because it serves as a tool used by companies to increase the demand of their product and reduce when they could not serve the entire market.
  3. Pricing also help many company/firm to regulate the competition in the market
  4. Price act as a regulator of economy because it influences the allocation of the factors of production.

e   Through price and consumers of a product van determine the quality of the product.


The price for a product may be influenced by many factors which can be categorized into two main group which are;

a   Internal factors

b    External factors


When setting price marketers must take into consideration several factor which are the result of company decisions and actions. To a large extent this factors are controllable by the company, and if necessary can be altered. However while the organization may have control over these factors making a quick change is not always realistic. For instance product pricing may depend heavily on the productivity of the manufacturing facility (e.g how much can be produced with a certain period of time). The marketer knows the increasing the productivity can reduce the cost of producing each product and thus allow the marketer to potentially lower the products price. But increasing productivity may require major changes at the manufacturing facility that will take time.

The internal factors affecting include;

  1. The company’s marketing objective
  2. Marketing mix strategy
  3. Cost
  4. Organizational consideration
  5. The company marketing objectives: before selling a price, the company must decide on its strategy for the product. if the company has selected its target market and posting carefully, then its marketing mix strategy including price, will be fairly straight forward.

II Marketing mix strategy: pricing is only one of the marketing mix tools that a company uses to achieve it marketing objective. Price decision must be co-ordinated with product design, distribution and promotion decisions to form a consistent and effective marketing program. Decision made for other marketing mix valuables may affect pricing decisions to position the product on high performance quality will mean that the seller must charge a higher price to cover high cost

III Cost

cost set the floor for the price that the company can charge. The company wants to charge a price both covers all its producing, distributing and selling the product and delivers a fair rate of return for its effort and risk. company’s cost may be an important element in its pricing strategy. Companies with lower cost can set lower prices that result in greater sales and profits



A company cost takes two forms, fixed and variable.

  1. Fixed cost: are costs that do not vary with production or sale level.
  2. Variable cost: these are cost that vary directly with the level of production.

Iv    Organizational consideration: management must decide who within the organization should set prices. Companies handle prices in a variety of ways in industrial market, sales people may be allowed to negotiate with customers within certain price range. Even so top management set the pricing objectives and policies and it often approves the prices proposed by lower level-management or sales people.


There are a number of influencing factors which are not controlled by the company but will impact pricing decision. Understanding this factor requires the marketers conduct research to monitor what is happening in each market the company serves since the effect of this factor can vary by market.

External Factors Influencing Factors Include:

  1. Elasticity of Demand: marketers should never rest on their marketing decision. They must continually use their market research and their own judgment to determine whether marketing decisions need to be adjusted. When it comes to adjusting prices, the marketer must understand what effects a change in price is likely to have on the target market demand for a product. Elasticity deals with three types of demand sceneries.
  2. Elastic demand: products are considered to exist in a market that exhibits elastic demand when a certain percentage changes in price result in a large and opposite percentage change in demand.
  • Inelastic demand: products are considered to exist in an inelastic market when a certain percentage change in price results in a smaller and opposite change in demand.
  • Unitary Demand: this demand occurs when a percentage change in price result in an equal and opposite change in demand.
  1. Customer expectation: possibly the most obvious external factor that influence price settings are the expectation of the customers and channel partners, this is because when it comes to making a purchase decision customers assess the overall “value” of the product much more than the assess the price therefore when deciding on a price, marketers need to conduct customers research to determine what price point are acceptable, because beyond this points could discourage customers for purchasing.
  2. Competitive and other product: marketers will undoubtedly look at market competitors for indication of how price should be set for many marketers of consumer product researching competitive price is relatively easy particularly when internet search tools are used. Prices analysis can be somewhat more complicated for product sold to the business market since final price may be affected by a number of factors including if competitors allow customer to negotiate their final price.
  3. Government regulation: marketers must be regulation that impacts how price is set in the market in which their products are sold. These regulation are primarily government enacted meaning that there may be legal ramification if the values are not followed. Price regulation can come from any level of government and vary widely in requirements. For instance, in some industries government regulation may set price ceilings (how high price may be set), while in other industries there may be price floors. (how price may be set) additional areas of potential regulation include deceptive price discrimination, predatory pricing and price fixing.

Source: knowledge source for marketing (1992)


The sellers pricing freedom varies with different types of market economist recognize (4) types of market, each presenting different pricing challenges.

They are as follows:

  1. Under pure competitive market: the market consists of many buyers and seller trading in a uniform commodity. Such as wheat, copper and financial securities. No single buyer or seller must affect the market going price. In a purely competitive market, market research, product development pricing, advertizing, sales promotions play little role or no role. Thus sellers in this market do not spend much time on market strategy.
  2. Under monopolistic competition: the market consists of many buyer and sellers who trade over range of prices rather than a single market price. A range of price occurs because sellers try to develop different offer for different customer segment and in addition to price. Freely use branding advertizing and personal selling to set their offer apart.
  • Under oligopolistic competition: the market consists of a few sellers who are highly sensitive to each other’s pricing and marketing strategy. Because there are few sellers, each seller is alert and responsible for competitors pricing strategies and moves.
  1. Pure monopoly: the market consists of one seller, the seller may be government. In a private regulated monopoly or private regulated non- monopoly pricing is handled differently each case.

Source: Kotler and Armstrong (2013)


The process of determining what pricing customers will involves examining a number of basic determinants which shape and constraints the process.

These are listed below:

  1. Nature of Market competition: the more competitive will ultimately, a market can develop into a state of what economists called perfect competitive in which competitive leads to prices being established at the point at which supply equals demand, certainly, the room for price variation on the part of the suppler will have to estimate the reaction of their competitors to any change in price that they may wish to make. And they will have to forecast the reaction of customers. To such customer’s sensitivity towards price as price elasticity of demand especially when the consumers equate price and quantity law price may be perceived as a reflection of low quantity.
  2. Customer types and market segment: where customers can be clearly differentiated by segment, when the product positioned on the segments should be appropriate to the particular demand, requirement and usage context associated with the segment. Price may be only one of relevant factors which determine the nature of segment demand and influence the acceptability of product targeted on that demand. For instance, a market which emphasizes product availability alternatives. Management must identify those characteristic of segment demanded that are most important to target customers and build in appropriate product attributes total constituent of segment demand.
  3. Consumer behavior and perception; research into consumer and buyers attitude perceptions and behavior has shown three (3) things namely;
  4. The relative importance of product shaping customers and buyers attitude towards particular product or purchases situations
  5. The relative importance of product prices in determining the outcome of actual purchase behavior.
  • The relative role of product price in shaping basic consumers perception on value or money.


       The following are the classification of pricing, they are:

  1. Cost plus pricing: here the firm adds a percentage to cost as profit margin to come to come to their final pricing decision.
  2. Cost based pricing: here the firm takes into account the cost of production and distribution, they then decide on the mark up which they will like for profit to come to their final pricing decision.
  3. Penetration pricing: this happen when the organization set a low price to increase sales and market share. Because once market share have been captured the firm may well then increase their price.

4         Skimming price: this is a type of pricing where the organization sets an initial high price and slowly lowers the price to make the product available to a wider market. The objective is to skim market profit layer by layer.

5         Competition pricing: this is setting price in comparison with competitors. Really, a firm has three options and these are pricing lower, price the same or price higher. Some firm offer a price matching service to match what their competitors are offering.

6           Premium pricing: here the price is set high to reflect the exclusive of the product.

7           Optional pricing: the organization uses this to sell optional price extras along with the product to maximize its turnover.


In general terms, policies are the general rule of intended to keep organizational decisions in line with its objectives while strategies give the guideline on how to achieve the objectives

There are two main pricing strategies they are:

  1. Skimming and penetration: besides there are other variations such as price leading, prestige pricing and customary pricing. The skimming strategy: it is used to reach the few core customers of a newly introduced product who are ready and willing to pay the high piece tag for the product. for instance coca-cola plc this strategy was used to introduce its 35cl bottle but was successful enough (limited demand) in the sense that customers switch to other competitor’s brand because customers are price sensitive especially in Enugu State. In the event of a company making success of this strategy, the benefit includes fast recovery of developmental cost, limited demand until full capacity is attained, creation of image of a high class quality product, and the opportunity to adjust price downward to the advantage of the advantage of the company. The disadvantage is that high initial price attracts competitors.
  2. The penetration strategy: it is used to achieve high volume sale through low entry pricing. Unlike the skimming pricing strategy in which appeals are to be directed to the core customers. Penetration strategy appeals to the market, the objective is to realize high sale volumes, which will result in high total revenue. The advantages of the strategy is mainly achieving large sale volumes and discouraging competitors. The advantage is that the developmental cost may be recouped over a long time. It is necessary to note that coca-cola plc adopted one or both of two strategies, but the one commonly used are

Price leading: this strategy is engaged by companies, who are leaders in their respective industries. They may have assumed this leadership positions through financial strength, innovative, high quality product, promotional efforts, such companies have been accepted by others in their respective industries as leaders. And no other bottling company would want to price above the leader.

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