BUS FPX 3030 Assessment 3 Price Analysis

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BUS FPX 3030 Assessment 3 Price Analysis

The market competition of global energy drink shows that Red Bull currently occupies a dominant position by deploying a premium pricing policy and a beautiful brand image. Also, as Red Bull plans how the new line of coffee-flavored energy drinks will be conceptualized and marketed, the question of pricing this particular product line comes out distinctly. Pricing: The former helps determine customer choice while the latter is a critical determinant of the success of a product in the market. BUS FPX 3030 Assessment 3 The purpose of this analysis is as follows In this work, it is proposed to analyze and discuss an evaluation Red bull has made of its price positioning relative to competitors and Recommendations for positioning the new products with the flavor of coffee energy drinks.

Understanding which strategies Red Bull has adopted from its pricing strategy in relation to similar products and how this strategy aligns with its business objectives will help this analysis to make recommendations on the best approach towards optimizing price and making more value out of it. In this report, Red Bull’s current pricing process and its success in gaining Customers’ advantage, and its influence on the overall marketing communication mix will be discussed. Moreover, we will investigate how the new pricing tactic could impact the company’s economic outcomes and further recommendations that will improve the product’s position in the market.

Pricing Strategy

The Red Bull case also uses the high price skimming strategy in the industry because it wants to make a statement that is targeting its energy drinks as a market niche. Cata: This strategy means that Red Bull is able to charge higher prices for their products as compared to other brands like Monster Energy and Rockstar. BUS FPX 3030 Assessment 3 Monster and Rockstar also have a price strategy that cuts down its price for its products which are usually below $1. 50 to $2. 00 per can. It means that to capture a higher market share this particular pricing strategy is set in a way to capture the attention of price-conscious consumers. Nonetheless, the price model adopted by Red Bull plays around the company’s brand image and uses the feeling of quality and efficiency to set higher charges (Kotler & Keller, 2021). Therefore, Red Bull’s offering at the premium price is has a competitive advantage because the company enjoys high brand recognition and its product offering is widely perceived to be different from those of other competitors.

The linkages made to extreme sports and the events of the brand’s promotion also enhances the brand’s positioning as a premium product; in addition, the availably of flavored energy drink line, including coffee-flavored energy drink, also maintains the brand’s appeal and exclusivity (Armstrong & Kotler, 2020). Also, the price of Red Bull is relatively higher than that of other energy drinks that contribute to the perception of higher value among the consumers hence the consumer loyalty and willingness to pay for the bull brand. While other players tend to concentrate on the price wars, Red Bull has proven itself to be special as it harnesses its outstanding brand image and a product that dominantly differs from its competitors when it comes to profit margins.

Company’s Price Strategy

In the case of Red Bull, there is a clear example of this because its energy drinks are in the market as premium, with high prices. This strategy enables Red Bull to sell its products at considerably higher prices to those of its counterparts like Monster Energy and Rockstar. As to the choice of the pricing strategy, both firms compete on the price: their drinks cost less (usually between $1); 50 to $2. 00 per can. This pricing strategy is meant to appeal to the consumers, who are sensitive to price changes, and hence increase the market share of the business (Smith & Smith, 2022). However, BUS FPX 3030 Assessment 3 pricing strategy of Red Bull seems to create a notion of premium product that contributes towards the brand image with people willing to part with their money to get what they consider the best in terms of quality and efficacy.

Basically, the notion of competitive advantage for using the premium pricing approach stems from the fact that Red Bull is a highly recognizable brand, and the product is in a category of its own. Endorsements through association with extreme sports and world events keep the brand in the niche market point of view that of exclusivity, extending it further through new variants like coffee flavoured energy drink. Furthermore, higher price also helps in creating the perception of higher value among the customers which in turn makes them loyal to the brand to a larger extent and ready to pay more (Smith & Smith, 2022). Albeit, rivals rely heavily on price-based competition Red Bull proactively utilizes its brand, within the frame of product differentiation, which allows it stay on top within the given industry and achieve desirable margins.

BUS FPX 3030 Assessment 3 Pricing System

Another notable feature of Red Bull marketing mix is the that uses a premium pricing strategy that has a wide impact on its marketing mix. It also involves fixing high prices to its products that reflect a high quality and the fact that not all clients can afford them. High pricing enables the company to build premium image that reflects its brand strategy as being associated with high performance and prestige (Kotler & Keller, 2021). It also enhances the company’s positioning by enabling the perception of greater value per product sold thus translating to increased earnings that can be channeled back to the marketing, enhancement of products, and distribution channels (Monroe, 2019). Regarding the product strategy, it is worth mentioning that the company follows a premium pricing policy which is quite explicit in their case. On this note, by pricing the energy drink higher than the traditionally priced energy drink, Red Bull claims the high ground and consistency with its new coffee-flavored energy drinks’ line. Majority of these beverages are positioned and advertised as luxurious items with unique taste and quality functional attributes from traditional economy ones, which makes them valuable for consumers (Armstrong & Kotler, 2020). This pricing strategy keeps the focus on the aspect of premium and performance oriented aspect of the product to appeal to the consumers.

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Pricing Strategy’s Impact on the Economic Success

The relevant pricing strategy particularly the premium pricing strategy in Red Bull has greatly affected the economic and overall performance, market share and consumer attitudes. Paying a bit higher price for Red Bull signifies that the client is buying a high-quality product, from a leading firm, hence the firm is able to attain higher profitability margins, a strong competitive edge.

 Economic Success

Another important aspect of the pricing strategy is that Red Bull is able to sell at a higher price compared to its competitors hence resulting in higher profit margins. BUS FPX 3030 Assessment 3 price strategy also helps to sustain the brand image and exclusivity is also well rewarded with good returns. This way, Red Bull benefits from the higher scenes per unit which permits the company to dedicate a lot of money in advertisement, new product development and expansion. It is argued that this financial flexibility is critical so as to sustain a competitive advantage and for continued business operations (Monroe, 2019). For instance, the amount accruing from the high-consumer-priced coffee flavoured energy drinks could be retained and used for increasing the market publicity of the product and thus increase the market perception of the product as unique from other similar products in the market.

 Market Share

Whereas, volume profitability serves to increase market share while at the same time increasing pricing puts into consideration the market share. This means that compared to cheaper brands such as Monster or Rockstar, Red Bull’s higher price puts off price-sensitive consumer who are willing to pay more for this brand. They are known to employ stiffer price mechanisms so as to cover a wider market share (Smith & Smith, 2022). Similarly, the price of Red Bull might limit the market share of this product, as they are more expensive compared to other brands and this may affect the number of people who can afford to take this product often. Nonetheless, Red Bull has a high brand recognition and a customer base that is willing to stick to the brand and also overlook such issues because of the next reason; Red Bull offers exclusive and high performing products and its customers are always ready to pay for the brand.