The chosen company is Coca Cola Company. The business corporation is based in the United States and is the leading manufacturer of carbonated beverages. The business corporation has very many brands such as Fanta, Dasani and many others. Coca-cola is a dynamic corporation that continues to invest in many countries and keep innovating new products and improving the existing products. These activities make it essential for the corporation to develop effective pricing strategies to allow market penetration. In the new locations and when introducing new products, there are difficulties to penetrate the market. Effective pricing strategy will be useful in enhancing the market entry.
Products go through several stages from the introduction into the market, the growth phase, maturity phase and finally, the decline phase (Kotler & Keller, 2016) . During all these phases, it is essential to have effective pricing strategies guiding the various products. During the product developmental stage, pricing is not a primary concern. The main emphasis is on the generation of prototypes and product testing. The need for effective pricing strategies is generated in the introduction phase. This is a very critical stage where the products can swim or sink. It is the phase where the product is gaining the people's attention, and the prices should serve to attract the people to make a purchase. At the introduction phase, several pricing options can be applied. Price skimming is an effective strategy where the prices offered during the introduction are relatively lower and hike as the product awareness and uptake increases. When a product penetrates the market, the next phase is growth where products gain new markets and new demographics. When the demand for the product reaches a point of saturation, this is referred to as the maturity stage. In the maturity stage, the sales of the product illustrate a steady increase (Pride & Ferrell, 2016) . Many customers have realized the value and are less price sensitive. The eventual phase of the product life cycle is the decline phase. In this phase, the product is not attractive to many people and is being edged out by some newer versions.
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Coca cola face a challenge in pricing with reference to the determination of price in the different countries the company operates. However, during the introductory phase, there are two appropriate pricing strategies. To cater for the costs incurred in the product research and development, a premium price can be attached to a product, especially when a product represents new technology. The other pricing strategy available is low prices at the introductory phase to attract the attention of the target customers (Kotler & Keller, 2016) . This strategy is accompanied by offering samples for promotion. The growth phase allows for the lowering of prices due to increased production and lowers costs. The lower prices facilitate opening up of new markets in this phase. At the maturity stage, the product has become more stable. At this phase, the company can make high profits and offering the company an opportunity to differentiate their products from other competitors. Price drops accompany the final decline stage as the company seeks to maintain the product in the market.
Several factors affect the target customers pricing decisions. Technology plays a critical role in increasing the value of the product. Technology is essential in improving the quality of a product and offers an ideal opportunity to strengthen customer relations. Higher value influence customers when making pricing decisions. Customers tend to pay high for the products they perceive their value to be higher. Regulations have impacts on the demand and supply patterns which in turn influence the price. Regulations cause high demand for a product cause the prices increase, which could discourage customers from making purchases. Market information is very critical in influencing the customer's decisions on pricing. Customers make decisions of pricing depending on the information they have about a product. The customers dislike, and likes, inclinations and motivations have a huge impact on the customers buying decisions.
Products value has a significant impact on pricing strategies and profitability. Higher product value encourages customers to buy the products, the increase in the product sales increase the company profit levels. Higher value products attract higher prices that further increase the profits (Pride & Ferrell, 2016) . Low product value discourages clients from making purchases lowering the product sales and profits. Marketing segmentation ensures that a product reaches the target customers at their specific wants and needs. Through market segmentation, companies utilize their resources effectively by making proper pricing strategies. The pricing strategy applied by the coca-cola company is influenced by the availability of a wide variety of similar products that can serve as substitutes. In different geographical locations, the prices are different, which has been effective in addressing the needs of the customers differently. Coca Cola Company applies technology to increase efficiency in communication.
References
Kotler, P., & Keller, K. L. (2016). Marketing management (15th global ed.). England: Pearson .
Pride, W. M., & Ferrell, O. C. (2016). Foundations of marketing . Cengage Learning.
