I’m trying to study for my Marketing course and I need some help to understand this question.
JAMBA JUICE, DEL MONTE, COCA COLA
Price is the only element in the Marketing 4P that generates revenue.Product, Place, and Promotion all cost money.Price is the only element that makes money, but perhaps the most intricate.
- Income Per Capita is different in different countries
- Purchase Power Parity plays a role
- Pricing requires basis of pricing
- Cost Plus Pricing
- Markup Pricing
- Demand Based Pricing
- Competition Based Pricing
- Then there are various pricing strategies
- Differential Pricing
- New Product Pricing (Penetration, Skimming)
- Product-Line (Captive, Premium, Bait)
- Psychological (Bundle, EDLP, Prestige)
- For highly priced item (e.g. I-phone) the pricing has to be same regardless of Income Per Capita to avoid Arbitrage
- Finally, the most challenging of all is the consumer’s “Perception of the Value”
The objective of this assignment is to evaluate how pricing should be determined in different countries, depending on the all the challenges listed above.
Let us assume that you are a consultant being asked by three clients: Jamba Juice, Del Monte Ketchup, and Coca Cola.
All these clients wish to research the probability of market entry into the cities they do not have presence in yet.Jamba Juice wishes to enter Lagos, Nigeria. Del Monte Ketchup wishes to enter Khabarovsk, Russia.Coca Cola wishes to enter San Salvador, El Salvador.These cities are major cities in their respective country that once these companies succeed in these major cities, they plan on expanding to other major cities.
Average household income in these cities are not nearly that of average household income in the U.S.Jamba Juice, Del Monte Ketchup, Coca Cola are perishables, so arbitrage concept does not apply.These products are consumables that should be within the range of what average household income should be able to afford…or should they?
The most challenging aspect of pricing is “consumers’ perceived value.”In the U.S., even free products are not wanted if consumers do not see the value in possessing them. On the other hand, just having a logo or emblem put on a product can make the product be highly desirable with premium pricing.
- Researching the consumer base in Lagos,
- What is your group’s consensus on the perception of Jamba Juice?
- If you were given a task of increasing the perception to a super-premium brand, what would you need to do?
- Would you change the product? If so, how?
- Understanding that Jamba Juice being an American product, Nigerians’ sentiment towards the U.S. will have some impact on the perception of the product.How would you control this?