Create a detailed analysis of the price for a new line of products.
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Introduction
Red Bull’s marketing manager has tasked you with preparing a plan for introducing a new product line of energy drinks with a coffee flavor.
You've already received positive feedback on the product and place analysis you've conducted. Now you're being asked to submit a detailed analysis of the price for this new line of products. You're feeling good about the work you've done so far, but you know the overall marketing plan isn't complete yet, and that your pricing analysis needs to be thorough and support the earlier product and place analysis you developed.
Companies need to decide which pricing approaches and strategies they will apply in order to both make a profit and make the price attractive to the final consumer—you. If the price is too high, Red Bull’s sales could drop, and if the price is too low, its profits could be impacted, since there are competitors in the marketplace. Since Red Bull is the market leader in energy drinks and is now marketing a new line of coffee-flavored energy drinks, please examine their pricing strategy and provide your recommendations.
Overview
Continue with the next part of your marketing analysis and focus on the next of the 4 Ps—the pricing decisions for Red Bull. In this analysis, you will also make a recommendation for how Red Bull should handle pricing for its new line of coffee-flavored drinks. Pricing influences your buying decisions, and companies and their competition use pricing and the product life cycle to compete for your attention and dollars. The recommendation you make will not only reflect the rest of the overall plan for the product line, but it can also have a real impact on the product's success.
Preparation
To assist you with this assessment, please refer to Chapters 4, 10, and 12 in Principles of Marketing for in-depth information on consumer decision-making and pricing concepts. Additionally, the provided reading list offers valuable insights into pricing strategy.
- Assessment 3: Pricing Strategy.
If you need guidance in locating additional information about Red Bull, please ask your faculty member.
Instructions
Create a price analysis in which you do the following:
- Accurately describe the pricing strategy of Red Bull in relation to their competition.
- Which pricing strategy does Red Bull use, and how does it compare to similar products in the product category?
- Which pricing strategy is being used to effectively create a competitive advantage?
- Describe the price strategy and its effect on business success.
- Explain whether Red Bull’s pricing strategy maximizes profitability or market share?
- What recommendations can you make regarding Red Bull's pricing decisions that may improve business success for the new coffee flavors?
- Examine the pricing strategy's impact on the economic success of the company.
- Describe the effect of the pricing strategy on the overall success of the company.
In the analysis:
- Incorporate information from one other source related to the content of the assessment. Cite any resources you use.
- Be sure your analysis presents a focused purpose through strong organizational skills. Also, be sure it presents evidence through strong paraphrasing/summarizing, appropriate tone, and sentence structure.
Planning
Consider the following as rough guideposts for setting aside the time you need to do your work. You will want to adjust these as you learn more about your own pace and working style.
- Research and reading: 4 hours.
- Interactive activities: 30 minutes.
- Writing: 6 hours.
- Revising: 2 hours.
Additional Requirements
- Written communication: Communication should be clear and well organized, and support a central idea, with no technical writing errors, as expected of a business professional.
- References: References and citations are formatted in a consistent style, using APA. See the Campus page Evidence and APA. Also refer to the Business Academic Professional Document Guidelines [PDF], which provide basic formatting and APA guidelines you should follow to create attractive and usable documents not just within your business program but in the workplace as well.
- Resources: Incorporate information from one other source related to the content of the assessment.
- Length of paper: Approximately 2–4 typed, double-spaced pages, in addition to the title and references pages.
- Font and font size: Times New Roman, 12 point.
Competencies Measured
By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and scoring guide criteria:
- Competency 1: Describe the basic marketing models for a business or organization.
- Discuss a pricing system along with its characteristics and effect on the marketing mix.
- Competency 3: Describe the relationship of basic marketing strategies to business success.
- Describe the pricing strategy of a company in relation to its competition.
- Describe the pricing strategy impact and how it benefits the company.
- Describe a company's price strategy and its effect on business success.
- Competency 5: Communicate effectively using professional standards embracing diversity, equity, and inclusion.
- Convey purpose, in an appropriate tone and style, incorporating supporting evidence and adhering to organizational, professional, and scholarly writing standards.