Price Analysis

Create a detailed analysis of the price for a new line of products.

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 can have a real impact on the product’s success.

Preparation

Read Chapters 6 and 19 in your textbook about consumer decision-making and pricing concepts in order to prepare for this assessment. Here is a website that can help provide background on Red Bull’s current pricing strategy:

Premium Pricing: The Ins & Outs of a Successful Brand 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 analyze the pricing strategy of Red Bull in relation to the 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?
• Provide an analysis of 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 in terms of pricing decisions that may improve business success for the new coffee flavors?
• Accurately analyze the pricing system along with its characteristics and effect on the marketing mix.
  • Describe how Red Bull’s pricing decisions on its new line of coffee-flavored drinks affect the other Ps in the marketing mix: place, promotion, and product.
• Analyze 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 three other sources 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 three other sources related to the content of the assessment.
• Length of paper: Approximately 3–4 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 3: Examine the relationship of basic marketing strategies to business success.
  • Analyze the pricing strategy of a company in relation to its competition.
  • Analyze a company’s price strategy and its effect on business success.
  • Analyze a pricing strategy’s impact on the economic success of a company.
• Competency 4: Apply effective marketing planning and implementation.
  • Address assessment purpose in a well-organized text, incorporating appropriate evidence and tone in grammatically sound sentences.
• Competency 6: Evaluate management implications of marketing and sales plans.
  • Analyze a pricing system along with its characteristics and effect on the marketing mix.