Pepsi pricing strategy

Pepsi pricing is based on consumer’s perception of Value. Cold drink prices are market determined. But Pepsi never got involved in a price war with coke as it would have eaten into the brand equity of Pepsi as consumers perceive that the basic price they pay for brands like Pepsi is justified as its more about the refreshing cola experience rather than a just a thirst quencher.

Pepsi is thus competitively priced to its major competitors, offering a better tasting product than other brands at a competitive price.But this is due first to the pressure in the beverage industry regarding pricing due to constant rise of  costs in transportation, ingredients and work force.

Moreover, the partnership with Wal-Mart impacts on its pricing strategies because of Wal-Mart urge to maintain low prices. So the company works hard on maintaining current prices by reducing their operating costs and adapting its processes.

Sources:
http://fr.slideshare.net/RyanBraganza/pepsi-marketing-mix#btnNext
http://www.marketing91.com/pepsis-brand-report-card-kevin-lane-keller/ 
http://www.marketingteacher.com/case-study/pepsico-case-study.html#