Pricing Concepts, effects and decisions

Pricing Concepts, effects and decisions

Pricing is one of the major aspects of a brand to breakthrough in the market. Pricing the energy drink at Rs 25, Tzinga is cheaper than rivals Gatorade and Red Bull largely on account of the advantage offered by domestic manufacturing and lower packaging cost.

The biggest benefit for Hector Beverage to breakthrough in the market is the price of the product, as they are local brands and most of the other energy drinks right now in India are imported and import duties on the finished product is around 60%. We import our ingredients and pay duties close to 10%. So that has helped Tzinga offer lower prices.

Neeraj Kakkar and James Nuttal were part of wharton’s MBA programme which ostensibly didn’t recommend forking out large sums of money on instinct alone. So they took the benefit of being a local manufacturer and got instant price and compared to other product. They name their price and breakthrough in the market. As per the fact of price elasticity, the demand is already high for the product and its emerging in the market.