Most of the international beverage companies such as Coca Cola and Pepsi have a strong base in the nation which makes the competition existing in China extremely tough. Multinational companies primarily target China as one of locations for expanding customer base facilitated by the nation’s growing economy (Vargo & Lusch, 2004).The market of China is largely characterized by low priced products. In order to capture and set up proper market base in China it is essential that the firm develops unique marketing strategies. Drink-Kola is planning to sell its products near schools, colleges and universities where the percentage of young population is significantly high. Chinese consumers in terms of soft drink consumption prefer products that are light and have low sugar content because of the high consciousness regarding health. This acts as a unique feature for the brand as compared to its competitors. It is expected that the Diet Kola will have a significantly greater market share in China than other products of the same brand (Turnbull & Valla, 2013).Chinese markets are characterized with low priced products. If Drink-Kola sells its products in China at the same price as it does in Australia and the US, it will be considered expensive by most consumers. As a result the brand will fail to achieve adequate market base. Hence it is essential that Drink-Kola sells its products in the market at a lower price. Hence it is important for the company to reduce its production cost for catering to the Chinese market. The company can achieve lower prices by achieving economies of scale in production. Such a pricing strategy would help the company to expand their market base. It has been noticed that consumers in China are largely driven by prices rather than quality and quantity. Therefore in order to be able to provide its products are a lower price, the company may consider lowering the net quantity of soft drink per bottle (Chetty & Campbell-Hunt, 2004).The pricing strategy of Drink-Kola for entering into the markets of China is largely penetrative. Penetrating pricing strategy involves selling products at a low price in order to attract a large number of customers. This type of a pricing strategy is suited for markets having a large number of competitors. It is also necessary for the company to ensure that the establishment cost is kept low so the net cost of
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Turnbull, P. W., & Valla, J. P. (2013). Strategies for international industrial marketing. London: Routledge.
Vargo, S. L., & Lusch, R. F. (2004). Evolving to a new dominant logic for marketing. Journal of marketing, 68(1), 1-17.
Walters, P. G., & Samiee, S. (2003). Marketing strategy in emerging markets: the case of China. Journal of International Marketing, 11(1), 97-106.
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