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    Pricing Strategy

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    Rupam Chakraborty
    Cadbury uses various pricing strategies to attract customers of all ages. Some products like Dairy Milk Silk and Bourneville target luxury customers with high prices, while others like Gems, Shots, Perk, Eclairs and Five Star have medium to low prices. Cadbury sets higher prices for new products and adjusts prices based on competition, market factors, and package size. The company also offers combo packs and discounts during festivals to encourage sales. Key strategies include price skimming for new luxury items, psychological pricing to influence customers emotionally, competition pricing to match rivals while outperforming them through advertising, and economy pricing through varied product sizes.

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    Pricing Strategy

    Uploaded by

    Rupam Chakraborty
    1K views2 pages
    Cadbury uses various pricing strategies to attract customers of all ages. Some products like Dairy Milk Silk and Bourneville target luxury customers with high prices, while others like Gems, Shots, Perk, Eclairs and Five Star have medium to low prices. Cadbury sets higher prices for new products and adjusts prices based on competition, market factors, and package size. The company also offers combo packs and discounts during festivals to encourage sales. Key strategies include price skimming for new luxury items, psychological pricing to influence customers emotionally, competition pricing to match rivals while outperforming them through advertising, and economy pricing through varied product sizes.

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    Cadbury uses various pricing strategies to attract customers of all ages. Some products like Dairy Milk Silk and Bourneville target luxury customers with high prices, while others like Gems, Shots, Perk, Eclairs and Five Star have medium to low prices. Cadbury sets higher prices for new products and adjusts prices based on competition, market factors, and package size. The company also offers combo packs and discounts during festivals to encourage sales. Key strategies include price skimming for new luxury items, psychological pricing to influence customers emotionally, competition pricing to match rivals while outperforming them through advertising, and economy pricing through varied product sizes.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    1K views2 pages

    Pricing Strategy

    Uploaded by

    Rupam Chakraborty
    Cadbury uses various pricing strategies to attract customers of all ages. Some products like Dairy Milk Silk and Bourneville target luxury customers with high prices, while others like Gems, Shots, Perk, Eclairs and Five Star have medium to low prices. Cadbury sets higher prices for new products and adjusts prices based on competition, market factors, and package size. The company also offers combo packs and discounts during festivals to encourage sales. Key strategies include price skimming for new luxury items, psychological pricing to influence customers emotionally, competition pricing to match rivals while outperforming them through advertising, and economy pricing through varied product sizes.

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    Pricing Strategy:

    The taste and quality determine the price of products of Cadbury. The company adheres to
    various pricing strategies to attract customers of all ages: from youth to old age. There are a
    few products like Dairy Milk Silk and Bourneville, which cater to luxury customers and have
    a high price, while others like Gems, Shots, Perk, Eclairs and Five Star are available in the
    medium to low price range. The pricing strategy for the marketing mix of Cadbury is
    influenced by the competition, market and size of the package. The company also provides
    offers to customers based on product size. Cadbury has adopted this pricing strategy in every
    target demographics. They often sell a group of products in packages as presents or launch
    special combo packs during the festive seasons for the public. These combo packs are being
    priced with special offers to encourage buyers to purchase them.
    Here are some of the strategies adopted by Cadbury for Pricing elaborated as follows:
    Price Skimming:
    Here the company sets a comparatively high price on its products to specifically target a
    particular group of customers. These products are mainly aimed at luxury items for high-end
    customers. It is also adhered to during a new launch or change in the product design. This
    strategy is most effective for products with inelastic demand. Some products falling in this
    category are: Dairy Milk Silk, Oreo Biscuits and Cadbury Bourneville, wherein Cadbury tries
    to keep its prices higher than the competitors.
    Psychological Pricing:
    The main aim of this pricing strategy is to influence the customers emotionally rather than
    have any rational basis behind it. It can be observed in the consumer market and not in the
    industrial market. This strategy can be identified by the price sign at the '– 9' ending. Cadbury
    once adopted this in the bar chocolates, but the bars' sizes were reduced. It was based on a
    cost reduction campaign of the firm.
    Competition Pricing:
    Cadbury extensively studies its customers, market scenario and competitors. Then it
    strategically marks up its products at a reasonably similar price. But the twist is the firm
    advertises its products over different platforms, making it known to a large mass that outwits
    the competitors. This approach creates a positive impression on the mind of customers, and
    people prefer it to competitors.
    Economy Pricing:
    Cadbury has a huge range of variants of its main products to reach a large audience. As an
    example, Cadbury Dairy Milk is manufactured in several sizes and marked at different prices
    targeted to various consumer segments. The products like Perk and Five Star also fall in the
    category of economic pricing.
    Cost Plus Pricing:
    This pricing strategy aims to maximise profits for the company by taking the accurate details
    of accounting data. It is very reliable and precise and also needs a simple markup procedure.
    But ignoring demand and competition is one of the major disadvantages of this method.
    Positioning Pricing:
    This strategy is adopted to set the price of Cadbury products within a specific range that is
    optimal for most consumers. This is preferentially suitable for chocolate bean selling.
    Demand-Based Pricing:
    Cadbury assesses the purchasing power of potential customers and trades its products at
    estimated prices they deem customers willing to pay. This strategy ensures Cadbury's profits
    and enhances its reputation and brand image. Also, it aids in gathering positive feedback from
    customers.
    Bundle Pricing:
    Cadbury also practices packing various products within a single package and selling them at a
    lower cost. The company offers such packages at a discounted price tag, specially during
    festive seasons. Cadbury Celebrations can set an example of this strategy.

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