4.

Price Pepsi being a company that emphasizes on product quality tends to sell its products with pricerange from moderately low to high prices, depending on the use and the targeted customers.Pepsi decides its price on the basis of competition. Fortunately, Pepsi is very flexible and is ableto reduce its price very quickly. For example, in the month of Ramadan whenever Coca-Colareduces their prices, Pepsi also responds through price cuts and then eventually after thatperiod, it raises its price. Unfortunately, Pepsi has also made several losses in taking risks.Though lowering the price would attract customers, PepsiCo wasnt able to cover up the costincurred in production, and therefore resulted in losses. However, PepsiCo is now a full-fledgedand growing company, and has covered all its losses and is growing at a rapid rate. Direct Price Discrimination: This is evident in the international operations of Pepsi.Domestically, direct price discrimination is based on distribution channel segmentation, Indirect Price Discrimination: Quantity discounts along with price coupons used insupermarkets are obvious indirect price discrimination tools Pepsi can use. However the mosteffective indirect price discrimination tool Pepsi has is in fact its brand name. The Pepsi brandequity actually allows the company to maintain pricing power. Is product image translates intoperception for higher quality vis--vis private labels and substitute drinks.Pepsi may enhance its price discrimination capability through creating bundle offers torestaurants and convenience stores. The Frito Lay Brand, controlled by PepsiCo through FritoLay North America, is the undisputed leader in the salty snack segment. If Pepsi bundlessnacks with soft drinks as part of its pricing strategy aimed at fast food restaurants andconvenient stores, it may be able to increase sales and obtain better shelf space from retailers.This may prove a very important tactic in trying to re-claim share in the fountain drink segment,a large part of which was lost after Pepsis exit from the restaurant business in 1997