I wrote on effects of recession on consumer behavior in one of my previous posts. In this era of great economic depression, customers want value for money and as such, cost based pricing or efficiency pricing are of great concern to customers as well as marketers.
Well, marketers well understand the implications of recession on consumers' purchase behavior. As such, PepsiCo has come up with a great strategy, that positions the brand on cost-based parameters. It says "Plenty in Twenty" (Twenty Mein Plenty), which is for 600ml. On contrary, Coca Cola sells at Rs. 22/600ml.
I think Pespsi has a real advantage here. Firstly, its positioning clearly indicates its concern towards customers in recessionary times. Secondly, Just Noticeable Difference (JND), in favor of Pepsi may be apparent. Though a difference of Rs. 2 is petty, but I think it is above JND for Coca Cola. This is because the drinks from PepsiCo and Coca Cola hardly have a distinguishing feature. As such, pricing can be a factor in favor of PepsiCo.
Well, sales will ultimately tell the impact of the current pricing strategy of PepsiCo.
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