BUS FPX 3030 Assessment 3 Price Analysis

BUS FPX 3030 Assessment 3 Price Analysis

Price Analysis

Price Analysis is determining if the price asked for a product or service is fair and reasonable without scrutinizing the vendor’s precise cost and profit estimates. The objective is to identify the ideal pricing that will allow the company to generate a profit while maintaining the product’s market competitiveness. Essentially, it compares the price to known markers of reasonableness (Santee, 2020).

BUS FPX 3030 Assessment 3 Price Analysis

Pricing Strategy of Red Bull

Red Bull has adopted a price approach that distinguishes it from its competitors. Red Bull has focused on differentiation and premium positioning rather than price competition. Red Bull’s pricing strategy is founded on the value-based pricing principle, which means that the corporation charges a premium price for its product based on its value to consumers. Red Bull advertises itself as a premium energy drink brand with superior quality, functionality, and branding compared to its rivals. Red Bull’s prices are higher than its rivals, Monster and Rockstar, which pitch themselves as more economical options. Yet, Red Bull justifies its premium pricing by highlighting the energy drink’s premium ingredients, excellent taste, and unique functional benefits. In addition, Red Bull has introduced a skimming pricing strategy, which entails charging a premium for a new and creative product. This technique has helped Red Bull establish an aura of exclusivity and luxury around its brand, which appeals to consumers ready to pay a premium for high-quality goods (Roberto et al., 2019).

Pricing Strategy for Competitive Advantage

Red Bull’s price approach has contributed significantly to its competitive advantage in the energy drink industry. Red Bull has distinguished itself from its competition and cultivated a loyal client base by marketing itself as a premium, exclusive brand. A premium pricing approach can generate a perception of superior quality and exclusivity among consumers. This perception may result in greater product demand and higher price readiness. Also, a premium pricing plan might result in more substantial profit margins for the business. Red Bull can boost its profitability by charging a premium price for each unit sold (Snowdon, 2019). This improved profitability can give funds for marketing and innovation, which can assist the company in maintaining its market advantage. Red Bull has retained a strong market position and cultivated customers by developing a reputation of exclusivity and superior quality among consumers (Stacey et al., 2019). 

Analysis of Price Strategy and Its Effects on Business Success

Red Bull focuses its pricing strategy on value-based pricing, which implies that it charges a premium price for its energy drinks based on the value it provides to consumers. This technique has assisted Red Bull in differentiating itself from competitors and establishing a strong brand image, which has been crucial to its financial success. Red Bull’s premium pricing approach has effectively produced better profit margins per unit sold (Roberto et al., 2019). Red Bull can boost its profitability by charging an excellent price for each unit sold. This improved profitability can give resources for marketing and innovation, allowing the company to keep its competitive advantage and increase its profitability. 

 Red Bull’s price approach does not only prioritize profit maximization. Instead, it focuses on building and maintaining market share by appealing to a specific target niche with a premium on good quality and functionality. By charging a premium price and appealing to a specific market sector, Red Bull has distinguished itself from its rivals and developed a strong brand image, which has been crucial to its financial success (Stacey et al., 2019).

Recommendations to Improve Business Success

Red Bull should examine the pricing of rival energy drinks with a coffee flavor and set a competitive price for its new offering. A price that is too high may reduce budget-conscious consumers, while a price that is too low may imply inferior quality. Red Bull should continue to use its value-based pricing approach to retain the quality and exclusivity perceptions of its new coffee-flavored energy drink. Red Bull should consider bundling its new coffee-flavored energy drink with its other popular products, such as the original Red Bull energy drink, to develop cross-selling opportunities and enhance sales (Bennett et al., 2019).

It should implement promotional pricing strategies such as discounts, coupons, and limited-time offers to encourage customers to try the new coffee-flavored energy drink. This can help increase initial sales and recurring purchases. Red Bull should evaluate regional pricing in light of local demand and market competitiveness. This strategy can help Red Bull obtain a larger market share in locations with high demand while maintaining its competitive edge in regions with greater competition. Pricing changes can substantially impact the popularity of Red Bull’s new coffee-flavored energy drink. Red Bull may maximize revenue and increase market share by employing a price strategy that considers the competitive environment, consumer value, bundling, promotions, and regional demand (Erdmann et al., 2021).

Characteristics of Pricing System and its Effect on Marketing Mix

Red Bull’s pricing structure is a crucial element of its marketing mix. It helps position the brand in consumers’ thoughts, express its value proposition, and create a perception of quality and exclusivity. Red Bull’s pricing strategy is centered on premium pricing, which implies it charges a more excellent price for its product than its competitors, depending on the perceived value it offers. Consistency is one of the primary elements of Red Bull’s pricing scheme. The brand has made a decision to apply a pricing strategy that remains constant and uniform throughout its entire range of merchandise, which comprises not only its initial energy drink but also various other products such as Red Bull Zero, Red Bull Sugar-free, and Red Bull Editions. This uniformity reinforces the premium posture of the brand and conveys a clear message about its value. Red Bull’s pricing strategy is also distinguished by its dynamic pricing. Red Bull’s prices vary frequently based on criteria such as location, season, and special events. At critical sporting events, for instance, Red Bull may boost its prices to capitalize on increasing demand, whilst, at certain oceans, it may give discounts or promotions to stimulate sales (Chen et al., 2019). Its adaptability allows Red Bull to optimize its revenue potential by adapting to changing market conditions.

BUS FPX 3030 Assessment 3 Price Analysis

Red Bull’s sponsorship of extreme sports events, such as the Red Bull Air Race and Red Bull X-Fighters, exemplifies its pricing strategy. These events allow Red Bull to promote its brand and connect with its target audience while earning cash through ticket and merchandise sales. Red Bull’s pricing approach for these events often involves premium pricing, with tickets frequently costing considerably more than similar events. Red Bull is able to effectively position its brand as a premium product, communicate its value proposition, and maximize its income potential by employing a consistent and dynamic price approach. Furthermore, its sponsorship of extreme sports events provides a robust platform for brand development and client connection (Lee et al., 2019). Red Bull’s price structure is an integral component of its marketing mix, as it helps to differentiate the brand from competitors and increase sales and profitability 

Pricing Decision on New Line of Product 

Red Bull’s pricing decisions for its new range of coffee-flavored beverages can substantially affect the other components of the marketing mix, including place, promotion, and product. The choices made regarding the prices of Red Bull’s coffee-flavored beverages have the potential to impact the positioning and distribution of these products within the market. The pricing strategy employed by Red Bull may determine how their coffee-flavored drinks are perceived by consumers and may influence their competitiveness and market share. As such, careful consideration and analysis of pricing decisions are necessary to effectively manage and optimize the performance of these products in the marketplace. Red Bull may not be able to distribute its coffee-flavored beverages as broadly if it sets its prices too high. A product viewed as being overly expensive may be less likely to be stocked by retailers and distributors, limiting the reach of the new product line. Conversely, if Red Bull prices its coffee-flavored beverages too cheaply, it could weaken its premium image and lead to poor quality judgments. Thus, the pricing selection must strike a compromise between the necessity for profitability and the need to preserve the brand’s premium status (Tahmassebi & BaniHani, 2019).

 The advertising message may only align with the premium image of the Red Bull brand if the price is higher. Hence, the pricing decision must be consistent with the brand’s messaging and positioning. Finally, pricing decisions for Red Bull’s coffee-flavored beverages can affect the product (Chen et al., 2019). Consequently, the pricing decision must consider the product’s quality and value proposition.

Pricing System and Its Impact on Economic and OverAll Success

Red Bull’s pricing structure has significantly contributed to the brand’s economic success. Red Bull has been able to differentiate itself from competitors and build a strong brand image linked with quality, exclusivity, and high performance by adopting a premium pricing approach. Red Bull’s premium pricing approach has contributed to the brand’s outstanding profitability and sales expansion. Red Bull has been able to attain a better profit margin per unit sold by charging a higher price than its competitors. This has allowed the brand to spend on marketing and innovation and to expand into new countries and product categories (Tahmassebi & BaniHani, 2019). As a result, Red Bull has become one of the most successful and well-known brands in the energy drink sector, with an approximate 70% global market share. Red Bull’s pricing structure has substantially affected its market share. 

 Red Bull has attracted a specialized market of consumers who are prepared to pay a higher price for its distinctive brand and product experience by marketing itself as a premium product. Although facing competition from other well-known brands, this has allowed Red Bull to attain a dominant market share in the energy drink sector. The brand’s market position has been strengthened by the premium pricing strategy’s contribution to the creation of an impression of excellence and exclusivity (Bennett et al., 2019). The pricing structure of Red Bull has also had a big impact on consumer perception. Red Bull has generated an impression of quality and exclusivity among consumers by charging a greater premium than its competitors. This has contributed to Red Bull’s reputation as a premium brand linked with great performance and innovation. In addition, Red Bull’s premium price strategy has distinguished it from rival energy drink brands, increasing its appeal to consumers seeking a distinctive and differentiated product experience.


 Red Bull’s pricing structure has significantly contributed to the brand’s financial performance, market share, and consumer perception. The choices made by Red Bull in terms of the prices for their recently introduced range of coffee-flavored drinks could potentially have a significant and far-reaching effect on the other fundamental elements of the marketing mix, including product, promotion, and place. The pricing decision must balance profitability and maintain the brand’s premium positioning while ensuring the product is high quality and aligned with the overall marketing message. Red Bull has been able to differentiate itself from competitors, attract a specialized market of consumers, and establish a reputation of quality and exclusivity by adopting a premium price approach. This has allowed the brand to generate high profitability, dominate the energy drink market, and build a strong, globally recognizable brand image.


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Chen, X., Liu, Y., Jaenicke, E. C., & Rabinowitz, A. N. (2019). New concerns on caffeine consumption and the impact of potential regulations: The case of energy drinks. Food Policy, 87, 101746.


Erdmann, J., Wiciński, M., Wódkiewicz, E., Nowaczewska, M., Słupski, M., Otto, S. W., Kubiak, K., Huk-Wieliczuk, E., & Malinowski, B. (2021). Effects of energy drink consumption on physical performance and potential danger of inordinate usage. Nutrients, 13(8), 2506.


Lee, M. M., Falbe, J., Schillinger, D., Basu, S., McCulloch, C. E., & Madsen, K. A. (2019). Sugar-sweetened beverage consumption 3 years after the Berkeley, California, sugar-sweetened beverage tax. American Journal of Public Health, 109(4), 637–639.


BUS FPX 3030 Assessment 3 Price Analysis

Roberto, C. A., Lawman, H. G., LeVasseur, M. T., Mitra, N., Peterhans, A., Herring, B., & Bleich, S. N. (2019). Association of a beverage tax on sugar-sweetened and artificially sweetened beverages with changes in beverage prices and sales at chain retailers in a large urban setting. JAMA, 321(18), 1799.


Santee, J. (2020). Red bull rampage: Using pop culture to promote curiosity and a research mindset. College Teaching, 1–2.


Snowdon, C. (2019, December 31). VOX Pop: Why banning energy drinks doesn’t make sense. Papers.ssrn.com.


Stacey, N., Mudara, C., Ng, S. W., van Walbeek, C., Hofman, K., & Edoka, I. (2019). Sugar-based beverage taxes and beverage prices: Evidence from South Africa’s health promotion levy. Social Science & Medicine, 238, 112465.


Tahmassebi, J. F., & BaniHani, A. (2019). Impact of soft drinks to health and economy: A critical review. European Archives of Paediatric Dentistry, 21(1).


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