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The Drinker Company Energy Drink “The Machine“ Pricing Strategies

The price set impacts the profit margin per unit sold, and the higher values give a higher profit per piece; however, higher fees lead to lower sales levels that can lower, or cancel, the profit because higher costs per unit increase as one sells fewer units (Ali & Anwar, 2021). Four basic pricing strategies are applicable – premium, skimming, economy or price, and entry with several other variations. A product is a commodity and adopts a cost-based pricing strategy directly and positively impacts profit margins.

Prices are based on price, competitive-based, cost-effective, and variable prices for all frequently used models, depending on the industry and business model. Price is the key to business success, and it is not easy to create in a way that assurances profitability. Businesses should continuously review prices to increase profit margins while keeping expansion strategies in line (Faith, 2018). Prices can affect everything about how your product is marketed. That is why it is essential to understand the importance of a pricing strategy. A meager price may not produce enough interest or be sufficient to make a profit.

Setting the price too high leads to losing customer interest, where a product pricing strategy considers costs and sets a price that exploits profit, supports exploration and expansion, and stands up against contestants (Li & Li, 2018). When pricing physical products, we recommend these pricing strategies: cost-plus pricing, competitive pricing, prestige estimating, and value-based pricing.

Price Skimming explores depreciation as a product price strategy in which a company charges the maximum initial price that clients pays and drops it over time. A pricing method where the manufacturer sets a high presentation value to attract buyers who have a strong desire for the product and services to purchase, gradually lowering the price to attract the next and next layers of the market. Many products were quite expensive in the 90s when they were new but have since depreciated; hence, a skipping strategy helps one make more money.

It is an approach based on identifying opportunities and times when customers are willing and able to pay more and then charge a higher customer dollar. Valuation itself is illegal but can be interpreted as inappropriate in some cases. As the demand for first-time customers is met and competition enters the market, the company lowers its price to attract another, more sensitive segment (Li & Li, 2018). The skiing strategy gets its name from the “skimming” consecutive layers of cream, or customer segments, as prices are reduced over time.

A Company makes revenue = A + B through Q1 sales in the above price strategy. With their following prices, the company generates additional revenue = C through sales of Q2-Q1. The company generates total revenue of A + B + C, with total sales for Q2.

Psychological pricing (example, $9.9 instead of $10.0) The concept of price consciousness is that customers will learn a slightly reduced price and treat it as lower than the actual price. An example of mental pricing is priced at $ 3.99 but brought to the consumer as $ 3 and not $ 4, and it costs $ 3.99 as less than $ 4.00. It is a combined effort of pricing, marketing, and sales to create an attractive promise that attracts consumer attention and makes the product so desirable that the consumer can wait another day to buy it.

Psychological pricing methods are nothing new, and savvy marketers have used these strategies throughout history to influence consumer behavior over the long term. Before price tags, store clerks had to learn the art of cheating to make deals that were equally beneficial to customers and the store, and since price tags appeared (Faith, 2018), retailers have used pricing power to achieve similar results. However, just because an idea is commonplace does not mean it is worthless. They are so fundamental in pricing, marketing, and sales that you must understand how these strategies work.

Bundle pricing Bulk Price is a business strategy where companies collect a few products together in bulk and sell them at a single price, rather than pricing each item on each item. It means that bulk is now an individual product. Common examples of integration include new car options and valuable food in restaurants. Companies sell bulk at a lower price than they would otherwise be charged in the bulk pricing system. of products of your choice in the bulk of the product. Combining is appealing to consumers who benefit from a single purchase, which is prone to the value of the corresponding offerings.

Bulk integration helps to increase efficiency, thus reducing marketing and distribution costs. It allows the consumer to look at a single source that offers fewer solutions. Combining enables you to sell more and reduce marketing and distribution costs. Instead of marketing all the products, you can combine related products and market them as one product (Faith, 2018). By packing different items together, you only need one barrel to store them instead of different drums. The downside of this is that it can lead to the consumption of your products that can be purchased in bulk.


Ali, B. J., & Anwar, G. (2021). Marketing Strategy: Pricing strategies and their influence on a consumer purchasing decision. International Journal of Rural Development, Environment and Health Research, 5(2), 26-39.

Faith, D. O. (2018). A review of the effect of pricing strategies on the purchase of consumer goods. International Journal of Research in Management, Science & Technology (E-ISSN: 2321-3264) Vol, 2.

Li, Y., & Li, V. O. (2018, December). Pricing strategies with promotion time limitation in online social networks. In 2018 IEEE/WIC/ACM International Conference on Web Intelligence (WI) (pp. 254-261). IEEE.


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