Pricing and Milo

784 WordsMar 13, 20134 Pages
2.2 Pricing Strategy 2.2.1 Factors affecting pricing decisions Milo is considered as a product of monopolistic competition market because there are many competitors of Milo in the market. Some of the competitors include Vico, Ovaltine, Horlicks, Dutch Lady and Nutrilite. Secondly, monopolistic competition market has free market entry and exit. This means that new competitors can enter the market easily and Milo may be easily force out of the market by its competitors. Monopolistic competition also needs a lot of money to spend on advertising to convince customers to buy their products. In fact, Milo sells all its products throughout the world and higher popularity compared to other chocolate drinks. According to the research, loyal…show more content…
Costs play an important role in setting international prices. Travelers abroad are often surprised to find that goods that are relatively inexpensive at home may carry outrageously higher price tags in other countries. Besides, such price escalation may result from differences in selling strategies or market conditions. In most instances, however, it is simply a result of the higher costs of selling in foreign markets such as the additional costs of modifying and packaging the product, higher shipping and insurance costs, import tariffs and taxes, costs associated with exchange rate fluctuations and higher channel and physical distribution costs. Futhermore, Milo also adopted Promotional Pricing strategy. Selling products is challenging when shelves are lined with similar-quality products, and customers are bombarded with advertising messages. Promotional pricing helps differentiate Milo’s product with its competitor and leverage a potential customer's attention long enough to purchase the Milo products. Promotional pricing involves lowering the price of a product, distributing coupons or offering specials, such as buy-one-get-one-free offers. For example, Milo offer promotional pricing for its product in weekly catalogue to create excitement and a sense of

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