Effect of Pricing of New Coca Cola Soft Drink Products on Sales Performance of Coca- Cola Company in Nyahururu Town

Abstract

A sales performance review of new soft drinks products introduced by Coca cola in Mount Kenya region, established that only 15% have succeeded, 55% have performed poorly, 17.5% have failed completely and another 12.5% have exhibited an abnormally high artificial growth. However, there is scanty and inconclusive empirical data that would explain this trend of Coca cola products within Nyahururu town in Kenya. The purpose of this study was to examine the effects of price as marketing mix variables of new Coca-Cola soft drinks products on the company’s sales performance in Nyahururu town. The specific objectives included examining the effects of pricing, of new Coca cola soft drinks products on sales performance of the company in Nyahururu town. To achieve these objective, hypotheses was formulated and tested empirically. This study was based on the marketing mix theory by Borden. The study adopted a descriptive research design that gathered both quantitative and qualitative data. The target population comprised of 375 managers and owners of outlets selling Coca cola soft drinks in Nyahururu town. The sample size was 75 which was 20% of the target population as per postulations from Mugenda & Mugenda (2003), which was arrived at through stratified random sampling. Out of this, 73 responded meaning the response rate was 97.3%. The study used a questionnaire to obtain primary data whose validity was enhanced through discussions with the supervisors. Test-retest method was used to achieve reliability during a pilot study conducted in Subukia town. Cronbach’s alpha was used to test the reliability in which 0.789 values was obtained which was acceptable.  Quantitative data was analyzed using the Statistical Package for Social Sciences (SPSS) version 20 computer software and presented in frequencies, percentages, and tables for clarity. Qualitative data was used to supplement interpretation of quantitative data. The study established that pricing of new products had an influence on sales performance of the existing Coca cola products. The, study recommends that the pricing of new products should compare favorably with existing products so as to avoid cannibalization and intra-distribution channel competition. The study has added to the body of knowledge that could benefit students, researchers and academicians interested in this area of study.

Keywords: Market Mix Variable, Pricing, Coca Cola, Sales Performance, Products