Pepsi is in an industry which is dominated by the two biggies – Coca cola and Pepsi. Thus the pricing of Pepsi is competitive. In a war between Coca cola and pepsi, neither of the brands can win if they enter a price war. This is because the cost of manufacturing and transportation is huge. Thus, these companies are likely to enter a brand war rather than enter a price war.
Expenses related to transportation, ingredients and labor continue to pressure the beverage industry toward price increases.
PepsiCo’s drink pricing strategies may be heavily influenced by its working relationship with Wal-Mart whose low price themes put pressure on PepsiCo to hold down prices.
The company strives to cut or maintain current prices by cutting overhead and re-engineering the manufacturing process.
PepsiCo is expanding its use of inexpensive and recyclable plastic bottles; nevertheless the company has instituted some price increases in recent years, specifically in its overseas markets such as New Delhi and Duba.