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Ask HN: What's up with Red Bull's pricing strategy?

4 points by mannicken ↗ HN
Foreword: hopefully this relates to HN as it is business/price-setting related, which could be related to startups.

Well, a 4-pack of 250 ml Red Bull cans costs around five dollars (at Walmart). That is an average price of $1.25/can.

A 24-pack of 250 ml Red Bull cans costs around 42 dollars (http://www.amazon.com/Red-Bull-Energy-Drink-Sugarfree/dp/B000MTM0WK). That means 42/24 = $1.75/can.

At Walmart also, a 12 pack of 250 ml Red Bull cans costs 20 bucks. That is 20/12=1.66 per 250 ml can.

So, 1.25 (4-pack) < 1.66(12-pack) <1.75(24-pack).

The question is: WHY?

Shouldn't a properly run pricing strategy encourage customers to buy more, not discourage them? What's going on exactly?

12 comments

[ 2.8 ms ] story [ 24.7 ms ] thread
davidw
If you drink a lot of that junk, you need something like this:

http://journal.dedasys.com/2008/10/17/programmer-fuel

I think I paid 2 euro for that whole bottle. Wow was I wired that day...

ErrantX
and I bet productivity plummeted :P

Top Tip - stimulants like that (and I include coffee there) dont work twell at all: try orange juice instead, it will work much better and for longer. Follow it up with plenty of water (even minor dehydration makes you tired).

One glass of OJ every half hr plus lots of water will keep you awake longer than a can of Red Bull etc. :)

progLiker
Sorry for posting several places, but when I really need to stay awake getting things done, I eat something with much curry in it. Having fried garlic aside ... tasty. And pours strong coffee.. And believe me that works!
pasbesoin
Try mixing half orange juice and half water. Very refreshing, and it doesn't impose as much of a "sugar rush" and crash.

I used to drink this after heavy exercise -- I was never into sports drinks (amongst other things, the food coloring in them upsets my stomach). I found it very effective; it also stopped my stomach from cramping at the sudden introduction of a large quantity of water.

jgrahamc
Perhaps Red Bull takes into account some discrete pricing jumps that people might have. For example, suppose a single can of Red Bull costs $1.50 (you haven't given that price, but I think it's important) and I go in and see that 4 cans cost $5. So I see that it's a good deal and it's just a five dollar bill.

But when I get to 24 packs I'm in a whole different league and not thinking of an individual note. Now we're talking serious money.

Or perhaps Red Bull buyers can't do arithmetic.

noodle
typical single pricing for a can is $2. also, typical pricing for a 4 pack is $6-8. walmart is specifically pricing them lower than "market", if what the OP is saying is true.
chanux
In local stores (in my country) a Redbull costs me around $2.5. Looks like you guys are very lucky :)
progLiker
It isn't legal were I live! :-)
lacker
1. You can't compare Walmart to Amazon and expect the same prices.

2. Although larger quantities are usually cheaper by the unit, sometimes that is not true. Maybe the store is running low on inventory for the larger one, or high for the smaller one. Maybe they cut the price on the smaller one to act as a loss leader - I know drinks are often in this category.

teej
Point 1 is incredibly important. Walmart achieves low prices in part by putting pricing pressure on their suppliers. I have never seen a 4-pack of Red Bull for $5 anywhere, it's always $6 or $7. My guess is that Walmart is setting that price point, not Red Bull.
gmonk
The original Thai version of Red Bull can still be found for much cheaper at your local asian grocery store. They will typically carry several off-brand versions as well for even less.
[dead] ram1024
Yes! get you some krating DAAAANG, pop a few amphetamines with it as well and you can drive that sip-laaw all night long