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Points Against a Five Rupee Price Point

The Retailer Problem

Most of the retailers in case of cold drinks generally would always charge Re.1 extra from the printed amount on the bottle - the reason given - Cooling charges in spite of the fact that they are provided with refrigerators by cold-drinks' companies.
This in effect many a times, instead of accepting Rs.4 customers, go in for buying something worth Four-rupees instead of collecting four one rupee coins or 2-two rupee coins, which happens to be heavy for carrying in a wallet. This curbs a chance for the customer to further use his five-rupee coin, which he would have got otherwise.

Competition

Products already available in the one-rupee or two-rupee segment will have to face competitions when introduced in the five-rupee price segment. For example - Shampoos are available as low as one-rupee and as high as five-rupee per sachet.

Counterfeit Five Rupee Coins

Recently, there has been news that some counterfeit five-rupee coins have been found. It is hard for a normal person to distinguish between the real and the fake one. If it is not controlled by the government, it could really hamper the preference that a five-rupee enjoys.

Future Of Five Rupee Price Point

With ever increasing inflation, overheads and raw materials costs, the price of product will have to be raised which could see an emergence of a new price point. But when the company does that, it will have to face competition from the one already in that new price segment as well as the one at five-rupee price segment.

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* Contributed by -
Mayur Mayank,
PGP-II (2004-2006),
Bharathidasan Institute of Management, Trichy.