The Demand Of Coca-Cola

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Abstract Coca-Cola is the number one non-alcoholic beverage in the world and is also the golden standard in the beverage industry. Over the pass decade carbonated beverage sales has decrease which has lead Coca-Cola to seek for new opportunity and investor. Contribution of US soda sales in Coca-Cola’s revenue could decline to less than 15% by 2020. By the end of 2017 Coca-Cola is looking to refranchise two-thirds of its bottling territories in North America. The outcome of Coca-Cola refranchise two-third of its bottling territories will reduce the revenue to Coca-Cola sales of its products, however the operating margin will increase. Also, this could reduce the percentage contribution by the U.S to Coca-Cola overall revenue. Supply and…show more content…
This type of relationship can be explained by the law of demand which states that as price of a good increase or decreases, the quality demanded of that good falls or rises all other things being equal. The following graph demonstrate the demand curve of how many items of a product or service a consumer would like to purchase at different prices. Now by having the product at a lower price, the more a consumer is likely to buy. For that same reason it can be concluded that the price is one major factor of the product demand. Figure 1 demonstrate that when Coca-Cola price goes down from $2.00 to $ 1.50 the demand of quality rises from 4 to 6. When Coca-Cola wants to get their consumers attention price is no the only factor that matters and sure it doesn’t determinate how much people will pay for the product. Figure 2 demonstrate how any change in one of the other determinants causes demand to rise or to fall by shifting the whole curve to the right or the left. Other factors that determinates of demand…show more content…
• Expected future prices: Price Elasticity of Demand When the price of a good rises the quality demanded falls, if we think about how much does it falls. To figure out by how much it falls we must calculate the price elasticity of demand which is calculate by how responsive demand is to rise in price. Also, the price elasticity of supply measures the responsiveness of quantity supplied to a change in price. • Availability of substitutes: If the price of Coca-Cola was to increase, we can say that a lot of consumers would turn to other kind of soft drinks and that bring a result of the quality demanded of Coca-Cola will decline. But if the price of Coca-Cola falls a lot of consumers will change other soft drinks to Coca-Cola • Passage of time: Time influences the elasticity of demand for a co • Luxury or necessity: There are just some consumers out there that really don’t care of the cost of Coca-Cola and they are ending up by buying the product. • Definition of the market: Marketing takes full effect for the brand. For example, the care a coke commercial and the super bowl ad every
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