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1、题目:作者学号:关键词:中文摘要KeyWords:Abstract中文摘要IAbstractIlICoca-Colahavinganinelasticdemandcurve1II HowCoca-Colamanagedtobecomesoinelasticinitsdemandwithmarketing52.1 Ownelasticity5III Cross-priceelasticity8References16WhytheDemandofCoca-ColaisInelastic?ICoca-ColahavinganinelasticdemandcurveInthisreport,Wewil
2、lexplorethepriceelasticityofCoca-Cola,useitspriceelasticitytoexplainthepreviouspricingstrategiesadoptedbyCoca-Cola,providereasonsbehinditspriceelasticityandfinallyshowsomecasesonhowCoca-Colausesitspriceelasticitytofightoffcompetition.Forthisreport,wecreatedasurveytoinvestigatehowdifferentfactorsaffe
3、ctthedemandforCoca-Cola.Thissurveywasdesignedintheformofonlinequestionnaireanddistributedamongourclassmatesandfriends.Wefinallyreceived94responsesin3days.84%oftherespondentswerelivinginChinaandtherestwereoriginallyfromothercountriesaroundtheworld.Thesurveywasalmostequallydistributedtoeachgender,as56
4、%oftherespondentsweremaleand43%ofthemwerefemale.Mostoftherespondents(80%)wereearningmorethan100kperyear.42%oftherespondentswerefrequentcokeconsumersand94%ofthemwouldconsiderbuyingCoca-Cola.Providedthebasicbackgroundinformationabouttherespondentsasabove,wemainlyfocusedonthepricingeffectbyaskingforthe
5、highestamount,scaledfrom1to10inintegers,thateachrespondentwouldbewillingtopayforabottleofCoca-Cola(500mlplasticbottle).WealsoaskedthesamequestionforabottleofPepsi-Colaofthesamesizeforcomparison.Amongallresponses,Wederivedtheaveragewillingness-to-pay(WTP)forCoca-Colatobe5.56whiletheaverageWTPforPepsi
6、-Colatobe4.82.ByplottingalloftheWTPdata,wewereabletogetthedemandcurveforbothCoca-ColaandPepsi(Exhibit1).Fromexhibit1,wecantellthatthedemandcurvesforCocaColaandPepsi-Colaarequitesimilartoeachother.However,wecanalsoobserveasharpdropinpriceelasticityforCoca-Colaaroundthepricefrom2.5to3.At3,wecalculated
7、thepriceelasticityforCoca-Colatobe-0.43,whileforPepsi-Colaitis-0.56.Itmeansthatat3pricepoint,bothCoca-ColaandPepsi-Colaareinelasticbecausetheabsolutevaluesofbothoftheirpriceelasticitiesarelessthan1.ThisconclusionremindedusofthepriceincreaseofCoca-Colaatthebeginningof2010.In2009,duetoheavyrainintheso
8、uthernpartofChina,therewasfloodinginGuangxiProvincewhichwasrankedthethirdheaviestfloodinginChinabasedonthegreatestheightofthewaves.GuangxiProvinceisthemajorproductionregionforsugarcane,themainingredientforsugarmanufacturing.In2021,GuangxiProvinceproduced68.56%ofthenationalsugarcanesupply.Duetothehea
9、vyimpactonsugarcaneharvestingfromthefloodsandmarketspeculation,thepriceofsugarrosefrom2,600pertonatthebeginningof2009toover5,000pertonatthebeginningof2010,asobsen,edintheBloombergpricechartinExhibit2.Sugarcostmakesup10%ofthesalespriceforCoca-Cola.Asaresultoftheincreasedpriceofsugar,Coca-Colaraisedit
10、spricefrom2.5to3atthebeginningof2010.However,thispriceincreasedidnotresultinasalesdecline.Onthecontrary,youcanbarelynoticethenegativeeffectofsuchapriceincreaseonCoke,ssalesvolumetrendpresentedinExhibit3.Coke,ssalesvolumebymillionsofcasessoldincreasedby2.5%yoyin2010.Webelievethatoneofthereasonsbehind
11、Coca-Cola,spriceinelasticityisitscultlikepopularityamongitsconsumers.DuringthecovidpandemiclockdownsinShanghaiin2022,householdswithinthesamebuilding/residentialzonewilltradegoodsandcreateamarketthattradesbasedonthepopularityofeachgood.TheobservedequivalenceobservedfromthattimeperiodisonebottleofCoca
12、-Cola=3piecesofvegetable=5eggs=2AAbatteries=5rollsoftoiletpaper.ExhibitLExhibit3.CokesSaIeSVOIUmeTrencl*Reference:Coca-ColaSAPsystemIIHowCoca-Colamanagedtobecomesoinelasticinitsdemandwithmarketing2.1 OwnelasticityInthispart,wefoundthatthefactorsaffectingCoca-Colaownelasticitywillbedividedinto2essent
13、ialfactors;thefirstfactoristheaddictivenessofCokeandthesecondfactorisbusinessinventionofCoca-Cola.Furthermore,thereareotherfactorsthatprobablymajorlyinfluenceditsownelasticitywhichincludedinthefirstpart.1) TheaddictivecessOfCOkeWediscoverthattheaddictivenessofCokeisthemainreasonofCoca-Cola,sinelasti
14、cityamongconsumers.WithCokeuniqueflavorscontainedwithsugar,caffeine,andallmarketingcomponents,Coca-Colamanagedtobecomethetopconsumerchoicesofcarbonateddrinks.Coca-ColaisoriginallyinventedbydoctorJohnStithPemberton,withCocaineandcaffeineaddedasadrugforcuredmanyillnesses.ItwassoldanddistributedtotheUn
15、itedStatesnationwideandbecameanaddictivedrink.NowadaysCoca-Colacontainsonlysugarinformofsucroseandcaffeinewithoutcocaine.EventhoughcocainewasremovedfromCoca-Cola,itstillhashighinfluencedtomakeanaddictiontowardconsumersaroundtheworld.NomattertherearemanypublicationsoftheestimationofexactrecipeofCoca-
16、Cola,therecipeiskeptasasecretrecipeinthevaultinworldofcoca-colamuseuminAtlantawithitsownhigh-techvault.TheoriginalingredientofCokehappenedwhendoctorJohnStithPembertonwaswoundedinAmericanCivilWar.Asanalternativetomorphine,hemadehisfirstdrinkcalled4FrenchWineCocaNerveTonicwhichhemarketedbyclaimingitas
17、adrugtocuremanyillnesses.Therefore,thefirstingredientofCoca-ColadrinkcontainedwiththesmallamountofcocainefromCocaleavesandcaffeinefromkolanutwhichisacaffeine-containingnutofevergreentreesofthegenusCola.Thedrinkwasmadeasathicksyrupandmixedwithcarbonatedwatertosoldtoconsumers hltpswww.coca-contentdamo
18、umeyusenour-companyhistorycoca-cola-a- short-history-125-years-booklet.pdf.Unfortunately,Cocainewasfirstbannedin1903soPembertonchangedhisformulaandremovedcocainefromtherecipe.However,theuseofcocaleavesisusedtomakeanaromaticflavoring.ForthecurrentingredientofCoca-Cola,itcontainedonlysugar,formedassuc
19、rose,caffeine,andothermixedofessentialoils.Furthermore,themodernsourceoftheadditiveingredientisCaffeinecitrate,whichisabyproductofthedecaffeinationofcoffeeanditsownflavoredprobablycamefromvanillaandcinnamon,whichexactedfromthearomacompoundsandfoundthevarietyofoils,cinnamon,lemon,orange,neroli,corian
20、der,nutmegandvanilla https:/pubs.acs.org/doi/! 0.1021jf504953s.AdditionalOpinionfromProfessor-WhatelsefactorsthatmakeCoca-ColahavedemandinelasticityandbeinthetopofconsumermindwhenevertheyarelookingforcarbonateddrinkFromfurtherstudy,WefoundthatProductPlacementandPoint-of-Salemajorlyinfluencedconsumer
21、decision.Coca-Colahasauniquebottlingsystemaroundtheworldtoproduce,distributethefinalbrandbeveragestotheirvendingpartnerstopenetratedintolocalmarket,forexample,CokehavedistributedandsupportedtheirvendingmachinetolocalrestaurantsinsomecountriessothatconsumerscaneasilyaccesstoCoca-Colaproductintheireve
22、rydaylife.2) BUSilIeSSIIlVSntiVllOfCoca-ColaInthispart,wediscoveredthathowCoca-ColainventeditsthebottlingsystemandvendingmachinetomakeCokemoreaccessibletothemassaroundtheworld.BottlinISUStemAtthebeginning,Cokewasservedonlyonfountain.Then,thebottlingsystembeganfromAsaCandler,Atlantabusinessman.Thissy
23、stemisthebeginningofthepopularizationofCoke.AsaCandlercreatedabottlingsystemandregulateditsbyhimselfforsolvingexcessiveofdemandforCoca-Colaproblemwhileitssupplycapacitylimitedatthattime.AsaCandleragreedtothefirstofferfromJosephBiedenharn,aMississippibusinessoperatorwhosawasteadyincreaseindemandforCo
24、ca-ColainMississippi,tobuyalargeamountofCoca-ColaundilutedsolutionfromtheCoca-ColaCompanyandsellitexclusivelyinMississippiin1894.TheBottlingSystemgivesbottlerexclusiverightstosellCoca-ColaintheregionthrougharegionalcontractwithBottler,abottlemanufacturer,whoreceivesalargeamountofundilutedliquidfromt
25、heCoca-ColaCompanyandsellsitintheirbottles.By1899,ChattanoogabusinessmanJohnLupton,TennesseebusinessmanBenjaminThomas,andMississippibusinessmanJosephWhiteheadbecameCoca-ColabottlersinUnitedState.Sincethattime,bottlersfromeachregionintheUnitedStatehavejoinedandbecameCoca-Colasbottlingbusinesssystemno
26、wadayswithmore250bottlingpartnersaroundtheworldanddistributedinretailingmorethan200countries https:/www.coca-.VenCIingMaChineThefirstCoca-Colavendingmachinewasinventedin1929bytheGlasgowBrothersmanufacturerinMuncie,Indiana.Inthe1930s,Glasscockcontinuedtoimproveitscokevendingmachine,whichwasoriginally
27、justanicebox.TheiceboxhassincebeencalledCoca-ColaJuniorandStandardcoolersandwasdesignedtobeinstalledinshops,coffeeshops,andgasstationswithminimalwallhangingorfloorspace.Inthe1960s,manufacturersbuiltvendingmachinesthatservedcannedcola.Thisisbecausetheyfoundthatcansareeasiertocoolandmanagethanglassbot
28、tles.Sincethen,thevendingmachinehasspreadthroughouttheUnitedStatesandhasplayedamajorroleingaininghugepopularitythroughoutthecountry.Therefore,vendingmachinedistributionistheimportantpointtoconnectCoca-Colaproductsandhelpacceleratepopularizationofcokearoundtheworld4Refhttps:WWWhttps:/WWWIIICross-pric
29、eelasticityPartThree-Lowcross-priceelasticityofCoca-ColaBytalkingaboutthecross-priceelasticityofCoca-Cola,wearetalkingaboutthesubstitutioneffectofCokeversusotherbeverages,particularlysparklingdrinks.Accordingtothetheoryofsubstitutioneffect,theharderaproductistobereplacedbyanotherproduct,thelowerthec
30、ross-priceelasticity,whichwouldcontributetoalowerelasticityingeneral.Duetotheresourcelimitationofthisstudy,wedidnothavethechancetorunaconsumerexperimentforCokeversusothersparkingdrinks,butwecouldstillexaminetheirinteractiosnqualitatively.Inthisresearch,weareprimarilyfocusingonthreecompetitorsofCoke-
31、Pepsi,FeichangCoke,andGenkiForest(YuanQiSenLin).WebelievethesethreebrandsareveryillusttrativerepresentatiosnofthecompeitionthatCokeisfacing,bothintermsofdifferencestagesofdeveopment,andintermsofitsreactivestrategies.Competitor1.PepsiIfoneistonametheprimarycompetitorofCoke,heorshewouldmostprobablygof
32、orPepsi.Foundedin1898,12yearsafterthefoundationofCoca-Cola,PepsihassuccessfullyestablisheditselfasadominantpresenceinCola-flavorsparkingdrinks.InChinain2021,Pepsitakearound46%marketshareinthecola-flavoredsparkling,whileCoketakes54%.SoPepsiisdoingaprettygoodjobrevenue-wise.Inoursuvery,however,Pepsiha
33、sahigherelasticitythanCokeatthecurrentpricepoint,whichis3RMB-4RMB.ItsbrandrecognitionhasbeenprovedtobeweakerthanCokeinmanywaysaselaboratedinPartyI.Asamatteroffact,Pepsi,salwayshasafollowerpricingstrategy,settingthepriceofa500mlPepsitobe0.1RMBcheaperthantheequivalentCoke.Pepsi,sfollowerpositiontoCoke
34、iscommonlyacknowledged.However,flavordifferencemightnotbethegreatestdifferentiationpointbetweenCokeandPepsi.Agoodproofisthatinthe1980Pepsiranaworld-widecampaigncalledtthePepsitastechallenge,invitingconsumerstohaveablindtasteofCokeandPepsi,leadingtotheconclusionthatoverhalfoftheconsumerspreferthetast
35、eofPepsithanthatofCoke,21.IfPepsididtastebetterthanCokeandflavorwasactuallyamajordifferentiationfactor,Cokewouldhavealreadylostinthecompetition.HowdidCokemanagetokeepitscompetitiveedge?Accordingtotheuniqueness-relevancebrandpositioningmodel,theedgeofabrandisdefinedthroughitsuniqunessandtherelevanceo
36、fitsuniquepoint.Byhavingunique,andatthesametimerelevantfeatures,thebrandwillhaveastrongedgethatwillbehardtochallengedbyothercompetitors.AndhereareexamplesofCoke,suniquenessandrelevancebuilding.1) Uniquness(exhibit3.1):IntheveryearlydaysoftheCoca-Colahistory,therewerequitealotCola-falvoredsparklingco
37、mpetingforthesamemarketasCoca-Cola.Theyallhadclosetastes,soldatthesameshops,andmostfatallytotheCoca-Colabusiness,theshapesoftheglassbottlesweresosimilarthatitwashardforconsumerstotellthebrandsapart.Asaninitiativetoprotectthebrand,Coke,sTrusteesvotedtoexpenduptoS500todevelopadistinctivebottleforCoca-
38、ColaonApril26,1915.Thebriefto8outofthe10glasscompaniesacrosstheUSsubsequentlywasasfollows:,todevelopabottlesodistinctthatyouwouldrecognizeifbyfeelinthedarkorlyingbrokenontheground,AndhencethecontourshapebottleWeseetodaythathasbecomeaculturaliconacrosstheworld.2) Relevance(exhibit3.2):Oneofthegreates
39、tachievementsofCokeinbuildingtherelevancewithitsconsumersistoblenditselfintofestivaloccasions.Before1931,SantaClausehasforalongtimebeenavaguepresenceinthemythssurroudingChristmas,withdifferentdepictions,someevenbeingscary.In1931,Coca-ColacommissionedillustratorHaddonSundblomtopaintajoyfulSantaClause
40、inredoutfitwithwhitebeardonthereindeerandabottleofCokeinhishand,fortheadvertisementoftheyear141.ThisdepictionofSantaClause,withCoca-Cola,smassiveadvertisinginvestment,hasnowbecomethemostrecognized,ifnottheonly,versionofSantaClauseworldwide.ByassociatingitselfwiththemostSiginificantfestivalforAmerica
41、nfamilies,Cokemanagedtohaveacloselinkwithitsconsumersandincreaseitsbrandloyaltydramatically.Infact,CokeplayedthesametricksinChinatoobycreatingapairofclay-dollsfortheChineseNewYearpromotion.TheelaborationinPart1abouttheelasticitycomparisonbetweenCoca-ColandPepsiprovesthatintermsofbrandbuilding,Coca-C
42、olawonoverPepsibyanupperhand.Competitor2.FeichangColaAnothercompetitorforCoca-Colaintheearly1990sinChinawasFeichangCola,acola-flavoredsparklingdrinkdevelopedbytheWahahagroup,adominantbottledwatermanufacturerwithvastdistributionchannelsdomestically.FeichangColastartedbyleveragingitsdeepdistributionch
43、annelsinthelowertiercitiesofChina,wherebackthenCokedidnothaveastrongpresence.CokeatthattimewasseenasaquitepremiumbrandfromtheU.Srsellingat2perbottle,whichwasquiteexpensivecomparedtothesalarylevelatthattime.Asaresult,eventhoughCokeenjoyedagoodbrandimage,butonlyasmallfractionofmostlyuppertiercityconsu
44、mershadthechancetodrinkCoke.Inordertoexpandtheirbusiness,thestrategyforFeichangColaandCoca-Colashouldhavebeenstraightforward:FeichangColashouldlooktolevelupitsbrandimagetowinoveruppertiercityconsumersandenhancebrandloyalty,whileCoca-Colashouldcontinuouslypenetrateitsdistributionsoastoreachmoreconsum
45、erswhohadtheneedfortheproductbutwerenotabletoaccessit.WhileCokemanagedtobuilditsvastdistributionchannelsoverthepast30years,FeichangColafailedtopremiumnizeitsbrandthroughthebrandpropositionastheColaforChinese,Nowadays,FeichangColaishardlyheardofThestoryofCoca-ColaversusFeichangColaexamplifiestheimpor
46、tanceofbuildingastrongbrand.Competitor3.GenkiForest(YuanQiSenLin)AnewlyemergingcompetitorinthesparklingindustryisGenkiForest.Featuringapeachflavorsparklingwith0sugar,0fatand0calories,GenkiForestsuccessfullyfounditsstandpointinthesparklingcategory,whichhastraditionallybeendominatedbytwomajorgroups-Co
47、ca-ColaandPepsi.In2021fullyear,GenkiForestenjoyed2%marketshareinthesparklingcategory151,whichwasaremarkableachievementforabrandfoundedonly3yearsago,andcompetingwithsomeofthetoughestplayersinthebeverageindustry.Onecouldeasilyask,isGenkiForestasubstituteofCoca-Cola?IntheconsumerlandscapedatafromtheKan
48、tarWorldpanel,researcherscategorizedthesourceofvolumeforGenkiForestinto4types:1) Newtosparklingcategory-wasnotasparklingdrinker,butwastradedintothecategorybyGenkiForest;2) Drinkmorethisyear-wasaGenkiForestdrinkerlastyear,butdrinkmorevolumethisyear;3) Switchinginfromothersparklingbrands-wasasparklingdrinkerofotherbrands,andstarteddrinkingGenkiForestthisyear4) Switchingouttoothersparklingbrands-thisisanegativesourceofvolumeforGenkiForest,representingtheconsumersthatleftGenkiForestt
