Coca Cola Demand Analysis

The Coca-Cola company is the world’s number one beverage company, It offers more than 500 bevarge brands, offering more than 800 choices for consumers. The total value of all its brands is around 20 billion-dollar, 18 brands are are offrered in low, reduced or no- calories. The Coca-Cola company is one of the top 10 private employers.

The picked product is Coca-Cola with a value of 78.42 billion U.S. dollars.

Determinants of the demand of Coca-Cola

1- Price:

The demand curve below illustrate how many Coca-Cola bottles aconsumer might want to buy at different prices. The lower the price of Coca-Cola, the more a customer is liable to purchase. Thus, it can be inferred that price is a noteworthy determinant of demand. The change in price

It likewise demonstrates that at each price on the demand curve D2 (or D3), more (or less) will be demanded than what was demanded on the original demand curve D1.

2. The other determinants of demand are:

2.1 Income: If consumers’ income increase this will lead to increase the Coca-Cola demand; and vice versa. An increase in income shifts the demand curve for Coca-Cola (a normal good) to the right.

2.2 The number and price of substitute items: Coca-Cola has more than a few substitutes available in the marketplace; Pepsi is close to a superb alternative. So, if the price of Coca-Cola increases, this will likely make Pepsi more attractive to the customers. The Law of Demand lets us know that fewer individuals will buy Coca-Cola; some customers may change to Pepsi. Henceforth, it can be reasoned a positive relationship between the price of one good, Coca-Cola in this case, and the demand for the substitute, Pepsi.

2.3 The number and cost of Prices of Related Goods and Services complementary goods: Coca-Cola is often complementary to various fast foods such as

It can be concluded an inverse relationship between the price of one complement, the fast food products in this case, and the demand of the other complementary goods, Coca-Cola here.

2.4 Expectations of future price changes: If the buyers got convinced of increasing Coca-Cola price in the next few months, then there will be increase in the demand today. Demand curve for Coca-Cola will shift rightward.

2.5 Time: Coca- Cola demand and revenue increase during summer and special events.

2.6 Tastes and customer preferences: Are important determinants and the more the product is preferred, this will shift the demand curve to the right. Less preference will shift the demand curve to the left. Consumer preferences are influenced by promoting, advertising, fashion and by observing other consumers. Coca-Cola had comprehended this right from the earliest starting point to use advertising.

Substitutes (Pepsi & Coca-Cola)

Increased Coca-Cola price Increases Pepsi demand Reduced Coca-Cola Reduces Pepsi