The Fixed Price of Coca-Cola from 1886 to 1959

"Levy says the folks at Coca-Cola thought about converting the vending machines to take a dime. But doubling the price was too much. They wanted something in between.

So they asked the U.S. Treasury to issue a 7.5-cent coin."

Re: The Fixed Price of Coca-Cola from 1886 to 1959

#5

Post by Nicholas_C » Mon, Nov 23, 2015, 5:37 PM UTC

percept wrote: post #4

dpflan wrote: post #2

Inspired by this Planet Money episode: http://www.npr.org/sections/money/2012/11/15/165143816/why-c...

"Levy says the folks at Coca-Cola thought about converting the vending machines to take a dime. But doubling the price was too much. They wanted something in between. So they asked the U.S. Treasury to issue a 7.5-cent coin."

>In another attempt, The Coca-Cola Company briefly implemented a strategy where one in every nine vending machine bottles was empty.

That is an absurd strategy.

Re: The Fixed Price of Coca-Cola from 1886 to 1959

#6

Post by carlesfe » Mon, Nov 23, 2015, 5:37 PM UTC

This story is so interesting!

- Lawyers screwing up the Coca-Cola founder on bottling

- Founder strikes back by advertising low bottled prices

- Price stable for 30 years

- They then try to raise price to 6c

- Company discovers that 1-coin pricing boosts sales

- President tries to convince the US Treasury to mint a 7.5c coin (?!?!?)

- Company using alternative strategies to bring the price up like placing empty bottles that some customer has to pay for

- Finally Coca-Cola, company who owns like 80% of vending machines, basically invents a method to reliably deliver change on machines.

Overall, I found it a surprisingly "canonical" story on how startup founders face adversities, how they try to lobby the government, screw up customers, and finally reach a creative solution based on technology that establishes their product!

Re: The Fixed Price of Coca-Cola from 1886 to 1959

#7

Post by jedberg » Mon, Nov 23, 2015, 5:40 PM UTC

Nicholas_C wrote: post #5

percept wrote: post #4

Earlier quoted context omitted.

"Levy says the folks at Coca-Cola thought about converting the vending machines to take a dime. But doubling the price was too much. They wanted something in between. So they asked the U.S. Treasury to issue a 7.5-cent coin."

>In another attempt, The Coca-Cola Company briefly implemented a strategy where one in every nine vending machine bottles was empty. That is an absurd strategy.

Today they would call that "Growth Hacking". :)

Re: The Fixed Price of Coca-Cola from 1886 to 1959

#8

Post by jedberg » Mon, Nov 23, 2015, 5:42 PM UTC

carlesfe wrote: post #6

This story is so interesting! - Lawyers screwing up the Coca-Cola founder on bottling - Founder strikes back by advertising low bottled prices - Price stable for 30 years - They then try to raise price to 6c - Company discovers that 1-coin pricing boosts sales - President tries to convince the US Treasury to mint a 7.5c coin (?!?!?) - Company using alternative strategies to bring the price up like placing empty bottl…

> President tries to convince the US Treasury to mint a 7.5c coin (?!?!?)

It was because at the time vending machines couldn't make change, and they wanted to raise the price, but doubling (from 5 to 10 cents) would be too much.

Instead they figured out how to make the vending machine make change.

Re: The Fixed Price of Coca-Cola from 1886 to 1959

#9

Post by 7Z7 » Mon, Nov 23, 2015, 5:45 PM UTC

Attempts to raise prices

The Coca-Cola Company sought ways to increase their prices, even approaching the U.S. Treasury Department in 1953 to ask that they mint a 7.5 cent coin.[1] The Treasury was unsympathetic. In another attempt, The Coca-Cola Company briefly implemented a strategy where one in every nine vending machine bottles was empty.[1] The empty bottle was called an "official blank".[2] This meant that, while most nickels inserted in a vending machine would yield cold drinks, one in eight patrons would have to insert two nickels in order to get a bottle. This effectively raised the price to 5.625 cents.[1] Coca-Cola never implemented this strategy on a national scale.

Re: The Fixed Price of Coca-Cola from 1886 to 1959

#10

Post by carlesfe » Mon, Nov 23, 2015, 5:52 PM UTC

jedberg wrote: post #8

carlesfe wrote: post #6

This story is so interesting! - Lawyers screwing up the Coca-Cola founder on bottling - Founder strikes back by advertising low bottled prices - Price stable for 30 years - They then try to raise price to 6c - Company discovers that 1-coin pricing boosts sales - President tries to convince the US Treasury to mint a 7.5c coin (?!?!?) - Company using alternative strategies to bring the price up like placing empty bottl…

> President tries to convince the US Treasury to mint a 7.5c coin (?!?!?) It was because at the time vending machines couldn't make change, and they wanted to raise the price, but doubling (from 5 to 10 cents) would be too much. Instead they figured out how to make the vending machine make change.

Yes, the exclamation marks were more in the line of "WTF". However I need to give credit to them for trying a ... creative... solution