NPR: Planet Money has a good podcast on this topic
The Fixed Price of Coca-Cola from 1886 to 1959
31–40 of 41 posts
Re: The Fixed Price of Coca-Cola from 1886 to 1959
#32Earlier quoted context omitted.
> President tries to convince the US Treasury to mint a 7.5c coin (?!?!?) Shows you how much power the Coca-Cola company had at the time, that they would even consider trying to make this happen.
I wonder why Coca-Cola went with that ~supergenius~ idea instead of just minting their own "redeem for one Coca-Cola" vending machine tokens and selling rolls of 20 tokens for $1.50. Then, if you need to raise prices to $0.08 each, you can raise the price of a roll to $1.60, or keep it at $1.50 and replace one of the regular tokens with a non-redeemable collectors' token. And you definitely wouldn't have to follow up…
Because it's not about "tokens", it's about "I want a Coke and I have a nickel right now and want to give you that for a Coke". Impulse buyers don't buy rolls of tokens, especially not when $1.50 in 1935 is actually worth about $26 in today's dollars.
Re: The Fixed Price of Coca-Cola from 1886 to 1959
#33Earlier quoted context omitted.
> President tries to convince the US Treasury to mint a 7.5c coin (?!?!?) Shows you how much power the Coca-Cola company had at the time, that they would even consider trying to make this happen.
I wonder why Coca-Cola went with that ~supergenius~ idea instead of just minting their own "redeem for one Coca-Cola" vending machine tokens and selling rolls of 20 tokens for $1.50. Then, if you need to raise prices to $0.08 each, you can raise the price of a roll to $1.60, or keep it at $1.50 and replace one of the regular tokens with a non-redeemable collectors' token. And you definitely wouldn't have to follow up…
It's very possible that many people used the vending machines as impulse purchase vs planned purchase. My understanding is lots of effort goes into having people make impulse purchases (example: grocery store layout). They would not make as much money from a pre purchase system.
Re: The Fixed Price of Coca-Cola from 1886 to 1959
#34Earlier quoted context omitted.
> 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, and there lies the interesting story of National Rejectors, Inc., which for decades had a monopoly on fake coin detectors.[1] Even today, most vending machine coin mechanisms are clones of that design. In a mechanical unit about 4 inches square and an inch thick, coins are tested for size, holes, weight, resiliency, electrical conductivity, and magnetic properties. It's an elegant bit of engineering. [1] http://…
Interesting. Is it cost-prohibitive to circumvent those test parameters, now (or since inception)?
edit: found an article [1] that answers my question.
Re: The Fixed Price of Coca-Cola from 1886 to 1959
#35Earlier quoted context omitted.
There's a funny reference to that in the movie 'Dr. Strangelove'. The one (US Army) guy tells the other (Peter Sellers, acting as an English representative to the US airforce) after he shoots up a Coca Cola vending machine to get a quarter he needs to call the US president to avoid a nuclear war: "Now you're in trouble with the Coca Cola company", all this in the middle of total carnage as if that's an escalation of…
Almost, I believe that the line is "You're gonna have to answer to The Coca-Cola Company" [1]. Brilliant film, one of my all time favourites. [1]: https://youtu.be/DUAK7t3Lf8s?t=1m49s
Ah right. Close enough... it's been a long time since I've seen it. I really should watch it again.
Re: The Fixed Price of Coca-Cola from 1886 to 1959
#36Inspired by this Planet Money episode: http://www.npr.org/sections/money/2012/11/15/165143816/why-c...
And even more so by Levy and Young's 2004 paper: http://www.biu.ac.il/soc/ec/d_levy/publications/jmcb4.pdf
Re: The Fixed Price of Coca-Cola from 1886 to 1959
#37Earlier quoted context omitted.
I wonder why Coca-Cola went with that ~supergenius~ idea instead of just minting their own "redeem for one Coca-Cola" vending machine tokens and selling rolls of 20 tokens for $1.50. Then, if you need to raise prices to $0.08 each, you can raise the price of a roll to $1.60, or keep it at $1.50 and replace one of the regular tokens with a non-redeemable collectors' token. And you definitely wouldn't have to follow up…
Because it's not about "tokens", it's about "I want a Coke and I have a nickel right now and want to give you that for a Coke". Impulse buyers don't buy rolls of tokens, especially not when $1.50 in 1935 is actually worth about $26 in today's dollars.
Think about how many people use real, actually-issued, legal-tender $2 bills, then think about whether a $0.075 coin would have promoted impulse purchases.
Now think about freemium mobile games. The games that price their in-game purchases in a separate currency make more money than those that price their micropurchases in the user's native currency. People are less apt to make impulse purchases with real money. But if the only thing this stupid token is good for is one bottle of Coke, why not redeem it now?
What if you sold the tokens for $0.08 each, and you sold the rolls at a discount of 6% off, at $1.50 for 20. Maybe you sold a box of 20 rolls for $24. You just made distributing Coke tokens into a profitable business, and broke the tie to the nickel.
Does that sound familiar in any way?
Re: The Fixed Price of Coca-Cola from 1886 to 1959
#38Earlier quoted context omitted.
Because it's not about "tokens", it's about "I want a Coke and I have a nickel right now and want to give you that for a Coke". Impulse buyers don't buy rolls of tokens, especially not when $1.50 in 1935 is actually worth about $26 in today's dollars.
Think about how many people use real, actually-issued, legal-tender $2 bills, then think about whether a $0.075 coin would have promoted impulse purchases. Now think about freemium mobile games. The games that price their in-game purchases in a separate currency make more money than those that price their micropurchases in the user's native currency. People are less apt to make impulse purchases with real money. But…
I am not sure if you are serious in your desire to elide how very different having to go to a store and buy tokens to get a drink when you're thirsty is to pressing a button on a phone.
Re: The Fixed Price of Coca-Cola from 1886 to 1959
#39Earlier quoted context omitted.
Think about how many people use real, actually-issued, legal-tender $2 bills, then think about whether a $0.075 coin would have promoted impulse purchases. Now think about freemium mobile games. The games that price their in-game purchases in a separate currency make more money than those that price their micropurchases in the user's native currency. People are less apt to make impulse purchases with real money. But…
I am not sure if you are serious in your desire to elide how very different having to go to a store and buy tokens to get a drink when you're thirsty is to pressing a button on a phone.
My first point was that even if the Mint actually stamped out some $0.075 coins, there's no way in hell they would have ever survived in general circulation. They would have been useless, except to buy vending machine Coke bottles. Everyone making change would still be using nickels and pennies, and not pricing things with half cents at all, because there was no half cent coin. So no one would actually have one of those coins in any of their pockets, at any time.
I can't even imagine the thought process that might have led to believing that would ever work, at any step in the process.
I am merely describing one thing of the many, many possible things that would have been less colossally stupid, even though it still may be inferior to just dropping the outdated requirement that one coke equals one coin, and it can't be a dime (because that's too much) or a penny (because that's not enough).
If you knew you liked Cokes, you might buy tokens in advance, instead of on impulse, and pass them around as near-cash equivalents. Though I must admit that if I only bought one thing with real cash from a vending machine, it would still be a more frequent occurrence than buying virtual nothings in a freemium game, so it was just a bit insincere. If I had to use tokens, I'd probably never get any Cokes.
Re: The Fixed Price of Coca-Cola from 1886 to 1959
#40Earlier quoted context omitted.
They were willing to lobby for a 7.5 cent coin and update their machines to recognize that, so it sounds like they could have handled dimes. The reason they didn't want to switch to dimes is that it was too big of a price jump.
I'm curious how they eventually handled the changeover. I seem to vaguely recall Cokes when they were a dime (in the mid-sixties or thereabouts) in the machine. I also don't ever recall vending machines taking pennies or giving change in pennies--though perhaps they did. I just also have some trouble believing that Coke vending machines pretty much doubled in price over a few years.
I don't think vending machines even now will give pennies in change.