Coca-Cola with the same price!!

 

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From the late 1800’s until

the mid 1900’s the price of a bottle of coke didn’t change. It remained $.05 per bottle. The story behind this is fascinating and speaks to the genius of Coca-cola.

After coke became a success as a fountain drink, two guys who owned a bottling company wanted to buy the rights to bottle coke and sell it as a bottled drink. The then CEO of Coke, didn’t believe in the two men’s vision for bottling and selling coke in individual servings. In an effort to get them out of his office, he agreed and signed a contract that required him to provide concentrated Coke syrup at a fixed price for the life of the contract.

Bottled coke took off and was a huge hit, being sold originally at $.05 per bottle. Seeing this success, Coke didn’t know what to do. In what is likely one of the greatest marketing decisions ever made, Coke ran ads that advertised the bottles for $.05, as though they themselves were selling them and setting the price. What this actually did, was force retailers to sell the bottles for $.05, or look stupid and over price the market. Coke set the market price by advertising it at a fixed price, when, in actuality, they had no say on the price of each unit.

Coke correctly assumed that if they could keep the prices down, thus increase the demand, the suppliers would need to buy more syrup and it would make the most of this terrible contract.

This will be remembered as one of the most impactful and innovative marketing decisions ever made.

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