Let’s now proceed to the Cross-Price Elasticity of Demand.

Based on my research,

Situation: Due to the similarities between the two products, an increase in the price of the
Coca-Cola Company increases the demand for a substitute product.

We all know that Cross-Price Elasticity of Demand means that the demand for good A will
increase as the price of good B goes up. In this situation, the price of the Coca-Cola Company
increases and it will result in the increase in the demand for a substitute product like Pepsi.
Kase nga diba nagmahal yung coca-cola syempre tayong mga tao maghahanap tayo ng
product na nag ooffer na similar sa coca-cola na mas mura kagaya ng Pepsi kaya naman mag
iincrease ang demand ng Pepsi. And dahil dito the price of Coca-Cola is elastic kase nga diba
nagtaas ang price ng coca-cola kaya naman malaki ang naging pagbabago nito sa demand
kase yung mga customers ay nag aavail ng substitute product nito. In addition to that, the
cross-elasticity value is positive since the two given products are substitutes.

However, based on my research

The Coca-Cola Company manages to sustain demand despite the price hike. The
management employs reduced package sizes, steps up its investment, and improves the
value of its brand through marketing.

Isa-isahin natin ang ginawang strategies ng Coca-Cola Company.

Reduced Package Sizes or Shrinkflation

Shrinkflation is the practice by companies of reducing the size or quantity of a product

while keeping the same price.
Dito hindi sila literal na nagtataas ng presyo pero binabawasan nila yung quantity ng product.
Yun nga same price pero mas maunti na lang ang laman. Kaya parang ganun din na tinataasan
yung price pero at least sa strategy na ito ay hindi gaanong ramdam ng consumers ang pagtaas
ng price kaya parang hindi rin ganun nagbabago ang demand nito. Yung regular can na
softdrink ay 330 ml pero itong regular slim can ay 325 ml na lamang ang laman. Kung
mapapansin niyo nagbago ang quantity at packaging nito pero hindi ang price.

Steps up its Investment

Coca-Cola wants more people, whether new or old, to be drinking their drinks. In order to
achieve this, the corporation has set goals to dramatically boost innovation by
introducing new goods and investing in other brands, including Jack Daniels,
Bodyarmor, and Powerade.
Dahil sa mga investment na ito ay nakakapag innovate ng bagong product ang coca-cola na
maaring mang engganyo pa lalo ng mga customers. Dahil nga bago yung mga products
gugustuhin nating mga tao na matikman ito sa kahit anong price pa lalo pa’t ito yung first time
na nagkaroon ng ganung klase ng product. Yung sa powerade ay ready-to-drink na sport
beverage. Yung sa Jack Daniels naman ay ready-to-drink na cocktail. Yung sa BodyArmor
naman ay kung hindi ako nagkakamali ay ang Coca-cola ay shareholder ng BodyArmor.

Marketing

The Coca-Cola Company is leveraging strategic experimentation and scale to create

global brand campaigns to expand its consumer base by connecting consumption to
consumer passions.

Bukod sa shrinkflation and investment, malaki rin ang impact ng marketing sa pagpapanatili ng
kanilang demand because through marketing they are working to increase its brand value. Ang
ilan sa kanilang ginawang marketing o pagppromote ay Coke Studio. It is a music television
program in the Philippines featuring performances by various Filipino music artists. Ang isa pa
ay ang Real Magic campaign, it is a celebration of the unexpected moments of connection that
make everyday life extraordinary. Kase diba dati yung campaign nila ay Taste the Feeling at
pinaltan nila ito noong 2021 ng Real Magic kase nga diba mas naging digitally connected na
tayo, tapos nagkaroon ng pandemic kung saan may physical distance, lockdowns and such.
Parang dahil dun we are longing for connections kaya dapat parang lagi yun cincelebrate with
Coca-Cola.