Coca Cola Demand Curve

DEMAND CURVE
Demand is defined as the different quantities people are willing to buy at different prices. As the price of good increases the demand decreases and vice versa. The law of demand states shows an inverse relationship between price and quantity demanded. The demand curve shows the relationship between the quantity of a good a consumer is willing to buy and the price of the good. The equation for that shows the relationship between the quantity demanded and price is as given below:
QD = f (P)
QD : Quantity demanded
P : Price of the commodity.
The demand for coca cola as any normal good is downward slopping from left to right which shows the inverse relationship between the price and quantity demanded. The lower the price of Coca

THE NUMBER AND PRICE OF COMPLEMENTARY GOODS:
Coca cola is generally served at KFC and McDonald’s, increase in the price of these complimentary goods causes a decrease in the demand of Coca Cola. Hence we can say that there is an inverse relationship between the complementary goods price and demand for Coke.

4. CONSUMER TASTES AND PREFERENCES
The more a product is found desirable the more likely will the person buy it. Effective advertising and positioning attracts customers. The brand equity of Coca cola is very high and it has established an emotional connect with consumers. Coca Colas brand slogan “Open happiness” has successfully positioned the brand as a global icon of happiness. Such connects are very important in order to persuade a consumer into buying the brand.
5. TIME
The demand for Coca Cola increases during festivals like Diwali and Christmas. Coca Cola the brand is positioned as a universal icon of happiness and hence a more preferred brand during festivals
SUPPLY CURVE
Supply is defined as the quantity a producer will supply at a given price. A supply curve shows the relationship between the price and the quantity supplied. The law of supply says that “ as price of a good increases the quantity supplied increases”. There is a positive relationship between the price and quantity

DETERMINANTS OF SUPPLY CURVE
1. COST OF PRODUCTION:
An increase in the cost of inputs of production such as sugar, caffeine and colors causes an increase in the cost of production. This means that an increase in cost will cause the supplier less willing to supply at a given rate. An increase in cost resulting from shortage of ingredients or disruption of supply is one of the common reasons why the suppliers cannot supply the product at a given price thus shifting the supply curve from S1 to S2.Adverse climatic fluctuations results in low productivity of agriculture which in turn affects Coca Cola.
2. TECHNOLOGY:
Automation is led way to decrease in the cost of production. Techniques to optimize production means the suppliers will supply more at a lesser rate. Coca cola recently implemented the Siemens automation to increase the capacity of its bottling plants. This ensures that the capacity of the plants increased manifolds and thus lowering the cost of production. Technology and optimization ensures that the supply curve moves towards the left.
3. NUMBER OF