Home > Behavioural Economics, Externalities > Coca-Cola use behavioral economics to increase sales

Coca-Cola use behavioral economics to increase sales

February 27, 2016 Leave a comment Go to comments

Coke Can 250mlYou may have seen on the shelves beside the standard 375ml Coca-Cola can the 250ml slimline can that Coca-Cola introduced over a year ago. Coca-Cola Amatil has used a clever trick to increase its fizzy drink sales over the past year – it’s putting its products in smaller cans.

There are two reasons for this:

1. We are paying more for less. In some shops the small cans sell for NZ$2.16 each, or NZ$6.50 a litre.

2. When we eat or drink smaller portions, we feel as if we’ve done something virtuous, according to David Just, a professor of behavioural economics at Cornell University who studies consumer food choices.

“If they are left wanting, they may be much more likely to move to a second can, which could be a bad thing for the consumer, but a good thing for Coke.

“If they feel they have done something virtuous, they might feel they have licence to consume more elsewhere, and most often overcompensate.”

Coke are already launch new products that tap into consumers’ desire for low- or no-sugar beverages. For example Coke Life, which the company packages in a green label instead of the usual bright red. To make it sweet Coca-Cola uses a mix of cane sugar and stevia which is up to 150 time sweeter than sugar. Coke Life has about two-thirds of the sugar and kilojoules of regular Coke, and the company hopes it and similar products will lure health-conscious consumers back to fizzy drinks.

But isn’t this familiar to what the tobacco companies did after the link between smoking and cancer was established? They tried to get the consumer to smoke ‘Light’ cigarettes as opposed to not smoking at all. Don’t we have enough sugar in our diet anyway?

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