RS 9: Why the Price of Coke Didn't Change for 70 Years

This blog post is my analysis on the economic podcast “Episode 416: Why the Price of Coke Didn’t Change for 70 Years.” This podcast appeared on the planet money website on November 13, 2012. The podcast summarizes how The Coca Cola Company used the strategy of having a fixed cost for 70 years. The price of coke was only 5 cents for 70 whole years. The way the company did this was advertising that their product was only 5 cents.. This made it that the retailers were unable to charge a higher price than what was being told. The contract of the fixed cost be Coca Cola was unable to change because so. People may have thought at first that the companies plan to charge at a fixed rate would be dumb, but I think their smart business strategy to advertise made it irrelevant. Another way they maintained the fixed cost was because of their vending machines. Coca Cola company manufactured their own vending machines where the machine would only take one coin. That coin was a nickel. After later trying to have Eisenhower issue a 7.5 coin value Coke was turned down. 

The Coca Cola Company is a very smart Company and is why they have been around for so long. It would have been great only paying a nickel for a soda, but thats not the world we live in today. With tons of competition the price values rise and drop. A soda today ranges from about $1.50 to $2.00. Coke is still a major power in the beverage distribution and their business strategy has to do with that.

RS 8: Manufacturing the Song of the Summer

This blog post is my analysis on the economic podcast “Manufacturing the Song of the Summer” by Planet Money. This podcast appeared on the Planet Money website on July 8, 2011. This podcast is an overview of how a hit song is made and costs. I figured it was expensive to make a song, but did not realize the exact amounts. According to the podcast to make a hit song costs over a million dollars. This cost is before the song is even a hit! The risk for this can be good or bad. If the song is good it will be played by everyone, but if not you pay all this money to make a crap song. If you think about the amounts of money the top artists make this is not that much to them. Most do not even write their own songs and is part of the costs to make the song. 

One thing I disagree with the whole music industry is how they cannot pay 
to put their songs on the radio. This is called payola. Companies can pay to put advertisements on the radio, but artists cannot for their music. This does not make much sense to me at all. I think they should be able to without having a problem. They get around this by treating these people good. They take them out to nice places and give them nice gifts. This helps them remember who was nice to them and throw their song on the air for a few spins.