Hi there,

I need to respond to my classmate discussion bellow:

There were many reasons for Coca Cola keeping the price so stagnant for a very long time. One of the main reasons was the existence of vending machines because during the 1950s Coca cola owned over 85% of all of the vending machines in the US so they had the monopoly when it came to vending machines thus being able to sell their Coca cola at a fixed price for such a long time because of no competition. One of the things that did hinder them was since they had promised a 5 cent coca cola bottle it had to be exact change it could not be more than the 5 cents or any sort of that combination that was not exact change. Phones being at 800 dollars have been a very sticky and stagnant thing for a while. It is the perfect amount because not only does it make companies very profitable by being able to sell for that price it is also not too expensive for the average person.

iPhone and Samsung's being an average of 800 dollars makes it so people know how valuable it is and since phones are always needed no matter what people will buy it even if they will go broke after. Because everybody wants the latest and the greatest iPhone or Samsung no matter what it takes. What causes things like this to be so sticky is the fact that nobody complains and it has became the new normal because people value things at this price so it just naturally becomes the norm. Also the companies promote these prices and talk about how it is cheaper than other things on the market so it makes people more inclined to want to buy from you. Sticky prices is what results in more sales and overall success for a company.