A Winner for Coca-Cola

Coca-Cola has developed a new hit soft drink in China. While most developed parts of the world are counting calories and drinking Diet Coke, those in developing parts of the world stick to the original drink. People in China's poor sections prefer drinking clear Sprite so they can see that there are no impurities in the drink, unlike their sediment filled drinking water. Coke developed "fruit pulp orange," a mixture of water, orange juice, and vitamins, which is cheap and is quickly becoming the most popular beverage. The success has upped Coke's volume of sales, and it plans to launch the new beverage in Thailand and India.

Coca-Cola developed the new beverage in response to the preferences of its consumers. The people of China wanted a beverage that was clear and cheaper than regular Coke. The orange drink could be considered an inferior good when compared with Coke; the demand for cheaper products increases as income decreases. The orange drink also serves as a substitute for pure orange juice which is often too expensive for the people of inner China. With the price of orange juice too high, the demand for the orange drink as a substitute increases. Coca-Cola has realized its success and will be increasing supply because they expect the orange drink to have as much success in Thailand and India as it has had in China.