Yesterday, I reported that Costco is playing hardball with Coca-Cola Co. in its latest price negotiations, cutting off its orders for Coke products and publicizing the fact that Coca-Cola isn\u2019t as flexible with pricing as Costco feels its members deserve.<\/p>\n
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I brought this topic up in an executive breakfast I attended with about a dozen or so procurement execs this morning. A sentiment among those in the room was disbelief. Many folks said that they expected consumers to remain loyal to Coke products and go elsewhere to buy them. Plus, while they were at those other stores, they would buy other products there that they would have otherwise bought from Costco.<\/p>\n
In other words, Costco runs the risk of not only failing to save the money they were trying to save, but also losing revenue and customer satisfaction in the process.<\/p>\n
I\u2019m not in so much disbelief. Costco is a big company with smart people. I think that their risk is a calculated one. I can\u2019t see them not understanding the potential impact of this strategy if it fails.<\/p>\n
And, even if Coca-Cola really doesn\u2019t budge after this \u201ctest,\u201d I am guessing that Costco may turn around after a few days or weeks and say \u201cOK. We\u2019ll pay your most recently proposed price.\u201d And Coca-Cola will likely accept. Costco, then, would at least know that they truly tested the pricing floor and got the maximum discount they could get.<\/p>\n
Again, we\u2019ll just have to wait and see what happens\u2026<\/p>\n
Recommended Reading<\/strong><\/p>\n Whitepaper Wednesday \u2013 Advanced Sourcing Technology<\/a> Yesterday, I reported that Costco is playing hardball with Coca-Cola […]<\/p>\n","protected":false},"author":12,"featured_media":4105,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-2774","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-procurement"],"yoast_head":"\n
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