Coca Cola’s New Vending Machine

1) Pros for coca plant dumbbell Co. Technology Avail mogul electronic components atomic number 18 becoming much and more versatile and cheaper. All that is infallible in order to ad only the determine with the diverges of the weather is a temperature demodulator and a computer chip. Therefore, it toilet reduce the go by means ofation costs. affix scrap through cost discrimination charge discrimination is used in order to increase the economic efficiency. In principle, the temperature sensitive vend mechanism is no different from any other form of price discrimination.For example, airlines orthodontic braces daily and hourly fluctuations in demand with fluctuations in price. more(prenominal) over, in japan some vending moulds already adjust their prices based on the temperature verbotenside. Increase profitability vending machines are an extremely profitable resource and canal and take aim the opportunity to be more profitable for coca gage. More profitability could be achieved through * Having the ability to take down the price to customers who would unremarkably non vitiate the product yet all the same with charging a higher price to those who would. Lowering the price at off-peak buying term in order to increase the overall gross revenue. * Providing information when a machine is out of stock. Facilitate the micro marketing information about which sop ups are selling and, at what rates in a particular localization is relayed by internet, helps salespeople to figure out which drinks go forth sell best in which locations. Cons for Coca Cola Co. Damaging the trade namemark chain it causes to interpret that Coca Cola is not customer-friendly Risk of price war automatic price adjustments result provide the capability to ignite the price war e. . over a holiday weekend. Pros for consumers * Interactive experience when purchasing a piano drink could produce added harbor as micro marketing can be used to satisfy the demand of consumers more easily. * Enjoy more promotion and pay less when the product is less demanded. Cons for consumers * Product is more expensive when it is more needed. This might seem unfair to a hungry(p) person. Considering that, the purpose of a atomic number 6 is al dashs to quench the thirst, people should not pay different prices for the same good. Exploit the consumers who live in strong climates. * Exploit the faithful customers who are loyal to Coca Cola brand. 2) Where? * In hot climates the appreciate of coke to customers is higher because a cold drink is needed more to quench their thirst. Therefore, this technology will increase the price of coke in warm climates and destroy the value of coke to brand switchers who will find an alternative. * In colder climates the value of coke to customers is lower because they do not desire cold drinks.Therefore, the price will be lower and this will make coke have a higher value for customers in colder climates. Who? * Brand switche rs this type of consumers will not have faithfulness to Coca Cola and therefore switch brands based on the cogitate price. Therefore, it may create value to brand switchers in colder climates and decrease value in hotter climates, as they find a cheaper alternative. Overall, brand switchers will gather the most from this technology. * Habitual buyers this type of consumers does not prefer the brand but switching costs are too high.Therefore, they stay with the same brand and if the price of coke becomes lower than competing brands it will add value of coke to these consumers. * Brand loyal consumers these customers will suffer the most because they will unavoidableness to buy Coca Cola whether the weather is cold or hot. Therefore, it will only add value to this product for them when it is cold. 3) Price Wars the ability to tax write-off prices so easily could cause competitors to lower prices, specifically on holidays.Price discrimination those consumers that drink on hot days will be worse off since they must pay a higher price, spell some consumers that drink Coke on cold days will be better off since they receive a lower price. Consequently, sales in warmer countries could decrease as a result of charging high prices. It will only be a success if the difference betwixt prices is not explicitly known. Otherwise, price discrimination could harm Coca Colas brand image. In addition, setting the price lower in cold climates might cause some profit losses and change the reference point, and destroy the brand image either. ) * Coca Cola should not have publicized the new technology while it was still be researched. Instead, they should have waited until they knew exactly what they wanted to achieve through this technology. Furthermore, they should not have publicized new technology in a way that vending machines would change prices harmonise to the weather temperature. Because, this creates controversy that made them look not customer-friendly but profit hungry. This might damage the brand image. * Their response to the promulgation of New York Times was the right action.Because, it cleared the intention of Coca Cola that was to improve product availability and promotion activity rather than to acquire prices of soft drinks in hot weather. * Another point they did right is that they carried out thorough product testing of this new technology to enable them to lay how successfully it could increase their vending machine profitability. * I would recommend that if Coca Cola decided to use the technology they might first implement it in colder countries and promote the new technology as a way for consumers to save money and increase their utilities.After the adoption of this new technology, they should come in it into warmer countries but without the emphasizing on the price, with more emphasizing on the attributes of the vending machine such as refrigerated display case, cooler, the ability of accepting credit cards and debit card s, better availability of products through better stock control. 5) I think the comments of Mr. Ivester were naive and not advantageously planned. He should not say that it is fair to raise prices in a championship event in a hot summer day.Therefore, according to the passage the Ivesters answer created the flap, seeming to cast the company as one that was not customer-friendly. Instead, he should say that Coca Cola is not introducing vending machines that raise the price of soft drinks in hot weather, just exploring innovative technology that can improve product availability, promotion activity. dear like the comments of Pepsi spokesman, Jeff Brown, At Pepsi we are focused on innovations that make it easier for consumers to buy a soft drink, not harder. Based on Ivesters comments, the image of Coca Colas brand eroded.