Soft Drink and Coca Cola

2217 WordsJan 30, 20119 Pages
Coca-Cola’s New Vending Machine (A) Case Questions 1. Is selling Coke through interactive vending machines a good or bad idea? Explain your answer. It is a good idea to sell Coke through interactive vending machines. Over the last three years, the soft-drinking giants have watched their earnings erode as they waged a price war in supermarkets. Vending machines have remained largely untouched by the discounting. Sales of soft drinks from vending machines have risen steadily over the last few years, though most sales still take place in supermarkets. Last year, about 11.9 percent of soft-drink sales worldwide were from vending machines. Vending machines require low cost for companies. Company can just place a vending machine at…show more content…
Therefore, it will only add value to the product for them when it is cold. Overall, brand switchers will benefit the most from this technology as they can buy Coca-Cola when it is cheaper and switch to an alternative when it is more expensive. 4. Are there any price related issues that can adversely affect the firm? Price Wars Coca-Cola needs to consider the risk of price wars if this technology is introduced because the ability to discount prices so easily could cause competitors to continually lower prices, specifically at holidays. Price Discrimination: This means, ‘selling the same good to different groups of buyers at different prices’. Price discrimination is used most through the internet because it so much easier to change prices and know information about the consumers buying behaviors so they can raise or lower the price accordingly- meaning that they are not sacrificing profits but increasing economic efficiency. Therefore with Coke, those consumers that drink on hot days will be worse of since they have to pay a higher price, while those that drink on cold days will be better of. Consequently, sales in hotter countries could decrease as a result of charging high prices. It will only be a success if the difference between prices are not explicitly known. Otherwise Price discrimination could harm Coca Cola’s brand image of being consumer friendly. 5. What did Coke do right? What did Coke do wrong? How would
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