Coca Cola's New Vending Machine
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Pros for Coca Cola Co.
Technology Availability: Electronic components are becoming more and more versatile and cheaper. All that is required in order to adjust the price with the changes of the weather is a temperature sensor and a computer chip. Therefore, it can reduce the implementation costs.
Increase competitiveness through price discrimination: Price discrimination is used in order to increase the economic efficiency. In principle, the temperature sensitive vending machine is no different from any other form of price discrimination. For example, airlines pair daily and hourly fluctuations in demand with fluctuations in price. Moreover, in Japan some vending machines already adjust their prices based on the temperature outside.
Increase profitability: vending machines are an extremely profitable resource and channel and have the opportunity to be more profitable for Coca Cola. More profitability could be achieved through: * Having the ability to lower the price to customers who would usually not buy the product but all the same with charging a higher price to those who would. * Lowering the price at off-peak buying time in order to increase the overall sales. * Providing information when a machine is out of stock.
Facilitate the micro marketing: information about which drinks are selling and, at what rates in a particular location is relayed by internet, helps salespeople to figure out which drinks will sell best in which locations.
Cons for Coca Cola Co.
Damaging the brand image: it causes to interpret that Coca Cola is not customer-friendly
Risk of price war: automatic price adjustments will provide the capability to ignite the price war e.g. over a holiday weekend.
Pros for consumers * Interactive experience when purchasing a soft drink could produce added value 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.
Pros for Coca Cola Co.
Technology Availability: Electronic components are becoming more and more versatile and cheaper. All that is required in order to adjust the price with the changes of the weather is a temperature sensor and a computer chip. Therefore, it can reduce the implementation costs.
Increase competitiveness through price discrimination: Price discrimination is used in order to increase the economic efficiency. In principle, the temperature sensitive vending machine is no different from any other form of price discrimination. For example, airlines pair daily and hourly fluctuations in demand with fluctuations in price. Moreover, in Japan some vending machines already adjust their prices based on the temperature outside.
Increase profitability: vending machines are an extremely profitable resource and channel and have the opportunity to be more profitable for Coca Cola. More profitability could be achieved through: * Having the ability to lower the price to customers who would usually not buy the product but all the same with charging a higher price to those who would. * Lowering the price at off-peak buying time in order to increase the overall sales. * Providing information when a machine is out of stock.
Facilitate the micro marketing: information about which drinks are selling and, at what rates in a particular location is relayed by internet, helps salespeople to figure out which drinks will sell best in which locations.
Cons for Coca Cola Co.
Damaging the brand image: it causes to interpret that Coca Cola is not customer-friendly
Risk of price war: automatic price adjustments will provide the capability to ignite the price war e.g. over a holiday weekend.
Pros for consumers * Interactive experience when purchasing a soft drink could produce added value 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.