Coca-Cola's New Vending Machine(a): Pricing to Capture Value, or Not?

Only available on StudyMode
  • Download(s) : 1612
  • Published : January 3, 2011
Open Document
Text Preview
Statement of the Problem:
Coca Cola, the world's largest beverage company, has been under a tremendous amount of media scrutiny lately. Word got out that Coke is testing a new vending machine technology that changes price based on weather conditions. The core problem which coke is facing here is public relations disaster. They have put their brand image at stake. The way in which the Chairman and CEO of Coke M. Douglas Ivester disclosed about the new vending machines was inappropriate. Price discrimination can be called as a symptom of a problem in this case as it is not the strategic problem. If the customer relations team dealt with the situations properly then this problem would not arise. Issue Analysis:

The main issue of this case as mentioned earlier is public relations disaster. The way in which coke disclosed about their vending machines was not proper. Coke abruptly disclosed that they have invented a new vending machine which fluctuates prices according to the teamprature. They should have known that no consumer will accept this readily. Their customer relationship can be damaged.

Price discrimination is also a main area of concern in this case. Price discrimination is generic but it is the first thing which gets to the consumers mind.

The next problem is that the brand image of the company is at stake. The reputation of coke can be damaged. They claim that from 113 years they have been putting products within the arms reach of desire for its consumers, but now they have messed up the situation.

Coke also can lose its target customers to its arch rival PepsiCo.

Alternative courses of action:
Some corrective measures can be taken to implement this strategy of price changes. Coke should try to improve their public relations by proper planning. Some of the alternatives are: Coke must try to show the value of its product to the consumer with this new growth strategy.

Lowering the price at off-peak buying time in order to...
tracking img