• Major Problems
o Major problem now is how Coca Cola is perceived in the market o Communicate to the public real intentions to gain consumers trust o Company now stands to lose customers due to hidden ploy of increasing vending machine prices based on weather. o Company still need achieve goal of maximizing profits through vending machine sales. o Consumers may choose cold water instead of a coke to quench thirst on hot days. o Do coke products actually quench thirst in extreme temperatures due to the sugar and caffeine content? • Rationales
o Consumers could decide to buy another brand of beverage instead of a coke product, e.g., water or nothing at all. o Company can maximize profit by re-evaluating how to increase vending machine sales based on other segment dimensions, e.g., geographic, demographics. o Re-evaluating distribution channels can help maximize profits. • Action Plan
o Communicate better with consumers through survey’s, taste test; find out how get an idea of what’s on the minds of consumers and what they want. o Leave prices fixed
o Seasonality pricing to maximize profits; adjust pricing based on demand by seasons. • Is selling Coke through interactive vending machines a good or bad idea? Why? • What is Coke? What does Coke mean to the average consumer? • Where, how, and for whom does this technology create/destroy value? For example, loyal Coke customers, switchers among cola products, loyal Pepsi customers, etc.? • Are there any pricing related issues that can adversely affect the firm? ================================================================================== 1) 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.. ==================================================================================
1. Is selling Coke through interactive vending machines a good or a bad idea? Why?
Certainly we cannot judge it from a moral perspective otherwise we will fall into endless and pointless debate. I suggest that we analyze it in a marketing point of view. Marketing is about customer...