Coca Cola Vending Machines Case Study

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Coca Cola a Vending Machine Case Study

Problem Statement:

Coca Cola Co., the world’s largest beverage company is facing a public relation nightmare which can ultimately put their brand image at stake. Their Chairman and CEO, Ivan Ivester, abruptly announced the introduction of interactive vending technology which will lower the price of coke during off-peak buying time and increase the price during very hot weather conditions, Ivester virtually confirmed the vending machines will be introduced to the market soon. The core problem is not if the vending machine should be brought to market but WHEN and what the public relations/marketing strategy should be in the midst of the current media scrutiny to rebuild loyalty with avid coke drinkers and Coke’s image.

Critical Factors:

Increasing the vending machine profit, which has been the main profit resource for the company, serves the purpose of the new technology. Sales of soft drinks are on the rise. Last year, about 11.9 % of soft drinks world- wide derived from vending machines. Intelligent vending has already begun in Japan using the same technology. Taking full advantage of the law of supply and demand, price fluctuations occur all the time in several industries such as the airline and movie industries and are not new to the general public. It often occurs when the supply for any product is high and the demand is low; basic economics. Price discrimination also can occur demographically or geographically and is hard to eliminate from a customer’s mind once disclosed in a negative light ultimately setting the stage to lose customers to Coke’s #1 competitor, PepsiCo.

Additionally, their brand image is at stake. Ivester's statements regarding the new technology was disclosed too soon and the response from the public relations team was not sufficient to the loyal coke drinkers and the media, spurring several negative articles and backlash from their customers.

Strategic...
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