Coca-Cola New Vending Technology and Marketing Paper
Dennecia M. Carter
BUS 508: The Business Enterprise
Paying more for a Coke dependent on the weather temperature is probably something that most people would not agree with. Coca-Cola tested a technology that would make such a thing possible. Former Chairman and Chief Executive Officer M. Douglas Ivester stated, “Coca-Cola is a product whose utility varies from moment to moment. In a final summer championship, when people meet in a stadium to have fun, the utility of a cold Coca-Cola is very high. So it is fair that it should be more expensive. The machine will simply make this process automatic.” ...view middle of the document...
There is a technology known as intelligent vending that allows information gathered from the machines to be transferred through the internet to be used by salespeople to do things like figure out which drinks will sell best in which locations.
Soft drink sales from vending machines have increased revenue for companies such as Coca-Cola. Most sales of soft drinks still take place in super markets. It is indicated that in Japan that there are machines that adjust prices based on the temperature outside. However, if only Coca-Cola had machines with this capability would people still consume the brand? A Pepsi spokesman stated, “We believe that machines that raise prices in hot weather exploit consumers who live in warm climates. At Pepsi, we are focused on innovations that make it easier for consumers to buy a soft drink, not harder.” (McGraw-Hill/Irwin, 2008)
After these reports in October 1999, Coca-Cola released a statement that they were not introducing vending machines that raise the price of soft drinks in hot weather. The new technologies they were exploring were to enhance their ability to put their products within arm’s reach of their consumers’ desire. The machines would draw on the idea of price discrimination which is normal occurrence in the market place. Price discrimination is the term economist use to describe the practice of selling the same good to different groups of buyers at different prices. The benefit to the consumer would depend on when they purchase Coke. For those that want to enjoy a Coke badly enough on a warm day they would have no issue paying at a higher price and those that enjoy when it is cool out will benefit from lower prices. Ultimately, this type of selling and pricing based on a true idea of the law of supply and demand will benefit the organization.
While Coca-Cola did not release such machines, if they did it would take very creative marketing to market their product around the new machine. Consumers love discounts...