Professional Documents
Culture Documents
Antima Tiwari
Bikash Pandey -315 Ravi Tiwary
-365
- 335
Media Reaction
Mechanics of Coke The Number Game
Problems in VM
Recommendation
beverage corporation.
The company is best known for its flagship product Coca-Cola, invented in 1886 by pharmacist John Stith Pemberton in Columbus, Georgia. Coca-Cola currently offers more than 500 brands in over 200 countries or territories and serves over 1.7 billion servings each day
VENDING MACHINE
Cokes testing of vending machines that could change price according to the weather. The smart Vending machine could automatically adjust prices.
If the temperature is high then price will be high If the temperature is low then price will be low.
MEDIA REACTION
A cynical ploy to exploit the thirst of faithful customers (San Francisco Chronicle) Lunk-headed idea (Honolulu Star-Bulletin) Soda jerks (Miami Herald) Latest evidence that the world is going to hell in a handbasket (Philadelphia Inquirer) Ticks me off (Edmonton Sun)
Discrimination
Selling the same product to different groups of buyers at different prices. Hot day v.s. Cold day prices
Economic
Rationale
Higher price (hot) higher profit Lower price (cold) induces sales higher profit
on a HOT day is 85 cents per can on a COLD day is 55 cents per can profit is 5,450 cents per machine.
Expected
Incremental profit per day per machine = 5,450 5,000 = 450 cents Assuming 200,000 smart vending machines, Annual incremental profit = 450 * 200,000 * 365 days = $328.5 million
Price discrimination- The company segmented group of buyers by the outside temperature. Communication:- Coke based its strategy purely on demand and supply.
PROBLEM CONT
Perceived price :- For product like coke people have an idea about its price Emotional Bonding:- Iconic brand has a very strong emotional attachment. Competition:- Speech form Pepsi.. we believe that machines that raise prices in hot weather exploit consumer who live in warm climates
RECOMMENDATIONS
Promotion Strategy is not good by sudden public announcement. Strategic placement of machines
High traffic areas with few repeat customers Examples: Rest areas, tourist traps, theaters etc