Coca Cola

COCA COLA

Taking full advantage of the law of supply and demand, Coca Cola, has quietly begun testing a vending machine that can automatically raise prices for its drinks in hot weather.

This technology is something the Coca Cola Co, has been looking at for more than a year, said Rob Baskin, a company spokesman, adding that it had not yet been placed in any consumer market.

Modification under discussion at Coca Cola includes adjusting prices based on demand at a specific machine. The process appears to be done simply through a temperature sensor and a computer chip not any breakthrough technology, through Coca Cola refused to provide any details.

Vending machines have become an increasingly important source profit of Coca Cola and its archrival, Pepsico. Over the last three years, the soft drink giants have watched their earnings erode as they waged a price war in supermarkets. Vending machines have remained largely untouched by the discounting. Now, Coca Cola aims to tweak what has been a golden goose to extract even more profits.

In the United States, about 1.2 billion cases of soft drinks were sold through vending machines.

In principle, the temperature sensitive machine is no different from any other form the price discrimination.

We do not agree with what Coke is doing as the price of a product is not expected to change by the climatic conditions of the country as this would benefit some and hurt others.

A Pepsi spokesman said no similar innovation was being tested at the No.2 soft drink company. We believe that machines that raise prices in hot weather exploit consumers who live in warm climates, declared the spokesman, Jeft Brown. At Pepsi, we are focused on innovations that make it easier for consumers to buy a soft drink, not harder.

We believe that Pepsi is right, since their strategy think more on consumer satisfaction.

As a conclusion we can say that Coca Cola should not make this price discrimination. Coca Cola should sell their products at the same price as in hot weather like cold weather or in sports championships, because increasing the prices is not fair for the consumers.

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