Differentiated Pricing and Coca-Cola’s Temperature Sensitive Vending Machines

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Essay #: 060506
Total text length is 5,612 characters (approximately 3.9 pages).

Excerpts from the Paper

The beginning:
Differentiated Pricing and Coca-Cola's Temperature Sensitive Vending Machines
Why are some products discounted and others are not? Because the discounted products are not selling! Why are some products sold at different prices, depending on the season or location? Because, at “regular” pricing, they may not sell as well. In recent months, there is no better example of such differentiated pricing, of course, than the automobile industry, especially Toyota. The enormous recall of
Prius
and Corollas and Lexus brands made it necessary to provide some consumer interest- that interest being “better deals.” Coca Cola’s adventures in differentiated pricing by increasing or decreasing vending machine prices depending on the weather, was not due to...
The end:
.....ing and other higher-cost convenience store sales. But, don’t count creative marketing with temperature sensitive vending units out! Incidentally, Los Angeles is now experimenting with special parking meters whose fees change during rush hours versus slower traffic times. So why not temperature-sensitive soft drink vending units. It is, after all, merely following the laws of supply and demand.
References:
Hays, Constance L: “Coke Tests Vending Unit That Can Hike
Prices in Hot Weather” New York Times, Oct. 28, 1999
Listed as Exhibit 1 in Harvard Business Review article
(see below)
King, Charles III and
Narayandas
,
Dae
: “Coca-Cola’s New
Vending Machine (A): Pricing to Capture Value or Not?”
Boston: Harvard Business School Publishing (2000)