Pricing and Distribution, marketing assignment help

Pricing and Distribution, marketing assignment help

1.Years ago, Coca Cola designed a vending machine that could raise the price of its drinks in hot weather. That was met with loads of bad publicity and the idea was scrapped… for a while.

Now, in Spain, Coca Cola revived the machines with a new purpose. The machines are stocked with water and a new lemonade drink (Limon & Nada). The price of the drinks goes down when temperatures soar. The idea is that this will increase trial of the lemonade.

“At temperatures of up to 25°, the cans of lemonade cost 2 euros. At 26-29°, they are around 30% cheaper at 1.40 euros, and when the temperature reaches 30° they are half price at just 1 euro.” (http://www.psfk.com/2012/07/vending-machine-prices-change-by-temperature.html) or:

“At outdoor temperatures below 84 degrees, the price was $2.40. When the temp. increased to 84-85 degrees, the price dropped to $1.70. If it broke the 86-degree threshold, the machines only charged $1.20.” (http://championvending.com/blog/?tag=coke-vending-machines)

Questions:

Is this a good idea?

What happens to the consumer’s reference price with this strategy? What is the impact if one consumer pays one price and then, sees a friend pay a different price 15 minutes later?

Is there a way to tweak this idea to improve it?

If you’re interested in the original price-hiking machines, read about it here

2.http://online.wsj.com/articles/new-pepsi-goes-to-a…

PepsiCo Inc. is going to the Web to launch its newest soft drink, a mid-calorie soda called Pepsi True. The soda will be sold exclusively through Amazon.com Inc.

… a 7.5-ounce can containing 60 calories.

The product, slated for release in mid-October, will be made with sugar and stevia, a natural sweetener. Pepsi True will be the second big-name soft drink sold exclusively online.

Coke last year in Argentina introduced its own naturally-sweetened, mid-calorie soda, Coca-Cola Life, which also is sweetened with sugar and stevia. It introduced that drink to the U.S. in August.

A Pepsi spokeswoman said distributing Pepsi True through Amazon.com will give it a chance to raise consumer awareness for the product and gauge consumer response before it begins putting the new soda on shelves at convenience stores, supermarkets and retail outlets like Walmart. …

Pepsi True and Coca-Cola Life are hitting the market at a time when sales of diet soda are declining and concerns about soft drink consumption and obesity are rising. U.S. consumption of diet soda fell 6.3% last year while regular soda fell just 1.7%, according to Beverage Digest.

The decline comes amid concern about artificial sweeteners, which have been identified as a potential cause of weight gain in recent health studies. Both Diet Coke and Diet Pepsi are sweetened with aspartame.

“There appears to be a growing set of consumers who graduate toward natural and want natural sweeteners in their beverages,” Mr. Sicher said. “There’s also a growing number of consumers concerned about obesity and health and wellness, so reduced calorie beverages with natural sweeteners would seem to be something that would appeal to consumers at this time.”

… The company plans to market it through digital advertising, primarily on Amazon.com, and sampling.

Questions:

What would success look like?

What are its chances for success?

Are there other products nontraditional to this channel that might work?