Coke Case Analysis

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1. What is the problem with how this controversial issue is framed? If you were Coke, how would you modify or counter its framing to ease consumer’s tension? Explain using Prospect Theory. Coca-Cola’s proposition of a new-concept vending machine raised concerns and doubts in many aspects from the consumers. However, even early on than the company actually launched the new project, Coke was unprecedentedly confronted by tons of negative reports, some might be supportive, that shared similar concerns toward Coke’s new vending machine. First, manipulating the unit price in a real-time manner is widely considered an act of price discrimination that the can coke would be sell to customers at different rates based on the current temperature. By this logic, customers were divided into two categories: those who bought at hot days, and those who bought at cooler time periods. It seemed legitimate for Coke to pursue higher profit by offsetting the present pricing strategy, yet this might lead those loyal customers who were in need to generate distrust or even resent the company’s unfriendly touch carried by those “mean machines.” As a result, it would be an alert for Coke that wishes to maintain repeated sales through new vending machines, which could even worsen sales contributed from those conventional ones that offer fixed prices. Second, the automatic feature of the instant-adjusted prices had provoked certain group of people to concern that this unfavorable trend could be further extended to more applications that would one day sweep across people’s daily lives. The fear of a big brother that oversees everything would somehow lead customers who value privacy to reject the new vending machine and turn to conventional shops, if possible, for quenching the thirst. Or these customers might simply decide to buy from Pepsi machine, assuming they are offered with conventional

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