No one could fault with Coca-Cola for testing vending machine technology that would automatically change pricing according to outside temperatures. From a shareholder's standpoint, the company was genius for thinking ahead and leveraging a profitable area of opportunity (vending machines); their fault was with the way in which they "introduced" their new technology to the public. Business should make the shareholders as well as the consumers happy, and while Coca-Cola was trying to maximize their profits to appease the stockholders, their public relations events left the consumers disgruntled and resentful.
Coca-Cola had to think of price elasticity and competition when deciding on pricing for these vending machines. Individual vending machines are essentially company monopolies, as are the venues in which they are placed. Suppliers have contracts to place their machines and products in public areas, such as concert and sporting arenas, theaters, hotels, theme parks, etc. This means Coke will only stock Coca-Cola Classic, Diet Coke, Dasani water and other Coke family products in its vending machines. Therefore, there is minimal immediate competition for vending machine business and it can price its products within a reasonable range that consumers are willing to pay. If a customer is in a theater that only sells Coke products, he or she is forced to choose that company if he or she wants a beverage.
Coke could have successfully introduced the new vending machines into the market as long as they did it quietly, with little hype or attention brought to the switch. If the general public did find out that prices increased in hot weather, Coke should have only emphasized the lower prices of products in the cooler weather.
Conditions of elasticity of demand e ...