Case analysis: Coca Cola’s new vending machine

It’s about Coke’s new vending machines that are able to automatically change prices according to ambient temperature. How this works: the price of Coke goes up in hot weather where cold drinks are regarded more valuable to satisfy thirst than in cold days.

Coca Cola tried to maximize profit from these smart vending machines, after facing war price in supermarkets. This practice is called price discrimination, where a company is charging different prices for the same product to different consumer. In the Coke’s vending machine case, the differentiation is on how consumer values cold drinks in different weathers.