Just Price… a real world example.

Posted on March 12th, 2006 by Christopher.
Categories: Current Events & Politics.

The Coca-Cola Company has tested a vending machine that automatically raises the price of a soda on hot days. Doing this does not require rocket science, just a thermostat and a computer chip. The company?s chairman and chief executive at the time, M. Douglas Ivester, noting that the desire for a cold drink goes up with the temperature, concluded: ?So it?s fair that it should be more expensive.? Airlines charge more when the demand is high, so why should Coke not do the same? ?The machine will simply make this process automatic,? Ivester explained.

Not everyone agrees. A Pepsi spokesman, no doubt seeking a competitive edge, took the high road: ?We believe that machines that raise prices in hot weather exploit consumers who live in warm climates.? Another beverage executive wondered: ?What?s next? A machine that X-rays people?s pockets to find out how much change they have and raises the price accordingly? … It?s another reason to move to Sweden!?

Apparently the price of a Coke?or that of any other commodity?is not, for some people at least, only something to be left to the market (or to the influence of large corporations). Economics Nobel Prize winner Daniel Kahneman (a psychologist by training) and his collaborators asked consumers if they thought it was fair for stores to raise the price of snow shovels during winter storms. The answer: they didn?t.

The Coca-Cola Company?s new machine strikes at least some people as unfair because they think that when two parties engage in a mutually beneficial exchange?one, say, that increases a company?s profits while quenching a consumer?s thirst?the distribution of the benefits and burdens should not violate ethical norms. This idea can be traced to Thomas Aquinas, the medieval Catholic philosopher, and his concept of a ?just price.?

My personal opinion on this matter is.. well good for coke #1.. will anybody actually notice if the price goes from $1.25 to $1.35 on hot days.. ? #2 Isn’t this what our society is based on anyway.. it seems to me that Coke has a moral obligation to their shareholders to impliment this type of pricing strategy.. “just price” is something we all experience in everyday life.. computers are just making it much easier to impliment this type of thing on the fly… the real question is.. how bad will the backlash against coke be?

19 comments.

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eric the Lil' Devil quibbed this

well since i’m here i may as well drop off my 2 cents. this could be the best idea and worst marketing ploy wrapped into one proposal. lets look back at woodstock 94,99 , paying 5 bucks for a bottle of water. it was hot as shit out there in 94, and i gladly paid it, in this case coke drinkers will do the same with these machines,regardless of how immoral and unfair it is.

March 12th, 2006

Keith the Director thought this

I think this is about ridiculous and the fact you agree surprises me..cause if this is allowed then where does it stop? I agree withthe afct that no one will notice if the price is up $.10 but say you live in Las Vegas or say Florida with all that humidity where its terrible hot all the time. I think you would notice that one day all the machines are $1.25, then in come the new machines day 1 and the price is $1.75 or $2.00 for a 20oz soda! No one will be buying coke products and move down to the pepsi machine for the same 20oz bottle for $1.25 If pepsi wants to stay in competetion with coke for everything they are doing then let coke bury itself with this dumbass idea. I think its ridculous that a 20oz bottle of anything cost over a buck to begin with remeber when you could get a can of soda for $.50 economy hasn’t changed that much in 10 years. Plus ppl pay airport prices b/c they have to. take shit in with you to eat or get raped inside its your choice. Amuzement parks do the same thing a bottle of fucking water costs $2.00 give me a break I don’t need a drink that bad to paythese outlandish prices I will wait till I get home or to my next destintion!

March 12th, 2006

Christine the Lioness remarked

This is an interesting one. But if you think about it… companies already do this. What really is the value of a coke? At an ‘SC football game, coke costs $4.00. At a movie theater, it costs $4.00. Do we pay it? Yes. Would I walk into 7-11 and pay $4.00 for a coke there? Hell no. We still have the choice if we want to pay the price for something or if we’re willing to say “forget it… I’ll get something else instead.” And companies certainly are within their means to charge whatever they want for their products. The only thing that governs them is whether people are willing to pay that price. If the price of something is too high for the value, no one buys it and the company is forced to drop the price in order to sell the product. It’s basic supply and demand. Get a hotel room in Vegas during the week and it’s $50 a night. The same room on the weekends is $350 a night. The demand is higher on the weekends, so of course the company (if it wants to make money which has to be the goal of every successful company) should charge more if people are willing to pay more. There are repercussions for doing this though. For example… I take a can of soda into the movie theater stuffed in my purse because I don’t want to pay $4.00 for a coke. Would I bother to do that if the coke cost $2.00. Probably not. Therefore, the company is losing $2.00 on me that it could have had because I chose to purchase nothing and bring my own in. If losing me as a customer doesn’t matter because for every person like me there are two people who will buy the $4.00 coke, then the company is doing the right thing. I don’t believe companies should rip off consumers, but they do have a right to charge whatever they want for their products. And the sheer nature of competition (like Pepsi in this case) will temper it from getting out of control because there will always be a company that will provide a similar product cheaper, hoping to steal market share. Reading an article like this doesn’t make me want to drink coke, but it sure makes me want to buy stock in the company. -)

March 12th, 2006

Keith the Director asserted

I guess i have to agree, and yes like you i do the same by taking in my own bottle of soda and back of trail mix to much on from the store. Bag of trailmix and 20 oz soda from the store around the corner about $3.65. That same 20oz soda insside $4.00 and another $2.75 for a bag of m&m’s that cost less than a dollar at the store. It is supply and demand and the general public is just to stupid to take there own shit in for fear of getting caught, orthey just don’t care! I don’t soda anymore anyway so i could care less, but I think fountain soda always tasted shitty compared to a fresh bottle or can. Plus I refused to be extorted!

March 12th, 2006

Christopher the Pyro uttered

The real point is.. if people are moving down the line to a Pepsi machine then it won’t work and coke will kill the idea.. but whatabout places like Penn State that are a “Pepsi Campus” and Pepsi bought the rights to be the only vender on campus.. I would pay the differnce rather then walk a mile off campus…

March 12th, 2006

Keith the Director uttered

good point, and being that I refuse to get extorted is why i didnt buy anything on campus. I didn’t like pepsi anyway compared to coke which was fine by me. The only day I bit my pride was that psu indiana game i showed up so fucked up I paid $5 for 2 20oz waters, and then I left at the start of the 2nd quarter b/c the sun was killing me. And I was getting dehydrated. Was better off at home watching on tv drinking all the water i wanted to for free. It is all supply and demand when it comes down to it. Which is why amuzemnet parks can get away with the price gouging they do. Although I’m always prepared, and will pack lunch and take a cooler, and not be a lazy ass and walk back to my car to eat lunch for a fraction of what ppl are paying inside for less! The movies is another place. I’ll go to the store on my way, and buy a 32oz gatorade, a bag of m&m’s and trailmix for around $4-5.00 and take it in. Where as the common person for fear of getting caught or stupidity will just pay $10.00 for the same exact thing I got minus the trail mix!

March 12th, 2006

eric the Lil' Devil chimed in with

don’t think if that shit works and coke shows record profits, pepsi won’t follow suit, ie. vanilla coke/pepsi?

March 12th, 2006

Haas the Addict said this

2 points:
1) We pay more in football games and movie theaters coz there is no choice(of drink I mean) Its either Coke or go thirsty
2) Will the coke be cheaper in winter… its only fair it is

March 12th, 2006

aJ the Zen Master thought this

I think if the other competetors do not toe Coke’s line, then it will not really be very successful. In such a case, Coke will probably have to shelve the idea.

March 13th, 2006

MY crazy Veiw the Virgin hunt n' pecked this

Well, I suspect I will give my two cents . I think Coke would show great profits wheter or not pepsi followed suit. There are those people that just like the taste of coke and despite the higher prices will pay for what they find refreshing and pleasurable ..take cars for example a guy goes out to buy a Mclaren …..when he can buy a suburu and save him self a couple hundred grand and still get similar preformace ..he just pefers the mclaren it is the same with all consumer products …people buy what they like despite price for the most part >

March 13th, 2006

eric the Lil' Devil spake, and sayeth

mcv, nice point, you obviously get it=d> it’s evident that america’s ignorant 90% of consumers can’t stop themselves from being rooked out of the other few pennies. just check out e bay around x- mas times when the x-box360 came out ,or even a decade ago with that damn tickle me elmo? yeah! the fucking prices went through the roof and overweight housewives paid, gladly

March 13th, 2006

Christine the Lioness scribbled

Of course overweight housewives paid gladly… it’s their husband’s money… $-) (as it should be -) )

March 13th, 2006

eric the Lil' Devil stated

ah yes, it’s the last truly over exploited target audience, nothing more attractive than a choclate eating, newport smoking, slob of a soccer mom, that inevitably blames her fat ass on a thyroid problem and not the 17 fucking soap opera’s and 10 boxes of malamars that she shreds in the first half of her overwhelming day? only later during a divorce preceding entitles her to “in cali” half the marital assets, god bless america~X(

March 13th, 2006

Christine the Lioness thought this

And she deserves every penny. -) If hubby could learn to pull out in time, at least the soccer part wouldn’t be an issue.

Man… and to think I thought I needed to support myself and work out everyday and get my hair done and all this shit just to find a guy… what the hell am I doing wrong, I ask you? What?! What?! I want to shred some malamars… -) =p~

March 13th, 2006

eric the Lil' Devil got all philosophical

don’t go down that road baby, it would ruin the hot chick status you have

March 13th, 2006

Keith the Director pontificated

yeah really do you want to sit around and eat malamars which would be fun, but even you would get disgusted when you look at your ass in 2 weeks when its gained some width and you no longer fit into the nice jeans and pants you once wore…then have to settle for wavy skirts to hide that ass until it gets too big you finally decide to go back into the gym. You get disgusted b/c it’s not coming off as fast as it came on. You get frustrated and eat more malamars. now you are fucked…oooooo its a vicious cycle I recomend staying the hell out of! ) you’re too cute for that route!

March 13th, 2006

Keith the Director scribbled

And whats up with the overwieght soccer mom gettng half and deserving every penny? WTF you know we wouldn’t go cheating on you had you kept you nice firm ass going to the gym everyday or at least every other day. Have you women not figued it out yet? We men do not like big women…some men do *shiver* so they can have them.. But those who are capable to have good figures, and are to lazy to keep them don’t deserve shit in my book on the divorce papers, b/c she didn’t keep her end of the bargain. Honestly if the judge asked me why shje doesn’t deserve anything, is this not the woman you married, and cheated on? I would say hell no my wife only weighed half as much as this woman I think she ate her and stole her identity. I’m not giving her shit!

March 13th, 2006

MY crazy Veiw the Virgin chimed in with

Ahh, one of the greatest things about Americans is this , As long as fat ass soccer mom stay a couple pounds less then the neigbor mary joe fatass then she is good ..as Long as other people see her husbands an ass and not her faults then she deserves everything ..this is more and moer the american way steal what you can fuck those that you can all the while holding a better out ward veiw then your neigbors that happen to be just a twitch more fuck up then you

March 13th, 2006

Christine the Lioness up'n wrote this

Well… I don’t advocate getting fat or being lazy… but the flip side of this is… there are some (and not just a few men) out there that like to have their wives stay home, not work, and take care of the kids. I don’t know if it’s mostly because it’s cheaper for the wife to take care of the kids than afford daycare, or if she doesn’t make as much as he does, or whatever… but it’s pretty unfair that if this type of arrangement is made between the couple and then the husband decides to leave, his life doesn’t change much. He still goes to work and brings home his fat check and does whatever he wants. Suddenly though… her life changes a lot. There are very few people who can go from not working a job for ten years to suddenly landing something that makes them a lot of money, and enough to support themselves and their kids at the standard they were living at (whatever that standard was… even if it’s only $60,000 a yaer). But the same goes for the reverse. If the guy gives up a job to stay home with kids and they get divorced, he deserves half from her. When you get married, you’re supposed to be marrying for life and you’re taking that person into your life as your partner. That’s that. If the aftermath of the divorce bothers you that much, maybe you should have worked a little harder at keeping the marriage going… or chosen your partner a little more wisely.

The funny thing is… I rarely see a big fat woman with a really fit attractive husband. But I do see attractive women with but ugly fat guys. The general rule is that attractive people tend to couple up with other attractive people and ugly ones do it with other ugly ones (or fat, or nerdy, or whatever). But it’s funny that the scenario presented here is that the wife gets fat and the husband cheats… in all logic, it probably should be the other way around.

March 13th, 2006

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