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Honolulu Lite

by Charles Memminger

Monday, November 1, 1999


Coke: It’s the real
(greed) thing

COCA-COLA made one of the biggest marketing blunders in history when it launched its "New Coke," and now it's preparing to make an even bigger boner.

According to recent news stories, Coke is testing new soda machines that can jack up the price of drinks depending on how hot the weather is.

If there ever was a plan nearly guaranteed to outrage customers, this is it. In fact, it is such a lunk-headed idea, I almost believe Pepsi agents infiltrated Coke's board of directors and launched this turkey.

Think about it. Every time you go up to a Coke machine, you'll have no idea how much you'll have to pay. It could be a buck or it could be 55 cents. Yesterday, you paid 70 cents for a Coke; today, they want you to pay $1.25. For the SAME product.

Coke officials defend the plan by saying it just capitalizes on the concept of supply and demand. Wrong. It is price gouging at its worst. It is insulting to customers. It is taking advantage of a bad situation.

And it discriminates against people who live in warm climates. If this hare-brained idea goes through, Hawaii residents will once again have to pay a higher price for a product simply because we live on an island near the equator.

The technology of self-pricing soda machines is not all that complicated. All you do is stick a sensor in the machine that changes the price of the drinks depending on the temperature. But just because you CAN do something, doesn't mean you should.

I suppose they also could rig the machines so that when there are only a few remaining Cokes in the machine, the price would go up. That's supply and demand also.

BUT it's not right. In fact, supermarkets and hardware stores are hammered by the public when they try to raise the prices of food, water and building supplies before or after a hurricane. You could argue that it is just supply and demand but would you continue to shop at a store you knew took advantage of you when the going got tough?

Coke is crazy. It spends millions of dollars in advertising trying to present itself as a caring, sensitive company. Remember the commercial which had people around the globe singing, "I'd like to teach the world to sing in perfect harmony. I'd like to buy the world a Coke and keep it company ... ?"

I envision a new commercial with a hundred happy automated Coke machines singing, "We'd like to gouge the world with Coke, and squeeze out every dime, when you're hot and nearly broke, it is Coke extortion time!"

I believe in a free market. Coke might have a legal right to jimmy its prices based on how hot and bothered its customers are. But customers are going to see this gambit for what it is, not free-market entrepreneurship but greedy profiteering. It reeks of taking advantage of people when they are suffering physically. Charging more for a certain product simply because hot weather is making people more thirsty is unscrupulous bordering on immoral. More importantly, from a marketing point of view, it's just plain stupid.

I'm no marketing whiz, but if I were on the board of Pepsi, I'd be loving this idea. I'd rig all Pepsi machines with the same sensors that the Coke machines have. Except, as the temperature went up, the cost of Pepsi would go down. Right along with Coca-Cola stock.



Charles Memminger, winner of
National Society of Newspaper Columnists
awards in 1994 and 1992, writes "Honolulu Lite"
Monday, Wednesday and Friday.
Write to him at the Honolulu Star-Bulletin,
P.O. Box 3080, Honolulu, 96802
or send E-mail to charley@nomayo.com or
71224.113@compuserve.com.



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