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Summary 4.8 Case Study Answers
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4.8 E-commerce: Case StudyDiscuss the costs and benefits to Coca Cola India of e-commerce.
E-commerce refers to the buying and selling of good or services online. In the context of this
case study, Coca Cola India “has recently piloted an online store” as the e-commerce market
constantly grows. This certainly will bring both costs and benefits to the company, thus it
will be discussed below.
One benefit to Coca Cola India would be the more exposure the company would get. By
opening online stores and making use of the internet to market their products allow Coca
Cola India to reach a wider customer base, which in turn, makes more sales possible. Taking
into consideration that India’s population is very dense, with over 1 billion people, gaining
exposure to that many people will become much easier using the internet with a relatively
low cost. Compared to opening more physical stores or traditional methods of promotions,
using the internet and establishing an official website is lower in terms of cost, allowing the
business to not waste as much money.
Another benefit to Coca Cola India because of e-commerce would be the increase in
convenience and comfort of purchasing products for the customers, which in turn, help
build customer loyalty. As the e-commerce market constantly grows, more consumers are
getting used to shopping or purchasing products through their device or online. By adopting
this method, consumers can easily purchase Coca Cola products through their phone and
have it delivered to them for a relatively low cost. Because of such convenience, Coca Cola
will have a competitive advantage from their competitors, thus gain customer loyalty and
possibility of more sales. For instance, if a consumer who loves to shop online due to their
busy schedule, they would likely choose to purchase Coca Cola than any other brands who
are not accessible online because it is more convenient to buy and more accessible.
However, e-commerce also comes with costs for Coca Cola India. This is because with e-
commerce, setting up the technology and system would also come with costs. And, to
ensure the security and safety of such systems, more money will have to be spend. This
means the cost of e-commerce may initially be lower compared to opening up retailer
stores, but to ensure the safety of such systems, the cost that comes with it is relatively
high. In addition, with e-commerce, which provides delivery services, means that Coca Cola
India should set up distribution channels to ensure that the delivery services can be done
efficiently. This, in turn, adds on to the costs of setting up the business and to keep it going.
In conclusion, there are both costs and benefits to Coca Cola India of e-commerce. While it
can increase Coca Cola’s exposure and increase customer loyalty, there are additional costs
that Coca Cola need to spend related to security issues and distribution channels.
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