Question

Please identify coco cola internal and external failure costs for their production. (300 words)

Answer 1

Internal failure cost
This cost appears before the delivery of product to the customer it can be due to quality or operational delays
Improper handling of the Coca Cola bottles, waiting time and the ideal time between the packaging and transportation of the Coca Cola bottles.
Cost related to failed marketing efforts of Coca-Cola because of presence of its competitors 'the Pepsi challenge'.
There was a marketing campaign associated with Coca Cola that is the new formula of coke was introduced that let workers in the Statue of Liberty get the free new Cox and subsequently at various locations product giveaways was organised. Initially the product of new Coke outperformed the old coke but customers were dissatisfied by the new product and the marketing strategy eventually backlashed.The product development cost like research and development cost, cost associated with acquiring the required permission to sell the new product, cost related to get the quality clearance certificate for the product.

External failure cost
This cost occur after the delivery of the product
Customer complaint related to quality of Coca Cola.
Failure due to introduction of new coke which was slightly sweeter version of old coke and not accepted by the customers.
Failure of the product diet coke because of it ill effects on health.