Vending takes new role in marketing

Piriyanthy Manokar Business Studies Faculty Jaffna University Vavuniya Campus

Vending machines work quietly to generate sales round the clock, 365 days a year, taking no holidays, never going on strike or leave

Vending machine operations are not successfully adopted in Sri Lanka. There are only few vending machines that are installed in the major cities in Sri Lanka. But there are millions of vending machines operating in the worldwide and the companies earn more profit and integrate latest technology in this new innovative venture.

A vending machine is essentially “A coin-operated machine for selling certain kinds of merchandise and refreshments”. It is an automated retail solution that, with one stroke, eliminates the need to browse through messy outlets, ensures exclusivity, extends reach, provides round-the-clock convenience and triggers impulse purchases.

Today, vending machines are operated by thousands of companies worldwide. These machines range from relatively simple to highly sophisticated ones, offering a diverse array of products, including impulse and convenience products like cigarettes, soft and cold drinks, chocolates and confectionery, newspapers and hot beverages. Other products include hosiery, cosmetics, food snacks, hot soups, paperbacks, records, T-shirts, insurance policies and fishing worms.

These machines are found in factories, offices, large retail stores, petrol pumps, hotels, restaurants, and many other locations.

They offer customers the advantage of quick, 24-hour service and no handling by people. The convenience and ease of such non-store retail outlets make them very attractive.

Significant features of vending machine in marketing

Vending is a retailing format that dispenses goods - such as beverages, chocolates and snacks - and services (such as ATMs) through coin, note or card-operated machines. It does away with the need for a salesperson and enables round-the-clock sales of products.

Machines can be placed wherever they are most convenient for consumers - inside or outside stores, in office and hotel corridors, at railway platforms and bus stations or even on high-traffic street corners.

Vending machines are used for foods ranging from sandwiches to simple chocolates and wafers as also for hot and cold beverages.

The greatest sales volume can be achieved in offices, school and college lunchrooms, refreshment areas, hospitals, high traffic public places and any other highly visible and popular sites.

To improve productivity and customer relations, a lot of new innovations are being incorporated into vending machines.

Why it should be installed?

There are several reasons to concentrate on this avenue of retailing.

Unbeatable product visibility: The machines not only display the products but also sell them. Nowadays, customers are bombarded with a huge number of brands and options when they enter an average retail outlet. However, as far as vending machines go, brand visibility is completely exclusive. In companies across the world, the budget for purchasing vending machines is shared by the advertizing department and distribution and sales.

Impulse purchases: Due to their striking visibility, automatic vending machines generate impulse purchases. The common marketing principle is at work here: the more they see, the more they buy.

Wider distribution: By placing machines at locations where its products are not normally available, manufacturers instantly create a new distribution outlet. Hygienic and protected storage a closed environment ensures that the product sold to a customer is always clean and undamaged.

Vehicle for unbiased customer response: A retailer typically promotes products that offer larger returns by influencing the customers’ buying decisions and choices. Unmanned automatic vending machines are the ideal vehicle to test the customer’s response to new products and new packaging.

Silent salesman: These machines work quietly to generate sales round the clock, 365 days a year, taking no holidays, never going on strike or leave. Eradication of duplication and adulteration. Many leading companies faces the problem of duplicates, copies and adulteration of their products. This is not only bad for their brand image; it also leads to a big loss of potential revenue. Now, for the first time customers can be absolutely sure that the product they are purchasing is genuine and not an inferior duplicate.

Enhanced brand image: Using this sophisticated method of merchandising automatically positions the company and its brands as sophisticated and forward-minding.

Incremental sales vending: machines have been used as an effective tool to enlarge the distribution network and increase sales.

Deeper market penetration: This method allows companies to tap newer locations and move one step closer to the customer.

Advertising and promotions: The side panels and the top and bottom of the machine can be used for valuable point-of-sale advertizing and promotions. The latest cold-drink machine designs also incorporate LCDs used in the vending machines to continuously play advertisements.

Helps to promote the product: Any vendor can serve as an advertiser, promoter or brand maker Traditionally Product, Price, Place and Promotion are called the 4Ps of marketing mix. In any kind of marketing activities, marketers and manufacturers integrate those components to make their marketing efforts successfully in the consumers mind. The blend of promotional mix includes advertising, sales promotion, publicity, personal selling and direct marketing.

Advertising in vending machines is a cost effective and also vending-operator does not need to pay for the use of these advertizing tools-the machine is working and making a profit for them.

The body of the machine is the ideal place to attach advertisement. Depending on the type of the machine, companies can use front panel, side panels or whole body.

One of the advantages of the advertisements on the machine body is simplicity of its replacement, comparatively small charge for making and replacement of advertisements.

Vending machines of Coco-Cola, Pepsi and some other companies are the examples of effective use of vendor surface for promotional campaign.

Further a purchase via vending machine is mostly impulsive. That’s why advertising on vending machine contains such slogans as “now”, “right now”, and “hurry up”. Children and youngsters are very sensitive and easily captured by those slogans.

Vending machines also offer sales promotional opportunities to consumers. Consumers can receive redeemable coupon, sweep takes, price off, free offers through the purchasing of such items.

If a new product can be installed into a vending machine, the buyers pay attention to appearance and also keep the brand name in their mind. The vendor will serve as a promoter of a new product.

Factors ensuring successful vending: The following factors should be considered in vending machine operations that successful one

* Identifying the vending need

* Choosing reliable equipment suppliers

* Ensuring strong service support

* Getting the strategic location of machine

* Getting the right product mix

* Ensuring strategic placement of brands in the machine

* Ensuring an efficient vending operator is required

Vending machines are relatively new but still it has novelty value. As is typical in all countries, convenience gradually becomes a habit. There are numerous potential growths waiting for marketeers and manufacturers to install the machines at a location. For many marketeers promoting products through vending machines the aim is to reach the final stage as soon as possible.