MARKETING AND RETAIL BUSINESS

Unit- II
Retail Management
Vending Machines

Objective of the Study:

The basic objective of this is to analyze
 The Concept of vending machines in retail industry
 The future of vending machine in retail business

The Concept of Vending Machines

• The vending machines are modern way of doing business in this technological era.
• The vending machines are available to various manufacturers and suppliers in different
sizes, shapes, colours, and cater to different budgets.
Vending machines have been a different trend impacting retailing of services. These are
machines which are available to customers, where they can access their facilities by paying a
certain amount of money. There is no salesman; they are automatically designed to look after the
customers at odd hours and at odd stations.
What are the facilities needed by vending machines.
Facilities Needed by Vending Machines:
• Some types of vending machines need electricity to operate, and some use mechanical
motion to vend the products.
• Different machines suit different purposes and locations and even for targeting different
customers.
Most of the machines which are sophisticated and highly technologically designed are located in
posh areas of cities which are governed through CC cameras. The electricity helps to operate the
machines. But sometimes, in remote locations, there are mechanical machines, which are using
mechanical power to vend products for the customers.
Functions of Vending machines:
• The basic vending machine offers
• Chocolates and lollies
• Soft-drinks
• Money exchange
• Other snack foods
How are vending machines helping customers-- Most of the stations are offering the basic
services of water, cold drinks, snacks, chocolates through vending machines? Even currency
exchange is done through ATM machine which is giving comfort to customers.
Popular Locations of Machines:
• These machines are available in most locations like -
• Office buildings

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 • Schools
• Train and bus stations
• Shopping centres
• Entertainment area
• Movie theatres and bowling alleys.
Where are vending machines available -- These machines are available at airports, railway
stations, entrainment areas, public parks and in areas like malls and organized shopping sector?
What is the use of these machines - You can handle most of the problems without the assistance
of salesman. So you just need to swap your card and get things done in faster way. These
machines are useful at public places because foot fall is high and the population pressure is high.
It may be any customer at any time feel thirsty and can feel hungry. So these machines can
support the basic needs in a big way.
Coffee Vending Machines:
• These vending machines offer a coffee menu that allows customers to select -
• Specific types of coffee
• Hot-chocolate drinks
• Tea and provides the cup
• Coffee, milk and sweetener
• The offices, universities, hospitals, and 24/7 convenience stores and service
stations can provide good vending machines for service to customers.
Most of the organization is working for 24 hours because online services of libraries and
universities are helping students to connect at odd hours. The call centres are working around the
clock; it is the hospitals where services need to be given to customers around the clock. So at this
time, it is very difficult to maintain high level of sales force that is talented and trained to support
any system to serve the customers. Customers can feel hungry and thirsty at any time. So
vending machine can give coffees, sweetener, sugar and any type of selection of chocolates or
milk, whatever you want. The facilities are given through a menu bar. You can select and pay,
without the support of any salesman. You get service at these places which are working around
the clock.
Toiletries Vending Machine
• Vending machines offering toiletry and medical supplies are usually situated in public
comfort rooms at airports, bars, restaurants and clubs.
• These vending machines provide essentials such as sanitary supplies, facial towels, dental
floss, toothbrushes and paste, headache tablets and even condoms.
Vending machines have become part of our life because we don’t take everything, when we
travel and sometimes we are at emergency in hotel or at airport. So, we can look up to vending
machines to get any type of toiletry required to clean face or to look after body. You can just
access the vending machine, pay and get the facility needed.
Change Vending Machine:
• The machines are useful to break a note into coins or smaller denominations.

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 • The vending machines take credit cards to give exchange
• They are popular in casinos, parking stations, self-car washes and even launderettes.
Exchange vending machine ---. Gives you exchange. You have big note and not able to do
shopping, the vending machine can give coins and money in smaller denominations. They are
available at parking spots and car services stations or hotels or at any location where customer is
influence is high because of their foot falls. So vending machines support the emergency needs
of people. If you want some money or if you want exchange or coffee or anything, the vending
machine is upgraded to give you any facility.
Office Supplies Vending Machines:
• This vending machine is useful in academic settings and libraries, airports, and career
centres.
• It provides pencils, pencil sharpeners, pens, paper, USB flash drives, and even mailing
products like envelopes and stamps.
If you are working in university and academic centres, every time, you need small facilities,
which require lot of efforts through shopping. So if you have vending machine, you can easily
access and get little things related to stationary like pencil and paper.
Customized Vending Machine:
• This machine provides a small number of different products such as CDs, DVDs, tickets,
console and computer games, disposable cameras, and even bulk refillable spring or
filtered water.
• They are great for supermarkets, shopping centres and retail stores.

Even retail stores and big supermarkets resort to vending machine because it is a cheap option to
connect with the customers, where you don’t need a salesman to look after customers. The
customer is a power who needs comfort. The retail sector has a shortage of trained people to look
into this total setup. The labor cost is high and to maintain this labor, you need to organize with
high salary statements, PF statements and all government norms to keep employees in
organization. So we need to reduce number of employees, so as to systemize operations which
are automatic and coordinated through vending machines. Most of the big stores also have
vending machines to give basic needs of customers, which is not very innovative and creative.
You can get access to CD’s and DVD’s or other items which are related to your daily life.
Convenience of Self Employment:
• Many people are seeking the convenience of self-employment.
• No better way than with a vending machine business.
• It can offer nominal income and revenue for any entrepreneur.
Because vending machines are becoming big way of doing business and people have accepted,
so even entrepreneurs are looking into this field in innovative way to earn money. If you have
costly location i.e. you have a space, your house is in a location which is more commercial, and
you can rent out that location to any bank and keep an ATM machine. This will give you rental

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charges, to run your house and earn bread and butter. May be the values are not very high, but
they are still enough to generate a fixed nominal income per month.
Challenges of Vending Machines:
• Vending machines are not magical money-making machines.
• They are a passive business, which operates up to 24 hours a day
• It’s not completely free from responsibilities.
Though we think that vending machines are automatic but it is 24 hours business and investment
is required. To earn cash on daily basis is really difficult because the vending machines also need
to attract to customers.
Problems:
• Form of passive business.
• Capital and profits are not easy to be earned.
• The daily cash revenues from vending machine cannot provide emergency funding to
keep business alive.
• No reserves to restock your machine.
• There are chances of theft also.
So when you are into business of vending machine, it is not easy to refill the machine because
daily revenues are not available. You have to start a day by funding machine, financing the
machine. So investment has to done before you at least get profits at the end of month or end of
the year.
Vandalism and Destruction:
• Vandalism and destruction is another problem that you may face. It can mean loss of
stock, but also put your machine out of action while it’s either repaired or replaced.
Sometimes these machines are easy target of robbers, who loot machine by breaking and
collecting money. The machine broken needs to be repaired. The replacement of machine can
cost inconvenience to the customers. So look after machines is also sensitive issue, which the
entrepreneurs need to address before they invest in this option.
Intermediate Cash Flow:
• The cash flow starts as soon as your equipment is placed. Most new businesses fail in a
large part due to lack of cash flow in the beginning.
The business can only sustain after certain breakeven point. Initially, to you maintain machine,
you need to invest money.
Multiple Streams of Cash Flow:
• Most people who are financially independent are those who have more than just one
source of income.
• A vending machine business allows you to establish more than one machine at many
different profitable sites, often selling different types of products which provide a good
potential for multiple streams of cash flow.
Now vending machine can be a source of income, like if, you doing a job, then the machine
can be a another source of income to you. So you don’t need to look after in a way, where 24

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hours presence is needed but you can take it option of side income. And if you are financially
independent and if you have lot of money, you can establish vending machines at different
location and try to increase your sources of income to make it larger part of your returns.
Part Time or Full Time:
The vending business can operate as little or as much as the owner likes-
• There will only working for oneself
• No need to have a boss to answer to
• No set hours
• No advertising costs
• No complicated paperwork
• No limit to income.
So it is good business that you don’t need to answer your boss and you don’t need to sit for the
whole day and commit yourself with lot off paper work but still if you have financially
independence. This can be a big option to connect with customers and establish source of income
for making your life easy.

Being a Salesman is not a Pre-requisite:

• The successful individuals in field of vending today are those who didn't feel they were
talented as salespeople.
• Need for good plan and location for the vending business
• There is some professional help needed from experts in vending machines to get business
to become more profitable.
To become a salesman is a serious challenge. You need to be trained. You need to sensitive to
people’s issue and need to connect with emotions and feelings of people to make a group of
customers, who can have faith on you so that you can give the retail services. But in case of
vending machine, when you don’t have qualities of salesmanship, still you can sell to consumers
by investing money and little expertise at initial level. This will help you to become independent
because once the machines starts functioning, your job is over and you have professional source
of income which can support life.
Mobility:
• The vending machine can always be moved to another area to target another market and
increase the profits.
If you think that this area is not having potential customers, you can always relocate and shift a
machine to other profitable locations.
Vending Machines in Gym & Fitness Centre’s:
• The Gym and fitness centre clients are health conscious people.
• The vending machines can provide them with products to enhance their fitness and
performance.
• Vending junk and high-calorie foods in machines is not in synchronisation with the
gym’s purpose of promoting fitness and good health.

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Most of the gym or fitness centres also have vending machines to sell burgers and cold drinks
but then this does not synchronises with the business concept you are in. These machines which
are at the fitness centres need to give supplements related to health and protein powders which
can become support to customers who are coming at gym and they don’t have problem to find in
market and can have right supplement which they need to have for the body.
Personalized Vending Machines:
• Vending machines can be personalised to particular business.
• A combo vending machine that offers customers healthy snack bars and workout drinks
powder or bottled in one machine would be a good place to start.
• As business grows, machines can be more customised by offering a machine for each
kind of product or brand or with the addition of extra products such as vitamins and
performance enhancing products.
So vending machine can have a combo in terms of offering many things but when business starts
growing, you can customize it, according to the needs of customers and sell only specialized
product that will increase the revenues.
Dual temperature Vending Machines:
• The customers need icy cold energy drinks as well as room-temperature nutritious
snacks.
• Machine needs to provide great products with eye-catching too attire.
• Customers to come and have a look in order to buy.
• The vending machine needs great products with attractive and easy to read labelling.
Vending machine needs dual temperature regulator because people need ice cold drinks or coffee
and at same time. They need snacks at room temperature. So your machine has to be temperature
regulated also and it has to be covered by glass to give attractive ambience to look at products
which have larger labeling, so as to be read what is written because you cannot touch products.
You can see the products and then automatically vend out.
Earn More Profits from Vending Machines:
• Need to install machines in places with high foot traffic and in common areas where
customers stop.
• The public places of banks and malls can have vending machines with high footfall.
• The machines should be placed at entrance/exit area where most people come and go.
• The machine should be areas where customers eat and drink like rest areas and waiting
lounges.
So the machine needs not to be located at any corner of mall because it will be hidden and will
not be seen by the customers. So the popular eye witnessing areas can be those which are
exposed to customer foot fall and the customers can see machines in an easy way. These are the
best points, where the machine can have good access to customer’s preferences.
Vending Machines:
• Micro-processor controlled and programmable digital controls for six per-programmed
beverages.

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 • Height adjustable coffee dispenser to fit all sizes of cups. Continuous dispensing function
• Flow meter to ensure consistency in the dispensed volume.
• Metallic brewing unit for the best espresso extraction
• Advanced vertical boiler for improved thermal consistency. Steam wand to heat
beverages.
So vending machines are computer oriented and the microprocessor will allow the functions to
be done. So inside, you have dispenser, to maintain the consistency, you also have the boiler
which will regulate temperature and vend out coffee at temperature you want. The steam wand
will maintain the hotness of beverage.
Future of Vending Machines:
• For vending companies, the technology will improve efficiency, data collection, and
maintenance.
• Machines will employ remote diagnostics to alert staff at headquarters when machines
need refilling or servicing.
• Detailed stock status will be transmitted to centralized locations so that route drivers and
technicians will know exactly what products are needed to re-stock their machines before
they even begin their routes.
What is the future of the vending machine? It will be more data oriented in terms of digital
transformation of retail industry where remote sensing will help people at remote areas. The
headquarters will understand what is needed and what products are to be refilled and re-stocked.

• Machines will transmit real-time data on transactions, allowing companies to give tighter
control and have more precise data on cash and stock accountability.
• Consumers will be able to use their cell phones to dial up a particular vending machine to
select and pay for soft drink.
So the technology will change in such way that the companies from their remote locations can
look in to what is the cash status, what is the stock status and consumer through the mobile
phones, can order and pay through their mobile phones to the vending machine and collect their
stocks.
Summary:
In this we studied about the importance of vending machine for consumers. Vending machines
have become a new way of doing business. The total operation of retail industry cannot be
carried through the vending machine but still vending machine is a profitable way to look into
the emergency need of people at airport, railways, banks, university and at all public places.
Even the retail organizations like malls and supermarkets have started keeping vending machines
because the vending machines do not need staff. The training and basic pressure of salesman
less. So this gives the option to connect to customers at their own end. The customers pay and
collect the stocks. So this self-service of the customers also keep the owners, devoid of problems
of customer’s complain and the pressure which customers puts on the organization. The coffee,
pencil, stationary, toiletries, drinks, water, exchange, everything which is needed in daily life is

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supplied by vending machines and for banks i.e. the financial industries, the ATM machines
have become in big way to collect cash and exchange money. So vending machines have bright
future where they will be upgraded in technological terms through remote sensing, to design the
flow cash and stock.
Thank you!