Question

Although the traditional vending machine has had declining locations and sales over the past decade, new businesses using the vending machine have been appearing. Products sold are varied, ranging from soft drinks to electronics, movies, lettuce, live bait and prescription medicine.

What are the advantages and disadvantages of vending machines for distribution and marketing? What products could be effectively marketed in a vending machine? (For instance, you might want to think about product categories, target markets, locations or the specific business model).

Answer 1

Advantages of vending machines:

1. Vending machines can used to serve wide variety of products handling from green grocery to processed products; they are easy to maintain.
2. Only low service cost required.
3. From the customer's view, one of the main advantage is convenience.
4. Vending machine can handle diversity of products, The huge variety of products that can be sold using the machine are fruits,beverages, drinks, and cigarettes among the other products.
5. Clients get free choice to purchase products at any time of the day. One can shop for his or her desired product 24*7, throughout the year.
6. It only requires one time investment by the owner who doesn't need a lot of running expenses to operate. This leads to eduction of overhead costs by not hiring of staff .
7. Vending Machines save the time as precious time will be wasted preparing the drink, as the vending machine can dispense a drink in around few seconds.
8. The machine can always be moved to other areas if required and still it will continue delivering the services as regular.
9. Employees take less lunch hours as they does not need to go out to buy food.

Disadvantages of vending machines:

1. They give no provision for the bargaining. Hence fixed prices for productts and this may be unfriendly to both the customer and the owner.
2. Vending machines are usually displayed in the public places and so they can suffer vandalism by the unruly groups or from the jealous competitors.
3. Fraud cases are very much common in this business mostly by the customers who formulate means of hacking into the system of the machine to dispense the products according to their wish.
4. Great losses must be suffered by the investor who faces the cases of destruction of the machine or the faulty programming such as the continuous dispensing of product due to the technical errors which causes huge watage of resources.

Products that could be marketed using vending machines

1. Snack:Snack vending machines can distribute a number of snacks like candy bars, chips and other food items in break rooms, hospitals and rest rooms, movie theaters around the world. They can be placed in any place with an electric hookup. These machines can also include cold storage machines which can also supply refrigerated items. High tech vending machines which contain computer processors can even supply items like ce cream, milk shakes and even warmed food items.
2. Beverage:Beverage vending machines can be customized to provide warm and cold beverages in a variety of sizes and flavors. Warm beverage machines can be progammed to,dispense coffee, tea and hot chocolates with user-determined amounts of additives ilike sugar and cream. Cold beverage vending machines provide cans or bottles at a chilled temperature. Cold beverages which include water, soda, iced drinks, fruit juices and sports drinks.
3. Movies:Consumers can rent a movie by just visiting a movie rental vending machine. The knd of ttand-alone vending machines in or outside grocery stores,or drug stores or even gas stations can hold hundreds of movies. Consumers are able reserve a movie online to make sure the film will be available when they visit the machine.
4. Consumer Goods:Consumer goods vending machines provide a variety of goods like electronic goods, household products or medicine. They can be custom-built and stocked to the environment whether it is washing products at a laundromat, MP3 players and headphones at a shopping mall or pain relievers and any kind of medicine at a rest room. They can serve the purpose of 24*7  convenience at any location.
5. Fishing Bait:Anglers frequently depart to fish on lakes before any stores or bait shops are open, so  Vending machines can offer them bait shops to sell several types of worms, or other baits from refrigerated vending machines at all hours.
6. Cigarettes:You are required to obtain a separate license for each location at which you maintain a cigarette selling vending machine. The license is only valid for the owner and the location mentioned on the application should be relinquished when you cease to do business.
7. Water: Selling of either bottled or unbottled water can be made. Before a permit is obtined for the sale of nonbottled water dispensed through a vending machine, applicants must submit copies of test results, from a certified laboratory, to check for bacteria, and for total dissolved solidsand to check for dissolved or settled particles in the water. New applicants must submit a certificate showing that they comply with the safety regulations for each machine, along with color photographs showing the stickers and labels on the front of the machine.
8. Food:According to the California State Board of Equalization, you need a permit to sell food via a vending machine if you sell the articles by charging for more than 15 cents per item. Only one permit is required, no matter how many vending machines you have.
9. Bulk:Bulk vending machines dispense portion-controlled amounts of an item, such as loose candy or nuts, packaged toys, stickers or other novelties in bulk. A permit or seller’s license is not required if you sell bulk items for 25 cents or less. It is illegal to dispense items in bulk through the machine that were meant to be sold in the original package.
10. Other items are also sold nowadays via vending machines like cupcakes, fresh farmer's vegetables, printed t-shirts or even pizza , etc.