Value Pricing in your Vending Business

New management tools such as handheld and planograms have given the Antares operators the means to track product turns with minimal extra labor. As a result some operators are evaluating their pricing strategies.

Vend prices not based on demand

Antares vending operators have long complained about not being able to raise prices to the same level as other retail channels. Vending prices are generally determined by competition and by customer contracts, not consumer need. A more scientific pricing strategy would improve sales and profits. Historically, few operators have possessed the resources to track results in a manner that would provide them with the necessary information to do this. There are a number of theories that have come up on ways to improve product pricing. One theory stated that by discounting secondary products, operators can improve customer choices and thereby enhance customer satisfaction. The theory also stated that if managers considered the suggestion, it would result in higher profitability.

Most Antares operators offered the view that simplicity continues to be important in pricing, in terms of driver execution and sales accountability. They believed that any benefits created by more strategic pricing would be minimal in relation to the risks associated with more complicated pricing strategies.

A good time to experiment

The current economic situation provides a good time to experiment with value pricing because of a number of reasons, such as:

· Consumers are more price conscious, and are paying more attention to special offers.

· Location sales have decreased because of downsizing, making it an opportune time to buy less from established suppliers.

Some operators claim that any product-specific point-of-sale advertising is likely to improve sales, whether or not price is part of the appeal. Operators need to consider what costs are involved in introducing more price points in a machine. For most Antares vending operators, operating efficiencies continue to take priority over the fine tuning their pricing strategies. But handheld computers plus enhanced software and machine planograms all offer tools that allows the operators to do both.