MSA 'VendScape' Juice Preference Study Shows Value Of Location-Specific Data In Boosting Cold Drink Sales
(Reprinted from the June 23rd 2000 issue of Vending Times)
PITTSBURGH, PA - The key to maximizing sales is offering the product that most customers will buy most of the time, according to Management Science Associates here. MSA is a national market research organization with nearly four decades of experience in consumer sales data analysis.
"'Efficient assortment,' 'SKU rationalization' and 'optimal product mix' are all fancy buzzwords for 'having the right item in the right machine at the right time'," the veteran researchers explained. "This results in greater customer satisfaction and, ultimately, more profit to your bottom line."
Offering a product mix that contains those items is the goal of "category management," MSA pointed out. And the starting-point is reliable information on patron preferences at each location. "The key to successfully implementing this common category management practices is having the right data," the company emphasized.
For example, an operator installing a packaged cold drink machine and asked to provide one selection of juice would have to decide which flavor to offer. "Your intuition probably would tell you to go with orange, a flavor that, in total, outsells all others," the researchers suggested.
Management Science Associates used its "VendScape" machine-level data to determine whether this decision would produce the best sales performance. "VendScape" was developed by MSA in cooperation with Validata Computer & Research (Montgomery, AL). Isolating "juice/ juice drink only" venders, MSA adjusted for distribution, and explored consumer preferences (item sales ranking) when a variety of flavors was available. And, since the tastes of eight-year-old schoolchildren differ from the tastes of "thirtysomething" female office workers, MSA drilled down to "location/trade class" detail to further examine those dynamics.
KNOWING THE TERRITORY
MSA's study, naturally enough, demonstrated that there are substantial differences between sales patterns in elementary schools and those in offices. There are 12 commonly available juice flavors. In elementary-school vending machines, orange juice ranked second to last; fruit punch, berry, and grape were first, second, and third, respectively, and fruit outsold both berry and grape by nearly two to one. Therefore, a decision to offer orange juice in the sole juice column of an elementary-school cold drink machine would not be optimal.
However, orange juice does lead all other flavors in offices and factories, where it outsells fruit (which ranks second) by two to one. Thus, an operator whose instinct prompted the choice of orange juice as the flavor to offer would be right in an office location, but wrong in an elementary school. If the company had a machine in one location of each type, its success would be 50:50.
"Do you want to risk your profits at those odds?" MSA asked. "Having the right data to help manage your item mix will minimize this risk."
Information on "VendScape" data and on "efficient assortment" for vending may be had from Suzy Silliman or Mary Jo Kirchner at Management Science Associates by calling (412) 362-2000.