The major candy and snack companies are encouraging vending machines operators to upgrade to large-size candy bars and larger snack because it will be the next best revenue opportunity. Beverage and soda companies were the first to offer this size upgrade in their product, convincing vending operators to upgrade from 12-ounce to 20-ounce beverages. In fact, when presenting this upgrade to vending operators, beverage companies proposed three major benefits: 1. Customer benefit. The customer would benefit from purchasing a 20-ounce beverage since he would receive 8 more ounces of product at a lower per ounce cost than if he chose to purchase a traditional 12-ounce beverage. 2. Vending operator benefit. The vending operator would benefit from upgrading to large-size bottles in the long run. Although the vending operator would realize lower gross margins, the gross dollar profit would increase. 3. Beverage manufacturer benefit. The beverage manufacturer would benefit since margins improved when they sold 20-ounce beverages instead of 12-ounce beverages. Trade-up marketing is a tactic used often, especially in the food industry. At many fast food chains, beverage sizes are increased dramatically for a small fee, allowing the consumer to get more for his money. In other cases, a small beverage option is completely eliminated. For example, McDonald's used to offer an 8-ounce beverage option which is no longer available. Certain convenience stores no longer offer a 12-ounce coffee, but now offer a 20-ounce coffee size. As consumers demand larger products at a small upgrade cost, many industries are experiencing success with trade-up marketing. Peter Levine President http://www.VencoaVendingMachines.com Copyright 2007
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