Canadian Vending

Features Business Operations
Operator’s Perspective: Sizing Up The Issue Of Portions

Sizing Up The Issue of Portions


April 29, 2008
By Lio Prataviera

Topics

Like many other businesses that resell a product, vending operators are at the mercy of the manufacturer. In the vending business, the packaging of a product is important because it is what attracts our customers: the look, the colour – the whole brand identity.

19Like many other businesses that resell a product, vending operators are at the mercy of the manufacturer. In the vending business, the packaging of a product is important because it is what attracts our customers: the look, the colour – the whole brand identity.

But one element of packaging that rarely gets mentioned is the portion size. Customers have an eye for quantity as much as quality, no matter what they say. And customers notice when something has changed, especially if it relates to the prices they pay for a particular product.

We’ve all seen a manufacturer change packaging and wondered why. A lot of it has to do with the cost of production, ingredients and even new packaging materials. But do they stop and wonder how a change in value affects customers’ perceptions? Because a change in value is what these changes really are about.
Sometimes quantity goes up and the price, of course, goes up as well. Sometimes portion sizes are reduced yet the price remains constant (it rarely goes down). But in either case, to the customer it becomes a question of, is this product still worth the price they’re willing to pay for it?

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Dealing with the day-to-day realities of this has shown me that customers do notice and it usually has a negative effect on sales and their perception of our service, even though the matter is entirely out of the vendor’s hands. And because the manufacturers don’t have to deal face-to-face with customers who complain to us, thinking it was our idea to switch sizes, vendors are caught between a rock and a hard place.

Another problem that hits vending operators on the bottom line is the time and money it takes to make the necessary equipment modifications to accommodate new sizes (or inconsistent product sizes). Often changes in the size of a product means that there are additional parts and labour costs involved to install different coils for snack machines or shims and cams for beverage machines.

I was in a liquor store over the holidays and took notice of a particular bottle I’ve been buying for almost 20 years. The size and the look has not changed at all in that time … the only thing that has changed is the price (which has obviously gone up). That is what’s known as ‘dedication to tradition’– it’s a big part of brand identity and at the core of customer loyalty. Kraft Dinner, while launching spin-offs of its traditional product, hasn’t changed the portion size and packaging since most of us were kids.

Manufacturers need to realize that when they want to ‘remake’ their product, they can’t overlook their traditional customers in the process. They must also remember that change doesn’t always work out well for their brand, their customers or the vendors selling their      products. o