Project Proposal

ENTREPRENEURSHIP & SME
MANAGEMENT
Project Proposal
By
MUHAMMAD
BILAL
2014
IQRA UNIVERSITY ISLAMABAD

CAMPUS
Chill Zone Vending Business
EXECUTIVE SUMMARY
Chill Zone Vending Company; is a company who starts-up business that specializes in
importing vending machines parts and assembling vending machines here in Pakistan and
merchandizing of the commercial food and beverage from local manufacturers. Initially
the company will be dealing in cold food. I will introduce a vending industry with the
innovation of high quality service and availability of the food all the time. I will establish
my own vending routes in the different location of Lahore, Pakistan.
High quality vending machines will be developed inside Pakistan keeping in view the
security concern along with the culture of Lahore. As the vending industry is a $30
billion industry world wide, there is also a very vast scope of the vending business here is
Pakistan due to the countries extreme weather conditions. It is expected that the average
profit per annum will be approximately 10 million.
Currently, there are no vending machine service providers in Pakistan, thus capturing the
market is not a big issue, and I will try to keep this edge with proper planning and
extensive surveys and intense marketing plan. The companies estimated sale is
approximately 200,000 items per month.
Keeping in view the response received around the globe it is expected that the vending
business will become one of the biggest industries in Pakistan as well in the up coming
decade.
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1. COMPANY OVERVIEW
The business that I am setting up is Assembling & Installation of Soda Vending Machines.
1
Today a soda vending machine can have more features than one can imagine. A cold drink
machine that keeps drinks inside and operated with card, coin or a note that gives that out, chilled
and hygienically untouched clean. 2Cold beverage vending machines most commonly vend drinks
and sodas held in cans or bottles. Cold beverage vending machines are now stocked with a variety
of drinks, including sports energy drinks, bottled iced teas, and juices. These vending machines
have a special mechanism that only allows them to dispense products at certain hours.
3
The name for my Company is Chill Zone. Chill Zone would be Soda & Snack Vending Machine
business operated by this company. It will offer a wide variety of services like Soda, beverages,
energy and diet drinks along with ice cream and cold snacks at various locations. However, due to
security reasons, I will not be installing these machines at public places but only at selected high
demand markets. I will be solely organizing this business and the
main objectives for me to form this business are:
Introduction of new concept (Soda & Snack Vending
Machines) in Pakistan where consumers can get drinks &

sandwiches just a button press away!
Creating more and more demand through this innovating
process and making it popular.
Making drinks and cold snacks easily accessible.
Exploring all possible target markets within Pakistan.
Innovating and re-innovating the concept through
constant improvements.
The company would try to hit possible market segments in future and multiply its market
opportunities by exploring new locations. Currently the markets that I have decided to place my
vending machines in are schools, universities, gyms & wellness clubs and a few workplaces. The
company would be based in Lahore as I see a more demand and market in Lahore as compared to
Karachi & Islamabad. The reasons being there are not as many schools & universities there as
1
http://www.vending.com/The_Wittern_Group/History_of_Innovation/Soda_Vending_Machine_History/
http://www.vencoa.com/conventional_vending_machine_products.html
3
Picture is drawn from http://e-vending.com/snack_vending_machine_hf3500_234r23f.jpg
2
Page 3
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compared to Lahore. And that is my major chunk of market. Secondly, atmosphere is very
favorable for new businesses to grow and expand at Lahore. Though, I do plan to branch out
nation wide but have no plans to go international. As internationally the market is already
maturing, but here, locally the company and product both are new, innovative and high growth
expectance. Therefore, starting from Lahore, I would spread in all major cities including
Islamabad, Multan, Karachi, Gujranwala, Sialkot etc. I would myself be importing the machinery,
then supervising and carrying out the assembling at my assembling unit, and finally the
installation of machines at various locations that I select. Furthermore, the purchase of the soda
and snacks to be places in my machines, making them ready to be used by the consumers. I would
keep on locating and hitting markets with new drinks like energy drinks, vitamin drinks, diet
drinks etc. There is more future growth in drink market as the trends are changing in Pakistan
over the past few years.
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1.1.
Mission Statement
Chill Zone Vending machines mission is to be the leader in introducing innovative,

quality vending machines to the market. Through close customer contact and
excellent relationships, we will meet the needs of our customers wherever we can.
The Company will secure sufficient profits by generating cash flow from operations,
to sustain its stability and finance future growth. We will add value to our community
by maintaining a friendly, familial work environment.
4,5
As a start-up company, new to the industry, and
introducing new products, we must be focused and

work hard to create acceptance for ourselves and our
products within the marketplace. The keys to our
success are:
Quality support and service, recognizing that

success
depends
most
critically
on
the
relationships it's able to create.
Innovative, quality products that are able to both

expand existing markets and create new ones for
our customers.
Steady, disciplined pattern of growth.
Our customers and keeping them happy.
Picture are drawn from
http://tbn0.google.com/images?q=tbn:9eEMu1bAzi1itM:http://www.rheavendors.com/imgs/ETA%2520BETA.jpg
5
http://www.bplans.com/Sample_Business_Plans/Wholesale_and_Distributor_Business_Plans/Vending_Services_Busi
ness_Plan/index.cfm
Page 5
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1.2.
6
Introduction
Vending is automatic retailing. Basically a vending machine allows selling the
products when one is not present to supervise the sales. The robotic world we as
human beings strongly rely upon is quickly and efficiently replacing human
interaction and contact. Services are now solely dependent on the consumer, who
wants products that are easily accessible with little to no hassle. Due to the demand of
machines and the constant rush everyone is in, the vending business emerged out to
be a successful business. A vending machine is defined as a machine that sells all
types of refreshments and miscellaneous items in which you pay some change and
choose which item you desire. 7Vending machines will eventually be able to take an
order and payment from a customers cell phone and be able to create gourmet meals
in minutes for its customers. Vending machines are now popping up in airports,
parks, subways and stores, as consumers become familiar with buying food and
drinks through this type of channel. 8Vending machines were only introduced in
domestic markets in 1999 but have expanded tremendously to reach great number of
customers.
It started with canned cold drinks when they were industry's top sellers. Practically
anything that can be vended, has been at one time or another. 9Items that have been
found in vending machines include clothing, flowers, milk, cigars and cigarettes,
postage stamps, condoms, cologne, baseball cards, books, live bait for fishermen,
comic books, cassettes and CDs, lottery tickets, and cameras and film.
10
Some
modern vending machines dispense hot foods such as pizza, popcorn, and even
French-fries. Vending machines generate a big share of foodservice sales in venues
such as college campuses, factories, businesses, hospitals, and schools. Bottlers pay
http://www.vendingmachines-business.com/articles/History_of_Vending_Machines.html
http://www.vendingmachine.bz/
8
http://www.euromonitor.com/Impulse_food_and_drink_channels_on_the_rise_in_China
9
http://www.madehow.com/Volume-7/Vending-Machine.html
10
http://www.answers.com/topic/vending-machine
7
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colleges, schools, and other institutions millions of dollars for exclusive rights to
place vending machines on campuses.
11
11
http://cache.gizmodo.com/assets/2006/06/12kiosk_600.jpg
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1.3.
12
History
The first vending machine is believed to have
been invented by Hero of Alexandria, a firstcentury inventor.
13
His machine accepted a coin
and then dispensed a fixed amount of holy water.

When the coin was deposited, it fell upon a pan
attached to a lever. The lever opened up a valve
which let some water flow out. The pan
continued to tilt with the weight of the coin until it fell off, at which point a counterweight would snap the lever back up and turn off the valve14.
Despite this early precedent, vending machines had to wait for the Industrial Age
before they came to prominence. 15The first modern coin-operated vending machines
were introduced in London, England in the early 1880s, dispensing post cards. The
first vending machine in the U.S. was built in
Company, selling gum on train platforms.
18
16
1888 by the
17
Thomas Adams Gum
The United States government began
granting patents for coin-operated vendors in 1896. However, it was not until 1888
that vending became a viable market in the United States. In that year, the Adams
Gum Company developed gum machines that were placed on elevated train platforms
throughout New York City. The machines dispensed a piece of tutti-frutti gum for a
single penny.
12
http://en.wikipedia.org/wiki/Vending_machine
http://www.hfaj.com/links/vwords/vendingmachines.htm
14
Picture is derived from http://web.mit.edu/2.744/www/Results/studentSubmissions/humanUseAnalysis/cosic/images/18.jpg
15
http://www.business.com/popular/coin_operated_food_vending_machine
16
http://en.wikipedia.org/wiki/1888
17
http://en.wikipedia.org/wiki/Cadbury_Adams
18
http://www.findarticles.com/p/articles/mi_gx5205/is_1999/ai_n19125123
13
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19
The idea of adding simple games to these machines as a further incentive to buy
came in 1897 when the Pulver Manufacturing Company added small figures which
would move around whenever somebody bought some gum
from their machines.
20
This simple idea spawned a whole
new type of mechanical device known as the "trade

stimulators".
21
The birth of pinball is ultimately rooted in
these early devices. After paying, a product may become

available by:
The machine releasing it, so that it falls in an open compartment at the bottom,
or into a cup, either released first, or put in by the customer
22
The unlocking of a door, drawer, turning of a knob, etc.
Sometimes the product is not just released, but prepared; this may be the case e.g. in
the case of coffee, french-fries, or a ticket that is printed after paying23.
1.3.1. How are these Machines made?
24
Vending machines are constructed primarily from four major raw materials:
galvanized steel, Lexan or other plastic, acrylic powder coatings, and

polyurethane insulation. The bulk of the machine is constructed from galvanized
steel ranging from 10 gauge to 22 gauge in thickness. The thicker gauges are used
for the outside cabinet, external doors, and internal tank. Thinner gauges are used
for internal doors and plates, can stacks, mechanisms such as coin verifier and
prod trays.
Lexan, a tough polycarbonate plastic, is used in the front panels of the vending
machine. 25Sheets of Lexan in vending machines usually range from 0.13 in (3.18
19
http://vending-machines.bestglobalinfo.com/pepsi-cola-vending-machines-to-buy.php
http://www.avoo.com/wiki/Vending_machines
21
http://vending.hostrocket.com/buy-a-vending-machine.html
22
http://en.wikipedia.org/wiki/Vending_machine
23
Picture is taken from http://www.shiotsu-used-car.com/blogpics/vendingmachine.jpg
24
http://science.enotes.com/how-products-encyclopedia/vending-machine
25
http://science.enotes.com/how-products-encyclopedia/vending-machine
20
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mm) to 0.25 in (6.35 mm) in thickness. Lexan is very difficult to break, flame
retardant, relatively easy to shape, and can be treated to restrict UV rays, light,
and heat transmission. Product logos, names, and illustrations are silk-screened on
Lexan sheets, which are installed in channels in the doors of the vending
machines.
26
Acrylic powder coatings are colored powders used to "paint" the surfaces of
vending machines. The powder is applied in a uniform layer and baked on during
the manufacturing process. Acrylic coatings withstand the rigors of weather and
abuse better than paints that are applied wet. In addition, acrylic powders more
readily meet governmental environmental standards. Polyurethane foam provides
the insulation for the inside of the vending machine. 27The foam is blown between
the outer cabinet and internal tank of the machine, where it cures into a very
tough, rigid material. In addition to thermal insulation, the stiff foam adds
structural stability to both the cabinet and tank of the machine. Finished machines
are tested after assembly. Checks are made to ensure that all electronic
components function properly, that the can stacks are fitted correctly, and that
cans are dispensed accurately and safely. If problems are found, the machines are
sent to stations capable of holding multiple units. A rework technician makes the
needed repairs, and the machine is tested again. If problems remain, the unit is
rejected and flagged.
Additional tests include refrigeration pull-down testing, in which the interior

temperature of the unit is "pulled down" to 30-31F (1-0.5C)28. This test
ensures that the machine controls and temperature controls are working properly.
Tested units are given a final visual check, then cleaned and wrapped in clear
plastic shrink-wrap. Finished vending machines are transported by conveyor to
the warehouse where they are packed and readied for shipping to customers.
26
www.madehow.com/Volume-7/Vending-Machine.html
www.answers.com/topic/vending-machine
28
http://www.digchip.com/datasheets/parts/datasheet/332/SM8220.php
27
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1.3.2. Soda Vending Machines in World Market:

29
Soda Vending Machines business started off in China, where value sales of
fruit/vegetable juice and bottled water through vending increased between 1999
and 2004. Among Chinese consumers, young adults increasingly drink bottled
water and fruit/vegetable juice, and this age group also happens to show the
greatest propensity towards usage of vending machines.
30
Unlike in other
emerging countries, sales of hot drinks were negligible in China.
In India and Russia, the most popular food and drinks products sold through
vending are tea and coffee, while sales of carbonates remain relatively marginal,
generally appealing to a narrower range of the population, such as teenagers in
Russia. This contrasts with the Mexican and Brazilian markets, which are well
developed for carbonates.
31
In India, the rapid increase in sales of hot drinks between 1999 and 2004 was
mainly driven by the dynamism of tea, while, in Mexico, coffee sales accounted
for the bulk of the additional sales.
Graph showing Soda Vending Machine Business in Worlds top Markets32

29
http://www.euromonitor.com/Vending_in_emerging_countries
http://www2.acnielsen.com/reports/documents/2003_privatelabel.pdf
31
http://www.foodandbeveragereports.com/products/eo34777.html
30
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1.3.3. Future for the industry:

Sales of food and drinks through vending in emerging markets are expected to
remain buoyant, helped by favorable macroeconomic conditions and rising
disposable incomes. 33This positive trend is fuelled by a rise in both domestic and
international tourism, as well as by new consumer habits, as the trend towards
snacking is likely to gain ground.
In most emerging markets, the continuous expansion of major cities, together with
the building of new shopping centres and the modernisation of transport
interchanges, is expected to lead to new opportunities for vending operators to
install new machines. Hence, the rise in the number of machines will continue at a
fast pace.
Meanwhile, strategies from product
manufacturers, in terms of product
packaging, and flavours innovations,
together
with
advertising
and
promotional activity, can contribute

to boost overall impulse purchases
of food and drinks from consumers,
which will also impact the vending
channel. This positive trend could
also be accompanied by the emergence of new products34.
35
The use of new technology such as cashless payment systems, using smart-cards
and mobile phones, and improved monitoring systems, also using mobile phone
technology and the internet, could help to increase the penetration of vending
machines, by providing added convenience.
32
http://www.bharatbook.com/bookdetail.asp?bookid=811&publisher=
34
Picture is taken from http://www.japan-guide.com/g/ib2010.jpg
35
http://linkinghub.elsevier.com/retrieve/pii/S1361372305001478
33
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36
In China, value sales are expected to double between 2004 and 2009, reflecting
a similar increase in the number of machines. Hosting the Olympic Games in

2008 will influence the development of this business further.
Graph showing Forecast Impulse Food and Beverage Sales through Soda Vending Machines37
38
36
www.euromonitor.com/Articles.aspx?folder=Vending_in_emerging_countries&print=true
38
http://www.pacificcoastvending.net/images/combo_snack_and_pop_vending_machine_53_k0j1.jpg
37
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1.4.
Market And Products
The companys initial strategy is to offer all of our products (beverages & cold
snacks) to selected segments of the market. The company will focus on both the end
user and the distributor initially, as the strategy to secure accounts with the nationally
branded companies will take some time to realize. As the project is an installation of
vending machine at specific allocated locations, this will address the people
requirements of getting a quality and hygienic food/drink readily available. In this
extreme weather condition of Lahore, the company has decided to launch soft drinks
and juices in summer.
39
The summer season is like ten months in Pakistan thus, this
will give the company good amount of period to get stable with single line of product
before applying new strategy.
40
The target market will be the sophisticated
and elite circle of the society because of the

security concern of the machines and the
products in them. Some of the plotted areas by
the management for the introduction of the
vending machines are Schools, Offices, Gyms
& Wellness Clubs, Colleges, Malls and some
specific hospitals. Though, the company has
decided to place the products regarding the
location and audience. Such as, in schools there
will be vending machines containing milk
shakes and snacks, as parents appreciate for
their children to have hygienic and fresh food.
Whereas in the offices; cold drinks and sandwiches will be more suited. By this the
company will segment the whole market in term of product distribution. There are
number of products available to be placed in vending machines, some of them are
39
40
http://www.fao.org/ag/AGP/AGPC/doc/Counprof/Pakistan.htm
Picture is drawn from http://en.wikipedia.org/wiki/Image:Old_Soda_Machine.jpg
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beverage, chips, sandwich, diet colas, water and many more. As more and more
consumers eat away from home, the demand for higher quality is also growing, thus the
company initially decided to be dealing with food and beverage only.
41
The hygiene and
quality maintenance is the priority of the company; the company will only be dealing
with the branded suppliers like Pepsi, Coca Cola, Nestle water and juices for the drinks,
Walls, for ice cream providing vending machines and local bakeries like gourmet, CTC
and Shezan for the supply of cold sandwiches.
The company will operate by having their own vending machines at specific routes.
Things included under this category are large institutional food service providers, and
soft drink manufacturers. The company will help the food providers to increase their sale
through vending machines at different locations.
41
http://www.cokefacts.com/news/news_in_articles_safe_water.shtml
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1.5.
Objectives
The main objectives for my business are:

Companys business objectives in our first year of operation are:
Sell 400 vending machines.
Directly place 10 vending machines that I will operate in the Lahore City area.
Achieve 20,000,000 in sales in our vending service subscription line.
For the following two years our growth objectives are:
Grow our vending machine business by 20% each year.
Grow revenues by 25% in our directly operated vending machines.
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2. PRODUCTS AND SERVICES DESCRIPTION

42
We provide vending services to all types of locations including: hotels, schools,
malls, apartments, factories, retail stores, offices and more.
Companies
and
organizations
benefit
from
Vending
Solutions
comprehensive, in-depth FULL SERVICE. We have real people providing

real service 24/7.
Vending Solutions takes care of all your vending needs. We install the
vending machines, keep the vending machines stocked with the products you
want and handle all the service and maintenance of the vending machines43.
Vending Solutions has years and years of experience refreshing people like
you. Leave the details to us today and well be refreshing your tomorrows
Its refreshingly simple.
P1
42
43
P1
Japanese Vending Machines
http://www.vendingsolutions.com/machines.htm
http://www.vendingsolutions.com/
Picture is drawn from http://www.japan-guide.com/e/e2010.html
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Stage Of Development
2.1.
The main key to success of business is understanding how markets change, and how
they react to the products and services is a vital part of management and marketing
strategy.
44
If I understand my Product Life Cycle Stage, I will be ahead of many of
my competitors. The 'Product Life Cycle' is a description of what happens to anything

that we produce and sell.
As here in Pakistan, the concept of Vending Machines is completely new and there
are no machines installed here, so my product would be in the initial stage of Product
Development and that is INTRODUCTION.
CHILL ZONE
2.1.1.Introduction stage:
At this stage of my product, the awareness level will be low and thus I will have
to spend high on advertisement costs. There will be additional costs incurred with
44
www.mactech.com/articles/mactech/Vol.13/13.10/SoftwareTestAutomation/
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distribution of my product. 45During this stage, my motive would be to build high
demand and publicity of my vending machines. The decisions for Product, Price,
Place and Promotion would be carried out here. Initially Sales volume will be low
but as the awareness level increases, and Market Strategies will be formed, the
product will start entering Growth Stage very soon.
46
The Marketing Mix
Strategies that I can consider in this stage of product are:
Need to build channels of distribution.
Develop primary demand/pioneering information.
Deciding among Price skimming (setting a high price in order to recover

developmental
costs
as
soon
as
possible.)
or a Price penetration (setting a low price in order to avoid encouraging

competitors to enter the market, also helps increase demand and therefore
allows the company to take advantage of economies of scale.)
47
The need for immediate profits might can be achieved if I use Skimming
Strategies like lowering the price of cold drinks and snacks available in my
machines initially, and then later on increasing the margins slightly. The first
concern, however would be first making people know that this new product is
here, and then thinking of making money. Substantial Development costs will be
made to complete the development(i.e. importing, assembling & installing the
machines). Since there will be little competition at this stage and I need to educate
consumers of the product's benefits.
Distribution channels will be decided and to target each market (the segments
defined in Market Analysis section), different promotional strategies will be
followed. Careful monitoring would be carried out so that my product enters the
growth stage soon.
48
As my product will be a new product, the Newness of Market and Newness of
Product are both considerable factors. It falls in the completely new category
(locally), and hence the most concerned area of business for me would be
45
http://creativity.net/blogs/ccafe/creativitycafe.html
www.cdc.gov/healthmarketing/basics.htm
47
ns.worldbank.org.ru/files/rer/RER_13.2_eng.pdf
48
www.nahbrc.org/news/presentations/ibs2007_edhudson.pdf
46
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PROMOTION and awareness creation. These costs and relevant strategies would
be covered in later chapters of my business plan. The obstacles in development
can be the import policies of the machines and their policies in different countries.
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2.2.
Market Comparison
Competitors are a vital aspect of any industry, and in many cases competitors force
the company to keep updating the business and bringing new ideas and innovation.
Fortunately in our case, currently there are no direct competitors present in Pakistani
market. 49As the list of our selling product are all the food material thus in the market
we have different competitors for every category. In short all of our client running
their own outlets will be considered as our competitors.
2.2.1. Soft Drink

Some of the indirect competitors of our company are Nestle water, Aqua Fresh,
Pepsi, Coke etc.
50
These companies currently have their
own
distribution
distribution criteria;
channels
and
this is because
currently there is no third party neutral

distribution platform available in the
market. As anyone can easily observe,
all these soft drink, juices and mineral
water
companies
have
their
own
transport and they deliver their product

directly to their distribution outlets like
shops on one to one transaction bases
Nestle and other companies mentioned

above are our indirect competitors, thou these are our expected clients as well, but
for initial launch of the vending machines we also have to compete with their soft
49
w.pakistaneconomist.com/database2/cover/c2003-29.asp
Picture is drawn from http://upload.wikimedia.org/wikipedia/en/thumb/b/b5/Japanese_Drink_
Vending_Machine.jpg/250 px-Japanese_Drink_Vending_Machine.jpg
50
Page 21
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drinks and mineral water currently available in the market.
51
We need to adopt a
comprehensive strategy which will provide us the edge over their distribution
topology.
Our identified list of competitors from the current soft drink market is as follows:
Company
Product
Nestle
Nestle Malta, Mineral water, Nescafe
Pepsi
Pepsi cola, Pepsi lime, Team, Fanta
Coca Cola
Coke, Sprite
Aqua Fresh
Mineral Water
General Stores
Soda bottles, mineral water, bakery sandwiches
School Caf
Soda bottles, mineral water, bakery sandwiches
2.2.2. Food
Currently we will be dealing with sandwiches, pastries, donuts and will be
distributing the greatest and renowned donuts makers of Pakistan Dunkin
Donuts. But as mentioned earlier Dunkin Donuts also have their own outlets
running throughout Pakistan and their more and more opening of branches will
affect our sales regarding sandwiches. And this will be the same case for Gourmet
and Shezan etc
Our identified list of competitors from the current food market is as follows:
51
Company
Product
Dunkin' Donuts
All donuts and sandwiches
Shezan
Cold Snacks
Gourmet
Cold Snacks
doi.ieeecomputersociety.org/10.1109/12.641936
Page 22
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The biggest edge we will have over these stated competitors will be easy access to
deeply located areas along with the less cost of deployment. For example, the
Dunkin Donuts will have more profit if they just sell their product through
vending machines instead of opening a full fledge branch. Moreover we will be
maintaining the hygiene level as well as the reorder level of each individual
location. Thus their product will be readily available with out any utilization of
their resources and they will have more access to the market.
52
Time and availability is critical in todays life, with the installation of vending
machine I can also address this need of the people. There are number of
advantages regarding the product I will be installing, some of them are as follows:
Superior hygiene level for the food available. And this is the surety
claimed by the vendors of the vending machines
Convenience for all the customers. There is nothing like having

availability of fresh drinks just a button press away!
53
54
Additional maintenance of the hygiene level of the food from my side.

My company will make sure the food placed in the machines are
quality maintained food along with the clean bottles and cans etc
52
search.techrepublic.com.com/search/application+availability.html
Picture is drawn from http://www.x-entertainment.com/articles/0887/16.jpg
54
Picture is drawn from http://tokenasian.animeblogger.net/wp-content/PIC_0022.JPG
53
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Consistence in the product delivery of the machine will be ensured by

my company such as, the food will be served at consistent temperature
Availability of the food will be ensured from my company that the

reorder level should be maintained at high priority
No rush in lines. As the serving of the machine is quite fast thus the
customers dont have to be in lines and wait for their turn for hours.
Moreover there is no issue regarding close of market/shops as the food
will be available in the machines through out the time
Standard in price will be implemented in all the products. There will be

consistency in the price at all the machines.
Page 24
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3. INDUSTRY AND MARKET ANALYSIS

55
Pakistans soft drinks industry is set to experience volume sales growth of 30.5% to
2010 according to our estimates and we believe that the bottled water sub-sector will be
the main driver of this growth. Within this industry, snacks and cold beverages are the
largest product segments, representing 29% and 25% of the industry respectively. These
two segments are the driving force of the industry.
The food category and especially hygienic food demand and consumption increased upto
7% in the last year, according to the Automatic Merchandiser.
56
Cold storage machines
grew at an even more impressive 42% in 2004, with this growth coming at the expense of
shelf-stable products.
57
The usage of the vending machines which I will be installing has no previous history in
Pakistan. Many companies tried to installed but failed because of poor survey and unclear
identification of the cultural environmental analysis. In Pakistan general public are not
every ethical where the user of sophisticated machinery is concern.
As my product is vending machine installation and operation, thus I will be

merchandising the soft drinks and snacks from the suppliers who are already in the
market and have a quite stable foundation, some of them are Pepsi, Coca Cola, Dunkin
Donuts, and Gourmet etc
There is no vending machine developers in Pakistan, thus I have decided to import the
vending machine from abroad. Some of the companies I listed down for the supply of the
machines are as follows.
55
56
57
http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20070629005236&newsLang=en
www.paloalto.com/sampleplans/BPP7/enu/Live/chefvending_Live.pdf
www.food.gov.uk/multimedia/pdfs/vendingmachinebooklet.pdf
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Soda Vending Machine58

o A & A Global Industries, Inc59
o Garmac Industries, Pondicherry, India
o Wave The Water, Noida, India
o Vendstar, New Delhi, India
o Enertech UPS Pvt. Ltd., Pune, India
o Panda Vending, Shanghai, China
Cold food Vending Machine60

o Garmac Industries, Pondicherry, India
o Panda Vending, Shanghai, China
o Vendstar, New Delhi, India
58
http://www.vendingconnection.com/ypmachines.html
www.aaglobalind.com/
60
www.vendingconnection.com/ypcoldfoodvending.html
59
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3.1.
61
Vending Machine Industry
The vending industry is a $30 billion-a-year industry, employing 700,000 people
who work at an estimated 13,500 companies. 16.3 percent of all vending machines
are located in schools and colleges. Most vending machines (30.2 percent) are located
in manufacturing settings.
62
Vending machine industry fulfills the concept of
the
63
Fresh Food Choice for People on the GO!
Today consumers can use vending machines to help

them streamline their busy lifestyle by purchasing
everything from cameras and vitamins to pasta
dinners
and
lobster
bisque.
64
Advances
in
technology and the growth of the internet have

created unlimited potential for this ultimate selfservice vehicle, while more services, various
payment options, and easier usage have made
shopping through a vending machine easier,
quicker and more reliable than ever for consumers.
The truth is that nowadays you can get just about
anything you can think of from a vending machine.
65
As the technological revolution continues to unfold, vending will offer new
opportunities for consumers to streamline their busy lives. Imagine,
66
for example,
instead of waiting in a long line to check into your hotel, swiping a card into a
machine. Out comes a magnetic striped key to a hotel room. Use the same card later
61
www.balancedforlife.net/pdf/About%20Vending.pdf
Picture is drawn from http://e-vending.com/snack_vending_machine_hf3500_234r23f.jpg
63
www.vending.org/cgi-bin/sc/order.cgi?storeid=*18bf609dd1cfae1c6d78aa595021&dbname=products&itemnu
64
www.emobility.eu.org/about_us.html
65
www.healthedtrust.com/pages/news.htm
66
www.mouseplanet.com/al/docs/fast.htm
62
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in the hotels vending machine to purchase a freshly made pizza where the charges
are instantly billed to the credit card used to secure the room.
3.1.1. Industry Segmentation

67
The development of new types of vending equipment led to some segmentation
of the industry, as many operating companies specialized in meeting particular

markets.
For example, 68full-line vendors turned increasingly to serving industrial plants,
colleges, hospitals, government facilities, office complexes, and other locations
with large populations that would benefit from quick access to refreshments.
69
70
These operating companies added hot and cold beverage machines, then
refrigerated food venders, to provide a wide choice of products. Some also began
67
ipc-lis.mit.edu/globalization/Development.pdf
www.abm.com/ilwwcm/resources/file/eb0006054750663/acss-capabilitybrochure.pdf
69
Picture is drawn from http://www.tropicalisland.de/japan/kyoto/images/KIX%20Kyoto%20%20vending%20machine%20for%20drinks%20near%20Shinkyogoku%20Covered%20Arcade%203008x2
000.jpg
70
www.coffee-business.net/pr/1j.html
68
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to operate ice-cream machines. Seeking to provide location management with a
single source for all employee or client refreshment services, full-line operating
companies often added manual cafeteria management to their total package
The past decade has seen a technological revolution in vending equipment, as the
application of electronics to retailing offered great increases in versatility and
convenience71. Major components of this revolution were microprocessor
controllers governing machine functions, and reliable in-machine bill valuators
allowing patrons to make purchases with banknotes.
The primary beneficiary of these advances has been the glass-front vender72.
Originally designed to sell candy and snacks, this design is now vending
everything from cigarettes to travelers necessities.
73
It can accommodate a wide
variety of package types and display them to best advantage. In fact, the glassfront machine has become indispensable. Greater product variety is required in
todays highly segmented market, and a live-product display approximating the
shelves of a store has optimum visual impact. Glass-front venders have been
replacing the traditional candy, snack and pastry machines at an increasing
pace.
3.1.2. Areas Of Vending Operator Involvement

PRODUCT OR SERVICE
DOLLAR VOLUME
Vending
$34,838,910,000
Amusements
$6,425,334,000
Music
2,000,000,000
Coffee (vending, allied products)
$4,500,000,000
Manual Foodservice
$9,090,000,000
71
www.dreamessays.com/customessaytopics/Information%20Technology.htm
www.infomotions.com/etexts/gutenberg/dirs/etext06/7batd10.htm
73
www.umsl.edu/technology/frc/worddocs/faqs.doc
72
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TOTAL COMBINED SALES
$56,854,244,000
Overall Vending Industry74
A $56.9 BILLION PIE75

My company will market its machines to three distinct segments76:
3.1.2.1. End Users

This segment will be the consumers of the product. This could be any person
who purchases the product places in the machine. According to the current
installation plan of my machines following could be the end users of my
company
o College Student
o School Student
74
http://www.4mega-vending.com/faq.htm
http://www.4mega-vending.com/faq.htm
76
http://www.bplans.com/Sample_Business_Plans/Wholesale_and_Distributor_Business_Plans/Vending
_Services_Business_Plan/Products.cfm
75
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o Teachers
o Officer staff
o Customers of any shopping malls
3.1.2.1.1. Branded food suppliers

This is the second category of my potential market. These will be the
companies interested in increase in their sale by selling their products in
the vending machines. As already mentions I will only be dealing with
cold storage food vending machine thus the major area of this segment
will be food and soft drink manufacturers77. Some of them are as follows:
o Pepsi
o Coca Cola
o Dunkin Donuts
o Gourmet
o Shezan Bakers
o International Bakers
3.1.2.2. Branded Sandwich Manufacturers and Branded Juice Companies
By working closely with these companies, we will customize our machines to

meet their specifications and to allow them to "brand" our machines with their
products78. They will either supply the machines or sell them to their
customers who will buy product supply for the machines from these
companies.
The following Market Analysis table and chart are broken down by general
market segments, versus the specifics listed above.
Market Analysis
77
78
www.businessmonitor.com/food/pakistan.html
www.bplans.com/spv/3043/index.cfm?affiliate=mbus
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2002
2003
2004
2005 2006
Potential Customers
Growth
CAGR
Cold Beverage Machines
4%
900
Heated/Food Systems
5%
1,500 1,575 1,654 1,737 1,824 5.01%
Cold Sandwich Retail Sales
5%
69
72
76
80
84
5.23%
Juice Sales Retail
4%
23
24
25
26
27
4.09%
Total
4.64%
2,492 2,607 2,728 2,855 2,987 4.64%
936
973
1,012 1,052 3.98%
Market Analysis Vending Product Sale Growth79
3.1.3. Current Trend
Demand for the product sold through vending machines remained strong in 2005,
the year for which the 2006 Census gathered and analyzed sales data for vending
machine sales80. Strong demand continued for soft drink bottles and cans despite
an increase in bottled drink beverage sales.
The summary of the 2005 Census reported the following:
VENDED PRODUCT
DOLLAR VOLUME
PERCENT SHARE
Packaged Cold Beverages
$20,877,000,000
52.95%
Snaks and Pastry
$8,695,000,000
22.05%
Cold Drinks
$4,555,478,000
11.55%
Vending Food
$3,055,000,000
7.75%
Ice Cream
$977,000,000
2.48%
Milk
$860,000,000
2.18%
Bulk Vending
$405,310,000
1.03%
Vending Product % Share in 2005 81
79
www.paloalto.com/sampleplans/BPP7/enu/Live/chefvending_Live.pdf
www.sweetleaftea.com/images/press/pdf/ConsumerProducstBuyerMar05.pdf
81
http://www.vencoa.com/2003_vending_machine_trends.html
80
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Vending Product Categories Accounting
52.95%
22.05%
1.03%
2.18% 2.48%
7.75%
11.55%

Snaks and Pastry
Cold Drinks
Vending Food
Ice Cream
Milk
Bulk Vending
For the 2006 census, vending times combined its tallies of canned cold drinks,
bottles cold drinks, and juice/juice drinks. In 2005, vending operators offered a
growing number of products and packaging to vend not only traditional soft
drinks in cans and bottles but bottles water, fruit juice, fruit juice drinks, energy
drinks, and dairy products82. Despite the increasing number of drink selections in
bottles, vending operators reported that 75% of their cold drink vending sales
were generated by 11.5 12-fl. Oz cans83.
The percentage of sales for cold drink vending products for 2006 are as follows:
VENDED PRODUCT
PERCENT SHARE
54.2%
Snaks and Pastry
22.1%
Cold Drinks
11.69%
Vending Food
6.8%
Ice Cream
2.86%
Milk
1.5%
Bulk Vending
0.85%
Vending Product % Share in 2006 84
82
www.federalreserve.gov/SECRS/2007/February/20070206/R-1270/R-1270_36_1.pdf
en.wikipedia.org/wiki/Wikipedia:Reference_desk_archive/Miscellaneous/December_2005
84
www.vencoa.com/CB_700_vending_machine.html
83
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Vending Product Categories Accounting
54.20%
22.10%
0.85%
1.50% 2.86%
6.80%
11.69%

Snaks and Pastry
Cold Drinks
Vending Food
Ice Cream
Milk
Bulk Vending
3.1.4. Current issues

The only and the biggest problem vending industry faces is the implementation of
the security on the machine. The security concerns on 2 sub issues
Physical security of the machine
Transactional security of the machine
3.1.4.1. Physical security of the machine

As the main concept of the vending machine is to provide service to the
consumers without any need of human hand, and most of the time the
machines are places idea without any surveillance. This raises a concern of the
physical damage to the machine85. A physical damage may also involve
tempering of the machine transaction verification unit and getting the product
without actually paying for it.
3.1.4.2. Transactional security of the machine

The cash will have to be verified by the machine itself in order to complete
the transaction86. Thus the main concern is that the machine should be mature
85
86
www.buildingdesign.co.uk/facil/crimeshield%20security/index.htm
www.patentstorm.us/patents/6295767-claims.html
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enough to validate the cash/coin paid by the consumer before dispatching the
product.
87
3.1.5. Growth forecast

The Vending industry has seen an extreme amount of growth over the last few
years. With vending consumers wanting products, fast, convenient and
economical88. Vending offers new entrepreneurs a way to start a business and
grow quickly. Snacks, Beverage, Candy and Food vending machines continue to
be the most lucrative and stable in the market place. Cashless vending is now
available for vending machines, swiping a debit card for added convenience when
no change in their pocket. Vending is a Billion Dollar industry, stable and
growing89
87
Picture is drawn from http://www.hack247.co.uk/wp-content/uploads/coke.jpg

www.valuationresources.com/Reports/SIC5962VendingMachineOperators.htm
89
www.vendingconnection.com/consider.html
88
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3.1.5.1. Study
The department of commerce study revealed that fewer than 5% of new
vending companies fail each month, compared with a 65% failure rate by the
Small Business Administration, for independent, new business start up90.
Vending can be a very profitable business!
3.1.5.2. Motivation
The main motivation for getting into any business is money. The only
common aspect of every business is money. That is what business is all
about. Vending allows a person to invest 10 to 20 hours per month and get a
return on money invested 100% to 200% in the first year91. This is 10 times
what they would get at a bank with a CD or Money Market account.
3.1.5.3. Money follows financial independence

Vending allows 95% of start-up to go for machines and product. Your home
can be your office92. This allows lots of possible tax write-offs that other
people never receive. 70% of vendors start off on a part time basis, keeping a
full time job, and checking their machines and servicing them after work or on
weekends. This allows their money to work for them while they keep their
present jobs. 85% of them turn to full time vending after two years. Money
does allow freedom but it doesnt93. Having money or not having it largely
controls what operation the operation we perform.
3.1.5.4. Vending can give you that independence.
90
www.bookofjoe.com/2004/09/05/index.html
www.aisa.org.af/Investment-Guide/Business-Environment.htm
92
www.eebizguides.com/downloads/pdf/BG-VM.pdf
93
www.eebizguides.com/eguides/vmrguide/becominganentrepreneur.htm
91
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Not only is the greatest growth of vending ahead of us, but also the greatest
diversification of vending is yet to come. Here are just a few reasons why
Automatic Merchandising "vending" is literally exploding94.
The high cost of labor in personal selling activities makes Automatic

Vending a more interesting alternative.
The movement of population to suburban areas, plus the desire for

more convenience in location and time of purchase makes vending
appealing.
The trends towards more impulse purchasing by customers will benefit

the growth of this industry.
95
94
95
www.eebizguides.com/eguides/vmrguide/becominganentrepreneur.htm
Picture is drawn from http://images.wikia.com/uncyclopedia/images/d/dc/Vmvm.png
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3.2.
Marketplace Analysis
This section will contain the details of my target market. As I have already explained
about the industry of the vending machine in the previous section and this section will
only address those marketplaces where I am concern.
The market will be divided into many segment, some of them are as follows96:
Potential customers
Competitors
Wholesalers
Distributors
3.2.1. Potential Customers:

As the main idea of deciding this product is to be something new to the market,
thus there will be lots of customers already available to be targeted 97. The market
always looks for new innovations and new services to ease their daily life and my
product will address their major issue of food consumption in their busy life. The
main problem I identified is the security concern of my machines thus selection of
the customers and places where I can install my machines are strictly filtered on
the bases of mode and grooming level of the consumers98.
The details of my identified customers for phase 1 and their details are as follows:
Locations
LUMS
Product to be placed
1. Soft drink
a. Pepsi diet
b. Coke light
96
www.focusmag.com/pages/targetcosting.htm
www.abika.com/help/customerprofiling.htm
98
www.acrwebsite.org/conference2005/ACR_Final_Program_2005.pdf
97
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c. Sprite Zero
d. Marinda
2. Cold Sandwiches
3. Donuts
a. Dunkin Donuts
4. Pastry
a. Gourmet Bakery
b. Shezan Bakery
c. International Bakers
5. Ice Creams
a. Walls
b. Yummy
c. Haigen Diazz (Tester First)
Justification:
The customers I found in Lahore University of Management Sciences are mostly
health conscious along with the style. Thus I have decided to place mostly diet cold
drinks there. The hostel lobby will be the best place for the sale of donuts and bakery
items along with soft drink.
LSE
1. Soft drink
a. Pepsi diet
b. Coca Cola
c. Sprite Zero
d. Sprite
e. Marinda
2. Mineral Water
3. Cold Sandwiches
4. Donuts
a. Dunkin Donuts
5. Pastry
a. Gourmet Bakery
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b. Shezan Bakery
6.
Ice Creams
a. Walls
b. Yummy
c. Haigen Diazz (Tester First)
Justification:
Being an LSE student myself, I can realize the huge demand for cold drinks &
beverages in the School. The reason for placing so many cold drinks at the institute
is the unavailability of the sheds at most of the areas of the institute. This will raise
the need of consumption of cold water and drinks because of extreme thirst.
Along with the soft drinks, I have also decided to place other cold food in the
college area along with the hostel lobby; this will help the hostiles to have fresh and
healthy food without going to all long distance to get a quality food.
BNU
1. Soft drink
a. Pepsi diet
b. Coca Cola
c. Sprite Zero
d. Sprite
e. Marinda
2. Mineral Water
3. Cold Sandwiches
Justification:
The reason for placing so many cold drinks in Beaconhouse National University is
the unavailability of the sheds at most of the areas of the institute. This will raise the
need of consumption of cold water and drinks because of extreme thirst.
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Along with the soft drinks, I have also decided to place other cold food in the
college area.
Shapes
1. Juices
a. Nestle
Sukhchaen
b. Marinda
c. Diet Coke
2. Mineral Water
3. Milk
a. Candia Milk
b. Skimmed Milk
4. Cold Sandwiches
a. Low calories sandwiches
Justification:
Gymkhana is already equipped with all the facilities so placing our vending machine
will be the added advantage for them. Moreover, the reason for placing healthy
items there is because of the consumer visits LG are mostly health conscious along
with in an intension of having a nutritious food. Furthermore, the same trend can be
observed at shapes and sukhchaen.
Telenor/Mobilink
1. Soft drink
a. Pepsi diet
b. Coca Cola
c. Sprite Zero
d. Sprite
e. Marinda
2. Mineral Water
3. Cold Sandwiches
4. Donuts
a. Dunkin Donuts
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5. Pastry
a. Gourmet Bakery
b. Shezan Bakery
Justification:
The biggest reason of selecting telecom industry is due to the fact most of the
employees have to do late sitting because of the client interaction with the client in
Europe and America where is a huge time difference and at night all the shops are
closed, at that particular moment my machines will help the employees to have
quality food and drinks readily available. Moreover their main business is call center
and their employees probably need drinks to fresh up their throat to be ready for
more calls.
Schools
1. Juices/Soft Drink
b. Nestle Juices
c. Sprite
d. Coca Cola
2. Mineral Water
3. Candia Milk
4. Cold Sandwiches
Justification:
Now a day, parents are very conscious about the food of their children specially
when they are at school. My vending machine will assure the parents they their
children will get quality and healthy food in lunch.
99
Food and beverages industry is a vast industry. Launching a vending machine in such
an extreme climate of Pakistan expected to have a big success. Initially the costumers
mentioned above are just because the product is new to the market and most of the people
99
Picture is drawn from http://www.healthpundits.com/wp-content/uploads/2006/10/junkfood.jpg

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doesnt know the operation and
features of the vending machines,
thus I have decided to go in a phases
instead of launching in the whole
Pakistan, I have decided to first start
my business with Lahore and only
targeting to a small area of elite
society.
3.2.2. Market Analysis
Market Analysis
2000
Potential
2002
2003
2004
Growth
Customers
Cold
2001
Beverage
CAGR
4%
900
936
973
1,012
1,052
3.98%
5%
1,500
1,575
1,654
1,737
1,824
5.01%
5%
69
72
76
80
84
5.23%
Juice Sales Retail
4%
23
24
25
26
27
4.09%
Total
4.64%
2,492
2,607
2,728
2,855
2,987
4.64%
Machines
Food Systems
Cold
Sandwich
Retail Sales
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Market Analysis (Pie)100
3.2.3. Competitors
Currently I do not see any direct competitors in the market except the fountain
fresh machines places in different food fast outlets. But there is a huge list of
indirect competitors which are as follows
Locations
Competition
LUMS
PDC: Pepsi Dinning Center is the official caf for

LUMS. And they have a vast verity of the soft drink
along with proper food supply. But the PDC only
places within the campus building; there is no place
where students can have food/drink at any remote
location of the institution.
My vending machine will provide quality food and

chill drinks at those places where PDC are very far
away, moreover the major portion of their students
100
http://www.bplans.com/Sample_Business_Plans/Wholesale_and_Distributor_Business_Plans/Vending_
Services_Business_Plan/Market_Analysis_Pie.jpg
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stay at hostel and there is no place to eat/drink in
hostel, the student have to goto the PDC to have
dinner or lunch thus placing vending machine in hostel
will get more costumers
Same as LUMS, the main competition at LSE will be
LSE
the LSE caf. But in case of LSE there is a clear edge

of no sheds available throughout the campus. And in
this extreme hot weather the student will prefer to take
chill drink which is available close to them instead of
walking all the way to cafeteria for a single coke.
Like as the institutes the BNU also have its on
BNU
cafeteria, but the same distance and quality food issue

lies here, and as my biggest aim is to provide healthy,
fresh and quality food along with the chill soft drink.
Will attract most of their students.
Telenor/Mobilink
There
is
no
as
such
competitors
in
the
Telenor/Mobilink centers because they dont have any

specific cafeteria or canteen. The employees bring
their own lunch or eat from outside. So I will provide
a complete meal in their office.
Askari
Alfalah
Bank,
Bank Most of the bank have well established cafeteria

system. But the young staff at bank will definitely be
interested in the features offered by my machine.
Vending machine as a product doesnt have any direct competitors, but I have to sell the
food items does have a big market and a vast range of competitors. Besides few of the
competitors mentioned above all the shops containing soft drink and cold food will lie
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under competitors list. Thou I dont have any plans to launch my machines at public
places at this point in time but still I need to make sure that there shouldnt be any
bakeries or food shops located near the machines.
101
101
Picture is drawn from

http://upload.wikimedia.org/wikipedia/en/thumb/b/b5/Japanese_Drink_Vending_Machine.jpg/250pxJapanese_Drink_Vending_Machine.jpg
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3.2.4. Wholesalers
For any business to work efficiently and to gain more profit, there is a big role of
wholesale division to play. In my case as the items which is going to sell is
already in a market and also in vast quantity. But as my product will increase their
sale in a broader scale I will be negotiating with them over the price as well as on
the supply of the soft drink and cold food in a vast quantity and in time102.
Some of the wholesalers I will initially approach for the contract and contents of
the draft will be approximately as follows:
Company
Item
Requirement/month
Pepsi
Pepsi Cola ( liter)
40000
Pepsi Cola (can)
16000
Pepsi Diet ( liter)
12000
Fanta ( liter)
12000
Fanta (can)
9000
Coke ( liter)
20000
Coke (can)
15000
Coke light ( liter)
6000
Sprite ( liter)
10000
Sprite (can)
6000
Donuts
4000
Sandwiches
4000
Pastries
10000
Coca Cola
Dunkin Donuts
Shezan
102
www.devilsfooddictionary.com/dfdarchive.html
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Sandwiches
4000
Pastries
8000
Sandwiches
7000
Nestle
Mineral Water
9000
Aquafina
Mineral Water
8000
Kinley
Mineral Water
7000
Gourmet
As already mentioned my main product to sell will be soft drink thus I will be
emphasizing on the soft drink sale more than other products. As one can observe
from the requirements mentioned above I have expected sale of around 200,000
soft drinks product around the Lahore in a month, and this will be my main
product for the revenue generation.
My vending machine will contain all the cold food items as well, thus I also have
a plan to provide my consumer a full meal package instead of just soft drink. For
this purpose I will also place an order of around 7000 cold food items and ice
creams103.
103
www.ifrc.org/docs/appeals/01/020103.pdf
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104
104
Picture is drawn from http://www.phil.mq.edu.au/staff/grestall/log/images/LBVMsmall.jpg

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3.2.5. Distributors
One of the priority areas I need to aspect is to make sure the availability of the
food in the machine all the time105. For this purpose I will make the reorder level
on all the machines and divide the market in the zone. Every zone will have its
warehouse depending and the number of items their will depend on the turnover
at that particular zone.
There will be two reorder levels to be maintained:
3.2.5.1. Reorder level of the machine

106
Refill staff will be hired and their job is to
refill the machine whenever it reaches the

reorder level. These staff will be hired on
fulltime bases. A well equipped software
will inform the back office whenever any
particular machine reaches a reorder level.
By this the person at back office can have
full information of the product sale level throughout the market.
3.2.5.2. Reorder level at warehouse

There will be another reorder level to be maintained. The level of stock at the
warehouse should not go beyond the danger line. Thus for this purpose the
software will play its part. It will inform the manufacturing company about
the number of order we required, if the warehouse itself is going down the
reorder level.
105
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106
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3.2.6. Trend Analysis

For the last couple of year it has been observed that the usage of soft drink and
cold food items has been increased tremendously. Keeping the extreme hot
weather in mind companies also launched many brand related to soft drink and
juices. The second major aspect is the increase in health conscious trend in
common public107. Today most of the people emphasis on healthy and nutritious
food items more then the cost of the product
Health, refreshing and low fat are the primary considerations in order to select any
food items specially fast food, soft drink and juices, resulting many companies
introducing new and more refreshing flavors to the market108. The biggest
example of such launch is the introduction of diet coke couple of years back by
Coca Cola Company. The product is well designed for the Pakistani market.
109
This trend is not only restricted towards
the usage of soft drink but also the

consumption of cold food is very much in
demand110. Cold sandwiches offered by
almost all the bakeries like Gourmet,
Shezan etc, moreover dunkin donuts is in
high demand among all the age group of the
market.
Whenever, there is a need of refreshments the one central requirement is the

serving of juices. This is another area at which many renowned companies are
targeting. Recently Nestle launches two flavors for juice market 111. Along with
107
www.tekes.fi/eng/publications/Tekes_Foods.pdf
www.aec.msu.edu/product/documents/Working/newproduct_fruit%20.pdf
109
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110
en.wikipedia.org/wiki/Soft_drink
111
www.drinknews.net/article.html?304
108
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Nestle, Energy drinks consumption among students and young people are at high
rate.
Growth rates in the vending industry remain strong. This growth is fueled by the
changes in the workplace and casual consumers to consume more of their meals
and beverages away from home.
As the demand for higher quality and convenience is also growing. Vendors are
now offering a full line of packaged cold meals in their machines. Margins will
increase as premium prices are being placed on branded, high-quality products.
Demographic trends are affecting the industry. A large group of young adults,
who mainly grew up on coke and Pepsi culture, have emerged as an economic
force112. This group's perceptions on colas, technology, and vending, will have a
positive impact in the vending business. Furthermore, overall population growth
rates, and immigration trends particularly, will also have a tremendous economic
impact on the vending industry.
112
www.transportation1.org/tif1report/demographic.html
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3.3.
Customer Analysis
A customer is someone who makes use of the product or service of the organization.
In my case the scale of my customers are very large and up to date. My primary
customers are the youth of the nation including school children, college student, and
fresh employees, thou I also have targeted the executive class but my primary target
is to get interest of the youth.
The main reasons for deciding such limited customer is because my product is new to
the market and contains new technology which old generation might not get so easily.
Secondly, the new generation are very much health conscious thus my healthy and
hygienic product will fulfill their need of nutritious food consumption. As vending
machine is a new product for the market thus there will not be any issue regarding
competition as far as the service is concerned.
3.3.1. Customer Definition

As Pakistan is a big market regarding soft drink consumption thus launching a
service to facilitate the sale of such product will definitely catch the customers. As
already mentioned my primary target customers so far are the young
generation113. Moreover in order to clearly understand my customers I have
designed a profile.
3.3.2. Customer Profile

A brain storming was conducted to identify and fill the attributes of the
customer114:
113
114
As Pakistan is a big market regarding soft drink consumption thus launching

www.uspto.gov/main/profiles/customerprofiles.htm
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1
115
116
Age115
1 -- 10
5%
11 -- 40
70%
40 plus
25%
Male
70%
Female
30%
Student
68%
Officers
20%
Retired
2%
Business Man
10%
Gender116
Occupation
Income Range
Pictures are drawn from http://acg.media.mit.edu/courses/mas001/exhibition/

Pictures are drawn from http://acg.media.mit.edu/courses/mas110/exhibition
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1000 -- 10000
35%
10001 -- 20000
35%
20001 -- 40000
25%
40000 plus
5%
Recreation117
Gymnasium
Sports
117
Marital Status
Married
20%
Single
80%
School
15%
Collage
30%
Level of Education
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Bachelor Degree
30%
Master Degree
25%
3.3.2.1. Detail of Customer Profile

3.3.2.1.1. Age:
As mentioned earlier my main target will be the mid age audience. Thus
my major portion of concentration will be this block118. I have also
decided to launch milk shakes and cold sandwich to gymnasiums and
health club thus this will be my second line priority
3.3.2.1.2. Gender:
In current Pakistani culture there are not frequent visits of female at
gymnasiums and health clubs. Moreover, even at college level there is less
ratio of female in comparison to male student.
3.3.2.1.3. Occupation:
My major market portions are students, office going employees.
3.3.2.1.4. Income Range:

As the product I will be selling are not very expensive. But the
communities I will be targeting are elite class.
3.3.3. Customer Behavior Metrics
118
oftwarefinder.mbtmag.com/.../Epicor-for-Service-Enterprises/ideal_customer.html
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To evaluate my customers I have decided to analysis the customer behavior
metrics of my potential customers119.
3.3.3.1. Timeliness:
I my case there is no credit transaction involved, but in future I do have a plan
to start vending machine for credit cards. In that case I will follow the
repayment process as per the banks standards procedures which are usually
45 days.
3.3.3.2. Risk score:

My customers are walk in customers and they price range is between Rs.30 to
Rs.60 per item. Thus I do not have a vast impact of credit risk. This might be
the case with the credit card acceptable machines at later stages but that that
scenario as well we will be dealing though bank.
3.3.3.3. Purchase behavior:

Who bought what products? As I have segmented my market into different
regions and different audience as school children will go for milk and
sandwiches whereas office staff will go for sandwiches and soft drink. College
students will be interested more in soft drinks than any other product
3.3.3.4. Affinity analysis:
I already have decided that there will not be only one thing for one location.
There will be a full meal available at every single location.
3.3.3.4.1. Schools:
Sandwiches + Milk Shakes
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Sandwiches + Juices
3.3.3.4.2. Offices:
Sandwiches + Soft drinks
Sandwiches + Milk shakes
Sandwiches + Soft drinks + Donuts
3.3.3.5. Timeliness profiling:
Usually we dont have such customers who subscribes to our service on

credit. But I have intentions to launch a service in which I will be placing my
vending machine at wedding halls and parties where we can direct the vending
machines means product will be dispatched without the payment and at the
end the host will pay accordingly. As this plan has a long way to go so it will
be discussed when required.
3.3.3.6. Event behavior:
Climate will play a major role on the sale of our product. In summers the sale
of my soft drink will definitely shoots up to its maximum120. This sale will
bring some extra cost of placing the machines up to maximum cooling
temperature and keeping the bottle cold. Moreover, for the cold food I have to
do something extra to keep the food fresh in these extreme hot conditions
3.3.4. Customer Value/Profitability Metrics

These metrics evaluate the customer's monetary value to the business121:
3.3.4.1. Potential profitability.

120
121
www.slashfood.com/category/soda/
www.asponline.com/profit_metrics.html
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The biggest profitability will be achieved from the sale of soft drinks.
3.3.4.2. Future profitability:

In future the products will be added to gain more profit depending on the
taste, trend and weather. As it is also a plan to launch coffee and tea vending
machines for winter.
3.3.4.3. Profitability profiling:

Students and youth will be our most profitable customers, along with the
young officer in office.
3.3.4.4. Profitability conversion:

Are our customers reaching their profitability potential? Which ones aren't? Is
there a natural grouping of these customers?
3.3.5. Loyalty Metrics

These metrics describe the customer's loyalty to the business122:
3.3.5.1. Regency:
Currently the customers of soft drink and cold food buy food from shops and
other outlets
3.3.5.2. Frequency:
In summer the sale of soft drink are at its maximum.
3.3.5.3. Monetary value:

122
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On average every customer spends around Rs.100 per day.
3.3.6. Customer Valuation

In order to retain the customers I have decided to perform an activity to identify
the vital aspects of my valuable customers123. Following table will contain
parameters along with the severity level of the customers in order to buy the
product.
3.3.6.1. Taste:
Taste mean purity. The product should be in its actual taste. Usually with soft
drink, taste changes depending on the cooling level of the soda.
3.3.6.2. Availability:
Availability means, when the customer reaches the distribution center, the soft
drink or the cold food should be available in stock
3.3.6.3. Originality:
Originality mean whatever the product is place should be original and
authorized from the manufacturers
3.3.6.4. Nutrition:
Healthy food are always in demand, and this demand has shoots up in the last
couple of year and expected to increase more in coming years
3.3.6.5. Variety:
123
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Variety is something which everyone wants. To provide this to my customers
I have decided to place different range of product and brand
3.3.6.6. Cooling:
It is directly proportional to the taste. All the bottles and food should be at
standard temperature.
3.3.6.7. Convenience:
This is a little different than availability. Convenience mean distribution
center should be available when required.
3.3.6.8. Hygiene:
Cleanliness
Severity Level
Item
High
Taste
Medium
Availability
Originality
Nutrition
Variety
Cooling
Convenience
Hygiene
Low
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3.3.7. Dissatisfaction by current product

As described above, few of the major areas which a customer emphasizes on are
vital to the sale. Current suppliers of soft drink lack with the standard of cooling
mechanism124. For example, some of the shops have extra chill rather frozen
bottles and some of the shops have warm tasteless bottles.
Convenience is the second thing which todays customer wants. If the product is
not easily available when required then the customer will definitely go for
something else. Thou every shop and every cafeteria contains the soft drink but
students cannot get the second outlet anywhere is the whole institute. This is one
of the biggest problem with my current market audience are facing.
124
www.claimvantage.com/news/media_coverage/2006/healthdecisions.php
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3.4.
Competitor analysis
The most important member of every business are competitors. In my case there are
no direct competitors as far as the vending service are concerned, as my main aim is
to launch a service/product which should be new to the market. But for the products I
will sell have a vast list of competitors.
3.4.1. Direct Competitors

Following are the products I intended to sell and the direct potential competitors
associated with them.
1. Soft Drink
a. Shops: All the general stores and shops if exist close to my vending
machine location will affect the sale of my product. Currently all the
soda manufacturers in Pakistan supply directly to the shops on
demand, thus there might be a good chance that they always have a
fair supply of the soft drink.
b. Cafeteria: Every institute has a cafeteria, and mostly has a well

established setup, and being soft drinks in a vast demand every caf
shop keep a good supply of the soft drinks.
2. Cold Food
a. Bakeries: Today every bakery contains a standard set of items

including sandwiches, pastries etc., Thus all the bakeries situated near
my machines will have a direct impact on the sale of my products
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b. Cafeteria: My biggest target market for sandwiches will be school and
offices where customers can have lunch almost everyday. And for this
reason schools and offices caf already have a meal planned for their
students and officers. There might be the case that after the launch of
my service the caf owners decided to launch something new to its
audience just to keep people away from the machine.
3.4.2. Indirect Competitors

As already notified I will be selling products from other companies. And those
companies are already well established in the market. They have their customers
exists in the marketplace but still my service will let them expand their business to
deep down the market with the use of my vending machines. Some of the indirect
customers are as follows:
1. Soft Drink:
a. Pepsi: Pepsi is a big brand in soda industry of Pakistan. They have

their market circle with a proper distribution process. If they launch
any outlet for their sale close to my machines then the sale at my point
will go down. Thou I will also be selling their product but they
launching their own channel will definitely affect my service in
general.
b. Coke: Coca Cola Company is almost equal to the Pepsi bottles. They
keep on launching new products and packages for their customers.
And for the sale of any specific product or under the influence of any
campaign, if the company decided to reduce the price of their soft
drink, then forcefully I will also have to do so.
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c. Nestle: The same aspect mentioned above also lies with the nestle
company. As they currently have one of the biggest supply chains of
their bottles.
2. Cold Food
a. Dunkin Donuts: Dunkin donuts are most renowned donut supplies are
the globe as well as in Pakistan. As it has been observed that the
company is launching small scale of outlets for their donuts here and
there. The biggest example is the launching of Dunkin outlet right at
the entrance of Pace Gulberg.
b. Shezan: The issue with Shezan is very different than the Dunking
donuts. Because Shezan opens up a full fledged bakery instead of
launching small scale outlets. But as being their in the market will
definitely affect the sale of the product placed in my vending machine,
provided if any outlet is opened near the placement of my vending
machine
3.4.3. Attributes of the Competitors
My direct competitors are not in big names but their scales are quite vast.
Basically I will be dealing with all the shops especially cafeterias of the institutes
at the level of the service they provide. As I will be selling the soft drink and cold
food in a machine and they will be selling the same products through a shops. But
my biggest edge is the availability of the product along with the quality and
freshness of the food.
3.4.4. Dislikes for competitors product

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After a vast survey the biggest aspects identified which might help me attract my
customers are the availability of the cold soft drink at all the time. As most of the
competitors like small shops and small caf owners do not have a big size of
refrigerator or fridge. This will lead them to store less number of soft drinks at a
time. At the time of lunch break hundred of school children and office going staff
some to one place for soft drinks and food, many of the especially those who
came late end of with warm soda serving.
A special instruction is mentioned on all the soft drink bottles saying Chill before
served. Because the soda bottle manufacturer knows that the taste and quality of
the soda bottle go down drastically if a warm soft drink is served.
3.4.5. Future Competitors
As seen in other part of the world, the vending machine business is a big success.
But in Pakistan the only thing lacking is a process and procedure to execute the
business. And after the success of my service there is a good chance of other
companies to jump into the business. Some of the future expected competitors are
as follows:
Atlantis Water: As already mentioned Atlantic Water Company has

already tried to launch a vending machine business but failed due to
security concerns. After observing the marketing strategy and process
flows defined by me, they will definitely try to launch their product again
in the market.
Pepsi/Coke: In other part of the work Pepsi and Coca Cola Company have
their own vending machines serving the purpose. Thus if my product
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achieves the goal states, they might try to import their own vending
machines to gain more sale just with their own name.
125
125
http://www.cokevending.co.uk/
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4. MARKETING STRATEGY
Marketing strategy is a process that will allow me to concentrate my resources on the

greatest opportunities to increase my sales and to achieve a sustainable competitive
advantage126. I will achieve the sale targets through a combination of relationship
building and aggressive pricing. I will continue to participate in industry trade shows and
expand my advertising budget when the funds become available. Current with this under
lying strategy, I wish establish relationships with larger brand name companies to
become a supplier of choice.
4.1.
Target Market Strategy
The under lining section will explain my plans to explain my business plan, which is
how to capture the market with planning and procedures127. In order to achieve my
goals I have decided the following questions to answer.
4.1.1. Market Segment

My market is very limited as compared with the overall food and soft drink
industry. Because of the limited audience exposed to the operation and utilization
of my machines and the security concerns. In order to understand and identify
specifically what my market is, I have divided the market into the following
segment and will describe each of them in proper detail to get more detailed
information to the targeted market.
4.1.1.1. Market by Age Group

I am more focused toward the youth of the nation and less focused on the old
generation. As my products are soda bottles and cold food supply thus I am
126
127
http://rch.bnet.com/search/competitive+advantage+and+marketing.html
www.soho.org/Marketing_Articles/target_marketing_strategy.htm
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pretty confident that youth will be more interested in buying of the product
from vending machines.
To define more specifically what are the major age group I should emphasis
on, I have divided this category into further two categories explained as
follows:
4.1.1.1.1. Marketing to Kids and Youth

This will be my primary customers, which I will emphasis most on. As
already decided that milkshakes, soda bottles, pastries and donuts will be
my primary product for the machines thus these food items are most
popular in the young generation.
Depending on the area and region where I will install my machines, I will
place the food accordingly. I will be placing a complete meal for the kids
which will include juices, milk shakes and sandwiches during lunch time.
To capture the kids attending is the most vital aspect here128. My vending
machines will play a role here as well. The operation of the machine will
help me get the attention of the kids. And just to operate the machine they
will buy the food and this will eventually increase the sale.
Moreover, for the youth capturing their attention will require more work.
Because just placing an electric gadget will not attract adult, or it can be
said like, initially it will but later stages when it is common this might lose
interest. For this reason I will keep on shuffling the items placed in the
machines. This shuffling can include any of the change in food items for
example, interchanging cola with lemon, or adding up milk shakes of
different flavors etc. This strategy will keep the adults visiting the
128
www.becker-posner-blog.com/archives/2005/01/comment_on_stud.html
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machines just to check the change and this will keep the product in to the
market as well.
129
4.1.1.1.2. Marketing to Seniors:

It has been observed that the health consciousness is constantly increasing
in senior people at a very large scale. The senior people dont like the coke
much but they do like white soft drink like sprite or 7up. There are very
less number of senior people who are on my list of primary customers so I
will concentrate more on the youth and kids for the major portion of my
revenue generation130.
129
130
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131
4.1.1.2. Culture
As already explained in the document, that due to major security concerns I
have restricted my service to limited audience only. To define those audience
I have analyze the market based on the culture. As my machine will be a new
technology and new to the market I have to retain its operation to only the
elite class of the market, furthermore, I have also decided to place my
machines in the clubs where average living people comes but all of them are
well aware of the use of the technology and well aware of the legal issues
131
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regarding tempering of machine physically or tempering the transaction
chamber of the machine132.
133
132
133
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4.1.2. Characteristics of the Market

Every audience reacts and attract to certain flavour offered, this reaction is
directly proportional to the background they belong and this background also
defined certain attributes in their personality. Following are few characteristics
which defines my target audience134:
4.1.2.1. Age:
As mentioned in the last section, the age of my primary audience will be
youth or kids of the society. As mentioned in the Consumer Analysis Section,
70% of my total market will belong to this block. As I have decided to target
schools, colleges and offices, thus with these area in mind I can clearly point
out that major portion of my market will consist of the people in the 11 to 40
yrs of block
4.1.2.2. Gender:
Due to our culture limitation many ladies and girls are not allowed to visit
gymnasium and clubs. And those who do are very small in number, thus male
customer will be more instead of female. This has nothing to do the taste or
interest, but here the culture and mindset plays the part. To get the most of this
category, I already planned to place my machines in schools and colleges
where women can have access to my service.
4.1.2.3. Occupation:
I have defined set of meals for school children and college students as well as
office staff, and most of my market belongs to this range.
4.1.2.4. Trends in Prices:

134
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The general concept of my audience is not being very price conscious. Paying
a little more for any quality product with easy access is acceptable rather than
saving couple of bucks to travel long distance in order to get the same
product.
4.1.2.5. Quality:
Quality is at high ground for my target market. People I have defined for my
audience and very quality conscious rather they emphasis most on the quality
then anything else. Hygiene also comes under the quality section and the
primary feature I offer to the market is full of quality and hygienic food.
4.1.2.6. Appearance:
Look and feel is something which always attract, and if it come with new
technology and new idea then this aspect will definitely capture the eye of
every single person.
4.1.2.7. Packaging:
To maintain high quality, I will keep the food cool and packing and delivery
should be up to the international standards, otherwise I will not offer that
specific product as part of my service. Standard packing boxes for
conventional produce may also be used for packing of food. However, the
packages should be clearly identified as eatables.
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135
4.1.3. Scale of the Market

The overall scale of the market is very vast. Soft drink and food consumption is at
its maximum level especially in summer season. Every person drinks at least a
single bottle per day and this is the minimum, most of the people consume around
3 to 4 soft drinks per day depending on their job136. Usually this figure is most for
those who have a field job.
My target market is very limited as compared to the whole, because of many

reason already explained. Even then the limited market I will be targeting
contains thousand of buyers per day. The list of my potential market audience is
as follows:
135
136
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4.1.3.1. School
i. Students
ii. Teachers
iii. Working staff
4.1.3.2. College
i. Students
ii. Teachers
iii. Working staff
4.1.3.3. Office
i. Officers
ii. Working staff
iii. Visitors
4.1.3.4. Gymnasium
i. Visitors
ii. Members
iii. Guest at parties
4.1.3.5. Health Clubs

i. Members
ii. Working staff
The market is very wide and being the pioneer of vending business in Pakistan
currently I dont have anyone competing with my service. Thus the market is full
open for me to launch my service, thou I have to complete in order to sell the
product. Still I have decided to place my machines at those locations where other
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distributors dont have access so far, thus under such circumstances, it save to say
that I have all the ways open provided my placement is correct.
137
137
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Customers:
The biggest portion of my market consists of the youth and kids. Following are
few answers which will further define my customers mindset138.
4.1.3.6. Who is using the product?

Mostly those people who spend most of their time outside the house or in the
field working will definitely require my product. This category includes
school children, salesmen, office staff and many more. These people required
soft drinks at standard cooling temperature along with fresh and healthy food.
4.1.3.7. Why do they use the product?

Under such extreme hot conditions my audience one way or another force to
have a drink to cool down their body temperature. And soft drinks are the best
way to do this with taste. But if the soft drinks are warm then the things get
worst. At that point my vending machines will play its part139. As it will
always keep the soft drinks cold up to the standard temperature required
4.1.3.8. How is the product used?

My product is mostly individually consumed by the customers. Soft drink and
cold food is a complete meal for every individual. And keeping the food under
the standard defined environment will keep the food healthy and nutritious140.
138
www.bplans.com/.../Wholesale_and_Distributor_Business_Plans/Vending_Services_Business_Plan/
index.cfm
139
www.bauerfeindusa.com/html_gb/service_faq.php4
140
www.adm.uwaterloo.ca/infostor/used_products/index.html
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4.1.4.
141
End Users
End users of my product will be the

individual buyers at schools, colleges and
offices. These users would ultimately buy
the products available at my vending
machines. All the first pace efforts made
from launching of machines to making
sure the availability of products would be
made to these end users142.
141
142
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4.1.5. Market Requirements:

The biggest requirement today of our target market is the availability of the
healthy and nutritious food at easy convenience.
4.1.5.1. Soft Drink Requirement:

The biggest thing people notice in the soft drink is the cooling level. And
because of the extreme hot season in Pakistan and extra consumption of soft
drink most of the people usually dont get the cold soft drink all the time. And
drinking warm soft drink will increase the frustration in the audience143.
My vending machines will address this issue as I will always keep the bottles
cold and maintain a standard temperature. Thus all my customers will always
get the cold soft drink. This will lead to addition of new customers on timely
bases, especially when cold bottles run out at cafeteria and shops.
4.1.5.2. Cold Food Requirement:

Today the biggest issue with the market is the weather conditions. Sandwiches
and other eatables rotten up because of hot weather, especially cheese and
butter items144. This lead to problem while consuming lunch at schools and
colleges even at offices.
My vending machine will make sure that the food placed in it will remain
healthy and fresh. This will increase the confidence in my customers that
whatever they get from my machines will be fresh and healthy.
143
http://member.openmobilealliance.org/ftp/Public_documents/MCC/2003/OMA-MCOM-2003-0073Input-for-Requirement-Gathering.doc
144
cityofbartlesville.org/caffeine/uploads/files/CommDev/zoningregulations.pdf
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In Pakistani summer season, the above mentioned problems are very vital and
common. Thus by introducing the vending machine concepts, I will address
the core issue of health problem in Pakistani market. Most of the people get
sick by eating rotten food and get flu and bad throat my drinking pirated or
warm drinks145. Moreover, my machines will increase the satisfaction level in
parents that their children are eating quality and healthy food in lunch.
145
waterfilters-r-us.com/watersecretsblog/
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4.1.6. Product Positioning

Product positioning refers to what the consumer thinks of my product when they
are making a purchase decision. As my customers will be elite class and mostly
upper level society, I have to be more focused on the quality matters.
Based on a very large scale survey, following are the result was observed
Results
Comments
Upon asking a question about the
appearance
and
condition
of
the
product which is to be sold, clear

majority are very much interested in
nice appearance of the product.
Same was the result found when the

survey was evaluated for the taste and
flavor of the soft drinks and cold food
As I have already decided that my

primary objective is to provide healthy
and fresh food, thus the survey result
was also up to my expectations. Around
62% of the people extremely wanted the
food to be fresh along with the 34% of
very high selection. Thus over all 97%
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of the people as looking for healthy and
fresh food.
As the product ill be distributing are
very much in demand, thus storage of
the soft drinks are not expected to be
more than 6hr tentative. But still many
people are concerned that the food
storage location (In my case vending
machine) should have the ability to keep
the food fresh for longer period of time
Graph showing the taste scale of the customer146
147
146
147
Graphs are drawn from www.foodproductdesign.com/articles/466/466_1096QA.html

Picture are drawn from http://www.idealcoffee.com/images/vending_snacks_big.jpg
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4.2.
Products Strategy
My vending business will import a variety of innovative products that will serve the
needs of special mentioned segment of the market. The main aim of the machine
business is to expand the existing sale of soft drink and cold food manufacturers and
open new lines of sales for our customers148. In order to achieve maximum sale and
profit, I have to categorize my products, according to the region
4.2.1. Product Description

My vending business has three channel of the vending machines three line of
restaurant equipment. The main center of revenue will be the service ill provide to
my customers in a form of selling soft drinks and cold food
My main services are:
4.2.1.1. Soft Drink Vending

This machine stores, in a refrigerated unit, up to 270 coke cans and 240
bottles. As the biggest demand of the customer is the availability of the soft
drink at easy convenience149.
4.2.1.2. Cold Food Vending

The machines placed for cold food can carry up to 140 pre packaged
sandwiches. When an order is placed, the machine will deliver the sandwich
in 5seconds. And can store the food for 48hrs, keeping the food fresh and
healthy150.
148
www.answers.com/topic/market-segment
www.newstarget.com/soft_drink_vending_machines.html
150
www.vending.com/Vending_Machines/Cold__Frozen_Food_Vending_Machines/
149
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151
4.2.2. New to the Market
My product will be new to the market and it will be new excitement to the
audience, many of my target audience must have seen the use of vending
machines in international dramas and movies, but operating it themselves will be
new and interesting for them.
4.2.2.1. Competitive Difference

The biggest edge I have over my competitors is being a pioneer of vending
business in Pakistan. Thus the whole market is open for my sale. But the
difference will be the way I sell the product. Keeping the produce cold and
assuring the consumer that whenever the consumer gets the product they will
get it up to the standard and with all the pre requisites fulfilled accordingly152.
4.2.2.2. Strength of my product

151
152
Picture are drawn from http://www.idealcoffee.com/images/vending_snacks_big.jpg

www.energystar.gov/ia/products/vending_machines/UB_Case_study012606.pdf
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There are lots of areas where I can focus on with full strength, in order to
attract the customers. Some of the strengths are as follows153:
4.2.2.2.1. 154Standard:
Implementing a standard pattern will
definitely catch the interest of the
customers. Especially I am targeting the
sophisticated class of the market. Thus
they all will definitely note the standard
procedures
and
their
quality
of
implementation.
4.2.2.2.2. New Technology:

As the vending business is new to the
Pakistani food industry thus this will
attract the audience a little more.
Because in summers of Pakistani the
consumption of soft drinks increases at
high scale and if they get their desired
product from something new and more attractive as compared to the
regular refrigerator, then this will create the curiosity among the general
audience.
4.2.2.2.3. Specific Audience:

It is already communicated that my target market for initial launch of
business will be the elite class of the society. This society emphases more
on the quality of the product and presentation of the service more than the
product price. Thus if I manage to make the product hygienic and present
153
154
www.vendingmachinesunlimited.com/gripstrentes.html
Picture are drawn from http://www.izze.com/data/fe/Image/schools/Izze-Machine-002.gif
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up to their expectations then I can change a little extra for the same
product155. This will increase my profit share.
4.2.2.2.4. Convenience
Due to availability of the machines at every possible location it will be
more convenience for my audience to access the product. Currently the
soft drinks and food are only available at shops and cafeteria. These
cafeterias are one for every institute, thus students having problem
accessing to the product156. My machine will be placed at different
locations where the distance to the cafeterias are very far.
4.2.3. Weaknesses of my service
157
Every business has some bottlenecks and
identifying such weaknesses at early stages

will be best for my future decisions
4.2.3.1. Security Concern

Depending on the trend observed in
Pakistan. Placing the machine at common
places of the market might lead to the
damage of the machine in both physical and
transactional aspects158.
4.2.3.2. Operational Concern
155
www.viaexpo.com/info-vending-forum-eng.html
www.ifla.org/IV/ifla73/papers/158-Johannsen-en.pdf
157
http://img.alibaba.com/photo/11067776/Hot_Beverage_Recipe_Based_Vending_Machine_With_Coin_Val
idator.jpg
158
www.hanna-vending.com/vendingsecurity.htm
156
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As the machines will be new to the market, consumer might not accept that
the food placed at the machines is hygienic food and the customers might
resist buying it at first place159. Moreover, all my audience is quality
conscious people, thus there might be confused while buying the cold food
due to the fact that food placed might be old and rotten.
159
www.food.gov.uk/multimedia/pdfs/vendingmachinebooklet.pdf
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4.3.
Pricing Strategy
There are a variety of pricing strategies in existence. Each strategy is used in a

different set of circumstances. Some of the things to consider when choosing the best
strategy for the situation in hand
The primary goal of most businesses is to make a profit. There are many factors that
affect the profitability of a business, such as management, location, cost of labor,
quality of product or service, market demand and competition. Market demand
controls the response to your product or services160.
According to me, the ideal price is one which is acceptable to me as well as to the
buyer. A brainstorming was conducted in a series of steps to determine the price of
my product.
4.3.1. Analyze the size and composition of your target market.
In order to forecast profit bases on the product price I will select, first of all I have
to do some calculations regarding the estimate approximately how large your
potential sales volume could be, based on a reasonable assessment of my potential
market share in the product category, at different price levels161.
Following table defines the locations of the market and the expected audience
count:
160
161
Location
Customers
Schools
9,000 per day
Colleges
3,000 per day
Offices
2,000 per day
www.marketresearch.com/map/prod/1488584.html
www.claritas.com/claritas/target-marketing.jsp
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Gymnasium
1,000 per day
Total
15,000 per day
4.3.2. Researching Product Price Elasticity
My product line and its demand are mostly inelastic. If I raise a bottle price by 2
to 5 rupee then it wont affect much of my sale block. As my audience are already
upper class of the society and fluctuation of couple of bucks will not put any
negative impact on my over all sale
4.3.3. What does price elasticity mean for product pricing
Currently there is no competitor present in the market. Thus I can place the price a
little bit higher then the market demand. But in later future if I get any strong
competitor I can reduce my price close to it. Moreover, my product line falls into
the inelastic scale, thus price fluctuation will not affect much.
4.3.4. Evaluating the Product's Uniqueness
My service is unique from other distributor current present in the market, due to
the implementation and placing hygienic and quality food items in a machine.
Moreover, my service will be 24hr available to the market with same parameters
and service level.
4.3.5. Analyzing the Costs and Overhead
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Not only defining the price of the product means the job is done. I also have to
cater many of the overhead cost to exactly price my product to gain maximum
profit.
The cost of the product production and services will be added to the overall cost
of the sale.
Marketing and other expenses will also be considered while pricing the product.
4.3.6. Selecting final Pricing level
Final pricing levels for products should have flexibility for both increases and
discounts to customers. Price increases may be inevitable because of component,
ingredient, and processing cost increases. The market may or may not absorb
price increases without decreasing volume effects.
Following table defines the price rate of my individual products
Items
Selling Price
Pepsi 1/2liter
22
Pepsi Can
26
Coke 1/2liter
22
Coke Can
26
Sprite 1/2liter
22
Sprite Can
26
Fanta 1/2liter
22
Fanta Can
26
Donuts
30
Pastry
35
Sandwiches
40
4.3.7. Evidence to prove the Pricing Strategy

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Pricing of individual product will be accepted by the selected target market,

because I have selected the upper level of the Pakistani society where people can
pay extra for hygienic and healthy food, along with the availability confirmation.
Thus I promise all the factors which are required by the client and in return I can
charge something extra to maintain such standard and hygiene level all the time.
Moreover, if one look at the price list of product then anyone can say the prices
are not very high as compared to other distributors.
The above conclusion was based on a survey where people emphasis on the
quality and hygiene along with the easy convenience and cold food availability
rather then price
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4.4.
Distribution Strategy
Distribution is placing the product at the desired location of the customer. One can
choose a wide variety of methods to distribute my product and service. It is
recommended that one should have multiple varieties of methods just to keep the
supply of the service in a flow162.
In general there are two distribution methods
4.4.1. Direct Distribution
In my case, the major portion of the distribution is the direct distribution, as I will
be managing all the distribution of the product and placing the cold food and soft
drink in the machines.
4.4.2. Indirect Distribution
It is expected that after sometime when the business expands and I cross the
business beyond Lahore and switch to Islamabad and Karachi. I probably need
more distributors to keep the food up to its upper level to service the customers all
the time.
162
www.fmcg.com/whatwedo/fs_distributionstrategy.htm
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163
Once, I have identified which distribution methods is most suitable for me in the
current circumstances
One can choose a wide variety of methods to distribute your products and
services. One probably end up with a variety of methods. Now its time to select
the channel of distribution164
In order to select the distribution channel, I have to consider the following factors:
163
164
Picture are drawn from http://static.flickr.com/112/291644186_2c517b16c4.jpg

www.tutor2u.net/business/marketing/distribution_channel_strategy.asp
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4.4.3. Market Factors

Market is the final arena where my product/service has to perform and buyers are
the key person to focus on. Thus following buyers attitude are importance to
notice in order to design a distribution architecture165
4.4.3.1. Buyers Behaviour

The audiences I have selected are mostly elite class of the society; they
usually have no time to search for food, thus the most convenient and hygienic
food available to them they will consume it. Keeping in view this behaviour of
my audience I have decided following standards to efficiency perform the
business according to the desire of the customers166.
4.4.3.1.1. Define Reorder Quantity

Depending on the number of audiences and the consumption of the food
items I have derived a formula to calculate the reorder level:
Reorder Lvl = (Max Quantity(Average Sale/refill+10% Average Sale/refill))167
165
www.efficientfrontier.com/ef/901/factors.htm
www.tutor2u.net/business/marketing/buying_introduction.asp
167
Formula designed by me from net analysis
166
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168
4.4.3.1.2. Reorder response time

Not only keeping and eye on the reorder level will increase the sale, the
next challenge comes is refilling of the machine in time. A tested formula
is derived to define the response time for reorder of the machine.
169
Response Time = (Distance in km x 180seconds)
168

http://upload.wikimedia.org/wikipedia/en/thumb/b/b5/Japanese_Drink_Vending_Machine.jpg/250pxJapanese_Drink_Vending_Machine.jpg
169
Formula designed by me from net analysis
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170
4.4.3.2. Buyers Need

The biggest attribute which allows every business to excel is the need of their
service/product in the life style of the customers. More will be the need, more
will be in demand.
After evaluating my audience, I have derived my parameters of the needs of

the buyers in customer strategy section above. The biggest requirement and
demand of my target customers are as follows171:
Hygiene
Convenience
Availability
170
Picture are drawn from http://www.bargainist.com/deals/images/2007/01/cold-drinks-vendingmachine.jpg

171
www.buyerzone.com/facilities/vending_machines/qz_questions_827.jhtml
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Nutrition
Variety
Taste
Originality
Cooling
4.4.3.2.1. Intermediately Cost

This is unforeseen costs which are mandatory to every business to operate.
Some of the common types of intermediate costs are Commission and
Mark-up. While selecting the distribution channel I also have to consider
these costs as well, because sometime these costs might be deemed
unacceptably high for the ultimate producer business.
4.4.4. Producer Factors

172
This is one of those factors
which are directly dependent on

me. How I run the business and
how much of the total budget I can
allocate to the distribution channel.
Not only have the monetary
factors to be considered also the
resource availability and resource
qualification and skills been also to be considered173.
In my case I have decided to establish my own distribution channel and

distribution staff will be explicitly recruited.
172
Picture is drawn from

http://www.notestomyself.net/notes/images/060124_japanese_drinks_vending_machine.jpg
173
www.ibtimes.com/articles/20070226/vending-machine-tax.htm
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4.4.5. Product Factors

For a small business like supply of frozen food and soft drinks to the customer
requires short distribution channel. As I have the resources and finance I can
manage to establish a distribution cell of my own174.
Reason for creating my personal distribution cell is the intensity of the supply
chain is very high for my product, and also the quality to be maintained because
one of my key features on which my audience will be most interested are the
quality, availability and hygiene level. Thus I have to manage all distribution
channels and proper performance audit should be conducted on timely bases to
maintain the standard.
Following table defines the intensity of the following factors on my business
Influence of Distribution Channel
30%
20%
Market Factors
Producer factors
Product factors
50%
Source: www.marketing-planet.com/articles/distribution-channels-performance-brand-image-influence-55.html
4.4.6. Distribution Intensity
174
www.articlepros.com/business/success-in-business/article-78282.html
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There are three broad options in order to select the distribution channel
4.4.6.1. Intensive
Security was a big concern in order to select the target market, and it is
decided that I will go for limited business cycle and limited business class for
the sale of my product175.
Thus, considering intensive sale is out of question depending on the current

circumstances and current decision made
4.4.6.2. Selective
This will be my area of interest. As already mentioned I will select a specific
audience for the sale of my product thus the selective distribution channel will
be best of my business.
I also have decided to establish my own distribution cell thus managing one
set of clients with one circle would be easy.
4.4.6.3. Exclusive
As there are many competitors already situated in my target market thus
exclusive channel distribution is not possible in my case
175
www.csis.ul.ie/dafx01/proceedings/papers/hanna.pdf
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4.5.
Advertising and Promotion Strategy
One of the major decisions that I have to make involves the selection of media
vehicles to use in an advertising plan. Thus, they must make choices between media
types television versus radio versus newspapers and so forth
I consider advertising as an investment in my business, similar to other investments to

improve and expand my business. The return I receive depends on the planning and
thought that precede the actual commitment and expenditure of advertising budget.
Four Basic Questions

The basic premise of an advertising plan requires me to thoroughly analyze the
answers to key questions before I can make effective advertising decisions.
There are four key questions to ask myself:
4.5.1. What Do I Want My Advertising To Accomplish?176
Under this section I listed down the points of my ultimate goals which I wanted to
achieve though advertising.
Following are few goals which I wanted to achieve and my advertising campaign
will help me get through.
4.5.1.1. Increase Awareness:
176
www.completesiteinteractive.com/content.asp?tgt=BS/fg/fg-Advertising.html
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As my business is new to the market, thus I wanted to create an awareness of
the full utilization of the vending machines. Moreover, not only the utilization,
but also to make my audience understand what is the difference between
purchasing a drink and food from the regular shop and purchasing it from the
vending machine.
Instead of just providing awareness of the vending machine among the

audience, I will also emphasis on the promotion of the health and hygiene
consciousness among by potential buyers. So that, they will prefer hygienic
and nutritious food over the open stored food from the cafeteria and shops
4.5.1.2. Attract Competitors Customers:
As my direct competitors of the vending service are not currently present in

the market but sellers of the product like soft drink and cold food are currently
sited in the industry like shops and cafeteria. My second objective is to attract
the competitors customers towards the use of the vending machine instead of
buying the soft drink from cafeteria177.
4.5.1.3. Increase the likelihood of keeping current customers:
As at this point I will be well aware of my customers along with the

competitors customers I can focus on. Now I will try to retain my current
customers by keeping the quality level up to the standard all the time and keep
bringing new deals and products for the customers to buy. This will keep the
177
www.retailsales.net/attract_&_keep_better_customers.htm
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customers intact and the customer will keep on visiting the machine every
now and then just to keep updated with the new arrivals178.
4.5.1.4. Generate immediate sales:

179
As my machines will work 24hr a day, and its automatic selling will start
the sale immediately. Thus, the user should know that whenever any machine
is placed at any location it is up for running and serving at the quality
standards.
180
178
www.henkberg.com/customer_service.php
rogerparker.typepad.com/newsletter_marketing/2005/04/how_to_convert_.html
180
Picture is drawn from http://www.danciprari.com/images/worldtrip/japan/ja-kyo-street-view-vendingmachine-kristen-600.jpg
179
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All the above mentioned goals are important for my business to run successfully. But
keeping in view the time schedule I have prioritize my goal accordingly.
Following is the priority list and its justification:
Priority Objective
Justification
Generate
The main reason for keeping this objection top of the
Immediate Sales
priority list is that, the end user should know about the
sale service criteria of the business. Mostly people here
in Pakistan are not very aware of the automatic selling.
But then trend is changing and mostly people are
familiar with the concept of ATM.
The biggest objective I want to achieve is that whenever

any customer looks at the vending machine will know
that if the machine is here then it should be ready for the
sale along with the quality and standard claimed by the
company.
Increase Awareness
Once the audience is familiar with the concept of the

machine, now its time to groom my customers about the
full utilization of the vending machine. This can be done
through leaving out flyers along with the user manual
instruction paper.
After the indirect training of the audience and when the

user started using the machine, now its time to increase
awareness among the audience about the hygiene and
health importance. Most of my audiences are currently
well aware of the health and hygiene level but just to
keep them close to the main service standard of the
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business which is providing hygienic, nutritious and
healthy food all the time.
Increase the
This is the most vital section of my whole business. It
likelihood of
has been observed that the audiences are always
keeping current
attracted towards the new things. Thus, keeping them
customers
happy and providing them new and exiting service all

the time is tough.
Once, I acquire the customer channel. My main focus

will be on their likelihood toward my products/services.
Attract competitors After creating my customer list and keep them loyal to
customers
my service, now its time to extend the business and

capture other part of the market. This can be done by
installing new vending machines along with launching
new promotion campaigns and offers to attract my
competitors customers and once they join my customer
list I switch back to priority 3, just to keep my current
and newly added customers loyal to my service.
NOTE: Priority Rating 1) Maximum. 4) Minimum

Source: Idea redesigned by ME from internet analysis
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181
4.5.2. Who Should My Advertising Speak To?
182
As I have determined my advertising goals now I can select my target audience
for my message. A detailed customer identification is done in customer analysis

section described previously, a brief summary of the audience any product
message is described below:
Audience
181
182
Products
Picture drawn from http://www.lhup.edu/rsandow/images/TokyoAdd/jihanki.jpg

www.completesiteinteractive.com/content.asp?tgt=BS/fg/fg-Advertising.html
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School Children
Sandwiches + Milk Shakes + Juices + Chocolates
School Staff
Sandwiches + Milk Shakes + Juices + Soda bottles
College
Sandwiches + Milk Shakes + Juices + Soda bottles + Pastries
Offices
Sandwiches + Milk Shakes + Juices + Soda bottles + Pastries
Gymnasium
Milk Shakes + Juices + Soda bottles
4.5.3. What Should My Advertising Say?

183
At this point I am well aware of my goals

along with the customer needs and my
product list, thus I can easily select my
advertising pattern for my audience. While
selecting the advertising pattern I have also
considered "AIDA"184 in mind:
Attract Attention: This is very important for

my kind of business where the product is new
to the whole market
Hold Interest: Just attracting the customers
are not the goal, keeping them intact and
retaining their attention towards our service will be the main activity
Arouse Desire: As my products are to be consumed, thus a desire of need

should be developed in my customer.
Motivate Action: Once the customer is aware of the product and a need is
identified by the customer for my product, at this point I should stimulate
183
Pictures are drawn from labnol.blogspot.com/2006/04/vending_pictures034343.html
184
http://www.selfgrowth.com/articles/FourStep_Formula_of_Writing_Classified_Ads_Use_AIDA_formula_for_Successful_Free_Online_Classified_Ads.html
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my customers to reach out towards my vending machine and actually
purchase the product.
4.5.4. Where Should I Place My Advertising?
This would be the last step of my advertising campaign. In this phase I actually
transfer my plans and my business plans to the open market. Every month new
advertising options become available. Beyond "traditional" media you can place
ads in airports, on ski lifts and on television monitors in the front of grocery
carts185.
Many advertising media work well to reach a diverse range of target consumers.
There is no single medium inherently good or bad. A good medium for one
product or service may be a poor186. There are many channels for me to publish
my advertisements on. Some of the selected media are as follows:
4.5.4.1. Television:
Today television is the most common and most reliable mode of transferring
my message to my respective audience, whereas, not only to my desired
audience but my future audience will also have the knowledge about my
product before I actually reach them.187
With the installation of cable-tv it is more easy and reliable to communicate

with the client, convey my message at a very cheaper cost. For this purpose I
185
labnol.blogspot.com/2006/04/where-should-i-place-google-ads-for.html
http://www.audit-commission.gov.uk/reports/product_list.asp?CategoryID=&prodType=BVIR&PageGroups=10
187
www.admedia.org/
186
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have decided to utilize both the media (TV & cable) based on the following
criteria:
For television a high level of advertisement and macro level of promotion

will be published. So that the whole industry should know about my
company, my plans and my services. This will lead us to the more
suppliers who wanted to access the market am currently located but
couldnt because of the access restriction.
For cable Ill be targeting my specific audience situated on that particular

region. For Example: If I launch any campaign for DHA Lahore, then
cable tv distribution center will only access my DHA advertisement to
DHA specific customers only. Same will be the case for Gulberg and
Model Town. In Lahore World Call are the biggest and most renowned
cable distributors. Moreover, local cable operators will also be accessed in
case of further advertisements
4.5.4.2. Newspapers
Newspapers permit an advertiser to reach a large number of people within a
specified geographic area. Newspaper advertising has several advantages for
the small business. An advertiser has flexibility in terms of ad size and
placement within the newspaper. Exposure to the ad is not limited, so readers
can take their time with your message. Short deadlines permit quick response
to changing market conditions188.
A well designed advertisement will be developed for the local and nationwide
news papers.
4.5.4.3. Magazine:
188
www.brandrepublic.com/
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Magazines provide an advertiser with the means to reach highly targeted
audiences. Specific groups can be reached by placing an ad in a magazine
whose editorial content specializes in topics of interest to that target. This is
true of both consumer and business publications.
Audiences can be reached by placing ads in magazines which have welldefined geographic, demographic or lifestyle focus. Beyond the ability to
reach specific audiences, the advantages of magazines include relatively long
ad life and repeated ad exposure (magazines are typically looked through
several times before discard), excellent reproduction quality and pass-along
value. The disadvantages of magazines include: long lead time, limited
flexibility in terms of ad placement and format, and the potential for high
costs in production and placement189.
As my selected audiences are from the elite class of the society thus
publishing an ad in the magazine will definitely catch an eye of my target
audience. Same as with the newspapers, a well formed ad will be printed in
the magazines.
4.5.4.4. Outdoor (Billboards)
It is observed that the sale for cold food and cold drinks are at its maximum in
summers and summers can be brutal when anyone is working outside in the
sun. Keeping this aspect in mind I have decided to place outdoor billboards
close to the situated vending machines. So that after watching a billboard the
customer will feel the need of soft drink and when the need is generated my
vending machine will be situated very near to make the sale possible.
189
www.websitemarketingplan.com/small_business/magazine.htm
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190
190
Picture drawn from http://www.beverage-vending-network.com/images/450px-Pringles_machine.jpg

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4.6.
Sale Strategy
First and foremost, I am enthusiasm to what I am selling is valuable in presenting it to

the marketplace. The next step is to develop a sales strategy, deciding how and who
to sell to. For this purpose planning is most crucial, more the planning more easily it
will be to close a deal and develop a loyal customer base.
Following are few steps that will ensure whatever the sale strategy I have decided to
create:
4.6.1. Identify product's features and benefits

The first and foremost thing is to know about my products worthiness. The
product am dealing with are the installation of the vending machines and selling
the product like soft drink and cold food191. The details of the products and
features are mentioned in the product description section earlier.
4.6.2. Look at competition

192
Regarding vending service there is no direct competitors. But for the sale of the
product I have a vast line of the competitors. I have been observed that the people
are not well aware of the brand recognition regarding consumption of soft drinks;
only the availability is enough for most of the audience. But my audiences are
well aware of the hygienic products. Thus currently my selected audiences are
forces to buy the product from my competitors because of the unavailability of the
hygienic and nutritious food.
191
192
www.mercury.com/us/products/quality-center/functional-testing/quicktest-professional/features.html
www.business-opportunities.biz/2005/10/08/look-for-competition/
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193
4.6.3. Sales method

Once I've identified my assets and my potential not it time to assess the benefits
of my products can potentially bring my customers, the next step is to plan what
method to use in selling your products194.
Following are some sale methods:
4.6.3.1. TV Infomercials:
As described in the pervious section, I will be producing an ad for the
television for both local and national audience
4.6.3.2. Who will sale:
193
194
Picture are drawn from http://www.inthesetimes.com/images/29/16/coke.jpg

changingminds.org/disciplines/sales/methods/sales_methods.htm
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In my case there will not be any specific person who is responsible for the
transaction to perform, in fact my machines are well designed to manage such
interaction all by themselves195
196
4.6.4. Sale Phases197

To get maximum my sale I have designed few phases and schemes for the sale
4.6.4.1. Phase I:
This phase will be the initial phase of my business, when I install the machine
at the specific locations. At that time the price of my product will be at the
195
www.chron.com/disp/story.mpl/business/4913998.html
http://web.mit.edu/2.744/www/Results/studentSubmissions/humanUseAnalysis/cosic/images/12.jpg
197
Source: Idea is project plan is generated by me
196
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least profit range. Moreover, instead of profit margin I will concentrate on the
quality and capturing the customers
4.6.4.2. Phase II:

In this phase I will be concentrating on the little bit of the profit margin but I
will increase my profit by installing new machine at other places. But the
price of the products placed in it will remain the same.
4.6.4.3. Phase III:

This will be the time when I have a well established customer list along with
the full fleet of machines operating all over the market. At this time I will
consider increasing little bit of my price list, to gain a little bit more profit.
Not only gaining a profit will make my business more successful, thus I will
invest a vast margin of my profit in the expanding and maintenance of my
current business.
4.6.5. Presenting
Just planning a sale strategy doesnt help until I communicate with my client.
There is a perfect established advertising and promotion strategy I already
planned to catch the audience.198
198
www.amazon.com/Advanced-Selling-Strategies-Techniques-Salespeople/dp/0671865196
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5. OPERATIONS
Now a days, companies are refocusing their attention on eliminating the mistakes of the
past is not enough any more. What are needed are plans for the future. This is the only
way to achieve a sustainable increase in sales and revenue.
Following are the divisions which are to be focused on, in order to establish a well
processed organization199.
5.1.
Research
Start of every business begins with the

research of the product to sell. In my
case the research will play as vital
role, as the product am offering is new
to the industry and under these
extreme
weather
conditions
of
Pakistan keeping the food healthy and

maintaining the cooling temperature of
the soft drink required lots of research
regarding following categories:
5.1.1. Machines:
With new and more enhanced
machines is developing then my
engineering department has to
keep up searching for new techniques and patterns to utilize the machines at its
maximum optimized level.
199
http://www.touchbriefings.com/cdps/minorcat.cfm?cid=9&maj=Purchasing&ckid=15&min=Purchasing
%20and%20 Supply%20Chain%20Books
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5.1.2. Food purification:

The main feature of my machines is to provide healthy and hygienic food to my
customers. Keeping the food healthy requires lots of research on the machine
cooling and storing level. Moreover, our engineering section is also responsible
for keeping an eye on the waves dispatched by the machine; special research will
be conducted on keeping the harmful waves away from the food.
5.2.
Development
Just researching on the new technologies are not enough for any business to work. As
already decided I will be importing different parts from around the globe and will be
assembling in Pakistan. Following are the list of parts used to assemble a vending
machine.
COMPRESSORS
Compressors
16,000.00
LOCKS & DOOR ACCESSORIES

Barrel Locks with 2 keys
800.00
T-Handle Assembly
839.40
Buttons
100.00
Product Labels
75.00
Front Panels:
New Pepsi, Aqua Fina, various sizes available
New
7,500.00
Refurbished
4,500.00
New Cold Drink Fronts, various sizes
7,140.00
COIN CHANGERS
Coin Co 9300 Series
8,000.00
Coin Co 3300 Series
8,000.00
Mars 5800 Series
8,940.00
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Mars 6800 Series
8,940.00
Mars 5000 Series
8,940.00
Mars 6000 Series
10,500.00
Dixie Narco USA-15
8,940.00
Mars VMF-1
8,940.00
Mars VMF-3
10,500.00
Coin Co BA30B
8,940.00
Coin Co MAG50
10,500.00
Coin Co MDB BA32SA
10,500.00
Maka NB-10
8,940.00
Maka NB-11
8,940.00
Rowe CBA (soda)
11,940.00
Rowe CBA (snack)
16,740.00
Source: http://www.vending-machines-online.com/HTML/parts.html
5.3.
Purchasing
In this division actual purchasing of the

parts will be performed. A brainstorming
was conducted to select the vendors of the
vending machines parts
Few of the vending parts suppliers and their

part list are as follows:
Machine Parts:
Compressors
Buttons
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Product Labels
Security
Handling product:
Hydraulic Pallet Jacks200

5500 Pound Capacity. The MultiTon handle control lever
provides positions for lifting, lowering and neutral-drive. The
neutral position frees the handle from hydraulic pressure and
makes moving easy.
o Low apron. Box section push rods. 7 1/8" wide forks.
o Self-return safety handle with low pivot point. Permits full 240 degree
steering arc.
o Oversize pallet entry and exit rollers.
o Standard 8" steering wheels.
o 2.9" load rollers.
o American made frame and aluminum hydraulic unit.
o Exclusive overload/bypass valve ends overloads.
o Load adjustment valve lowers at constant speed.
o Width: 26 3/4"
o Fork Length: 47 1/2"
Price: $699
EQUIPMENT TRUCKS
201
Equipment truck with ratchet strap tightener & automatic
strap recoil. Specially designed to handle vending machines and
200
201
Picture and material is taken from www.m-h-e.com/lifts/pallet_jacks.html

Picture and material is taken from www.abtec.com/magnum.htm
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other heavy, bulky appliances. Constructed of tough, durable steel, this modes is
equipped with retractable, swivel casters which support the entire load.
o Rugged steel construction, 1200 lb load capacity.

o Retractable swivel casters.
o Roller bearing stair crawlers.
o Rubber and felt padded.
o 17" wide, 24" x 5" footplate.
o Model SRT-M-72 72" high.
Price: $459
5.3.1. Purchasing of the product

Not only purchasing of the equipment will do the complete business, I also have
to purchase the product to sell in the machines. The initial purchase made to start
my business is as follows:
Company
Item
Requirement/month
Pepsi
Pepsi Cola ( liter)
40000
Pepsi Cola (can)
16000
Pepsi Diet ( liter)
12000
Fanta ( liter)
12000
Fanta (can)
Coca Cola
4000
Coke ( liter)
20000
Coke (can)
10000
Coke light ( liter)
6000
Sprite ( liter)
14000
Sprite (can)
4000
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Dunkin Donuts
Shezan
Gourmet
Donuts
4000
Sandwiches
4000
Pastries
10000
Sandwiches
4000
Pastries
8000
Sandwiches
14000
Nestle
Mineral Water
8000
Aquafina
Mineral Water
4000
Kinley
Mineral Water
4000
Source: The above mentioned figures is derived from www.patentstorm.us/patents/7174304.html
Page 121
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5.4.
Assembling
The major component to complete my

operation block is assembling of the
machine.
This section comprise of two parts,

assembling
of
the
machine
and
installation of the machine at the desired

location.
Details of the contents of this section are

as follows:
Assembling
The most popular type of vendor in
the around the globe is the cold
canned soft drink machine, which
vends the traditional 12 oz (355 ml) aluminum can of sodas and soft drinks202.
The manufacture of a cold can drink vending machine is often accomplished on
several automated, concurrently running assembly lines that make all the
components simultaneously.
Installation
Once the machine are in working condition, now its time to deploy and install the
machines at the desired, selected location.
Following are the list of areas which are preliminary selected for the business.
1. Lahore University of Management and Sciences

202
www.energyrating.gov.au/library/pubs/200511-mepsvending.pdf
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2. Lahore School of Economics
3. Beaconhouse National University
4. NetSol Technologies Limited
5. Lahore Gymkhana
6. Shapes
7. Sukhchaen
8. Telenor
9. Mobilink
10. Schools
11. Colleges
5.4.1. Production Plan

Location of the company
There will be two main requirements to purchase the land for the operation of the
company activities. First is the land for the assembly unit and the second is the
land for the warehouse.
It has already decided that for warehouses I will purchase the land/house in its
enclosed region203.
5.4.2. Plant and Building cost:

It is observed that in Pakistan the usual measurement of the land is done in kanal
and marlas.
Note204:
1 kanal = 20marlas; 1 marla = 272.25 sq ft
Assembly Unit
Assembly unit will be the main part of my business, as I will be compiling the
machines here in Pakistan and installing it to different parts of the market.
203
204
www.businessplans.org/2mba/2mba07.html
www.getrealestateinpakistan.com/gracelandhousing1kanal/asp/ProdID/1035/af/page.htm
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Following are the requirements of the assembling unit in terms of expense:

Area
(sq, Ft)
Description
Land for Assembly
unit
/Unit
Cost
Total
9000
600
5,400,000
Comments
This will be the land cost to
be purchased
This will be the
Construction of
Assembly building
construction cost to be
7000
400
2,800,000
purchased for the

deployment and installation
of the assembling unit
This will be th land and
Offices
2000
400
800,000
construction cost for the

development of the office
Furniture & Fittings

This will contain all the
Office furniture
200,000
200,000
furniture required by the

office including tables
chairs cafeteria furniture etc
All the lighting and heating
Lighting and
50,000
heating
50,000
material will be purchased

and installed in the building
Under this extreme
condition of pakistan there
Air Conditioner
25,000
200,000
should be proper cooling

system for the employees to
work efficiently
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Computers to perform
business more efficiently
Computers
13,000
117,000
5 computers for back office

4 computers for individua
warehouse
Assembling Unit
15,000,000 15,000,000 Actual assembly unit

Import Duty on assebling
Import duty
6%
900,000
900,000
unit
This will be the back up
Unforeseen Expenses
100,000
100,000
money incase any of the

planning goes wrong or any
mishap happens
Total
25,567,000
Total Cost of Assembling Unit Deployment205
Warehouses
The second and far most cost is the warehouse, the reason for focusing more on
the expenses of warehouse is due to the fact is my target market is elite class of
the society and constructing a warehouse near it will be very expensive in terms
of construction and purchase.
It is decided that there will be initially two warehouses for four zones of the
market. Following are the building cost for individual warehouse
Area
(sq, Ft)
Description
205
/Units
Cost sq/ft
Total
Comments
http://www.vending-machines-online.com/HTML/parts.html
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This will be the land cost to
Land for Warehouse
2700
800
2,160,000
be purchased (2700 =
10marlas)
This will be the contruction

Construction cost
2700
400
1,080,000 cost of a single warehouse
Furniture & Fittings

This will contain all the
furniture required by the
Office furniture
100,000
100,000
office including tables chairs

cafeteria furniture etc
All the lighting and heating

Lighting and
20,000
heating
20,000
material will be purchased

and installed in the building
Under this extreme condition

of pakistan there should be
Air Conditioner
25,000
50,000
proper cooling system for the

employees to work
efficiently
This will be the cost for

Transpoters of goods
30,000
120,000
purchase of transporters for

the transfer of goods
This will be the back up

Unforeseen Expenses
10,000
10,000
money incase any of the

planning goes wrong or any
mishap happens
Page 126
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Total
3,540,000
Total Cost of Warehouse Deployment206,207
As my sale directly depends on the availability of the food present in the machine
and I will be launching my distribution unit thus I require vehicles to transport the
food to its desired machine in the set standard time
Description
No of Units
Cost
Total
Comments
These will be the pick up vans for

Vehicles
400,000
1,600,000
the transportation of the food

from warehouse to its destination
Vehicle Cost208
This will be the construction cost of one warehouse but as decided I have planned
to construct two warehouses initially thus the total cost for the contraction of the
whole company buildings are as follows
Description
No of Units
Cost
Total Cost
Assembling Unit
25,567,000
25,567,000
Warehouses
3,540,000
7,080,000
Vehicle Cost
400,000
1,600,000
Total
34,247,000
Building/Vehicle Cost209
206
http://www.yespakistan.com/economy/assetboom.asp
www.dawn.com/2006/04/07/ebr1.htm
208
www.rezista.co.jp/vehicle_estimate.php
209
Above mentioned figures are extracted calculated done is previous section
207
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5.4.3. Operational Cost

In order to start of the business I require following number of vending machines
initially
Description
No of Units
Soft Drink
25
Food Vending
20
Milk Shakes
10
Juices
10
Total
75
Total number of Development in 5yrs210
Description
No of Units
Cost
Total Cost
Year 1 Dev cost
40
66,628
2,665,130
Year 2 Dev cost
15
66,628
999,424
Year 3 Dev cost
20
66,628
1,332,565
Devision of Development in 3yrs211

To assemble such vast number of vending machine I require the following
number of parts to be purchased.
No of
Description
Units
Cost
Total
Compressor
40
1,600
64,000
Comments
Compressor is the heart of
every cooling machine
To keep the machines
40
800
32,000
locked so any any intruder

cannot open the front
panel of the machine
210
211
Requirement is calculated by ME on the bases of the survey attached below

Development of machines on fixed interval is decided by ME
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T-Handle Assembly
40
839
33,576
Buttons
40
100
4,000
Handle to open machine

Buttons to operate
machine
Stickers to show what are
the contents of the
Product Labels
40
75
3,000
machines plus to give

machine a fancy look to
attract the customers
Coin Charger - Mars

5000 Series
Dollar bill acceptor Maka NB-11
Coin charger device

40
8,000
320,000
which checks the validity

of the coin
Bill charger device which
40
8,000
320,000
checks the validity of the

coin
The thicker gauges are
Galvanized steel
40
9,000
360,000
used for the outside

cabinet, external doors,
and internal tank
A tough polycarbonate
Lexan
40
7,000
280,000
plastic, is used in the front

panels of the vending
machine
Acrylic powder coatings
Paint
40
2,500
100,000
are colored powders used

to "paint" the surfaces of
vending machines.
Polyurethane foam
provides the insulation for
Insulator
40
5,000
200,000
the inside of the vending

machine. The foam is
blown between the outer
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cabinet and internal tank
of the machine,
Import Duty
40
6%
109,174
Total
40
45,489
1,819,571
Import duty
Total Cost of First Year Development212

The above table shows the total cost to develop all the 53 required machines for
the initial business execution. For the single machine development please refer to
the following table:
Description
Cost
Compressor
16,00
800
T-Handle Assembly
839
Buttons
100
Product Labels
75
Coin Charger - Mars 5000 Series
8,000
Dollar bill acceptor - Maka NB-11
8,000
Galvanized steel
9,000
Lexan
7,000
Paint
2,500
Insulator
5,000
Import Duty
6%
Total
45,489
Total Cost of Individual Machines213
212
213
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5.4.4. Final Expense Calculation

At this point I have identified all the construction and operation cost regarding the
machines and the total expense for the whole year is as under:
Description
No of Units
Cost
Total Cost
Assembling Unit
Warehouses
3,540,000
7,080,000
Vehicle Cost
400,000
1,600,000
40
45,489
1,819,571
Development cost
25,567,000 25,567,000
Total
36,066,571
Salary
8,280,000
Purchase of Items
27,408,000
Advertising
12
Utility Bill
12
180,000
500,000
Total Expense
6,000,000
77,934,571
Seven hundred and seventy nine million thirty four

thousand five hundred and seventy one
Page 131
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5.5.
Supply Chain Management
Once the machines are assembles and

installed at the pre-selected location, now
it time to fill the machines with the
products to sell.
The biggest issue for this division is to

keep the supply level up to the required
level all the time. For this purpose I have
designed a distribution channel to keep the
reorder level of the machine.
A warehouse will be established on the

basis of regions to keep the machines full
of quality and fresh food all the time.
Moreover, there will also be second
reorder level to maintain, which is
keeping the stock available at the warehouse. For this purpose our suppliers will
provide their stocks to sell on demand and order placed by the warehouse. Automatic
software will help to perform such activity much easily and efficiently214
Following are the list of suppliers and their product which initially I will place in my
machines.
Company
Item
Pepsi
Pepsi Cola ( liter)

Pepsi Cola (can)
214
http://en.wikipedia.org/wiki/Supply_chain_management
Page 132
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Pepsi Diet ( liter)
Fanta ( liter)
Fanta (can)
Coca Cola
Coke ( liter)
Coke (can)
Coke light ( liter)
Sprite ( liter)
Sprite (can)
Dunkin Donuts
Donuts
Sandwiches
Shezan
Pastries
Sandwiches
Gourmet
Pastries
Sandwiches
Nestle
Mineral Water
Aquafina
Mineral Water
Kinley
Mineral Water
Page 133
of 164
5.6.
Working Capital
Initially, I have a capital of 100million rupee

to establish small level of business in
Pakistan.
A division of such a large amount of capital in

a proper pattern is very important. Following
are the division percentage of the capital
depending on the priority and severity of the
department in hand.
Department
Percentage
Research and Development
7%
Purchasing
28%
Assembling
20%
Supply Chain
10%
Complexity Management
10%
Saving
25%
Working Capital Distribution Chart215
215
beginnersinvest.about.com/cs/investinglessons/l/blanalymsft.htm
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The above mentioned figures are the distribution of the whole capital to efficiently
perform the business along with all the expenses to be made in time and doing a
business with profit
Working Capital
Saving, 25%
Complexity
Management,
10% Supply Chain,
10%
Research and
Development,
7%
Purchasing,
28%
Assembling,
20%
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5.7.
Complex Management
Just planning, purchasing and start of

business in nothing until I manage to
perform the daily operations effectively,
and to perform the business I have to
establish
quality
and
efficient
management
Human Resource management

At this point I have identified all my
expenses in order to start a business,
but to operate a business I need to
have effective human resources.
To establish
an
efficient human
resource team. I have noted down the

salary and incentive chart to keep my
employees happy and be loyal to the
company216.
The table below shows the employee I required and the salary package I will offer
to them along with all the incentive which company bares so that employee can
concentrate on his task and perform at his best for the betterment of the company
YEAR 1
Description
216
No
Monthly
Salary
Incentives
Total
Monthly
Salary
Mobile
Provident
Medical
Insurance
fund
10% of
Group
www.managementhelp.org/hr_mgmnt/hr_mgmnt.htm
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10% of the
the basic
basic salary
salary
Level
Managing
Director
50,000
50,000
5,000
5,000
Manager
40,000
160,000
4,000
4,000
Officers
12
20,000
240,000
2,000
2,000
Staff
30
5,000
150,000
Total
47
600,000
YEAR 2
Incentives
Description
No
Monthly
Salary
Total
Monthly
Salary
Mobile
Provident
Medical
fund
10% of
Insurance
10% of the
the basic
Group
basic salary
salary
Level
Managing
Director
55,000
55,000
5,500
5,500
Manager
44,000
176,000
4,400
4,400
Officers
12
22,000
264,000
2,200
2,200
Staff
30
5,500
165,000
Total
47
660,000
YEAR 3
Incentives
Description
No
Monthly
Salary
Total
Monthly
Salary
Mobile
Provident
Medical
fund
10% of
Insurance
10% of the
the basic
Group
basic salary
salary
Level
Page 137
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Managing
Director
63,250
63,250
6,325
6,325
Manager
50,600
202,400
5,060
5,060
Officers
12
25,300
303,600
2,530
2,530
Staff
30
6,325
189,750
Total
47
759,000
YEAR 4
Incentives
Description
No
Monthly
Salary
Total
Monthly
Salary
Mobile
Provident
Medical
fund
10% of
Insurance
10% of the
the basic
Group
basic salary
salary
Level
Managing
Director
72,738
72,738
7,274
7,274
Manager
58,190
232,760
5,819
5,819
Officers
12
29,095
349,140
2,910
2,910
Staff
30
7,274
218,213
New Staff
20
5,000
100,000
Total
67
872,850
YEAR 5
Incentives
Description
No
Monthly
Salary
Total
Monthly
Salary
Mobile
Provident
Medical
fund
10% of
Insurance
10% of the
the basic
Group
basic salary
salary
Level
Page 138
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Managing
Director
83,648
83,648
8,365
8,365
Manager
66,919
267,674
6,692
6,692
Officers
12
33,459
401,511
3,346
3,346
Staff
30
8,365
250,944
New Staff
20
5,750
115,000
Total
67
1,118,778
Salary Incentives in 5yrs217
217
Salary is derived after consulting the web link: www.salarychoice.com.au/

Page 139
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5.8.
Competing in the Market
At this point in time, I have done all my internal organization planning and strategy,
now its time to go in to the industry and compete with the open market.
Following are some of the point which I have to concentrate, in order gain advantage
over my competitors218
Quality:
The biggest edges I have over my competitors are the assurance of the quality
services with nutritious and healthy food to my target audience. My machines will
keep the food fresh at standard cooling temperature
Timeline:
The timeline of refilling the machine are kept at minimum, because of a
established warehouse near the installed machine will let the audience not to wait
even for few minutes to get their desired product.
218
www.researchandmarkets.com/reportinfo.asp?report_id=474656
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6. DEVELOPMENT
Developing a business plan is the most crucial phase to any business because it contains
all the step and phases where and how business flourishes in the market. In the
development of a business plan I have pointed out the break point along with the steps
and phases of my whole tenure.
I have started a business with intension to excel this business to all the time to come.
Obviously to accomplish such dream is a very difficult task, but through proper planning
I believe I can achieve this milestone.
Following are the strategy which I will follow in order to foreseen difficulties on the way
to make the business excel and also a standard set of procedures with pre defined goals
and milestones to accomplish.
Initial I have divided my ultimate goal of becoming a giant of vending service providers
in Pakistan into multiphase.
6.1.
Phase I
My initial and foremost target is to launch a vending business in Pakistan to sell

cold food to the industry. This will by prime object today. For this purpose I will
be importing parts of the machine from around the world and assemble it here in
Pakistan. Obviously there is no need of the assembly factory to be implemented in
Pakistan, in fact a small assembly unit can perform the activity provided the
calculations and the planning done at high level with minimum or no error.
This phase is further divided into different segments or below mentioned parts
6.1.1. Part I INITIAL PLANNING

Research
In this part research for on the following areas will be conducted:
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Location of Target Market
Identification of the target market will be the most important and
vital parameter. If the target market identification fails, the whole
planning and execution fails
Identification of Suppliers
After identifying my target market the next step will be the
selection of the suppliers which will allow us to sell their product
as part of my vending service.
Exploring Suppliers of vending machines

Research will be conducted to explore new suppliers of vending
machine especially those who are experienced in vending spare
parts suppliers as I have planned to install an assembly unit in
Pakistan for the compilation of machines.
Recruitment
In parallel to the research, I have plans to start conducting interview for
the lower staff; such as officers and below necessary for the business to
excel.
Negotiation
Negotiation with the identified suppliers will be started on initial pace
6.1.2. Part II - OPERATIONS

Purchasing of companys land
As I have decided to install assembly unit and compile the machines here
is Pakistan for this purpose I have to purchase a land to deploy and install
the assembly unit.
In this part I will buy two main category of land for the operation purpose
of my company.
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1. Buying of the land for the assembly unit

2. Buying of the land for warehouses
Negotiation
Negotiation and prompting the food manufacturing companies will
continue in this part as well because of I dont have the food to sell I
cannot sell anything at all. And this will be my main source of revenue
generation
Purchasing of Machinery
Not only the purchasing of land will be fulfilled but also the order for
machinery for the assembling unit and the parts of the vending machine
will be placed to the selected vending companies
6.1.3. Part III FINALIZING PLANNING

Delivery Acceptance
At this point I have almost completed all my planning and now its time to
move to the next step which is execution of the planning. The order placed
in the last step will result in delivery of the machines. It is noted that the
delivery of the spare parts of vending machines will be delivered sooner
than the assembly unit itself.
Recruitment
In parallel to the delivery acceptance of the machinery, I will recruit the
personal for the carry and maintenance of the machine along with the
installation and deployment personnel
Negotiation
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At this point the deal with the food suppliers will be at ends. And a final
draft will be generated mentioning the price of the food offered to us and
the quantity required per day
6.1.4. Part IV - DEVELOPMENT

Installation and Development
With the successful acquisition of the land and the machinery, now its
time is to start of with the installation of the assembling unit.
Once the assembly plant is installed and functional development of the
machines will be started on urgent basis
Testing
As this part will be directly linked with the assembling and the
development process, thus testing of the machines before placing them in
public will be dangerous.
A detailed testing of the machines in worst case scenarios will be

conducted to make sure any tempering both physical and transactional can
be avoided
6.1.5. Part V operation of the business
Once machines are cleared from the quality control test. Now its time to
start of the business by installing machines at the specific selected points.
6.2.
Phase II
After the successful completion of the phase one, now its time to start with the phase
II; which is expansion of the business. Thou, the exactly timeline and calculation of
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this phase cannot be provided at this time because of the dynamic business scenarios,
and unforeseen industry environment.
6.3.
219
Risk Factors
Risk is the major portion of every planning; basically a planning is done to mitigate
the risk factor. Following are the risk which my business might face during execution
of the plan:
6.3.1. Technological Risk

Technology is the most fast growing industry today. And with such speed in
technological patterns there is also a parallel growth of the negative technology
use. It might be the case that after few time the user come up with new patterns of
breaking into the machine.
To overcome such issues I have plans to stay in touch with the internet and keep
on looking into new patterns to break into machine and my testing team will test
such issues with the machines. Moreover I have edge over this; which is
assembling of the machine here in Pakistan thus I can manipulate the technology
to implement proactive checks and verifiers to prevent my business to get dented.
6.3.2. Cost Risk

This is the least case in my business as there is no credit transaction for my
business thus there is no risk of defaulter in my case
6.3.3. Competitive Risk

There might be a case that by looking into the success and processes I defined,
many new companies launch their vending business. Or my current competitors
reduces their price to make their sale more than previous. In this case I might also
have to reduce my prices a little bit. But currently as I have selected specific class
219
www.marketresearch.com/product/display.asp?productid=1481729&g=1
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of the society to sell my product who are concern with the quality more than the
price. Thus this move played by my competitors might not harm my business
much.
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7. MANAGEMENT
Management are people who steer an organization towards meeting its objectives.
Management has been describer as: The process of planning, organizing, leasing and
controlling the efforts of organization members and of using all organizational resource
to achieve stated organizational goals. In my case there will not be extended
organizational structure as I am running a small enterprise. Some of the roles defined in
my company and their responsibility are as follows:
7.1.
Managing Director
A Managing Director will be appointed who has overall responsibility for running the
company. The managing director with help of other directors will appoint senior
managers to run the company.
In my case, I will be running the business thus I will be the managing director and the
ultimate authority to take all the decision.
7.2.
Managers
There will be number of managers working under me depending on the requirement

and the skill set. Keeping in view, my business and its requirements I have divided
my manager layer into four main areas.
Manager Business Development:

These will be the starters of my business. All the client communication
and expansion in business clients will be their ultimate responsibility.
Manager Finance:
This manager has to be finance personal, who can control and audit all the
financial matters of the company.
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Manager Administrator:
All the in-house company administration will be controlled by the
manager administrator.
Manager Supply:
To keep the supply up to the defined standard level in the warehouse as well
as in the machines around the market will be controlled by the manager
supply
7.3.
Officers
As already mentioned that I will be dividing the whole marketplace in regions and
zone, which will allow me to further focus on individual set of clients, for keeping a
close eye on the machines
To make the work more efficient I have introduced another layer of resources which
will work directly under the corresponding managers and divided into zone level.
Initially I will be appointing two officers for four zones. Each officer will have one
critical and one normal zone. This layer will be further divided and after an year or so
there will be more officers depending on the intensity and number of clients per zone.
At this point, I am pretty sure about the laying of my management architecture. Now its
time to define their authority and responsibilities
Role
Authority and Responsibility
Decision maker of the whole company
The main and foremost responsibility of the managing director is

to take the most crucial decisions. Not only taking a decision but
also to make sure that the decision made should be in the favor
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of the company.
Overall execution of the company
Managing director is not responsible to make sure all the minute

Managing Director
execution of the work is done under proper process, but to keep

an eye on the overall working and process execution of the
company.
Defining ultimate goals for the company
All the new goals and targets for the company have to be
approved by the managing director.
Provide sufficient capital to operate the business
As I am the managing director and the owner of the company

thus its my responsibility if to provide initial capital to the
company. Also have to make sure that whatever the finance
required by the company should be in time and in sufficient
amount
Prioritizing of the client based on it severity
Once the goal is set by the managing director regarding the

client list, now its time for the manager business development is
to be functional. His main responsibilities are to communicate
with the client though presentations or any other media and
make the client satisfy regarding the quality and efficiency of the
Manager
Business
company
Development
Establishing contact with the new clients
Vending industry is a vast industry and being a pioneer of the

vending business, there is lot to explorer. Thus to keep the
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business expanding, the company requires new clients and new
business. and this is one of the prime responsibilities of the
manager business development
Maintaining good relationship with the existing clients
Just focusing on new clients does not mean anything until the
current clients are satisfied. If the current customers are satisfied
then automatically more people will take interest in my
company. It is observed that it takes 5times expensive in order to
acquire one new customer than retaining a current customer.
Making sure the objectives of the company are met
Just expanding a client list is in no use if the new business is not

in the favor of the company. While communicating with the new
clients it is mandatory to keep in mind that whatever the deal is
finalizing, it should be in the favor of the business in regard of
monetary and reputation level
Communicating target to the team
Whenever the target is set to achieve the companies objective, it

should be properly communicated with the team in order to
reduce confusion
Advising managing director; how to perform best
As the manager are the main person who has to make the job
done, and to communicate with the client. Thus he can advice
the managing director, how to make better decision keeping in
view the desires and requirements of the clients.
Motivating Employees
Not only working for the company and client will make the
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company in profit. Employee satisfaction and motivation is also
a very vital aspect for any company to excel. And its primary
responsibility for the managers to keep its employees loyal to the
company by providing them justified intensives
Follow the defined standard and process
Once the process if finalized and approved by the managing

director. It should be implemented accordingly and in its all
essence.
Prioritizing of the product on it severity
Finance is the primary concern for all the companies and

prioritizing financial allocation depending on the product are the
biggest concern and something to focus on. Thus it is the
responsibility of the finance manager to make sure that the
Manager Finance
companys revenue should be invested on the primary issues

rather than secondary or minor issues.
Designing a fool proof budget
For every fiscal year, the budget is reallocated to all the parts of
the company and to all the departments. Keeping in view the
future goals and environmental concerns, the finance manager
should design a budget to cater all the expenses of the company
during the year with least or no duplication.
Just restricting the expenses and only focusing on the primary

concerns is not always in the favour of the company. While
defining the budget, it is mandatory to keep in mind that
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whatever the area to focus on regarding financial expenditure, it
should be in the favour of the business

reduce confusion
done, and to manage all the financial matters. Thus he can
advice the managing director, how to make better decision
keeping in view the mandatory expenses and total budget of the
company.

essence.
Prioritizing of the product on it severity
Depending on the demand and environmental conditions, it is
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prime responsibility of the manager supply is to keep the supply
level of the product up to the standard.
Keeping the required quantity
Supply will be of two categories, first if the supply of the food to

Manager Supply
the machines and the second is the supply present in the

warehouse. And its prime responsibility being a manager supply,
he should keep an eye on the quantity of the stock as my main
business is to supply product to the consumers and availability is
the prime concern of the customers.
I have decided to gain profit with more sale, not by increasing

the price of the product. Thus every time supply of the food
should be readily available to make the sale possible. Moreover,
just to keep the supply is not the standard practice; spite of this,
supply manager should make a chart of the product according to
consumption of the food.

reduce confusion
done, and to manage all the stock related activities. Thus he can
keeping in view the warehouse capacity and the stock
availability in hand
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essence.
Daily Activities
The foremost duty of the manager administrator is to make sure

all the activities on daily basis should be in a running form.
Moreover, all the bills and building management is also the
responsibility of the manager administrator including the
Manager
conditions of the warehouse.
Administrator
Audit
As the purchase of daily items and other support things are done
on the request of administration department this audit of the
financial expenses and the utilization of the purchases items
should be done on scheduled and random bases
done, and to manage all the stock related activities. Thus he can
keeping in view the administrative activities of the company
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essence.
Machinery And Equipment
Using the most appropriate machinery and equipment, and

making sure that it is maintained, replaced and updated where
necessary
Officers are the main driving force of the company. They are
the one who will follow the order directly assigned by the
managers, and their main aim is to execute the order as per
the process and instruction.
Officers will be specific to their respective zones
Officers
o North zone
o South zone
o East zone
o West zone
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Management Skills and Responsibilities220,221
220
221
www.ee.ed.ac.uk/~gerard/Management/art1.html
Pictures are derived from office.microsoft.com/clipart/
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7.4.
Salary Package
Salary Package of the above mentioned staffs are as follows
YEAR 1
Incentives
Description
No
Monthly
Salary
Total
Monthly
Salary
Mobile
Provident
Medical
fund
10% of
Insurance
10% of the
the basic
Group
basic salary
salary
Level
Managing
Director
50,000
50,000
5,000
5,000
Manager
40,000
160,000
4,000
4,000
Officers
12
20,000
240,000
2,000
2,000
Staff
30
5,000
150,000
Total
47
600,000
YEAR 2
Incentives
Description
No
Monthly
Salary
Total
Monthly
Salary
Mobile
Provident
Medical
fund
10% of
Insurance
10% of the
the basic
Group
basic salary
salary
Level
Managing
Director
55,000
55,000
5,500
5,500
Manager
44,000
176,000
4,400
4,400
Officers
12
22,000
264,000
2,200
2,200
Staff
30
5,500
165,000
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Total
47
660,000
YEAR 3
Incentives
Description
No
Monthly
Salary
Total
Monthly
Salary
Mobile
Provident
Medical
fund
10% of
Insurance
10% of the
the basic
Group
basic salary
salary
Level
Managing
Director
63,250
63,250
6,325
6,325
Manager
50,600
202,400
5,060
5,060
Officers
12
25,300
303,600
2,530
2,530
Staff
30
6,325
189,750
Total
47
759,000
YEAR 4
Incentives
Description
No
Monthly
Salary
Total
Monthly
Salary
Mobile
Provident
Medical
fund
10% of
Insurance
10% of the
the basic
Group
basic salary
salary
Level
Managing
Director
72,738
72,738
7,274
7,274
Manager
58,190
232,760
5,819
5,819
Officers
12
29,095
349,140
2,910
2,910
Staff
30
7,274
218,213
New Staff
20
5,000
100,000
Total
67
872,850
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YEAR 5
Incentives
Description
No
Monthly
Salary
Total
Monthly
Salary
Mobile
Provident
Medical
fund
10% of
Insurance
10% of the
the basic
Group
basic salary
salary
Level
Managing
Director
83,648
83,648
8,365
8,365
Manager
66,919
267,674
6,692
6,692
Officers
12
33,459
401,511
3,346
3,346
Staff
30
8,365
250,944
New Staff
20
5,750
115,000
Total
67
1,118,778
Salary Incentives in 5yrs222
222
Salary is derived after consulting the web link: www.salarychoice.com.au/

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8. FINANCE
Page 160
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9. EXIT STRATEGY
All good business plans include a very important section that lays out the benchmarks
youll use in deciding to call it quits. This section is important because at this point all the
planning and strategy done is based on internal calculations or experience, but nothing is
real. It might possible that the entire problem I identified in my draft comes true and the
business is full of loss. Under such circumstances ill execute the following plan:
9.1.
Sale out of Machinery
The biggest asset I hold is the vending machines and the assembling plant. For this
purpose ill contact the Pepsi and Coca Cola Company to buy my machinery because
they are the bigger companies and in other countries they are fully equipped with the
vending strategy. Thus I will sell the machines and the assembly plant to these
companies.
9.2.
Sale out of Warehouses
As I have already bought the warehouses in the middle of the market, thus selling out
the warehouses and selling then in profit will not be a big problem
9.3.
Clear of Products
All the products will be sending back to the companies on the purchase price with no
profit and no loss.
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CONCLUSION:
The opportunity to start a vending business is really positive in Pakistan. As Pakistan
persist an extreme weather conditions, especially 9 months of summer is a perfect
environment to sell chill soft drinks to the consumers.
The main requirement to make this a successful business is setting a realistic goals and
doing the research will result in exceptional profits. Marketing plan will play a vital role
in the success of the business. All the research is done on the extreme analysis and
targeted the specific results.
As it is decided that due to many valid reasons, I will be targeting only the selected
market. This will provide me comprehensive time to analysis my business processing in
the live environment along with customers behaviour. The business opportunity of
vending machines is advancing since more entrepreneurs, suppliers and manufacturers
are realizing there is a huge demand for products that are readily available and
strategically placed.
Page 162
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REFERENCES:
Page 163
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BIBLIOGRAPHY:
Babyak, Richard J. "New Era for Insulation (Change is in the Wind for Blowing
Agents)." Appliance Manufacturer 41, no. 8 (August 1993): 47-48.
Bailey, Jane M. "Vending Machines Take a Beating." Industrial Finishing 67, no. 4
(April 1991): 36-37.
"Coca-Cola Customers to Buy Vending Machine Drinks Using Marconi's GSM Dial-aCoke Solution." Wireless Internet 3, no. 5 (May 2001): 7.
Marcus, David L., Leslie Roberts, and Jeffery L. Sheler. "A Hot Idea From Those ColdDrink Folks." U.S. News and World Report 127, no. 18 (8 November 1999): 10.
Prince, Greg W. "100 Years of Vending Innovation." Beverage World 117, no. 1651
(January 1998): 214-216.
Simpson, David. "A Peak in the Heart of Dixie (Dixie-Narco Inc.'s Use of Powder
Coatings)." Appliance 46, no. 8 (August 1989): 56-57.
Somheil, Timothy. "Vending Innovation." Appliance 55, no. 1 (January 1998): 87-89.
Stevens, James R. "The Dixie-Narco Story." Appliance 47, no. 6 (June 1990): 31-4.
Sutej, Joseph M. "Evaluating Low-CFC Foam Insulation." Machine Design 62, no. 10
(24 May 1990): 108-109.
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ENTREPRENEURSHIP & SME

IQRA UNIVERSITY ISLAMABAD

Chill Zone Vending Business

Chill Zone Vending Business

Introduction of new concept (Soda & Snack Vending

Machines) in Pakistan where consumers can get drinks &

Creating more and more demand through this innovating

process and making it popular.

Making drinks and cold snacks easily accessible.

Exploring all possible target markets within Pakistan.

Innovating and re-innovating the concept through

Chill Zone Vending Business

Chill Zone Vending Business

Chill Zone Vending machines mission is to be the leader in introducing innovative,

As a start-up company, new to the industry, and

introducing new products, we must be focused and

Quality support and service, recognizing that

relationships it's able to create.

Innovative, quality products that are able to both

Steady, disciplined pattern of growth.

Our customers and keeping them happy.

Picture are drawn from

Chill Zone Vending Business

Vending is automatic retailing. Basically a vending machine allows selling the

Chill Zone Vending Business

Chill Zone Vending Business

The first vending machine is believed to have

been invented by Hero of Alexandria, a firstcentury inventor.

His machine accepted a coin

and then dispensed a fixed amount of holy water.

Thomas Adams Gum

The United States government began

Chill Zone Vending Business

This simple idea spawned a whole

new type of mechanical device known as the "trade

The birth of pinball is ultimately rooted in

these early devices. After paying, a product may become

The unlocking of a door, drawer, turning of a knob, etc.

the case of coffee, french-fries, or a ticket that is printed after paying23.

1.3.1. How are these Machines made?

galvanized steel, Lexan or other plastic, acrylic powder coatings, and

Chill Zone Vending Business

Additional tests include refrigeration pull-down testing, in which the interior

Chill Zone Vending Business

1.3.2. Soda Vending Machines in World Market:

emerging countries, sales of hot drinks were negligible in China.

Graph showing Soda Vending Machine Business in Worlds top Markets32

Chill Zone Vending Business

1.3.3. Future for the industry:

promotional activity, can contribute

Chill Zone Vending Business

a similar increase in the number of machines. Hosting the Olympic Games in

Chill Zone Vending Business

Market And Products

The summer season is like ten months in Pakistan thus, this

The target market will be the sophisticated

and elite circle of the society because of the

Chill Zone Vending Business

The hygiene and

Chill Zone Vending Business

The main objectives for my business are:

Sell 400 vending machines.

Achieve 20,000,000 in sales in our vending service subscription line.

For the following two years our growth objectives are: