The fountain of success

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The most innovative ways of distribution have been developed by the Cola companies. They introduced the vending machines which soon became very popular and gave a boost to their sales. Vending machines suddenly made it so convenient to buy products you would hesitate to pick up otherwise (like condoms). Of course, they also made cigarettes and alcohol easily accessible to the youth. Today vending machines are selling just about anything and everything. Companies are quickly realising the potential of new distribution techniques. In the United States, sales through snack and beverage vending machines grew by 150% over a tenyear period reaching $35 billion annually in 1999.

Apple even started distributing its iPods and other products via vending machines. From digital cameras to batteries to other accessories, all were available in a single vending machine. Who would have thought a whole store could be shrunk into a staff-less 6-foot wide space!

Like the vending machine, the “soda fountain machine” is the very heart of Coke’s US strength and the major reason for Pepsi’s weakness. It’s the fountains business, which accounts for nearly all the difference in the 12 to 13 share-point lead Coke has over Pepsi (in US). About 25% of soft drinks sold in the US are dispensed by fountains (at McDonald’s, Pizza Hut etc). It just goes on to show that good and unique distribution channels can really become a brand’s “fountain” of success.

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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