GE401- Innovative Product Design & Development I

Literature Survey and Competition Report 10/19/2011

Macaroni Vending Machine

Team 2 Seydi Afin nl Emirhan Akdemir Cansu Acar Melodi Trkili Onur entre Engin yidoan

Table of Contents

Introduction ...................................................................................................................2 Underlying Technologies ..............................................................................................2 Possible Applications ...................................................................................................4 Possible Competition at the Expected Time of Our Production...................................5 Existing Direct and Indirect Competition ....................................................................6 Pricing of Competitors .................................................................................................8 Conclusion ..................................................................................................................9 References ...................................................................................................................10 Appendix......................................................................................................................11

Introduction Automation is an emerging trend in todays world. Vending Machines are great examples of automation since they reduces manpower to a certain extend. Their other main advantages are being more accessible, faster and simpler compared to their competitors in their specific category. According to the article, Vending and the Technological Revolution Delivery Systems of Future, according to current researches the vending industry has a $ 30 billion-a-year value while employing 700.000 people on 13.500 distributed companies.8 Depending on the article, it is clear that the competition is quite challenging due to the big and fast growing market. Literature Survey and Competition Report of our project will be a guideline for us to examine our competitors in a deeper manner and following to that to analyze our weaknesses. Our specific aim is to strengthen our strengths and eliminate our weaknesses so that we can be the winner of the competition with right differentiation.

Underlying Technologies

Typically, a vending machine consists of some major components. First, there is always a system that takes true amount of credit from the customer in credit card or cash. And tell the automation system to allow the user to choose a product s/he desires. Then, the spring does one complete turn to push the product to the output slot. The Macaroni Vending Machine follows the same principles. However, since the machine will not vend canned beverage or biscuits but a bowl of macaroni with desired ingredient in it, the internal structure will be more complex.

The automation system of our product is the most essential part of the project. Any asynchronous behavior of the internal mechanical components may result in a disaster such as giving an empty plastic bowl as output or dropping tuna fish in the

machine or taking money from the customer but not giving an output. The system controls the complete process from the money taken as input to the macaroni given as output. This process consists of a system that understands whether the customer paid the money or not. And a control panel and a display that enable the customer to choose the a the particular ingredients to put in the macaroni. There are several choices that enable us to build a functional automation system. Despite the fact that the capabilities of FPGA boards are more than its competitors in the field of automation, they are expensive. The BASYS2 board is around 140TL however, a microcontroller, Intel 8051 is just 7TL and it is also capable of doing some basic automation work.1 Some microcontroller circuit boards may also be used such as Arduino UNO7. Consequently, financial concerns and the complexity of the automation system make microcontrollers preferable rather than FPGAs.

The internal mechanical system may be considered three separate parts. The method to place only one plastic bowl in the output slot may be considered as first part. We will design this process as follows. The plastic bowl unit near the automate will give a plastic bowl to the customer after taking the money and after that customer will put this plastic bowl into the output slot. In order to prevent the system operate without a bowl in the output slot, there will be a digital sensor to understand whether the bowl is located into the output slot or not. After the bowl is located, our system will process second part which is the process of filling the bowl with macaroni and the desired ingredients. Metallic spiral components enable us to drop a desired amount of macaroni, corn or tuna fish in the bowl (See Figure 1). Each of the spiral components will be connected to an electric motor. After the bowl comes under the ingredients, these electric motors will be activated according to the ingredient choice of the customer. When the motors are activated, spirals will start to rotate and will push the food inside the bowl and the number or angle of the rotation will determine the amount of food dropped to the bowl. One advantage of using these metallic spiral components is the following. We will know how many turns they can rotate without a

shortage of stock. Number of turns of each spiral will be counted in the microcontroller, when one of the spirals reaches maximum number of turns, following customers will be warned about the issue that one of the ingredients has ran out of stocks. And thirdly, the machine will also have a vapor-compression cooling system to prevent the foods to decay in the machine even if it will be replaced daily. This cooling system will run to keep the internal temperature at 15(3) degree Celsius which slows the process of decaying considerably. Also, it is worth to mention that we will buy the technology of the payment system and integrate it into our machine. We plan to make this automate works with both cash and visa.

Figure 1: Helical Metallic Component

Possible Applications

Our products basically offers quick and delicious meal. The places where the Macaroni Vending Machine may serve varies in a wide range. Universities, schools so the dormitories are places where vending machines is quite popular and widely used. And vending machines are needed in some schools that do not offer any food before and after the lunch time. Our product may also serve delicious meal in

business centers. Since in business centers and governmental units, the workers generally eat via Sodexo or Multinet or tickets in business centers, Sodexo and Multinet integration to the Macaroni Vending Machine may makes it a preferable choice for a lunch. All Inclusive hotels may be also a good place for our product to serve for free for the customers who have already paid for the hotel.

Possible Competition at the Expected Time of Our Production In todays world, people have strict time constraints,so they prefer doing daily activities by sparing minimum time. In order to meet this need, the companies start to create fast and qualified services.

One of our competitors which is trying to find a way of fast and qualified service and might come around at the expected time of our production is McDonalds. In USA, McDonalds have started to use vending machine which includes coke, fries, and icecream. The product is like in Appendix A. 10 According to this website, a customer can get McDonalds coke and fries with $2,5 and only fries with $1,5. Fries are done nearly in 40 seconds and cokes are given in 10 seconds. 10 Although the customers in USA is not happy with the heat of the machine, they have started use it in especially bus stations, schools, etc. McDonalds aim is to spread it over the world starting from Europe.11 In our opinion, since the testing period is already ended in USA and it is seen that customers are satisfied with the service, European developing countries like Turkey will be one of their choice to introduce their vending machine in the near future. Although they are offering different products to the customers, this step will make them our competitors since we are mainly met the same needs of the customers: fast, qualified and cheap service. In order to differentiate from our competitors, we can focus on health in value proposition, and our promotions.

Existing Direct and Indirect Competition

Indirect Competitors

As long as our product is directly about food category, there are too many substitutes that can be threat for our competition. Depending on the location of the vending machine, each service and each product that offers food service generates our Indirect Competitors. The major Indirect Competitors are defined as follows:

1. Cafes:

Since they are offering delicious foods and one-to-one relationships, cafes can be one of the most threatening competitors within the competition.Our differentiation point compared to this segment is to provide cheaper and faster food service.

2. Fast Food Restaurants:

Our common feature with restaurants is to provide faster food for customers, which is an emerging trend in the whole Europe. As they also offer cheaper price, the competition is quite tough. We want to position ourselves in a better value point in the Value Map by presenting better perceived performance in terms of healthiness of foods.

3. Kiosks:

The main advantage of kiosks is accessibility. They can be on the every street, every corner etc. Today, many of the kiosks offer hot sandwiches, toasts and

different types of fast foods as well as snacks and drinks. Kiosks also offers faster and cheaper food compared to cafes. According to that, it is the toughest player for our vending machine. We need to differentiate our product with lower price due to the fact that we do not employ any manpower, and with higher accessibility in the high potential points.

Direct Competitors:

Since our product is a vending machine that presents food solutions , all vending machines that offers a king of food are our direct competitors. In order to analyse the direct competitors in a deeper manner, the food vending machines are grouped as follows:

1. Vending Machines with Warm Food:

There are various types of warm food vending machines such as macaroni, french fries and pizza vending machine especially in foreign countries such as Germany, Japan and United States. They are quite preferable compared to others as they can serve warm foods as restaurants do. In other words, their main competitive advantage is their taste which is closer to the restaurants. To illustrate The vending machines in use today, cooks macaroni instantly so it is served hot and within 2 minutes. Since we will not cook the macaroni in the machine instantly, we must do it in 30 seconds at most so that our product can differentiate itself by being faster. There are also vending machines which offers different kinds of food such as french fries or pizza. They also offers user relatively quick food. Since they are mostly cooks instantly and inside of the machine their process time varies between 45 seconds and 3 minutes which may be considered long time for a vending machine. Again, the serving

time of our macaroni vending machine will be what makes our product favored.

2. Vending Machines with Snacks:

Snacks vending machines are one of the most common vending machines in the world. They basically offer biscuits, chocolates, chips etc for consumers. They appease the hunger for a while and give taste pleasure. Their main advantage is their price is usually lower than the supermarkets. Our competition is not directly related, but as they offer tasteful snacks in a shorter service time, they can be more preferable for consumers who are in tight time.

3. Vending Machines with Cold Sandwiches:

The vending machines with cold sandwiches offer different types of sandwiches to consumers. The types are usually with ingredients such as tuna fish, salami, cheese etc. The producer creates different types of sandwiches by having different ingredients. Their main competitive advantage compared to restaurants are being cheaper, faster and more accessible. Since they are also in the cold food solutions category by claiming to have healthier food compared to other direct competitors and fast food restaurants, they are one of the most critical competitors. Our main superiority is being more customized as we let the customer to choose the ingredients of the product.

Pricing of The Competitors

The price for vending machines which offers only candy, biscuit, coffee, canned beverage varies between $2000 and $7000.5 The ones cook fries, pizza etc. are priced even higher.9

Conclusion

As it is mentioned above parts, automation technologies become new trends of food industry and vending machines are most preferred products of market. These machines are mainly designed for hot and cold drinks or snacks. However, our product is designed for vending macaroni with desired ingredients. We decided to use microprocessors, specifically Arduino UNO, instead of FPGAs due to its price and easy-use. This product can be used schools, hospitals, campuses and business centers. And with some integrations it can be used in different places, such as in hotels.

After searching possible competitions in world, we can classify them to direct and indirect competitions. Direct competitions of vending machines offer coffee, tea, cokes and snacks to consumers. Our product shows its difference in this perspective because we offer macaroni as main dish for most people instead of giving snack. In order to analyze the competitors in a deeper, we structured the SWOT analysis to strengthen our feature which can be seen in Appendix B. When we compare prices of similar products in market, prices are changing between 2000-7000$ and we aimed to reduce prices in our automate machine. It becomes our advantages by comparing with similar products.

References
1. Digilent

BASYS2. vending.

Digilent. Wikipedia.

October October

2011. 2011.

<http://www.digilentinc.com/Products/Detail.cfm?Prod=BASYS2
2. Full-line

<http://en.wikipedia.org/wiki/Full-line_vending
3. Inside a Vending Machine Image Gallery. How Stuff Works. October 2011

<http://www.howstuffworks.com/gadgets/other-gadgets/vending-machinepictures3.htm
4. Intel

8051.

Atmel.

October

2011.

<http://www.atmel.com/products/mcu8051/default.asp?category_id=163&fa mily_id=604&source=left_nav>
5. Kahve

Otomati B.E.

Fiyat

Listesi.

Kahveotomati.com. Machine Patent.

October January

2011. 1943. 2011.

<http://www.kahveotomati.com/Fiyat.html>
6. Mills,

First

Vending

<http://www.freepatentsonline.com/2682984.html>
7. Why

Arduino?. the

Arduino

UNO. Vending

October

<http://www.arduino.cc/en/Guide/Introduction>
8. About

Industry.

<http://www.balancedforlife.net/pdf/About%20Vending.pdf>
9. Cold Food Vending Machines. VendingWorld.Com. October 2011.

<http://www.vendingworld.com/vending/coldfood.php>
10. McDonalds Vending Machine. Artstechnica.com. 2011.

<http://arstechnica.com/civis/viewtopic.php?f=3&t=706895>
11. Vending Machines Grow Up. Mindfully.org. 2011

<http://www.mindfully.org/Technology/2011/Vending-Machines.htm>

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Appendix A Figure 1- The vending machine which is similar to McDonalds one.

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Appendix B

Table 1- SWOT Analysis

SWOT ANALYSIS

Strengths

Weaknesses

Healthier food solutions compared to fast food and existing vending machines Cheaper than indirect competitors Faster service than restaurants and cafes Easier accessibility for consumers Customized service with diverse options Easier settlement to wide range locations Unique type within the local market User friendly machine

Lack of different food types The need for maintenance Customer dissatisfaction depending on instant system faults Lack of business experience of the team

Opportunities

Threats

Emerging trend of health considerations about food in the whole world Time consuming considerations of the target market Potential growth with vending machine in other food solutions segments

The possibility of entering Turkish market for foreign companies Wide range of possible competitors that offers food solutions without automation Legal issues regarding to the location of the vending machine

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