A

REPORT ON

“OTC VENDING MACHINE”

Submitted by

ENROLLMENT
S.NO. NAME
NO.
1 RITUSHREE GOSWAMI 20BSPHH01C1005
2 MEHAK KOUSHIK 20BSPHH01C0689
3 PRITAM AGRAWAL 20BSPHH01C0917
4 MANOJ JANGLE 20BSPHH01C0657
5 SHREYA SINGH 20BSPHH01C1196
6 MANICKAVEL A PL 20BSPHH01C0652
7 KIRANKUMAR PATIL 20BSPHH01C0585
8 SARAN G 20BSPHH01C1105

A report submitted in partial fulfillment of the requirements of the MBA Program of IBS
Hyderabad.

Date: 31/08/2021 Submitted to: Vijayudu

Course Title: Service Marketing

1|Page
 INDEX

2|Page
 ACKNOWLEDGEMENT

It's our great pleasure and privilege to express our sincere gratitude to Prof. Vijayudu
Gnanamakonda who has very kindly guided and supported us. We are grateful for his constant
encouragement and inspiration which very much helped us during the preparation of this project.

We would also like to extend our significant gratitude to “IBS Hyderabad” for expanding this
opportunity and giving each and every imperative resource required.

3|Page
 INTRODUCTION

In rural areas, Pharmacies and pharmacists, in particular, play a very important role in providing
medicine, educating patients, and ensuring patient safety. However, rural community pharmacies
face many challenges of being open-minded, including low-cost purchases, low interest rates,
undesirable insurance practices, and a few pharmacy staff.

If the pharmacy is not available nearby, timely access to pharmaceutical services may be
hampered by a lack of travel options, extreme weather conditions, or a patient who is too ill to
travel long distances to the nearest pharmacy.
While the manufacture of tele pharmacies and online mail orders may suggest that access points
are no longer a concern, many rural residents do not have the equipment, technical skills, and / or
access to telecommunications required by these services. In order to solve this problem in rural
areas especially during the COVID19 outbreak, we have come up with a solution (OTC
VENDING MACHINE) that can be easily found by people living in rural areas.

TOTAL LAND AREA IN INDIA

30%

70%

RURAL AREA URBAN AREA

OTC VENDING MACHINE:

OTC Vending Machines are a great way to market medicines and related products for daily use,
for example, paracetamol, and digestive and digestive products. These products are very small
and well-integrated, so they can be delivered in the form of integrated equipment. The sales
method is straightforward and can be fully machine-generated, battery-operated, or connected to
mains. Such opportunities provide great flexibility.

4|Page
List of basic first aid and related items e.g. Plaster, disinfectant cream, files and nails, eye
drops, cold treatments that can be sent all this way, as well as sun tan lotions and after
sunscreen etc. Clearly, discretion should be exercised when selling medicines of any kind,
especially to prevent access for young children. Availability of the machine is often the key to
this, and it is best to install pharmaceutical equipment, even those that only sell OTC products
(over the counter), where they can be placed under adult supervision if possible. This is not a
problem only for adult settings, but it can be when children make the most of the facility.
World Health Organization (WHO) promotes the practice of self-medication without medical
consultations for effective and quick relief of symptoms to reduce the burden on health-care
service centres, which are often understaffed and inaccessible in rural and remote areas. Over the
counter (OTC) drugs are a form of self-medication. The buyer diagnoses his/her own illness and
buys a specific drug to treat it. OTC products provide symptom relief for conditions that do not
always require medical intervention.

ABOUT THE SERVICE:

The new service that we designed is an OTC vending machine service. The name that we decide
for our vending machine will be CoviConnect.
CoviConnect aims to establish an automatic medicine vending machine in villages with a self-
contained on-site pill dispensing mechanism and a storage facility for the pills that can be
dispensed based on the user requirement. Along with OTC medicines, vending machine will also
provide sanitizer, masks, gloves and one covid kit which include immunity booster medicines,
sanitizer and mask.
How it works:
An individual goes to the vending machine, selects the medicines that he wants and after
selecting when you proceed to check out the amount is generated. The person needs to put the
cash in the machine since it also holds an inbuilt system to receive money from the user for the
drugs that are dispensed. Once the correct amount is taken then the medicines will come out
from the machine. There is also an option where if more money is put in the machine, after
deducting the amount of medicines, the amount will be refunded.
The inventory monitoring system also keeps track of the expiry date of each batch of medicine
and sends alert to refill the storage when the pills run out. All these systems are monitored by a
central microprocessor, which is programmed to receive input from the user. The machine can be
viewed as an automated pharmacy placed on a commercial scale so that infinite number of user
will be able to access it anytime.
Since in the initial days the machine will be set up in many areas of the villages, it might happen
that the residents will not be able to access the vending machine. Owing to this, we came up with
an idea that the panchayat can collaborate with the hospitals in and around the set-up area and
send students to help these residents as a part of their internship process. Once the residents get a
hold of the machine, assistance will not be needed any further.
The machine will be a life savior when it comes to the covid patients. Since they are not allowed
to move around or visit the medicine shops, it’ll be easier for them as well as the other residents
as the exposure will be very less.

5|Page
There will be sanitizer bottles around, after you take the medicines, one should spray the
sanitizer and keep it safe for the next user. Also, sanitization will be done two to three times a
day to avoid spreading of the virus. The vending machine operates 24 hours a day hence it’ll be
easy to access and residents do not have to wait for the shops to open in the morning the next
day.
In this area of covid where the spread of the virus is tremendous and OTC medicines are not
available to the patients at the correct time, CoviConnect proves to be an aid in this difficult
situation. In the coming years, these machines will be the trendsetter and the need of the hour.
Medicines will be easily available and time and energy will also be saved. Medicines will be
available at a walkable distance and millions of lives can be saved at one go.

PRICING STRATEGIES

Vending machine costs

Most of the cost of starting a vending machine business comes from vending machines and
inventory items. With an investment of only $2000, you can usually start a basic vending
machine business. Many vending machine operators recommend buying second-hand or
refurbished machines at a price of between US$1,200 and US$3,000. The price of a new vending
machine ranges from US$3,000 to US$10,000, depending on its size and features.

In addition to the machine itself, you also need to consider the inventory cost of the storage
machine. Depending on the number of machines you plan to have and the type of inventory you
have in stock, this can range from hundreds to thousands of dollars.

Starting a vending machine business doesn't require as much startup capital as most other small
businesses; some businesses can cost hundreds of thousands of dollars to start.

Product Life Cycle:

If properly maintained, the vending machine can be used for more than 10 years, which can help
secure lenders. In addition to your own financial information and business plan, if you choose to
apply for an equipment loan, you will need an equipment quote for the equipment you plan to
purchase. Also, if you need funds to purchase inventory, you may need to consider inventory
financing.

In terms of pricing strategy, market skimming and premium pricing will be used. The basic
principle behind this is that we have unique and differentiated products. Since the service is
relatively new to the market, it is better to be relatively new to the market and better to use when
the price is higher.
Since there is no human interaction and the service is available 24 hours a day, we may charge
high prices to pharmaceutical companies and customers who use the service. Since the service is
new, there is not much competition, but there will be competition over time. Therefore, to
maintain the market, it is necessary to maintain skimming.

How to Maintain Revenue:

6|Page
 1) Pharmaceutical company service fees and Customer sales.

2) According to a survey, there are approximately 80,000 customers per day at each
station.We have made different assumptions for the regions where different assumptions
are made, as follows:

 40 customers will buy goods from the vending machines at each station every day.

 25% of customers will use online consulting services.

In addition to revenue, fixed costs will mainly include rent and maintenance costs. The monthly
rent for each vending machine generally is Rs.18,820 and the warehouse rent is Rs. 47,050. In
addition, there will be a monthly maintenance fee of Rs.75,280 and a logistics fee of Rs28,230
for contracting with third-party service providers. In terms of depreciation, the expected useful
life of the machine is 5 years, with an annual depreciation of Rs.6,77,520. In addition, the
business is subject to 16.5% corporate tax, and interest payments will occur at the end of the
fourth year until the loan is repaid.
Location chosen for placing OTC vending machines
The vending machine’s locations were selected only where there will be a higher congregation of
public on a daily basis. The following points contain why this location? and what impact does it
have by placing it there?
1. Primary Health Care (PHC) centers
 PHC’s play a very important role in promoting the good health in the rural society.
 This location was selected because many individuals come to hospital for checkup
and this can be an easy access for medicines to get.

2. Medical shops
 In the medical shops there will be a regular supply of medicines. These can act as
support for replenishment
 And sometimes shops might get closed at night and these vending machines can
provide the required drugs.

3. High schools/colleges (Especially residential one’s)

 There is a lack of medical care centers in government/private schools in rural areas
and even if they are present the location is too far.
 Sanitary pads, masks, First Aid kits can be very helpful to the students as well as
school management too.

4. Bus stations
 This is the place where most of the public commutes and many finish their work and
return home.
 Due to work stress/motion sickness (sick of bus/car travel) even they can take the
basic medicines and get into the bus.

5. Railway stations
 Currently in India there are only sanitary pads vending machines in railway station
but not the medicines supply machine.
7|Page
  We can consider railways is the backbone of our country’s transportation and many
people travel in trains.
 Every train/individual cabin can be selected for setting up of miniature vending
machines.

6. Govt offices- Panchayat offices

 Every day many people approach these offices with one the other paper/documents
work with their personal work.
 These offices can set an example of how to use the machines efficiently and can act
as promotional partner.
 Sometimes people visiting office can also volunteer for the work and work for their
daily wages.

7. Vegetable markets/APMC Mandi

 Everyone during Covid-19 were asked to wash their vegetables because many didn’t
know because of unhygienic transportation methods and source of the vegetables was
grown.
 By placing these vending machines in the market, the vegetable vendors can directly
get the basic hygienic kits to their nearby selling areas such as mask and gloves.

8. Banks
 In the recent years there is an increase in public awareness for holding a savings
account in banks. Many people daily come to banks for withdrawing/depositing the
amount.
 Village heads if they visit banks if interested, they can try to ask bank loan for
installing these machines even in their villages for benefit of their peoples.

PROMOTION

In the promotion of pharmaceutical companies, only the push strategy was implemented, because
the relationship with pharmaceutical companies is mainly for niche marketing. With this key
target group, the push strategy includes personal sales and direct marketing. Personal selling
includes meeting directly with the company and giving a keynote or presentation. Due to its
interactive nature, personal sales are used. Using personalized messages for each different
company will be a helpful way to build effective relationships. In addition, in direct sales, in
addition to using online sales platforms such as LinkedIn, it can also send direct emails or phone
calls. In this sense, direct selling helps to reach more potential customers, and direct selling helps
to reach more potential customers.
Techniques:
1. Promotion with UPI/other payment apps: Stores can be geo tagged as the screenshot
below:
2. Pharmaceutical Companies can help in promoting by stating that their products are
available even in the vending machines near to the customer’s location.

3. Advertisements can be displayed on hoardings in collaboration with hospital chains.

8|Page
 4. Collaboration with various NGOs for female hygiene products.
5. Collaboration with government hospitals for providing medical services in the rural areas.
6. Collaboration with insurance companies for easy redemption of pharmaceuticals bills,
medical bills as well as renewal of health insurance.

PEOPLE
Here we are going to talk about people directly or indirectly involved in the production and
consumption of a service.
Training:
It involves training for people who will be assembling the vending machine, managing supplies
and invigilating the vending machine at the service. In assembly there will be a team of experts
who will train the people who will use their training to perfectly assemble mechanical and
electrical components of the machine. For supplies management there will proper expert training
for the employs to assure availability of medicines and other products in vending machine.
Talking about the invigilator at the service who will be resident of that rural area who can ensure
the working condition of the machine regularly, this person will be properly trained by the
experts on site.
Awareness:
At every site of the service the team of experts are going to conduct awareness program with the
help of local panchayat or Z.P.School. In these programs we will give demonstration about how
to use vending machine and also be talking about importance of the vending machine in that
area. Experts will give in-depth knowledge about every OTC medicines. Experts will make sure
that how that people use this service easily without any challenges.
PROCESS
Here we are going to talk about initial setup process, supplies management process and
maintenance process.
Setup: Initially we company finalise the location of the service. After finalising the site we will
to collect necessary components for the assembly of the vending machine. After assembling
machine, machine will be properly transported to the service location with the help of any
transportation agency. Then maintenance team will setup vending machine at the decided place.
Supplies Management: After successful setup of the machine, sales person of the respective
medicine company will provide required quantity of medicines to the invigilator who is
appointed at that location. That person will be doing refilling work of the medicines and other
products.
Maintenance Process: There will be monthly visit of the maintenance team at every location to
take care of proper working of the vending machine. If there any technical or hardware problem
occurs before monthly maintenance then invigilator will inform immediately to the maintenance
team and maintenance team will readily reach on the site and resolve the problem as soon as
possible.

PHYSICAL EVIDENCE STRATEGIES

9|Page
 Physical evidence
Area- rural, semi urban
Location – near hospital and
population area
Service Service scape Other tangibles
Automated Number pad Medicine id
Drugs Coin manager
Bill printing Medicine identifier
Ai- Voice
PPE kit
Sanitizer kit
Display
Sprinklers

Physical evidence strategies

1) Location
For any kind of vending machine location is a primary attribute if it is not situated in a good prime
location, it won’t get much crowd or client attention for this reason we are keeping our vending machine
at
 Hospitals
 Near populated areas
The reason for keeping it near a hospital to reduce waiting in hospital for medicine and also it will be a
very simple and generic one so that from layman to educated any one can operate
2) Service
It will an automated vending machine which will give medicine at free of cost and also it will be
displayed with steps to get the medicine as well as PPE + sanitizer kits
Although how convenient service you provide there is always operation issue from end user so we will
also give workshop to one member of each family in that area so that they will get to know how to
operate it.

3) Clarify Roles of the Servicescape

Display – to show time, and medicine available
Number pad – to choose medicine and no of strips
Ai-Voice – to listen options selected
Bill printing – for showing no of medicines, kits and dosage to take
PPE kits – to prevent further spreading of corona in the family
Sanitizer kit – gloves and sanitizer for preventing corona
Sprinkler – to reduce bacteria and virus contact in machine and further
spreading
4) Physical Evidence Opportunities

10 | P a g e
  Nearest hospital map to help them find out what’s the criticality
 Medicine reuse if strips are unused
 Government awareness programs
 Corona prevention instruction in back of bills
5) Updating
 Guidelines update on time to time basis
Medicines uses instructions and also doctors helpline number

CURRENT INDUSTRY TRENDS ON OTC VENDING MACHINE

SERVICES

Since 2020, the COVID crisis is there, the whole country has had a problem with their health and
physically faced many challenges. So, especially in this situation, we plan to launch an
innovative OTC vending machine – gives a hands-on customer experience.

The global vending machine market size was valued at USD 30.30 billion in 2018 and is
expected to register a CAGR of 9.4% from 2019 to 2025. The vending machine already
emerging trends in the food & beverage service sector. Especially, the company “Coke” did a
giant marketing campaign using the vending machine where the people can get an instant coke
by inserting their money into the machine. This campaign reached a lot of audiences and globally
recognized and made a huge growth & revenue brought up to the company. As, like vending
machine used in the various sector and places…such as shopping mall complex, retail stores,
hospitals, medical... so on. Those machines were emerging and helping customers to get simply,

11 | P a g e
right things at the right time using machines they can acquire. It enables all people in the single-
core line. 

As per The Business Research Company's examination report on the drug stores and medical
services stores market, drug stores are progressively utilizing medication candy machines to
support clients, particularly in distant areas where they can't put resources into opening a
foundation and positioning drug specialists. The medication candy machine is outfitted with a
telephone, web association, a remedy scanner, an in-assembled POS machine, and up to 2,000
bunches of generally utilized physician recommended drugs.

OTC Vending Machines: Govt & Private sector usage:

Government usage:
In government hospitals, Machines were used to dispense drugs, serving patients, giving service
remotely. The main aim is to reduce waiting time and out-of-pocket expenditure. The machines
work behind the cash vending process. Mainly, they were aligned with govt medical college.
Also, vending machines were used in the railway stations to provide sanitary napkins for women,
Drinking water bottles, snacks delivery. In general, it’s used in general public places. As an
emerging technology, new innovative things happen day to day in our life. As a part of the
digital world, those machines enhance technology with the customer’s hands-on experience.

Private usage:
Vending Machines were inclined with branded FMCG companies mostly like cool drinks,
snacks... In the pharmaceutical industry, pharma boxes, med life, were using those vending
machines They were made user-friendly to customers – simply viewing display screen – OTC
Drug details, quantity, quality, time, and date. 

CONCLUSION

OTC Vending Machines is definitely going to be a life savior in terms of time, energy,
and ease of managing. It wouldn’t require huge maintenance and is also very user-
friendly. People can use it according to their requirements whenever they want. Patients
can safely collect medicines 24/7 without any tedious waiting. According to the report, it
is briefly explained all the pros and cons and keeping everything in mind it is a service
which everyone has been waiting for since so long. Most importantly, its AI feature will
be very beneficial for rural people.

Overall, in order to enhance the medical facilities with the new technologies like this is a
fruit for people and advancement for a country as a whole.

12 | P a g e
13 | P a g e