Posted by admin on Apr 29, 2015
Marketers for firms who sell chewing gum are facing a challenging task. U.S. sales of chewing gum have fallen 15 percent to $3.5 billion since 2009 and companies are looking for new product ideas to win over consumers. Hershey’s has high hopes for its new product Cool Blast Chews, which went on sale this month. Ice Breakers Cool Blast Chews, which dissolve in a burst of mint after about 10 chomps, straddle the market sweet spot between mints and gum. But competition is fierce, as startups and entrenched players alike rush out new flavors and packaging. Other creative marketing ideas include the Wrigley Co. effort to get some traction with an Orbit gum pack designed to fit snugly into a car cupholder. In an attempt to attract health-conscious consumers, the industry is selling all-natural varieties, including Glee Gum’s aspartame-free product in recyclable pouches. Trident created a limited-edition pumpkin spice gum and Wrigley marketed a “dessert delights” line that has included such flavors as Root Beer Float and Peach Cobbler. So far, the rush to re-invent gum hasn’t made much difference. Last year, Americans chewed gum 1.4 times a week on average, down 30 percent from 2009, according to NPD. Aging boomers are giving up the habit often because of concerns surrounding their dental work. Many millennials never developed a taste for gum, preferring more trendy savory snacks. Fewer Americans are smoking so there’s less demand for gum to cover tobacco breath. There’s one bright spot internationally: China, where gum sales almost doubled to $3 billion from 2009 to 2014 and are projected to grow an average of 6 percent through 2018, according to Euromonitor. But the food companies can’t lose focus on the U.S., where they still generate a substantial portion of revenue. In January, Wrigley released the first national Juicy Fruit television ads in 10 years. One features two young men in a locker room making rude noises with their armpits. The sophomoric humor is targeted towards teens and young adults, who are often considered the lifeblood of the industry. As consumer behavior changes, it is critical that chewing gum marketers find new ways to create, communicate and deliver value to their customers. Source: Craig Giammona, “Hershey wants to get Americans Chewing.” Bloomberg Businessweek, April 8, 2015. Discussion Questions: 1. What promotional strategies would you use to increase awareness and usage of chewing gum by younger consumers? 2. Which...
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Posted by admin on Apr 10, 2015
In biotech labs across the world, Coca-Cola, PepsiCo, and their suppliers are racing to find a soda that tastes as good as the iconic colas, is sweetened naturally, and has zero calories. Globally, colas account for more than half of all sodas sold. The challenge for the $187 billion soft drink industry is giving consumers in developed markets the sugary taste they want without giving them the mouthful of calories they don’t. Concerns about obesity and health have led to nine years of falling U.S. soda consumption. The soda giants can’t rely on existing diet versions of their namesake colas, as consumers are shying away from the artificial sweeteners they contain, including aspartame. Critics have blamed the ingredients—rightly or not—for everything from weight gain to cancer creating a marketing challenge for these organizations. Diet Coke is losing U.S. sales at 7 percent a year, almost double the rate of decline of American cola sales overall. So Coke and Pepsi are turning to science to save their cola businesses, which take in about two-thirds of the industry’s U.S. sales. Researchers are focusing on finding new products such as sweeteners for a simple reason: That’s where almost all of a soda’s calories come from. The classic American cola is 90 percent carbonated water; the next most plentiful ingredient is calorie-laden sugar or high fructose corn syrup. A 12-ounce serving has 140 calories or more, as much as three Oreo cookies. But soda makers must be careful when changing sweeteners, because they also help provide the liquid’s taste and the sensation on the tongue and in the back of the throat that consumers expect. Being able to position their products effectively as consumer behavior changes, will be one of the most important challenges cola marketers will face in the years ahead. Source: Duane Stanford. “Scientists Are Racing to Build a Better Diet Soda,” Bloomberg Businessweek, March 19, 2015. http://www.bloomberg.com/news/articles/2015-03-19/coke-pepsi-seek-diet-soda-s-perfect-sweetener Discussion Questions: 1. How do you think cola marketers should position their new diet drinks and sweetener products to appeal to consumers? 2. As consumer behavior evolves over the next decade, do you think it will be a more difficult challenge marketing traditional colas (Coke, Pepsi,etc.) or diet colas (Coke Zero, Diet Dr. Pepper,...
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Posted by admin on Mar 31, 2015
One of the most fascinating strategic marketing decisions over the past couple years has come from World Wrestling Entertainment (WWE). In early 2014, the WWE shifted part of their business model from being driven by monthly pay-per-view events (PPVs) (where fans paid between $45-$70 to watch each event live on their television) to launching a new digital channel called the WWE network available across numerous devices. For wrestling fans, it’s a good deal as for $9.99 a month, you get a live 24-hour-a-day network that features some original content, broadcasts of classic WWE matches, video on-demand access to the entire WWE, WCW, and ECW pay-per-view archive, plus live streams of all 12 WWE pay-per-views. This Netflix type monthly fee model that includes all (12) live PPVs for what it previously would have cost a fan to buy just (2) PPVs is a fascinating business decision that led some investors to wonder if the WWE Network revenue could make up for the lost pay-per-view revenue. WWE announced this week that the WWE Network, which launched in February 2014, had surpassed 1.3 million subscribers, thanks in large part to recent subscriber additions for last Sunday’s WrestleMania. Despite the boost in subscribers (WWE had just 1 million at the end of January), investors reacted negatively as the company said the figures could fall in the future following big events. WWE marketers have been aggressively using a variety of sales promotion strategies. For example, the boost in subscribers was aided by a free trial available in February, which added 201,000 trial subscribers, with 77% of them converting to paid subscribers in March. Sources: Chris Ciaccia, “WWE Gets Pummeled as Investors Fear Subscriber Numbers Will Erode,” thestreet.com, March 30, 2015. http://www.thestreet.com/story/13095125/1/wwe-gets-pummeled-as-investors-fear-subscriber-numbers-will-fall.html?puc=CNBC&cm_ven=CNBC Ben Sin, “The WWE’s New Digital Channel Could Kill The Business Model They Built,” Sports Illustrated, January 9, 2014. http://www.si.com/extra-mustard/2014/01/09/wwe-digital-channel-ppv Discussion Questions: 1. Do you agree with the WWE’s strategic marketing plan to shift revenues toward their digital network instead of traditional pay-per-views? 2. What sales promotion strategies would you suggest that the WWE use in the future to increase the number of network subscribers?...
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Posted by admin on Mar 23, 2015
If you watched the NCAA Tournament this past weekend, you saw some great basketball and a variety of marketing strategies. Under Armour Inc., which has six schools wearing its shoes and jerseys in the NCAA tournament, is gaining traction and market share in basketball shoes. Basketball is one of the fastest-growing parts of the U.S. sporting goods industry. Sales surged 20 percent in 2014, about four times as fast as the overall athletic-shoe market Under Armour endorsers include several tournament teams such as No. 4 seed Maryland, and No. 3 seed Notre Dame, which in January 2014 signed the richest apparel deal in college sports history. Under Armour’s Notre Dame deal brings the school more than $90 million over 10 years, according to Fighting Irish Athletic Director Jack Swarbrick. Founded in 1996, Baltimore-based Under Armour outfits 32 basketball programs at the highest level of college play and the entire athletic departments of 15 schools. Last year, just one of its sponsored teams reached the tournament (Stephen F. Austin), while Nike had 40, including eventual champion Connecticut. This year Nike still has the most at 48, including undefeated Kentucky. Eleven schools will wear Adidas AG, and three squads will have jerseys from Berkshire Hathaway Inc.’s Russell Athletic, while wearing Nike shoes. Under Armour marketers got $1.9 million in television exposure from Stephen F. Austin’s two tournament games last year, according to sponsorship evaluation firm Front Row Analytics. The company’s six teams this year will bring at least $3.9 million in exposure, which increases throughout the six-round tournament. Source: Mason Levinson and Matt Townsend, “Under Armour is the NCAA Tournament’s Real Cinderella Story.” Bloomberg Businessweek, March 19, 2015. http://www.bloomberg.com/news/articles/2015-03-19/under-armour-is-the-ncaa-tournament-s-real-cinderella-story Discussion Questions: 1. Are investments like the $90 million Under Armour paid Notre Dame to wear its apparel, profitable marketing strategies? 2. Can you think of other effective product placement strategies in...
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Posted by admin on Mar 6, 2015
One of the questions I get often from instructors using our book is how many Connect assignments should be used during a semester. I wrote (5) Connect exercises for each of the 14 chapters to give instructors maximum flexibility to choose from the (70) total Connect exercises built into the book, including one video case and one social media assignment in each chapter. The decision on how many of those (70) Connect exercises to assign can be based on a number of factors including teaching format (face-to-face, online, etc.), and time frame of the course (15 week semester, 5 week summer term, etc.). While there is no answer that is best for everyone, I wanted to share why I assign 19 Connect exercises each semester and then some things I have seen other instructors using our book have success with. My Principles of Marketing course is a Tuesday-Thursday class that meets twice a week over a 15 week semester. With those 30 class meetings, I subtracted 4 classes where we have exams, 4 where I have quizzes, 2 classes the first week when people are still adding and dropping, and 1 class when their projects are due. When I took those 11 out, I had 19 classes that I assign a Connect exercise at the end of each of those classes. These are usually split between assignments that reinforce what I covered in class that day, and assignments that “flip the classroom” to prepare students before the next class. I picked the Connect assignments that I thought had the biggest impact for students and/or the topics they most struggle with. I picked at least one in each of the 14 chapters with a few chapters having a second assignment. With 5 different Connect Assignments in each chapter to choose from, you can pick what you are most passionate about or what you think the students need the most practice on. Depending on student feedback and assessment metrics, I typically change some the assignments I select each semester once I see where my students are having the greatest challenges. I know instructors who adopted our book to teach in an online marketing class. These instructors are typically more concerned with keeping their online students engaged on a day to day basis. Some online instructors assign all (70) Connect exercises requiring students to average about one assignment per day during each...
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Posted by admin on Mar 4, 2015
While Pizza Hut has successfully added more than 1,300 restaurants across China, its international expansion into Africa has been more difficult. The world’s largest pizza chain failed in sub-Saharan Africa seven years ago, after consumers were cool to its prices and dine-in model. This time around, Pizza Hut marketers are targeting takeout and delivery service. It will limit drop-off distances to a few miles, which means eventually it will have smaller stores in lots of neighborhoods. From its current eight stores in South Africa and Zambia, it aims to have 200 stores across the continent in three years. While fast-food purchases in South Africa are growing, much of that nation’s fast-food industry is homegrown. In countries such as Ghana, Kenya, and Nigeria, there’s less competition than in South Africa. So while supply chains are less reliable, those newer markets offer foreign restaurant players good growth opportunities. Almost half of Africa’s fast-food restaurants are focused on chicken with hamburgers being second. Pizza is a distant third, accounting for about 5 percent of total spending. A major reason for this is the more moderate cost and wider availability of poultry supplies. Some Pizza Hut toppings, such as air-dried pepperoni, have to be imported leading to higher prices for consumers. For example, the “Streetwise 5” meal from KFC, which includes a large order of fries and five pieces of chicken, costs $5.50 in South Africa, while a fully loaded large Pizza Hut pizza approaches $8. In Zambia, the same pizza costs about $10. To offer more affordable items, Pizza Hut has added fries to its menu in South Africa. Chicken wings and breadsticks are also options. Source: Janice Kew and Christopher Spillane, “Pizza Hut returns to Africa” Bloomberg Businessweek, February 19, 2015 http://www.bloomberg.com/news/articles/2015-02-19/pizza-hut-returns-to-africa-with-new-strategy 1. How should Pizza Hut position their products to overcome the higher prices they are charging consumers? 2. Are there things that Pizza Hut could do to improve their supply chain in Africa and reduce...
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