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Billboards are enjoying a new lease of life. By 2011 the first new digital billboards were beginning to become more widespread. These combine the advantages of a traditional approach with moving images, the ability to add updates and to reflect a current news story. Now British Airways have launched a new campaign to take the technology further.read more...»
If ever there should be a "growth" market, it ought to be laser-based hair rejuvenation. After all, there are millions of adults who have experienced hair loss in one form or another and relatively few can afford the services of hair transplant surgeons who have treated the likes of Wayne Rooney and Shane Warne.
So could this innovative product make inroads into the hair restoration market?read more...»
The launch of Sony's PS4 alongside Microsoft's XBox One signals the beginning of a highly intense competitive battle in the games console market. With both the new consoles being launched in time for the crucial Christmas sales period, pricing strategy is crucial in order to gain maximum market share.
In the US, Sony has priced the PS4 at $399 (retail). Of course that is the retail price. Distributors will be wanting to make their margin on each unit sold. So how much does it cost Sony to make a new PS4?read more...»
Christmas is coming and it's time for the new generation of games consoles to be released. It's also a good time for students to refresh their coverage of the product life cycle concept.read more...»
I came across a great infographic that you will like if you're interested in marketing. Special cross-over appeal to those of you with 2D Design skills or aptitude.read more...»
It's here! The John Lewis Christmas Advert for 2013. Simple, Stunning.
What do you think?read more...»
Where would you expect a Starbucks latte to be cheaper - in a coffee store in downtown New York or in a Starbucks store in China? Keep in mind that per capita incomes in China are around one tenth of those in the United States.
The answer may come as something of a surprise!read more...»
A superb short video here from the business team at Reuters which highlights a strategic challenge facing camera manufacturers in Japan.
Top-end cameras for professional use are almost all Japanese - Japan made 81% of all digital cameras in 2012.
However, the emergence of high quality photography features on smartphones has slowed down demand for mid-range digital cameras.
Camera makers are moving away from compact digital cameras and moving towards the high-end market segments where sales might be lower but profit margins are higher.read more...»
Entrepreneurship, finance, research, corporate culture, marketing, product development, changing management structures are all part of the ingredients in this BBC entrepreneurship feature about the development of Charlie Bingham's Foods.read more...»
Students looking at international expansion strategies of multinationals will soon come across the term "glocalisation". It sounds similar to the idea of diversification and both are concerned with choices that businesses make about which products and services are offered and into which markets. Such choices are often analysed using the Ansoff Matrix. But is glocalisation the same as diversification? Or is it really a kind of market development?read more...»
"The 20th Century was about dozens of markets of millions of consumers. The 21st Century is about millions of markets of dozens of consumers."
So said Joe Kraus, founder of a search engine called Excite in the middle of the 1990s. Never heard of it? That's not surprising; in 1999 it was a $6.7bn enterprise with hundreds of employees, but a year later the dot-com bubble burst and it disappeared from the market place. But this quote is one of in an article about Peter Day's Radio 4 Archive programme to be broadcast tonight, and already recommended by Michael Owen in his blog below; forgive me for this repetition, but this is such a brilliant article that it really merits a second look, and hopefully between us we will convince you of that!read more...»
This is brave! Camelot have decided to double the price of a ticket for the National Lottery main prize draw, Lotto, from £1 to £2, starting this Saturday. And the reason for doing it? Because sales have been falling for years. So what does this tell us about their perception of the PED for Lotto tickets?read more...»
How on earth is Starbucks making a success of its push into China? China is a tea-drinking nation. In fact, China has the world's oldest and largest tea-drinking culture. Chinese people hate coffee – they say it tastes so bitter it is like tasting medicine.
But, look at the evidence. Starbucks has been in China for 13 years, with an initial presence in the major tier 1 cities Beijing, Shanghai and Guangzhou. Starbucks expects China to become its second-largest market by 2014 aiming to have 1,500 outlets throughout China by 2015. The number of staff employed by Starbucks in China is forecast to rise from 12,000 to 30,000.
According to the latest Euromonitor report, Starbucks has a 60 per cent share of China's emerging coffee house market, well above its closest competitor.
That sounds like a success story. So how has it done it?read more...»
Businesses from outside China trying to sell in China face a critical question as they try to enter China. How far should they go to adapt or redesign (“localise”) their products and services to meet the needs and wants of customers in China? Should they adapt existing products just enough to appeal to consumers in China? Or should they look to start again – rethinking the product or service from the ground up – in order to established a position in the market and then gain market share?
Yum! Brands is a multinational that operates or licenses Kentucky Fried Chicken ("KFC"), Pizza Hut, Taco Bell and other small restaurant brands worldwide. Yum! is the world's largest fast food restaurant company in terms of outlets with more than 39,000 restaurants around the world in over 125 countries and global sales of over $12bn.
For the last decade, Yum! Brands has relied upon international expansion as the main driver of revenue and profit growth. China in particular has proved to be a significant source of growth. For example, KFC has opened an average of one new outlet per day in China and has an objective of reaching 15,000 outlets.
KFC has achieved this high rate of growth by adopting the concept of localisation. It has largely ignored the traditional model of KFC outlets in the US and other developed economies - that of a franchise operation with a limited menu, low prices and an emphasis on customers taking-out their food and drink to consume. Instead, the KFC model in China was redesigned to meet local needs.read more...»
In early 2013 the BBC asked global brand research company Millward Brown to identify the 20 most powerful foreign brands in China: the ones that have gone in and succeeded where many others have failed.
When the results came back one noticeable feature was that one company - Procter and Gamble ("P&G") - had three of the top 5 brands!
Of course you might expect P&G to be successful in China. After all, P&G is the world's largest maker of household and personal-care products. At the start of this decade P&G had set itself an ambitious corporate objective. It aimed to add 1 billion customers by 2015 (a 25% increase) and P&G were clear that emerging markets would be crucial in achieving that goal. Of all the emerging markets, P&G is strongest in China, which by 2012 had become its second-biggest national market with around 6% of the firm's worldwide sales.
So how has P&G managed to achieve such a strong position in China? Why had P&G succeeded when so many other Western brands had struggled to establish a leading position there?
To understand the achievement, you need to go right back to when foreign firms were first allowed to enter China. Here are some key features of the P&G approach to building its business in China.read more...»
A useful article here in BusinessWeek for business teachers and students - particularly those interested in the sports wear market. The article analyses recent comments by the CEO of Under Arnour, a fast-growing and increasingly global sports wear brand.
Under Armour is a great example of a business that has been able to sustain high levels of revenue growth using an organic growth strategy. But can it sustain this growth?read more...»
This looks like a must-watch and must-record series from Robert Peston. Robert's new three-part series takes us behind the scenes of some of Britain's most successful retailers and also explores their history, heritage and organisational culture. Robert Peston Goes Shopping is on at 9 p.m. on Monday nights starting 2 September. Fantasticread more...»
An excellent case study here in how to grow a business through expansion into faster-growing international markets.read more...»
The Office of Fair Trading is investigating potentially illegal pricing activities by six furniture retailers. It all relates to the use of price discounts.read more...»
Imagine the scene. You've left what looks like your most promising Christmas present to open last. The package indicates something tablet-sized & the box feels pretty sturdy. You asked Santa for a tablet computer - so this looks promising....read more...»
It has been announced that the Sky advert that featured Bruce Willis complaining about his broadband access has been banned by the Advertising Standards Association for being misleading. The prices quoted on the advert were for existing Sky customers but gave the impression that they were available for new customers as well.
Now, if only someone could find something inaccurate about those Kevin Bacon adverts!
Worldwide sales figures recently released have shown that sales for PCs is in a long-term decline. The primary reason for this would appear to be that customers are purchasing tablets and smartphones in preference to laptops and desktops.
The activity that you can download from this link gives some details of this downturn in sales, reminds students of the product life-cycle diagram and then challenges students to quickly devise a strategy to combat the downturn - either a new advertising campaign, aiming the PC at a new market or devising a change to the PC to enliven interest. I would use this resource by giving the 3 possible strategies to individual groups (if you have enough students to create more than 3 groups then I would allow 2 groups to look at the same strategy), allowing them the 5 minutes on the timer to come up with a suitable suggestion and then present this suggestion back to the whole class at the end. In total, this activity would take between 15 and 25 minutes. The final 3 slides on the Powerpoint file are the worksheets that can be given to the groups.
You can see the original story by following this link.
John Lewis are opening a store at Heathrow terminal 2, which will be the Partnership's smallest store, the first away from town and city centres and an important step in their international strategy. For a while I’ve been looking at the idea of place in the John Lewis marketing mix, and the business has clearly identified deeper trends in retail location.read more...»
It’s three years now since we got excited at T2U by the budget hotel concept (there’s a reminder link here) and the format seems to have been a success. Imitation by Whitbread, with their new 'hub by Premier Inn' format suggests this is a successful innovation.read more...»
Sophi Tranchell MBE was our guest for the afternoon session at the Business Teacher National Conference 2013 and she gave a simply inspirational talk on the story of Divine Chocolate!
Sophi has very kindly agreed to her presentation being shared with tutor2u teaching colleagues and students. Highly recommended - a wonderful case study in social enterprise; packed full with other business studies gold too!read more...»
When students start work and marketing I encourage them to come up with a product or service that appeals to 'everyone'. So far they have never come up with an example that really satisfies me. It seems that almost every product that is sold is tailored, in some way, to the needs of its target audience. That concept lies behind the idea of market segments, or groups of consumers who share the same buying habits.
If you enjoyed Jim's reference to the hilarious Bic biro for women (!) then you'll like my new favourite. And that's the point of my new market segment challenge!read more...»
This simply couldn't be worse news for two multinational giants in the global chocolate product market. Authorities in Canada have charged the food giants Nestle and Mars, together with a network of independent wholesale distributors, in an alleged conspiracy to fix prices of chocolates. Hershey is also involved - but they appear to have confessed to the illegal price-fixing activities and will be hoping for relatively lenient treatment in return for cooperating with the Canadian authorities.
Price-fixing is illegal - plain and simple. But it's also unethical. To be caught out price-fixing is to be caught acting against the interests of consumers. Not a good place to be if you are a global brand that values its reputation.
Nestle and Mars have both denied the alleged behaviour and have vowed to fight the legal action:
Nestlé said in a statement:
“Nestlé Canada will vigorously defend these charges. At Nestlé Canada, we pride ourselves on operating with the highest ethical business standards.”
Mars issued a similar promise to fight the allegations.
Time will tell whether price fixing has actually taken place.
But what is price-fixing?read more...»
A great example here of a European manufacturing business that is attempting to compete based on product differentiation compared with the cost leadership approach adopted by competitors relying on mass production techniques.read more...»
Pedal power has been around for a while. But are turbo-charged eBikes the way forward? The specifications of electric bikes are impressive - but will the price put potential customers off?read more...»
‘Feel free to browse’ often strikes me as an odd sign in many shop windows. Why wouldn’t I feel free to do so? Well, the answer should have struck me by now. Apparently, many ‘bricks and mortar’ retailers are feeling the pressure from ‘showrooming’ – when people see something they wanted in a shop, try it, check the price online on their smartphone, find it’s cheaper, and walk out.
I’ve just been reading about the phenomenon and was reminded of the sign I’ve used to illustrate this blog, which appeared in a shop window after the British camera chain went into administration. "The staff at Jessops would like to thank you for shopping with Amazon". (I think any discussion of tax avoidance can be saved for another occasion).read more...»
This revision quiz tests knowledge of the role of product trial and gaining repeat purchase. The questions are particularly suitable for GCSE or other Level 2 students.
A new revision quiz here with 10 multiple-choice questions on branding and product differentiation, with the questions particularly suitable for GCSE or other Level 2 students.
This revision quiz has 10 multiple-choice questions on the product life cycle, with the questions particularly suitable for GCSE or other Level 2 students.
Bigger is better, or so it seemed to the UK supermarkets over the last 20 years. Size seemed to offer all kinds of advantages (or ‘economies of scale’ in business terms). Many of those economies are still very present for the larger chains (especially with purchasing and technical benefits), but I’ve been reading that this mood is shifting. Since the early 90s, the UK's £160bn a year grocery business has understood that one of the key routes to success has been the ability to open more and bigger shops.
Now it seems as though the major players have come round to thinking that size is not necessarily what matters, because shoppers are changing their habits fast. Has the “space race” run its course?read more...»
I’ve taken the title of this blog straight from a BBC article that will catch the attention of those of you who are interested in retail. What tricks have the retailers developed in recent years to get us to part with our hard-earned cash?
Here are some hooks to get you into the article:
- Why are sweets and chocolate always by the till in supermarkets? Why do they put the everyday essentials like bread and milk at the back of shop so you have to walk through as many aisles as possible to reach them?
- Why is the perfume and jewellery section always at the front of a department store?
- Why do some shops have low lighting? Why in Ikea do you have to do a loop of the whole shop rather than being able to get straight to the bit you actually want?
A classic example here of how earning a low contribution per unit can lead to big problems for a business if it does not sell high-enough volumes - particularly when fixed costs are high.
Nintendo's new "next-generation" console retails in the key US market for a selling price of $299. However, the (variable) cost of the components used and assembly are pretty close to the selling price, which leaves little if any scope for Nintendo to make a contribution on each console unit sold. Don't forget, it also needs to allow its retail and other distributors to earn a satisfactory margin too.
Of course Nintendo can recoup much of the cost back through lucrative royalty payments from games-developers who are licenced to develop for the new console.
But the big problem for Nintendo would be if the Wii U fails to sell in large quantities. The early indications of consumer demand do not look good...
This excellent short video from CNN takes a look at the variable costs of making the Wii U.read more...»
Tesco's decision to acquire restaurant change has been described as "a very significant move". That's a nice piece of evaluation. So why has Tesco decided to diversify into the family restaurant market?read more...»
A great example here of premium-pricing in action. Most of us have to stretch our budget to afford around £500 for a high-end smartphone. So a price tag of $10,000 for a Vertu smartphone is well out of reach for the vast majority of potential users.
So what goes into such a premium product and which operating system does it use?read more...»
5 minutes of business studies gold here with an interview by Bloomberg with the CEO of global toy brand Lego. It is simply packed with core business concepts including market segmentation, innovation, competitive advantage and finance.
The growth story of Lego is an organic one. The business has never made an acquisition. It focuses on using new product development and innovation as the driver of revenues and profits - to great success. Since 2007, Lego has tripled its revenues globally and achieves an operating profit margin of almost 25%!
The strategy of Lego is summed up nicely by the quote: "We want to be the best, not the biggest".
In the video, Joergen Vig Knudstorp, chief executive officer of Lego, talks about the company's performance and the outlook for growth. Lego, Europe's biggest toymaker, boosted profit and market share in 2012 as demand for its new building block sets for girls propelled sales growth.read more...»
Take a look inside the Google campus here in this video which looks at how Google has approached the development of apps for the two key smartphone ecosystems - IOS and Android.
The video provides a useful and fascinating insight into the changing corporate culture of Google and the impact of Google CEO Larry Page who has transformed the business around the vision of innovative design (competing now with Apple?).
A good example of this is how Google redesigned the Gmail app that works on Apple's IOS operating system. It had to look like Gmail (Google) but have an Apple feel!
A real feature of this video is the importance of teamwork in app design - another strong feature of the Google culture.read more...»
The discovery of horse meat - disguised as beef - in burgers and lasagnes has kicked off a crisis which illustrates lot of key business studies concepts.
At the heart of the issue is trust. Can consumers trust what retailers sell to them?
From the consumer perspective, if a product is labelled "Beef Lasagne", is it too much to ask that the ingredients for the lasagne include beef rather than horse or donkey?
From the retailers perspective, can they trust that the products they source from their supply chains are as described? What checks and controls do they need to have in place to ensure that suppliers deliver what they promise?
Lots of other concepts are relevant to the developing story. For example, what contingency planning is in place to deal with the media storm and consumer reaction to further revelations.
In this video, the FT's Hannah Kuchler reports on how food companies now have to rebuild trust, without pushing prices too high.
If you had lasagne last night you might be wondering if it was the last remains of the non-running hurdler "100% Pure Beef". Findus have a major problem to resolve after tests showed that their lasagne had been made from horsemeat.
I had been guilty of listening to radio 1 in the past on my cycle in, very useful to get starter ideas or discussion points for GCSE business-Recent changes in the radio 1 product strategy has meant I have switched back to radio 4 (I wish 5 live was on FM!) so good news for my economics class, not so good for my GCSE class! In the Daily mirror today, was a very accessible rport on audience figures- I plan to use it for GCSE to consider segmentation and product extension, for As to support marketing and A2 to support strategy -In the document which I have had put onto TES I have also included some questions on the data to give A level students (and the quicker GCSE students) a chance to number crunch.
Answer are on the final page- Please check before use!
My students know that I love the radio. Many a spare half an hour can be whiled away with a podcast of The Bottom Line (which returns on Thursday/Saturday this week), or More or Less, or Peter Day’s World of Business. And the great thing about this form of learning is that it can overlap with other tasks – there’s no opportunity cost! Listen to a business/economics podcast whilst at the gym, going for a run, doing the washing-up, whatever…
But whilst Radio 4 is well-scouted territory, but one students might not be so familiar with is NPR’s Planet Money. This show, from America’s public radio, is quite close in style to R4’s More or Less with a more of a business focus. 2 fifteen minute shows are podcasted a week.
This edition is a great place to start.
In a way it's a shame that the market-leading business featured in this video needs to exist. But it does and for good reason - many customers are looking for the protection provided by the firm's products. A great story of a successful firm in a classic niche market, where the added value is all about "protection" and in which customers are prepared to pay a premium for their lives being saved...read more...»
I adapted the title for this blog from an article and video clip I came across in the Telegraph, which contains the observation that "consumers forgot that Blockbusters still existed". I don't really think its demise was very hard to predict, and I think most of you will have seen this coming for some time.
But with the decline of Blockbusters - and so much other bad news on the High Street - I've decided to bundle together a lot of ideas and links to encourage students to work independently on this topic, to see if they can understand some of the forces putting pressure on our High Streets at the moment.read more...»
A lot of people will be saddened - but probably not shocked - by the news that HMV looks like it may be the latest casualty amongst big-name retailers. There's a lot of coverage of this story, so I've put together several links and questions to encourage you to consider some independent research on what's gone wrong, and what may be the way forwards from here.
I'm enjoying using Storify at the moment, and the links and suggestions for the HMV story are all posted here.
Sony is one of our favourite case study businesses and fantastic source of research insights for A2 students wanting to improve their understanding of business strategy. So we were pleased to spot this short video from the FT which evaluates the potential success of Sony's new smartphone - a so-called "super smartphone". Given that Sony only has a single digit market share in the smart phone market, can this new product provide Sony with something which will compete with Apple and Samsung?read more...»
I love the annual CES (Consumer Electronics Show). Coming at the start of each calendar year, CES is a showcase for some major new product launches by global players like Sony as well as by smaller, niche manufacturers of consumer products. T
For example, take this new product: the iPotty. The Daily Mail has this description of the product which seeks to forge a creative link between a popular electronic item (the iPad) and a core need for parents - help with potty training.
Parents of toddlers will know that their offspring can spend a surprisingly long time "on the pot" waiting for some relevant output. So does it make sense to provide the little ones with some mental stimulation at the same time?
Priced at £25, the iPotty clearer doesn't come with an iPad. But will it take off? Of is this just another product innovation that proves to be a flush in the pan?read more...»
The updated list has been published by Interbrand (the people who brought you the slogan “a Mars a day helps you work, rest and play”) and they describe it as the ‘definitive ranking of the world’s most valuable brands’.read more...»
You may have read about the company Teapigs, which presents itself as a quirky small upstart company, when it began its life under the close support of a much bigger business. Here’s another example: Harris and Hoole - a coffee shop that presents itself as an independent chain but is in fact 49% owned by…read more...»
As reported in Private Eye, when is a small business not a small business? At first glance, Teapigs looks like a small company on a mission to introduce quirky, premium teas to the mid-market segment. The company’s website tells a reassuring story of Nick and Louise who “met while working for a really big tea company”. What you won’t find out by reading the website is that the really big company is in fact…read more...»
Markets for ethical goods and services have remained resilient throughout the economic downturn as a progressive core of retailers and producers continue to factor sustainability such as Fairtrade ingredients into their products and services.
That is the conclusion of The Co-operative’s annual Ethical Consumer Markets Report (pdf) which shows that since the onset of the recession five years ago the total value of ethical markets has gone from £35.5bn to £47.2bn.
Acting as a barometer of green markets since 1999 when annual ethical sales were just £13.5bn, the report analyses sales data for various sectors including food, household goods, eco-travel and ethical finance.
Amongst the biggest growing categories during the recession are sustainable fish up 323 per cent from £69m to £292m, Fairtrade which has increased 176 per cent from £458m to £1,262m and free range eggs sales up 78 per cent from £444m to £792m.
However, sales of organic produce, although now stabilised at £1.5bn, have declined from a high of £1.9bn in 2008.
In 2011, ethical food and drink markets increased 7.8 per cent per cent to reach £6.9bn. Markets for green home products were up 10.6 per cent to £8.4bn and ethical personal products were up 4.3 per cent to £1.8bn
A nice example here to help explain and illustrate the impact of technological change on the product life cycle.
This article in the Telegraph reports a 20% decline in UK sales of MP3 players during 2012 compared with 2011. Total sales in 2012 were £381million, a fall of £110million. According to one Mintel market forecast, annual sales could slump further to around £25million within the next 5 years as the market penetration of smartphones continues to make the MP3 player less relevant to consumers.read more...»
A fantastic video here from the team at the FT who explain the link between Big Data and the crucial role of design and innovation in creating products and services that people want.
Companies are battling to cope with an avalanche of valuable information as big data becomes fundamental to their business models. Ravi Mattu, the FT's business life editor, reports on how important good design is to getting consumers to give up their data and the benefits the numbers can bring.read more...»
This revision presentation highlights the role of objectives in marketing planning and illustrates how they can be linked with the other main functional areas. It also summarises the main internal and external influences on marketing objectives.
This revision presentation provides an overview of the marketing planning process including a brief description of each stage in marketing planning together with discussion of the role of the marketing budget.
In this revision presentation, some core concepts of marketing data analysis are introduced. The presentation introduces topics such as test marketing, calculation of moving averages, extrapolation, correlation and qualitative methods of marketing forecasts (hunch & delphi).
Ansoff's Matrix is a classic model of marketing and business strategy that business students can use very effectively in their exams. This revision presentation outlines the key features of the model.
This revision presentation explains how Michael Porter suggested four "generic" business strategies that could be followed in order to gain competitive advantage. The differentiation and cost leadership strategies seek competitive advantage in a broad range of market or industry segments. By contrast, the differentiation focus and cost focus strategies are best used in a narrow market or industry.