Pricing and the consumer - a question of haggling?
I got into trouble with Mrs T2U last week when I criticised her for accepting the first price offered by a supplier of bespoke curtains. “We’ve been ripped off!” I suggested, indicating that a door-to-door salesman is there to close the sale and will always accept a lower offer before signing the customer. A period of silence from Mrs T2U ensued…
I’m sure the curtains will be lovely (honest), but was I right to suggest that consumers should haggle? Do you feel comfortable negotiating the price of something or do you take it as a given?
read more...»Product innovation - extending the humble cupcake
It is often said that if you want to find the next “big thing” in consumer trends, then take a flight over to North America to see what is popular. Cupcakes are one such phenomenon - their popularity has spread quickly over here to the UK. So, could this slightly unusual product extension idea for cupcakes take off here too?
read more...»Which is better? Aldi or Lidl? Compare and contrast these (and others) using ‘Store Wars’
I’ve only just stumbled on this excellent resource which pits Aldi against Lidl - and takes a snapshot of the differences in customers’ opinions. In this example, Lidl won 60/40. This is a fun few minutes suitable for a starter activity, with over twenty other examples to choose from.
read more...»Mini’s PR backfires badly in central Europe
No doubt it seemed a jolly good idea at the time. Someone in Sassenbach, the advertising agency that handles the BMW Mini account spotted an oppportunity; the German meteorology institute offers ‘Adopt a Vortex’, the chance to name, or ‘sponsor’, weather systems and encourages people to follow the path of the weather on meteorological websites. So they decided to name a weather system ‘Cooper’, and according to the BBC report they thought that naming the front after the open-air vehicle was a “wind- and weather-proof idea”.
read more...»The 7p Valentines Day Card
With just a couple of weeks until Valentine’s Day, many shops are going into overdrive with the displays of flowers, hearts, chocolates etc… It’s a lucrative time of year to charge top prices for certain products that might have a very inelastic PED (depending on how late you leave it to purchase!) and many firms see this as a good opportunity for business - I know plenty of Young Enterprise teams in schools all over the country who see it this way as well.
read more...»Success for the Daily Mail’s online strategy
Last year I started my A2 students on the topic of business strategy by looking at the UK newspaper market. Analysis of their position paints a pretty bleak picture, but the industry has a successful record of innovation, so it was interesting to compare their strategies for survival. A year later, and the success of one paper’s strategy is becoming apparent.
read more...»Leadership - Howard Schultz on the importance of leading an innovative culture
I’m a big fan of Starbucks as a case study for business students which provides some great examples of linkages between the different aspects of business strategy. In this clip from a recent business conference (London 2011), Starbucks CEO Howard Schultz discusses the importance of innovation in a competitive environment where businesses that stand still face defeat.
read more...»Growth strategy - Starbucks eyes the franchise model
As of 1 January 2012 there are 17,244 Starbucks outlets around the world. Not one of them is operated as a franchise - until now. Starbucks has announced that it is looking to the franchise model as part of its organic growth strategy, with the first franchise store likely to be opened in London later in 2012.
read more...»More perspectives on our changing shopping habits
There have been plenty of recent blogs on the problems faced by struggling firms on the UK “High Street”. You’re all encouraged to think through these problems, perhaps using a framework like PEST analysis.
This blog adds a couple more perspectives, from recent articles in The Guardian and The Economist that paint a pretty grim future for the High Street - at least in its current form. All is not well for the out-of-town grocery chains either.
read more...»The tablet takeover?
I bought twin-brother Geoff a Kindle Fire for Christmas (after he’d dropped several unsubtle hints in the festive build-up 
). It seems I wasn’t alone. Some great data in this analytical feature indicates that tablet ownership in the USA almost doubled in December 2011 - January 2012; a significant growth in the user-based of tablet-style devices.
What’s gone wrong for Kodak?
Ever heard of Coca-Cola? How about Google, Microsoft or IBM? What about McDonald’s? They sound familiar, and the amazing thing (to me) is that even in the 1990s, you would have heard Kodak mentioned in a list of the world’s five most valuable brands. Kodak was the Google of its day and by 1976 it accounted for 90% of film and 85% of camera sales in America. How the mighty have fallen, with the announcement that Kodak files for bankruptcy protection.
I was reading about Kodak’s decline and here are some of the key points that made an impression:
read more...»Virgin plays on brand heritage and brand extension to launch Virgin Money
Virgin Money - the new name for the former Northern Rock - is a further example of brand extension by Virgin. This new advert focuses on Virgin’s long history of brand extensions that has taken the brand from being a record label, to an airline, train operator and more. Do you think this approach will be successful? Does it make existing and potential customers more likely to entrust their financial affairs to Virgin Money? Take a look at the advert and see what your think…
read more...»Strategy Lessons from the Tesco Downfall
A highlight for me and many business teachers was the superb presentation given at the Business Teacher National Conference 2011 by Sir Terry Leahy who, just weeks earlier, had retired as CEO of Tesco leaving behind a stunning record of profitable growth.
Who would have thought that less than a year later, the shares of Tesco would fall by 16% in just one day (nicknamed “Tesco Thursday”) wiping £5bn off the value of Tesco shares. The sudden downturn in Tesco’s fortunes will be a rich source of business lesson material for months, perhaps years to come.
read more...»A quality control disaster turns into a new product opportunity
What happens when a product that is supposed to delight customers for 20 minutes lasts for just 50 seconds? That’s what happened to the good people of Oban in Scotland, when their bonfire fireworks celebration turned out to be a little shorter than expected…
read more...»Online marketing at children
The British Heart Foundation have been campaigning recently about the actions of junk food companies marketing at children online.
read more...»Functional recipes (strategies) for success at McDonalds UK
Love them or loathe them, it’s hard to deny that McDonalds has really got its act together in the UK and is thriving in a tough environment for consumer spending. This excellent article from the Independent features an interview with Jill McDonald (no relation to the original founder!) describes some of the key functional strategies that the business has adopted which are credited with improved business performance.
Lots for business students (and their teachers) to get their teeth into here. Among the key strategies adopted are:
- Redesign and renovation of location interiors, with renewed focus on families (marketing & ops)
- Wider menu choice, including some healthier options (marketing & ops)
- Free WIFI (marketing)
- High level of training, including extended apprentice programmes
- Increased proportion of locations which are franchises (up from 40% in 2006 to 65% now)
Well worth a read.
Pricing - Daftest In Store Deals!
This is a fun resource as a starter to pricing strategies and tactics…
read more...»Fair Trade
Actress Emma Watson launches organic clothing line in support of the People Tree Foundation, with all profits resulting from sales going to the People Tree Foundation. Nice starter to the topic of fair trade (and also nice to talk about something other than coffee or chocolate)
read more...»
Ethics - Coca Cola ‘Happiness is Home’ Project
This Christmas, where will happiness strike next? Is this Coca Cola’s attempt to further enhance their reputation, or merely a clever marketing tool to increase their Christmas sales. Let your students decide….
read more...»Strategies to revive the High Street: Mary Portas reports
The woes of the UK High Street had begun long before the Credit Crunch and recession. It seems that a combination of factors (think PEST analysis) have combined to create the difficulties that are squeezing this traditional sector of business activity. Nobody has the answers to saving the High Street, but Mary “Queen of Shops” Portas has given it a go.
Why not try this exercise for yourself?
Firstly, use a form a marketing analysis like PEST or the Porters’ 5 Forces model to identify where the problems lie. Secondly, make 3 recommendations to either firms or governments as to how they might resist the decline (there’s some background here to help). Then read on…
read more...»My favourite commercial of 2011 - Nandos bids farewell to the Dictators
This advert from Nando’s did it all for me - it made me laugh, it made me reflect upon the tumultuous events of 2011, and even made me feel a twinge of sympathy (but only for a second) for someone I never usually would!
read more...»Time for this Dragon to Cut Costs to Keep his Health Clubs Fighting Fit
The downturn in consumer confidence and spending is hitting just about every business in the retail and leisure sector - and even a Dragon like Duncan Bannatyne is not immune.
read more...»CGI modelling gauze and effect
Photographs of flawless models with tiny waists, perfect bums and endless legs, may hold the attention of consumers, but is it ethical to use computer generated images to promote a firm’s clothing ranges?
Marketing and the supermarket ‘price war’
You’ll be well aware that this Christmas the supermarkets are trying hard to lure customers with bargain prices. Pricing is of course a vital component of the marketing mix, perhaps especially so in the current economic climate. Investigative journalists on the BBC show Panorama have been digging deeper; to see if the supermarket offers are all they seem…
read more...»The Boston Matrix, whisky and booming exports
Don’t know why I keep using alcoholic beverages as examples in my lessons, but a recent discussion of the famous Boston Matrix got us all thinking which drinks belong in which Boston Box category. We decided that Guinness probably represents a cash cow for its producer, Diageo. In Europe, the market for beers is stable, or shrinking. But Guinness is a popular brand, with a large market share. It’s a good earner for the drinks giant.
But the Boston Matrix hints that there are better marketing opportunities out there: like grabbing a large share of fast growing markets – and developing star products. And that’s what Diageo have done, with whisky exports to China of popular brands like Johnnie Walker rising so fast the industry is struggling to meet demand.
read more...»Woman pepper-sprays rival bargain hunters. So what is ‘Black Friday’?
I don’t think this term had really crossed over the Atlantic and into our consciousness until a few years ago. Black Friday is both a date (it follows the American Thanksgiving festival, and marks the traditional start to Christmas shopping) but it is also a business occasion. Retailers try to create a buzz with significant discounts to draw in customers. But the ‘black’ bit comes from the phrase ‘being in the black’. When you stop being ‘in the red’ you are getting out of debt. Being ‘in the black’ means to have a financial surplus, or profit.
Stated simply, Black Friday is said to be the day in the calendar year when US retailers have covered all their fixed costs and achieved break even. They are in the black. Now the race is on to secure a healthy level of contribution towards profit before the end of the year.
Read on for photos of stampedes, accounts of pepper-spraying crazy ladies etc.
read more...»The Rise and Fall and Rise of Gerald Ratner
I had a fun evening with Gerald Ratner last week, he was speaking at the Entrepreneurship Society at our school.. Business teachers of a certain vintage and distinction will know the Gerald Ratner story well, at the time it was just about the most remarkable tale of business success and then rapid collapse that one could think about!
From being one of Britain’s most successful retailers - indeed the owner of the world’s largest chain of jewellry stores - a mis-placed joke in a lunchtime speech at the annual conference of the Institute of Directors at the Royal Albert Hall set off a chain of events that sent the Ratners brand into free fall.
read more...»Cut price cup cake deal goes wrong…...
This is classic business studies news article, packed full with learning for students!
‘Need a Cake’ is a small business in Reading owned by Rachel Brown, who has been in the baking business for 25 years and simply loves making and decorating cakes. Her website says “I can never remember a time, even as a child, when I did not enjoy creating innovative cakes.” The business employs eight people, and normal production is around 100 cakes a month. Mrs Brown thought she would like to try expanding a little, and decided to offer online vouchers for a discount deal in order to drum up some new customers - with disastrous results.
read more...»Who do you think should be named Brand of the Year 2011?
Who has your vote for brand of the year 2011? The Marketing Society has come up with a shortlist of 20 brands that you and your students can vote for using this link:
There is a useful summary of each brand’s activities in 2011 on that website - a good starting point for research and for discussion about the criteria that we might use in making a decision.
One possible approach in a lesson is to ask the students to come up with their nominations for Brand of Year 2011 before showing them the Marketing Society list. Which of their nominations are reflected in the “official list”? It might highlight how judgemental any awards process like this is.
There are some interesting choices in the shortlisted 20. Yeo Valley is clearly there as a result of its prominence on X-Factor and subsequent viral promotional popularity. Help for Heroes is another interesting and, I think, worthy choice.
But what of British Airways, Innocent, IBM & Barclaycard? What have they done to deserve their nominations?
Nationwide gets “Streetwise” with it’s marketing
Back in February, Ofcom relaxed it’s rules over the use of product placement in TV programmes as a means of marketing products & services, and Jim blogged an entry challenging students to spot the first placements.
read more...»
