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Innovation: Will eBikes Power Ahead?
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’ … for how much longer?
‘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...»Revision Quiz - Product Trial and Repeat Purchase
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.
Launch Revision Quiz on Product Trial and Repeat Purchase
Revision Quiz - Branding & Differentiation
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.
Launch Revision Quiz on Branding and Product Differentiation
Revision Quiz - Product Life Cycle
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.
Launch Revision Quiz on the Product Life Cycle
Are supermarket economies of scale beginning to fade?
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...»Shopping: The new tactics to get you spending
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?
Low Contribution & High Fixed Costs - the Problems for Nintendo’s Wii U
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...»Growth strategy - Tesco’s “Related-diversification” into Family Restaurants
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...»Would you pay $10,000 for a smartphone?
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...»An Organic Growth Strategy Based on Innovation - Lego Powers Ahead
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...»Design Becomes Part of the Culture at Google
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 Horse Meat Scandal - A Question of Trust
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.
Findus hurdles to uncertainty
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.
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Explaining changes in business performance with the help of Radio 1
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!
Planet Money
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.
A Niche Market in Which the Market Leader is Well Protected
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...»Now Blockbuster fails ... is the High Street dying?
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...»The HMV story
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’s New Super Smartphone - A Premium Product, But Can It Compete with Apple & Samsung?
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...»Is the iPad inspired iPotty a viable business idea?
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...»Top Brands of 2012
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...»Big Firm launches smaller brand – the Harris and Hoole story
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...»Is the Teapigs approach to branding effective (and ethical)?
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...»Ethical business is a recession-buster!
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
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Technological Change - MP3 Players in Rapid Decline
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...»Big Data - How Product Design & Innovation Needs to Work in Harmony
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...»Revision Presentation - Marketing Objectives
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.
Revision Presentation - Developing & Implementing Marketing Plans
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.
Revision Presentation - Analysing Marketing Data
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).
Revision Presentation - Ansoffs Matrix
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.
Revision Presentation - Porter’s Generic Strategies
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.
Revision Quiz - Marketing Objectives
This new revision quiz provides 10 questions on understanding the nature of marketing objectives and the internal and external influences that affect those objectives.
Revision Quiz - Marketing Objectives
Ansoff and Tesco - What Went Wrong with Fresh and Easy?
Tesco's decision to review the future of its US grocery supermarket chain Fresh and Easy will provide us all with some fantastic teaching material to use when looking at some core topics such as international expansion, product/market strategy (Ansoff), retrenchment and other elements of corporate strategy. Tesco have invested up to $1.6bn over five years in trying to establish the Fresh and Easy format in the US, facing fierce competition. The result? Heavy losses and no sign of achieving the break-even point, even after five years.
read more...»Turnaround in Tesco’s overseas strategy
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I’ve taken a lot of interest in Tesco’s overseas strategy, which took them to the United States in 2007 with their Fresh and Easy store chain. The set-up was bold; adding lots of capacity but high fixed costs, meaning the enterprise has consistently struggled to break even. Now Tesco have just confirmed that they are launching a strategic review that may lead to the sale or closure of its US operations. Dramatic news. What’s behind it?
read more...»The rising profile of ‘Cyber Monday’
I steered clear of the topic of Black Friday this year. Perhaps it’s not as hyped as it was. Instead, this year the media has been making a lot ‘Mega Monday’ or ‘Cyber Monday’, emphasising the growing role of internet retailing in the UK.
read more...»Revision Quiz - Marketing Strategies
In this revision quiz we provide ten questions on marketing strategies, including Porter's Generic Strategies and Ansoff's Matrix:
Revision Quiz - Marketing Strategies
Revision Quiz - Market Analysis & Planning
This new revision quiz provides 10 questions on the basic techniques of market planning & analysis:
Revision Quiz - Market Analysis & Planning
It’s Beginning to Look a Lot Like Aldi
If you've noticed the high-profile Christmas campaign for Aldi this year (see the two example videos below) you may be interested in this article from Yahoo which gives a few pointers as to how the company have managed to turn the recession into a major profit-making opportunity.
Whilst the major TV campaign shows that Aldi are now in a position to market themselves to directly compete with Morrisons, Sainsbury's et al, the article shows how the key to their success lies in the 'Product' aspect of the marketing mix - their profits up by an incredible 200% over the last two years. By minimising the use of big-name brands and concentrating on giving value-for-money with their own home-branded products, Aldi have given cash-conscious consumers a genuine alternative to the more established supermarkets in the UK.
read more...»Brand Extensions - Tango In The Shower!
Tango, the Britvic-owned fizzy drink, is to extend the brand into a range of shower gels that will be targeted at supermarkets.
read more...»Cross-Curricular Project With Our On-Site Art Gallery
Here at Eltham College, we are fortunate enough to have our
own art gallery on site. Part of its purpose is to enrich learning across the
curriculum. Opened just 6 months ago, I decided that the gallery was an ideal
start-up case study for my Year 12 Business students to get their teeth into,
so I set them to work on a market research group task with each group focusing
on one of the gallery's key functions: exhibitions, art classes, and a cafe.
Exporting - a Case Study in How to Do It
Why and how should UK firms expand into international markets? Exporting provides a significant opportunity for UK firms to reduce dependency on demand from domestic markets. But exporting isn't straightforward and it carries risks if not implemented properly.
This short video features a UK business that has embraced the export opportunity. Selling overseas has made British skincare firm Eve Taylor stronger - their MD explains how.
Admittedly it's a bit of an advert for Barclays Bank (who made the video) but there are still some really useful insights for students.
read more...»Big Data - Helping to Offer a Personalised Product Offer
I like the short animation animation below by the team at dunhumby. Dun who? dunnhumby is a United Kingdom-based Retail media group, best known for being key to the creation of Tesco Clubcard. Currently a subsidiary of Tesco, the company employs approximately 2000 people in 30 countries. dunhumby runs a 40-terabyte database, selling information to companies including Procter & Gamble, Coca-Cola about consumer preferences. If you are reading this blog entry, it is highly likely that you are in that database somewhere!
The video describes how the use of Big Data analytics can potentially help businesses personalised the products and services offered. To be able to do that, a business needs to have insights into yout behaviour and preferences. Insights are created from the analysis of data - a great example of Big Data in action.
read more...»Big Data - the Shift from Intuition and Hunch to Scientific Strategic Decision-making
Big Data - remember that term because it is important. Big Data is the term that is used to describe the rapid growth of data from our movements, choices, activities and transactions.
According to estimates provided by IBM, every day, we create 2.5 quintillion bytes of data — so much that 90% of the data in the world today has been created in the last two years alone. This data comes from everywhere: sensors used to gather climate information, posts to social media sites, digital pictures and videos, purchase transaction records, and cell phone GPS signals to name a few. This data is big data.
If Big Data is so important in the world of business, how come you may not have heard about it?
To you and I, big data is probably best understood as the enormous datasets held by businesses, governments and other large organisations whose activities affect millions of us. Big data is used to determine your recommended friends on Facebook, suggested purchases on Amazon and the point at which your mobile phone network offers you a freebie to keep you on side.
A key question is, how can Big Data be used by businesses to make decisions?
read more...»Hotel Chocolat - British Chocolatiers on the March!
Angus Thirwell the co-founder and CEO of Hotel Chocolat is immensely grateful to Joanne Harris and Juliet Binoche. respectively the author and star of the hit film Hotel Chocolat. The movie educated a generation of aspirational chocolate lovers in how to pronounce Hotel Chocolat and has helped millions of consumers in Britain and around the world advocate the hit chocolate retail brand without committing a pronunication faux-pas! I wonder how many satisfied customers realise that Hotel Chocolat does not exist? Perhaps they have typed the name into Trip Advisor hoping for a review of a retreat flowing with rather wonderful chocolate made from a St Lucian plantation?
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The Co-op claws back retail market share
Twenty years ago the Co-op had a share of the grocery market similar to Tesco’s. Then Tesco took off and left it behind. This isn’t so much a blog on the rise of Tesco, but picks up on a few ideas about where the Co-op may have gone wrong, and some indications that the co-operative ‘movement’ is fighting back.
read more...»Sustainability, brands, and marketing ‘the big idea’
Last night DigitalDonut hosted a debate in London discussing the view of Kevin Roberts, CEO of Saatchi and Saatchi, that Marketing is Dead. He has said that "Creative leaders should go for getting lots and lots of small ideas out there. Stop beating yourself up searching for the one big idea. Get lots of ideas out there and then let the people you interact with feed those ideas and they will make it big.”
Roberts' view was contrasted with the belief of David Ogilvy, hailed as the 'father of advertising', that "You will never win fame and fortune unless you invent big ideas. It takes a big idea to attract the attention of consumers and get them to buy your product. Unless your advertising contains a big idea, it will pass like a ship in the night."
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No Mr Bond, I expect you to sell
Businesses are lining up to exploit the value of the 007 brand, with the latest release causing a stir both virally and in the choice of product placement.
read more...»Customer Profile: A Great Introduction to Market Segmentation
When introducing a new topic, I’ve always liked the idea of starting with an activity that enables the students to generate business theory for themselves. This simple activity does just that.
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“Place” in the John Lewis marketing mix
This is more than just a question of business location. It’s well established that John Lewis think very carefully about their target market segment when deciding where to locate department stores or Waitrose outlets. Recent reports claim that the retailer is now ‘thinking small’ to beat the recession, with compact stores in smaller prosperous towns.
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