teachthe4ps.com - For instructors of marketing.

Electronic Arts (EA) has been a dominant player in gaming — especially with their live action sports games that are usually played on computers or TVs.  Then, along came Zynga, which offered mobile games through social media like Facebook.  Since this market is relevant to many of our students, it might be useful to keep up with the latest competitive battles.  Now EA is trying to play catch up; EA has a lot of cash to invest into these new markets.  n this “listen” at NPR’s Morning Edition, “Game Giant Forced To Play Catch Up” (May 4), you can hear what EA is trying to do.  The strategy relies on mining customer data and anticipating customers’ behaviors and needs.  While Zynga has been mining customer data for many years, they traditionally monitored customer behavior to decide how to adapt or when to drop current games.  EA hopes that its efforts to anticipate behavior will help it leapfrog Zynga.

We have posted before about Zynga’s strategy which includes a move away from relying on Facebook.  But it is not clear if that strategy is working, see “Zynga Posts Loss, Sees World Beyond Facebook” (Wall Street Journal, April 26, 2012).  We have also posted this in Learn the 4 Ps.

Showrooming is the practice of shopping in a physical store and then purchasing the product online from home.  Online retailers often have cost advantages over their brick-and-mortar competitors; online retailers don’t build stores in high-traffic, high-cost locations, and they don’t need to employ a large, knowledgeable sales staff, many do not have to charge sales tax.  Brick-and-mortar retailers do have those costs – and increasingly, customers are going to those physical stores to view products and talk to sales staff before buying online.  These advantages, and some great marketing and technology, have fueled Amazon’s rapid growth.  This article from the Wall Street Journal, “Can Retailers Halt ‘Showrooming’?” (April 11, 2012, non-subscribers may need to click here) discusses how retailers like Target and Walmart are fighting back. The 3:54 video (an interview with kind of weak sound quality) might be shown in class to stimulate discussion.  Also at Learn the 4 Ps.

The article provides great examples to use when you cover competition, consumer behavior, retailing, or discuss the impact of the Internet or technology.

Setting retail prices has always been a challenge for marketing managers.  Two factors make it even more difficult today.  First, customers are better informed — the internet and smartphone apps let them easily check the prices of products they see on retail store shelves.  Second, consumers have been conditioned to wait for steep discounts — in department stores very few sales are made at full retail.  Retail giants J.C. Penney and Macy’s are trying new strategies to try to maintain profits.  Read more at “Knowing Cost, the Customer Sets the Price,” New York Times, March 27, 2012.  Also posted at Learn the 4 Ps.

This article would be good to read for examples relevant when you cover price setting — but could also be used to talk about consumer behavior and retailing.

The iPhone has considerable market share and mind share among consumers.  So how do you break into that market?  Maybe you start by copying Apple’s iPad and iPhone.  Then you try to differentiate your phone with a larger screen and 4G connection speed.  Of course explaining technical differences in an ad can be a challenge.

So Samsung tries to make fun of Apple diehards with this latest ad.  Does it work?  I would imagine that Apple fans hate it and Apple haters love it — but those two groups are probably not Samsung’s target market with Galaxy (they are already too loyal).  How does it work for smartphone buyers who are not strongly pro- or anti-Apple?

Either way, this is a good example of comparative advertising.  Also posted at Learn the 4 Ps.

Remember when Apple was known for high prices.  That is no longer the case.  This article provides a nice example that will link to your discussion of skimming and penetration price policies.  In the old days Apple was a niche player known for high prices.  Now it owns some markets (tablet computers, smartphones, portable music players) and benefits from economies of scale.  The company offers even lower prices by keeping older products in its line and offering them for lower prices.  It will be interesting to see how they respond to the new Kindle Fire.  Read more at “Apple’s Lower Prices Are All Part of the Plan” (New York Times, October 23, 2011).  Also posted at Learn the 4 Ps.

I have posted before on the daily deal site (see “Get to Know Groupon,” March 28, 2011).  If you are not up to speed on LivingSocial, Groupon, or other sites, check out that post. As a consumer, I love these promotions — getting half off at a favorite restaurant is hard to pass up.

I have even written a case that I plan to put in the next edition of our books — since it looks like daily deal promotion is here to stay.  I still question the strategy — which is why it makes for a great case — there is room to debate both sides.  The case made for fun discussion on the first day of class and one of my students tells me she works at a local restaurant that swears by LivingSocial coupons. I have previously questioned if a small business really wants these deal-prone consumers — because the deep discounts almost require them to spend more than the coupon or come back again for it to be a profitable promotion.

A second issue relates to the profitability of Groupon and LivingSocial — the two leaders in this space.  There is already a shakeout occurring among daily deal sites.  With such low barriers to entry, I have often wondered if anyone would really make much profit in this space.  One key is differentiation — and LivingSocial, which copied Groupon in the first place, is working at it (see: “LivingSocial Aims to Be Different from Groupon,“ BusinessWeek, September 22, 2011).  Groupon announced its own new product ideas back in March (“Are Four Words Worth $25 Billion for Groupon?” BusinessWeek, March 17, 2011), but I have not heard if these are working.  For a variety of reasons, Groupon’s IPO has been delayed.

I have been reading a lot of articles this week about the new line of Amazon Kindles.  The most intriguing of these is the Kindle Fire which appears to provide a worthy competitor to the Apple iPad.  While more limited, the Fire is also less than half the price.  The best article I have found on the new Kindles is from Bloomberg BusinessWeek, “Amazon, the Company That Ate the World” (September 28, 2011).  This article, while long, really digs into the marketing strategy angle from Amazon’s perspective.  It also provides a nice compare and contrast of the marketing strategies of Amazon and Apple — two companies that are bound to have a big impact on American business for many years to come.  The article is also very relevant given our recent post titled “Tablets Drive Online Shopping” (September 30). The article also provides an update to the case scenario on Amazon that opens chapter 3 in each of our books.  We have also posted this at Learn the 4 Ps.

This article provides examples you might find useful when you cover price, competition, marketing strategy planning, new product development or retailing.
 

Increased competition results in the need for more sophisticated marketing tools.  This article describes the pressure on many college athletic teams (particularly the big revenue sport of football) to sell more tickets.  A growing number of college athletic departments have turned to telemarketing — many outsourcing the task to a specialist firm with commissioned salespeople.  Many of our students will be interested in the context, but it might also be interesting to talk about the fine line that many colleges have to walk with respect to their marketing efforts.  Read “Marketers reshape how college teams sell tickets” (USA Today, Auguts 5, 2011).

This article and example could be used as a first day of class marketing example as students could relate to the context, or use it when you discuss competition or personal selling.

I love Yelp.  My family just returned from vacation and we found Yelp enormously helpful in identifying restaurants and activities.  We would simply pull out the smartphone, click on Yelp, type in what we wanted to do (“restaurants seafood” or simply that we wanted to eat) — and a list of restaurants would appear in order of how close they were to our current position.  Plus, most of the restaurants included a collective rating and individual reviews.  Yelp steered us right and we discovered some great local places.  We also used TripAdvisor.com to help us identify activities and hotels before our vacation.  I rely a great deal on reviews in my buying process.

These sites rely on the wisdom of crowds — but are all these reviews “real”?  Apparently there is a growing market for posting fake reviews — good ones for your company and even bad ones for the competition.  Our text books include an ethics scenario addressing this exact issue. Sites like Yelp and TripAdvisor rely on our trust in these reviews — so they are concerned about this trend.  This article “A Rave, a Pan or Just a Fake?” (New York Times, May 21, 2011) gives you a bit more insight into how this works and how Yelp is trying to fight it.

In our books we discuss reviews in a new publicity section which covers a wide range of social media.  The article could provide some background when you discuss the ethics exercise in the first promotion chapters in our books — or when you cover reviews and social media.

Audi probably doesn’t have the same reputation as its more well known competitors — BMW, Mercedes, and Lexus — in the luxury car market.  Comparative advertising can be a good strategy for a less popular brand.  I think Audi has done a nice job with this ad — it is simple yet effective.  What do you think?  With the Microsoft-Apple and Verizon-AT&T comparative advertising battles a bit stale by now, maybe this new ad can be shown in class when you talk about competition or types of advertising.  Also posted at Learn the 4 Ps.