teachthe4ps.com » External market environment

Economic Downturn Changing Consumer Behavior

Joe Cannon — Wed, 26 Oct 2011 22:53:11 +0000

We have made several previous posts on the impact of the economy on consumer behavior. This ABC News video describes both how consumers are changing their behavior — and how major marketers like Target and P&G are responding. You can directly link to the video and a related written story, “How to Advertise During a Down Economy,” (ABC News, September 23, 2011). The video is short at only 2:39 — though you do have a :15 ad before it starts — and could work well in class. It might stimulate some class discussion to ask: What companies might do well in this economic environment? How would you respond if you were Best Buy? Ben & Jerry’s Ice Cream? or Coca-Cola?

I am going to use this when I cover the economic effects on consumer behavior, but it might also work when you look at the external market environment. We also posted the video only — not the link to the article — at Learn the 4 Ps.

video platform video management video solutions video player

Little Price Sensitivity with Luxury Goods

Joe Cannon — Sat, 27 Aug 2011 13:17:55 +0000

We all teach price sensitivity (some of you may prefer the economics term price elasticity) when we cover Price. In response to our depressed economy, most consumers have become much more price sensitive in the last few years. One market segments has been almost immune to this trend — luxury shoppers. This article in the The New York Times, “Even Marked Up, Luxury Goods Fly Off Shelves” (August 3, 2011) offers some great examples — Mercedes-Benz just had its best July in the last five years and “Neiman Marcus has sold out in almost every size of Christian Louboutin “Bianca” platform pumps, at $775 a pair” (right click my image and copy/paste to your slides). The article also includes a chart that shows trends in U.S. luxury spending over the last few years.

This might be fun stuff to talk about you cover consumer behavior, the external market environment (economic environment – kind of a counter-example), pricing or price sensitivity.

Offering Credit – A Growing Trend in Brazil – Good or Bad?

Joe Cannon — Tue, 21 Jun 2011 00:43:48 +0000

As one of the world’s fastest growing economies, Brazil is a country our students should learn about. Here we have a great combination of a video and article on Brazil — with a video showing a clever promotion to make customers aware that they can buy on credit. Then, an article about potential problems for Brazil’s economy as more consumers use credit.

Brazil might want to learn from the experiences the United States has had with easy credit. Apparently the Brazilian government is concerned — but many firms know that easy credit brings in customers. A recent Businessweek article, “Brazil’s New Middle Class Goes on a Spree” (May 12, 2011), describes how easy access to credit appeals to many Brazilians. Unfortunately many of these consumers don’t understand what they are getting into with the sky high interest rates they are paying. Brazil’s government is putting in some controls, as it fears credit problems might drag down the economy.

You might start a discussion with the clever and seemingly innocuous video below. The short (0:54) video describes a campaign by Brazilian retailer Magazineluiza which targets elderly Brazilian consumers and informs them about credit through a crossword puzzle. After showing this in class, you could discuss the pros and cons of credit in an economy like Brazil’s. The article provides a nice background for your discussion.

This combination could work well in discussing international, ethics, public policy, promotion, and pricing.

Technology in the Brick-and-Mortar Retail Store

Joe Cannon — Sun, 05 Jun 2011 00:08:44 +0000

This article “Check Out the Future of Shopping” (Wall Street Journal, May 18, 2011 – non-subscribers click here) and its companion video (3:33) below describe a variety of different technology solutions retailers are employing to make shopping more convenient. The article provides an excellent example of the influence of the external market environment (for retailers) or when discussing retailing. Also posted at Learn the 4 Ps.

Consumer Behavior: Economy vs. Sustainability

Joe Cannon — Mon, 25 Apr 2011 23:25:11 +0000

A growing concern for global warming and our environment began about four years ago and fueled the growth of brands like Method and Clorox’s Green Works. Then – bam! — the economy tanked. Now consumers have a decision — do they pay a bit more for a greener product? It appears that the economy is winning out. Sales for “green” products have slowed or declined in the last couple of years. Read more in “As Consumers Cut Spending, ‘Green’ Products Lose Allure” (New York Times, April 21, 2011).

It might be interesting to ask students how the economy has affected their purchases. Do they think that these products will pick up in sales after the economy gets back on track?

“Zippo Preps for a Post-Smoker World”

Joe Cannon — Sun, 13 Mar 2011 01:10:02 +0000

What do you do when changes in the social environment reduces demand for your core product? That what happened to Zippo — best known for its windproof lighters. Cigarette smoking in the United States has been declining for decades — and if you don’t smoke, you probably have little need for a Zippo lighter. Zippo has had mixed results with various product extensions. The article “Zippo Preps for a Post-Smoker World” (Wall Street Journal, March 8, 2011 – non-subscribers click here) provides a nice foundation for discussion the effects of social trends and for brand extensions.

“India Solar Rules Burn U.S.”

Joe Cannon — Thu, 17 Feb 2011 00:45:10 +0000

This recent Wall Street Journal article, “India Solar Rules Burn U.S.” (February 8, 2011, non-subscribers click here) describes how India has banned the sale of foreign-made solar panels, unless the seller sets up a local manufacturing plant with a joint venture. India has great potential for solar, but this change in the external market environment puts a crimp on U.S. solar firms. This is a good example to use when discussing the legal aspects of the external market environment or international distribution.

“Defying Conventional Wisdom to Sell Glasses Online”

Joe Cannon — Sat, 22 Jan 2011 17:46:32 +0000

Here is the latest example of the internet threatening to radically change an industry — retail eyeglass sales. This article in the New York Times, “Defying Conventional Wisdom to Sell Glasses Online” (January 16, 2011). The article describes a New York start-up Warby Parker. There are other online sellers of prescription eyeglasses — Zenni Optical and EyeBuy Direct have been around for a few years and sell primarily based on lower prices that start at less than $10 for a pair of glasses. I have used both of these retailers and while they have pretty limited customer service, I have been pretty satisfied with the experience. Warby Parker seems to be shooting for a place in the market between the full-service neighborhood optical store and the low price, limited service provider.

The example here could fit into a discussion of market segmentation, competition, technology as an element of the external market environment, place, or retail.

The Evolving Consumer Digital Lifestyle

Joe Cannon — Tue, 18 Jan 2011 00:41:21 +0000

The primary theme driving the revision of the latest edition of our book, Basic Marketing 18e, is the digital lifestyle we observe among consumers, organizational buyers, and its effect on marketing strategy planning. Customers increasingly rely on the internet, cell phones, and other digital media to gather information related to purchasing. As we point out in chapter 5, this trend is not limited to the developed countries in the West. The implications for marketing managers is important and pervasive. So we were excited to see this article in the Wall Street Journal which outlines “The Year Ahead for Media: Digital or Die” (January 4, 2011 – non-subscribers might need to click here). The review looks ahead at social media, movies, television, magazines/newspapers, books, advertising, games, and music.

The discussion would probably fit well when you discuss technology and the external market environment or consumer behavior.

“Selling Health Food to China”

Joe Cannon — Wed, 05 Jan 2011 00:37:33 +0000

This article, ”Selling Health Food to China” (Wall Street Journal, December 13, 2010 – non-subscribers click here) will give you a versatile set of examples. The examples can be used when you teach the external market environment or about adapting products for international markets. The Chinese are becoming increasingly concerned with their health. Major consumer products companies, including Nestlé, Coca-Cola and Pepsico, are adding many traditional Chinese ingredients to gain credibility for their healthy foods.