teachthe4ps.com - For instructors of marketing.

As we all know and teach, two trends have had a big impact on lowering manufacturing costs in many industries.  First, many firms have turned to sole source suppliers and built closer relationships that focus on creating value through cost reduction or by finding other benefits.  Second, firms will look all over the globe for suppliers.  These trends have had a powerful impact on organizational buying behavior.  The risks in this new world can be seen in this current auto industry example, “German Chemical Plant Fire Threatens Auto Backlog,” (NPR Morning Edition, April 23, 2012).  A German chemical plant is the major source of a chemical used in plastic fuel and brake lines — used by all the major automakers.  A recent explosion and fire at the plant threatens to become a major supply disruptions.  This short radio story outlines the problems and how the industry is reacting.

This example might be helpful when you discuss organizational buying or supply chain management.

Are you looking for an interesting example to use when you are teaching Place?  I like to start my students with with straightforward examples like breakfast cereals where channels might include a manufacturer’s warehouse, a food broker, and a grocery store.  I suggest that the same cereal maker might also have a restaurant supply house followed by a restaurant chain.

You might find the concept resonates when you also provide a a “non-traditional” example.  Service and high tech firms also have to make channel decisions.  So why not show them an example that many can relate to — in the gaming arena.  That is why I point out this article on Zynga, which has distributed many of its popular games (Farmville is one of the best known) over Facebook and via smart phones. Now the company is “going direct” with its own website.  Read more at “Game Changer for Zynga:  No Facebook” (Wall Street Journal, March 1, 2012, non-subscribers may need to click here).

The growth in online retailing presents a very real threat to traditional brick-and-mortar stores. Traditional stores have some clear advantages including a physical presence that allows customers to touch/hold/see/try on something before they buy or to be able to get what they buy now. Multichannel retailers offer multiple ways for consumer to shop — for example a physical store and an online store. Unfortunately, most retailers that offer multichannel options do a poor job integrating those experiences. Mitch Joel’s post, “Endless Aisles” (Six Pixels of Separation – The Blog, February 9, 2012) and an article in USA Today “Touch-screens create online shopping experiences at stores,” (February 7, 2012) offer a starting point. The image at the right shows a Kohl’s in-store kiosk which connects to Kohls.com.  It might be fun to share these ideas in class and ask students how ideas like this might benefit brick-and-mortar stores.  You might ask them to suggest other multichannel opportunities.  We also posted this at Learn the 4 Ps.

Internet entrepreneurs in Vietnam are figuring out how to overcome challenges posed by the country’s infrastructure.  Among Vietnam’s 88 million people, there is growing interest in the convenience of online shopping.  There are now more than two dozen Vietnamese sites copying Groupon’s “deal-of-the-day” concept.  These companies adapted the strategy used in more developed countries.  So for example, few Vietnamese consumers have credit cards or PayPal style accounts.  To over come this, at least one of the Groupon copycats NhomMua, relies on a team of more than 100 moped-driving couriers that deliver vouchers directly to consumers and then collect cash.  Read more in this Bloomberg Businessweek article, “Vietnam’s Dot-Com Boom” (January 19, 2012).  Also posted at Learn the 4 Ps.

The examples here might work well when you cover Place, retail, Price, or Promotion and want to provide an example of how a concept is adapted in international markets.

A couple of interesting stories about how retailers utilize high-tech analytics to better understand customer shopping behavior.  I heard “The secret life of discounts” (Marketplace radio, December 16, 2011, link to listen or read the transcript) as I drove to the airport last night to pick up my daughter who was coming home from college.  There are some examples about how stores use analytics to try to remain profitable with consumers conditioned to buy only at a steep discount.

In “Big Brother is Watching You Shop” (Bloomberg Businessweek, December 15, 2011), you can read about retailers using in-store video cameras and tracking your cell phone to better understand how you move through a retail store.  Analyzing video from a Miami store allowed Montblanc managers to more strategically locate merchandising, signage, and salespeople.  The result — a 20% bump in sales.  Other retailers follow customers’ cell phone signals to track and map movement through stores.  This of course is raising privacy concerns.

These two stories can be useful examples for marketing research (where we cover dashboards and marketing models), retailing, and in discussions of privacy.  Also posted at Learn the 4 Ps.

This article, “Philly Cream Cheese’s Spreading Appeal” (Bloomberg Businessweek, December 12, 2011) is a great example that has many classroom uses.  Sometimes I like to describe an extended case study — to help students integrate the marketing strategy planning process — this article is that type of example.  Sales of Philadephia brand cream cheese were pretty much flat (mature or decline stage of the product life cycle) for most of the last decade.  Then Kraft researchers (market research) noticed that heavy users of the product were using cream cheese as an ingredient in their cooking — not simply as a spread for bagels.  Starting in Europe back in 2008, Kraft’s brand managers tapped into social media and the Internet to gather and share recipes using Philadephia brand cream cheese, they promoted it on cooking shows and with contests (Promotion).  In the U.K. the share of customers using cream cheese as an ingredient (effective repositioning) has almost doubled to 37% — and sales are up 20% in Europe (data – it is nice to show case studies in class with real results).  All of this in a mature product category.  What a great example of how to revitalize a brand.  Check out the article for more details on the strategy.  Also posted at Learn the 4 Ps.

The drive to enhance customer value with more efficient and effective distribution systems leads many warehouse and distribution center managers to various forms of automation.  In our books we refer to this as the physical distribution concept.  Kiva Systems has created a warehouse automation system that relies on robots and software, and yes some human beings, to achieve these objectives.

The video below provides a short (3:20) overview and demonstration of Kiva’s robots in action.  Sorry about the :30 commercial up-front.  An accompanying article “Robot workers take over warehouses,” (CNN Money, November 9, 2011) addresses Kiva’s roots and start-up challenges.  The article might be more useful background material or it could be assigned if you emphasize entrepreneurship in your marketing instruction.  The video is a good fit when you cover physical distribution.

Sanitation is a huge problem in many emerging markets.  The World Health Organization estimates that 37% of the world’s 7 billion people do not have access to hygienic toilets.  Entrepreneur David Auerbach smelled an opportunity (literally as the inspiration came from a particularly nasty bathroom in China).  Auerbach’s new company Sanergy, is using a franchise model as it starts out in Kenya.  Local entrepreneurs pay $500 for a Sanergy toilet (often using local microlenders).  They charge $.05 per use, and the toilets are emptied daily, with the waste brought to fertilizer plants. Read more at “Cleaning Up:  David Auerbach’s Sanergy” (Bloomberg Businessweek, October 13, 2011)

This provides examples of entrepreneurship, franchising, sustainability, and international (developing) markets.

Food distributor Sysco touches all of our lives.  We have an extended example about Sysco in the latest editions of Basic Marketing and Essentials of Marketing.  Sysco is a progressive distributor and you can read about how Sysco addressed a surprisingly difficult challenge from Michigan State University’s food services.  MSU wanted more local produce — supporting local farmers and theoretically helping the environment.  This short article “Sysco’s Produce Division Makes Room For Local Farmers” (Fast Company, October 19, 2011) includes a graphic that you might be able to squeeze onto a PowerPoint if you want to show a very current example when you teach channels of distribution.

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.