teachthe4ps.com - For instructors of marketing.

When we teach students about exchange rates, it helps to have some good examples of how the changes impact consumer buying power.  This article, “Japanese Splurge on Imports, Foreign Deals” (Wall Street Journal, November 28, 2010 - non-subscribers may have to link here).  In Japan, the yen has become very strong of late.  Consequently, many imported goods now cost 20-30% less than even just a few months ago.   This article offers examples useful in teaching exchange rates related to price and exporting.  It might also be a good example to use when discussing the economic dimension of the external market environment.

We have long known that online sellers have the ability to offer the same product to different customers at different prices — in fact Amazon was caught doing this back in 2000 with a resulting PR disaster.  This is a great article in Slate‘s online magazine which offers some nice detail and examples in a short easy read (“How Much Is That Doggie in the Browser Window?” Slate, December 6, 2010).

Students usually find this practice abhorrent — and claim it must be illegal.  Selecting some of these examples might lead to an interesting in-class discussion of price discrimination along strategic, legal, and ethical lines.

Amazon.com comes up with some very creative marketing strategy ideas.  While not all of them work, many do and the company’s stock and sales have been soaring.  One of its very successful programs is Amazon Prime.  For $79 a year, Prime members have all Amazon orders shipped with free two-day delivery (full disclosure, Joe is a very satisfied Prime customer).  This Bloomberg Businessweek article, “What’s in Amazon’s Box?  Instant Gratification” (November 23, 2010), describes how this brilliant “Place” decision has built loyalty and sent major competitors scrambling.  This provides a great example of a firm leveraging its strengths (wide selection and low prices) — making it hard for other online retailers to copy the strategy.  Combine this with Amazon’s new smartphone comparison shopping app (which makes Amazon’s price shopping advantage even more apparent) — and Amazon is looking pretty good moving forward.

This article could provide great examples of sustainable competitive advantage, place, retailing, or price.  Also posted at Learn the 4 Ps.

Great Dilbert comic on pricing in this morning’s Sunday comics… [Note: also posted at Learn the 4 Ps.]

Wal-Mart likes to think it is the low price leader — especially for toys.  Well this year Target has aggressively priced its toys – and Amazon also boasts low prices, no sales tax, and free shipping.  This article “Wal-Mart First Shot in Toy War” (Wall Street Journal, November 8, 2010 – use this link if the other doesn’t work) describes the battle between these retailers over toy prices.  The logic for the battle gives some insight into their price objectives and will offer a good, current example if you are teaching price soon — also works well when teaching competition or retailing.

Many of us are covering pricing soon in our Principles classes.  So it is nice to see a couple of recent Wall Street Journal articles that address timely pricing challenges.  In “Dilemma Over Pricing,” (WSJ, October 21, 2010) rising commodity prices are pressuring profit margins at companies ranging from General Mills to Domino’s and Harley Davidson.  Of course the economy has many cautious, price sensitive customers — so firms are treading carefully.  In “Raising Prices Pays Off for Some,”  (WSJ, October 27, 2010), you can read how a few small companies have raised prices in the current environment.

The Bloomberg BusinessWeek cover story this week (“What Amazon Fears Most: Diapers,” October 7, 2010) is a long article on Diapers.com.  Our kids are older — so we are not in the target market and we were unaware of the success this company is having.  The story is interesting and relays the low-cost start-up strategy.  The founders spent their seed money on building a customer friendly website.  When they launched they were buying diapers from the local club stores and storing them in a friend’s garage.  They have since moved into three state-of-the-art warehouses.

The article describes Diapers.com’s retail and pricing strategy — let’s not make money on the diapers but on the other products shoppers add to the cart with the diapers.  The article also has some excellent examples of logistics and distribution.

UPDATE, November 13:  Amazon buys Diapers.com.

Fortune magazine looks behind the scenes at the fast-growing Trader Joe’s retail stores.  While I have never shopped at a Trader Joe’s, friends who shop there swear by the merchandise.  This article, “Inside the secret world of Trader Joe’s” (August 23, 2010) provides some background on the secrets of its success.  Among the secrets — low prices, private label brands, and stock turnover — provides some great examples to use when covering retailing, price, and product.  It also suggests that the store may be coming to Colorado — and maybe your town (if it is not already there) soon.

In these tough times, figuring out the right price is even more critical.  This article (“Executives Zero In on Pricing,” Wall Street Journal, September 27, 2010) provides some examples of CEOs that are trying to answer the question — what is the right price?

Yes we have posted plenty of articles on Apple.  But students like Apple and listen when I use it as an example in class.  This article, “Apple’s Pricing Decoys” (Bloomberg BusinessWeek, September 1, 2010) analyzes Apple’s pricing strategy and tactics using consumer psychology.  This might be a bit complicated for intro marketing students, but instructors may find the examples useful to carry into classes on pricing or consumer behavior.