teachthe4ps.com - teaching the 4 ps

Have you been following Zappos over the last few years?  Well we have.  The online retailer (not just selling shoes anymore) is known for its “Wow” customer service and quirky culture (see “Zappos knows how to kick it,” Fortune, January 22, 2010).  They have recently come out with a new television advertising campaign (see below) and they are moving into video sharing.  Looking for more?  Link through to read more about Zappos and its founder, CEO and “2009 SUCCESS Achiever of the Year,” (Success Magazine, March 2, 2010)  Tony Hsieh.

I like to talk about Zappo’s when I get into retailing.  I like to show students how one or two retailers have developed marketing strategies that work — and walk through the target market and four Ps.  I start by confessing to my students that fifteen years ago I told students that shoes would probably never be sold over the Internet because of the need to try them on (what did I know?).

You can walk through the marketing strategy — starting with big efforts at customer retention — so a major target is current customers.  Especially with shoe buyers, customer retention is key — since their returns will be much lower than new customers.  They keep customers with phenomenal customer service.  Prices are reasonable.  For Promotion, the great customer service generates word of mouth.  Promotion also utilizes advertising (see example below — that probably targets new targets and customer acquisition) and now I can add a discussion of online video.  Place befits a quick tour of the Zappos website – where you can demonstrate more Promotion with the customer reviews of several products.  you can also talk about free shipping and returns when you are talking about Place policies.  And Product is interesting as the firm has a very wide selection and now sells a lot more than shoes.

This article (”McDonald’s: the world’s local restaurant,” The Times Online, February 9, 2010) provides some great examples on how successful global firms tweak marketing strategies to better appeal to local markets.  While much of the article is about McDonalds in the UK, there are other examples as well.  This would provide examples for talking about international in general, or in combination with lectures about retailing or product.

If you subscribe to BusinessWeek, this issue will probably hit your mailbox very soon.  I found it online this morning.  I have only skimmed the articles, but the issue always has some great stories.  This year’s list includes the usual cast of characters – see “World-Class Customer Service” for links to all the articles.  This year’s issue highlights L.L. Bean and USAA –plus you can find a slide show  and the “Top 25.“   Many great examples to use when discussing customer service and retailing.

I just listened to an interesting report on American Public Media’s (radio) Marketplace Money show – “Warehouse clubs scream ‘bargain!‘” Click through to listen – or simply read the text of this story. It highlights how warehouse clubs understanding of consumer behavior drives their marketing strategy.  Would probably provide a good example in discussing retail or consumer behavior.

…and I was not impressed. But somehow, it shot up to #1 (with more than 1.6 million views last week) on Visible Measures Top 10 Viral Video chart — knocking the Evian roller skating babies out. What do you think?

Another example from China — this one looks at retailing there.  Just published in BusinessWeek, “China: Where Retail Dinosaurs Are Thriving” (January 21, 2010).   This might be useful when talking about consumer behavior in other countries, in retail, or international.

People have long predicted that online shopping and home delivery of groceries would change the market.  Another wrong prediction (see Webvan go down in flames) — and of course they said no one could sell shoes online (tell that to Zappos).  Anyway, I digress.  This January 14, 2010, Wall Street Journal article, “In France, a Drive-Up Grocery Takes Off” (subscription may be required - for “back door” see here) describes a French retailers hybrid version — online order then pick-up.  Would this model work in other cultures?  Or is it uniquely French?

The Wal-Mart vs. Amazon battle continues to become increasingly intense (see “Price War Brews Between Amazon and Wal-Mart,” New York Times, November 23, 2009). These two competitors have already engaged in price wars over toys, books, and DVDs this holiday season.  Now Wal-Mart is cleverly using one of their strengths relative to Amazon — their physical stores — to their advantage.  This a nice example of competitive advantage, SWOT, and logistics.  Check out “Wal-Mart Uses Its Stores To Get an Edge Online” (see The Wall Street Journal, December 15, 2009 – subscription required, or search the net using the article title).

With the holiday season here, there is more talk about Best Buy — which is also the focus of the chapter opening scenario we use for our retailing and wholesaling chapter.  A BusinessWeek article “Why Tech Bows to Best Buy” (December 10, 2009) the company’s strategy now that its direct competitors have largely gone out of business (see Circuit City) and new competitors Amazon and Wal-Mart are emerging.  Consequently Best Buy has changed its strategy. The article supplements discussions of competition (chapter 3), strategy planning (chapter 4) and retailing.

You can also watch a Wall Street Journal video below, “Best Buy’s Battle Between Sales and Margins” (December 15, 2009) includes an interview ith an analyst who discusses how competition and the need to lower prices has eroded Best Buy’s margins.  A bit more finance oriented, this video might complement a classroom discussion of pricing.