teachthe4ps.com - For instructors of marketing.

Retailers and packaged goods makers are responding to a shift in consumer shopping behavior.  According to a study by ESPN (yes the sports channel, which may have a vested interest here), 31% of men nationwide are the primary grocery shopper — up from just 14% in 1985.  So how have retailers better appeal to this new grocery shopping man?  Some are creating “man aisles” that put all that “man stuff” in one aisle instead of having is spread across several aisles.  Read more examples and details in ”More men taking reins of the cart” (Chicago Tribune, December 27, 2011).

This article, “Using Google’s Data to Reach Consumers” (New York Times, December 22, 2011) describes a clever campaign Vicks used for its new Behind Ear Thermometer.  To identify a target market Vicks’ marketing managers first looked to smartphone users who were more likely to buy the $40 thermometer.   They ran ads on popular apps like Pandora, which also allowed them to target demographic characteristics, including gender and whether a user was a parent.  Next, it turned to Google Flu Trends an online database that shows which parts of the country have greater flu activity.  Vicks targeted parents in high flu incidence areas who received banner ads stating:  “Flu levels in your area are high, be prepared with Vicks revolutionary Behind Ear Thermometer.”  If they tapped the ad, location services told them of the nearest retailer carrying the thermometer.

This case study is one of the best examples of digital advertising I have read lately.  A nice example of using analytics to identify a target market and a great use of mobile advertising.

Lego is the world’s most admired toy company.  It hasn’t always been that way — back in 2004, the company teetered on the brink of bankruptcy as it lost a million dollars a day.  In Basic Marketing we have a great chapter opening case scenario that uses Lego.  This was one of my favorite openers to write.  Bloomberg Businessweek‘s cover story “Lego is for Girls” (December 14, 2011) provides the latest chapter in this story.  The article provides some insights on the development of the latest marketing strategy for Lego.  This one targets girls.  The article includes a bit of history – showing some of the toymaker’s previous failed attempts to appeal to girls.

The article provides some good examples for market segmentation (boys v. girls, differences in play across international markets), market research (researchers “embedded” with families to observe how Lego kids live and play), and product strategy (product design to appeal to girls).  The result is the Lego Friends line of toys.  Lego has put $40 million behind its global marketing effort.  Still it might be a while before we know if this will work.  Lego decided to wait until after the holidays to launch the new line.  Given the importance of Christmas to toy sales, it might be a year or two before we know if Lego has finally cracked the code for the other 50% of the toy market.

Harley-Davidson’s sales of premium motorcycles  have suffered in the recession — falling more than 40% from its 2006 peak.  Harley cut costs with more efficient manufacturing and labor cuts.  It has also carefully adapted its marketing strategy.  For one, the company is trying to broaden its target market — trying to lure women, minorities, young adults and people outside the U.S.  It must target these new markets with caution; Harley doesn’t want to dilute its carefully crafted macho image.  Harley’s marketing chief notes, “We’re not trying to be everything to everyone, we’re trying to be our thing to more people.”  So Harley has adapted its promotion and products to appeal to new segments.  This is not an easy task — and your macho image might be lost when riders look around and see a growing number of women riding Harleys.  The article provides a nice example to use with marketing strategy planning for product or promotion.  You could ask students for other ideas about how to adapt the company’s strategy for these new target markets.

You can read more about Harley’s efforts in this Wall Street Journal article, “Harley, With Macho Intact, Tries to Court More Women” (October 31, 2011, non-subscribers may need to click here).  Also posted at Learn the 4 Ps.

Should the U.S. government ban food marketing to kids?  Should kids cereals no longer include cartoon characters, free prizes inside, and other promotions directed at children?  That is the position taken by one side in a debate at USA Today “Ban food marketing to kids” (October 16, 2011).  The other side of the debate can be read in “Food fight over marketing to kids misses the mark” (USA Today, October 16, 2011), which advocates new voluntary guidelines created by the food industry.  We have also posted this over at Learn the 4 Ps with some questions for our students to answer.

The debate could be extended into your classrooms when you cover ethics, legal, or corporate social responsibility — which comes in the first and last chapters of our books.  It could also be discussed in the segmentation chapters (we have an Ethics Exercise on a topic relevant to this in our segmentation chapter) or in ethics when covering promotion or product.

With sales slow in the U.S., Procter & Gamble brand managers are looking to sharpen their appeal to the growing Hispanic market.  In 2010, there were about 50 million Hispanic-Americans living in the U.S.  In our books we cover this demographic trend in chapter 5 (Basic Marketing) or chapter 3 (Essentials of Marketing).  Obviously P&G sees this growing market these numbers.  So its crack marketing research uncovered new ways to appeal to this market.  This article, “Hola:  P&G Seeks Latino Shoppers” (Wall Street Journal, September 15, 2011, non-subscribers may need to click here) highlights efforts in packaging and product.

This example will work well when you cover demographic trends, market segmentation, cross-cultural, or product — since most of the examples in the article have to do with adapting product to this market.

Recent research finds that consumers enjoy online shopping on tablets (like the iPad) more than they do on their standard PCs.  All kinds of measures — from conversion rate (orders divided by visits) to order size — are showing this trend.  This knowledge is driving online retailers to invest in optimizing the online experience for the tablet shopper.  This Wall Street Journal article, “Tablets:  Ultimate Buying Machines” (September 28, 2011, non-subscribers may need to click here).  We also posted this at Learn the 4 Ps.

This example suggests some interesting ideas to bring up in class.  For example, the customer market continues to fragment for retailers, many now aim (at least) two segments of online shoppers — PC users and tablet users.  And retailers are adapting their marketing strategies to each target market.  The article provides some good examples of the types of online retailers are using to better address tablet customers.  While many retailers initially invested in apps specifically for their store, research shows that most tablet shoppers still prefer the browser interface.

The business side of online games is quite fascinating.  In our text book, the segmentation chapter opens with a case highlighting how Nintendo grew the gaming market by designing products for new gamers.  The easy-to-use Nintendo DS hand-held and the Wii console targeted girls and senior citizens with easy to learn, fun games.  Zynga did Nintendo one better when it developed online games for Facebook.  Its FarmVille soared in popularity with 10% of all Facebook users growing virtual crops online.

This example is a bit complicated, but it demonstrates a number of important marketing concepts:

• Price and the freemium business model.  Freemium refers to a business model where most customers use a product for free, while a few power users cover costs.  More than 95% of Zynga’s 150 million monthly visitors pay nothing to play its games.  The other 5% pay hundreds and even thousands a year for virtual products that enhance their gaming experience.  For example, $5 might get you a chicken in FarmVille, a skyscraper in CityVille, or an anglerfish in FishVille.  Of course they love to sell these low cost virtual products…
• Fixed and variable costs.  There are minimal fixed costs for creating a new anglerfish, but the variable cost of producing hundreds of thousands of them is very small.  Almost no variable cost.Segmentation and targeting.  In this post at TechCruch (“Who Spends The Most Money In Freemium Games?” September 8, 2011), you can see by age group, who uses mobile freemium games — and who “spends”.  Not surprisingly, while more than half of users are under age 24 — this younger market contributes just 21% of the spending.  Consequently, most of the action in online games targets an older demographic.  And of course a little analytics can identify what products encourage spending…
• Marketing research.   In “Virtual Products, Real Profits,” (Wall Street Journal, September 9, 2011, non-subscribers click here), Zynga’s president of data-analytics says, “We’re an analytics company masquerading as a games company.”  Zynga analyzes game player behavior and adapts the game to get players to play longer or spend more.  For example, after finding that FishVille players bought the translucent anglerfish much more often than other sea creatures, they created more variations on the anglerfish.

I don’t play these games — but I have Facebook friends who love them.  Some of your students might relate to these examples.  Also posted at Learn the 4 Ps.

When I teach segmentation and targeting this week, 5-hour ENERGY will be one of my examples.  Many of our students are familiar with this or similar products that help them stay awake and focused.  5-hour ENERGY can be found at check-out counters in stores around campus.

Marketing managers at 5-hour ENERGY are now targeting the senior citizen market.  I got a first-hand look at one element of the strategy at the Cherry Creek Arts Festival this past summer, where 5-hour had a tent with promotional material and free samples.  For more on the new target market and strategy, see “Bottlers of Buzz Wake Up to Find Seniors as Newest Customers” (Wall Street Journal, June 2, 2011 - non-subscribers may need to click here) will give you more information.

Here is how I plan to use 5-hour ENERGY in class.  I will start by using 5-hour ENERGY as the example when I explain how to define a product market – and use the student market as my customer type.  Later, as my lecture continues and I get into qualities of a good market segment (homogeneous within, heterogeneous between, substantial and operational), I will introduce the senior market (which fits these criteria).  Then I will get the students active and talking.  I like to use an approach called “Think Pair and Share” which works well in the large 90-student sections I teach.  I will focus students with the question – “What ideas do you have for 5-hour ENERGY if the company pursued a senior citizen target market?  Think about all 4 Ps.”  To motivate and reward their effort, I have them turn in a page with their ideas.

Here at T4Ps, we think the marketing strategies of both Ford and Zipcar are worth sharing with students.  Both companies have extended coverage in our books. Now these two companies have teamed up with a joint marketing strategy that looks like a win-win-win as Ford, Zipcar, and the college student target market all look like winners.  Ford gets more exposure for its Focus and Escape SUV in one of its key target markets.  These two vehicles will make up up half of Zipcar’s college fleet.  Zipcar hopes to get more rentals – as college students use Zipcar more in response to buzz about the high-tech Focus.  And students get discounts — we all know how they love discounts.  Learn more at “Ford and Zipcar court college kids with high tech Focus” (USA Today, August 31, 2011).  Also posted at Learn the 4 Ps.

This article might work well when you talk about market segmentation and targeting.  If you are using our books, we have an extended example of Ford’s marketing strategy planning over the years in chapter 2 — this provides a way to add a recent twist.