Dating app Tinder was recently found guilty of age discrimination based on their pricing policies. Tinder charges individuals over 30 twice the price they charge those under 30 for their premium service, Tinder Plus. Their rationale was that younger people have less money to spend but the court said that older members can be budget constrained as well. You can read more about the issue in this Slate article. Tinder argued that companies like Amazon do the same thing (with a lower price for Prime membership for students) but there’s an important distinction. Ask your students why what Amazon does is legal and what Tinder does is not. The key is the concept of protected classes. Amazon provides their discount based on status as a student. While most students are younger, there can be older students as well. Most importantly, “student” is not a government recognized protected class whereas age, race, sex, etc. are recognized as protected classes and subject to discriminating scrutiny.
Facebook started as a platform for college students and quickly became popular with teenagers as well. As the platform went through the adoption curve it started to pick up older users. As the Facebook demographic shifted, so too did it’s appeal to the younger audience that helped establish its dominance. This USA Today article, “Facebook losing young users even faster to Snapchat, eMarketer says“, talks about some of the challenges currently facing Facebook and how Snapchat is now growing its user base faster than Facebook. Better privacy control, faster viewing, and limited permanence are some of the factors that are driving 12-17 teenagers toward Snapchat and away from Facebook. 6 years ago Facebook recognized the threat and acquired Instagram as a means of continued access to teenagers but Snapchat is now getting new users even faster than Instagram.
The consequences of this change can be significant for Facebook. Their business model relies on advertising and if they can capture users early in life it is much easier (and cheaper) to retain those users rather than trying to switch users off of competing platforms. Should Facebook modify their platform to cater to younger viewers? What would they have to do? Could they be successful with a redesign or is their present brand identity too strong for younger viewers to consider using them? Can they succeed if they stay focused on an older demographic?
USA Today article, “Gas prices head up when they usually head down in winter“, talks about a nationwide increase in gas prices during a period that typically sees a decline. The winter generally leads to less driving which results in lower gasoline demand. That lowered demand typically results in lowered pricing as suppliers try to move their inventory but, in this case, the primary gasoline suppliers have limited production which has kept prices artificially high. That gasoline supply industry operates as an oligopoly (leaning toward monopoly through the OPEC consortium) which we discuss in Chapter 3 as well as Appendix A.
Beyond the impact on pricing, the article also discusses the impact gasoline prices have on consumer preference when it comes to buying a new vehicle.
Every few months there is an article about the end of the brick-and-mortar retail era. Chain after chain disappear, often citing Amazon as the primary driver. This article from the USA Today lists 15 retailers that declared bankruptcy in 2017. Is brick-and-mortar retail truly doomed?
Ask your students what they would do if they were responsible for marketing for a brick-and-mortar chain. Can Target, Best Buy, and Wal-Mart survive in the Amazon age? How? This can lead to a good discussion on differentiation and competitive advantage. Capture those ideas on the board and then ask them to design promotions that can effectively communicate those ideas. What type of promotion? Where would it be seen? What is the message?
If you have time, ask them if there’s anyone that could displace Amazon and force them into bankruptcy. It may sound like an absurd idea but remind them that many strong brands like Blockbuster, Barnes & Noble, Kodak, Macy’s, and Sears were once considered icons that would last forever. How can you beat Amazon? Can Amazon undermine their own success and open the door for competitors?
I saw this cartoon and it reminded me of many meetings I was in while working in various marketing roles. As marketers we often have an abundance of information to consider and goals to achieve. Figuring out where to start and how to create a cohesive strategy is a challenge many businesses, large and small, struggle with. In Essentials of Marketing we provide a framework and process for creating a marketing strategy. It all starts with bringing in information from your customers, company, competitors, and external market environment (context). From there the process organizes and filters that information, applies segmentation and positioning approaches, and at that point creating your marketing mix becomes much more straightforward. A diagram of the process is shown below and more information can be found in our book. Chapter 2 provides an overview of the process and then each subsequent chapter dives into detail on one of the components.