Do B-Corps react better to adversity? (#M4BW)

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A new key term in 17th edition of Essentials of Marketing, is B-Corporation (B-Corp) certification “a private certification that meets a high standard for social and environmental performance. An independent company, B Lab, conducts this certification process. Some B Corps are subsidiaries of publicly traded companies. There are more than 2,500 certified B Corps in more than 50 countries, a list that includes small companies and well-known names like Ben & Jerry’s, Patagonia, and Method.” (Chapter 17).

This article, “How businesses emerge better after COVID-19, according to B Lab” (Fast Company, March 31, 2020) describes how the challenges of this pandemic may get companies thinking differently. I think many consumers will emerge from the pandemic differently as well. It might be interesting to get your students thinking and talking about how the pandemic will influence consumer and company behavior.

Dutch Florist Gives People a Choice About What to Pay…(#M4BW)

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Occasionally brands allow customers to pay what they can or what they think is appropriate. You can learn more about the psychology of “pay what you want” pricing here. The florists at BOLT Amsterdam are now offering a bundle of 200 tulips for three different prices–one they acknowledge makes it a loss leader (35.95 euros), one price where the florist breaks even (39.95), and at one price (45.95), the florist makes a profit. The idea here is to help tulip growers and the florist, both of which who are faced with falling demand in the face of the Coronavirus. An interesting approach for dealing with falling demand for a perishable product. The example might stimulate useful discussion in class about how, when, and why to use pay what you want pricing. The linked article may provide you with some interesting closing thoughts.

Why is Panera selling coffee subscriptions for $9 a month?

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This short article in Fast Company (February 27, 2020) describes a new business model being used by Panera, “Panera debuts $9/month unlimited coffee and tea subscription.” While short, the article offers an interesting example that can be applied across many topics:

  • Customer lifetime value and customer equity (Chapter 2) — Panera found that subscription customers visited the stores 3 times as often and purchased 70% more add-on items.
  • Subscription pricing model (Chapter 17) — Our new edition of Essentials of Marketing delves a bit more deeply into subscription pricing as many products now utilize the business model.
  • Marketing research (Chapter 7) — the article describes some of the findings from a test market Panera used before launching the new subscription pricing model.

Will customers subscribe to Nike shoes?

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The Nike Adventure Club is an interesting new sales approach from the leader in athletic footwear. The target market is parents, who would pay a monthly subscription fee (of $20, $30, or $50 per month) to get new shoes every 90, 60 or 30 days. You can read more about the new business model in this Fast Company article, “Nike’s first shoe subscription, two years in the making, is here.” Part of the pitch is sustainability–as customers return the old shoes for recycling by Nike. But as the article notes, this may not be the best approach to lowering carbon emissions.

Companies love the subscription model as it can help drive up customer lifetime value (Chapter 2). You can now subscribe to get regular boxes of healthier snacks (SnackSack), date nights (Date Night in a Box), or doggie gifts (Dog Mom Box). These might be some interesting examples to offer when you get to the first pricing chapter (Chapter 17).

Mattress firms creating value (?) with financing deals…

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The mattress industry is a pretty crazy (check out “The Great Mattress Conspiracy: Why Are There So Many Mattress Stores?” on Endless Thread, podcast and story). You might check out the podcast for a fun example when you cover retailing. Or ethics. You might also check out one of our previous posts, “The Gray World of Online Reviews” (Teach the 4 Ps) — tags include ethics and online reviews.

Onto our story of the day and we are back in the retail mattress industry. With the emergence of new mattress products designed for easy shipping, online mattress stores (Casper, Leesa, Tuft & Needle), this market continues to be very competitive. Retail brick-and-mortar store Mattress Firm has closed 700 stores and is in Chapter 11 bankruptcy. Now they are competing on financing. In fact, Mattress Firm will give you six years of 0% interest on a mattress purchase of up to $3999. Financing is certainly one way to create value for customers — and the automobile industry has done it for years — but does it make sense for buyers of mattresses. We will see. Learn more reading “6-year, 0% loan for a mattress? Intense competition continues to grip mattress industry,” USA Today, October 25, 2019.