• Home
  • About
  • Archives
  • Our Book
  • Contact

Mattress firms creating value (?) with financing deals…

October 31, 2019 by Joe Cannon Leave a Comment

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.

Filed Under: Chapter 12, Chapter 16, Chapter 17, Chapter 18, Ethics, Place, Price, Promotion, Retailing

Ever-Increasing Airline Fees

October 21, 2018 by Jon Firooz Leave a Comment

Jet Blue and United Airlines recently raised their checked baggage fees from $25 to $30 for the first bag checked (see this article to read more).  Just 10 years ago checked baggage fees were unheard of but they are the norm today and airlines are increasingly looking for ways to add charges and fees to improve their bottom line.  Air travel is basically commoditized and, as a result, leisure travelers tend to search for the lowest price when booking travel.  This significantly hurt airline profitability until they started charging additional fees for checked bags, carry-on bags, early check-in, seat reservation, leg room, in-flight snacks, entertainment, and more.  Now airlines can benefit from the high margin they get on these fees yet still advertise low fares.

This topic presents numerous angles for a conversation with students.  Is it ethical for airlines to advertise low prices when the end price a consumer will pay will likely be significantly higher?  Why were the airlines able to enact this trend in adding supplemental charges?  i.e. if one airline started charging for checked bags, why didn’t others push free bags as a differentiator?  How does the airline industry’s status as an oligopoly affect this market dynamic?  How do business travel and loyalty programs make it easier for airlines to push price increases like this?

 

Filed Under: Chapter 03, Chapter 17, Chapter 18, Chapter 19 Tagged With: airlines, ethics, margins, pricing, travel

Wendy’s Salad Giveaway

September 26, 2018 by Jon Firooz Leave a Comment

Wendy’s and McDonald’s are once again competing for customers.  The most recent efforts have centered around luring customers into installing their mobile apps.  Wendy’s has been giving away free burgers to help promote use of their mobile app and now they’re using giveaways to promote both the app and their new Harvest Chicken Salad (read more here).  Until October 7, customers can get a coupon for a free half-size salad if they download the Wendy’s app.

Given students’ propensity for free food this may be a good discussion on a number of fronts.  This can fit into promotions, new product introduction, and even a pricing discussion if you want to talk about the impact of cannibalism on a product portfolio or have students calculate the number of return trips necessary for Wendy’s to break-even on the promotion.

Filed Under: Advertising, Chapter 09, Chapter 13, Chapter 15, Chapter 18

What’s Now? Chapter 18 – Consumers Willing to Pay More for Products Boasting Fair Trade Logo

July 27, 2016 by Joe Cannon Leave a Comment

FairtradeA research study at the Universität Bonn (Germany) found that consumers are willing to pay more for products that include the Fair Trade logo (see image of logo on left). The logo can be found on a range of products including bananas, coffee, chocolate, and wine. TheUniversität Bonn study found consumers were willing to pay 30% more when the product carried the Fair Trade logo.

In addition, they thought Fair Trade branded products tasted better. Another part of the study asked consumers to sample two pieces of chocolate and determine which tasted better. While the chocolates were identical, one included the Fair Trade logo. the logo alone caused consumers to report the chocolate tasted better. Read more at Science Daily, “Fair Trade Logo Boosts Consumer’s willingness to pay” (August 27, 2015).

The Fair Trade logo appears to reduce consumer’s price sensitivity. Review chapter 18’s discussion of price sensitivity and explain how the Fair Trade logo example influences price sensitivity.  

Filed Under: Chapter 18, Price, Social responsibility, What's Now?

Categories

  • #M4BW
  • Advertising
  • B2B
  • Chapter 01
  • Chapter 02
  • Chapter 03
  • Chapter 04
  • Chapter 05
  • Chapter 06
  • Chapter 07
  • Chapter 08
  • Chapter 09
  • Chapter 10
  • Chapter 11
  • Chapter 12
  • Chapter 13
  • Chapter 14
  • Chapter 15
  • Chapter 16
  • Chapter 17
  • Chapter 18
  • Chapter 19
  • Competition
  • Consumer behavior
  • Cross-functional
  • Customer service
  • Demographics
  • Ethics
  • External market environment
  • Flip Exercise
  • Integrated marketing communications
  • International
  • Legal
  • Logistics
  • Market research
  • Marketing strategy planning
  • New-product development
  • Place
  • Positioning
  • Price
  • Product
  • Product life cycle
  • Promotion
  • Publicity
  • Retailing
  • Segmentation
  • Selling and Sales Mgmt
  • Service
  • Social media
  • Social responsibility
  • Strategy planning
  • Sustainability
  • Teaching Technology Tips
  • Tips for Teaching
  • Tips for Technology
  • TV Commercial
  • Uncategorized
  • Video
  • Viral campaign
  • What's Now?
  • Word-of-mouth

Archives

  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018

Copyright © 2019 · Lifestyle Pro Theme on Genesis Framework · WordPress · Log in