Promoting differentiation in a mature market

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Bloomberg’s short article/interview entitled “A Folding Bike Helmet That Looks Good and Still Shields Your Brain” shows inventors can still find room to innovate, even in a mature product market.  Spanish inventor, Carlos Ferrando, created a bike helmet that has two unique features – it collapses/folds to reduce space when not in use, and it is designed to be more aesthetically appealing than the traditional bike helmet.  Ferrando said he wants his helmet to “normalize the idea of wearing one (bike helmet) as a fashion accessory”.

Ask your students who they think the target market for this product would be.  If they say “bicycle riders” push them to go deeper.  It’s true that anyone who rides a bicycle could benefit from this product but a mass market strategy is unlikely to be as successful for a product like this.  A segmented strategy has a better chance of success.  In chapter 4 we offer a possible market segmentation for the bicycle-riders product-market.  If students believe this product could effectively serve multiple segments you might want to break them into groups and have each group focus on a particular segment.  Ask each group to develop a promotional strategy for their target market.  After a few minutes have each group share their strategy and discuss the differences.  If the students did a good job there should be distinct strategies for each market.  If the strategies are generally similar then they’ve taken a “Combiner” approach which doesn’t really cater to the unique attributes of each segment.  Either way, you have a good discussion!

 

“We wanted [our restaurant] to be Instagrammable”

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Most industries report a decline in the effectiveness of advertising as a means to tell customers about their product. As we note in chapter 16, customers tend to place more faith in what real people say about goods and services they might buy. Apps, including the online review site Yelp and social media site Instagram, offer customers an easy and fast way to hear about other customers’ experiences.

Restaurants have long benefited from word-of-mouth (telling a friend about that “great meal you had at the new bistro”). Today, some restaurants are looking for ways to be more “Instagrammable.” Read more at this trend in “Instagram is pushing restaurants to be kitschy, colorful, and irresistible to photographers,” The Verge, July 20, 2017.

This article could be discussed at many different points in the semester. It offers an interesting example of customer value (chapters 1, 8 and 17); for some target customers, improving the “shareability” of an experience enhances the experience. For many young people, sharing the experience is part of the experience. It also suggests how consumer behavior (chapter 5) with social media (chapter 16) can impact new product development (chapter 9). After sharing this example in class, students could be asked: why are these businesses doing this? They are likely to immediately get that it fosters word-of-mouth, but may not readily connect with other benefits.

What’s Now? Chapter 9 – New Product Planning at Gatorade

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gatorade-smart-cap-100650671-largeAs you know from chapter 9, identifying and developing new-product ideas — and effective strategies to go with them — can be key to a firm’s success and survival. So what do you do if your main product is a sports drink first developed 50 years ago by a team of scientists at the University of Florida after a request from the football coach (the football team is nicknamed the Gators — hence the name Gatorade)?

After years of focusing on new flavors and packaging, Gatorade is using technology to personalize its contribution to athletic performance. Read more about Gatorade’s “smart cap” bottles in this article, “How Gatorade Plans to Reinvent Sports Drinks – Again” (Fast Company, February 2016).

Read the article to learn more about Gatorade. Which type of the three types of innovation (continuous innovation, dynamically continuous innovation, or discontinuous innovation) discussed in chapter 9 best describes Gatorade’s “smart cap” and associated product line falls? Explain your answer. 

New-product development at Ikea

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IKEA-logoIKEA is one of the most successful and interesting companies of our day. IKEA is a case study we use to open our chapter on cross-functional coordination (chapter 19 in Basic Marketing and Bonus Chapter 2 in the new Essentials of Marketing 15e). This article, “Behind the Scenes at IKEA’s Top Secret Furniture Lab” (Wired), provides an inside look at IKEA’s new-product development process. The article lines up well with the new-product development process we describe in our textbooks — so it would be a great complement to your coverage of chapter 9. You could assign the article and ask your students to identify Ikea examples of the five steps in the new-product development process.

You could use this short video — no text, only music — as an introduction to a discussion.

Mercedes Benz’s driverless car prototype

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The driverless car is a reality. This video might be fun to drop into a lecture on the external market environment — to stimulate a discussion of technology. What markets will the driverless car influence? How will it change law enforcement? What about bars and restaurants — which may have more demand as people can stay out and drink without having to drive home? There are predictions that driverless cars will have many fewer accidents? What are the implications for the automobile insurance industry? What about demand in hospital emergency rooms?

These discussions will help students see the need to monitor technological changes that may not immediately appear to impact their business. The emergence of the driverless car (which now seems inevitable) will impact many different product-markets. There might also be a discussion of consumer behavior (some consumers may love this idea, it may be a challenge for others) or the product life cycle (how do you introduce this product to the market) or new product development (the role of prototypes).

The video shows Mercedes Benz’s driverless car prototype.