Monthly Newsletter Presentation Quick Links • Article Abstracts • Commercials • Videos September 2009
Article Index • P&G Moves Down Market with “Tide Basic”(Chapters 1, 2, 8, 10, 11, 13) • Walmart’s Sustainability Labeling(Chapters 4, 10, 15) • Is It Time for a New Nickname for Whole Foods? (Chapters 12, 13, 18) • Banned in Boston? (Chapters 4, 5, 13) • Is 90 Percent Good Enough? (Chapters 12, 14) • Just a Regular, Ol’ Pair of Blue Jeans (Chapters 5, 10, 13) • Preventing Deforestation Through Supply Chains (Chapters 3, 15) • Social Media to the Rescue! (Chapters 9, 17) • Interacting with Friends While Online Shopping (Chapters 5, 10, 16) • Misleading Claims about “Local” Products(Chapters 2, 3, 4, 15) • My Macy’s Goes Nationwide (Chapters 8, 12, 16) • A Beer Drinker’s Dream: New Packaging Innovations (Chapters 10, 11, 13) • Grocery Wars: The Prices Strike Back (Chapters 7, 14, 18) • Sunday Shopping in Switzerland (Chapter 3, 4, 7, 16)
Video Index • Starbucks CEO Interview (Chapter 4) • Staples and OXO Partnership (Chapters 10, 16) • Cash for Clunkers (Chapter 4) • McDonald’s in India (Chapters 7, 10, 13)
Commercials Index • Sainsbury’s(Chapters 16,18) • Dunkin’ Donuts (Chapters 5,10,18) • El Pollo Loco (Chapters 4, 10) • Nike Plus (Chapters 17,18)
P&G Moves Down Market with “Tide Basic” • The high-end laundry detergent maker, Tide, is introducing a lower-priced product called Tide Basic for customers that are shopping for value in this economy. • Tide Basic is hoping to snag customers who would otherwise buy the store brand powder detergent. • Tide Basic is packaged in a yellow box, different from the orange color of the Tide product line • Tide Basic is 20 percent lower in price than the regular Tide product line but has less anti-pilling and color-preservation technologies. Tide’s Web site
What Do You Think? • Why is Tide developing a lower-priced product when it is a high-end brand?
Walmart’s Sustainability Labeling • Walmart is mandating that its suppliers measure the environmental footprint for each of their products. • Walmart’s goal is to create a universal rating system to compare the environmental impact of different products, similar to comparing nutrition facts on nutrition labels. • The retailer is sending its more than 100,000 suppliers a 15-question survey to ask them about their sustainability practices. • Customers likely will make their purchase decisions based on the amount of harm the product causes to the environment. Walmart’s Web site
What Do You Think? • Why is Walmart planning to require suppliers to attach labels that document the environmental impact of their products? • How might such labels affect your purchasing behavior?
Is It Time for a New Nickname for Whole Foods? • Whole Foods earned the nickname, “Whole Paycheck,” because of its high prices. • The poor economy has caused consumers to switch to less expensive grocery stores. • Whole Foods is improving its value proposition with low prices on select items, as well as offering “value tour guides.” Whole Foods’ Web site
What Do You Think? • What is Whole Foods doing to combat negative price perceptions that customers have? • Can Whole Foods succeed in changing consumers’ perceptions and avoid the moniker “Whole Paycheck”?
Banned in Boston? • Stop N’ Shop and Shaw’s supermarkets both banned a customer who continuously catches the stores ringing up prices on products that differ from their listed prices, which is a violation of pricing laws • The pricing errors can cause the store to incur fines; they also must provide customers who identify the discrepancy the item for free. • Recently proposed legislation would prevent stores from taking retaliatory actions against customers who note price discrepancies, such as banning them from stores.
What Do You Think? • When you notice your grocery bill seems higher than you thought it would, do you stop and question the cashier? • Do stores have the right to ban customers who question the prices on their receipts?
Is 90 Percent Good Enough? • 90 percent of Apple’s customers are very satisfied with the customer service that they receive. • Most computer companies have 75 percent customer satisfaction. • Customers are dissatisfied most of the time because of the gray area associated with Apple’s warranty. • Apple Care, the company’s warranty package, is $170 for the Mac and offers free service for a specified period of time.
What Do You Think? • What are the problems with Apple’s customer service? • Is it worth it for Apple to try to please the remaining 10 percent of customers, or is a 90 percent customer satisfaction rating good enough? Apple’s Web site
Just a Regular, Ol’ Pair of Blue Jeans • The denim jeans industry increased 17 percent last year. • Denim brands including Levi’s, Lee, and Wrangler that sell for around $20-$30 per pair have been popular. • Customers are still buying premium denim brands but in smaller quantities. • 7 for All Mankind, the premium denim brand, has lowered its retail prices so that 85 percent of the company’s jeans are less than $200 compared with 70 percent the year before.
What Do You Think? • What might denim companies do to increase sales? • What would you predict for the future of this industry?
Preventing Deforestation Through Supply Chains • Every eight seconds, an acre of Amazon rainforest is destroyed by the Brazilian cattle ranching industry, which is the biggest single driver of deforestation in the world. • Deforestation is the greatest cause of increasing carbon dioxide levels; rainforests are critical for the health of the planet. • Large companies, including Nike, Walmart, and Carrefour, that use leather in their products are discontinuing their contract with suppliers that contribute to this deforestation.
What Do You Think? • Why are companies concerned about being environmentally friendly?
Social Media to the Rescue! • Ford Motor Co., Pepsi Co., Coca-Cola, and Southwest Airlines are using social media as important communication vehicles with customers. • These companies hire staff to surf the Web and search on blogs, Twitter, and Facebook to find out what customers are saying about their brands. • Social media are valuable as a means for companies to respond quickly in crisis management situations. • Southwest Airlines made an emergency landing on July 13; company employees monitored the passengers’ comments about how the crew was handling the situation. The company then Tweeted a response as a result of the positive remarks.
What Do You Think? • Why do companies feel social media is important?
Interacting with Friends While Online Shopping • Vans.com, the surf and skater lifestyle brand, enables customers to design their own shoes. • Customers can then share their created shoes with their friends via a Facebook application • Vans.com stores all of the comments that the customer’s friends make on the image on the product page of the Vans.com site. • This capability makes it easier for customers to go back, even months later, when ready to make the purchase, and see what their friends have said about the newly designed product. • Vans.com’s target market is 12-24-year-olds. This group is very influenced by their friends’ opinions, so they are more likely to be happy with their purchase if their friends approve.
What Do You Think? • How does the Vans.com e-commerce site work? • Would you purchase on Vans.com?
Misleading Claims about “Local” Products • Customers are looking for locally produced foods, which require less energy to transport the produce and provide more support for local communities. • The definition of a “locally” grown product differs across different contexts, which means this claim may be misleading claim to many customers. • The federal government says that products can be labeled local if they are produced within a 400-mile radius of the consumer. • Logistically it is difficult for retailers to source enough produce from local farms, so they have to look farther and farther away. • Whole Foods is working toward greater clarity by stating the exact number of miles that the product traveled to reach the store and the name of the farm.
What Do You Think? • Why are retailers advertising “buy local”? • Are consumers really able to “buy local? • Do you believe that there is an ethical problem when retailers advertise “buy local,” but supply merchandise that isn’t really very local?
My Macy’s Goes Nationwide • Macy’s has realized that it needs to cater to the local needs of its customers. • The My Macy’s initiative has reassigned 1,600 merchants from New York City to 70 local markers throughout the United States. • The stores that have already undergone My Macy’s customization have seen an increase in sales compared with other Macy’s stores. • Some stores will eliminate departments that are not as important to customers and increase departments that they care about, such as cosmetics in lieu of a fine china department. Macy’s Web site
What Do You Think? • What are the advantages of My Macy’s?
A Beer Drinker’s Dream: New Packaging Innovations • In this economy, new packaging for existing products can revitalize a brand without the high cost of new product innovation. • MillerCoors created a Home Draft system that holds 1.5 gallons, fits into the fridge, and is designed for consumers who periodically consume beer rather than just on special occasions. • Coors Light has cold-activated bottles that turn blue when the beer inside is cold. • Bud Light is creating regionally specific labels depicting the NFL team for the area.
What Do You Think? • Why are companies focusing on new packaging innovations rather than new product innovations? • Do you think the Home Draft system will be successful especially considering it is 15 percent more expensive per ounce than an 18-pack of beer?
Grocery Wars: The Prices Strike Back • The U.K. grocery retailers Sainsbury’s, Tesco, Morrison’s, and Asda are known for their high-quality private-label products, efficient supply chains, and sophisticated loyalty card programs. • In this poor economy, these retailers instead are focusing on price wars for fear that their customers will defect to discounters. • Every morning, Asda compares its prices with the prices listed on every other grocery Web site to ensure that it is the lowest priced on every item. • Sainsbury’s has changed its slogan from one boasting quality to one boasting low prices.
What Do You Think? • Why are Britain’s grocers reverting to price wars?
Sunday Shopping in Switzerland • Stores are closed on Sundays in Switzerland for a “day of rest.” • There are conflicting rules regarding opening regulations on Sunday. • The government allows railway stations and airports to open; stores can open four Sundays per year but much have a good excuse! • The Swiss Trade Union says that employees can only work on Sundays voluntarily, but the employees feel pressured that in this economy they should not risk losing their job. • The bad economy is making the country rethink these policies, because Sundays are when tourists are out and about.
What Do You Think? • Why are the Swiss considering opening stores on Sundays? • Why are the unions against being open on Sundays?
Video – Starbucks CEO Interview • Describe Starbucks’ strategy. • Where has the company stumbled in recent years? Video: Starbucks
Video – Staples and OXO Partnership • Do you think this is a good time for the OXO cobranded product launch? • What is the target market for these products? Video: Staples OXO
Video – Cash for Clunkers • Is this a green initiative? Video: Cash for Clunkers
Video – McDonald’s in India • How does McDonald’s maintain a consistent brand image worldwide? • What are the differences in McDonald’s strategy in India compared with that in the United States? Video: McDonald’s
Commercial – Sainsbury’s • What is the purpose of this commercial? • Is it successful? Sainsbury’s Web site Sainsbury’s commercial
Commercial – Dunkin’ Donuts • How does Dunkin’ Donut’s advertising differ in South Korea compared with in the United States? • What brand image is Dunkin’ Donut’s attempting to portray? Dunkin Donuts Commercial Dunkin Donuts’ Web site
Commercial – El Pollo Loco • What is the purpose of this commercial? • Is this a successful commercial? El Pollo Loco Web Site Pollo Loco Commercial
Commercial – Nike Plus • What is the purpose of this commercial? • Is it successful? Nike Plus Web site Nike Plus Commercial