Week 5 Discussion

Discussion Questions – Week 5

Initial Blog Post - Due time: Friday at 11:00 pm

Responses – Next Tuesday at 11:00 pm

Each piece of marketing theory or concept is first introduced and explained in the context of a specific application.  Please use relevant concepts and theories from the textbook and give examples to support your argument.

Please read Chapter 6 before approaching the following discussion questions.

Part 1 (Q1-7): (Note – I have the sixth edition of McGraw Hill’s “Marketing” by Levy and Grewal rather than the fourth edition, so I’m unsure if the same product comparison and information was used)

1. Food packages have claims about taste, value, and nutritional information as well as information on the organic or conventional status of the product.

2. The Snapple tea mentioned early in the chapter claims to be natural – claims such as this lead to the idea that the product doesn’t contain highly processed or synthetic ingredients, meaning that they are healthier for consumers, however the Snapple tea in question does contain high fructose corn syrup. Labels such as “organic” or “natural” can be deceiving to the non-critical consumer.

3. Individuals who are concerned about their health, but perhaps are not the most critical consumers. They are willing to shell out more money for products that promise to be all natural or low fat, but may not spend time researching exactly what the benefits of the product are, and therefore won’t be likely to find out that their all-natural product contains not-so-natural ingredients.

4. Consumers favor products with packaging that sticks out from the rest. The example used in the book was a tube of Pringles – chips in a tube are less common than a shapeless bag, so Pringles stick out from the competition because the packaging doesn’t look the same.

5. Kashi certainly has the most public image for a nutritious product, with low fat, lots of fiber, little sugar, and plenty of protein. Grape Nuts have less fat, but less protein and more carbohydrates than Kashi. Cheerios have the same amount of fat, but less protein and fiber than Kashi. Overall, I would say that Kashi is the most nutritious.

6. At Walmart, Kashi cereal costs about $6, while Cheerios and Grape Nuts are closer to the $3-5 range.

7. A 2-for-$5 is more effective than $2.49 each. If you have a 2-for, you will almost guarantee that every customer will buy the multiple. Why? If purchasing two items guarantees that a consumer will pay a lower price for each than they would pay for the two individually, most consumers will purchase multiple because the lower price-per-item offsets the idea that they will be spending more money overall.

Part 2 (Q8): Please read Chapter 6 (i.e., 6.1 Ethical and societal dilemma) before approaching the following discussion question.

8. Gun owners absolutely should have to buy liability insurance. I believe this is the case because guns can cause an inexplicable amount of damage, and certainly need to be controlled much more than they currently are. I believe that liability insurance is a great idea for a way to control guns. If insurance companies had to offer insurance for gun owners, in order to reduce the risk of insuring this population the insurance companies would certainly lobby for more stringent requirements on gun ownership.

Part 3 (Q9-12): Please read Chapter 6 and the reading Prospect Theory before approaching the following discussion questions. You might also want to check out the following video if you prefer video-based learning:

9. When viewing advertisements in my daily life, I am careful to be aware that companies are only telling consumers what they want consumers to know. I never make decisions based on an advertisement alone, because obviously a company is not going to tell me about the flaws in their product or service.

10. With no context on what the numbers represent, I would choose option B because 3 is my favorite number.

11. The example of insurance is similar to the example of the warranty on the TV in the reading. Consumers will fail to take into account their future income, or their likelihood of actually needing to pay the deductible, choosing to pay a higher premium. I agree with the reasoning of paying a higher premium, but on a different basis. For me, it comes down to costs I expect and costs I do not expect. I would rather diminish unexpected costs that have the potential to derail my financial plans, even if it means expecting to pay a little more up front. I have had to pay the deductible on my car insurance twice, and both times I was very happy to have paid more up front to save money when I wasn’t expecting it.

12. In today’s technological age, new models of phones are always coming out. In advertisements, only the new features and improvements are mentioned, while many things remain the same from model to model. New features are seen as a gain, so whichever company advertises the most gains will likely see greater profits. Old features that are kept are not gains, they are just sticking to the status quo. These features won’t be mentioned in advertisements nearly as often because they just don’t bring in new consumers.

Week 4 Discussion

Q1. What consumer trends does Seventh Generation respond to most effectively?

Seventh Generation's marketing is based on consumer desires to purchase environmentally friendly products. As mentioned in the reading, the company is great at offering products that consumers want before they are even requested - Seventh Generation knows exactly what products their customers want. They are the dominant eco-friendly brand for most household cleaning products because of their excellent customer relations and superior goods.

Q2. Which consumer trends might it be missing?

While Seventh Generation offers excellent products, they do not offer budget products. More eco-friendly goods can often be more expensive to manufacture, however many consumers may not be able to afford Seventh Generation products on a regular basis despite wanting to do something good for the environment. I can speak for myself and say that I try to buy eco-friendly products as much as possible, but as a college student trying to save up money, it's hard to justify paying $2.97 compared to $0.99 for dish soap. Seventh Generation should either place more effort into providing affordable products, or into educating consumers on why it's worth paying the extra cost for eco-friendly goods.

Week 3 Discussion

Please read Chapter 3 and the report Customer Research using Market Basket Analysis - Unraveling-the-Customer-Mind (Cognizant) and answer the following questions:

1.       How did Kroger use the market basket analysis method?
Kroger used MBA to determine which items drew customers into stores and generated the most profit. to do this, they made up a matrix of all products that customers purchased, and compared which combinations were the most popular. They were then able to use this data to provide customized coupons and offers to their customers.

2.       Why is market basket analysis so popular in the retail industry?
In short, because it can help companies to generate more income. By advertising one item, or offering a certain discount, a company that has performed proper market basket analysis will be able to increase sales based on groups of items that are most commonly purchased together.

3.       How easy is it to run a market basket analysis?
Because most companies offer a wide variety of goods and services, market basket analysis can be a complicated process. By using computer algorithms to analyze patterns, the process is greatly simplified, however there is a vast amount of data to consider.

4.       Which method was introduced in the report?
Kroger created a three dimensional co-occurrence matrix to analyze which combinations of goods were purchased together most frequently.

5.       Based on your shopping experience or direct observation, which Maine-based grocery store is the best player in market basket analysis? Why? Use pictures if you can.
While I may not have a great picture of the situation, as I do most of my grocery shopping at Hannaford, I think that they have a great method of market basket analysis. It seems like anything that I might consider buying is conveniently placed just when I'm thinking about it as I walk through the store, and many of the coupons or sales that they offer would pair very well with another item. Today I noticed that the brand of tortilla I prefer was on display at the end of the aisle where beans, salsa, and other ingredients I would choose to put in a burrito are sold in addition to the display in the bread aisle where I usually find them. An example of MBA based more on discounts than display locations is the new My Hannaford Rewards app - upon downloading the app, I was offered a variety of coupons for free items, however, most of the items were something that would either require another purchase with them for the meal to make sense, or they were items that would put the idea of something more in a consumer's head. 

Please read Chapter 4 and the News release: The food and beverage industry is marketing our children and youth to death and answer the following questions:

6.       Who should be responsible for the overconsumption of sugar?
Companies that market processed and unhealthy foods to children are certainly responsible for the unhealthy diets those children will learn to follow. It is unfair for the food and beverage industry to market this way to children, causing either an unhealthy diet or conflict within families if parents won't give in.

7.       Do you believe if the government should regulate the sugar advertising?

Yes. I believe that all advertising targeted towards minors should be regulated by the government, because currently many harmful products and lifestyle choices can be marketed to people of all ages and backgrounds. Children in particular are susceptible to the advertisements around them, so products that have been shown to have negative effects on health should not be marketed directly to children.

8.       Identify the stages in the ethical decision-making framework in Chapter 4 and describe how ethics can be integrated into the snack industry’s advertising strategy?
The first step is identifying what decision must be made - here, should harmful products be marketed to vulnerable children? Step 2 is research - find out what is at stake, who stands to gain and who stands to lose from any possible outcome. Here, the food and beverage industry is a stakeholder, as are children and families. The third step involves considering any alternative choices, and taking time to think about the impact of the decision. In this situation, we can contemplate whether there is, in fact, a happy medium. Maybe we can outlaw certain marketing strategies, or mandate that food and beverage companies must also market healthy lifestyle choices such as exercise or spending time outdoors along with their harmful products. The fourth and final step is to choose a course of action. As I have stated, I believe that government interference is necessary for the question at hand, however others may feel differently.

Google Trends: Searches for Crossfit over the past twelve months

For this project, I used Google Trends to determine which of Crossfit's competitive worldwide events in 2017 sparked the most searches. I compared the terms "Crossfit" (blue), "Crossfit Open" (red), "Crossfit Regionals" (green), and "Crossfit Games" (yellow) for all web searches worldwide in the past 12 months. For reference, the Crossfit Open is the worldwide qualifier for the next two stages of worldwide competition - most Crossfitters will participate, so even those individuals who don't qualify to move on will get a good idea of how they measure up in the sport as a whole. This event begins in late February, with one workout released each Thursday for five weeks. Regionals are the next step in the process - the top 40 male and female athletes as well as top 40 teams in each of the eight regions go to competitions in May and June, and the top ranking individuals and teams (a different number in each region) will go on to the Crossfit Games in August, where they will compete for the title of Fittest on Earth.

Overall, "Crossfit" is a much more popular search term than any of the individual events, with year round popularity and spikes during each of the major events. During the Crossfit Games and Crossfit Regionals, "Crossfit Games" is the most popular of the remaining terms, while "Crossfit Open" barely surpasses it during the Open. "Crossfit Open" peaks during the Open, of course, and becomes a hair more popular during the Games. Finally, "Crossfit Regionals" accounts for an insignificant number of searches, except after the Open when qualifiers are announced and during Regionals - however, "Crossfit Games" is more popular during Regionals than searches for the event itself.

It makes sense that Crossfit-related search terms would become more popular during worldwide Crossfit events - because the Games is certainly the most publicized, and probably the only event that members of the general public who are not involved in Crossfit will follow at all, its popularity is natural as more individuals are likely to perform a "Crossfit Games" web search rather than a search for any other specific event. Additionally, the Open and Regionals are run out of the same website as the Games, so searches from one will often lead to information about both. Regionals are less publicized both in and out of the Crossfit community, so the term is unlikely to garner many searches year round, and because of the way the competition cycle works, searches for "Crossfit Games" will lead to information about Regionals as well. Of course, "Crossfit" is the most popular term because it applies not only to whatever phase of the competition season is currently happening, but to all individuals curious about the sport, trying to find workouts, or trying to locate a gym near them.

Week 2 discussion

Explain Netflix’s marketing strategy. Can it sustain its competitive advantage? Why or why not?

Netflix’s marketing strategy seems to be to provide a service that differs from their competitors and has a lower price point. To this day, you can see Netflix pioneering streaming services with their original series coming out before other providers like Amazon Prime or Hulu were producing their own shows. Netflix also continually updates their service offerings, as is the case with their new option to watch offline with the mobile app. In many ways, I believe Netflix has great potential to stay in the game – Netflix makes the right decisions at the right times to be successful. However, it is a common complaint that Netflix’s streaming service is losing variety, and many popular titles are disappearing from their library. Because of this weakness, I believe that Netflix certainly has an edge to stay in the game, but is unlikely to ever be the most popular streaming service by far.

How has their strategic change and rapid reversal affected their customers?  Do you believe this situation is short-term public relations nightmare or a long-term reversal of fortune?

I think that the change to Qwikster and rapid reversal was a short-term PR nightmare, however in the long run it did show customers that the company cares about what they want. Many customers were turned away because of the uncommittedness that Netflix was showing and their unhappiness with rising prices and changing services, but the customers who remained loyal saw that Netflix cares enough about customer preferences to undo a large shift in the company to keep their customers happy.

Perform a SWOT analysis for Netflix. What are its biggest threats and which opportunities should it pursue? You may attach an attachment if necessary.

Strengths: High quality original series, easy to use platform, reputation, and offline video streaming.

Weaknesses: Decreasing library, focus shifting away from the older library into primarily original series.

Opportunities: Netflix has many opportunities available, some of which they have certainly capitalized on lately. I think the best way for Netflix to grow would be to place more of a focus on making new movies available sooner after they come out – I would definitely be a lot more likely to watch new movies on Netflix as soon as they leave theaters, especially only paying $10/month for as many as I want, than I would be to go to the theaters every time I think a movie could be interesting. By focusing on newer movies, I am confident that Netflix would gain more customers and that these films would be viewed by a much wider audience.

Threats: I think that Netflix’s biggest threat currently is Hulu. As many old favorite shows are being taken off of Netflix, Hulu still offers these shows and keeps a low price. While Hulu users must deal with commercials, it can certainly be worth a few commercials to see your favorite show. Hulu also offers new episodes much sooner after they air, making it much more convenient to stay up to date on your favorite shows.

What is the best way for Netflix to grow its business? Justify your answer.

By offering more new releases, Netflix will expand its customer base. Many people are not willing to pay to see a movie in theaters, and definitely won’t go to see every film that interests them in order to save money. That being said, offering unlimited streaming of each months newest films for one low price is definitely a key factor that will entice new users who have interest in seeing any new movie they want for the price that they’d pay to see just one movie in a theater.