We know the latest and greatest technologies – new product announcements are trumpeted from the hill tops. But what about old stalwarts? Do we even realize when a faithful product line is put out to pasture?
We can now add the loyal video cassette recorder (VCR) to the list of gone, but not-forgotten products. This fall, Funai Corp. of Japan announced that it would stop production of VCRs due to difficultly acquiring needed parts. Funai was the world’s last remaining manufacturer of the VCR. According to the company, only 750,000 units were sold worldwide in 2015, making it uneconomical to continue to source and produce the product.
VCRs were first introduced in the 1950s. The technology wowed the scientific and technology communities, even though it took decades for VCRs to make it into consumer households. The product was so stunning that when it was first launched in the late 1950s, units sold for $50,000 each, and more than 100 orders were placed the week the VCR debuted! Just think of that in today’s dollars, and without any Internet to hype the product!
VCRs started making it to into homes in the 1960, and in the 1970s competition from Sony and JVC propelled it to wide availability. In the 1980s, VCRs cost between $600 and $1,200. By 1982, there were five million units in homes, and that number tripled to 15 million by 1984.
Alas, all products eventually must eventually come to an end. The killer product taking out VCRs was the DVD player. DVD players were released in 1997 and by 2002 DVD sales surpassed video cassettes.
R.I.P. to the VCR. Gone, but not forgotten.
Group Activities and Discussion Questions:
Discuss the stages in the product life cycle. What are the marketing objectives in each stage?
Divide students into teams. Have each team draw a product life cycle and place various products and services into each stage.
What is a brand? Does a brand have a financial value? These are critical questions that drive the strategic marketing decisions of corporations around the world. In general, marketers define brand as the position that a company/product holds in the minds of the consumers. It follows then that if the brand holds a position in consumers’ minds, then it would definitely translate into a financial value for companies.
Each year, Interbrand does a financial analysis that seeks to define, in dollars, the value of a company’s brand – the result is the annual Best Global Brands ranking. In order to be included in the analysis the brand must be global – it must have successfully crossed geographic and cultural boundaries:
At least 30% of revenue must come from outside the brand’s home country.
It must have presence in at least three continents as well as broad geographic coverage in emerging markets.
There must be sufficient publicly available data on the brand’s financial performance.
Economic profit must be expected to be positive over the longer term, delivering a return above the brand’s operating and financing costs.
The brand must have a public profile and awareness above and beyond its own marketplace.
Interbrand’s brand valuation methodology seeks to determine, in customer and financial terms, the contribution of the brand to the company’s business results. There are three key components in the methodology for the valuations: analyses of the financial performance of the branded products or services, of the role the brand plays in the purchase decision, and of the competitive strength of the brand.
Ask students to define “brand.” What is it? Does it have value to a company?
Have students take out a piece of paper (or write answer on laptops). Ask them to choose what they thing are the top 10 most valuable brands in the world. Then show the top 10 list from the Global Brand report.
Around the world, consumers are used to being able to have nearly any product or service available using the Internet. We easily buy common products online, as well as more unique services and products. Online shopping provides details about products/services, delivery options, and clear pricing.
Perhaps one of the most unique services obtained over the Internet is in Japan, where a Buddhist priest can now be found with a few simple clicks on Amazon’s Japanese site. Before thinking this is a far-fetched idea, consider how the Internet has already disrupted many traditional commerce and activities. Religious and spiritual needs may be one of the latest disruptions.
For example, when Buddhists in Japan relocate, it can mean leaving behind a spiritual foundation and people may not have local temples to turn to in times of need. One such need was that of a widower who obtained a priest for a memorial service using obosan-bin – priest delivery via Amazon in partnership with a local start-up firm. While it has been viewed by some as unseemly commerce, priests and backers view that they are addressing people’s real needs. They hope that obosan-bin will preserve traditions and make them accessible to people who have become estranged from religious traditions.
Group Activities and Discussion Questions:
Discuss how Internet shopping has changed people’s buying habits.
Poll students: What have they purchased online in the last two weeks?