Monthly Archives: August 2018

IKEA Opens its First Store in India

IKEA has opened its first store in India. The store, located in Hyderabad, cost roughly $100 million to build and is an estimated 400,000 square feet. The company plans to have up to 25 stores in India by 2025.

India has a large and complex retail base. The country’s 1.3 billion people account for about $30 billion per year for furniture and household items. However, unlike the U.S., 95% of the goods are sold through small shops that offer specialty products or single-category stores. IKEA’s broad product mix and store operations had to be significantly revised for India. While the store layout is similar to other IKEAs, the displays are different, featuring hundreds of products priced at 100 rupees or less ($1.45 U.S.).

To research how India’s people live and shop, employees visited about 1,000 homes in different areas of India to understand consumers’ needs. Some differences: most Indians do not use knives to eat, women are shorter than Europeans, and children often sleep in the same room as their parents until they are school-age. In addition, India’s government requires foreign-owned, single-brand retailers to use local suppliers for 30% of the value of the goods sold in India.

IKEA, the Sweden-based multinational, now owns and operates 415 stores in 49 countries around the globe. With revenue in excess of $42 billion (U.S.), and an estimated 12,000 products, the company uses more than 1% of the world’s commercial-product wood.

It’s not always easy to change, but entering a new market requires research and revision.

Group Activities and Discussion Questions:

  1. Ask students about their experiences at IKEA. What works, doesn’t work?
  2. View the IKEA India website: https://www.ikea.com/in/en/
  3. A video of IKEA India store is available at: https://economictimes.indiatimes.com/industry/services/retail/ikea-says-namaste-to-indian-customers-as-it-throws-open-its-first-store-in-hyderabad/videoshow/65340339.cms
  4. Discuss how to build and use a SWOT analysis grid: strengths, weaknesses, opportunities, and threats.
  5. Divide students into teams. Have each team develop a SWOT for IKEA in India.
  6. What are the issues and risks?

Source:  Goel, V. (7 August 2018). Ikea opens first India store, tweaking products but not the vibe. New York Times.

 

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Product Placements on the Screen

If a brand wants to get a customer’s attention, marketers know that there is no substitute for showing the customer how a product fits into real lives in the real world. And to show a lot of prospective consumers this, brands need to show them the product on a large scale such as in a television show or a movie.

Product placement might not be an official component of the four 4Ps (product, price, promotion, place), but maybe it’s time to add it as a fifth P. While there are times that the product is very noticeable (such as BMW cars in James Bond movies), there are many times when products are used subtly (but still get our attention).Companies that are able to get their products shown on the big screen – or even a small screen – bring their products to the attention of millions of viewers, all of whom have opted-in to watching a show or movie.

Some recent placements where the products were included as a part of the show include Apple iPhones on Fox’s “9-1-1,” Anheuser-Busch beers in Netflix’s “House of Cards,” Lavazza coffee on “Comedians in Cars Getting Coffee,” Flaming Hot Cheetos in “Orange is the New Black,” and Pepsi in “Empire.”

Is it worth the cost to marketers? Considering that the average 30-second commercial can easily cost several hundreds of thousands of dollars, then several seconds of airplay of the product in use can easily recover the costs.

What are you seeing on the screen?

Group Activities and Discussion Questions:

  1. Ask students to name their three TV shows and/or movies that they recently viewed.
  2. Next, ask them to name at least three products that they can recall seeing in the show. Were those products there by accident?
  3. Show a video clip of one of the TV shows or movies. The clips can easily be found on hulu.com, www.youtube.com, and other sites.
  4. Divide students into teams. Have each team choose two products they would like to have placed in a TV show.
  5. How would these products be incorporated? What is the desired result?

Source:  Fleck, A. (9 August 2018). 6 product placements on TV so good you didn’t realize you were being sold something. Ad Week.

 

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Grandkids On-Demand

Even though it’s a fact of life, aging can be lonely. Friends and family members may have passed on, moved away, or moved into care facilities. And, caregiving for someone who is older can be hard when the caregivers also have other responsibilities such as families and full-time jobs. This was the need behind a new service called ‘Papa’ which helps provide senior citizens with a little extra attention through what it calls ‘Grandkids On-Demand’.

Papa has a simple premise – to provide college students to help senior citizens. It connects students with the seniors for tasks such as driving, shopping, reading, laundry, pet help, technology help, or even just companionship. It emphasizes a fun was for two generations to connect and frees senior citizens from being confined or left on the margins of life.

Members (the senior citizens) pay a monthly fee of $15 to $30 to belong, plus $15 per hour for visits from the Papa Pals (the college students). The Pals must be enrolled in college or working on a masters degree, social work degree, or nursing or medical degree. Pals must also have a four-door car and pass a background check. Pals are given the company’s personality test which look for people with empathy, patience, and the ability to draw people into conversation. The biggest focus is on curing loneliness; being with a younger person stimulates the seniors – relationships form to help both parties understand the world.

Become a Pal and help Papa.

Group Activities and Discussion Questions:

  1. Poll students: Do they have family members or friends that fall into this category? How do these people get assistance?
  2. Review Papa: https://www.joinpapa.com/
  3. Make sure to show some of the videos available on the Web site to illustrate how the service works: https://www.joinpapa.com/video-gallery/
  4. Discuss the components of a situation analysis: company, general industry, trends, key competitors, technology, legal, etc.
  5. Divide students into teams. Have each team use laptops to do general research to analyze the market for Papa. (Ex: overview of industry, size, growth, new technologies, environmental impact, etc.)
  6. Debrief the exercise by compiling information on the white board.

Source: Bahrampour, T. (20 June 2018). These college kids moonlight as ‘grandkids’ for hire. Washington Post.

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