Monthly Archives: April 2020

Airbnb: Agility in Services

Companies and marketers are facing unusual times. Since the coronavirus has impacted global businesses, nearly all companies have had to make pivots in strategy to accommodate the rapidly changing environmental conditions.

One of the industries hardest hit by the coronavirus is travel and tourism. Airplanes are nearly empty as states implement stay-at-home policies. Hotels have empty rooms. Restaurants are restricted to curb-side delivery only. Honestly, it’s a mess and every marketer has to be up for the challenge and demonstrate agility.

Case in point: Airbnb has had to halt its ‘Experiences’ business where local residents provide unique experiences to travelers. It hosts 40,000 events in more than 1,000 cities around the globe. But, due to coronavirus, the in-person experiences are closed until stay-at-home restrictions lift.

Pivoting with the changing environment, Experiences offers online events in more than 30 countries. Experiences include tango lessons with a Latin Grammy nominee, guided meditation with sleepy sheep in United Kingdom, meditation with a Japanese Buddhist monk in Japan, and my favorite – a day in the life of an Olympic bobsledder!

Airbnb provides free experiences for isolated senior, giving them an opportunity to meet new people, but also travel anywhere in the world to learn something new.

Search out new experiences.

Group Activities and Discussion Questions:

  1. Discuss the differences between marketing products and marketing services.
  2. What has been the impact of the coronavirus on the travel and tourism industry?
  3. What are ways that this industry can stay relevant and responsive to a changing marketplace?
  4. View the Airbnb Web site: https://www.airbnb.com/s/experiences/online
  5. A video about the service can also be found at: https://youtu.be/XhaTCzKrEtE
  6. Discuss the Airbnb experiences. Which ones would student try?

Source: Ad Week; Associated Press; other news sources

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Back to Basics: Toilet Paper

We consumers are a strange bunch. One minute we are buying in a predictable way, at the usual times and in the usual patterns. Then, boom! Suddenly the world changes seemingly overnight and consumers take drastic and unusual shopping actions.

In this case, what was once a stable item – toilet paper – became a hot product in high demand as the coronavirus hit the U.S. According to Nielsen, in the first week of social distancing guidelines, toilet paper demand increased 120% versus the same time last year. Customers began buying toilet paper in bulk and ratcheted up hoarding of the commodity product. This type of reaction is not uncommon during times of stress when consumers feel a need to control at least one aspect of their lives.

Why the shortage though? In part, it is because toilet paper manufacturing and distribution flows through an efficient, tightly-controlled supply chain. Since it is a bulky product to ship and shelve, retailers keep low inventory on-hand and depend on frequent shipments to replenish stock.

On average, the volume a household consumes toilet paper is about 141 rolls per year. But, during the current crisis, consumers are going through more toilet paper at home since more people are working at home and not venturing out to restaurants, retailers, and other out-of-home events.

Be kind. Share.

Group Activities and Discussion Questions:

  1. Discuss the elements in the supply chain and marketing channel.
  2. Diagram the supply chain and marketing channel for toilet paper.
  3. Show a brief video about toilet paper supply chain: https://youtu.be/By2mmIUzG-w
  4. Another video choice: https://youtu.be/NiQKvfo3l94
  5. View Cottonelle’s Web site and it’s plea for kindness and sharing: https://www.cottonelle.com/en-us/share-a-square
  6. Where are the stress points in the supply chain and marketing channel?
  7. What can be done to better produce and manage products such as toilet paper during times of crisis?

Source: Ad Week; Associated Press; Nielsen Research; Wall Street Journal; other news sources

 

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Pepsi Buys Rockstar

Energy drinks are still a growth market, particularly as consumers shift away from sugary sodas and towards lower-calorie drinks. To gain market share, beverage companies are increasingly looking for new categories of drinks. And towards that end, PepsiCo recently acquired Rockstar Energy Beverages for roughly $3.85 billion dollars.

Acquisitions are a common way of entering new markets with new products. But acquisitions can also be problematic. Rockstar and Pepsi have decidedly different looks and branding, as well as different target markets and products. In addition to energy drinks, Rockstar makes sugar-free and low-calorie drinks, plus organic and fruit juice beverages.

The energy drink category is one that continues to grow, including new entrants such as Bang and A-Shock. And of course, Coca-Cola is in the mix with Monster. According to Mintel, energy drink and energy shot sales are approximately $13.5 billion; the market grew nearly 30% between 2013 and 2018.

Now that’s energy!

Group Activities and Discussion Questions:

  1. Discuss acquisitions as a marketing strategy. When is this effective? When is it not effective?
  2. Show Rockstar Energy drink Web site: https://rockstarenergy.com/
  3. Show Pepsi Web site: https://www.pepsi.com/
  4. Rockstar YouTube channel: https://www.youtube.com/user/RockstarEvents
  5. Pepsi YouTube channel: https://www.youtube.com/user/Pepsi
  6. Have students compare the two sites. What are similarities and differences?
  7. Discuss the risks and challenges that Pepsi might have with the acquisition.

Source: Associated Press; Wall Street Journal; other news sources

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