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Tesla Shifts Retail Strategy, Then Shifts Again

Tesla, Tesla, Tesla… It’s so much fun to track this company. Not only are the products innovative and exciting to follow, it is also a marketing case study in nearly constant motion.

Case in point: At the end of February the company announced it would be closing its retail stores in order to cut costs and lower the pricing of the Model 3 to make it more affordable (at a starting price of $35,000). Tesla believes that car buyers will increasingly rely on on-line ordering instead of physical stores. Tesla stated that in North America, a customer can buy a Tesla on their phone in approximately a minute. Which begs the question, just because customers can do this, will they do it?

However, two weeks later, Tesla reversed its strategy and stated it would instead keep most of its 378 retail stores and would instead raise prices of cars by 3%, excluding the Model 3 cars. Tesla hoped to cut costs by closing stores, but landlords, customers, car dealers, and lawmakers protested the closings. The stores will still function as a showroom and location for test-drives, but sales will still be done online.

Where do you want to stop for your next car?

Group Activities and Discussion Questions:

  1. Discuss the distribution model used by Tesla and compare it to the distribution model used by other automotive manufacturers.
  2. Here is an interesting video on why Tesla cars cost so much: https://www.wsj.com/video/the-secret-to-why-a-tesla-costs-so-much-hint-batteries/65F3A21D-0837-4DA6-B739-612124815603.html (Hint – it’s the batteries.)
  3. Poll students: How many would buy a car online instead of at a dealer/store?
  4. What are advantages and disadvantages of buying cars online only?
  5. Why has Tesla disrupted the traditional automotive sales model?
  6. Will other automotive companies follow the Tesla model?

Source: Wall Street Journal, New York Times, Assoc. Press, other news sources

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Snack Robots are Invading Campuses

Robots are invading! Ok, maybe they aren’t exactly invading the entire nation, but they do seem to be infiltrating some college campuses. Rest easy though – these robots seek not to dominate, but instead to satisfy students’ craving for delivered snacks.

The self-driving robots are being tested for “last mile delivery” courtesy of PepsiCo, and have been deployed to serve students at the University of the Pacific’s campus in Stockton, Calif. The robots, developed by robotic company Robby Technologies, carry a variety of healthy snacks and drinks from Pepsi’s ‘Hello Goodness’ product line. Ordering and delivery on campus is easy using an app that is available to all students with a University of the Pacific email address. With a single charge, the robot can travel 20 miles to find a multitude of consumers eager for a quick snack.

The robots do have a normal work hour shift of 9-5 (sorry, no late night munchies) and deliver products to 50 areas around the campus. The robots are equipped with cameras and headlights so that they can navigate in rain and darkness. And, with six-wheels and all-wheel drive, curbs, rough paths, and steep hills can be handled with ease.

Students – are you hungry now?

Group Activities and Discussion Questions:

  1. Discuss the impact of robots and drones on marketing.
  2. Show a video of the Pepsi SnackBots: https://youtu.be/skUbYVmRogI
  3. More information can be found at Pepsi’s Website: https://www.pepsico.com/news/press-release/pepsicos-hello-goodness-snackbot-is-off-to-college01032019
  4. Information on the robots from Robby: https://robby.io
  5. Discuss how to build and use a SWOT analysis grid: strengths, weaknesses, opportunities, and threats (internal and external factors).
  6. Break students into teams and have each team build a SWOT analysis grid.
  7. Based on the analysis, what are the issues and risks that might occur?
  8. Debrief by building SWOT analysis grid on the white board.

Source: Ad Week, other news sources

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Different Perspectives: Dream Crazy, Crazier, and Be the Best You

Consumers have many opinions about product advertising and branding, and they are not afraid to voice them. Opinions can depend on the times, trends, and moods of the population. In the U.S. today, the topics of social justice, harassment, and equality are very much top of mind for many consumers. Consequently, they may respond to advertisements in a different way today than they might have responded a few years ago.

One very timely topic that is addressed by Gillette is the harassment that started the #MeToo movement. A new ad from the company focuses on bullying and ‘toxic masculinity’ and asks consumers “Is this the best a man can get?” The ad was designed to inspire positive behavior, but has faced a backlash of negative reactions. Why?

Another company that is no stranger to controversy is Nike. A few months ago it released an advertisement narrated by Colin Kaepernick titled “Dream Crazy.” That advertisement focused on the power of social justice and dreams that drive people to achieve more. However it also generated a score of negative publicity initially for Nike. Why?

Finally, a new advertisement from Nike features Serena Williams narrating a “Dream Crazier” video focused on the achievements of women in sports, and reminding viewers that women are not crazy just because they want to achieve more than stereotypes have limited them to. This one is generating positive publicity. Why?

How can companies and brands tie into broader social messages? Should they?

Group Activities and Discussion Questions:

  1. Discuss the perspectives and attitudes of consumers. What are conditions or topics that impact perspectives and purchases? What are current events that influence behavior?
  2. Show the recent advertisements from Gillette: https://gillette.com/en-us/the-best-men-can-be
  3. Discuss the message of the ad. Should consumers view it negatively or positively?
  4. Next, show Nike’s ad titled “Dream Crazy” narrated by Colin Kaepernick: https://news.nike.com/featured_video/just-do-it-dream-crazy-film
  5. Discuss the message of the ad. Should consumers view it negatively or positively?
  6. Finally, show Nike’s newest advertisement narrated by Serena Williams about females in sports (“Dream Crazier”) from Nike: https://news.nike.com/featured_video/dream-crazier
  7. Discuss the message of the ad. Should consumers view it negatively or positively?
  8. Why do these ads generate such passionate responses?

Source: Ad Week, Wall Street Journal, New York Times, other news sources

 

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