Category Archives: Classroom Activities

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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Stressed? Try Legos!

Feeling stressed? Kids and adults need to be able to relax and play. One toy company ready to accommodate adults is a long-time favorite around the globe – Lego!

Lest we think that Legos are only for young kids, the company has set its sights on the adult market, promoting the colorful blocks as a way to escape stress and achieve a level of calm. Lego has new, more complicated and expensive kits that are targeted at Gen X members. New kits include the Central Perk café from “Friends,” a vintage Batmobile, Star Wars Millennium Falcon, Harry Potter Hogwarts Castle and many more. Lego has also revised instruction manuals to make kits foolproof and introduced new models that have soothing movements.

Adult Lego fans also have their own Facebook and Reddit groups, along with the acronym AFOLS (adult fans of Legos). Plus, in a master stroke of branding, Legos now has a prime-time TV show featuring teams competing to build Lego masterpieces. There are even books that focus on the joy of playing with Legos.

Ready to relax?

Group Activities and Discussion Questions:

  1. Review Lego. Company Web site: https://www.lego.com/en-us
  2. Search the site for adult Lego sets, prices are $100+: https://www.lego.com/en-us/categories/price-over-100-dollars
  3. View Lego Masters TV show: https://www.fox.com/lego-masters/
  4. Discuss the components of a situation analysis: company, general industry, trends, key competitors, technology, legal, etc.
  5. Ask students what data they would want in order to make a marketing decision for Lego products.
  6. Divide students into teams. Have each team do general research to answer the questions above. (Ex: overview of industry, size, growth, new technologies, environmental impact, etc.)
  7. Debrief the exercise by compiling information. Does this give a good picture of the situation faced by Lego?

Source: Washington Post; other news sources

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