Tag Archives: competition

Why Buy Clothes? Rent Them Instead!

Do you have a tough time keeping up the latest fashions? Or, an even tougher time paying for the new designer clothes you covet? Despair no more. Instead of buying, try renting your clothes!

Renting clothes is a new way to spruce up wardrobes without breaking the bank. While there are a number of subscription-based services such as Rent the Runway, traditional retailers are also entering the new market, including options to rent clothes from Bloomingdales’, Banana Republic, Urban Outfitters, and more. Consumers are not limited to just renting clothing – some retailers rent shoes, jewelry, and handbags, too. And, lest you think this is just for women, a number of companies rent clothing and accessories to men as well.

The clothing rental industry, while still relatively new, is also quite large and still growing. According to research firm GlobalData, the clothing rental industry is roughly $1 billion today, and is projected to grow to $2.5 billion by 2023. Not too shabby (chic).

The sharing economy industry is still establishing itself for consumers who are not interested in owning, but still want access to new brands and services. After all, consumers already rent apartments, homes, cars, bikes, and furniture. Now we can add clothing to the list.

What will you wear?

Group Activities and Discussion Questions:

  1. Discuss the sharing economy. What is it; what drives it; what should we watch?
  2. Show a video overview of clothing rental: https://youtu.be/7OKLqBZoOYY

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Target Launches New Athleisure Clothing Line

It’s a new year and a new time to set some resolutions, right? Target thinks so and has come up with a set of resolutions about the joy of movement, being inclusive and accessible. These resolutions are a lead-in to a new Target brand of athleisure apparel.

Athleisure apparel sales in the U.S. have grown 140% in the last decade and is expected to reach $83 billion. Athleisure is a crowded market however, with loyal followers of brands such as Lululemon and Athleta. What will Target need to do to create value for customers of its new “All in Motion” line of active wear and sporting goods?

The company did extensive research for the new line. Target gathered data from more than 15,000 men, women, and kids, from all areas of the country, to gain insights into what customers want from their sporting apparel. The result is a new brand of sports apparel that was developed for the entire family, at all stages of fitness, and in diverse sizes.

All in Motion also uses sustainably-sourced materials, and includes features such as water-resistant, UPF50+ sun protection. Designs include secure zippered pockets, thumbholes in sleeves, and is a broad range of sizes. But the best part is that prices will be mostly under $40.

Ready to move?

Group Activities and Discussion Questions:

  1. Discuss the components of a situation analysis: company, general industry, trends, key competitors, technology, legal, etc.
  2. Review Target’s new line of athleisure clothing: https://www.target.com/b/all-in-motion/-/N-4apdi?lnk=Madeforeverymov
  3. Ask students what data they would need in order to make a marketing decision to start this product line.
  4. Divide students into teams. Have each team do secondary research to answer the questions such as industry overview, size, growth, competitors, social trends, new technologies, environmental impact, etc.
  5. Debrief the exercise by compiling information on the white board. Does this give a good picture of how Target arrived at its decision?

Source:  Ad Week; Minneapolis Star Tribune; other news sources

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Pricing in the Entertainment Streaming Industry

The entertainment streaming industry is on fire right now. Apple, Hulu, Netflix, Disney, HBO, and more brands are ramping up to fight it out for the monthly consumer subscription!

Here is how the current prices compare between services:

Service Monthly cost Shows
Netflix $12.99 Stranger Things
Hulu $11.99 (ad free), or

$5.99 (with ads)

Handmaid’s Tale
Amazon Prime Video $8.99 Marvelous Mrs. Maisel
Apple TV+ $4.99 The Morning Show
Disney+ $6.99 The Simpsons
HBO Max $14.99 Friends

 

Notice anything interesting in the prices? How each price ends? Which vendor is using penetration pricing? Or below-competition pricing? Name a price model and it’s probably on the list above. Blockbusters, as well as all-new created movies and shows are all offered from multiple services and it can be hard to determine which has which. The marketing focus should be on differentiation – the services are starting to sound alike, and be priced alike.

There has been a dramatic shift in recent years about how consumers get their information and entertainment, and how many more consumers use streaming services each year. The average consumer in 2019 has 2.6 stacked services. This is up from 1.6 stacked services in 2016, but far short of the projected 4.9 staked streaming services by 2023.

Think about it… how many services are currently in your household?

Group Activities and Discussion Questions:

  1. Poll students: How many subscription services does each household have today? Add them and average it for the class.
  2. Show a video about the topic: https://www.wsj.com/video/video-streaming-services-battle-for-subscribers/AED37E41-E1EC-447A-A47F-C55D1834B7E0.html
  3. Pricing is usually a complex topic. Discuss the six steps for pricing (determining objectives, estimating demand, determining cost/profit relationships, select price level, set list price, and make adjustments).
  4. Discuss the various pricing models in class: demand-oriented, cost-oriented, profit-oriented, and competition-oriented.
  5. For these streaming services, divide students into groups and have each group work on setting the price level.
  6. Assign each team a different model to use (demand-oriented, cost- oriented, profit-oriented, and competitor-oriented) and have the team explain how the model was used when setting their price.
  7. Compare the various pricing models and discuss advantages/disadvantages of each.

Source: FitzGerald, D., & Flint, J. (29 October 2019). AT&T lays out price, show line-up for HBO. Wall Street Journal; other news sources

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