Tag Archives: competition

by | Monday, November 14, 2022 · 8:36 am

More Electric Vehicles Make it to Market

There is no doubt that electric vehicles (EV) are seeing an increase in inventory and sales. Globally, electric vehicle sales doubled in 2021 and sales are still strong in 2022. In the second quarter of 2022, EV sales were 5.6% of the total auto market, up 2.7% from the same time a year ago. Consumers are embracing the EV market for its clean energy and solid performing vehicles.

Pricing remains a sticking point with consumers though as many EVs are priced in the range of $50,000 – $100,000 and up. Sure, consumers want to help the environment, but they also face a very real limitation on spending for EVs.

To help position it as a more general option, General Motors plans to release an EV Chevy Equinox in fall 2023 at the lower price point of $30,000. Today, there are few models of any type of EV below $35,000. Complicating the pricing, the costs of battery materials (such as lithium and nickel) have risen significantly. On average, U.S. buyers paid $66,000 for an EV, an increase of 28% from a year ago according to J.D. Power research.

The Inflation Reduction Act is one option to help consumers lower the costs. It offers up to $7,500 in federal EV tax credits, but only for models that meet certain domestic-production requirements. While both new and used cars qualify, there are other restrictions that can limit how much tax credit a consumer receives including income limits and vehicle list prices.

Are you ready to make the leap to an EV vehicle?

Group Activities and Discussion Questions:

  1. Poll students: What is their perception of pricing for EVs in today’s market?
  2. Have students research prices for EV automobiles and SUVs. Build a spreadsheet with information about select vehicles such as Volkswagen, Tesla, Kia, and Toyota.
  3. Have students research the Inflation Reduction Act for federal EV tax credits. What are the caveats?
  4. Show video from WSJ about the EV discounts: https://www.wsj.com/video/series/george-downs/the-climate-bill-unlocks-new-ev-discounts-but-not-everyones-a-winner/26F2FC57-3150-4311-AE3E-705E554AB4D6
  5. Another classroom discussion can focus on how the Inflation Reduction Act fits into an environmental scan for the EV market.

Sources:  Colias, M. (8 September 2022). GM courts mainstream buyers with $30,000 electric Chevy Equinox. Wall Street Journal.; Forbes growth sector: Electric vehicle sales and the new electric economy have arrived (24 September 2022). Forbes.

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by | Saturday, October 29, 2022 · 9:02 am

Grape-Nuts Cereal Stands the Test of Time

This article is a bit of a reversal – instead of writing about cutting-edge technology products, or autonomous cars, or drones, or another exciting technology, we’re writing about what may be one of the oldest products still on the market. Any guesses?

It’s Grape-Nuts cereal. At 125-years on grocery shelves, Grape-Nuts is one of the oldest ready-to-eat cereals. The other two cereals that are still being sold today after their introduction to the marketplace in the 19th century are Shredded Wheat and Corn Flakes.

And, even at its advanced age, Grape-Nuts is still the same product that it was 125-years ago (although manufacturing has been modernized). And to be clear, the cereal has never contained either grapes or nuts. The name was derived from the manufacturing process that resulted in a ‘grape sugar with a nutty texture’.

Why has the product endured over all these years? Perhaps because it is a healthy food that still has a low-sugar nature-based appeal for consumers. It didn’t depend on trends, color, and lots of sugar.

During the pandemic, Grape-Nuts had production issues resulting in low inventory. The core audience asked “where’s my Grape-Nuts?” and that led to social media and a new, younger group of consumers gaining interest in the brands.

What foods will future generations still be eating?

Group Activities and Discussion Questions:

  1. View Grape-Nuts website: https://www.grapenuts.com/
  2. Show a commercial from the 1970s: featuring naturalist Euell Gibbons: https://youtu.be/QffEYYotXIk
  3. Discuss the stages in the product life cycle.
  4. What are the marketing objectives in each stage?
  5. Divide students into teams. Have each team draw a product life cycle and place different cereals and other foods into the PLC.
  6. Why has Grape-Nuts sustained over the decades?
  7. What are the lessons that other discontinued cereals could learn from Grape-Nuts?
  8. Next, have students brainstorm on how to reposition or revise products/services to that they can move into an earlier stage of the life cycle.

Sources:  Johnson, B. (13 August 2022). Grape-Nuts: It is your grandma’s cereal. Minneapolis Star Tribune.

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by | Wednesday, August 3, 2022 · 11:27 am

Kellogg Splits into Three Companies

Organizations never sit still for very long. Before you know it, there is a new product/service rival, or new company, or change in supply chain, or change in consumer demands. Since we know change is inevitable, the challenge for marketers is to be aware of the environment and know where their company is strong and weak. Where are the opportunities? What are the threats? What companies want to take their market share?

Often these environmental changes, combined with revised corporate strategies, cause an old, established company to split into separate entities in order to better serve the market and shareholders. For example, last year, Johnson & Johnson announced it will break into two companies serving (1) consumer health products and (2) pharmaceuticals. General Electric will split into three companies to serve (1) healthcare, (2) power, and (3) aviation. 

The most recent example of a large conglomerate breaking into separate companies is Kellogg. Kellogg is the latest large company to announce it is splitting businesses into separate entities. The North America cereal business will be around $2.4 billion in sales; the plant-based foods business at $340 million in sales; the global snacks business is the largest at $11.4 billion (and was 80% of Kellogg’s sales last year).

Each of these businesses faces different environmental factors, and of course markets its products to different segments. In this case, cereal is stable, plant-based is growing but with increasing competition, leaving snacks as a large and growing segment.

Breaking Kellogg into independent companies will help it focus on distinct strategic priorities and opportunities in each of the three markets. Snacking is a higher-growth market than is cereal. Plant-based foods are growing overall, but need attention. And all three companies face increasing competition not only from established companies such as General Mills and Mondelez, but also new companies building more plant-based and natural food products.

What would you do?

Group Activities and Discussion Questions:

  1. Show WSJ video on why companies split up: https://www.wsj.com/video/series/news-explainers/why-conglomerates-split-up/F7EF3E9D-2D5D-4732-AA79-F41889C7D039
  2. Discuss when breaking up a conglomerate makes good business sense.
  3. Review Kellogg’s products and overall company: https://www.kelloggs.com/en_US/home.html
  4. Show the company announcement of the split: https://investor.kelloggs.com/news-and-events/press-releases/news-details/2022/KELLOGG-COMPANY-ANNOUNCES-SEPARATION-OF-TWO-BUSINESSES-AS-BOLD-NEXT-STEPS-IN-PORTFOLIO-TRANSFORMATION/default.aspx
  5. Discuss the components of a situation analysis: company, general industry, trends, key competitors, technology, legal, etc.
  6. Ask students what data they would want in order to make a marketing decision for dividing Kellogg into separate companies.
  7. Divide students into teams. Have each team use laptops to do general research to answer the questions above. (ex: overview of industry, size, growth, new technologies, environmental impact, etc.)
  8. Debrief the exercise by compiling information on the white board. Does this give a good picture of the situation faced by Kellogg?

Sources:  Gasparro, A. (21 June 2022). Kellogg splitting into three companies as it shifts focus to global snacks. Wall Street Journal.  

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