Tag Archives: consumer behavior

by | Tuesday, April 30, 2024 · 7:50 am

Let’s NOT Lose a Finger at Work Today

I don’t know what you think, but I think having all my fingers is important, and worth paying for when buying power tools. The question is how much more to pay though?

If we consider possible compensation from insurers for fingers, it ranges upwards of $15,000 depending on injury and occupation. But maybe you’re a very careful woodworker and don’t think this can happen to you. It might be wise to look at the numbers: Table saws account for about 30,000 injuries per year, and of those, amputations happen nearly 4,300 times. Whoa. That’s a lot to consider.

Now, what if there was a saw that prevented the blade from cutting fingers and hands? Well, that would be great, but there is only one company that sells such a saw – SawStop.

SawStop products use a blade that carries a small electrical signal, which when skin connects with the blade, activates the safety system. An aluminum brake springs into the blade path, which in turn stops the blade and motor instantly. In less than 5 milliseconds, the blade drops beneath the table and removes all contact risk for woodworkers. No fingers lost.

SawStop holds more than 100 patents related to its safety mechanism and its laws cost more than competing models. It is the only company that has the technology, and SawStop has not agreed to license the technology. However, the Consumer Products Safety Commission is now considering a mandate that all saws be equipped with the stop mechanism.

On average, SawStop table saws cost several hundred to $1,000 more than conventional table saws. It seems few consumers are willing to pay the premium as less than two percent of the 675,000 table saws in the U.S. are from SawStop.

What would you pay for safety?

Group Activities and Discussion Questions:

  1. Poll students: How much would they pay for a saw that would not cut them accidently?
  2. Show SawStop website: https://www.sawstop.com/
  3. YouTube channel: https://www.youtube.com/@sawstop
  4. Pricing is 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).
  5. Discuss the various pricing models in class: demand-oriented, cost-oriented, profit-oriented, and competition-oriented.
  6. For SawStop, divide students into groups and have each group work on the six steps.
  7. When setting the price level, assign each team a different model to use (demand-oriented, cost- oriented, etc.).
  8. Debrief the exercise. Compare the various pricing models and discuss advantages/disadvantages of each.

Source: Blatt, B. (30 March 2024). How much would you pay to make sure you never sawed off a finger? New York Times.

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by | Saturday, April 20, 2024 · 9:41 am

Tide Evolves into New Tile Form

Laundry is big business. How big? Roughly $9.3 billion worth of big annually! Market researcher Circana estimates that of that amount, 70% is spent on liquid detergent, 24% on packets and tablets (e.g. Tide Pods), and powder detergent is only 6%.  Tide Pods were launched in 2012 and quickly reached $500 million in sales within its first year.

That’s a big shift in how consumers select detergents to do their laundry. And Tide (owned by Proctor & Gamble) is introducing yet another form of detergent – dry detergent sheets for your laundry – with hopes to repeat its success with Tide Pods.

Why the new form? The dry laundry sheets appeal to consumers who want to eliminate both plastics and waters that adversely impact our environment. The new technology also eliminates the need for heavy plastic bottles and thereby reduces shipping weight and cost for online purchasers. P&G isn’t the first to use this dry sheet format, but it is the largest laundry detergent brand and hopes to convince consumers to change the way they wash clothes.

What are they? The dry sheets are roughly the size of your palm and are composed of six layers of fibers that dissolve in cold water, reducing energy bills for washing. A package of 44-tiles will retail for $19.94, the same price as a 45-pod container of Tide Power Pods + Ultra Oxi.

Unlike the colorful Tide Pods, which presented problems with children mistaking the pods for candy as well as criticism of water pollution, the dry sheets will be colorless, a form preferred by consumers in the testing phase.

What’s your preferred laundry detergent?

Group Activities and Discussion Questions:

  1. Show website: https://tide.com/en-us/our-commitment/tide-evo
  2. Discuss the importance of clearly defining a target market.
  3. Divide students into teams. For Tide evo, what is the target market? Include demographics, psychographics, behaviors, values, attitudes, etc.
  4. Based on the target market profile, what makes this product unique for these customers?
  5. Discuss newness from the consumers’ perceptive. Is this product an example of continuous innovation, dynamically continuous innovation, or discontinuous innovation? Why?
  6. How does this product fit into P&G product line?
  7. Who is the main competitor to Tide evo?

Source: Khan, N. (3 March 2024). P&G launches Tile Tiles in bid to change how laundry is done. Wall Street Journal; Weiss, G. (8 March 2024). Forget Pods. Tide wants to make fabric ‘tiles’ the future of laundry. Business Insider.

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by | Tuesday, April 9, 2024 · 7:19 am

Are Negative Ads a Positive Thing?

While advertisements comparing products are not unusual in the marketplace, seldom are these ads really negative about a competing product or service. By negative, we mean boldly stating information about a competitor’s weaknesses to make sure consumers think of it as inferior.

(However, political ads tend to be very negative. In this case, the campaigns from Candidate A are promoting the mistakes that Candidate B has made so that voters are aware of the weakness and will choose Candidate A.)

While most students will not know about much about the “Cola Wars” of the 1980s between Coca-Cola and Pepsi, those two companies went head-to-head to portray the other brand as tasteless. (Remember the “Pepsi Challenge”?) However, the focus on product deficiencies eventually led to lower consumer confidence in both brands.

McDonald’s took on Starbucks with a billboard campaign about pricing. In other words, why spend $4 on a coffee when McDonald’s sells coffee at a much lower price. And Mac took direct aim at PC inefficiencies with its “Get a Mac” campaign.

Another approach is the use of negative information in Public Service Announcements (PSA). For example, a PSA might show the very negative after effects of a drunk driving accident. It’s a warning though, not an ad designed to gain sales.

In general, highlighting a competitor’s weakness leads consumers to examine the similarities between products, negatively impacting the entire product category. After all, if Company A attacks Company B, then Company B will likely retaliate and attack Company A. And round it goes… Both companies lose.

What is your opinion?

Group Activities and Discussion Questions:

  1. Discuss the various approaches to advertising, including competitive advertising.
  2. When is competitive advertising good to do? When should it not be done?
  3. Divide students into teams. Have each team find examples of negative, competitive advertising (but not in politics).
  4. Show Pepsi Challenge ad: https://youtu.be/eiO_JES4yBY?si=cr0csSsSZJUBwsI2
  5. Show “Get a Mac” Mac vs. PC ads: https://youtu.be/0eEG5LVXdKo?si=Fzzd_tYsdMnZC3um
  6. Discuss with students why a negative ad approach was used.
  7. In teams, have students develop a negative ad comparing two alternatives.
  8. What are the risks? Rewards?
  9. Have each team discuss their negative ad to debrief the exercise.

Source: Bostanci, G. & Yildirim, P. (25 January 2024). Does negative advertising pay off for consumer brands? Wall Street Journal; Murray, S. (6 February 2024). Are attack ads effective? Knowledge at Wharton.

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