Tag Archives: distribution

Amazon Buys Whole Foods’ Grocery Stores

By now you have likely heard about Amazon’s planned acquisition of Whole Foods for $13.4 billion. The combined companies will span the breadth of online shopping, and add 460 physical outposts in hundreds of communities across the United States.

The grocery business today accounts for approximately $800 billion in annual spending in the U.S. Yet, in its current form, Amazon has not been able to make a major inroad to selling groceries online. The Whole Foods purchase would give Amazon direct access to consumers, and their information, as they shop in stores for their foods. On average, groceries are purchased five times per month.

It seems somewhat incongruent that a 23-year old company funded on shopping over the Internet is now investing heavily in brick-and-mortar stores. Yet, Amazon has been opening some stores in select locations – bookstores and food-to-go. The combined companies would become the fifth largest grocery retailer, but only account for 3.5% of grocery spending in the U.S.

Where – and how – will you shop for groceries?

Group Activities and Discussion Questions:

  1. Discuss with class: Why did Amazon purchase Whole Foods?
  2. Which retailer(s) will be most pressed by this acquisition? Why?
  3. Discuss how grocery retailers will compete with the combined Amazon/Whole Foods.
  4. Is the Whole Foods acquisition a good move by Amazon?
  5. Discuss the four primary marketing strategies: market penetration, market development, product development, and diversification.
  6. Which strategy is Amazon using by purchasing Whole Foods? Why?

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

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Wienermobiles Drive Across America!

Have you ever seen the Wienermobile in person? It’s like seeing a famous celebrity – everyone stops and looks, takes a selfie, and smiles at the giant hot dog mobile. It’s a great rolling billboard that gets attention and promotes products.

The Wienermobile first began 80 years ago during the Depression as a way to promote product and make people smile. It’s gone through a number of style changes, but continues today with six vehicles and 12 official “Hotdoggers” who drive it and pass out dogs and smiles around the country. (More than 1,000 people applied last year for the 12 Hotdogger spots!)

This summer, the Wienermobiles are touring the country to spread the word about the reformulated hot dogs, now without any added nitrates, nitrites, artificial preservatives, or by-products. In addition to updating the products, Oscar Mayer is also using social media to engage consumers and help determine locations for the tour. Already visited was Whittier, Alaska, population 220, accessible via a 2.5 mile tunnel and icy roads

No word on the miles per gallon though (or does it run on mustard?).

Group Activities and Discussion Questions:

  1. Discuss the stages in the product life cycle. What are the marketing objectives in each stage?
  2. Divide students into teams. Have each team draw a product life cycle and place various products and services into each stage.
  3. Discuss hot dogs and where they are in the product life cycle.
  4. Show the Wienermobile Web site: http://www.oscarmayer.com/wienermobile
  5. Show a video of the Wienermobile in Alaska: https://youtu.be/3e_1Z_oxt5g
  6. Now, have students brainstorm on how to reposition or revise products/services to that they can move into an earlier stage of the life cycle.

Source:  Advertising Age

 

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The Changing Face of Selling Furniture

Consumers are used to buying small items such as books, music, and household goods online thanks to Amazon and other ecommerce retailers. But what about shopping for larger and more expensive items such as furniture? Is there a market for online sales of furniture?

It turns out that the answer to that question is “yes.” Wayfair, Inc., a Boston-based retailer has no physical stores with very minimal inventory, but it has grown to be the largest online-only retailer in the United States with revenue more than $2.25 billion! The company advertises itself as selling “a zillion things home” and carries more than seven million products, from rugs to sofas. Utilizing a supply network of more than 7,000 different furnishings suppliers, the company ships large bulky items direct from suppliers to the consumers.

While it might initially seem that consumers would not be interested in buying furniture online, Wayfair uses a unique combination of Web site along with television shows to showcase its products and designs. The show “The Way Home” sponsored by Wayfair airs on Lifetime TV on Saturdays. Different episodes focus on design challenges including the latest trends, utilizing small spaces, and decorating on a budget.

Go ahead, see how to make over your least-favorite room on a budget!

Group Activities and Discussion Questions:

  1. While the buying process may vary slightly for different products and target markets, the basic 5-step process remains the same: problem recognition, information search, evaluation of alternatives, purchase decision, and post-purchase behavior.
  2. For furniture buying, have students work on the actions taken in each of the five steps.
  3. Next, show Wayfair’s Web site: https://www.wayfair.com/
  4. Show Wayfair’s TV show: https://www.wayfair.com/thewayhome/?&episode=10&clip=1
  5. How is the company using integrated marketing communications?
  6. For furniture, who is the target market?
  7. Divide students into teams and have each team develop a profile of a target market for Wayfair. Include demographics, psychographics, behaviors, values, attitudes, etc.

Source:  Wall Street Journal   

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