Tag Archives: manufacturing

Tesla Shifts Retail Strategy, Then Shifts Again

Tesla, Tesla, Tesla… It’s so much fun to track this company. Not only are the products innovative and exciting to follow, it is also a marketing case study in nearly constant motion.

Case in point: At the end of February the company announced it would be closing its retail stores in order to cut costs and lower the pricing of the Model 3 to make it more affordable (at a starting price of $35,000). Tesla believes that car buyers will increasingly rely on on-line ordering instead of physical stores. Tesla stated that in North America, a customer can buy a Tesla on their phone in approximately a minute. Which begs the question, just because customers can do this, will they do it?

However, two weeks later, Tesla reversed its strategy and stated it would instead keep most of its 378 retail stores and would instead raise prices of cars by 3%, excluding the Model 3 cars. Tesla hoped to cut costs by closing stores, but landlords, customers, car dealers, and lawmakers protested the closings. The stores will still function as a showroom and location for test-drives, but sales will still be done online.

Where do you want to stop for your next car?

Group Activities and Discussion Questions:

  1. Discuss the distribution model used by Tesla and compare it to the distribution model used by other automotive manufacturers.
  2. Here is an interesting video on why Tesla cars cost so much: https://www.wsj.com/video/the-secret-to-why-a-tesla-costs-so-much-hint-batteries/65F3A21D-0837-4DA6-B739-612124815603.html (Hint – it’s the batteries.)
  3. Poll students: How many would buy a car online instead of at a dealer/store?
  4. What are advantages and disadvantages of buying cars online only?
  5. Why has Tesla disrupted the traditional automotive sales model?
  6. Will other automotive companies follow the Tesla model?

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

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“Bear Resistant.” A Label that is Rigorously Tested.

Truth in advertising is important. Consumers today have a built-in detection system to weed out unrealistic and over-hyped claims that aren’t true. If a product makes a promise, then it should live up to it. We question claims such as organic, natural and others. These labels and promises are important, especially when it comes to the backcountry and using gear labeled ‘bear resistant.’ A broken promise for ‘bear resistant’ products means that both bears and people are in danger! (A saying in the mountains is that “a fed beer is a dead bear” – meaning that bears habituated to human foods are in danger from the humans.)

How does a product earn a ‘bear resistant’ badge? It’s simple. The bears are the actual product testers. Yes, 600-pound, hungry grizzle bears are the product testers at non-profit organization The Grizzle and Wolf Discovery Center in West Yellowstone, Montana. In order to keep bears and people safe, containers are put through rigorous testing by bears at the rescue center.

Picture it: Seven grizzles. Smart, large, and the ultimate sniff machines. Products are baited with the bears’ favorite foods. Coolers are padlocked (bears can open handles and latches), then placed in the bears’ enclosure. Bears go at it in their habitats, trying to break in and gain a food reward!

Once the bears start their “testing” process, the timer counts an hour to see if the bears can get into the coolers. Biting, smashing, bouncing, basically anything goes by these diligent product testers. If it passes – it gets certified as “bear resistant.” And if the bear gets in, then manufacturers review the video footage to see how the product fares with the grizzles. Some of the products that earned bear resistant badges are Bare Boxer, Bear Keg, Wise Backpack, Big Daddy, and more food canisters.

This has to be the ultimate in product testing.

Group Activities and Discussion Questions:

  1. Put students into groups. Have each group come up with common product labels and claims (e.g., organic, all natural, etc.). What is their opinion about how the claims are verified?
  2. Show the bear testing video: https://player.vimeo.com/video/296016960
  3. View the Web site for product testing: https://www.grizzlydiscoveryctr.org/research/product-testing/
  4. List of bear resistant products: http://igbconline.org/wp-content/uploads/2018/10/181026_Certified_Products_List.pdf
  5. Have students develop positioning maps for outdoor products.
  6. How should the certification be used in marketing the products?

Source: Housman, J. (20 November 2018). This is how bears decide if gear deserves the ‘bear resistant’ tag. Adventure Journal; Outside magazine.

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Baby Food Innovation

“Baby food.” Even the phrase itself brings to mind mushy, tasteless, pureed, prepared food. While that may have been true of the old-fashioned prepared baby foods, it certainly doesn’t apply to today’s offerings of fresh, organic, foods for babies. Today, new parents are turning to delivery-based meal services to help them save time on meal preparation, but still provide healthy, nutritious, and delicious foods for their families.

Meal preparation is a topic for all stages of family life. According to Pew Research, both parents work in nearly two-thirds of all U.S. households. And, with so much time spent at work, time in the kitchen is at a premium. This has given rise to a number of meal delivery services such as Home Chef, Blue Apron, Plated, and more. But all of these are focused on adults. What about meals for the babies? Meals for babies present a somewhat unique problem– babies can eat only a small amount at a time, meaning that the potential waste of food is quite high.

A number of start-up companies have entered the baby food arena. These companies offer a variety of prepared products including flash-frozen food pouches which contain portioned, chopped, ingredients to meet a baby’s nutritional needs. Other companies deliver cold-pressed fruit and vegetable food pouches in temperature-controlled packaging. And yet another provides tubs of cold-pressed baby purees, including a spoon and packaged in a reseal-able container.

Food matters.

Group Activities and Discussion Questions:

  1. Discuss the use prepared, delivered meals. Have students had an experience with these?
  2. Review key aspects of developing a product positioning map, including determining the axis labels for positioning.
  3. Divide students into teams and have each team review a baby food product company with respect to product, price, place, and promotion.
  4. Examples include:
    1. Raised Real: https://www.raisedreal.com/
    2. Once Upon a Farm: https://onceuponafarmorganics.com/
    3. Little Spoon: https://www.littlespoon.com/
    4. Gerber: https://www.gerber.com/products/baby-food
  5. Have each team develop a positioning map.
  6. Have each team draw their map on the board.
  7. Debrief exercise.

Source:  Painter, K. (29 September, 2018). When the jar isn’t enough: Baby food innovators are on a roll these days. Minneapolis Star Tribune.

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