Tag Archives: market-product grid

Is Ironing Clothes Obsolete?

When was the last time you used an iron to de-wrinkle clothes? If you are like most consumers, it’s probably been quite a while. While most homes in the U.S. still have an iron, many have not been used for much besides just gathering dust in the laundry room. Why is this?

Well, today’s clothes are more likely to be no-iron clothing than past clothes that required ironing in order to eliminate wrinkles. And today, even when there are wrinkles, Millennials have new solutions – such as popping wrinkled clothes in the dryer for a few minute. Steamers are also popular, as is the dryer setting for removing wrinkles. Other options include dry-cleaning, spraying clothes with wrinkle-release liquids, plus wrinkles can even be considered fashionable for cotton and linen clothing. And finally, ironing is often seen as a ‘chore’ to be avoided at all costs.

All these factors have resulted in sales of irons declining 7% from levels in 2016. In the same time period however, steamer sales have increased 19% as the steamers have gotten smaller and added new functions. Iron makers are moving into manufacturing portable garment steamers, and the spray starch industry is also reinventing its products and marketing.

Are irons a tool of the past?

Group Activities and Discussion Questions:

  1. Poll students: What household products did their grandparents and parents use, but students do not use?
  2. Ask students when they last ironed clothes? When? Why? Other options?
  3. Discuss the different stages in the product life cycle. What are the marketing objectives in each stage? In what stage are clothes irons?
  4. Divide students into teams. Have each team draw a product life cycle and place various household products and services into each stage.
  5. Show Web sites for companies that make irons:

Reliable: https://reliablecorporation.com/

Rowenta: https://www.rowentausa.com/

  1. Divide students into teams: Have teams brainstorm how to reposition or revise irons so that it can be repositioned into an earlier stage of the life cycle.

Source: Konclus, J. (14 May 2019). No, millennials didn’t ‘kill’ ironing. Washington Post.

 

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Economics of Airline Class Seating

Plane fares are frustrating. From the time someone searches for a flight in the morning, until they book it later in the week (or day), the price changes. And don’t even get started about how little leg-room and seat space there is in the economy class section! But then again, the economy class is not how airlines make money. How does an airline make money on fares?

First class and premium cabin seats!

Here is an example of a flight’s pricing: British Airways 777, round-trip, non-stop between London and Wash. D.C.

  • 224 seats total
  • 122 economy seats @ $876/seat = $106,872
  • 40 premium economy seats @ $2,633/seat = $105,320
  • 48 business class seats @ $6,723/seat = $322,704
  • 14 first class seats @ $8,715/seat = $122,010

The front sections of the plane account for 45% of the seats, but generate 84% of the revenue! While this model does not always hold true, in general airlines get 66% of revenue from the premium, business, and first-class seats.

In essence, airlines are able to sell the same service (transportation) to different people, at vastly different prices (enhanced amenities and the onboard experience). Airlines realized that passengers could be segmented into two categories: tourists, and business people.

What else will future air travel hold?

Group Activities and Discussion Questions:

  1. 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).
  2. Discuss the various pricing models in class: demand-oriented, cost-oriented, profit-oriented, and competition-oriented.
  1. Show this video that explains the basic economics of airfare:
  2. https://youtu.be/BzB5xtGGsTc
  3. Draw the price structure on the board.
  4. Divide students into teams. Have each team work on a possible re-design of planes to address more market segments.

Source: Wendover Productions, YouTube

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Sharing Happy Hour with Pets

Americans increasingly treat pets as more than just an animal or belonging – we treat our pets as important members of the family. Pet owners now look for healthier choices and lifestyles for pet care, fundamentally shifting consumer behavior and spending. The pet care industry represents more than $20 billion in the U.S., and, according to Nielsen Research, 95% of pet owners consider their pets to be part of the family. This attitude carries over into shopping for food, treats, toys, and specialty items.

Therefore, it was just a matter of time for companies to develop new product so that humans could share celebrations and happy hour beverages with their pets. The newest category of product is faux wines for cats (and dogs, too)! With clever names and packaging, the category is expanding. People can buy their kitties bottles of “Catbernet,” “Pinot Meow,” and “Meowgarita” from Denver-based Apollo Peak. Or, buy “Dog Perignon” and “Dogtini” from Pet Winery in Fort Myers, Fla.

Of course, since alcohol can harm animals, these wines are actually alcohol-free. Using organic ingredients and catnip, the beverages are aimed at people who want to enjoy celebrations with their pets. But, as most cat owners know, cats can be quite finicky. In taste tests, some cats loved the products, while other cats simply showed their disdain.

Happy hour, meow?

Group Activities and Discussion Questions:

  1. Poll students: How many have pets? How much do they spend on their pets?
  2. Show the Web site for Apollo Peak: http://www.apollopeak.com/
  3. Also show Pet Winery: https://www.petwinery.com/
  4. Videos can be viewed at:

https://youtu.be/g1b4V_DJ-oo

  1. The Chew: https://youtu.be/4DiO8MZTmnU
  2. Divide students into teams.
  3. Using a market-product grid, have students develop target markets for pet owners. Then, put categories of products across the top (Ex: food, toys, treats, wine…)
  4. Which target markets represent the best opportunity for pet wines?
  5. How should the products be marketed?

Source:  New York Times, Nielsen Research

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