Tag Archives: market strategy

Kellogg Buys RXBAR

Consumer taste trends are moving to healthy and natural foods.  Nutrition and energy bars are a still-growing industry segment that is particularly appealing to Millennials. Yet, many of the older, established CPG firms struggle to attract and retain sales from that market segment. What should a company do? While it can certainly develop new products, market adoption of the new products can take valuable time and development itself takes resources and money away from a company’s established products.

A fast way to enter a new market with a new product is through acquisition. Kellogg recently took just this approach and acquired the very trendy RXBAR nutrition bar brand for a cool $600 million. The four-year old company currently has built its sales up to about $120 million and has added a children’s bar line, also.

RXBAR is known for a “no B.S.” innovative spirit. The brand highlights its commitment to whole food, protein bars that contain simple ingredients. The bars are gluten-free, soy-free, and dairy-free, tapping into a growing food product segment. RXBAR has a distinctive package that clearly states ingredients on the front of each package. For example: “3 Egg Whites, 5 Almonds, 4 Cashews, 2 Dates, No B.S.”

Group Activities and Discussion Questions:

    1. Discuss the four primary marketing strategies: market penetration, market development, product development, and diversification.
    2. Show RXBAR Web site: https://www.rxbar.com/
    3. Video about the company story: https://youtu.be/aMFwfKThixA
    4. Which strategy did RXBAR use?
    5. Which strategy is Kellogg using?
    6. Divide students into teams. Have each team select one of the four different strategies and explain why that strategy could be used to market RXBAR.
    7. Have each team determine the marketing mix (4Ps) to support their strategy choice.
    8. Debrief the exercise.

Source: Buss, D. (2017, Oct. 9). Kellogg looks to “no B.S.” RXBAR for growth and inspiration. Brandchannel.com

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Register Robot System in Japan

Do you ever get tired of waiting in line to check out of a grocery store? In the future, the check-out process will be streamlined, using more robotic registers. Recently, Panasonic teamed with Lawson food stores in Japan for a trial run of its new robotic check-out system. The “Reji-Robo” robotic check-out uses RFID tags to scan the items in a shopper’s basket, and then even bags the groceries automatically. (RFID tags are thin, small electronics components that wirelessly communicate within a short distance.)

Panasonic’s robotic check-out is somewhat similar to Amazon Go’s concept store in Seattle. However, with Reji-Robo, customers get a sensor-equipped basket when they walk into the stores, then choose items and place them into the smart basket. In a step beyond Amazon Go, the Panasonic basket once placed in to the robotic check-out system, automatically computes the transaction, the bottom of the basket opens, and the items are automatically lowered into plastic bags for the shopper.

The RFID system also holds promise to speed up the supply chain, increase accuracy, improve productivity, and improve inventory control and tracking.

What’s in your basket?

Group Activities and Discussion Questions:

  1. Discuss some of the more frustrating and costly parts of retail and shopping.
  2. Show the Panasonic video: https://youtu.be/Hpp-3Ver7ig
  3. If students are not familiar with Amazon Go, view the video and concept at: https://www.amazon.com/b?node=16008589011#
  4. Discuss the four primary marketing strategies: market penetration, market development, product development, and diversification.
  5. Which strategy is Panasonic using for this product? Why?
  6. Divide students into teams. Have each team select one of the four different strategies and explain why that strategy could be used to market robotic check-out systems.

Source: Brandchannel.com

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Tide Pods Win Market Share

8Consumer-packaged-goods (CPG) is one of the toughest categories for marketers. It’s crowded with a many similar products, the products tend to be in the mature stage of the product life cycle, and companies spend tens of millions of dollars on marketing campaigns each year! This translates to the need to keep products innovative, fresh, valuable, and memorable. Or, as least as memorable as products such as shampoo, toothpaste, and detergent can be.

However, with the launch last year of Tide Pods, detergent has recently emerged as a very memorable product. In the first year of sales for Tide Pods, the product has reached roughly $500 million in revenue. This is quite a feat given that of the 1,500 new consumer-packaged-goods launched last year, only 21% reached first year sales of even $50 million.

Tide Pods did not have a smooth market entry; the product was launched six months later than scheduled and, because of supply shortages, did not have retail promotions. Even today, supply problems have caused the Pods to be excluded from coupon offers. Despite these problems, Pods have earned the lion’s share of the market. Why? One reason is that Pods provide consumers with a new value and offering a unit-dose product (this means consumers can’t put more detergent than is needed into the washer; over-dosing is a common way manufacturers increase sales). Pods also appeal to specific market segments such as urbanites, apartment dwellers, and college students.

Group Activities and Discussion Questions:

 

  1. First, discuss the four main market strategies: market penetration, market development, product development, and diversification. Which strategy did Tide Pods choose?
  2. View several of the Tide Pods commercials: http://youtu.be/GNz4A1rMTnA and http://youtu.be/W_3SMf2tyck
  3. Poll students: What laundry detergent do they use, and why?
  4. Next, discuss the product life cycle stages. Where are most CPG products? Where is detergent?
  5. How has Tide Pods changed its position in the PLC?
  6. Divide students into teams. Select a common CPG category (i.e., toothpaste, shampoo, soap).
  7. Have students select a market strategy to pursue (i.e., product development, etc.), then have them develop a marketing plan for that strategy.

 

Source:  Ad Age Daily, Brandchannel.com, other news sources

 

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