Tag Archives: Marketing strategy

Mayo + Ketchup = Mayochup!

Who likes mayonnaise? Who likes ketchup? Who combines the two? If you are like millions of other consumers in the U.S., then you like combining the two products into a single sauce. And, now, Heinz wants to bring the combined taste to you in one convenient bottle!

Yes, a new condiment that combines the two sauces is being developed for the U.S. market. Heinz recently taunted consumers, asking people to vote using Twitter if they want to see a new product – ‘mayochup’ – in grocery stores. Millions of people voted yes for the mash-up, and Heinz has said it will produce a new sauce.

There is a controversy about mayochup though. Claims that Heinz has invented a new condiment has been disputed. Other countries have long used the combined condiment in their cultures and foods. A combination of mayo-ketchup is popular across Latin America and in the Caribbean. However, there is no similar product available in the wider U.S. market. (A close cousin might be Fry Sauce, very popular in parts of the U.S. and around the world, where it is considered a staple condiment on the table.)

If you don’t like the mayochup name, Heinz is taking suggestions for alternative names. Maybe ‘ketchannaise’ will catch on instead!

Group Activities and Discussion Questions:

  1. Discuss the four primary marketing strategies: market penetration, market development, product development, and diversification.
  2. Show information about mayochup:
    1. Twitter: https://twitter.com/HeinzKetchup_US/status/984133260216332302
    2. Mayochup news video: https://youtu.be/C-ZYv-TDh3Y
  3. Which strategy is Heinz using for this product? Why?
  4. Divide students into teams. Have each team select one of the four different strategies and explain why that strategy could be used to market mayochup.
  5. Have each team determine the marketing mix (4Ps) to support their strategy choice.
  6. Debrief the exercise.

Source: Schmidt, S. (13 April, 2018). Heinz promotes its new ‘mayochup’ and sparks an international controversy. Washington Post.

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Brand Extension – PetComfort

 

Brand and product line extensions can be tricky things to successfully pull off. If the extension is too far out of the organization’s capabilities, or if the extension brings the organization into contact with a new target market, then the extension might be too costly or risky. However, when the extension helps expand the offerings and meet needs of the current market, it can be a beautiful thing.

WeatherTech is a company well-known for its American-made floor mats and trunk liners. It has gained greater market awareness through advertising in the Super Bowl for each of the last five years. However, WeatherTech recently announced an interesting brand and product line extension that takes it into a new market – pet care. The new brand is called PetComfort and is a line of pet food bowls and mats that are made to human-safety standards.

The PetComfort products are ergonomically designed stainless steel bowls on an elevated state with integrated floor mat. Materials are NSF-certified safe for humans and uses anti-microbial and anti-fungal additives and resins that are meet FDA requirements. The products come in different sizes and colors and range in price from $89.95 – $149.95.

Does this new product line fit into the WeatherTech brand?

Group Activities and Discussion Questions:

  1. Discuss product and brand extensions. What makes for successful extensions? Unsuccessful extensions?
  2. Show WeatherTech Web site: http://www.weathertech.com/

Show PetComfort Web site: https://www.petcomfort.com/

  1. Which marketing strategy is WeatherTech using for PetComfort? (Ex: market penetration, product development, market development, or diversification)
  2. Divide students into teams. Have teams develop a target market profile for WeatherTech products and PetComfort products.
  3. What are the similarities? Differences?

Source:  Buss, D. (27, Feb., 2018). For Pet’s Sake. Brandchannel.com

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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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