Tag Archives: Marketing strategy

Datsun and Internet Explorer Bite the Dust

As we’ve written in previous articles, no product lives forever. There are always new innovations, trends, social forces, competition, and technologies that push products forward. Ultimately, every product eventually reaches its final stage in the Product Life Cycle (PLC) – decline/harvest – when the product is put to sleep and resources are reallocated to up-and-coming new products.

Two more products joined the eliminated list: Microsoft Internet Explorer and Datsun cars.

Datsun helped Japanese car manufacturers break into the American and European market after World War II. In its heyday, 20 million Datsun cars were sold in 190 countries across the world. The Datsun name was phased out in the 1980s, only to be revived 30 years later as “an important part of Nissan’s DNA.” However, Datsun eventually reversed the decision, making Nissan the primary company brand for the auto maker.

Joining Datsun on the gone-but-not-forgotten product list is Internet Explorer – the Web browser that many say really started the popularity of the Internet. First launched in 1995, IE was the dominant browser for many years, reaching 90% of users in early 2000s. But competition from Google Chrome, Apple’s Safari, and Mozilla’s Firefox finally proved to be too much. All is not lost however; in its place will be Microsoft Edge browser.

Farewell to our old favorite brands.

Welcome to the newcomers!

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 PLC and place various products and services into each stage?
  3. How are cars moved through the PLC?
  4. How does technology move through the PLC? What are the adoption cycles?
  5. Show video of Internet Explorer death: https://youtu.be/wZoZV6GjzPA
  6. We’ve seen other products revived after being declared “dead.” What would it take to revive these two brands?

Sources:  Jacobsen, R. (15 June 2022). Internet Explorer has retired. Associated Press.; Nissan signals end of road for Datsun cars. (25 April 2022). BBC News.; other news sources.

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Game Companies are a Hot Acquisition Target

Are you ready for the metaverse? It might not be quite a reality yet, but it has certainly caught the attention of technology companies that are positioning themselves for growth in the industry. While the metaverse might be difficult to define, there is no doubt that technology companies view video games as an important strategy for growth and customer acquisition for the metaverse.

So far this year three companies have been on a buying binge:

  • Microsoft will pay $69 billion for Activision Blizzard.
  • Sony will buy Bungie for $3.6 billion.
  • Take Two Interactive is paying $11 billion for Zynga.

Whew – that’s a lot of activity and investment at more than $84 billion!

Activision makes some of the most popular game titles such as Candy Crush and Call of Duty. However, Activision has been accused by employees of discrimination and sexual harassment, making the purchase by Microsoft rife with potential employee issues.

Microsoft was also the previous owner of Bungie, buying the company in 2000 for $20 million for the top multiplayer shooter games – Destiny and Halo. In 2007, Bungie split from Microsoft and became a privately-held company. Bungie’s most popular game currently is Destiny 2 (which is available on multiple platforms including Xbox and Playstation.

All of these acquisitions are predicated on the assumption that people will be spending more time in the digital metaverse, including augmented and virtual reality.

We have already seen an increase in gaming during the pandemic as people look for new entertainment options. According to MarketWatch, video games are a bigger industry than movies and sports combined. According to IDC Group, global video game revenue was roughly $180 billion in 2020, with mobile platforms showing the most growth.

What will you do in the metaverse?

Group Activities and Discussion Questions:

  1. Discuss the four primary marketing strategies: market penetration, market development, product development, and diversification.
  2. Which strategy are Microsoft and Sony using?
  3. Discuss with class: Why did Microsoft and Sony buy game makers?
  4. Show websites: Activision: https://www.activision.com/
  5. Bungie: https://www.bungie.net/
  6. Zynga: https://www.zynga.com/
  7. Check out Nielsen’s list of top video games: https://www.nielsen.com/us/en/top-ten/
  8. What are the risks and rewards that will be faced by the acquiring companies?
  9. Which competitors will be most pressed by these acquisitions? Why?

Source: Tilley, A., Lombardo, C., Gring, K. (January 18, 2022). Microsoft to buy Activision Blizzard, Wall Street Journal; Metz, C. (January 31, 2022). Sony to buy game maker Bungie in $.6 billion deal, New York Times; other news sources.

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Chocolate and Pretzels Make a Perfect Match for Hershey

It’s always snack time around our work place. And of course the best snack flavor profile favors chocolate and salt! Sweet and savory. All of which makes Hershey’s acquisition of snack companies Dot’s Pretzels and Pretzels, Inc. a great match. The two deals will amount to roughly $1.2 billion for the chocolate company and expand its product portfolio farther into the snack area.

North Dakota-based Dot’s Pretzels is a key prize for Hershey as Dot’s accounted for about 55% of the pretzel category growth last year. The snack category overall has done well under the pandemic as people everywhere reach for comfort foods and treats. And it’s easy to grab snacks when studying or working from home!

Pretzels aren’t the only product that Hershey is buying. In 2018 it bought SkinnyPop popcorn maker Amplify Snack Brands for $1.6 billion. Hershey also has entered into the nutrition bar category, diversifying from chocolate as consumers buy healthier snacks.  Hershey has also acquired Krave jerky and expanded Reese’s pretzel-nut-chocolate snacks. Other new treats from the company include:

  • KIT KAT Thins
  • Reese’s Snack Cakes for a mid-morning snack
  • Organic Hershey’s Bars
  • Organic Reese’s Peanut Butter Cups
  • Zero sugar chocolates

Shoppers seek more options than ever before. Hershey’s stated goal: Become a snacking behemoth. That’s a tall order when competing with companies the size of Nestle, PepsiCo, Mondelez, and Kraft.

Care for a snack?

Group Activities and Discussion Questions:

  1. NOTE: If available near you, buy a couple of bags of Dot’s Pretzels and bring them to class (along with Hershey bars). It’s always a nice idea to feed students.
  2. Discuss the four primary marketing strategies: market penetration, market development, product development, and diversification. When is each used?
  3. Which strategy is Hershey’s using with Dot’s Pretzels? Why is it in acquisition mode?
  4. Show the list of brands Hershey owns: https://www.hersheyland.com/brands
  5. Show Dot’s website: https://dotspretzels.com/
  6. Next, discuss setting SMART objectives (specific, measurable, achievable, realistic, and time-bound) for marketing strategies.
  7. Divide students into teams. Have each team develop five SMART objectives for the new acquisition’s products.

Source: Hershey to buy two pretzel makers for $1.2 billion, Reuters News Service; Newman, J. (Nov 10, 2021), Hershey plans to spend $1.2 billion in deals for pretzel producers, Wall Street Journal.

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