Tag Archives: product life cycle

Contagions Apply to Both Sickness and Health

Trends are contagious, both when they are growing as well as when they are declining. Think about it. We see new trends nearly every day, adopt them, but then just as often we quit those trends. This is not just a lone event of one person though. Social networks are strong components in helping us decide what to adopt.

According to research, many health behaviors are fundamentally contagious ideas. Basically, your social network can predict health, weight, and exercise (even stock prices). A timely case that illustrates this movement is Peloton, which reached a high during the pandemic, only to plummet a year later as the pandemic waned.

How do we get ‘infected’ with the contagion? Social networks lead consumers to catch the trend, live with it, and then move on to new trends. During the pandemic, it was all about fitness at home, online training, and connected exercise equipment. We couldn’t go to the gym and many sports were suspended, leading to more investment in home-based fitness. However, now that pandemic restrictions have been removed, we’ve gone back to the gym and sports teams.

Research conducted by the American College of Sports Medicine shows us how trends move in cycles: Pilates, Zumba, Cross Fit, spinning, and boot camps are all examples. Even exercises with staying power, such as yoga and running, move into new variants and practices to survive. Some of the top fitness trends for 2022 include:

  • Wearable technology
  • Home exercise gyms
  • Outdoor activities
  • Strength training with free weights

What trends do you think will stick around?

Group Activities and Discussion Questions:

  1. Divide students into teams. Have each team list past fitness trends they have tried?
  2. What helps a trend stick around?
  3. What leads trends to quickly fade out?
  4. Using Peloton as an example of trends, show video about Peloton’s life cycle: https://www.wsj.com/video/series/wsj-explains/why-peloton-spun-out-what-happened-to-the-bike-and-treadmill-firm/30FEB49E-85EE-4719-9B6D-F7E44D195CE5
  5. View ACSM report on fitness trends: https://journals.lww.com/acsm-healthfitness/Fulltext/2022/01000/Worldwide_Survey_of_Fitness_Trends_for_2022.6.aspx
  6. Discuss the stages in the product life cycle. What are the marketing objectives in each stage?
  7. Divide students into teams. Have each team draw a product life cycle and place various fitness and health trends into each stage.
  8. Next, have students brainstorm on how to reposition or revise products/services to that they can move into an earlier stage of the life cycle.
  9. Have teams draw a product life cycle. Place different fitness and health trends on the PLC.

Source: American College of Sports Medicine (30 December 2021). Wearable tech named top fitness trend for 2022.; Zumbrun, J. (9 September 2022). Both sickness and health, it turns out, are contagious. Wall Street Journal.

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Netflix Now Offers Ad-supported Subscriptions

It’s long been rumored that Netflix was considering adding advertising to its streaming service. That time is finally here.

Beginning in November in 12 countries (including the U.S., U.K., Australia, Brazil, Britain, Canada, Germany, and South Korea), Netflix will offer a $6.99 per month subscription option (Basic With Ads) that will show four to five minutes of advertising for each hour of content watched. The 15 to 30-second ads will show before and during TV shows and older movies; for new movies ads will only be shown before the movie begins.

Netflix’s subscriber base dropped significantly this year for the first time in a decade. Netflix is showing signs of maturing compared to other streaming services that are earlier in the cycle and must remain competitive. In 2021 ,it release 500 original programs (roughly $20 billion/year) but only a small percentage became hits.

Why the new pricing package? It’s one of Netflix’s key strategies to increase its subscriber base and improve average revenue per user. The company hopes that the new service option will encourage viewers who currently share passwords to get their own subscription, thereby increasing the customer and revenue base. (Netflix estimates that it has 100 million users who share passwords, making it a significant loss of potential revenue.)

For advertisers wanting to promote their brands, the new service is an opportunity to extend their reach to specific segments based on country and genres such as action, comedy, romance, and more.

Netflix isn’t alone in offering new subscription tiers. Disney+ will soon offer an advertising-based subscription in December at $7.99 per month. Hulu has long offered ad-supported subscriptions which accounts for more than half of its customers; HBO Max also offers ad-supported subscriptions.

Will you switch to the advertising version?

Group Activities and Discussion Questions:

  1. Poll students: What streaming services do they use? How much do they spend each  month? Is it worth it? Do they share passwords?
  2. Discuss the product life cycle. Where is Netflix in the PLC? What is the biggest challenge in that part of the PLC?
  3. Show a WSJ video that outlines Netflix’s strategy: https://www.wsj.com/video/series/news-explainers/netflix-hit-a-subscriber-peak-heres-how-it-plans-to-keep-growing/62158AB3-FBBB-4C38-8F72-30F8E27C9CD7
  4. Divide students into teams. Have each team build a price chart that includes the options from streaming services such as Disney, Prime, Paramount, Showtime, Hulu, etc.
  5. Discuss various pricing models. Which model is Netflix using?
  6. Have students develop pricing objectives for Netflix.

Sources:  Krouse, S. (13 October 2022). Netflix’s ad-supported plan will launch in November at $6.99 a month. Wall Street Journal; Sperling, N. (13 October 2022). Netflix to offer cheaper ad option beginning Nov. 3. New York Times; other news sources

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Grape-Nuts Cereal Stands the Test of Time

This article is a bit of a reversal – instead of writing about cutting-edge technology products, or autonomous cars, or drones, or another exciting technology, we’re writing about what may be one of the oldest products still on the market. Any guesses?

It’s Grape-Nuts cereal. At 125-years on grocery shelves, Grape-Nuts is one of the oldest ready-to-eat cereals. The other two cereals that are still being sold today after their introduction to the marketplace in the 19th century are Shredded Wheat and Corn Flakes.

And, even at its advanced age, Grape-Nuts is still the same product that it was 125-years ago (although manufacturing has been modernized). And to be clear, the cereal has never contained either grapes or nuts. The name was derived from the manufacturing process that resulted in a ‘grape sugar with a nutty texture’.

Why has the product endured over all these years? Perhaps because it is a healthy food that still has a low-sugar nature-based appeal for consumers. It didn’t depend on trends, color, and lots of sugar.

During the pandemic, Grape-Nuts had production issues resulting in low inventory. The core audience asked “where’s my Grape-Nuts?” and that led to social media and a new, younger group of consumers gaining interest in the brands.

What foods will future generations still be eating?

Group Activities and Discussion Questions:

  1. View Grape-Nuts website: https://www.grapenuts.com/
  2. Show a commercial from the 1970s: featuring naturalist Euell Gibbons: https://youtu.be/QffEYYotXIk
  3. Discuss the stages in the product life cycle.
  4. What are the marketing objectives in each stage?
  5. Divide students into teams. Have each team draw a product life cycle and place different cereals and other foods into the PLC.
  6. Why has Grape-Nuts sustained over the decades?
  7. What are the lessons that other discontinued cereals could learn from Grape-Nuts?
  8. Next, have students brainstorm on how to reposition or revise products/services to that they can move into an earlier stage of the life cycle.

Sources:  Johnson, B. (13 August 2022). Grape-Nuts: It is your grandma’s cereal. Minneapolis Star Tribune.

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