Tag Archives: supply chain

The Ultimate Vending Machine Contains Cars

What was the last item you purchased from a vending machine? Most consumers purchase convenience items such as drinks and snacks at the ubiquitous machines. Maybe in an airport or mall there might be a vending machine for electronics such as headphones and chargers, movies, or prepared meals for people on the go. And, speaking of “on the go”……..

Alibaba’s Tmall recently unveiled what is possibly the world’s largest vending machine, for the world’s largest car market. The product sold in the machines? Cars!

The automobile vending machine, located in Guangzhou, China, is a partnership between Chinese e-commerce company Alibaba and American car manufacturer Ford Motor. The program offers a three-day test-drive to potential customers shopping for a new car. The giant vending machine contains more than 100 vehicles, including small cars, family cars, sports cars, and SUVs. Cars include those made in China as well as imported from the U.S. The goal for the new program is to improve the car buying process for consumers.

The process starts with a mobile app (of course) called the “Super Test-Drive” app. Consumers use the app to research, browse available models, and select a car and pick-up time. Snapping a selfie picture provides facial recognition that is used to confirm the booking and borrow the car from the vending machine. And, if the customer’s credit score is good enough, then the three-day test-drive is free.

This sounds a lot more fun than just getting a snack from the local vending machine!

Group Activities and Discussion Questions:

  1. Poll students: Where are vending machines? What do they buy form vending machines? Why buy from vending machines?
  2. View video of the process: https://youtu.be/zFDDcTOFkEA
  3. While the buying process may vary slightly for different products and target markets, the basic 5-step process remains the same: problem recognition, information search, evaluation of alternatives, purchase decision, and post-purchase behavior.
  4. Does this vending machine fit the model? Or does the model need to change?
  5. Consider assigning different student groups to work on different target markets. Then the process for the different target markets can be compared and contrasted.

Source: Brandchannel.com (26 March, 2018). Alibaba and Ford launch China’s first Tmall car vending machine.

 

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Where’s the Chicken?

In what might arguably be one of the most ironic situations faced by a restaurant, KFC ran out of chicken and had to close more than half of its 900 restaurants in the UK. Yes, you read that right – Kentucky Fried Chicken ran out of chicken (which I guess makes it KF instead of KFC).

The supply chain issue that closed the 562 outlets was blamed on switching KFC’s delivery contract from South African-owned distribution group Bidvest Logistics to DHL. DHL blamed “operational issues” for the snafu. Some of the outlets were able to remain open, but with a limited menu.

Indeed, one can understand that it is a complex task to get fresh chicken to 900 restaurants across the country. According to news reports, the GMB union warned KFC that switching suppliers was a mistake. It certainly appears that they were right.

(Update: As of Feb. 28, 97% of KFC stores were open, but according to Reuters the company is now reporting facing another shortage… this time it’s gravy!)

Group Activities and Discussion Questions:

  1. In order to be successful, companies must be able to physically get a product into the hands of the customers. Discuss how a distribution channel works.
  2. Show the video of the KFC issue: https://youtu.be/jM53cQJACCg
  3. For KFC, what distribution channels are used now?
  4. How can the channel be expanded? What approach could be used?
  5. Divide students into teams. Have each team draw a flow chart for the distribution of the product.

Source:   BBC (19 February, 2018). Chicken chaos as KFC closes outlets.

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Was The Force with You? Columbia’s Star Wars Jackets

The newest movie in the Star Wars franchise is now in theaters and fans can’t get enough of the series of popular movies, or the Star Wars’- related products. The products are flying off the shelves as if they were under control of The Force. We are particularly sad to report that Columbia’s exclusive Star Wars-themed Echo Base outerwear collection sold out within minutes after its release! (Cross that one off your Christmas shopping list.)

Columbia released three jackets based on those worn by Luke, Leia, and Han while on the icy planet of Hoth. Luke’s jacket was designed to be “warmer than a tauntaun.” Han’s jacket reminds us to “Never tell me the odds.” And with Leia’s jacket, “May the force be with you.”

The company made only 1,980 coats (Get it? 1980 was the year of The Empire Strikes Back release) and they sold out online almost immediately, with very few left in stores. According to Columbia, the Luke jacket sold out in 5 minutes 22 seconds; the Han parka in 6 minutes 23 seconds; and the Leia jacket in 7 minutes 05 seconds. Not quite hyper-drive speed, but pretty darn fast nonetheless.

Columbia said the jackets were “built to withstand freezing temperatures on Hoth or other galaxies closer to home.” Unfortunately for fans, there are no plans to create more jackets.

Never underestimate the power of The Force, or a limited release.

Group Activities and Discussion Questions:

  1. Discuss the power of entertainment for marketing products.
  2. Poll students. What products related to movies or shows can they recall? Have they bought any of these?
  3. Show Columbia’s Star Wars-themed site: https://www.columbia.com/starwars/
  4. Discuss why the product sold out so quickly? Who was the target market? What role did exclusivity play in the sales?
  5. Should Columbia make more of the jackets?

Source:  Griner, D. (2017, Dec. 8). Columbia created a line of Empire Strikes Back’ jackets and sold out in minutes. Adweek.

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