marketing
300
discussion section
http://mywebspace.wisc.edu/rkamath/
http://mywebspace.wisc.edu/rkamath/
Question
“Today, my friend, her parents and I, drove 5
hours all the way to Disneyworld, only to realize
we had bought Disneyland tickets. Disneyland is
in California, 3000 miles away. We couldn't switch
them out and we didn't have money to buy new
ones. FML.”
What should Disney do in this situation?
http://mywebspace.wisc.edu/rkamath/
discussion question
What’s the difference between
 Discount houses
 Conventional retailers cutting prices
 Mass merchandising
Forecast the future of low-price selling in food,
clothing, and appliances. How will internet
affect this?
http://mywebspace.wisc.edu/rkamath/
discussion question
Discount houses
• What is a discount house?
high
• Sell ‘hard goods’ (appliances,
furniture, etc.) at large discount
• No credit, sometimes no cards
• Customers pay cash
• Marketing mix shaped by this low
MARGIN
high
• Some examples?
VOLUME
http://mywebspace.wisc.edu/rkamath/
low
discussion question
Price-cutting by Retailers
high
• Why do they cut prices?
• Discounts are a competitive reaction
• No permanent discounts intended
• More tactical than strategic
• Examples?
MARGIN
low
high
VOLUME
http://mywebspace.wisc.edu/rkamath/
low
discussion question
Mass Merchandisers
high
• What is a MM?
• Sells all kinds of stuff!
• Soft goods / Hard goods
• Extremely cheap!
• Examples?
MARGIN
low
high
VOLUME
http://mywebspace.wisc.edu/rkamath/
low
discussion question
How does the future of low-price selling look?
?
http://mywebspace.wisc.edu/rkamath/
discussion question
http://mywebspace.wisc.edu/rkamath/
discussion question
Are consumers getting tired of low prices?
2004  $252.8b
2005  $281.5b
2006  $308.9b
2007  $345.0b
2008  $374.5b
48% growth
8% CAGR!
Source: Walmart.com/investors
Fortune *1* company!
http://mywebspace.wisc.edu/rkamath/
the year 2050
Does this really mean that mass merchandisers
are going to take over the world?
Europe
http://mywebspace.wisc.edu/rkamath/
discussion question
Maybe, but not necessarily; and even if they
do, they likely won’t put everyone else out of
business. Because:
 Increasing desire for specialty products
 Not all target markets will want massmerchandised goods or will want to shop at
mass merchandisers
 People who can’t buy stuff they want locally,
can go to online stores
http://mywebspace.wisc.edu/rkamath/
discussion question
How will internet affect the future of low-cost
shopping?
 Can buy almost everything online now
 Instantaneous price comparisons
 Can use stores to see products then buy them cheaper online
 Much more competition in general!
 Biggest barrier for online: Logistics of buying stuff must get
cheaper to compete effectively with brick-and-mortar mass
merchandisers and retailers
http://mywebspace.wisc.edu/rkamath/
an experiment
• I’m going to ask you something.
• What is the first business that comes to
mind when you hear this category?
– Madison bar
– accounting firm
– fast food restaurant
– charity organization
http://mywebspace.wisc.edu/rkamath/
an experiment
• Top-of-mind Awareness
– Good TOPA is usually an indicator of good marketing.
Why?
• People have high strong understanding of your
product/services, and why they’d want them
• Associate your product as being the optimal in the
category
• Consumer needs understood and ability to deliver
on them conveyed
– Being synonymous with category is usually good!
When is it a problem?
http://mywebspace.wisc.edu/rkamath/
an experiment
• you usually want to be the first one people
think of
• when do you not want that?
• what is the value of being first one thought
of?
http://mywebspace.wisc.edu/rkamath/
group project
• How’s it coming?
• Due 4/22 or 4/23
http://mywebspace.wisc.edu/rkamath/