Teacher’s Manual for Strategic Marketing Management, 10th edition
Case Discussions
Part I
Retailing Trends
Energy Bar
Transformational Innovation
Instructor Note — Trends in Retailing (Understanding and Working
with Industry Trends)
One way to start is to ask for each of the four brands (or substitute one that might be
Discussion Questions
1. Trend drivers
1. The upscale trend—wealthier people are getting even wealthier and have money to
spend. Plus coming off a recession many more would like to indulge in affordable luxuries.
There has always been a price end but Target and Wal-Mart and Costco have made going for low
price less of a trade-off.
4. There is an increased need to create energy and interest and providing trend responsive
merchandise is a way of doing that.
5. Private label strength is driven by the desire or retailers to control a category, to obtain
higher margins, and to have leverage over the big brands. The reason that private label is doing
well lately is that retailers have become better brand managers and the private label products are
now better.
6. In store media is driven by its effectiveness and the corresponding inefficiency and
ineffectiveness of traditional media.
2. What trends will be around?
Forecasting is tough. One way is to look at analogous situations. Another is to ask what impact
it has on business strategy. Fast fashion (turning fashion inventory in weeks instead of 6 to 8
months) creates a new business model. It will win if it remains feasible as a retailer gets large.
3. Key threats and opportunities.
All four represent threats and opportunities that can be identified. After doing so, you might ask
how each brand should spend their investment dollars to sharpen the trade-off judgments that
must be made.
4. Against the trend.
5. Losing the core.
The Gap and Saks both went trendy because they were not attractive to the teens and 20s or so
they thought. As a result they lost their core market, which was a classic dilemma and a tough
Instructor Note—Energy Bar Industry (A New, Dynamic Industry)
There are now bars around breakfast, protein, sports and energy, diabetic, diet (the South Beach
Diet Bar), soy (SoyJoy – a major Japanese brand), and nutrition. A key issue in this case is the
concept of emerging submarkets, their projected growth, and their competitor set.
1. What are the submarkets that will be major factors going forward?
2. What can firms do to enhance the success of “their” submarket?
1. External Analysis
What are the segments? Should they be grouped? How? Can a brand appeal across segments?
And PowerBar, is it sports and energy? Is it energy in any context? Can the subbrands take
2. Submarket projection.
Look at what are the trend drivers? Are they real? Do they have legs? Will the submarket be
splintered over time?
3. Leveraging brands
4. A basic question is how distinct all these categories are and will be over time. Sometimes a
category splinters into many competitors and then comes together with a few major survivors.
Will that happen here? Think of other contexts in which such dynamics occurred.
5. The energy bar category and its life cycle
6. SoyJoy
Students might try one. They are well marketed but have a taste and texture problem (very dry)
even though they come in a dozen flavors. They might have to come out with different product
Instructor Note—Transformational Innovations (Evaluating and
Assessing the Implications of a Transformation Innovation)
Zopa
1. Traditional banks and, to a lesser extent, credit card firms. We might look at other Internet
finance firms like eLoan to see how much business they took. However, eLoan and the car sites
are simply front ends for existing institutions whereas Zopa aims to replace. It would be very
awkward for a bank to go into this business because it is so anti-bank.
Eestor
1. All car companies that do not find a way to participate will be threatened, plus the oil industry.
Evaluation must start with technology analysis both theoretical and experimental. The problem
in part is to not only evaluate the current technology but also to project it because as in the case
of the telephone it was not the initial technology that won. Think of the automatic transmission,
NextMedium
1. Anything connected to advertising and the 30 second spot is at risk. This could divert a lot
from the advertising budget. Media companies who help people place advertising will have a big
hole in their offering. Agencies will be bypassed because there is no need for any of their
services. To project, we might look at other Internet firms especially those dealing in
advertising. Media companies could easily be motivated to come up with competing modes or
trying to incorporate brand integration into their systems. It might be hard psychological for
some to admit that advertising simply needs to be bypassed.