Discussion Topic Week 4

Consider the three major categories of new products: “really new” products (ones that create new product categories like iTunes for digital music), new products in existing product categories, and line extensions which are just new varieties of existing products (such as new flavors). How does the job of the marketing manager differ for these three kinds of new products? How does a marketing manager forecast product demand each of these categories?

How does the job of the marketing manager differ for these three kinds of new products?

Some of the steps in any new product launch are common. Such as identifying a new idea, then selecting the feasible one, R&D department to come up with the prototype, business analyst team to find target segment and price, a testing phase where the customer acceptance is measured and then finally launch. We will highlight the part where the marketing managers job differ based on the type of new product.

Marketing manager for “really new” products have one critical task of creating awareness for the upcoming product. If a customer is not aware of a product the product will never be sold. Although promotion attracts competition it is essential. So marketing team uses print media, online media, TV and radio to introduce the product to the customer base. So in this case marketing managers has to first identify the need and then create a product ( with the help of R&D team) to meet the need of the customer and deliver the value. Then creating awareness about the product, making sure target customers understand the benefit and value proposition of the product. In this case, educating customers and extending support to them becomes critical for the success of the product. And lastly, the price should be what the target customer are comfortable paying for the product. The marketing managers must bear in mind that some product launches are time sensitive, the success of the product depends on when it is introduced, based on that the product can gain first mover advantage over competition or simply be used. And this is where the product enters growth phase in PLC after a successful launch. Once the product gains maturity, the competitors might have caught up and introduced similar products for the lower price.

New category entries is another type of “new product” for a company when the company decides to add already existing products from the market in their own portfolio. In this case, the marketing manager has to reach out to target segment and find out the customer need.  In this instance defining the products value proposition would be essential. Since there are already similar products available in the market and from competitors. Defining the value proposition is absolutely critical for the marketing manager since target segment needs to know why this product is different and better. Few other areas would quality and price. The customer would be pleased to see a better quality for a cheaper price too. And a marketing manager will have to be mindful of that, what the target segment prefers and what is the price they are willing to pay. The business analysis, testing and concept development will be played in a similar manner. During commercialization, the marketing manager has to play a most critical role to create the buzz, presenting the value proposition to increase interest in target segment and then reaching to maximum possible customer base would be important. In this case, the product team can use the Target costing approach since the product is already available from the competitors so getting feedback from the customer would be easier.

For line extension, all the procedures are almost similar to the introduction of a new product. But I believe the marketing manager needs to run more surveys or testing to make sure the product is well liked by the potential customers and for the price. Since the value proposition for the product is already proven, and there is a reference to price point acceptable for the customer, developing and launching this kind of product should be easier. The R&D department can create the prototype after selecting an idea. And then business analysts can evaluate the demand. Once the product is proven to be liked by target segment for the price the marketing manager can work on creating awareness of the product using different online, print or electronic media.

How does a marketing manager forecast product demand each of these categories?

The business analyst teams perform branded and unbranded test to find out the potential sales and to determine the actual formulation respectively. There are essentially 3 different types of use tests for different new products. Let us discuss those –

There is a type of test (Winer, 2011, Pg no 229) usually performed with employees and focus group to determine if it is liked, this sort of test helps remove any serious problem in the product and helps the testers determine if this product is better or worse than the competition. And help the testers understand how the product will be used by customers and based on these finding they can shape up the value proposition for a bigger audience. This kind of test can be performed while introducing new category entry or line extension, to forecast product demand of the product.

The next type of test (Winer, 2011, Pg no 230) is when a sample size of users are given the product to use it for a certain number of days. And after the end of that period, they are asked if they are going to buy the product. This kind of test can be helpful for “really new” kind of product launch or for the line extension products. This could help forecast the demand, popularity of the new product in the market.

The 3rd type of test (Winer, 2011, Pg no 230) is essentially bit extended version of the 2nd type. In this situation, the product is given to home or business for an extended period of testing to find out users experience with the product. Testers get data from before and after questionnaires. Find out usage of the product and the usage pattern can be compared with competitive products too. And this way actual usage for the product can also be found out. This type of test can be used for really new, new category entry or line extension products.

Reference

Winer, R., & Dhar, R. (2011). Marketing management (4th ed.). Boston: Prentice Hall.

Diageo’s Growth in African Market

Abstract

Diageo turned to Africa for further growth in sales and revenue. Since Africa is frontier market that has a lot of growth potential, Diageo did not want to pass the opportunity. The average consumer in Africa does not have great purchasing power, but Diageo tapped into the mass market, reducing prices for their products. Diageo’s journey in African market did not come without any headwinds. It faced competition from other brands, pricing power is not great and Diageo had to deliver their product per local taste. This paper will discuss more on the Diageo’s global branding strategies and the outcome of its actions.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Why haven’t Diageo’s global branding strategies worked in Africa?

 

Diageo thought it could apply global marketing techniques to its African spirits brands (Evans, 2015). But the key to success was to making Diageo more like the local brand for the African customer base who are more like global agnostics. They did not care about the brand and were not ready to pay a premium price for the Diageo branded products. The real demand for liquor was for liquors available under $2. “All the real action is when you go below 200 Kenyan shillings,” around $2, says John Williams, marketing director at Kenya Breweries Ltd., a Diageo subsidiary (Evans, 2015). And Diageo was competing against a global brand like Pernod Ricard and other local distillers who were offering a variety of product for the really cheap price. In order to cut cost, Diageo introduced Jebel in a plastic pouch, but the customer preferred glass bottled alcohol from competition to be hygienic and safe, so Jebel’s sale plummeted. In Ghana and Nigeria where customers prefer herbs as those are considered to be healthy, and Diageo was not aware of the fact. So, Diageo focused on being the premium brand they are globally and did not really understand what the local markets in countries like Kenya, Nigeria or Ghana want. And that is what went wrong for them. The local preference for taste, quality and hygiene were different than what Diageo was offering them.

What has the company done to change its marketing strategies?

 

            The company understood the segment and the demand which comes from the products priced below $2. And Diageo changed its marketing strategies to reach the segment. In order to set a base for their spirits business, Diageo introduced a number of herbal and ready-to-drink drinks, with close to 24 brand extensions in 2011. These acted as the basis to pave the road to mixing spirits and non-alcoholic counterparts. Giving customers the end drink might boost consumption of spirits, which bodes well for Diageo (Team, 2015). Apart from introducing products matching the market demand, Diageo tried to reach its customer base, they used banner advertising, radio ads in channels (known as slum radio) popular among targeted segment. They even started delivering using motorcycle instead of trucks to be more local like in Kenya. These are the strategic changes Diageo made.

 

Are there risks to the Diageo brands to the new approach?

 

I believe there are risks. Diageo can now put up banner ads wherever they want or play advertisements over radios. But changes in government regulations restricting Diageo from doing so might force Diageo to look for new ways to reach to the targeted segment. And the competitors can always come up with a better product for the better price that might pose challenges for Diageo too. But there is one more risk posed by the society. If the drinking problem becomes so bad that society revolts against the companies selling spirits, that won’t be good for Diageo or its competitors. However, in spite of the huge potential this market presents, it also poses a number of challenges prevalent in developing nations that could threaten prospects for Diageo (Team, 2015). One of such risk could be, change in regulations by Government and not allowing Diageo to produce alcohol in the mobile distillery and forcing them to set up a new distillery spending $45 million. In that case, selling liquor for cheap would be a problem for Diageo.

What are the social implications of Diageo’s actions?

           

            In my opinion, social implications of what Diageo is doing can create a long-term problem in societies of frontier countries such as Nigeria, East Africa (Kenya, Tanzania, Uganda, Burundi, Rwanda, and South Sudan), Regional Markets (Ghana, Cameroon, Ethiopia, Angola, and Mozambique) and South Africa. Africa has 15% of total global population and half of it is under age of 20. And these are low-income societies which have men with a drinking problem and in many instances and Diageo is trying to sell them cheap liquor in their favorite flavor and taste. And school going children are being exposed to advertisements on city skyline and on radios and that poses a different kind of long-term risk to society. But I understand Diageo is just trying to sell their products, but while doing so they are posting quite a bit of threat to already vulnerable societies.

I believe Diageo should be a little bit more responsible and show some self-restraint while advertising, such as not advertising near schools or parks and playing radio or TV ads when kids are least likely to list or watch them. Aggressively campaigning against binge drinking and maybe they can set up rehabs for alcohol addicts to earn respect and give back to the society.

 

 

 

 

 

 

                                            References

Team, T. (2015). Diageo: Could Africa Be The Motor For Growth?. Retrieved from https://www.forbes.com/sites/greatspeculations/2015/04/30/diageo-could-africa-be-the-motor-for-growth/#17d5f8a47999

 

Evans, P. (2015). Thirsty for Growth, Liquor Giant Taps African Market. Retrieved from http://ih.advfn.com/p.php?pid=nmona&article=67961057

 

Winer, R., & Dhar, R.(2011). Marketing management (4th ed.). Boston; Prentice Hall.

Discussion topic week 3

I would like to discuss a financial product (Auto Loan to be precise) offered by DCU or Digital Federation Credit union. DCU is for profit credit union based out of Marlborough, Massachusetts, offering financial products to retail users, such as savings account, checking account, credit card, insurance and different loans. The Auto loan offered by DCU has the best rate and it is very popular in the New England region of the east coast of United States.

DCU competes against big names such as Bank of America, Chase. And yet DCU manages to get the lowest rate on the auto loan to its 500000 + members (Muckian, 2014). But, the reason DCU Auto loan is most popular in the region because even the members with bad credits get a good rate. And the difference usually is huge. Like one user Tracy Williams was being charged 24.29% by big banks, DCU charged her only 5.9% despite her bad credit score. (Williams, 2018).  Now that we are a little bit familiar with the brand and its product, we can switch our focus to the strategy that has helped DC gain this success.

Here are few of the DCU strategies –

Create a Brand Identity – DCU is a member only, not for profit credit union and its vision is “All Members Achieve Their Financial Goals” (http://dcu.org). DCU wants to help its members achieve their financial goals without cutting the corners. DCU has successfully differentiated itself from other big banks with their value proposition and their no-fee products (i.e. checking account/saving account) and low APR loan products.

Be Consistent over time – DCU was established in the year 1979 and ever since they have stood by their value proposition. They are consistent over time to offer low rate loans and no fee banking accounts to its members.

Track the Equity – Tracking equity of DCU brand is easy. Because DCU members who have bad credit can get a great rate on a Credit card or auto loan. And since they have a loyal member base, most of the members get referred by word of mouth. So potential customers are made aware of the brand by other members that show the brand equity is pretty great.

Brand Development activities – DCU center has been built in New England region as a premier arena and convention complex (https://www.dcucenter.com/) which does a good job in increasing brand awareness in the region.

Investing in the Brand – DCU entered with a partnership with the city of Worchester and built DCU arena in the year 2004 and DCU sponsors the area to build the brand equity since the year 2004.

These are few ways DCU has taken to build brand awareness in New England region of United States. But the best part is, of course, the products offered by DCU to retail users, such as no-fee checking and savings account or low APR Credit card and auto loans even for people with bad credit score, which help people to get back on their feet fast.

References

William, T. (2018, January). Digital Federal Credit Union

. Retrieved from https://wallethub.com/profile/digital-federal-credit-union-13311008i/

Muckian, M. (2014, October). Top 20 Credit Unions. Retrieved from http://www.cutimes.com/2014/10/07/top-20-credit-unions?page=9&slreturn=1518823453

Retrieved on February 16, 2018, from  https://www.dcu.org/

Retrieved on February 16, 2018, from  https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=4276489

Retrieved on February 16, 2018, from  https://www.dcucenter.com/

Retrieved on February 16, 2018, from  https://www.dcucenter.com/about-dcu-center/dcu-digital-federal-credit-union/

Model of Buyer Behavior

Abstract

We would discuss about Google Project Fi. This service is just like mobile phone service from Verizon or AT&T in USA, the apparent difference is not many people are aware about this service from Google. Cheaper monthly service plans are the best attraction of Project Fi. Unlimited calls in North American plus national and international texts costs $20 a month. 1 GB high speed data costs $10 and any amount of data above 6GB is basically free. Hence few of the attributes of the service would be (https://fi.google.com) –

  1. It is inexpensive ,
  2. User get to save money on data in case they don’t need it
  3. Latest Android phones on discount in case you switch to the plan
  4. Free unlimited international text
  5. Data costs same overseas
  6. Easy to use internationally ( I have taken the connection to middle east and India)
  7. Great customer support, available on email, live chat
  8. It offers family plan too, add another person to your plan for $15 a month

We are going to create model buyer behavior for this service in this paper and will create a model for an organizational buyer vs individual consumer.

 

 

 

 

 

Model of Buyer Behavior

Who are the customers of Google Project Fi?

Anyone in the USA who usage a smartphone would be a potential Google Project Fi customer. But project Fi works on only android phones, so consumers who do not want to leave apple won’t be able to use project Fi.

Why would consumers buy google Project Fi?

Someone who does not want to pay for unused data and lower their phone bill could use project Fi. Many people pay a lot for their current phone service plan, they can switch to project fi to save on monthly phone bill.

How do consumers make a purchase decision?

Any mobile phone user who is in the market for alternative or first-time buyers who do not want to spend too much on other providers plans and do not use too much data will be interested. Moreover, Project Fi is backed by a strong brand name like Google. Once interested the potential buyer will make some research, to find out more about the quality of the service, so if the potential buyer finds any friend or relative who can influence him or he can go on the web to find out reviews. If the quality, brand are convincing another point of consideration would be the price. If the potential customer is okay with the price then they will go ahead with the purchasing decision.

Where do consumers buy?

Project Fi is exclusively available on Google web store, so the consumer cannot find this in any retail stores. So consumers who are used to making purchases on the web an visit google project Fi web store and make a purchase.

When do consumers buy?

I would assume the consumer can switch in to project Fi any day, any month of any year. But during holidays the sales may go up if Google has some great offers on, that might influence the consumer and make him/her make the purchasing decision.

 

 

Model of Organizational Buyer Behavior

Organizations can switch to Project Fi too. Please note, Google Project Fi is currently in beta stage and available for individual use only, so there is no corporate plan available. I am not aware if Google employees usage the project Fi network. But let us explore if any organizational buyers decide to switch to Project Fi then what are questions it will go through.

 

 

Why does organizational buyer buy?

When we consider an organizational buyer we need to remember since Project Fi is available only on Android phones. The organization has to be okay with using the phone. Many companies might have some security concern on using Android, or their company app might not be available on an android platform. If the organization is okay with the android, then the most probable reason to buy or switch into project Fi would be to save cost, because project Fi provides inexpensive plans.

 

How do customers make purchase decisions?

The administration in the organization might decide to save cost on corporate phone plans, and they can look for alternatives. Once they find out Project Fi, the organization has to be okay with Android and Google brand name. The most critical decision might be the price. Because if they currently use blackberry or iPhone then there will be an extra cost for the mobile phone. But if the organization, to be specific the influencer thinks in long run the organization can save money if they switch to android and project Fi then he/she can propose the switch. And the final decision maker can make the final decision to purchase the phones and switch to Project Fi. If the number of users is high, they might reach out to Google and negotiate a better rate.

 

Where do organizational buyers buy?

The organization can reach out to Googles marketing or sales team to negotiate a better rate. But since Project Fi does not have any retail presence, they have to reach google be it to purchase or to negotiate via the web store.

 

When does organizational buyer buy?

An organizational buyer might decide to switch current provider because of the current cost of a service provider or a bad experience with the current provider. And then I believe if Google offers a good price may be on plan or on a device or even better if, on both, the organization might decide to buy Project Fi connections for their employees. Since organization takes any purchasing decision based on cost and budget allocation. So the budget or availability of the money to finance the cost will play a role. Since I expect an organization to switch to Project Fi to save cost even if the company is not expecting much growth they can still go for this long-term cost-saving way.

 

 

 

 

Conclusion

Like consumer purchases, industrial consumers purchasing decisions are benefit driven (Winer, R., & Dhar, R., 2011). Organization and an individual buyer can initiate the search of the alternative for the same reason, like the bad experience with a current service provider or intending to save cost, but an organization might have an extra reservation on switching, as the preferred device has to be android. And getting the device for everyone might cost a significant amount based on the employee strength. So the price would be more critical for the organization than the individual buyer. But then if an organization can negotiate a good deal with Google they can mitigate the challenge. Unlike an individual customer for an organization, I expect finance to do the cost accounting and admin or HR to initiate and evaluate the service. And the IT or security team will play the vital role to evaluate the Android device and service too.

If the customers are it the individual customer or the organization customer are in some lease agreement with the current service provider, both of them cannot switch without paying the current provider. As Google does not cover any lease breakage cost.

 

 

 

 

 

 

 

 

 

                                            References

Retrieved February 12, 2018, from https://fi.google.com

Winer, R., & Dhar, R.(2011). Marketing management (4th ed.). Boston; Prentice Hall.

Are there ways in which you want to improve your own consumer behavior?

Using what you have learned in Units 1 & 2, consider your own behavior as a buyer.   Think about the kinds of things that move you to make purchases, large and small.  Before making a major purchase, what types of data do you gather?  What types of data is most compelling to you? Do you buy impulsively?  If so, what type of products do you buy impulsively?   Are there ways in which you want to improve your own consumer behavior?

Going by my purchasing habit I would like to differentiate large and small by price. A Large purchase would be anything more than $200 and anything below that price range is more or less small purchase that I do not think about much.

When I making any large purchasing decision the primary mover would be “need”. Be it a mobile phone or flight ticket or a suit. First I think thoroughly if I absolutely need it. I guess the price is a big trigger for the question.

But for small purchases such as appeals or shoes I do not focus on the question “Do I really need it?” so much, I guess it is more of self – actualization.

 Before making a major purchase, what types of data do you gather?

Before making any large purchases there are few data points I try to gather. First is obviously “review” of the product or service, especially in case I do not have any prior experience with the service or product. The reviews on Amazon or yelp really helps to get a feel for what other users think of the product or service. Best example would be when I buy a laptop, I usually check the reviews on Amazon.

Secondly, I look for alternatives, in case I get a better price for similar or better service. But then the price is secondary in some cases like there are budget airlines those offer very cheap fare but infamous for almost always being late or getting flights canceled, I would never consider their service just because the price is low, so the quality of service is more important than the price.

Then there are certain brands I will consider because I have experience or my friends or family have experience with them, for example, while I am shopping for a car. Where safety and service are very important. I would not go for a brand because it is recommended by the car salesperson, I would look for someone who has experience with that brand.

In some cases brand alone is enough for me though, such as when I switched from T mobile to Project Fi, it was enough for me that Google was providing the service, I trusted Google to do a good job.

Location and availability is a critical factor when I am hunting for a place to leave. I consider how far the grocery store or the public transport is.

One last thing and probably most important, can I really afford it. Be it rent or car or a really expensive laptop, I try to be mindful of my finance too.

What types of data is most compelling to you?

             For any large purchases, the most compelling data is what kind reputation the brand has for their product or service and if I have prior experience with the brand that counts most otherwise the reviews and recommendations from previous users. The reason is before spending the amount of money, I like to make sure I am spending it well and going to get the value for my money, a good quality, and service.

Do you buy impulsively?  If so, what type of products do you buy impulsively?  

             I do buy impulsively. Mostly when I go to grocery shopping I buy foods impulsively. I do not stick to any list and end up buying way more than I should have. Sometimes it causes waste, if not waste it makes me fat.

             Another product category would be apparels, I buy way too many apparels than I need.

Are there ways in which you want to improve your own consumer behavior?

             Yes, my purchasing habit was way too worse before. I used to purchase books, mobile or electronics on impulse. I try to wait 1 day before purchasing, it gives me time to think if I really need it.

To stop making impulse apparel purchases, I have limited going to malls.

To improve my grocery shopping habit I can use a list and then stick to it. I have tried it few times and it worked. But, I am not very rigid on this because I like trying out different things and the price is not that much.

Week 2 – Discussion topic

Select a product or service. Write down a list of its characteristics/attributes. Take each characteristic and indicate what benefits it provides to a customer. How would an advertisement reflect this information? Also, which benefit or benefits do you think are most likely to differentiate it from the competition (think back to the value proposition in Unit 1). Be prepared to provide your list to your discussion group for their feedback.

 

I would like to talk about Google Project Fi. This service is just like mobile phone service from Verizon or AT&T, the apparent difference is not many people are aware of this service from Google.  It is not popular like the most popular ones but it has all the attributes to be.

Cheaper monthly service plans are the best attraction of Project Fi. You get unlimited calls in North American plus national and international texts for USD 20 a month. You have to spend $10 per 1 GB high speed data and any amount of data above 6GB is basically free. Hence few of the attributes of the service would be –

  1. it is inexpensive ,
  2. user get to save money on data in case they don’t need it
  3. latest android phones on discount in case you switch to the plan
  4. Free unlimited international text
  5. Data costs same overseas
  6. Easy to use internationally ( I have taken the connection to middle east and India)
  7. Great customer support, available on email, live chat
  8. It offers family plan too, add another person to your plan for $15 a month

The benefits were pretty evident to me when I switched from a different carrier to Project Fi the day it was launched. I was paying a ton of money on monthly plan to the provider I switched from. Yes, I was getting unlimited data which I did not really need, I have wifi access all the time. I travel overseas, so inexpensive data, easy roaming and free texts are just perfect fit for my travels. And when I have a problem I can drop an email or chat live with a support person, so quick solutions to my questions are great too. On top of that I have unlimited call and text when I am in USA.

Project Fi does not have the stores or any presence in any shopping mall, it is selling their service and phones on their website, hence they can keep the costs low, provide the same service for the cheaper price.

An advertisement to reflect the benefits Project Fi provides should focus on simplicity of plan. It should focus on users who need an unlimited call and text plan with great coverage and need high-speed data occasionally. The ad could highlight hassle-free data roaming and inexpensive international calls too. So, in the ad, they can show busy professionals who need a phone on the go, who travels overseas and calls overseas and do not want to spend a ton of money doing all those.

The simple inexpensive plan that allows the user to make unlimited call, text and lets the user roam the globe for the same price of data and make cheap international calls, yet does not charge for unused datasets Google Project Fi apart from its competition.

Value Proposition for BJs Wholesale Club

Abstract

BJ’s Wholesale Club is a member’s only warehouse store, just like Costco or Sam’s club. This company started in 1984. They operate mainly in the east coast of the United States and Ohio. Fortunately, I have one store in my neighborhood. That gave me the opportunity to familiarize myself with Bj’s. I have an idea about the “4 Ps”, (Price, place, promotion, and product). In this paper, I intend to construct a value proposition for the warehouse club. Just to be precise, I will work with the information based on the fact I reside in Boston suburbs and the BJ’s wholesale club we have here. And of course, we receive some promotional materials often times.

Keywords: value proposition, BJ’s Whole Sale club

 

 

Value Proposition for BJs Wholesale Club

BJ’s Wholesale is membership-only warehouse club. To get the 1-year membership you need to pay $45 and you can add someone from your household along with your membership. In the store, you will get TV and other electronics, furniture and any other grocery item you can think of. They offer travel services too along with auto parts. And my favorite is if you have BJ’s membership, you get a discount from Auto insurance.

I signed up because I got a promotional offer with my credit card. Sign up with the credit card brand, you pay only $25 for the yearly membership and a $20 store gift card. So essentially I signed up for only $5. And their promotional material did not stop there. They have in store rack of coupons. Even if you do not carry the coupon book they send you every month, you can still grab some coupons in store, and yes, they send you a coupon book every month. You can combine these coupons with any other coupon you get for the brand you want to purchase. So you can imagine they flood the customers with promotional materials. Now that I am not a member anymore, I still receive a promotional join back offer, I can go back to their store with $25 yearly membership fee that comes along with the coupon book. And trust me it tempts me to re-join.

Now that we have talked about the “promotion” let us talk about the “price” which is very important too. BJ’s claim that on average customers save 25% on their purchases. I will be conservative and say it might not be 25% but it is more than 5% and if you can use those coupons wisely you save even more. So, I will say, BJ’s offer great price than its competitors those are mostly the supermarkets and   Walmart.  BJ’s has a gas station too and it offers gasoline for a discount price to the members. So, the membership gets you discount grocery and gasoline for your vehicle.

Now that we got the idea of “Price” and “Promotion”, let us discuss the “place”. Like I mentioned before BJ’s operate mainly on the east coast of the United States and Ohio. But I will be specific to the store I have in my neighborhood. This store is situated near an exit from the busiest highway in the state of Massachusetts. And I am aware of another BJ’s store that is placed the same way, near an exit of the busiest highway. How it benefits the store is interesting. We live near Boston, and when people return from work they can quickly take the exit, do their shopping and take the route back to the home in suburbs. I think the stores are very strategically placed to capture suburban customers.

BJ’s is a warehouse club and you get pretty much everything here, but the catch is it is a wholesale store. So there is no small box. Everything comes in wholesale size, so if you have a bigger family you will be happy about the big boxes and small prices. If you are single and live by yourself, maybe BJ’s does not have the right size for you. But the cheaper price, plenty of coupons make it worthwhile to find good deals on what you need and can use. I would recommend visiting their website to check out their complete product catalog. My favorite section was definitely the organic produce section in the store. And apparently it is really popular, to quote Chris Baldwin, the CEO of BJ’s “We sell groceries at 25 percent less than grocery stores on average in our markets and we validate that every week”.

 

Value Proposition -Now let us work on the value proposition. As Ken Krogue mentions “Price and quality are obvious, but in the age of mobile and the Internet, the speed of service may be the new secret sauce.” With so many great promotions BJ’s is already doing great on price. And with much organic produce in the produce aisle and great selections and brands in another product category, I am sure BJ’s scores good in product segment. During my research and from my experience I know BJ’s checkout lines take a lot of time. So that is one area “Speed” they need to work on. But, our value proposition can focus on what works best for now and can exclude the areas which need improvement and let the respective departments take care of those. Before I present my proposition, I wanted to mention BJ’s own tagline “Live Generously”. BJ’s run those radio ads locally, those mainly tells that “your dollar goes a long way in BJ’s”. They do not really talk about quality or convenient locations they have. Here is the value proposition –

For suburban families, BJ’s Whole Sale Club, is more than just another member’s only wholesale club, because BJ’s has the better selection of organic produce, great selection of groceries than supermarkets for less than 25% of the price and the cheapest gasoline for members and BJ’s credit card holders.

 

 

 

 

 

 

 

 

 

References

Krogue, K. (2015, March). What Is Value? The Costco Value Proposition

. Retrieved from https://www.forbes.com/sites/kenkrogue/2015/03/26/what-is-value-the-costco-value-proposition

Troy, M. (2017, May). In Focus: BJ’s Wholesale Club

. Retrieved from https://retailleader.com/focus-bjs-wholesale-club

 

Week 1 Discussion Assignment

Assume that you inherited a company that makes and sells packaged ice. Traditionally, the company has sold to commercial users such as restaurants, supermarkets, or food distributors. You have decided to expand your customer base to include consumers. Develop a statement of your target market(s), competitor targets, and a value proposition. Be prepared to discuss and defend your strategic decisions with your classmates.

 

In order to sell packaged ice directly to customers, first, we need to find a customer group. In my opinion, we need to try to sell somewhere where the weather is kind of tropical, people are active – hence often thirsty and where they spend few hours. To reduce the competition we need to make sure we are away from any casual or fast food restaurants just to avoid competition from those fountain drinks.

So, we should sell near beaches, stadiums during matches and people going to hikes or other outdoor activities can be good potential customers. So, the statement would be “We are committed to the customers to bring the ice to them wherever and whenever they need it the most”.

As I see the selling ice directly to the consumer will face a headwind from fast food chains, restaurants, food courts wherever consumer gets ice with their beverages. In this case, supermarkets are competitors too because they are selling ice too. To keep the competition to a minimum we need to be specific about geographic locations and target consumer. Why geography is critical is because people do not go to the beach during winter. Or any place on earth where the winter lasts for 4 – 5 months, people won’t go out so much, even if they do, chances are less than they would need ice. So we should stick to the hot place, where people are physically active (so there would be an age range too, say 15 – 35 men and women) and where people spend few hours. So, sporting events, beaches and outdoor activities such as fishing or hiking can give us perfect opportunity to sell our product to a customer who wants a cold beverage.

Value proposition is going to be – For men and women who love outdoors, our packaged ice is perfect, unlike going restaurant or stores for a cold drink, our packaged high-quality ice gives you a cold drink wherever you want and whenever you want and for a price that would cost you less than the gas you would need to drive to store.