Appendix 2 CBC Video Cases Trouble in Toyland

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Appendix 2 CBC Video Cases
Each video case corresponds to specific chapters. See the correlation table below for
details.
Video
Video
Video
Video
Video
Video
Video
Case
Case
Case
Case
Case
Case
Case
1:
2:
3:
4:
5:
6:
7:
Chapters 1, 2, 3
Chapters 4, 6, 8
Chapters 4, 5, 16
Chapters 8, 9
Chapters 4, 11, 13
Chapters 10, 16
Chapter 14, 15
CBC Video Case 1
Trouble in Toyland
According to the Canadian Toy Association, the toy
industry in Canada represents $1.4 billion in sales.
Despite the size of the marketplace, many companies
are struggling as the market becomes increasingly
unpredictable. Sales of traditional toys fell by almost
3 percent in 2003, and by 5 percent in 2004 according
to the NPD Group Inc. Technology is playing a bigger
and bigger role in the industry. Children are increasingly sophisticated, and every day children seem to be
growing older faster! Because of “age compression,”
toys are being put aside sooner in favour of electronic
gadgets, such as cellphones, computer games, and
even electronic organizers. Though some companies
are struggling, others, such as Spin Master Ltd., seem
to be on the road to success. Its vision is to be a company that understands kids in general versus one that
manufacturers toys. Retailers, like manufacturers, are
under pressure to keep pace with competition and
changing tastes. On one hand, you find the giant discount retailers, such as Wal-Mart (which is now the
number-one toy retailer), putting pressure on prices
and margins. On the other hand, you have small independent chains, such as Ottawa’s Mrs. Tiggy Winkles,
which operates only five outlets and features traditional and retro toys.
Questions
1.
Identify the key trends that are affecting the toy
industry and demonstrate why a player in the toy
industry should be aware of these trends.
2.
How can relationship marketing and market orientation help small toy retailers such as Mrs. Tiggy
Winkles survive? What value can it create for its
customers?
Sources: Peggy Cunningham wrote this case based on the CBC
Marketplace video “Trouble in Toyland” and the following articles:
“Hot Toys For The Holidays?” Canadian Toy Association press release,
www.cdntoyassn.com/mnews.htm; Paul-Mark Rendon, “Campaign
ushers back Irwin Toys,” Marketing Magazine, January 12, 2004; “Toys
“R” Us acquired by investment group,” Marketing Daily, Friday, March
18, 2005; “Toy companies expand into home décor,” Marketing Daily,
Tuesday, February 15, 2005, www.marketingmag.ca.
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Appendix 2 CBC Video Cases
CBC Video Case 2
Buying Into Sexy
Canadian children 8 to 14 years of age have lots of discretionary money. They spend $1.7 billion of their own
cash on a huge range of products. Marketers are well
aware of this group’s buying power and it’s not surprising that they are targeting this segment.
However, what children in this age group are buying and what is being marketed to them is causing
some concern. Video games featuring scantily clad
women and music videos with overt sexual imagery
are aimed at both sexes, while “sexy” clothing and
accessories are aimed particularly at very young girls.
Take the case of “sex bracelets,” for example. They’re
cheap, colourful jelly bracelets that carry sexual connotations. As one tween noted, “Pink means ‘kiss,’ and
white means “lap dance.” Some wear them because
they are “fun,” and tweens may not fully understand
the sexual connotations.
Some analysts believe the trend towards mimicking and valuing sexual imagery starts at a very young
age, as young as four years of age, with the marketing
of products like the “Bratz” dolls. These toys feature
skimpy clothing and heavy make-up. Marketed along
with the dolls is the Bratz “Superstyling Funktivity
Book,” which is aimed at six-year-olds and covers topics like “luscious lip tips,” “design your own sexy skirt,”
and “tips on being an irresistible flirt.” Visit any mall,
and you’ll find entire chains devoted to young shoppers full of racy clothing, make-up and lingerie for girls
who may not have hit puberty.
The buying and wearing of such products is sometimes causing a lot of dissention between children and
their parents. While kids feel a lot of pressure to be like
their friends, some parents don’t want their children
dressing in a sexy style or using products like video
games traditionally aimed at older consumers. In other
cases, parents are too busy to pay much attention to
what their kids are doing, watching or accessing over
the Internet.
To speak to this market, celebrities are often hired.
Take a recent ad campaign for Candies shoes. It featured pop star Ashlee Simpson, who some consider a
relatively “good girl” with a wholesome image. The
Candies ad shows a scantily clad Simpson wearing a
pair of Candies high heels. A teddy bear is tucked in the
corner. Says Candies’ CEO, Neil Cole, the ad shows “a
young girl who’s growing up.”
The trend may be the result of what’s called “age
compression.” Children are adopting the behaviours
and tastes traditionally associated with older people.
Instead of dolls and building blocks, children today are
demanding electronic gadgets like cell phones and
iPods. Nonetheless, critics are asking where we should
draw the line and question if the trend towards “buying into sexy” is the result of exploiting a vulnerable
market.
Questions
1.
What factors in the marketing environment (technical, demographic, lifestyle, social and cultural)
have contributed to the attitudes many tween girls
have about buying and wearing provocative clothing? (Hint: think about what has happened to families as well as to children themselves.)
2.
Big questions arise about whether marketers are
responding to market demands and are just providing the services and products that this age
group demands, or whether they are creating the
demand with inappropriate imagery and then
feeding it with products and services. Discuss how
a marketer’s ethical responsibility would change
under these two different points of view.
Sources: “Buying into Sexy: The sexing up of tweens,” CBC
Marketplace, Broadcast: January 9, 2005; “Sex sells: Marketing and
'age compression',” CBC Marketplace, Broadcast: January 9, 2005.
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Appendix 2 CBC Video Cases
CBC Video Case 3
Mining Your Business
At the heart of any good marketing practice are the
concepts of market segmentation, target marketing,
and positioning. Without good information about consumers’ needs, attitudes, and buying behaviour, this
entire process breaks down. However, many consumers believe that the gathering of information for
marketing purposes violates their rights and their privacy. Accurate, timely information about consumers is
especially important for the direct marketing industry.
It comprises organizations that send material directed
personally to you, the consumer. It may be delivered
through the mail, over the Internet, by telephone, or by
email. Direct marketers include companies as varied as
Microsoft Canada, The Shopping Channel, Reader’s
Digest, and Allianz (sellers of registered education
plans) as well as the many charities operating in
Canada.
Many in the direct marketing industry are aware
of the challenges associated with consumer resentment and the need to respect privacy. They have strict
internal policies about how information will be gathered, protected, and used. Other firms, unfortunately,
are abusing the goodwill of consumers and may be
damaging the image of an entire industry in the
process. Of particular concern are companies, such as
Growing Families, that gather information and then
sell it to other firms. Growing Families is a firm that
goes to maternity wards to take pictures of newborns.
New parents fill out forms to receive their pictures and
provide a lot of personal information in the processes.
Growing Families sells this information to their partner firms—companies such as Allianz and Procter &
Gamble, who have products of relevance to new
parents.
When it comes to the use of technology to create
vast databases and target customers, marketers must
ask themselves not just what they can do using technology to gather information and compile integrated
databases, but also what they should do to truly create
value and respect customers rights.
Question
1.
Registered education savings plans are big business, and Canadians have plunked $12.8 billion
into these plans to help finance the mounting cost
of postsecondary education for their children.
Growth in these plans has exploded. In Ontario
alone, 14 firms are registered as scholarship plan
dealers. The Ontario Securities Commission (OSC)
recently uncovered numerous problems involving
sales practices within the industry. The three
largest players in the sector are Allianz Education
Funds Inc., CST Consultants Inc., and USC
Education Savings Plans Inc. They account for
nearly $5 billion in assets and more than 600 000
plans. If the industry cannot improve its practices,
regulators will soon step in. If you were a senior
marketing and sales manager at Allianz, what policies would you put in place to improve the data
gathering and sales practices of your firm to
ensure consumer satisfaction and privacy
protection?
Sources: Peggy Cunningham wrote this case based on the CBC
Marketplace video “Mining Your Business” and the following articles:
Rebecca Harris, “Hitting the Target,” Marketing Magazine, July 4,
2005, www.marketingmag.ca; Karen Howlett And Paul Waldie, “The
Ontario Securities Commission cracks down on RESP sector,” Globe
and Mail, July 16, 2004, http://www.vaninvestor.com/You/RESP/
OSC_cracksdown_resp.htm.
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Appendix 2 CBC Video Cases
CBC Video Case 4
The Rebirth of a Brand: Avery Wines
The American Marketing Association defines a brand
as “a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate
them from those of competitors.” Avery Wines
engaged Bernie Hadley-Beauregard, owner of
Brandever Strategy Inc., to rebrand and reposition
their winery. When Brandever undertakes a project, it
takes a broader definition of the branding and communication task than the above definition suggests.
According to their website (www.brandever.com):
Our core belief is that everything matters.
Competitive advantage and marketing impact are
increased significantly once a company adopts a
holistic, interwoven approach to its communication [and branding] endeavours. It all begins with
a thorough understanding of all touch points that
a prospect, stakeholder or customer has with your
company: every phone call, email, printed material, package, and web communication. Each is a
vital marketing event; an opportunity to define
and differentiate and advance your firm, your
offerings. In essence, Brandever advocates that
marketing should not be interpreted as a department, but rather a mindset. A shared frame of reference adopted throughout an organization. A
powerful force.
Hadley-Beauregard had a big job ahead of him
when he took on the Avery project, a family-owned
winery located just west of Abbotsford in B.C.’s Fraser
Valley. Avery Winery and their promise of “A’Very Fine
Wine” was a play on words based on the surnames of
the owners, David and Liesbeth (Liz) Avery. The winery
was born in 1998. The owners had invested their life
savings into the development of the vineyard and were
carrying almost a million dollars in debt. Cash flow
was, therefore, a big problem for them. The good news
was that all of the wines were made exclusively from
organically grown grapes.
Bernie had a very short timeline in which to reinvent the brand. If the project could not be completed
before the important Christmas selling season, the
winery would probably go into bankruptcy. The new
brand name, Lotusland, was developed after a lot of
thought and negotiation with the winery owners.
Questions
1.
Provide clear reasons why Avery wines needed a
new brand. In formulating your answer, be sure to
think about the past experiences that consumers
may have had with this wine.
2.
Why do many firms, like Avery Wines, neglect
branding?
3.
Some brand researchers suggest that a brand is
the totality of what is experienced by customers,
and that brands do not have meanings until the
product has a history and customers have experienced the brand over time. What meanings does
the new Lotusland brand suggest? In formulating
your answer, think about how the new brand has
appropriated cultural icons as part of the branding
effort and why getting adoption of the product in
fine restaurants was one of the keys to success of
the project.
Sources: Peggy Cunningham wrote this case based on the CBC
Marketplace program “Avery Wines—The Brand Man,” aired February
8, 2004; and the following websites; http://winesofcanada.com/
bc_fraser.html and www.brandever.com
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Appendix 2 CBC Video Cases
CBC Video Case 5
The Bait in Rebates
Walk into many retail stores or thumb through the
advertisements in your local newspaper and it seems
as if almost any product you are thinking of buying
comes with the offer of a rebate. Many retailers and
manufacturers love them because they tend to boost
short-term sales. Rebates are featured on products as
varied as automobiles, computers, stereos, and pleasure boat navigation systems. However, despite the fact
that the “carrot” of a price reduction is dangled in front
of consumers to get them to purchase today, many
rebates are never claimed. In fact, redemption rates
vary from a startling 1 to 50 percent even when a $100
rebate is offered. Today’s consumers are time pressed
and may not want the hassle of sending in the bar code,
their original receipt, and the required photocopies.
Retailers are heavy users of mail-in rebates. In an
era of growing price competition, rebates allow retailers to advertise significantly lower prices than is possible with such tactics as everyday low pricing. Such
pricing gets consumers into the store and provides the
retailer’s sales staff with the opportunity to convince
the buyer to make the purchase on the spot.
Manufacturers, such as Sony, also use their own rebate
programs. Manufacturers often cooperate with retailers and help pay for the costs of rebate programs
either by providing lower large-order minimums or
through cooperative programs. Some people wonder
why they just can’t get their rebate at the checkout
counter. Manufacturers cling to the mail-in rebate system to obtain demographic information pertaining to
the purchasers of their products and don’t want to give
control of this information to their retailers.
Faced with a growing mountain of complaints,
some retailers and manufacturers have started to take
action. Sony and Staples, for example, have moved
their rebate systems to the Internet so that the process
of claiming the rebate can be streamlined. In 2005,
Best Buy and Future Shop announced that they will no
longer stock products that are tied to mail-in rebates.
Questions
1.
What types of products are most likely to use
rebates? Are rebates an effective way of adding
value to a product or a service?
2.
Marketers recognize that consumers often actively
process price information, interpreting prices in
terms of their knowledge from prior purchasing
experience, formal communications (advertising,
sales calls, and brochures), informal communications (friends, colleagues, or family members), and
point-of-purchase or online resources. Marketers
know that purchase decisions are based on how
consumers perceive prices. Explain how you think
rebates affect consumers’ price perceptions.
3.
Do you think the use of rebates is ethical and fair
to all stakeholders (customers, retailers, manufacturers, competitors, the general public)? Provide
clear criteria for your opinion, and clearly state the
reasons why you have drawn your conclusion.
Sources: Peggy Cunningham wrote this case based on the CBC
Marketplace program “The Bate in Rebates,” January 2, 2005; and
the following articles: Wayne Mouland, “Rebates rule!” Marketing
Magazine, October 18, 2004, www.marketingmag.ca; David Menzies,
“Mail-in rebates RIP,” Marketing Magazine, September 12, 2005,
www.marketingmag.ca.
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Appendix 2 CBC Video Cases
CBC Video Case 6
Earth Energy Systems
With energy costs for cooling and heating with conventional fuels going through the roof, the time may finally
be right for geothermal heating. While the technology
has been available for 20 years, consumers have been
skeptical about the viability of such a system.
Geothermal systems use a series of pipes buried
15 metres underground. They transfer naturally occurring heat (the heat the land absorbs from the sun) from
the ground below the frost line into a building during
winter, converting it into warm air and distributing it
through ducts. In summer, the system is reversed to
transfer heat out of the building, where it uses the
cooler ground as a heat sink. The efficiency of the system is one of their major advantages. The heat
obtained from the ground (via the condenser) is much
greater than the electrical energy that is required to
drive the various components of the system.
In an era where green house gases and global
warming are becoming major concerns, geothermal
heat pump systems present an attractive alternative
energy source. They are one of the most environmentally friendly heating systems available. Moreover,
once they are installed, these systems offer homeowners the opportunity to significantly reduce their heating
costs. While geothermal systems still use electricity to
run the components, they use up to 75 percent less
electricity than conventional heating or cooling systems. Geothermal systems can also reduce greenhouse gas emissions by 66 percent or more, compared
with conventional heating and cooling systems that
use fossil fuels. Finally, the systems are misers when it
comes to maintenance costs.
So what’s the catch, you might ask. The systems
are expensive to install and currently require a lot of
land for installation. For example, a system for a relatively small house costs approximately $25 000.
Geothermal systems also have commercial applications. They can be used to heat offices, stores, hotels,
schools, hospitals, and even recreational facilities. For
example, the Glenboro Curling Club in southwestern
Manitoba recently installed a system which not only
keeps the club’s dressing rooms warm, but also keeps
the ice sheets cold.
Manitoba has taken the lead provincially in terms
of having the highest adoption rates of geothermal
systems. However, adoption rates for these alternative
energy systems is still quite low compared to countries
like Iceland, for example, where geothermal heating
accounts for 50 percent of the country’s heat development.
Questions
1.
Who do you think would be the most likely early
adopters of geothermal heating systems in your
province?
2.
Describe a marketing program you could use to
target this group and build awareness about this
type of system.
3.
If you were a salesperson representing a company
selling these systems, describe the tactics you
would use to address the concerns a potential
consumer might have about this type of system.
Sources: CBC Venture, “Energy: Sawdust to Bio-oil,” aired January 23,
2005; “Curling club keeps cool with new geothermal heating system,”
CBC News, October 27, 2006; “Geothermal Power Latest News,”
November 9, 2006, http://www.alternative-energy-news.info/
geothermal-power/; “Geothermal Energy,” Manitoba Energy, Science
& Technology, Energy Development Initiative, 2003, www.gov.mb.ca/
est/energy/initiatives/geothermal.html; Earth Energy Society Of
Canada http://www.earthenergy.ca/tech.html (all websites accessed
November 9, 2006).
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Appendix 2 CBC Video Cases
CBC Video Case 7
Advertising in Crisis?
In 2004, Yasmin Glanville, president of CTR Inc., a
Toronto-based marketing consulting group, made a
bold and controversial statement: “It’s no secret that
the advertising industry, as we knew it, is extinct.”
However, Glanville added, “the advertising industry is
not dead. It is evolving and diverging into solutions relevant to the needs of our times.”
Rick Shaver, a VP at The Hive Strategic Marketing
in Toronto, believes that though the “rules of the game
have changed forever … a new era of infinite possibilities is upon us.” New media options have not only
splintered mass markets into a vast assortment of
communities of common interest, but they have also
created niche markets that are accessible as never
before if marketers understand the new rules of consumer engagement. “Push has been replaced by permission, power is shifting to the buyer, and the
advertising monologue is giving way to consumer dialogue,” according to Shaver.
Advances in technology and changes in consumer
behaviour are shaping a new landscape. For example,
instead of TV, video games are becoming a mainstream media for young adult and teenage males. Bill
Gates, chair of Microsoft, forecast that all traditional
mass media will be delivered via the Internet and that
“The future of advertising is the Internet.” Furthermore,
the Internet, along with the rapid adoption of digital
video recording devices, will enable consumers to
record many television programs by pressing a single
button and downloading the program to their hard
drive. The big concern is that they can undertake this
process largely commercial free. According to
Forrester Research, this may mean that exposure to
advertising may be reduced by more than 50 percent.
Despite all the debate about this industry being in
flux, advertising is indeed very much alive. There is no
doubt that its shape and roads to success are evolving.
Combining business results earned through divergent
and innovative ideas will help to win the minds and
hearts of increasingly empowered consumers.
Questions
1.
How will marketing communications change in
this era of empowered consumers?
2.
Pick one of your favourite brands. State the target
market for the brand. Design an innovative integrated communications program for your brand.
Explain why you selected certain types of media
vehicles for your campaign.
Sources: This case was written by Peggy Cunningham based on the
Venture show “Advertising in Crisis,” aired October 15, 2004, and the
following articles: Yasmin Glanville, “Creativity versus performance,”
Marketing Magazine, November 22, 2004, www.marketingmag.ca;
Rick Shaver, “Custom media: New rules for a new game,” Strategy,
May 31, 2004, p. 11; Michael Kanellos, “Newsmaker: Gates taking a
seat in your den,” CNET News.com, January 5, 2005; Jennifer
Whitehead, “Gates says future of advertising lies on the Internet,
Brand Republic, October 27, 2005; Adam Pasick, “Sorrell sees media
industry ‘panic’ over Internet,” Reuters Canada, October 27, 2005,
http://ca.today.reuters.com/news/newsArticle.aspx?type=technology
News&storyID=2005-10-27T161859Z_01_EIC749378_RTRIDST_0_
TECH-MEDIA-WPP-COL.XML.