Archive for October, 2010

It’s those shades of gray that are keeping you from making a decision …

October 8, 2010

Excerpted fro WSJ: Why So Many People Can’t Make Decisions, Sept. 27, 2010

Some people meet, fall in love and get married right away. Others can spend hours in the sock aisle at the department store, weighing the pros and cons of buying a pair of wool argyles instead of cotton striped.

Seeing the world as black and white, in which choices seem clear, or shades of gray can affect people’s path in life, from jobs and relationships to which political candidate they vote for, researchers say.

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People who often have conflicting feelings about situations — the shades-of-gray thinkers — have more of what psychologists call ambivalence, while those who tend toward unequivocal views have less ambivalence.

High ambivalence may be useful in some situations, and low ambivalence in others.

And although people don’t fall neatly into one camp or the other, in general, individuals who tend toward ambivalence do so fairly consistently across different areas of their lives.

Now, researchers have been investigating how ambivalence, or lack of it, affects people’s lives, and how they might be able to make better decisions.

Overall, thinking in shades of gray is a sign of maturity, enabling people to see the world as it really is. It’s a “coming to grips with the complexity of the world.”

If there isn’t an easy answer, ambivalent people, more than black-and-white thinkers, are likely to procrastinate and avoid making a choice. 

People with a strong need to reach a conclusion in a given situation tend to black-and-white thinking, while ambivalent people tend to be more comfortable with uncertainty.

Because of their strongly positive or strongly negative views, black-and-white thinkers tend to be quicker at making decisions than highly ambivalent people.

Ambivalent people, on the other hand, tend to systematically evaluate all sides of an argument before coming to a decision. They scrutinize carefully the evidence that is presented to them, making lists of pros and cons, and rejecting overly simplified information. 

http://online.wsj.com/article/SB10001424052748703694204575518200704692936.html?mod=WSJ_hp_mostpop_read

Registers Are Ringing … at the Dollar Stores, that is.

October 8, 2010

TakeAway: As people make fewer costly shopping trips to stock their pantries and increasingly can only afford inexpensive items in small quantities, stores are scrambling for the once-ignored low-end customer.

Some customers at Wal-Mart and the major dollar chains have such modest budgets that the retailers report upticks in spending at the beginning of the month, when government benefit checks and many paychecks come through.

Some of the stores have even managed to reach some middle-income shoppers, by increasing products from well-known brands such as Hanes, Quaker Oats and Nabisco. 

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Excerpted from the New York Times, “Stores Scramble to Accommodate Budget Shoppers” By Stephanie Clifford,September 22, 2010

Dollar stores have shown the biggest gain in shopper visits over the last year out of all the retailers that sell basic consumer goods. Manufacturers are racing to package more affordable versions of products common at those stores, and other budget retailers, feeling the loss of customers, are trying to duplicate their success.

 Wal-Mart, the world’s largest retailer, is adding thousands of items to its shelves, including inexpensive ones, and is asking dollar-store suppliers to create small, under-a-dollar packages for its stores, too.

 In areas with high unemployment, Wal-Mart is grouping together its less than $1 items in a clear challenge to the dollar stores. About a quarter of Wal-Mart’s stores are beginning to offer items for under $1, such as a four-pack of toilet paper, boxes containing just a few garbage bags and single rolls of paper towels.

The dollar stores have best been able to capitalize on the downmarket trend because of strategies they embraced during the recession, when the stores kept things cheap and expanded their merchandise.

During the recession, Wal-Mart pulled back on very inexpensive products, suppliers said, to make the stores look less cluttered and to appeal to shoppers who might be testing out that retailer instead of, say, Target. That decision has it now playing catch-up.

The dollar stores have found creative ways to keep their prices low. When commodity costs rose for suppliers, for example, the dollar stores asked them to decrease the number of sandwich bags in a box or pushed them to come up with a cheaper version of the products.

Edit by AMW

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Full Article:
http://www.nytimes.com/2010/09/22/business/22dollar.html?_r=1&th&emc=th 

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What if the rich leave the building ?

October 7, 2010

I think this is the fatal flaw in Obama’s class-warfare tax plan.

Initially, high earners will push their tax deductions to the absolute limit (no, I don’t think they’re doing that now).

…  then they’ll just re-create tax shelter devices reminiscent of the pre-Reagan days (e.g. rental properties; gas, oil, timber partnerships)

…  and finally, they’ll take their bank accounts to safe havens.

A couple of vignettes bring the dynamics to life.

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According to FBN’s John Stossel …

New York billionaire Tom Golisano isn’t stupid.

With $3,000 and one employee, he started a business that processes paychecks for companies. He created 13,000 jobs.

Then New York state hiked the income tax on millionaires.

“It was the straw that broke the camel’s back,” he says.

“Not that I like to throw the number around, but my personal income tax last year would’ve been $13,800 a day. Would you like to write a check for $13,800 a day to a state government, as opposed to moving to another state where there’s no state income tax or very low state income tax?

He established residence in Florida, which has no personal income tax.

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Maryland created a special tax on rich people that was supposed to bring in $106 million. Instead, the state lost $257 million.

Former Gov. Robert Ehrlich, who is running again for his old job, says: “It reminds me of Charlie Brown. Charlie Brown was always surprised when Lucy pulled the football away. And they’re always surprised in Washington and state capitals when the dollars never come in.”

Some of Maryland’s rich left the state.

“They’re out of here. These people aren’t stupid,” Ehrlich says.

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Donald Trump, who knows something about making money, says of course the rich will leave when hit with higher taxes.

“I know these people,” he told me.

They’re international people. Whether they live here or live in a place like Switzerland doesn’t really matter to them.”

You haven’t left, I told him.

“I haven’t left yet. … Look, the rich people are going to leave. And other people are going to leave. You’re going to end up with lots of people that don’t produce. And then that’s the spiral. That’s the end.”

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Excerted from John Stossel, Taxing the Rich, September 29, 2010
http://www.realclearpolitics.com/articles/2010/09/29/taxing_the_rich_107350.html

Your choice: 4 Corvettes or a college diploma ?

October 7, 2010

Parent’s lament: “It’s like driving a new Corvette to the campus every September, leaving the keys and taking the bus home.”

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Excerpted from: RCP, Why Corvettes Cost Less Than College, September 21, 2010

American colleges continue to float in the bubble of economic exceptionalism once occupied by Detroit carmakers.

American median income has grown 6.5 times over the past 40 years, but the cost of attending one’s own state college has ballooned 15 times.

American universities now rake in $40 billion a year more than they did 30 years ago. And most of that money isn’t going for academics.

  • For starters, the money is going to more numerous and more pampered sports teams. Duke University in Durham, N.C., spends over $20,000 a year per varsity golf player. And these squads rarely pay for themselves. There are 629 college football teams, and only 14 make money.
  • The number of administrators per student at colleges has about doubled over 30 years, according to Hacker and Dreifus. Their titles point to such questionable duties as “director for learning communities” and “assistant dean of students for substance education.”
  • Full-time faculty members are being paid more for teaching less. Some elite colleges now offer sabbaticals every third year instead of the traditional seventh. Harvard has 48 history professors, and 20 of them are somewhere else this year.
  • Compensation for college presidents, meanwhile, has soared to corporate CEO levels. Vanderbilt University in Nashville, Tenn., pays its president $1.2 million a year!
  • Universities are also competing to make their on-campus experiences more like a resort than a bookish monastery. Some dorms feature granite counters, kitchens and walk-in closets. Fancy health clubs have replaced musty gyms.

What else are students getting in return for their enormous college bills?

They do receive an education, though the quality doesn’t seem to justify the rising costs.

Bill Gates recently predicted: “Five years from now on the Web for free you’ll be able to find the best lectures in the world. It will be better than any single university.”

A year at a university costs an average $50,000, the Microsoft founder and Harvard dropout said last month. The Web can deliver the same quality education for $2,000.

The market will eventually recognize the out-of-whack economics of today’s “place-based colleges” and intervene. Some day soon, Web alternatives will be a force to be reckoned with.

Full article:
http://www.realclearpolitics.com/articles/2010/09/21/why_corvettes_cost_less_than_college_107241.html

Kodak tries to hang on …

October 7, 2010

TakeAway: For years Kodak’s photo kiosks received little traffic as people decided that they’d rather print at home or keep their photos in digital form.

Now Kodak has caught on that consumers are interesting in specialty printing, such as collages, so the company is updating its kiosks for this functionality.

It’s an insight that the company hopes will change its stodgy brand association into something more cutting edge.  But there’s a catch.  You have to buy a mat or a frame.

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Excerpted from Brandchannel, “Kodak Touts Innovations at Photokina,” by Barry Silverstein, September 21, 2010

Kodak, a brand name that may find it a major challenge to shake its association with conventional photography, is doing everything it can to become a hip, socially aware digital photography provider. …

Kodak’s latest entry into the “cool, hot and worthy” category was unveiled this week … The company’s new retailer photo kiosk “automatically enlarges, shrinks, crops, aligns and arranges as many as 13 images on one print.”

… The new “collage option” software will be introduced in December at some 5,000 CVS stores in the US.

There is one catch … The consumer is required to purchase a mat, or a frame with a mat, along with the collage. …

“Most creative collage systems in the market don’t really take the presentation into account — you create the collage but then you have to mount or frame it. Kodak is taking it all the way to the wall,” …

While traditional photo prints have dropped in popularity because of digital photography, specialty printing is now booming for that very same reason.

Specialty sales of such items as posters, postcards and t-shirts made from digital images have increased from $738 million in 2006 to $1.3 billion last year.

Clearly, Kodak is looking to create its own “Kodak moment” and ride the wave with specialty photography products of its own.

Edit by DMG

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Full Article
http://www.brandchannel.com/home/post/2010/09/21/Kodak-Photokina-Collage.aspx

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The uber-rich speak: Gates (the father) says rich should pay more taxes …

October 6, 2010

I’ve often expressed my chagrin over Warren Buffet’s pontificating that his taxes are too low and so all high earners should pay more taxes.

Now Bill Gates’s father has jumped on the bandwagon and is helping fund support for a new millionaire’s tax in Washington state.

He riles me more than Buffet.  At least Buffet created his pile of gold.  This guy’s major claim to fame is providing young Bill with some DNA.  Now, he lives a lavish life as part of young Bill’s live-in posse. 

Give me a break …

And, oh yeah, before you tell me how philanthropic Buffet and Gates are, remember (1) most of their gifts are forthcoming when they die — allowing to retain the the power of their wealth until they’re long gone, and (2) all of their giving is specifically directed to causes they care about, and managed by members of their posse. 

Why don’t they just turn over their accumulated wealth to the the government right now?

Answer: they’d lose their power as super-rich guys … and even they know that most of the money would be wasted on wacky, ineffective programs.

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According to Art Laffer in the WSJ …

It’s one thing to believe in bad policy. It’s quite another to push it on others.

But Mr. Gates Sr.— a retired lawyer— is now trying to have his way with the people of the state of Washington.

Mr. Gates Sr. has personally contributed $500,000 to promote a statewide proposition on Washington’s November ballot that would impose a brand new 5% tax on individuals earning over $200,000 per year and couples earning over $400,000 per year. An additional 4% surcharge would be levied on individuals and couples earning more than $500,000 and $1 million, respectively.

If Mr. Gates Sr. and his son feel so strongly about taxing the rich, they should simply give the state a chunk of their own money and be done with it. Leave the rest of Washington’s taxpayers alone.

The 11 states where income taxes were adopted over the past 50 years are: Connecticut (1991), New Jersey (1976), Ohio (1971), Rhode Island (1971), Pennsylvania (1971), Maine (1969), Illinois (1969), Nebraska (1967), Michigan (1967), Indiana (1963) and West Virginia (1961).

Each and every state that introduced an income tax saw its share of total U.S. output decline. Some of the states, like Michigan, Pennsylvania and Ohio, have become fiscal basket cases. As the nearby chart shows, even West Virginia, which was poor to begin with, got relatively poorer after adopting a state income tax.

WSJ, The Bill Gates Income Tax,  OCTOBER 5, 2010
http://online.wsj.com/article/SB10001424052748703882404575520241519315372.html?mod=WSJ_Opinion_LEADTop

Lululemon’s Ambassadors wear their loyalty on their sleeves … literally !

October 6, 2010

TakeAway: Upstart retailer Lululemon Athletica, a Vancouver-based maker and retailer of athletic wear, enlists fitness instructors as “ambassadors” to distinguish itself from sportswear giants who typically hire high-priced sports celebrities to model their outfits. 

Lululemon spends almost nothing on advertising beyond occasional print ads in yoga and running magazines; instead, ambassadors receive up to $1,000 of free apparel in return for modeling it for their clients. 

Word of mouth is certainly powerful.

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Excerpted from The Wall Street Journal, “Lululemon Grows Fast on a Slim Budget” By Kevin Helliker, September 13, 2010

Lululemon belongs to an emerging class of retailers focused primarily on designing, making and selling athletic wear to women—and grabbing growing shares of the estimated $15 billion market for women’s fitness attire. 

The companies’ believe that traditional sportswear giants have treated female athletes as an afterthought resonates with many women.

Even amid the recession, Lululemon’s high-priced apparel is selling briskly.

The company has expanded its roster of ambassadors to include running, spinning and resistance-training gurus, including some men.

In keeping with the peace-and-love ethos of yoga, Lululemon publicly describes its primary purpose as promoting good health and well-being rather than making profit.

The company says it offers free yoga classes in its stores to introduce people to yoga’s stress-relieving benefits, not to sell clothes.

Similarly, the company says its ambassador program offers vital feedback on new apparel from fitness experts.

 

Edit by AMW

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Full Article:
http://online.wsj.com/article/SB10001424052748703960004575481890366935552.html#printMode

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From a high of 91% to a low of 12% …

October 5, 2010

Most media reports highlight President Obama’s average job approval.

A recent Gallup survey reports Presidential Approval across major segments and blocs.

Some highlights:

  • Blacks 91 %, Hispanics 55%, Whites 36%
  • 18 to 29 year olds 57%, over 65 year olds 28%
  • East coasters 52%, Southerners 41%
  • Income < $24,000 51%,  income $60,000 to $90,000 43%
  • Dems 79%, GOP 12% 

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http://www.gallup.com/poll/143354/Obama-Approval-Averages-September.aspx?utm_source=alert&utm_medium=email&utm_campaign=syndication&utm_content=morelink&utm_term=Politics

Obama’s professorial credentials …

October 5, 2010

Last week, I questioned Obama’s professorial credentials.

A faithful reader — who is uber-loyal to Obama — provided a link to aUniversity of Chicago media release:

From 1992 until his election to the U.S. Senate in 2004, Barack Obama served as a professor in the Law School.

He was a Lecturer from 1992 to 1996. He was a Senior Lecturer from 1996 to 2004, during which time he taught three courses per year.

Senior Lecturers are considered to be members of the Law School faculty and are regarded as professors, although not full-time or tenure-track.

The title of Senior Lecturer is distinct from the title of Lecturer, which signifies adjunct status. Like Obama, each of the Law School’s Senior Lecturers has high-demand careers in politics or public service, which prevent full-time teaching.

OK, I concede that he taught enough to be “regarded as a professor”.

But, I still don’t like it when folks dis professors as a group.

Dis us individually, please.

Puttin’ on the Ritz

October 5, 2010

TakeAway: Responding to the sharp decline in rates consumers will pay for luxury hotels during economic hard times, Ritz-Carlton will join airlines, credit-card companies, and many other hotel chains in offering a loyalty program to its customers. 

“Ritz-Carlton Rewards” will let guests earn free nights at other hotels.

The high-end chain had long held that its customers weren’t interested in anything as pedestrian as “points,” but the recession has hit luxury hotels even harder than the rest of the industry.

The new points program is one of a number of actions taken at Ritz hotels to try to attract more business and leisure travelers.

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Excerpted from the Wall Street Journal, “Ritz Carlton Bows to Recession, Adds Rewards” By Alexandra Berzon,September 14, 2010

 

“We always said in the early days, we’re not going to give you a toaster, we’re going to give you service,” said Ritz President and Chief Operating Officer Herve Humler. “That was part of the philosophy.”

The occupancy problems for luxury hotels have been compounded by what is known within the hotel industry as the “AIG effect“: Corporations that were the beneficiaries of taxpayer dollars or were laying off workers were criticized by politicians for booking expensive conferences in luxury resorts, and so they started to pull back. Recently, that problem has begun to ease slightly.

Even before the recession, the Ritz found it necessary to make changes in its high-class veneer, becoming more relevant for younger generations that were put off by the traditionally stiff service at many of its hotels.

That led to such changes as making the greetings from staff members less scripted, adding more technology to the rooms and removing the traditional piano and harp players from the lobbies in favor of, in some cases, pop music.

After spending years studying whether to include Ritz in its loyalty program, Marriott executives said that focus groups in the last year and a half began to show that customers were demanding enticements, particularly in Asia where Ritz is expanding. 

The company designed the new loyalty program to keep it separately branded from the general Marriott points program, Marriott Rewards, which has more than 30 million members who can earn points, which can be redeemed at any Marriott hotel as well as several airline partners.

 

Ritz’s top competitor, Four Seasons, has no plans to implement a loyalty program.

Edit by AMW

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Full Article:
http://online.wsj.com/article/SB10001424052748704190704575490113861298350.html

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High taxes? … At least you don’t live in New York or Hawaii …

October 4, 2010

 According to Bloomberg …

High-income residents of New York City and President Barack Obama’s home state of Hawaii would have the highest marginal tax rates in the U.S. if Congress adopts the president’s proposal to increase taxes for top earners, a study found.

State, local and federal levies would result in a top 50.8 percent rate on high-income New York City residents. Affluent Hawaiians would pay 49.7 percent. Residents of California, Vermont, Maryland and New York round out the five states with the heaviest burdens, with top federal- state rates of 49.4 percent, 48.8 percent, 48.6 percent and 48.4 percent, respectively.

States rounding out the top 10 are Maine, Minnesota, Idaho, North Carolina and Ohio.

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Separately, IRS data shows 80 percent of those facing higher taxes under Obama earn between $200,000 and $500,000. An analysis by the congressional Joint Committee on Taxation in August concluded their taxes would increase on average by $532 a year.

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Source:
http://www.bloomberg.com/news/2010-09-22/new-york-hawaii-top-earners-face-highest-tax-under-obama-plan-study-says.html

Playing chicken with the economy …

October 4, 2010

According to the WSJ …

If he Bush Tax Cuts are allowed to expire at year-end per current law, after-tax income for every working American would be reduced.

According to the Tax Policy Center, the average reduction in after-tax income would be 3.3% .

Do the math:

94% of income goes to consumption, and consumption is 70% of gross domestic product.

All else being equal, if the Bush tax cuts don’t get extended, that’s a 2.3% hit to 2011 GDP.

In other words, a certain double dip.

The Trade and Tax Doomsday Clocks, Oct. 4, 2010 
http://online.wsj.com/article/SB10001424052748704116004575521822940983434.html?mod=djemEditorialPage_h

"Young People and Minorities Are All the President Has Left"

October 4, 2010

That’s the headline on the National Journal’s new poll of Americans, conducted with the Pew Research Center.

Digging into the details:

  • Obama still retains support among voters under 30 , but even there his excellent or good job rating is only 45%, as opposed to 47% who rate him fair or poor.
  • His worst numbers are with voters aged 50 to 64, only 34% of whom rate him positively.
  • Minority voters are still solidly behind the president, with 76% of blacks expressing approval. A majority of Hispanic voters also still approve.
  • Among non-Hispanic whites, the bottom has dropped out. Only 30% score Obama positively, with 66% rating him fair or poor.
  • White women who are college graduates give Obama a 39% positive job rating; 31% of white men with a similar educational background do.
  • Only 31% of white women without a college degree rate the president well; only 22% of men without a college degree .

WSJ, For Obama, Even the Good News Is Bad, Sept. 30, 2010
http://online.wsj.com/article/SB10001424052748704116004575522160145340470.html?mod=WSJ_Opinion_MIDDLETopOpinion

 

Spend Real Money on…Fake Money?

October 4, 2010

TakeAway: Starting September 5, Target will offer Facebook Credits gift cards. 

With 500 million members, Facebook expects many to purchase the cards and use them on their favorite social games, applications and virtual goods. 

Target jumped on board, expecting the markets for online gaming and digital music to continue to grow.  For some potential cross-promotion, Target also has more than 1.5 million fans on its Facebook page.

What ever happened to good old conversation or handwritten letters, anyway?

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Excerpted from USA Today, “Target to sell Facebook Credits gift cards” By Jon Swartz, September 2, 2010

The new Facebook gift cards will be available in values of $15, $25 and $50 at all of Target’s 1,750 retail stores and at Target.com. Two or three more national retailers will start selling the cards in coming months.

This will be the first time Facebook has had any presence in a retail store. Facebook already has an arrangement with online-payment services PayPal and MOL to purchase Facebook Credits.

More than 200 million people play free social games on Facebook each month, according to Facebook. And many of them are beginning to spend money on premium goods and services associated with those games.  By year’s end, Facebook expects to have gift card credits available for its thousands of games. At least 19 games on Facebook have more than 10 million active users a month.

 Facebook’s entry into the growing prepaid gift card market could prove lucrative. The domestic prepaid gift card market is expected to reach $86.2billion this year, compared with $80.6billion in 2009, according to Mercator Advisory Group.

Edit by AMW

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Full Article:
http://www.usatoday.com/tech/news/2010-09-01-target01_ST_N.htm

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Clyburn says: “GOP majority would waste time, create gridlock”

October 1, 2010

House Majority whip James Clyburn warned other Dems this week that the GOP — if they win a majority in the House — would waste Congress’ time with hearings into whether the Obama was really born in Hawaii.
 http://thehill.com/blogs/blog-briefing-room/news/121059-rep-clyburn-gop-majority-will-issue-birther-subpoenas-against-ob

My take:

  1. His comment comes during the week that the House committee was entertained by Stephen Colbert’s stand-up testimony.
  2. I like it when the Congress wastes time … means they’re not causing any real damage.
  3. I am concerned that Congress adjourned with unfinished business, e.g. steroids in baseball, the BCS play-off sytem.
  4. Is that Clyburn’s best shot re: why Dems should be elected ??? 

They don’t like his policies, but they still like him … oh yeah ?

October 1, 2010

The refrain that ‘Obama is still personally popular’ is repeated so often — especially in the mainstream media — that it’s treated as a universal truth.

Unfortunately (for Obama) the facts don’t support the contention.

Based on the latest WSJ-NBC poll :

  • 47% of people feel positively towards Obama … 29% very positively
  • The 47% is down from 64% on Inauguration Day
  • 41% of people feel negatively towards Obama … 27% very negatively
  • The 41% is up from 19% on Inauguration Day

My take:

  • People started out liking him, but …
  • Less than half now feel positively towards the guy
  • Numbers correlate pretty well with his job approval

Question: how would you feel if half the people who knew you felt negatively about you ?

Bummed, right ?

So why do the pundits keep saying he’s one popular dude ?

I must be missing something …

http://online.wsj.com/public/resources/documents/WSJNBCPoll09282010.pdf

Leveraging a "P": Wal-Mart Expands Its Reach via FedEx

October 1, 2010

TakeAway: Wal-Mart is experimenting with allowing customers to buy merchandise online and have it delivered for free to urban FedEx locations in a bid to boost sales in big cities where the retailer has little to no store presence.

A perfect example of one of the 6Ps – placement!

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Excerpted from the Wall Street Journal, “Wal-Mart Uses FedEx to Expand Urban Push” By Miguel Bustillo,September 20, 2010

This summer, Wal-Mart started tests in Los Angeles and Boston to allow customers to direct purchases made on Walmart.com to FedEx Office outlets at no cost, mimicking a Wal-Mart offering called Site to Store that lets online buyers send items to the retailer’s stores for free.

Wal-Mart has no stores in Boston and two in Los Angeles, but FedEx has many locations in both. Wal-Mart is still collecting feedback from the tests.

Some retail experts said it seemed like an inevitable next step for the retailer, which has struggled to expand into America’s largest cities amid political opposition from labor unions. Wal-Mart is searching for new ways to spark domestic growth without needing to invest in real estate.

Wal-Mart also is pursuing younger urban shoppers, who don’t think twice about making big purchases online.

The partnership could allow FedEx to capitalize on its locations near college campuses it inherited when it acquired Kinkos in 2004.

Edit by AMW

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Full Article:
http://online.wsj.com/article/SB10001424052748704416904575501790739176042.html

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