Archive for December 22nd, 2010

Oregon hikes tax rates … and tax receipts (predictably) go down.

December 22, 2010

Remember when Charlie Gibson stunned Candidate Obama by pointing out that when capital gains tax rates go up,capital gains tax receipts go down? It was obviously new news to Obama who countered: “But, it should be done for fairness”.

Continues to amaze me that our crack legislators confuse “tax rates” with “tax revenue” … and refuse to accept the repeated empirical evidence that they are inversely related.

Excerpted from WSJ, Ducking Higher Taxes, Dec 21, 2010…

Oregon raised its income tax on the richest 2% of its residents last year to fix its budget hole, but now the state treasury admits it collected nearly one-third less revenue than the bean counters projected.

Oregon’s liberal voters ratified a tax increase on individuals making more than $250,000 and another on businesses … no doubt feeling good about their “shared sacrifice.”

Congratulations. After the tax was raised “income tax and other revenue collections began plunging steeply.  Instead of $180 million collected last year from the new tax, the state received $130 million.

One reason revenues are so low is that about one-quarter of the rich tax filers seem to have gone missing. The state expected 38,000 Oregonians to pay the higher tax, but only 28,000 did. Funny how that always happens.

All of this is an instant replay of what happened in Maryland in 2008 when the legislature in Annapolis instituted a millionaire tax. There roughly one-third of the state’s millionaire households vanished from the tax rolls after rates went up.

http://online.wsj.com/article/SB10001424052748704034804576026233823935442.html?mod=WSJ_Opinion_AboveLEFTTop

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The Evolution of Focus Groups

December 22, 2010

TakeAway:  Arguing that focus groups were never really all that effective in the first place, agencies and research facilities have introduced a variety of methods aimed at shaking up the traditional focus group approach. 

Young & Laramore, an Indianapolis-based agency, frequently runs what the company president calls “friendship groups.”

That’s when the company will tap one consumer and ask that individual to recruit two or three others from his/her social circle. The assumption is that one is more likely to be comfortable in an experimental setting when with others in one’s social network.

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Excerpted from Forbes, “From Focus Groups to ‘Friend’ Groups” By Elaine Wong, November 19, 2010

In these situations, researchers can tell when participants are sharing “secrets with each other, you can catch them winking their eyes or exchanging signals with each other, and you dig into that and find out what’s up.”

Contrast that with the conventional focus group model, in which the scenario in question usually runs something like this: A packaged goods company, retailer or marketer, let’s say, asks an agency or research partner to recruit a panel of consumers with whom to test new products, packaging or ideas. These groups, which can range anywhere from six to 12 or more in number, then gather in a “sterile” room, as many agency execs describe it. A moderator then runs through a list of questions and records participants’ responses while researchers in the back room watch. Such procedures are routine, boring, not to mention long—one session can last 90 minutes—and yield few, if any, new insights.

One catalyst driving the push is the proliferation of social media mining tools, which allow companies to test and tweak new go-to-market strategies in real time and without the need for an actual focus group.

To avoid the typical, ho-hum answers, one company, The New England Consulting Group, uses a methodology called Super Groups, which involves finding the extreme, “lunatic fringes” of a consumer set. Talking to those who are not your average consumer ensures that you get not-so-average—and in some cases, off the chart—results. Several agency executives also brought up the idea of “conflict groups,” when “you recruit and mix people who love something [with] others who hate it or [bring together] passionate lovers of two different brands,” explains an Arnold executive.

Efficiency aside, the historical focus group also posed other problems. One is the gap between what people think and how they later act. Consumers may rationalize their shopping or buying behaviors, but emotion, rather than reason, is often a big driver of these decisions.

Edit by AMW

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Full Article:

http://blogs.forbes.com/elainewong/2010/11/19/from-focus-groups-to-friend-groups/

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Posted in Mktg - Consumer Behavior, Mktg - Market Research | Leave a Comment »