Just kidding, of course.
Off-shore rigs are still shut-down, waiting for Cowboy Ken Salazar and Energy Secretary Steven Chu (excuse me, the Nobel Prize winning US Secretary of Energy, Steven Chu) to give them the green light to re-start.
No sites being developed in ANWR, no new off-shore rigs, existing rigs mothballed … and the Middle East in turmoil.
It’s gonna take a lot of windmills and solar shingles …
My bet: $5 gas this summer …
Just kidding, of course.
Off-shore rigs are still shut-down, waiting for Cowboy Ken Salazar and Energy Secretary Steven Chu (excuse me, the Nobel Prize winning US Secretary of Energy, Steven Chu) to give them the green light to re-start.
No sites being developed in ANWR, no new off-shore rigs, existing rigs mothballed … and the Middle East in turmoil.
It’s gonna take a lot of windmills and solar shingles …
My bet: $5 gas this summer …
Peggy Noonan was a Republican speech writer … then she jumped on the Hope & Change train … then she fell out of love with O … then the Tucson speech reignited her enthusiasm … then came the State of the Union.
Here a few of the notable quips from her WSJ op-ed …
I hate writing this. I wanted to write “A Serious Man Seizes the Center.” But President Obama was not serious and he didn’t seize the center, he went straight for the mush.
It is a strange and confounding thing about this White House that the moment you finally think they have their act together — the moment they get in the groove and start to demonstrate that they do have some understanding of our country — they take the very next opportunity to prove anew that they do not have their act together, and are not in the groove. It’s almost magical.
Rhetorically the speech lay there like a lox, as if the document itself knew it was dishonest, felt embarrassed, and wanted to curl up quietly in a corner of the podium and hide. But the president insisted on reading it.
The President continues not to comprehend America’s central anxiety about government spending: that it will crush our children, constrict the economy in which they operate, make America poorer, lower its standing in the world, and do in the American dream.
We’ll focus on “greater Internet access,” “renewable energy,” “one million electric vehicles on the road by 2015,” “wind and solar,” “information technology.” “Within 25 years, our goal is to give 80% of Americans access to high-speed rail.” The administration continues to struggle with the concept of priorities. They are like people who’d say, “Martha, the house is on fire and flames are licking down the stairs—let’s discuss what color to repaint the living room after we rebuild!” A better priority might be, “Get the kids out and call the fire department.”
The president will limit the cost of government by whipping it into shape and removing redundant agencies. Really? He hasn’t shown much interest in that before. He has shown no general ideological sympathy for the idea of shrinking and streamlining government. He’s going to rationalize government?
On education, the president announced we’re lagging behind in our public schools. Who knew? In this age of “Waiting for Superman” and “The Lottery,” every adult in America admits that union rules are the biggest impediment to progress. “Race to the Top” isn’t the answer. We all know this.
There is often about the president an air of delivering a sincere lecture in which he informs us of things that seem new to him but are old to everyone else. He has a tendency to present banalities as if they were discoveries. “American innovation” is important. As many as “a quarter of our students aren’t even finishing high school.” We’re falling behind in math and science: “Think about it.” Yes, well, all we’ve done is think about it.
When you talk this way, as if the audience is uninformed, they think you are uninformed. Leaders must know what’s in the national information bank.
He too often in making a case puts the focus on himself. George H.W. Bush, always afraid of sounding egotistical, took the I’s out of his speeches. We called his edits “I-ectomies.” Mr. Obama always seems to put the I in. He does “I implants.”
The president made a semi-humorous reference to TSA pat-downs, but his government is in charge of and insists on the invasive new procedures, to which the president has never been and will never be subjected. So it’s not funny coming from him.
WSJ, An Unserious Speech Misses the Mark, Jan. 27, 2011
TakeAway: Like many new, innovative products, there is an adoption chasm between the early adopters and the early majority.
While the new Chevy Volt has already demonstrated appeal to the early tech adopters, there are some issues that could spell trouble.
One, the short battery range doesn’t really offer a complete solution to eliminating the need for gasoline.
Two, once you have exhausted the battery, it’s just another car. Until the battery technology improves, the “killer application” seems to be lacking.
* * * * *
Excerpted from NPR, “Electric Cars Steal the Spotlight at Auto Show,” by Sonari Glinton, January 14, 2011
When the North American International Auto Show opens in Detroit on Friday, there’s going to be electricity in the air. …
… the star of the show is the Chevy Volt, the electric car with a backup gas engine. It won the top prize — the 2011 North American Car of the Year. …
GM has high hopes that the Volt will be adopted by a mainstream audience.
“Today a lot of our customers are early tech adopters — typically the first on the block to have an iPhone or an iPad,” says Tony DiSalle, the head of marketing for the Chevy Volt. He thinks those numbers will improve over time.
“The most important thing is to get consumers — mass-market consumers — to understand the benefits of the Volt,” DiSalle says.
GM expects to sell about 10,000 Volts this year. In 2012, the company will ramp up production to about 45,000 cars. But even that figure is small compared with the more than 2.2 million cars and trucks that GM’s four brands sold in 2010. …
One of the barriers to the adoption of the electric car is a phrase that keeps coming up at the auto show — range anxiety. Many of the cars on display can only travel under electric power for short ranges. Analysts say that until the big car companies can conquer consumer fears of running out of charge, electric vehicles will remain on the fringes.
“Look, the electrification of the American fleet is not going to happen overnight,” says Bob Lutz, who retired as vice chairman of GM in May.
… He says electrification will be a gradual process, predicting that it will take until 2025 for electric vehicles to account for 10 percent to 15 percent of the overall market. …
Edit by DMG
TakeAway: Like many new, innovative products, there is an adoption chasm between the early adopters and the early majority.
While the new Chevy Volt has already demonstrated appeal to the early tech adopters, there are some issues that could spell trouble.
One, the short battery range doesn’t really offer a complete solution to eliminating the need for gasoline.
Two, once you have exhausted the battery, it’s just another car. Until the battery technology improves, the “killer application” seems to be lacking.
* * * * *
Excerpted from NPR, “Electric Cars Steal the Spotlight at Auto Show,” by Sonari Glinton, January 14, 2011
When the North American International Auto Show opens in Detroit on Friday, there’s going to be electricity in the air. …
… the star of the show is the Chevy Volt, the electric car with a backup gas engine. It won the top prize — the 2011 North American Car of the Year. …
GM has high hopes that the Volt will be adopted by a mainstream audience.
“Today a lot of our customers are early tech adopters — typically the first on the block to have an iPhone or an iPad,” says Tony DiSalle, the head of marketing for the Chevy Volt. He thinks those numbers will improve over time.
“The most important thing is to get consumers — mass-market consumers — to understand the benefits of the Volt,” DiSalle says.
GM expects to sell about 10,000 Volts this year. In 2012, the company will ramp up production to about 45,000 cars. But even that figure is small compared with the more than 2.2 million cars and trucks that GM’s four brands sold in 2010. …
One of the barriers to the adoption of the electric car is a phrase that keeps coming up at the auto show — range anxiety. Many of the cars on display can only travel under electric power for short ranges. Analysts say that until the big car companies can conquer consumer fears of running out of charge, electric vehicles will remain on the fringes.
“Look, the electrification of the American fleet is not going to happen overnight,” says Bob Lutz, who retired as vice chairman of GM in May.
… He says electrification will be a gradual process, predicting that it will take until 2025 for electric vehicles to account for 10 percent to 15 percent of the overall market. …
Edit by DMG
TakeAway: Social media has increased the speed at which customers hear from their friends about good and bad experiences with companies. In times of recession, low prices AND good customer experience are what’s needed to succeed. People-centric industries, like retail and hotel, where there is more competition tend to spend more to create a good customer experience and find success in doing so.
* * * * *
Excerpted from AdAge, “The Marketing Value of Customer Experience,” by Josh Bernoff, January 12, 2011
Customer experience is marketing. That is, in a world drenched in social word-of-mouth, the way you treat your customers — and the way they perceive you — makes all the difference in what they say to their friends.
…results from Customer Experience Index survey.
The best performers overall were Borders, Barnes & Noble, Kohl’s, Costco, Amazon, JCPenney, Walgreens, Target, BJ’s Wholesale Club, and USAA (credit cards). …a great experience by itself doesn’t make up for an industry facing digital disruption. It’s also fascinating how many low-price providers are in the top ten,… . In a recession, providing low prices and an experience that’s better than people expect is a prescription for success.
… advertising is a lot cheaper and easier than changing… to focus on customer experience. … sure, you can keep hammering the message of how great you are, even if your customers think differently. … But in the end, people will find out the truth — and with social technology, that happens more easily every day.
Or, you could put your money and effort into improving the experience. That’s an effort that will take a couple of years, but with buyers coming back and seeking value as the recession lifts, you’ll attract the leaders. They’ll talk. You could end up like Zappos, where the customer word-of-mouth is most of the marketing. Or, you could just develop a customer experience that resonates with consumers, which is a whole lot easier to advertise.
Edit by HH
Bottom line: State universities and even some private colleges are culling senior faculty members to trim budgets.
That “lifetime employment” thing will get you every time …
* * * * *
BusinessWeek, States Take Aim at Tenured Professors, January 6, 2011
Hundreds of professors at public universities across the U.S. have been coaxed into retirement with offers of as much as two years’ pay.
Faced with 2012 deficits estimated at a total of $140 billion … states are looking to their university systems for savings, even if it means circumventing the once-sacrosanct tenure system.
The buyouts make business sense: Pay for tenured professors averages $117,000 a year at the top 200 U.S. public universities. Annual contracts for replacement instructors cost an average $52,500.
Texas A&M University in College Station persuaded 104 professors to retire.
Even some private colleges and universities, which have cut budgets because of falling endowment returns and rising competition for tuition dollars, are considering culling senior faculty.
At Harvard, retirement incentives were offered to 176 professors 65 or older … 46 of them, with a median age of 70, accepted.
The American Association of University Professors, warns that the departure of the most seasoned professors may prove damaging down the line.
“Experienced and active faculty members who will be leaving and replaced in the short-term are going to be followed by people who are much more transient.”
Everybody knows that Fed Dept’s have many overlapping and redundant agencies … and that inefficiency rules the day.
My POV: getting Fed spending under control can’t be done simply “at the margin” by squeezing all agencies 10% or so.
Rather, major surgery needs to be done – eliminating agencies or whole departments.
I assumed that most of the bureaucracies were set up by Dems, and was surprised to learn that out of the 15 Departments in the Executive Branch …
Republicans created these Departments;
Hmmm.
TakeAway: If what you’ve done in the past isn’t working, understanding why and communicating changes to consumers is imperative.
But if what you are offering is not what the consumers want, no amount of restaging will solve the problem.
It’s also important to understand where in the PLC your product is and what are the feasible alternatives for stretching maturity out as long as possible.
* * * * *
Excerpted from AdAge, “Pantene set to try again to reverse slide,” by Jack Neff, January 17, 2011
After a second restage in three years failed to take hold with consumers last year, the Procter & Gamble Co. brand is preparing another course correction later this month for what remains the leading brand in U.S. and global hair care.
P&G believes it’s identified and will soon fix problems with the latest restage. … problems included consumers being more loyal to discontinued products (particularly two-in-one shampoo-conditioners) than the brand, and restrictive policies at Walmart that kept the brand from communicating changes to consumers…
But some say the problem goes deeper to the basic premise behind the restage. Traditionally hair-care products touted what they do for your hair — be it volumize, smooth or add shine. Pantene took a different approach — organizing into ranges based on hair types, not solutions.
One hopeful sign is that the midcourse correction following Pantene’s last restage, which included more readable packaging and more focus on value positioning vs. salon brands, ended a similar skid.
Even so, the restages and tweaks have engendered skepticism among analysts. Pantene may be facing consequences of line extensions that aimed to blunt advances by competitors leaving Pantene with a complex product lineup and growing distance from its “healthy, beautiful hair that shines” equity.
To be sure, the U.S. hair-care business has been brutal for big players and design firms beyond P&G — though the mass business did begin growing again last year after two years of decline. Unilever last year discontinued Sunsilk in the U.S. four years after its launch and little more than two years after a 2008 Super Bowl ad for the brand created by design firm Desgrippes Gobe (now BrandImage) and positioning specialist BrandThinkTank. L’Oréal Vive, launched in the 1990s, is hanging on in drug and grocery stores, but is off shelves at Walmart and Target.
Edit by HH
Oil companies, banks, insurance companies, manufacturing companies with global footprints.
Hmmm.
Tax rates for high-earners are going up to fund “investments” in things Americans are clamoring for … like high speed rail between Disneyland and Las Vegas, and wiring up rural America (when the rest of the world is going wireless).
Corporate tax rates coming down, but corporate taxes staying the same or going up … huh?
Closing corp tax loopholes except for windmills, solar shingles, etc.
Don’t even think about touching ObamaCare … except the 1099s for small businesses.
Bottom line: I lost, you won, I don’t care, business as usual.
* * * * *
Most notable: Colleges should welcome back military recruiters and ROTC.
Silliness: “Sputnik moment”, faces in the crowd, weird stories of visits to community colleges and shingle companies.
Most surprising: Even the Dems in the crowd looked bored. My imagination, or were some doing Siduko puzzles?
So “do it” moment: overlapping functions across executive branch agencies (e.g. the salmon story) … they’re under your management Mr. President. So, fix them and stop yakking … !
Interesting point raised by new Senator Pat Toomey in the WSJ regarding the debate on raising the national debt limit:
For months, some political leaders have argued that failure to raise the debt ceiling would necessarily cause the U.S. to default on its debt.
President Obama’s Council of Economic Advisors chairman, Austan Goolsbee, recently warned, “If we get to the point where you’ve damaged the full faith and credit of the United States, that would be the first default in history caused purely by insanity. I don’t see why anybody’s talking about playing chicken with the debt ceiling.”
In fact, if Congress refuses to raise the debt ceiling, the federal government will still have far more than enough money to fully service our debt.
Next year, for instance, about 6.5% of all projected federal government expenditures will go to interest on our debt. Why would we ever default?
To make absolutely sure (we don’t), I intend to introduce legislation that would require the Treasury to make interest payments on our debt its first priority in the event that the debt ceiling is not raised.
This would not only ensure the continued confidence of investors at home and abroad, but would enable us to have an honest debate about the consequences of our eventual decision about the debt ceiling.
WSJ, How to Freeze the Debt Ceiling Without Risking Default, Jan. 19, 2011
In rough numbers, the U.S. is paying about about 1.5% in annual interest to service the $13 billion national debt … that’s about $200 billion.
Tax collections are a tad over $2 billion annually; spending is running about $3.5 billion … for an annual deficit of $1.5 billion.
In other words, $3.3 billion – almost 95% of total expenditures are for stuff other than interest on the debt.
Why not follow Toomey’s advice? Pay the interest, and shave 6% off the rest of the spending.
Makes sense to me
* * * * *
For numbers galore:
http://www.federalbudget.com/HistoricalTables.pdf
TakeAway: Campbell Soup wants to boost its business in China via a joint venture with the conglomerate Swire Pacific Ltd. to sell soup and broths. Swire has been the company’s distribution partner in China, but with its varied business lines (it is also the largest Coca-Cola Co. distributor in China), Campbell can now access broad distribution channels in China.
* * * * *
Excerpted from WSJ, “Campbell-Swire Venture To Market Soups In China” By Paul Ziobro, January 12, 2011
Campbell, which has slowly been building its business in the emerging markets of China and Russia, will control 60% of the joint venture, called Campbell Swire, which will launch early this year. The partnership will manufacture, distribute and market Campbell’s soups, broths and stocks in China. Profits and losses will be shared according to ownership.
Faced with slower growth in the U.S., food companies have focused on developing markets to inject growth into the business. China represents one of the biggest opportunities, with 1.3 billion consumers that have the spending power of the U.S. population, according to a recent PricewaterhouseCoopers LLP report. But challenges lurk in trying to develop enough scale to turn a profit and navigate a complex distribution network.
The arrangement has the potential of helping Campbell accelerate its growth there without having to pay most of the costs, although it is sacrificing some potential profits.
For Campbell, the prize in China is a demographic with one of the highest rates of per-capita soup consumption in the world, although most of it is homemade. Campbell says Chinese consumers have nearly 355 billion servings of soup a year.
Campbell will keep ownership of its brands and recipes, and license them to the joint venture.
Edit by AMW
OK, the stock got a bump on Friday thanks to a sweet earnings report … and, perhaps, thanks to Obama naming CEO Immelt to head up his recovery board of advisers.
I’m conflicted, for a couple of reasons.
First, GE stock has steadily lost value during Immelt’s tenure … which started in 2001.
Yeah, there was 9/11 and the financial crisis, but the rest of the world – measured by the S&P 500 has pretty much gotten back its losses.
GE is still down 50% from when Immelt took over.
But, it makes you wonder: why didn’t Obama pick a CEO with a record of success?
Say, like Immelt’s predecessor –- Jack Welch – who knows how to cut costs and drive innovation.
I guess Obama wanted somebody he could count on to support his healthcare and cap & trade initiatives.
FoxNews has taken to calling GE “Government Electric” because it yapped the TARP program, it takes a heavy dose of government contracts, and its media outlets (NBC and MSNBC) cheerlead for Obama..
There are a few companies on the Obama corporate A List – Democratic patrons Google and Goldman Sachs both turn up again and again at White House functions and for special recognition – but no company seems to get the VIP treatment that General Electric receives.
While most corporate leaders have taken a wait and see approach to Obama’s occasional overtures to the private sector, G.E., along with Google, Goldman and few others, have backed him to the hilt.
Whether it is pushing the president’s plan for global warming fees in order to create demand for his “Ecomagination” line of windmills, solar panels, etc., boosting the president’s national health-care law as part of an effort to sell more medical equipment, or enthusing over the Obama strategy of making loans available for industrial exporters, Immelt has been an Obama stalwart all along.
Immelt has also consistently argued to shareholders that there is big money to be made in advancing the Democratic agenda, in huge government contracts, subsidies and incentives.
FoxNews.com, Obama Teams Up With GE, January 21, 2011
That raises some major angst for me – my political philosophy is on one side, and my wallet is on the other.
Oh my.
Fitness guru Jack LaLanne passed away on Sunday … at the ripe old age of 96.
Nice article in the Wash Post touting the man …
Jack LaLanne was … a fitness pioneer!
He inspired us to get off the couch and do jumping jacks.
He once swam the length of the Golden Gate Bridge while toting 140 pounds of equipment!
And, on television, he encouraged us to engage in manageable fitness — or at least to buy a juicer!
Jack LaLanne was a hero for people like me.
The world these days is more polarized than ever. The Fit People meet up once a year, slather their bodies in oil, and march around in swimsuits lifting refrigerators with their teeth. They jog distances traditionally associated with announcing that the Greeks are victorious and then dying on the spot.
The Fat People meet up every day at Chili’s and order platters of things slathered in other things that you wouldn’t think were a good combination unless your goal was to singlehandedly consume more calories than the entire population of a smaller first-world country like Liechtenstein.
There are the rest of us. We just sort of muddle along. Every year we resolve to go to the gym and lift things and jog on the machines and maybe use those giant inflatable balls for whatever it is they’re supposed to be used for.
Jack LaLanne wasn’t about just the fit people — or just about the Fat People.
During his years on television, he encouraged everyone to work out, not just the people with buns of steel or buns of cinnamon.
I’ll miss Jack LaLanne.
Washington Post, This is why we’re fat: Missing Jack LaLanne, January 24, 2011
TakeAway: With the proliferation of DVRs such as TiVo, building awareness for products and services through TV commercials is more challenging than it used to be.
To get viewers to stop skipping through the commercials, advertisers are starting to make commercials look like the shows they interrupt.
It’s tricky but effective.
* * * * *
Excerpted from NPR, “‘Podbuster’ Ads, Calculated To Make You Hit Pause,” by Neda Ulabe, January 12, 2011
Call it smart advertising — or bad boundaries. You may have noticed a spike in the number of TV commercials designed to look and feel like whatever show you’re watching. They’re called podbusters, DVR busters or interstitial ads, and they’re designed to remove viewers’ fingers from the fast-forward button during blocks — or “pods” — of ads.
The advent of TiVo and similar devices can be thanked for the rise of the podbusters. About 40 percent of households have DVRs — meaning 40 percent of households can easily zip past commercials. Think of podbusters as speed bumps for ads.
Media consultant Dan Portnoy got caught while watching … the AMC drama Mad Men. That evening, he was speeding through the commercials as usual when he saw guys in ’60s fashions in a familiar-looking office, and he thought the program had started again. So he stopped fast-forwarding. What he saw looked like Mad Men. It sounded like Mad Men. But it was an ad for shampoo. …
He’d been caught by one kind of podbuster: a commercial that looks like the show. Bravo’s Top Chef employs a different variety: brief, vacuous outtakes from the real show, slotted in between commercials to make you think the program has started up again. …
There are other kinds of podbusters, too. Both Glee and 30 Rock are punctuated by commercials featuring actors from the shows. When you see Tina Fey in an American Express ad as it whizzes by on fast-forward, it’s easy to mistake it for 30 Rock — and so you stop to watch. …
Edit by DMG
What can I say? Granddaughter Anna wins by a landslide …
Thanks to Meg (a.k.a. “Mommie”) for candid capturing this teaching moment.
First, the disclaimer: I own a statistically significant amount of GE stock – leftover from my years working with the company. So, I’m as biased as biased can be. I’d like the stock price to go up — a lot.
* * * * *
I was bummed a week ago when the crack Sanford C. Bernstein analysts downgraded General Electric stock from an “outperform” rating to a “market perform” rating. As near as I can tell, in analyst-speak, that means “sell”.
I assumed that those dudes were plugged in and were foreshadowing a bad earnings report.
Then, the headlines started rolling in: G.E. Profit Rises 51%, Topping Forecasts … and the stock bumped more than 5% in a day.
Remind me not to listen to Sanford C. Bernstein analysts … boy, they must feel dumb … but, I bet they’ll still get fat bonuses.
* * * *
Tomorrow: Obama appoints Immelt to his recovery board …
TakeAway: While some consumers balk at logo changes for aesthetic reasons, others react due to an emotional connection companies wanted to create in the first place. Companies involve consumers in what used to be regarded as internal corporate operations. Sometimes, you get what you ask for.
* * * * *
Starbucks wants to join the small club of companies that are so recognizable they can rely on nothing but a symbol: Nike and its swoosh; McDonald’s and its golden arches; Playboy and its bunny; Apple and its apple.
The danger is that it will join the much larger class of companies that have tried to change their logos only to be forced to backtrack by an electronic lynch mob.
The people who spend their lives creating new logos and brand names have a peculiar weakness for management drivel. Marka Hansen, Gap’s president for North America, defended the firm’s new logo (three letters and a little blue square) with a lot of guff about “our journey to make Gap more relevant to our customers”. The Arnell Group explained its $1m redesign of Pepsi’s logo with references to the “golden ratio” and “gravitational pull”, arguing that “going back-to-the-roots moves the brand forward as it changes the trajectory of the future”.
People have a passionate attachment to some brands. They do not merely buy clothes at Gap or coffee at Starbucks, but consider themselves to belong to “communities” defined by what they consume. A second reason is that the more choices people have, the more they seem to value the familiar.
The debate about logos reveals something interesting about power as well as passion. Much of the rage in the blogosphere is driven by a sense that “they” (the corporate stiffs) have changed something without consulting “us” (the people who really matter). This partly reflects a hunch that consumers have more power in an increasingly crowded market for goods. But it also reflects the sense that brands belong to everyone, not just to the corporations that nominally control them.
Edit by AMW
* * * * *
* * * * *
Keith Olbermann and MSNBC abruptly parted ways on Friday night, as the network announced it had agreed to end his contract and the last installment of his show would air that evening.
Olbermann made his debut on “Countdown” in 2003 and quickly became the face of MSNBC’s more liberal tilt in its evening hours. Along with fellow host Rachel Maddow, he helped catapult MSNBC ahead of Time Warner’s CNN in the size of its primetime audience.
Olbermann averaged 1 million viewers in 2010 in the 8 p.m. hour, according to MSNBC, a distant second to Fox News’s Bill O’Reilly, but nearly double what CNN averaged against him in the hour.
WSJ, MSNBC, Olbermann Call It Quits, Cancel Show, Jan. 22, 2011
* * * * *
Note: It’s a heavy round up to get Olberman’s audience to 1 million … typically, it ran around 750,000. O’Reilly is usually pegged at 2.5 to 3.0 million. CNN at about 500,000 to 750,000.
Most interesting: About 300 million folks don’t watch any of them in prime time … and, I think WWE beats them all when RAW and Smackdown are on.
* * * * *
Source: Drudge Reports
Previously, we posted that a 26-state majority was suing over the constitutionality of ObamaCare mandates.
Make that 27 …
Governor Mary Fallin announced last night that Oklahoma will file a lawsuit against the new healthcare law.
Instead of joining the 25 states in the Florida suit or Virginia in its free-standing lawsuit, Oklahoma will sue on the grounds that the federal healthcare law violates the new constitutional amendment just approved by Oklahoma voters.
Oklahoma State Question 756 changed Oklahoma’s constitution to say Oklahomans can’t be required to participate in any healthcare system – be it Federal or State dictated.
For those keeping score …
But, Reid says “no up or down vote” and Obama says “veto”.
So much for “government by the people, for the people” …
There’s still a lot of chatter about how evil health insurance companies are causing health care costs to continue to soar. The implication is that the increases are largely attributable to their expanding profit margins and astronomical exec bonuses.
Then, a WSJ op-ed got me thinking.
The punch line: Blue Shield of California announced that it was upping premiums by as much as 39% to cover increases in the underlying cost of health care and the added costs of ObamaCare – e.g. coverage for adult children and pre-existing conditions.
Here’s the rub: Blue Shield of CA is a not-for-profit insurer. All they do is collect premiums and pay health providers – and try to breakeven at the end of the year. So, their premium increases can’t be demonized as profiteering. If they have to pay more out, they simply adjust premiums to cover the difference.
Got me wondering: how much of the health insurance business is handled by not-for-profits?
About 275 million Americans have health insurance … roughly 1/3 of them are covered by Medicare or Medicaid.
Since the gov’t doesn’t engage in profiteering, we can dismiss 1/3 of insureds and half of health care expenditures as irrelevant to the profiteering argument.
OK, we’re down to 200 million insureds.
There are plenty of NFP insurance companies, but the biggie is Blue Cross / Blue Shield.
From their web site: Health plan providers affiliated with the Blue Cross and Blue Shield Association (BCBSA) — known as “the Blues” — serve more than 100 million members nationwide.
So, at most, for profit health insurance companies cover about 1/3 of all insureds – and handle less than 1/4 of all health care expenditures.
Looks to me, like premiums are going up because healthcare costs are going up … not because of profiteering.
Maybe I’m missing something …
TakeAway: Starbucks unveiled an alliance Thursday with India’s flagship conglomerate, Tata Group, a wide-ranging company that owns everything from Jaguar cars to steel mills and tea plantations. This move is designed to pave the way for retail locations and to sell more Indian coffee world-wide. The alliance is with India’s Tata Coffee Ltd. unit, which owns the Eight O’Clock Coffee Co. in the U.S. and is a big coffee producer in India.
Starbucks’s success will depend on its adaptability to local tastes, but plans to stick to its strategy of being a “third place” for young Indians.
* * * * *
Excerpted from WSJ, “Starbucks Brews Plan to Enter India” By Paul Beckett and Vibhuti Agarwal and Julie Jargon, January 14, 2011
India remains one of the big untapped markets for Starbucks. Chairman Howard Schultz said India could one day rival China, where the company recently announced plans to more than triple the number of outlets to about 1,500 in five years.
Although known as a land of tea, India is also a major coffee exporter—the fifth-largest in the world, according to the USDA. Indians have been flocking to coffee themselves as well. Overall domestic consumption rose to an estimated 94,400 metric tons in 2008, up almost 90% since 1998, according to Indian government figures. Much of that has been driven by quick-service, comfortable cafes that are Starbucks’s specialty.
Mr. Schultz said one of the reasons for the alliance is to raise the profile and use of Indian premium Arabica beans in Starbucks stores elsewhere. The first phase of the alliance involves sourcing and roasting beans.
The companies also are considering the opening of Starbucks outlets in Tata retail locations and hotels, Mr. Schultz said. Tata’s Taj hotels are among the most upscale in India and include the landmark Taj Mahal Palace & Tower besieged in the 2008 Mumbai terror attacks.
In recent years, many brands have been expanding as greater exposure to western culture has boosted their appeal among young people and a growing middle class. Starbucks had been looking for a partner in India since about 2007.
Some Indian consumers in New Delhi welcomed the prospect of Starbucks’s arrival, while others see it as a status symbol for the elite.
Edit by AMW
* * * * *
Full Article:
http://online.wsj.com/article/SB10001424052748703583404576079593558838756.html?mod=dist_smartbrief
* * * * *
Remember when Obama’s crack Secretary of the Interior — Cowboy Ken Salazar – said he was putting his boot on BP’s throat and keeping it there “until” they paid up? Then, he and Obama demanded that BP set up a $20 billion account to fund recovery efforts.
Well, I guess the boot can be lifted from BP’s throat now … thanks to the Russians.
The NY Times reports:
Russian companies are talking to BP about buying billions of dollars in oil fields and other assets to help it pay its gulf cleanup and compensation costs.
Along with a partner, BP is planning to explore the rich oil fields in Russia’s Arctic waters, a region that is off limits in the United States and Canada.
And BP’s chief executive, Tony Hayward, who is turning over the reins this Friday to Robert Dudley, is being welcomed onto the board of TNK-BP, the company’s 50-50 joint venture in Russia.
NY Times, In Russia, BP Sees a Second Act, September 29, 2010
Though BP seems doomed to years of hostile regulation and lawsuits in the United States, in Russia, the second-most important country for the company’s operations, BP’s fortunes are brighter than ever.
Guess we showed them.
According to conservative economist Thomas Sowell is short-term thinking that ignores second-order consequences:
* * * * *
Source: Chapter 1, Applied Economics, Thomas Sowell, Basic Books, 2010
TakeAway: As times change, more and more men are self-identifying themselves as the primary decision makers for the household and they don’t feel companies are doing a good job of targeting them?
Know your audience and what is important and communicate that message in channels they will see. (NFL games perhaps?)
* * * * *
Excerpted from AdAge, “Time to Rethink Your Message: Now the Cart Belongs to Daddy,” by Jack Neff, January 17, 2011
Mom is losing ground to Dad in the grocery aisle, with more than half of men now supposedly believing they control the shopping cart. The implications for many marketers may be as disruptive as many of the changes they’re facing in media.
… marketers of packaged goods … take solace in one thing — at least they could count on their core consumers being moms and reach them through often narrowly targeted cable TV, print and digital media.
But a study last year of 2,400 U.S. men ages 18 to 64 finds more than half identify themselves as the primary grocery shoppers in their households. …about six in 10 identifying themselves as their household’s decision maker on packaged goods, health, pet and clothing purchases. …only 22% to 24% of men felt advertising … speaks to them…
Recession has forced millions of men in construction, manufacturing… out of work and … into more domestic duties. At the same time, Gen X and millennial men in particular more likely to take an active role in parenting and household duties.
…any stigma once attached to men as shoppers is fading fast.
Behavioral research of shoppers shows a number more like 35% of grocery and mass-merchandise shoppers are now men…. That number has been growing thanks to the economy and changing gender roles, she said.
… the fact that a third of a brand’s shoppers are male is an awful lot to ignore. As a result, shopper-marketing efforts are increasingly gender-neutral rather than targeted for female shoppers,
Last year’s tear-jerking “Behind Every Olympic Athlete is an Olympic Mom” Winter Olympics ads for P&G created some resentment from dads, who still make up the vast majority of volunteer coaches for youth sports.
Perhaps favorably for marketers… men are more brand-loyal and less focused on promotions than women shoppers, Ms. Weinberg said. In advertising, they do more product research …because they’re often newer to the categories, prefer ads with more information.
There are more ads that speak to men,… But many …still portray [men] as hapless domestically, which doesn’t help marketers. “Men,” he said, “need to be something other than invisible or buffoons in advertising.”
Edit by HH
* * * * *
Full Article
http://adage.com/article?article_id=148252
* * * * *
Six more states – Iowa, Ohio, Kansas, Wyoming, Wisconsin and Maine — are joining Florida’s federal lawsuit challenging ObamaCare’s constitutionality.
That puts the number at 26 – a majority of states.
Hmmm … I guess they’re not swayed by “adult children” free-riding on parents’ policies.
South Florida Business Journal, Six states join health care reform challenge, January 18, 2011
Roads were icy in DC yesterday, so on the way into Georgetown I heard my favorite weather-related announcement:
“Only essential Federal employees need to report today; non-essential employees may take liberal leave”
Raises an obvious question: why do non-essential government employees ever need to report?
Sounds like a cost reduction opportunity to me … nice place to start the belt tightening … get rid of the slackers who self-identify as “non-essential”.
Why not?
According to conservative economist Thomas Sowell …
“Moral hazard” is an insurance term.
People behave differently when they are insured from the way they behave when they are not insured.
For example, people whose cars are insured may not be as cautious as other people are about what kinds of neighborhoods they park their car in.
Similarly, when taxpayer-subsidized government insurance policies protect people against flood damage, more people are willing to live in places where there are greater dangers of flooding.
Often these are luxury beach front homes with great views of the ocean.
So what if they suffer flood damage once every decade or so, if Uncle Sam is picking up the tab for restoring everything?
More than 25,000 properties have received government flood insurance payments more than four times.
Over a period of 28 years, more than 4,000 properties received government insurance payments exceeding the total value of the property.
If a property is located in a dangerous place, repeated damage can easily add up to more than the property is worth, especially if the property is damaged and then later wiped out completely.
Excerpted from RCP: “Moral Hazard” in Politics, August 27, 2010
http://www.realclearpolitics.com/articles/2010/08/27/moral_hazard_in_politics_106909.html
TakeAway: Fostering innovation for a decades old candy isn’t easy.
To come up with some new ideas, Mars implemented an innovation initiative.
The result – a new business unit making customized M&Ms.
* * * * *
Excerpted from Bloomberg Businessweek, “How Mars Built a Business,” by Jessie Scanlon, December 28, 2009
“There is little reason for an individual to have a computer in their home,” Ken Olsen, the president and founder of the Digital Equipment, famously said in 1977. As Olsen’s quote suggests, predicting demand for new, innovative products and services can be difficult, in part because many of the traditional methods of market testing—using historical data to forecast sales, for instance, or asking customers in a focus group to compare a new product with an existing, competing one—aren’t well-suited to the innovation process
This was the dilemma that Dan Michael, then R&D director for Mars‘ M&Ms brand, faced in 2000. He and his research team at the advanced R&D lab in Hackettstown, N.J., had an idea: to make customizable M&Ms printed with the word or image of a customer’s choosing. …
… Michael and team needed to convince management there could be a market for customized candies. To do that, they had to reinvent the development process—and the role of marketing within it.
Mars had recently launched an innovation initiative called Pioneer Week. Select research teams were given a modest budget and 90 days to build a trial production line, after which the new product would be made available to Mars’ 65,000 employees. “The teams were allowed to bypass some of the testing normally associated with product development,” says Marc Meyer, a professor at Northeastern University’s College of Business in Boston, who has studied the company. …
The internal trial provided critical marketing feedback: The four-pound minimum order size was too big, and customers wanted colored candy and “party favor” packaging options.
Setting the price was another challenge. For the internal launch, the team chose $12 a pound, $4 more than the retail price for standard M&Ms. Since then, according to Cass, the price has changed four or five times. …
Ready to take it to the next level, the team began selling My M&Ms, as the custom candies are now known, to the public through a small link from the main M&M Web site in March 2004. Without any marketing blitz, sales took off. That’s also when the team began to do more serious customer research. …
In 2006, Mars’ My M&Ms experiment became a formal business unit called Mars Direct. …
Edit by DMG
* * * * *
Full Article
http://www.businessweek.com/innovate/content/dec2009/id20091217_120646.htm
* * * * *
Steve Jobs’ announced leave of absence reminded me of a chat I had with one of my sons a couple of weeks ago. He casually observed that Apple stock seemed to be the common denominator across mutual funds that were beating the market averages.
Point 1: Apple stock is up nearly 80% since last February — and more than 400% since its 2009 low —the stock has single-handedly guaranteed that my portfolio has outperformed the major averages.
Point 2: A whopping 71% of Apple’s stock is owned by institutions. That compares to 52% for GE and 49% for Exxon Mobil. Fidelity & Vanguard own almost 10% of Apple’s stock. Five institutions – adding State Street, TRP and Blackrock – push the number to almost 20%.
Point 3: For some big funds, Apple is a huge part of total holdings: it’s almost 12% of Janus 20 and almost 7% of Fidelity’s Contrafund.
Raises a couple of interesting questions:
1) How much of the market run-up the past year or so can be attributed to Apple – directly or indirectly? It has to be statistically significant.
2) What happens if the funds that have ridden Apple’s stock rise decide it’s time to cash out?
Given the concentration among a few big hitters, things could interesting …
Data from Yahoo Finance
According to conservative economist Thomas Sowell, for some, a life of crime may be a series of rational economic choices:
Applied Economics, Thomas Sowall, Basic Books, 2010 Chapter 2
TakeAway: Dial hit it big in 2009 with Purex Complete 3-in-1, which combines detergent, fabric softener and an antistatic treatment in a single laundry sheet.
Now, for the new year, Dial is seeking to score a second success by bringing Purex Complete Crystals Softener to the United States. The softener is in crystal form, meant to replace liquids and sheets.
* * * * *
Excerpted from NYTimes, “Laundry Products Put Into Yet Another Form” By Stuart Elliott, January 5, 2011
The product is being billed as “a purer way to get laundry that smells clean and fresh for weeks.” It is making its way this month onto the shelves of American grocery, drug and mass-merchandise stores, priced around $4 to $7 for a 28-ounce package that can be used for 32 loads of laundry.
The campaign will include, in addition to television and print advertising, discount coupons, online ads, ads in stores and an extensive presence in social media. For instance, a group of so-called mom bloggers, whom Dial describes as Purex Insiders, have received samples of Purex Complete Crystals to write about on their blogs. To help sell consumers on the idea that Purex is more than just prosaic laundry products, the campaign for Purex Complete Crystals ends with a word, “Purextraordinary” that also appeared in the campaign to introduce the 3-in-1 laundry sheets. “The idea is that there would be a brand story of continual innovation,” said Dan Fietsam, chief creative officer at Energy BBDO, “a substantial innovation story in a category that isn’t known for a lot of innovation.” A commercial for Purex Complete Crystals plays up its distinctive differences, among them that the product is to be added to the washer with the laundry at the beginning of the wash cycle rather than placed in the dispenser for liquid softener.
“In this recession, we learned consumers are looking for value,” said Eric Schwartz, vice president for United States laundry care marketing at Dial, “but ‘value’ doesn’t mean just low price.” The word “value” can also mean “products that work differently.”
Dial tested the laundry sheets under names besides Purex, in case consumers said they associated the brand only with lower-price mainstay products like liquid detergent. But “we found our brand is more extendable than we expected,” Mr. Schwartz said, so 3-in-1 and Crystals are part of a new Purex Complete line. It can cost less to market a new product under a familiar brand name than to try to make shoppers aware of a name they have not heard before.
Edit by AMW
* * * * *
Full Article:
http://www.nytimes.com/2011/01/06/business/media/06adco.html?ref=media
* * * * *
That’s the question, and a recent Rasmussen Reports national telephone survey found that:
A pretty even split, but digging deeper:
Flipping the numbers: 1 in 4 government employees think their pay should be cut.
Hmmm.
P.S. Note that they’re called government “employees”, not “government workers”.
Double hmmm.
Exceprted from:
http://www.rasmussenreports.com/public_content/business/jobs_employment/january_2011/many_favor_cutting_pay_benefits_of_state_employees
TakeAway: Under Armour started slowly, but wants “to be a legitimate number two [after Nike] in the basketball market, and that may take time.”
To get there, CEO Plank focuses on a set of principles for success – “Passion,” “Vision” and “People.” He also abides by what he calls the “four pillars of greatness:
* * * * *
Excerpted from Knowledge@Wharton, “Under Armour’s Kevin Plank: Creating ‘the Biggest, Baddest Brand on the Planet’” By Suzanne Vranica, January 5, 2011
Plank says: “Great companies have to manage the cadence of what they do. Every great brand is like a great story. Every commercial we run, every product we make, is like a chapter in that book. If we don’t manage the cadence, though, we will get too far ahead of ourselves.”
“Organic growth is happening everywhere,” Plank noted. “Our object cannot be to try to convince 25-year-olds to change brands, though that is always something good. But now 8-, 9- and 10-year-olds have a relationship with Under Armour [and say] it is their brand. I tell them that their great-great grandfather [bought products from] the guys from Germany [Adidas] and their grandfather grew up with the guys from Oregon [Nike]. But you will grow up with Under Armour.” Accordingly, Plank has gone after young athletes to become the faces of Under Armour because they have great potential for marketing into the future. Plank also likes his team young. He said the average age of his more than 3,000 employees is 32, “and we want to keep [the work environment] young and fresh.” Under Armour’s advertisements tend to include young athletes in action – competing in extreme sports “X Games” events, snowboarding, soccer, wall-climbing, ultimate fighting and beach volleyball.
Plank plans to solidify the company’s growth in the women’s sports apparel market, which he said now accounts for about 30% of sales. He is also looking to create more of a presence for the brand in Europe and Asia – an effort that will take time because the company has to break into the soccer and, to a lesser extent, basketball markets.
Under Armour’s advertising makes full use of two of Plank’s favorite slogans – often together: “We must protect this house” and “We will.” Protecting the brand ensures consumer respect, and Plank believes the company must work hard to continually improve. In fact, he says “we have not yet built our defining product at Under Armour. We are not living in the past. Our larger competitors are 20 times our size. There is running room all over.”
Edit by AMW
* * * * *
Full Article:
http://knowledge.wharton.upenn.edu/article.cfm?articleid=2665
* * * * *
According to conservative economist Thomas Sowell:
Insurance is, at it’s core, a pooling of risk.
“But, political Incentives make it rational to mandate insurance coverage on things they would not be covered by insurance on purely economic grounds, since those things are not a matter of risk.
For example, the cost of an annual medical checkup is not a risk, since is known in advance that these checkups occur once a year.
To have health insurance covers annual checkups is like having automobile insurance cover annual state inspection checks or routine oil changes.
But, because of the stronger emotions involved in medical issues, annual health checkups are more readily depicted as a good thing — and therefore justified as part of a government mandate.”
Source:Applied Economics, Basic Books, 2009
A friend send me an article about the current economic challenges.
The author turned a phrase that caught my attention:
“Capital and technology are mobile, labor isn’t.”
He was making a globalization point, but it holds domestically, too.
Now, as somebody who made 13 job-related moves, I almost glossed over the point.
My parents told me that – in the real old days – folks moved from the coal mining area of Pennsylvania to Detroit (autos) and Pittsburgh-Cleveland (steel) because that’s where the jobs were. I guess labor was mobile then.
So, I always wondered why folks in Detroit didn’t pack up and head for Texas when the car companies started to crater.
I guess the usual answer is friends & family and an odd geographic comfort factor.
These days, lots of folks – even if they want to move — are tied down geographically since they can’t sell their houses.
So, labor is even more immobile, and we don’t just need jobs, we need jobs in places like Detroit.
Might happen ..
TakeAway: From PepsiCo to Kraft Foods to Campbell Soup Co., makers of some of America’s most well-known products are trimming the calories and content when it comes to package sizes.
ConsumerReports.org listed examples of household and grocery products that have decreased in size, thanks to packaging shrinks, in part due to rising commodity and energy costs.
* * * * *
Excerpted from Forbes CMO Network, “What? America’s Favorite Brands Are Slimming Down, Too?” By Elaine Wong, January 4, 2011
Häagen-Dazs’s ice cream container went from 16 to 14 ounces, a reduction of 12.5 percent. ConAgra Foods’ Hebrew National franks are now 11—not 12—ounces. Even household products are not immune: anti-chafing gel Lanacane is now 99 and not 113 grams (12.4% difference). Kraft sliced the weight of its 2% Milk Singles and Fat Free Singles from 16 to 14.7 ounces last May.
Package shrink is not a new tactic to either the consumer or manufacturer (including private label companies). Indeed, it has been going on for a while, most frequently during times when ingredient costs are soaring high. And calorie-conscious consumers, newly refreshed from their 2011 vows, might actually have something small to cheer about. After all, smaller amounts of product might, hopefully, lead to smaller waistlines. But in this day and age of social and digital media, when today’s cost-conscious consumer is much more smartly trained to detect such downsizes, even if unannounced, can such maneuvers actually hurt advertisers?
Robert Passikoff, CEO and founder of Brand Keys, a New York-based consultancy that specializes in brand engagement and loyalty, says most definitely yes. Social media’s prevalence and transparency aside, consumers, over the last two decades, have just become smarter shoppers, and such changes, even if subtle, aren’t likely to go unnoticed. Consumers, especially in today’s tough economy, are more likely to balk if such increases get passed along in the form of price hikes.
Though most instances of package shrink happen stealthily, some marketers, such as PepsiCo, make it up by publicly announcing the changes to make sure consumers weren’t surprised. Such was the case when the company’s Tropicana brand announced that it was reducing the packaging on one of its most popular orange juice cartons by about 8 percent, in addition to raising the price, to cope with a severe citrus crop loss in March.
Regardless, some consumers are bound to complain as Consumer Reports found that some instances of package shrink were as high as 20 percent. Procter & Gamble’s Ivory dish detergent, which went from 30 to 20 ounces, was one.
Edit by AMW
* * * * *
* * * * *
Interesting interview yesterday.
Interviewer was trying to goad the Senate’s Sergeant of Arms — who is responsible for Senators’ security – into saying (a) the shooting was politically motivated, and (b) Senators & Congressional reps should get more security.
He didn’t take the bait.
Rather, he said: “Put the situation in context. We have about 15,000 murders in the U.S. annually. That’s the problem we should be focusing on.”
In fact, there were 15,241 reported murders in 2009 … which works out to about 40 each day.
The Baltimore-Washington Metro areas average about 1 murder per day.
In 2009, Baltimore’s homicide rate ranked the highest among the nation’s cities with a population of more than 500,000 … 37 homicides per 100,000 residents … ahead of Detroit’s 34 per 100,000 residents.
DC ranked third, with about 31 killings per 100,000 residents.
No other city with a population of more than 500,000 came close; Philadelphia had the next highest rate, with 22 homicides per 100,000 people.
Raises a couple of interesting questions:
(1) While the Tucson killings are a tragedy, for sure, what about the other 15,235?
(2) Why no outrage that the region around the White House has the highest murder rate in the country?
* * * * *
Side note: The last congressman to be attacked by a gunman was California Rep. Leo Ryan, murdered at the Jonestown massacre in Guyana in 1978, 32 years ago.
http://www.realclearpolitics.com/articles/2011/01/13/systematic_assassinations_not_part_of_our_politics_108518.html
* * * * *
Source statistics:
http://www.disastercenter.com/crime/uscrime.htm
http://www.disastercenter.com/crime/dccrime.htm
http://www.disastercenter.com/maryland/crime/4850.htm
http://articles.baltimoresun.com/2009-06-03/news/0906020063_1_baltimore-decline-in-homicides-city-homicide-rate
TakeAway: Ads have begun to make consumers work harder during the past few years. More companies are incorporating technology into their marketing to make their promotions stand out and forcing consumers to engage with pitches in new ways.
* * * * *
Excerpted from WSJ, “Ad Execs Gaze Into 2011 Crystal Ball” By Suzanne Vranica, January 3, 2010
Souped-Up Mobile Ads: As marketers spend more on mobile ads, experts predict the ads will start to contain more elements beyond basic images and text. “The big thing in mobile ads this coming year will be the ability to directly buy products from within brand ads,” says Eric Litman, chief executive of Medialets Inc., a mobile-ad firm based in New York.
Virtual Product Demos: Companies increasingly will introduce products with technology that creates a virtual feel for a product—such as test-driving a car.
TV Apps: Marketers have blanketed Apple’s app store with branded mobile apps, from store finders to games. Charmin offers an app that lets consumers find clean restrooms. This year couch potatoes can expect branded applications to make their way to the TV.
Brands Get Fit: More marketers will look to sponsor lifestyle activities, such as running, triathlons and yoga. “Those sports tie to a macrotrend in individual consumers being focused on fitness and wellness,” says Kevin Adler, president of sports-marketing consulting firm Engage Marketing Inc. Going Long:
Over the past few years, shorter ads have risen in popularity as marketers trimmed their pitches to match consumers’ dwindling attention spans. But longer ads will make a comeback, thanks to new technologies, such as Internet enabled TV’s, Microsoft Corp.’s Xbox, Apple TV and interactive features coming from cable operators, says Alan Cohen, chief executive of the U.S operations of OMD, a media buying firm. “Creative agencies will be developing deep, long-form content as consumers engage in marketers brands as they do their favorite TV shows,” he says.
Big Government:
The ad business has seen plenty of legislation and federal oversight, including the Federal Trade Commission’s recent call for the development of a “do not track” system that would enable consumers to avoid having their activities monitored online. There is more to come. Look for a tougher hand in areas such as Internet privacy and food advertising directed to children. Getting Real:
Brands will be more honest and open about their products as companies seek to develop deeper relationships with consumers on sites such as Facebook, says Andrew Keller, CEO of Crispin Porter + Bogusky.
Ringing Up Jingles: Jingles—short songs used in commercials for decades—began to resurface last year, a trend that is expected to pick up steam this year. “Coming out of the Depression in the ’30s, happy music became very important,” says Susan Credle, U.S. chief creative office at Leo Burnett.Edit by AMW
* * * * *
Full Article:
http://online.wsj.com/article/SB10001424052970204204004576050141843811676.html
* * * * *
No idea whether the body of research supports the conclusion, but the article caught my attention …
* * * * *
The history of the stock market is not kind to investors who chase growth stocks.
Over the long haul, study after study has shown that so-called growth stocks tend, on average, to fare poorly. For each winning stock, there are many costly losers.
Indeed, some analyses argue that investors have typically done better investing in the beaten-down stocks that everyone hates than they have in the glamorous ones everyone loves.
That’s because unloved stocks tend to be so cheap, and expectations so low, that positive surprises can come quite easily.
With go-go glamour stocks, the reverse is true. Even a single disappointment can get punished severely.
WSJ, Is This the Peak for Netflix?, Dec. 24, 2010
http://online.wsj.com/article/SB10001424052748703548604576037920087686958.html?mod=WSJ_hp_mostpop_read
Punch line: Charitable gifts are a cheerful protest vote against the growing state.
Translation: since charitable donations are tax deductible, folks can divert money from the Fed coffers to causes of their choosing.
It’s a win-win-win. Charities get money to operate, the Feds get less money to waste, and the contributors can feel that they did good in two ways – by supporting worthwhile causes and constraining our free-spending Congress.
Explains why Buffett pledges his dough to Gates’ Foundation and why, generally, conservatives give way more to charity than liberals.
From the WSJ …
Your intuition might tell you that people who favor government redistribution of wealth care most about the less fortunate and would give more to charity.
But the data tell a different story.
A large, nonpartisan survey asked people about both redistributive beliefs and charitable giving. It found that those who were against higher levels of government redistribution of wealth privately gave four times as much money, on average, as people who were in favor of redistribution. This is not all church-related giving; they also gave about 3.5 times as much to nonreligious causes. Anti-redistributionists gave more even after correcting for differences in income, age, religion and education.
Obviously, not all charity has ideological connotations — nor should it.
But for many, especially at this time of year, giving is a cheerful, productive protest vote against the growing state.
WSJ, Tea Partiers and the Spirit of Giving, Dec. 24, 2010
http://online.wsj.com/article/SB10001424052748704774604576036010174911064.html?mod=WSJ_newsreel_opinion
STARBUCKS !
Remember when Prince decided to chuck his name and start going by a symbol ? Many folks thought it a bizarre move.
Apparently Starbucks thought it was a stroke of brilliance.
The Seattle-based coffee giant unveiled a simpler logo (below) that no longer includes the green circle that says “Starbucks coffee.” The iconic mermaid inside the circle is now larger
The company says the move is preparatory to it becoming more of a consumer packaged-goods company.
“Even though we have been and always will be a coffee company and retailer, it’s possible we’ll have other products with our name on it and no coffee in it.”
Already, the move has generated some backlash.
Some folks have accused the company of arrogance for losing their name … others think the mermaid is sexist or sexy – a blade that cuts 2 ways.
![[0105starbucks]](https://i0.wp.com/si.wsj.net/public/resources/images/OB-LQ256_0105st_F_20110105135427.jpg)
As usual, Thomas Sowell hits the nail on the head.
Why should responsible taxpayers bail out fiscally irresponsible non-taxpayers (and fiscally irresponsible states)?
Excerpts from RCP: Saving” the Housing Market, January 4, 2011
Sometimes, some people are especially deserving.
But this cannot be said about those who borrowed money to buy homes that they could not afford, or who borrowed against the equity in their homes, and now find that what they owe is more than the home is worth.
If anyone is especially deserving, it is those who had the common sense to avoid taking on bigger financial obligations than they could handle, but who are now expected to pay as taxpayers for other people’s irresponsibility.
No doubt some people who are facing foreclosures might have been able to continue making their mortgage payments if they had not lost their jobs.
But since when were we all guaranteed never to lose our jobs?
People used to put money aside “for a rainy day.” But now people who have spent like there are no rainy days are supposed to have the taxpayers pay to give them an umbrella.
What about the people who saved and put their money in a bank?
Those who blithely say that the banks ought to modify the mortgage terms to accommodate people who are behind in making their monthly payments forget that, however “rich” a bank may be, most of its money actually belongs to vast numbers of depositors, most of whom are not rich.
Those depositors deserve to get the best return on their money that supply and demand can offer.
Why should people who save be sacrificed for the benefit of those who spent more than they could afford?
http://www.realclearpolitics.com/articles/2011/01/04/saving_the_housing_market_108421.html
The Decibel (dB) scale measures noise in objective terms.
On the Decibel scale, each 10 points [dB(A)] added represents 10 times as much sound.
For example; 70 dB(A), is not 17% louder, but ten times as loud as 60 dB(A).
TakeAway: India’s middle class is enormous but still relatively poor.
With the world’s cheapest car, the Nano, Tata Motors thought that large segment was finally accessible.
But Tata forgot that the Nano comes with more than a low price, it also comes with the stigma of driving the world’s cheapest car.
* * * * *
Excerpted from Washington Post, “India’s Tata Nano, ‘the world’s cheapest car,’ struggles to move ahead,” by Emily Wax, January 3, 2011
When the Tata Nano – known as the world’s cheapest car – zipped out of factories in 2009, it was praised as an example of Indian innovation in cost-cutting. It quickly became a cult hit … [b]ut today, sales are so slow that the $2,200 Nano is barely seen on Indian roads. …
The podlike vehicle dubbed “the people’s car” has also suffered from … poor marketing and competition from a flood of slightly more expensive cars made by companies such as General Motors India and Maruti Suzuki. Those companies have launched aggressive campaigns aimed at India’s growing young families and call-center workers, with claims that their cars are better made and more reliable.
… the low sticker price, which was predicted to be Nano’s selling point … has also contributed to its downfall.
For India’s newly middle class, owning a car is the ultimate sign of status, and the Nano is synonymous with something cheap, said Ashish Masih, assistant editor of India’s edition of What Car? Magazine. …
Many of the top-selling automobiles fall into a sweet spot of under $7,000, industry experts say. …
… at the Nano factory in India’s western state of Gujarat, about 7,000 cars are parked in the open, and just 509 cars were sold from the plant to dealers in November, according to the Society of Indian Automobile Manufacturers.
The lagging interest in the Nano comes at a time when India’s auto industry as a whole is enjoying record sales, with a reported a 33 percent growth from April to October 2010, compared to the same period in 2009, according to a study by SIAM.
Tata Motors is trying to revive the Nano’s fortunes. Debasis Ray, head of corporate communications for the company, said it has launched a comprehensive marketing push and added a free four-year manufacturer’s warranty. …
Edit by DMG
* * * * *
Full Article
http://www.washingtonpost.com/wp-dyn/content/article/2011/01/03/AR2011010302721.html
* * * * *
Let’s see, the BLS reports 100k jobs added in Dec. –– pushing the unemployment rate down from 9.8% to 9.4% – giving Obama & Goolsbee fodder to crow that their economic programs are “clearly working”.
Hmmm.
According to the BLS data set, in Nov. there were 238.715 million non-institutionalized civilians age 16 and over … 153.950 of them were participating in the labor force by either being employed or actively looking for work … that’s a 64.5% participation rate, down from 64.9% in May.
Of the 153.950 million … 138.909 (90.2%) were employed, 15.041 (9.8% – rounded up from 9.77%) were unemployed.
Then the BLS reported that about 100k jobs were added in Dec.
OK, let’s do the math.
138.909 million employed in Nov. plus 100k jobs added in Dec. equals 139.009 employed in Dec. … which divided by 153.950 participants equals 90.3% employed … or, flipping the numbers, 9.7% unemployed … down from the rounded 9.8% in Nov.
But, the Feds say unemployment went from 9.8% to 9.4% … how can that be?
Simple.
First, the unemployment number comes from a different source: household surveys vs. employer surveys.
The household survey says that 297k jobs were added … 3 times what the employers say they added.
OK, let’s recalculate.
138.909 million employed in Nov. plus 297k jobs added in Dec. equals 139.206 employed in Dec. … which divided by 153.950 participants equals 90.4% employed … or, flipping the numbers, 9.6% unemployed … down from the rounded 9.8% in Nov. and the 9.7 based on the employer data.
But, the Feds say unemployment went down to 9.4% … where’s the other .2% ?
Simple.
260k unemployed people who were previously participating in the labor force by at least looking for work got sufficiently discouraged (or distracted by Xmas) that they stopped looking for jobs … so the labor pool denominator dropped to 153,690.
Let’s re-do the math one more time.
138.909 million employed in Nov. plus 297k jobs added in Dec. (according to the household survey) equals 139.206 employed in Dec. … which divided by 153.690 participants equals 90.6% employed … or, flipping the numbers, 9.4% unemployed … down from the rounded 9.8% in Nov.
Presto.
Bottom line: if government policies can simply discourage another 7 million people enough that they stop looking for work, we’ll have the unemployemnt problem fixed.
TakeAway: Consumers are still cash-strapped, but that hasn’t stopped Ford from selling more cars. The company’s sales were up 19% last month, and its year-to-date sales increased 21% versus the last year. Ford’s secret? “It all starts with product.” Because without product, there’s nothing to market!
* * * * *
Excerpted from Forbes, “Ford: How To Maintain A Sales Streak In Tough Times” By Elaine Wong, November 5, 2010
Ford’s VP of U.S. marketing, sales and service describes how Ford is tapping into social media and consumer trends toward vehicle customization, fuel efficiency and higher product quality to drive sales in an economic downturn.
Ford’s product development team has been focused on their four pillars – quality, green, safety and smart. The sales and marketing team has done a lot of work to transform the image of Ford to being not just a company that makes the bestselling truck [F-Series] in America for 33 years or the Mustang, but a company that delivers products that are fun to drive.
Ford has a program called Drive One 4 UR School, where thousands of dealers help support local high schools, many of which are under a lot of financial stress. Fundraisers give people a chance to test drive new products. People aren’t naturally inclined to go to the dealer to get a new car when they go to a school event, but if they’re test driving it to help raise funds for their school and as part of a no-pressure environment, they may reconsider.
Ford is continuing its “rant” style of advertising when launching its new campaign for the F-150. The ads cut through the clutter, have great recall among consumers and, if imitation is the sincerest form of flattery, more kinds of advertising with the “rant” style are being used in Iots of other commercials.
Edit by AMW
* * * * *
Full Article:
http://www.forbes.com/2010/11/05/ford-sales-strategy-economy-social-media-elaine-wong-cmo-network_print.html
* * * * *
Punch line: The Olin College of Engineering attracts 140 applicants for every faculty position. And they can even be fired.
* * * * *
Excerpted from WSJ: How to Succeed in Teaching Without Lifetime Tenure
The Franklin W. Olin College of Engineering in Massachusetts opened its doors 10 years ago, does not offer tenure to its faculty.
The president of Olin says that “There are more important things than permanent employment — like offering students a fulfilling education.”
Olin is showing what’s possible when a school sheds tenure, one of the most antiquated and counterproductive employment anomalies The policy protects laziness and incompetence — and rewards often obscure research rather than good teaching.
But by the 1990s, Olin’s trustees were frustrated with their inability to promote change — particularly in the field of engineering.
And so the Olin board of trustees decided to start over. The trustees laid out their idea for a college, which included creating a “culture of innovation” and thus deciding not to offer faculty tenure.
Students are also engaged in a constant process of evaluating their education: They are asked for extensive feedback about each course, and alumni are surveyed routinely.
Though Olin doesn’t offer lifetime employment, the school’s vision has been appealing enough to attract an average of 140 applicants for every faculty position. In all but three cases, Olin got its top choice to fill each teaching slot.
The passion of the Olin faculty and students is unmistakable. They’ve become “a community of zealots” — not exactly what you expect from a bunch of engineers.
But then giving up tenure seems to do some strange things to people.
Full article:
http://online.wsj.com/article/SB10001424052748703440004575548320163094444.html?mod=djemEditorialPage_h
TakeAway: Looking to become the world’s leading clothing retailer, Uniqlo plans to move into the fast-growing Indian and Brazilian markets and to vastly expand its presence in China, where the number of stores are intended to leapfrog those in Japan by 2020.
The retailer quickly is becoming a template for the rest of corporate Japan, faced with the twin obstacles of shrinking domestic demand and a dearth of Japanese leaders with the know-how and language skills needed to lead a push into global markets.
* * * * *
Excerpted from WSJ, “Uniqlo Plans for a Global Push” By Mariko Sanchanta, December 20, 2010
Fast Retailing’s fashion focus, however, is different from its competitors (e.g. Zara and H&M): It sells casual, affordable basics, such as fleece jackets, jeans and its Heat Tech line of thermal underwear. "We don’t make clothes that you throw away after one season."
In its home market, where Fast Retailing derives the bulk of its revenue, the company has caused a buzz by breaking with many of the conventions of Japanese businesses. Fast has said English must be spoken at all business meetings where foreigners are present, that all email correspondence must be written in English by 2012 and that the number of its foreign employees will overtake Japanese workers by 2015.
"Our advantage is that we are a Japanese brand, which is known for good quality and design, and we are closer in proximity to the Asian countries."
"In China, we will grow organically without alliances or collaborations. There are no Chinese companies that can do a better job there than us. . . . We won’t be striving to increase our store count in Japan by that much going forward."
Uniqlo is forecast to have 844 stores in Japan and 76 in China by the end of August. By 2020, Uniqlo aims to have 1,000 stores in China through organic growth alone. Zara had 60 stores in China as of Oct. 31.
Analysts said that with more than 800 stores in Japan, the market is saturated and consumers are reining in their spending. "Overall purchase sizes [in Japan] have been going down, but Japanese consumers have been increasing the frequency of their visits to stores in some categories. People want to spend less on each visit," said Brian Salsberg, head of McKinsey & Co.’s retail-and-consumer group in Japan.
The company admits that it still has a lot to learn, particularly from rivals. "We can learn from H&M and Zara by looking at the speed with which they launch new stores. They are very courageous to open new stores, whether they succeed or not. We, in contrast, are very cautious with what we do," he said.
Edit by AMW
* * * * *
Full Article:
http://online.wsj.com/article/SB10001424052748704368004576028453572446140.html
* * * * *
The Homa Files 