Archive for the ‘Uncategorized’ Category

How do you feel about the country’s direction?

November 5, 2018

Here’s a variant of the question: Are you better off than you were 2 years ago?
=============

According to the mainstream media, America is going to hell in a handbasket.

Evidence: Only 40% of Americans think that the country is on track and  moving in the right direction.

image

True, but let’s put that number in perspective…

(more…)

Nums: A world of battling algorithms

February 7, 2018

Some stock market pundits are charging algorithms – or more precisely, algorithmic trading –  for the  recent extreme stock market swings.

That brought to mind a very cool 15 minute TED Talk.

Tech entrepreneur Kevin Slavin tells how algorithms have reached across industries and into every day life.

A couple of lines caught my attention:

  • There are more than 2,000 physicists working on Wall Street developing operational algorithms
  • Massive scale speed trading is dependent on millisecond read & respond rates …
  • So, firms are physically literally locating right next to internet routing hubs to cut transmission times
  • And, of course, there isn’t time for human intervention and control
  • “We may be building whole worlds we don’t really understand, and can’t control.”

Obviously, Slavin comes down on the side of the quants.

Worth listening to this pitch … a very engaging geek who may be onto something big.

* * * * *
Follow on Twitter @KenHoma >> Latest Posts

Debate Commission: “Yep, there was a problem with Trump’s audio”

September 30, 2016

This election campaign gets wackier by the day.

=========

After the debate, Trump complained  that his microphone wasn’t functioning properly at the debate.

“And they also had, gave me a defective mic … My mic was defective within the room.”

========

Of course, Team Clinton jumped on that:

According to CNN: Trump’s Democratic challenger, Hillary Clinton, mocked Trump the day after the debate for complaining about his mic:

“Anybody who complains about the microphone is not having a good night.”

image

========

I agree that it was a bad nite for the Trumpster, but …

(more…)

Are more folks employed in manufacturing jobs or government jobs?

September 21, 2016

Of course, the answer is government jobs.

======

Interesting analysis by Terence Jeffrey of CNS News

According to the BLS, government employees in the United States now outnumber manufacturing employees by almost 10 million.

Federal, state and local government now employs 22,213,000 people: 2,790,000 federal employees, 5,120,000 state government employees, and 14,303,000 local government employees.

The manufacturing sector now employs 12,281,000.

A difference of almost 10 million.

 

image

=========

Note on the above chart that manufacturing employment peaked in the late 1970s at just under 20 million.

Government employment has been on a tear since the mid-1940s.

The lines crossed in the late 1980s.

While government employment has leveled off, manufacturing jobs continue to disappear.

So, the gap keeps widening and soon government employment will be twice manufacturing employment.

Think about that for a moment.

=======

#HomaFiles

Follow on Twitter @KenHoma            >> Latest Posts

=======

Is Princess Elsa an anti-Semite?

July 10, 2016

She looks very innocent ….

image
========

But, Team Trump had to raise the controversial question…

(more…)

Comey folds!

July 5, 2016

FBI Director Comey spent 14 minutes laying out the case against Hillary Clinton:

Extremely careless handling of classified material (a felony) that in high likelihood has fallen into the hands of sophisticated enemies of the state.

image

======

Then, he spent less than 1 minute explaining that since there was no direct evidence of wrongful intent, the FBI is recommending that no criminal charges be brought against Clinton.

A total non sequitur.

The last honest man just lost his title.

=======

Next time you’re stopped for doing 70 in a 55, jest tell the cop that you didn’t intend to speed.

Surely, he’ll let you off since he would have no direct evidence of your intent to speed.

Let me know how it goes.

=======

P.S. We called this one … See our prior post AG Lynch: “Depends on what the meaning of the word ‘is’ is …”

======

Click for a transcript of Comey’s remearks

#HomaFiles

Follow on Twitter @KenHoma            >> Latest Posts

=======

High frequency trading: A world of battling algorithms…

August 27, 2015

The extreme market volatility this week,  at least partially fueled by the algorithm-based high frequency traders, reminded me to reprise a very cool 15 minute TED Talk that is stashed in the HomaFiles archives.

Tech entrepreneur Kevin Slavin tells how algorithms have reached across industries and into every day life.

A couple of lines caught my attention:

  • There are more than 2,000 physicists working on Wall Street developing operational algorithms
  • Massive scale speed trading is dependent on millisecond read & respond rates …
  • So, firms are physically literally locating right next to internet routing hubs to cut transmission times
  • And, of course, there isn’t time for human intervention and control
  • “We may be building whole worlds we don’t really understand, and can’t control.”

Obviously, Slavin comes down on the side of the quants.

Worth listening to this pitch … a very engaging geek who may be onto something big.

* * * * *
Follow on Twitter @KenHoma >> Latest Posts

Sparkling water … but, no brown M&Ms !

June 15, 2015

This came up in conversation over the weekend, so I thought a reprise was in order …

Awhile ago,, I was invited to do a radio interview on NPR.

When I told my daughter-in-law, she suggested that I request sparkling water and green M&Ms.

M&Ms

====

I thought that was pretty funny, but didn’t know the story behind it (more…)

Nums: A world of battling algorithms

April 28, 2015

In my Strategic Business Analytics course, we were covering decision rules .. specifically, the current day importance of decision-making algorithms.

Reminded me to flashback a cool 15 minute TED Talk.

Tech entrepreneur Kevin Slavin tells how algorithms have reached across industries and into every day life.

A couple of lines caught my attention:

  • There are more than 2,000 physicists working on Wall Street developing operational algorithms
  • Massive scale speed trading is dependent on millisecond read & respond rates …
  • So, firms are physically literally locating right next to internet routing hubs to cut transmission times
  • And, of course, there isn’t time for human intervention and control
  • “We may be building whole worlds we don’t really understand, and can’t control.”

Obviously, Slavin comes down on the side of the quants.

Worth listening to this pitch … a very engaging geek who may be onto something big.

* * * * *
Follow on Twitter @KenHoma >> Latest Posts

Nums: A world of battling algorithms

December 10, 2014

In my Strategic Business Analytics course, we were covering decision rules .. specifically, machine learning and algorithms.

Reminded me to flashback a cool 15 minute TED Talk.

Tech entrepreneur Kevin Slavin tells how algorithms have reached across industries and into every day life.

A couple of lines caught my attention:

  • There are more than 2,000 physicists working on Wall Street developing operational algorithms
  • Massive scale speed trading is dependent on millisecond read & respond rates …
  • So, firms are physically literally locating right next to internet routing hubs to cut transmission times
  • And, of course, there isn’t time for human intervention and control
  • “We may be building whole worlds we don’t really understand, and can’t control.”

Obviously, Slavin comes down on the side of the quants.

Worth listening to this pitch … a very engaging geek who may be onto something big.

* * * * *
Follow on Twitter @KenHoma >> Latest Posts

Nums: A world of battling algorithms

October 3, 2014

Recently I gave a pitch that touched on whether quants (left-brainers) or poets (right-brainers) were on the rise.

Reminded me of a cool 15 minute TED Talk.

Tech entrepreneur Kevin Slavin tells how algorithms have reached across industries and into every day life.

A couple of lines caught my attention:

  • There are more than 2,000 physicists working on Wall Street developing operational algorithms
  • Massive scale speed trading is dependent on millisecond read & respond rates …
  • So, firms are physically literally locating right next to internet routing hubs to cut transmission times
  • And, of course, there isn’t time for human intervention and control
  • “We may be building whole worlds we don’t really understand, and can’t control.”

Obviously, Slavin comes down on the side of the quants.

Worth listening to this pitch … a very engaging geek who may be onto something big.

* * * * *
Follow on Twitter @KenHoma >> Latest Posts

Sparkling water … but, no brown M&Ms !

August 14, 2014

Awhile ago,, I was invited to do a radio interview on NPR.

When I told my daughter-in-law, she suggested that I request sparkling water and green M&Ms.

M&Ms

====

I thought that was pretty funny, but didn’t know the story behind it (more…)

Nums: A world of battling algorithms

April 16, 2014

Recently I gave a pitch that touched on whether quants (left-brainers) or poets (right-brainers) were on the rise.

Reminded me of a cool 15 minute TED Talk.

Tech entrepreneur Kevin Slavin tells how algorithms have reached across industries and into every day life.

A couple of lines caught my attention:

  • There are more than 2,000 physicists working on Wall Street developing operational algorithms
  • Massive scale speed trading is dependent on millisecond read & respond rates …
  • So, firms are physically literally locating right next to internet routing hubs to cut transmission times
  • And, of course, there isn’t time for human intervention and control
  • “We may be building whole worlds we don’t really understand, and can’t control.”

Obviously, Slavin comes down on the side of the quants.

Worth listening to this pitch … a very engaging geek who may be onto something big.

* * * * *
Follow on Twitter @KenHoma >> Latest Posts

Nums: A world of battling algorithms

September 11, 2013

Yesterday I gave a pitch that touched on whether quants (left-brainers) or poets (right-brainers) were on the rise.

Reminded me of a cool 15 minute TED Talk.

Tech entrepreneur Kevin Slavin tells how algorithms have reached across industries and into every day life.

A couple of lines caught my attention:

  • There are more than 2,000 physicists working on Wall Street developing operational algorithms
  • Massive scale speed trading is dependent on millisecond read & respond rates …
  • So, firms are physically literally locating right next to internet routing hubs to cut transmission times
  • And, of course, there isn’t time for human intervention and control
  • “We may be building whole worlds we don’t really understand, and can’t control.”

Obviously, Slavin comes down on the side of the quants.

Worth listening to this pitch … a very engaging geek who may be onto something big.

* * * * *
Follow on Twitter @KenHoma >> Latest Posts

Florida could make it an early night …

November 6, 2012

Surprised to see Florida deadlocklocked with over half the vote in …  Romney has been gaining, and may pull it out … but it shouldn’t be this close.

If Florida goes to Obam, it’s lights out.

= = = = =
On;ine tracking

Real Clear Politics is  the best vote tracker I’ve found  online ..  way better than the TV data flashes and screen crawlers

7.9%

November 2, 2012

In October there were 171,000 new jobs added.

Most of the job creation came in the services sector, with a gain of 150,000.

The unemployment rate moved higher to 7.9 .

Economists had been expecting the report to show a net of 125,000 new jobs and a steadying of the unemployment rate at 7.8 percent.

= = = = =
What Homa Files Predicted

Earlier this week, we posted Re: Friday’s big number … what to expect (if the BLS doesn’t hide-the-weinie).

We said …

My bet: They’ll report on time that the unemployment rate clicked up to 7.9% …  it’s the best “managed” number …. let’s Obama crow that it’s under the magic 8% … and, let’s Romney point out that it’s going in the wrong direction.”

Bingo !

Flash: BLS Commissioner’s post vacant since January … previously headed by Bush appointee.

October 11, 2012

That’s right, the BLS Commissioner’s position has been vacant since January 2012.  A Deputy Commissioner has been doing double-duty — running his department and overseeing day-to-day ops for the entire BLS.
BLS org chart

Question: Has Labor Secretary Hilda Solis been providing the “quality control” of the numbers coming out of BLS this year?

So, during an important time period, BLS has either been (a) under-supervised, or (b) more aggressively managed from above by one of the President’s cabinet members.

Either way, sounds like what we in b-school call “sub-optimal”.

Hmmm.

Imagine if  Jack Welch catches wind of this one.

* * * * *
Story Line

Dr. Keith Hall was the Commissioner of the BLS from January 2008 to January 2012.

He was appointed by George W. Bush (uh-oh) and approved by the Senate to serve a 4-year term

When his term expired, President Obama cut him loose, and still hasn’t filled the position.

Since January,  the entire Bureau of Labor Statistics has apparently been managed more directly by Secretary of Labor Hilda Solis, with day-to-day ops handled by Deputy Commissioners.

The Labor Secretary, of course, is a cabinet member reporting to President Obama

* * * * *
Resume: Hilda Solis

Hilda Lucia Solis is the 25th United States Secretary of Labor, serving in the Obama administration.

She is a member of the Democratic Party and served in the United States House of Representatives from 2001 to 2009, representing the 31st and 32nd congressional districts of California.

She gained degrees from the California State Polytechnic University, Pomona (Cal Poly Pomona) and the University of Southern California (USC) and worked for two federal agencies in Washington, D.C.

She was elected to the Rio Hondo Community College Board of Trustees in 1985, the California State Assembly in 1992, and the California State Senate in 1994. She was the first Hispanic woman to serve in the State Senate, and was reelected there in 1998.

Solis was elected to the U.S. House of Representatives in 2000, where she focused mainly on labor causes and environmental work.

She was reelected easily to four subsequent terms.

In December 2008, President-elect Barack Obama announced his intention to nominate Solis as the next United States Secretary of Labor.

She took office after being confirmed by the United States Senate in February 2009, becoming the first Hispanic woman to serve in the U.S. Cabinet

Source

* * * * *
Resume: Dr. Keith Hall

Keith Hall received his Bachelor of Arts degree in Economics from the University of Virginia and M.S. and Ph.D. in Economics from Purdue University.

Prior to his government service, Dr. Hall was a full time-faculty member in the economics departments at the Universities of Arkansas and Missouri.

Dr. Hall had over 20 years of federal service with the Department of the Treasury, the International Trade Commission, the Department of Commerce, the Executive Office of the President, and BLS.

Prior to becoming BLS Commissioner, he served as Chief Economist for the White House Council of Economic Advisers, where he analyzed a broad range of fiscal, regulatory and macroeconomic policies and directed a team that monitored the state of the economy and developed economic forecasts.

He served as the Chief Economist for the U.S. Department of Commerce for four years. In that role, he was the principal economic adviser to the Under Secretary for Economic Affairs and served as a special adviser to the Secretary of Commerce.

Dr. Hall previously served as a Senior International Economist in the Research Division at the U.S. International Trade Commission, an independent agency that investigates any matter involving tariffs, international trade, and competition between U.S. and foreign industries.

In 2007, President George W. Bush nominated Dr. Hall to be the 13th Commissioner of the Bureau of Labor Statistics. He was confirmed by the Senate in December 2007 and officially sworn in to office in January 2008.

Source

* * * * *
Recent Developments

From Watchdog.com

“Ex-BLS chief says unemployment data flawed”

The U.S. Bureau of Labor Statistics’ method of calculating unemployment is a “flawed measure” that contains “real problems,” the agency’s former commissioner, Keith Hall told the Wisconsin Reporter on Tuesday.

He said: “The monthly unemployment data is an imperfect tool”.

Appointed by former President George W. Bush, Hall served as commissioner for much of Obama’s term in office (until January of this year).

Hall said he understands, even agrees with, some criticism of BLS unemployment data.

Among his concerns:

  • The unemployment rate is “artificially low” because only people who are actively seeking employment are counted as “unemployed.” People who got frustrated and stopped looking for work aren’t technically “unemployed,” according to the data.
  • The rate does a poor job measuring “underemployment,” those people who are working but not at the level or to the extent they should be, based on their education and experience. “If you worked one hour (in a given month), and got paid at all, you’re employed,” according to BLS data, Hall said
  • The payroll survey, conducted by interviewing businesses and government agencies, gives a good, broad overview, but not a lot of information. The household survey gets a lot of information from households about their earnings, hours of work, demographics, etc. But Hall said the sample size probably needs to be larger for the statistics to be more accurate.
    “And that’s the one that probably should be larger than it is,” he said. “It’s a cost thing.”

“There’s no one best single indicator that tells you about the health of the labor market,” Hall said.

“You have to look at a number of things.”

* * * * * *

Bottom line: In January, Obama sends an experienced, highly qualified BLS Commissioner packing.  For the past 8 months, the BLS has been reporting to the Secretary of Labor – who has a deep political background, but no particular expertise in economic statistics.  For the past 9 months (as frequently reported here in the HomaFiles) the BLS data has been arousing curiosity, culminating in last week’s incredible (i.e. not credible) pre-election unemployment report.

Hmmm.

See also “Why would anybody distrust the BLS?”

>> Latest Posts

Are people well enough informed to vote?

October 11, 2012

In his book The Ethics of Voting, MSB prof Jason Brennan argues that all adult citizens have the right to vote … but that they shouldn’t exercise that right unless they are informed, rational, and aiming for the common good.

image

Regarding how informed citizens are, Prof. Brennan, referencing other research and studies, writes

Overall levels of political knowledge are low.

For example, 79% of Americans can’t identify their state senators.

During election years, most citizens cannot identify any congressional candidates in their district.

And, political knowledge is distributed unevenly.

The top quartile (of informed citizens) knows much, but the bottom quartiles knows hardly anything.

Ballparking, political scientists conclude that less than half of voters are informed; some put the number as low as 10%

Against that backdrop, I was pretty encouraged when Nielsen reported that over 67 million households tuned into last weeks Presidential debate.

To put that number in context, about 125 million people voted in the 2008 Presidential election.

That means that over half the number of people likely to vote this year watched the debates.

And, the 67 million was almost evenly divided between those over and under 55 years old.

Interestingly, Pew Research reports that over 80% of Romney supporters have given the election a lot of thought … not so much for Obama supporters … 1 in 3 of them have not given the election a lot of thought.

Hmmm.

Too bad all voters aren’t required to watch the debate before voting …

image

>> Latest Posts

Darden increases class size …. to 50,000!

October 11, 2012

According to Fortune

UVA’s Darden School has joined up with Coursera and plans to launch its first B-school class in January.

In a typical year, Professor Ed Hess figures he teaches no more than 300 students in his courses on managing smaller enterprises and the challenges of business growth.

When Hess walks into the classroom this January to teach Smart Growth for Private Businesses, however, as many as 50,000 people are expected to have signed up for it — more students than Darden has graduated since its founding nearly 60 years ago and in all probability the largest single audience ever assembled for a business course.

The professor will be the first to deliver a so-called MOOC (a massively open online course) for Darden to anyone with a computer and an Internet connection.

The free online class is part of a partnership with Coursera, an online education startup.

Since it began six months ago, Coursera has enrolled 1.57 million students in a wide range of courses taught by professors from Princeton, Stanford, the University of Pennsylvania, and other prominent schools.

Very few of those courses, however, have been in business.

Mostly, students have gravitated to classes in computer science, math and engineering.

For Prof. Hess, it means learning an entirely new way to teach.

Like other MOOC courses, his course will be broken into manageable chunks, with short video modules, PowerPoint slides, and interactive quizzes.

An online forum will allow students to ask questions, get answers, and collaborate in learning teams by industry sector, work backgrounds, or geography. “This is like going to Mars,” he laughs.

Hess also plans two live webinars in addition to the five class sessions, one to give students real time access to him and another with an entrepreneur to help students create a growth plan.

Students who complete the course with passing grades will receive a certificate of completion.

>> Latest Posts

AMS Concept: Disruptive Innovation

May 4, 2012

In every market, there are two trajectories—the pace at which products and services improve and the pace at which customers can utilize the improvements.

Customers’ needs tend to be relatively stable over time, while the offerings improve at a much faster rate.

Therefore, over time, products and services that once were not good enough for the typical customer ultimately pack in more features and functions than the customer can use. These are sustaining innovations. Whether they are simple or breakthrough improvements, they help industry leaders make better products that they can sell for higher profits to their best customers.

Industry leaders—or incumbents—almost always win battles of sustaining innovations, regardless of how technologically challenging they are.

Industry leaders stumble, however, when they face disruptive innovations.

A disruptive product or service is not a breakthrough improvement — in fact, it’s actually not as good as the item the industry leaders are selling. Because of this, existing customers won’t use it, and the leaders ignore it.

But these disruptive innovations are more threatening than industry leaders realize.

They transform complicated and expensive products into simpler and more affordable ones, so they appeal to consumers who previously lacked the money and skill to own and use the leaders’ products.

And little by little, the disruption predictably improves, until the disruptive products serve a much wider audience better and more affordably.

As a result, everyone is better off—except for the disrupted companies.   Consumers abandon more expensive and less accessible old-line products, and the incumbent companies that produced these go out of business.

The dynamics of disruption play out in virtually every industry, from electronics to transportation. The personal computer disrupted mainframes and minicomputers. Southwest disrupted the major airlines. Toyota disrupted the Detroit car companies.

Excerpted from BizEd, “On Innovation”, Clayton Christensen, May / June 2008

>> Latest Posts

Microsoft tries to stay relevant

December 23, 2010

TakeAway: As personal computing moves away from desktops and laptops to smartphones and tablets, Microsoft has yet to establish a foothold in either.

Its new smartphone platform offers the best chance get to gain market share but there are some steep challenges to overcome.

Developers don’t want to develop apps for the platform until sales justify doing so, but people won’t buy Windows 7 phones without compelling apps.

Not only that, but the platform won’t work on Verizon until next year, when Verizon is expected to launch the iPhone.

* * * * *

Excerpted from Bloomberg Businessweek, “Microsoft is Pinning Its Hopes on Windows Phone 7,” by Peter Burrows and Dina Bass, October 14, 2010

In an interview shortly after he unveiled Microsoft’s new Windows Phone 7 mobile software on Oct. 11, Chief Executive Officer Steve Ballmer declared a new era for Microsoft. “This is a big launch for us—a big, big launch,” he boomed.

Ballmer, never known for understatement, may be lowballing this one. Gartner expects smartphone sales to surpass PCs in 2012. Microsoft remains immensely profitable thanks to its aging PC monopoly, and it will remain so even if it never figures out the smartphone market. …

By almost any measure, Microsoft is nearly out of the mobile game. Its market share fell to 5 percent from 22 percent in 2004, says Gartner. Customer satisfaction of Windows smartphones is 24 percent, according to ChangeWave Research; it’s 74 percent for iPhones and 65 percent for handsets powered by Google’s Android. …

… With Apple and Google each activating more than 200,000 customers a day, according to those companies, handset makers, carriers, and app makers have far larger audiences than Microsoft offers. …

… While AT&T and T-Mobile will offer Windows Phone 7 devices, the software won’t work with Sprint or Verizon Wireless until next year. (Apple’s AT&T-only iPhone may be on Verizon by then.) …

Holding share in such a fast-growing market could require sales of about 20 million units in 2011, no easy feat. That’s how many iPhones Apple sold in its debut year. …

Microsoft’s to-do list doesn’t end with Windows Phone 7. It has no tablet software that can match the iPad. Failing in smartphones would be bad. Failing in tablets, which users expect to run office software, would be catastrophic …

* * * * *

Full Article
http://www.businessweek.com/magazine/content/10_43/b4200042877975.htm?campaign_id=magazine_related

* * * * *

Barack Obama: “Elections have consequences”

November 3, 2010

Let’s see if he’ll man-up and say that in his press conference this afternoon.

Some quick morning after thoughts:

1) The sheer number of GOP wins in the House sent a clear message, for sure.

2) GOP control of the House is key b/c revenue bills originate there and there’s supoena power to call hearings

3) Rep. Issa will kick butt from his chairmanship of the House Oversight Committee … that’ll be fun to watch

4) I really did want Reid to survice as Senate majority leader … I hope he gets a lot of visibility as Obama’s sidekick over the next couple of years … helps GOP in 2012

5) When does Pelosi have to turn over the keys to her mega-Air Force passenger jet?

6) Hooray for John Kasich in Ohio … the only candidate that got $$$ from me …  the sweep of governor seats — especially in the Midwest — is huge !

7) Sorry, but there are 2 Americas … New York & California (& maybe Illinois) … and the rest of the country … that’s a problem.

8) Luckiest gal: Meg Whitman … that state is unmanageable … nobody can get the public employees’ unions under control … the unions showed their muscle in CA and NV

9) Angle, O’Donnell, Raese, Miller stirred things up …  if only they were stronger candidates

10)  My bet: Obama didn’t hear the message and will dig in his heels after some faux conciatory rhetoric.

Those ungrateful CEOs …

September 24, 2010

An economic recovery depends on the private sector … and the private sectors is run by CEOs.

Does the Prez really think that demonizing business leaders is a way to get their support?

Interesting article in the New Republic.

Here are some snippets …

* * * * *

From the New Republic …

Valerie Jarrett, the president’s chief liaison to the business community stresses: “Our goal is to foster an environment where companies invest and innovate and grow and expand their employment base in a way that will be good for the country and good for business.”

The business community has spent the past few months locked in an increasingly public squabble with the administration.

Alternately sounding like an outraged populist and a free-market cheerleader, Obama’s balancing act serves mostly to confuse people. He is bashed simultaneously as a market-hating socialist and as a bloodless elitist, uninterested in the suffering of regular Americans. This betwixt-and-between stance is Obama’s trademark brand of thoughtful, noncommittal pragmatism.

To connect with business chieftains at their annual gathering in Washington. the president came with a teleprompter and a prepared speech that was more lecture than invitation to engage. He said his piece, took no questions, and decamped with impolitic alacrity — leaving behind a roomful of disgruntled chief executives still anxious about the White House’s policy aims and unaccustomed to such high-handed treatment. Far from feeling courted, or even understood, some members felt they’d been used as props.

Obama officials, in turn, suggested business was being overly sensitive, unrealistic in its demands, and more than a little ungrateful for all that government had done to stave off an economic apocalypse

There is, in the words of one Democratic strategist, “a cultural dissonance” at work here.

“I don’t think anything will honestly happen before the election to change the dynamic,” says one administration official. “The business community by and large is sitting and waiting and hoping that we learn a lesson in the election.”

New Republic: Executive Indecision – Obama and the CEOs: He loves them, he loves them not,  September 10, 2010 http://www.tnr.com/article/politics/magazine/77394/obama-and-the-ceos-executive-indecision?passthru=Yzc1MWI5ODI2NjFiMWI2MTA3YjdlNDFmZDNjYzIzZjQ

Jersey Boys pulls professor out of Five-O funk …

September 23, 2010

I’ve been slowed all week by my lingering disappointment over the Hawaii Five-O premiere — which, incidentally, drew almost 14 million viewers.

I’m pleased to report a bounceback.  Trekked into NYC yesterday to finally see Jersey Boys.  Man, was it good — nice storyline and great oldies.  The 2-1/2 hours flew by.

If you haven’t seen it, you should — even if you’re too young to know who the Four Seasons are.

Happy Fourth of July !

July 4, 2010

Kick back … enjoy your families … be thankful for our freedoms.

How Beef-Loving Voters Can Get Tofu for President

November 2, 2009

Ken’s Take: This is from my archives – one of my favs.  The original article was inspired by Clinton’s win over elder Bush (the Perot factor), younger Bush’d win over Gore (the Nader factor), and Jesse Ventura’s gov win in Minnesota.

There’s current news in the article since the independent in NJ may allow Corzine to sneak thru, and the Conservative may prevail in NY 23 as the party cadidates split the liberal vote. It’ll be interesting to watch … and (I think), the article is a fun read.

* * * * *
Excerpted from WSJ:  How Beef-Hungry Voters Can Get Tofu for President, March 14, 2003

Those odd ducks who scrutinize returns, calculate how each additional candidate affects the others’ chances and analyze strategic voting are hard at work. I refer, of course, to mathematicians.

Yes, there is a mathematics of elections.

Research has identified various voting systems world-wide in which, paradoxically, becoming more popular can make a candidate lose, abstaining gives your preferred candidate a better chance, and picking a winner means accepting someone a majority of voters don’t want.

This last paradox characterizes the U.S. system of plurality voting (vote for one; the top vote-getter wins). It works fine when there are two candidates, but with three or more, plurality voting can come up short.

For a democracy, the mathematicians’ most robust result is chilling. “It’s surprisingly difficult to identify a voting system that accurately captures the will of the people”.

* * * * *

The Election

So as not to inflame passions with current political examples I’ll illustrate his point with food.

You and two colleagues are planning an office party, and the caterer offers chicken, steak or tofu. You poll 17 invitees:

5 people prefer chicken to steak to tofu.

2 people prefer chicken to tofu to steak.

4 people prefer steak to tofu to chicken.

4 people prefer tofu to steak to chicken.

2 people prefer tofu to chicken to steak.

One organizer tallies the ballots by the plurality method, counting only first-place votes. Chicken wins (7 votes), while steak is last (4 votes).

A second organizer uses “approval voting,” in which voters mark all acceptable choices (everyone’s top two choices are acceptable). Now steak wins with 13, tofu gets 12 and chicken is last with 9.

The third organizer uses a point system that gives their first choices 2 points, second choices 1 and last picks 0. Now tofu wins with 18, steak gets 17, chicken 16.

The ‘winner’ changes with the choice of election procedureAn ‘election winner’ could reflect the choice of an election procedure” rather than the will of the people.

* * * * *

It gets better. Thanks to a mathematical property called nonmonotonicity, in some voting systems, ranking a choice higher can defeat it.

In a plurality-with-runoff system, the two candidates with the most first-place votes face one another in round two.

This time, we invite other departments to our office party, and get this first-round result:

27 prefer chicken to steak to tofu.

42 prefer tofu to chicken to steak.

24 prefer steak to tofu to chicken.

Chicken (27 votes) and tofu (42) reach the runoff. Assuming steak fans maintain their preference and give their second-round votes to tofu, tofu wins the runoff.

That seems fair.

But what if four people in the group of 27 chicken lovers are last-minute converts to vegetarianism and, in round one, prefer tofu to chicken to steak, like the group of 42?

Now steak (24 first-place votes) and tofu (46) make the runoff, in which steak beats tofu 47 to 46. Tofu’s late surge turned its win into a loss.

* * * * *

Such paradoxes tend to occur under specific but far from unusual circumstances.

With plurality voting, the most common is when two centrists face an extremist. The majority splits its vote between the centrists, allowing the fringe candidate to squeak in. In Minnesota’s 1998 governor’s race, Hubert Humphrey got 28% of the vote, Norm Coleman 34% and Jesse Ventura won with 37%, even though most voters ranked him last.

* * * * *

Thanks to such outcomes, scientists say what’s most needed is “a way for voters to register their second and third choices … especially in primaries, where there tends to be a large field.” Both a ranking system (give candidates 4, 3, 2 or 1 point) and approval voting accomplish that.

The U.N. chooses a secretary-general by approval voting. “It is particularly appealing in elections with many candidates … If your favorite candidate is a long shot, you can vote for both him and a candidate with a better chance without wasting your vote on the long shot. Approval voting would do a lot to address the problem of presidential-primary victors not being the choice of most voters.” Approval voting could well make more people (especially supporters of long shots) feel their ballot matters.

Still, no system is perfect. As Nobel-winning economist Kenneth Arrow proved mathematically in 1951, no voting system is guaranteed to be free of paradoxes in a race with three or more candidates, except one — a dictatorship.

Ring, ring, ring … want a couple of bucks off?

October 28, 2009

TakeAway:  Mobile coupons delivered directly  to  smartphones are catching on, spurring impulse purchases. 

* * * * *

Excerpted from CNBC, “Coupons Via Cellphone: Whipping Up the Impulse Buy,” By Christina Cheddar Bank, October 15, 2009

To date, the concept of receiving coupons on your cell phone has been more theory than practice. This is despite a resurgence in coupon use and an increasing dependence on cell phones.

But with the focus on mobile coupons as a marketing tool on the rise, is the industry heading to an inflection point? A new Harris interactive survey … of more than 2,000 adults … found that 42 percent of those who were between 18 and 34 years old, and 33 percent of those 35 to 44 years old are at least somewhat interested in receiving opt-in alerts on their cell phones for specials at their favorite establishments …

This type of technology is even more impressive when one considers how many purchases consumers make on the fly … 9-in-10 Americans have made an impulse purchase when they were out shopping in a store based on a sale or a special that was going on around where they were … Among adults who own a cell phone, nearly a quarter — some 22 percent — make this type of purchase at least once per week or more often …

1020 Placecast  has designed a system to use digital marketing and mobile devices in an attempt to drive consumers to specific locations.  Using their systems, a restaurant or retailer can send an alert to a customer’s phone whenever the person is nearing its location

Coupons.com … developed applications for the Apple’s iPhone and other devices to help consumers sort through coupons and pair them with their grocery lists … also trying out a system that allows shoppers to browse through coupon offerings on its Web site, then load the offers on to a key tag. Once at the store, shoppers can wave their key tags over the scanner during checkout in order to get the credit.

Both companies caution this is still early days for these technologies.

However, with the number of smartphone users on the rise … penetration is about 15 percent in the U.S. today (about 40 million phones) … most forecasts call for that number to at least double by the end of 2011 … coupled with the yet untapped interest, there may be significant opportunities for a technology that is simple enough for consumers to understand and appreciate …

Still, at this time, the reality is there is still more buzz about mobile coupons than people actually using these offers. But as retailers look to hone in on how they can improve relationships with their customers it seems the demand for this type of service is there.

Edit by TJS

* * * * *

Full Article
http://www.cnbc.com/id/33244923

* * * * *

About that 4 year old who bought her 1st home and got the $8,000 tax credit … call me suspicious

October 26, 2009

Ken’s Take: The finding of extensive fraud in the new home owners’s tax credit program can not possibly surprise anybody. But, I am a bit startled by the magnitude — likely to be in the billions when the dust settled.

Just wait until the analysis is done on Cash for Clunkers.  My bet: will make this look like chump change.

* * * * *

Excerpted from WSJ: Home-Buyer Credit Tempts Tax Cheats, Oct. 23, 2009

The Treasury tax-oversight office told Congress that “tens of thousands of people” submitted suspicious — and possibly fraudulent — claims for a federal tax credit meant for first-time home buyers. 

The credit, adopted as part of the February stimulus bill, modified and expanded on a tax credit that was first passed by Congress in 2008. The current credit is available only to first-time buyers who purchased a primary residence since April 9, 2008. The full credit is available to individuals with incomes of less than $75,000 and $150,000 for married couples.

The IRS is conducting more than 100,000 examinations that could require filers to give back the credit and pay civil penalties.

At least 19,000 filers who hadn’t bought homes claimed $139 million in tax credits and were reimbursed.

An additional 74,000 tax-credit claims, valued at $500 million, for people who previously owned a home. 

More than 500 people under the age of 18, including a 4-year-old child, also had their names on applications for the credit, which has no minimum-age requirement. Most of the claims involving children were made by parents who purchased a home but were ineligible for the credit because their incomes were too high.

The authorities blamed a lack of safeguards, including lack of documentation requirements, for the extent of the problems.

* * * * *

Rep. Charles Boustany Jr. (R., La.) said the problems show the dangers in creating refundable tax credits that give money to filers even if they didn’t owe any taxes. “Every time Congress creates a new refundable credit…the incentive for fraud is magnified,” he said.

The credit’s main sponsor, Sen. Johnny Isakson (R., Ga.), said he is “cautiously optimistic” that an extension — with procedural safeguards added — can move in the Senate next week. “Just because someone used fraud [to claim the credit] doesn’t mean the credit is a bad idea, it means there are some bad folks running around,” he said.

* * * * *

Full article:
http://online.wsj.com/article/SB125622884824101553.html

The housing glut … peaking, but still high — very high.

October 6, 2009

There are still a record number of houses on the market — 9.4 months’ worth of existing homes for sale, according to NAR data.

The backlog is usually under six months.

And, based on current and projected delinquencies, nearly seven million housing units will eventually enter foreclosure … that could add 1.35 years’ worth of inventory to the market.

[housing supply]

Source: WSJ: Housing Recovery Obstacle: So Many Houses, Sept 24, 2009http://online.wsj.com/article/SB125374552378835617.html#mod=WSJ_hpp_MIDDLENexttoWhatsNewsTop

* * * * *

Ironic twists as Hurricane Bill heads for Bermuda

August 21, 2009

1) Bill & Hillary Clinton are vacationing in Bermuda.  Imagine Hillary dealing with 2 Hurricane Bills simultaneously.

2) Wouldn’t it be justice delivered if the 4 terrorists who got relocated from Gitmo to Bermuda got their clocks cleaned ?

* * * * *

Marketing to retiring boomers …

August 18, 2009

For many Boomers “aging is not about the inevitable end, but rather about the evolving self.”

It seems this age group is redefining retirement as “a time of growth when identity is broadened, expressed, and completed through consumption.”

Researchers scoured the current literature on aging and lifestyle, observed seniors in a wide range of communities and life situations, and concluded that a boomer retirement is:

  • A dynamic life stage full of self-evolution and identity work.
    Marketing hint: Emphasize making a mark, leaving a legacy (take heed, nonprofits).
  • A culture in which “identity experimentation” is increasingly acceptable and common.
    Hint: Keep it in mind as you market that those in this age group are rediscovering their true selves. “It’s finally time for me!”
  • A culture that emphasizes staying busy and traveling.
    Hint: Forget frailty. Assume they’re tough and ready to explore!
  • A time when consumers favor consumption.
    Hint: Don’t rule out any product as not fitting this generation. They’re ready to buy—once they’re shown a little respect.

Don’t treat today’s seniors like they’re old and frail. Instead, market to them as the vital, active individuals they think are.

Extracted from: Marketing Profs, Now Is the Time for Me, Baby!, July 29, 2009

Source: “Consumer Identity Renaissance: The Resurgence of Identity-Inspired Consumption in Retirement,” by Hope Jensen Schau, Mary C. Gilly and Mary Wolfinbarger. Journal of Consumer Research, 2009.

* * * * *

Presidential Legacies …

August 14, 2009

image
FDR: The New Deal

 

image 
LBJ: The Great Society

 

image 
BHO: Cash For Clunkers

* * * * *

Brace yourself for higher healthcare premiums … (unless you live in NY or NJ)

August 12, 2009

Ken’s Take: Article cuts to the chase on 2 critical reform issues: guaranteed coverage and community rating … both of which will push up premiums for folks who currently have health insurance …

Excerpted from WSJ, The Truth About Health Insurance, Aug 12, 2009

9 out of 10 people under 65 are covered by their employers, most of which cover all employees and charge everyone the same rate.

The tax code subsidizes private insurance only when it is sponsored by an employer

* * * * *

President Obama’s horror stories are about the individual insurance market, where some 15 million people buy coverage outside of the workplace.

The individual market is relatively small and its turnover rate is very high. Most policyholders are enrolled for fewer than 24 months as they move between jobs, making it difficult for insurers to maintain large risk pools to spread costs.

If you develop an expensive condition such as cancer or heart disease, and then get fired or divorced or your employer goes out of business — then individual insurance is going to be very expensive if it’s available.

* * * * *

By forcing insurers to cover anyone at any time (“guaranteed coverage”) and at nearly uniform rates … many people will buy insurance only when they need medical care. This raises the cost of insurance for everyone else, in particular those who are responsible enough to buy insurance before they need it; they end up paying even higher premiums. 

Another proposed reform known as "community rating" imposes uniform premiums regardless of health condition. This also blows up the individual insurance market, by making it far more expensive for young, healthy or low-risk consumers to join pools — if they join at all. And if the healthy don’t join risk pools, then premiums go up for everyone and insurers have little choice but to reduce their risk by refusing to cover those who have a high chance of getting sick, such as people with a history of cancer.

New York, New Jersey and Massachusetts have both community rating and guaranteed issue. And, no surprise, they have the three most expensive individual insurance markets among all 50 states, with premiums roughly two to three times higher than the rest of the country.

In 2007, the average annual premium in New Jersey was $5,326 for singles and in New York $12,254 for a family, versus the national average of $2,613 and $5,799, respectively. ObamaCare would impose New York-type rates nationwide.

* * * * *

ObamaCare would impose on all 50 states rules that have already proven to be failures in numerous states.

Because these mandates would raise the cost of insurance, ObamaCare would then turn around and subsidize individuals to buy the insurance that the politicians made more expensive. Only in government could such irrationality be sold as "reform."

* * * * *
Full article
http://online.wsj.com/article/SB10001424052970204908604574332293172846168.html?mod=djemEditorialPage

* * * * *

Some course adjustments for the immutable laws of economics …

July 16, 2009

Homa Note: Mankiw – a Harvard prof – is probably the foremost econ teacher these days.  Evidence: he got an author’s advance of over $1 million for his textbook …

* * * * *

Excerpted from NY Times, “That Freshman Course Won’t Be Quite the Same”, Mankiw, May 24, 2009

Despite the enormity of recent events, the principles of economics are largely unchanged. Students still need to learn about the gains from trade, supply and demand, the efficiency properties of market outcomes, and so on. These topics will remain the bread and butter of introductory economics courses.

Nonetheless, the teaching of basic economics will need to change in some subtle ways in response to recent events. Here are four:

THE ROLE OF FINANCIAL INSTITUTIONS

Students have always learned that the purpose of the financial system is to direct the resources of savers, who have extra funds they are willing to lend, to investors, who have projects that need financing.

The economy’s financial institutions — banks and insurance companies are  part of a system [that is largely taken for granted] and quickly fade into the background

The current crisis, however, has found these financial institutions at the center of the action.

Financial institutions are like the stagehands who work behind the scenes at the theater. If they are there doing their jobs well, the audience can easily forget their presence. But if they fail to show up for work one day, their absence is very apparent, because the show can’t go on.

THE EFFECTS OF LEVERAGE

The economic crisis arose because some financial institutions had, in effect, invested in housing by holding mortgage-backed securities. When housing prices fell by about 20 percent nationwide, these institutions found themselves nearly insolvent.

[The] important question: “If housing prices have fallen only 20 percent, why did the banks lose almost 100 percent of their money?”

The answer was leverage, the use of borrowed money to amplify gains and, in this case, losses.

Economists have yet to figure out what combination of mass delusion and perverse incentives led banks to undertake so much leverage. But there is no doubt that its effects have played a central role in the crisis.

THE LIMITS OF MONETARY POLICY

The textbook answer to recessions is simple: When the economy suffers from high unemployment and reduced capacity utilization, the central bank can cut interest rates and stimulate the demand for goods and services.

When businesses see higher demand, they hire more workers to meet it.

But,  what would happen if the central bank cut interest rates all the way to zero and it still wasn’t enough to get the economy going again?

Now, with the Federal Reserve’s target interest rate at zero to 0.25 percent, that question is  pressing.

The Fed is acting with the conviction that it has other tools to put the economy back on track. These include buying a much broader range of financial assets than it typically includes in its portfolio.

Economists are far from certain how well these tools work.

THE CHALLENGE OF FORECASTING

It is fair to say that this crisis caught most economists flat-footed.

In the eyes of some people, this forecasting failure is an indictment of the profession. But that is the wrong interpretation.

In one way, the current downturn is typical: Most economic slumps take us by surprise. Fluctuations in economic activity are largely unpredictable.

Yet this is no reason for embarrassment.  Some things are just hard to predict. [The vest an economist can do is] assess risks and to be ready for surprises.

Full article:
http://www.economics.harvard.edu/faculty/mankiw/files/That%20Freshman%20Course.pdf

Your cellphone will keep you connected … with companies trying to sell you something.

June 2, 2009

Summary: The jargon is “mobile marketing” — marketers placing ads, coupons, reminders, and links in and around your cellphone apps.  It’s the next wave of innovative marketing and will spread quickly.  Why? Because it seems to work.

* * * * *

Excerpted from Business Week, “Pandora: Unleashing Mobile Phone Ads: Kraft, Nike, and others are getting results advertising on Pandora’s mobile music service. Is cell-phone marketing finally taking off?” By Tom Lowry, May 21, 2009

It’s just a matter of time until mobile marketing will take off in the U.S.  … for two reasons: Web-surfing smartphones are selling briskly even in a downturn, and applications for those gadgets … are proliferating.

People are spending a lot more time playing games, watching TV, and shopping on their phones. That’s what marketers call engagement, a fancy way of saying people are paying attention. Companies, of course, prize that, so they’re looking for mobile applications that are a good fit for their brands.

Which brings us to Pandora, a nine-year-old, free online service that lets users design “radio stations” based on their musical preferences. Since Pandora launched a mobile edition two years ago, it has signed up 6 million people…That has prompted the likes of Best Buy, Dockers, Target, and Nike to buy ads on Pandora and experiment with what remains a cheap advertising medium

“Marketers, especially consumer brands, have to take mobile seriously now. You have to be where your customer works, lives, and plays.”

Pandora has become a test bed because people who use the service tend to spend a lot of time playing around with it. They are constantly creating stations, rating songs, and scrolling through playlists to find artists they don’t know … on average subscribers use the mobile service about 90 minutes a day (though there are no independent numbers).

Advertisers are trying out Pandora in myriad ways. Sometimes it’s as a direct marketing tool. Domino’s, for example, puts up ads that urge people to call in for a pizza directly from their phones.

Other companies are using coupons. Docker’s offered a 20% discount if visitors went to the brand’s site and entered a promotional code .

Some companies prompt users to watch movie clips where their products are featured prominently.

If one thing has surprised advertisers, it’s how avidly consumers are responding. Target says 27% more people clicked on its ad for the release of Christina Aguilera’s greatest hits CD last fall than on any other mobile Web campaign. The ad urged users to visit a site where they could get a free Aguilera ringtone and buy the album…

Sonos, which sells home music systems, just wrapped up a campaign on Pandora. DeAnna Wassom, Sonos’ senior marketing director, says she has never seen better customer response in her 20 years in the business. The ads asked people to click through to a promotional video. Typically, only 1% to 2% of people click on ads overall. But nearly 5% clicked in this case…and almost 40% of those clicking watched the entire video. During the campaign, nearly twice as many people asked to be put on Sonos’ e-mail list as those signing up on the company’s regular site.

Most brands have no clue how to market on mobile devices. Many try to do too much, including making sites so technologically flashy that they crash phones. The key is to keep it simplebuild special mobile sites, because regular ones don’t translate well to supersmall screens.

Edit by TJS

* * * * *

Full Article:
http://www.businessweek.com/magazine/content/09_22/b4133052597112.htm

* * * * *

Want more from the Homa Files?
Click link =>
The Homa Files Blog

 

Soften your hard edges … with an empathic logo

March 16, 2009

Excerpted from Brandweek, “Grim Times Prompt More Upbeat Logos” By Todd Wasserman, Feb 21, 2009

* * * * * 

As the economy gets uglier, logos are getting prettier. The stolid, angular look of visual trademarks like IBM’s and Bank of America are being supplanted by ones that sport softer, more approachable fonts; multiple colors and natural, child-like symbols.

The latest example of the trend is Kraft. While the food giant’s previous visual treatment was a red, white and blue hexagon, the new one, which the company introduced with great fanfare last week, is in lower-case and sports yellow, green, purple, blue and orange as well …

Designers have a name for the trend: The Google Effect. Many say that Google’s multicolor design and the company’s willingness to tweak its logo for holidays and such have been widely influential.

Ruth Kedar, the woman who designed Google’s logo, agrees … While acknowledging that Google wasn’t the first to tweak its logo … she said the notion was still an anathema to most companies until recently. “The idea that you could modify a brand and play with it was kind of a radical change in branding, going way out of the corporate ID manual” …

Indeed, the Google Effect in this case may have a triple meaning—Google’s introduction of an era of more transparent corporate images and the advancement of the Internet as a medium to showcase logos are also influences. Years ago, logos were designed to be seen on buildings and trucks, but now the primary forum is the Internet where “color restrictions aren’t as much of an issue” …

In regard to transparency, Mike Mitchell, a Kraft rep, said that the company’s new logo is a manifestation of a bottom-up change at the company. The visual treatment, he said, is designed to convey Kraft’s new mantra: “Make today delicious.” It symbolically represents various Kraft products. The triangle shape “is invocative of pizza,” he said.

Most consumers won’t catch those references but instead will walk away with a more positive feeling about the company, said Mitchell.

Cal McAllister, co-founder of Wexly School for Girls, a design firm … said the new logos are a reflection of a desire to at least appear more approachable and transparent. “Everyone is working off the same brief,” he said. “They say, ‘Give me something natural, like a sun or a flower,’ or ‘Make it soft and make it seem friendly …”

Since such sentiment is based on consumer research, McAllister speculated that the gloomy times may be prompting consumers to gravitate to such imagery.

“Because we’re in a tough time and people are getting laid off, I think there’s a subconscious desire to take you back to when you weren’t worried about things like that, which is why we’re seeing these almost hand-drawn logos … And when you see a logo that’s boxy and the edges are hard and sharp, and the company just laid off 10,000 people, you get mad at them. But if it’s a watercolory rounded logo, you feel kind of sorry for them” …

Edit by SAC

* * * * *

Full Article:
http://www.brandweek.com/bw/content_display/news-and-features/direct/e3i6c21c5456af55219d01b2ee3650498cf

* * * * *

Want more from the Homa Files?
Click link =>
The Homa Files Blog

How much hope can the market withstand ? … Update

February 24, 2009

For folks who like to keep score:

The Dow closed at 8,228 on inauguration day.

The Dow closed at 7,114 yesterday (Feb. 23, 2009)

A decline of 1,114 points (13.5%) for the presidency to date.

* * * * *

The Dow dropped 382 points on the day that Geithner’s speech bombed.

The Dow dropped 298  points on the day that Obama signed the non-stimulus package (the first day that the market was open after the bill was passed).

The Dow dropped 468  points on the days after Obama announced his mortgage modification plan.

The total decline since recovery initiatives were mobilized 1,114 points

* * * * *

Fasten your seat belt for Obama’s announcement of his intention to increase in the capital gains tax rate in 2010.

Keep the change …

* * * * *

Want more from the Homa Files?
Click link =>
  The Homa Files Blog

Make ’em feel special with tiered loyalty program

February 22, 2009

Excerpted from the Journal of Consumer Research, “Feeling Superior: The Impact of Loyalty Program Structure on Consumers’ Perceptions of Status.” by Xavier Drèze and Joseph C. Nunes, April 2009.

* * * * *
How special does that gold card offered by a hotel or airline make you feel? A new study explores the connection between status and loyalty. Many businesses create loyalty programs to confer a sense of status to their customers. Examples are platinum, gold, and silver charge cards, or red and blue membership levels. The study provides insight for planning programs that enhance consumers’ perception of status.

The authors studied the limits of customer loyalty, testing how far an organization can go in adding status levels to a loyalty program before customers feel they are not so special anymore.

The authors tested a variety of options for expanding loyalty programs. They added tiers and people to customer loyalty programs in varying combinations to determine how people would feel if an organization added people to a top-tier program. They asked respondents how they felt when they added more tiers on top of them (platinum on top of gold), or added more tiers below them.

“We find that increasing the number of elites in the top tier dilutes their perception of status, but adding a subordinate elite tier enhances their perceptions of status.”

“Thus, if the firm creates a larger top tier while adding a second status tier rather than persisting with a single small top tier, it can recognize more customers without decreasing the perceptions of status among its most elite.”

In other words, being in the gold level is more special if there is a silver level below.

“A possible drawback a firm always confronts when providing preferential treatment to an elite few is whether it might disenfranchise the masses. Our study shows this concern to be unfounded. We find that given the choice between alternative firms, respondents favor companies that offer elite programs even when it is clear they would not qualify for the lowest elite tiers.”

“In other words, those at the bottom of the pyramid do not begrudge the success of those at the top.”

Edit by NRVFull article:
http://www.xdreze.org/Publications/superior.html 

* * * * *Want more from the Homa Files?
Click link => The Homa Files Blog

Make 'em feel special with tiered loyalty program

February 22, 2009

Excerpted from the Journal of Consumer Research, “Feeling Superior: The Impact of Loyalty Program Structure on Consumers’ Perceptions of Status.” by Xavier Drèze and Joseph C. Nunes, April 2009.

* * * * *
How special does that gold card offered by a hotel or airline make you feel? A new study explores the connection between status and loyalty. Many businesses create loyalty programs to confer a sense of status to their customers. Examples are platinum, gold, and silver charge cards, or red and blue membership levels. The study provides insight for planning programs that enhance consumers’ perception of status.

The authors studied the limits of customer loyalty, testing how far an organization can go in adding status levels to a loyalty program before customers feel they are not so special anymore.

The authors tested a variety of options for expanding loyalty programs. They added tiers and people to customer loyalty programs in varying combinations to determine how people would feel if an organization added people to a top-tier program. They asked respondents how they felt when they added more tiers on top of them (platinum on top of gold), or added more tiers below them.

“We find that increasing the number of elites in the top tier dilutes their perception of status, but adding a subordinate elite tier enhances their perceptions of status.”

“Thus, if the firm creates a larger top tier while adding a second status tier rather than persisting with a single small top tier, it can recognize more customers without decreasing the perceptions of status among its most elite.”

In other words, being in the gold level is more special if there is a silver level below.

“A possible drawback a firm always confronts when providing preferential treatment to an elite few is whether it might disenfranchise the masses. Our study shows this concern to be unfounded. We find that given the choice between alternative firms, respondents favor companies that offer elite programs even when it is clear they would not qualify for the lowest elite tiers.”

“In other words, those at the bottom of the pyramid do not begrudge the success of those at the top.”

Edit by NRVFull article:
http://www.xdreze.org/Publications/superior.html 

* * * * *Want more from the Homa Files?
Click link => The Homa Files Blog

The Stimulus … Line Item Detail

February 20, 2009

Below is a summary of the top spending items in Obama’s stimulus plan.

And, here’s a PDF with all of the line items:
Stimulus by Line Item High to Low -PDF

If you’d like the Excel file, email me at homak@msb.edu

image

click to enlarge

WSJ Source:
http://online.wsj.com/public/resources/documents/STIMULUS_FINAL_0217.html 

* * * * *

Want more from the Homa Files?
Click link =>
  The Homa Files Blog

Using card member databases to protect consumers and boost relationship marketing

February 20, 2009

Excerpted from MSNBC.com, “Dial-a-recall? Stores use cards to warn buyers” by JoNel Aleccia, January 23, 2009

* * * * *
Jon Lowder usually disdains computer-generated telephone calls but when he got two this week from Costco, he didn’t mind.

The giant warehouse retailer was dialing Lowder to warn him that two brands of peanut butter sports bars he bought for his kids had been recalled as part of a growing salmonella food poisoning scare.

“They’d scoured their database and found any members who had purchased Clif Bars from them and then called them to let them know that they should dump those Clif Bars,” said Lowder. “Did I mention I love Costco?”

Certain shoppers are getting personalized warnings from the stores that sold them. They’re customers who hold membership cards at places such as Costco, or “loyalty cards” used to access discounts and services at some grocery stores.

About 1 million of Costco’s 54 million card-carrying members got calls about peanut butter products this week.

And in the Northeast, the Wegmans regional grocery store chain completed more than 17,000 calls about potentially tainted ice cream on Tuesday, and nearly 3,000 calls about suspect peanut butter cup candy on Thursday, all to holders of the store’s “Shoppers Club” cards who bought the affected items.

“It was really amazing that so many customers had no idea about the recall.”

The outreach is part of a small but growing trend that raises questions among consumer privacy advocates but draws praise from shoppers warned away from suspect products.

Chalk up a victory to “relationship marketing,” in which retailers try to woo consumers with personal reasons to seek their stores. In the case of food safety outreach, it’s a win all around.

But that confidence may come at a cost, noted Alessandro Acquisti, assistant professor of information technology and public policy at Carnegie Mellon University. He said he appreciates the constructive use of consumer data to warn about food poisoning, but worries about less benevolent actions.

“In this case, many consumers would be happy their information was used that way,” said Acquisti, “But they may be very unhappy if that same data is used to send them advertising they don’t want or if it is used in other ways they don’t want.”

Costco started making phone calls within the last two years, after a decade of sending letters about recalled items.

The effort isn’t comprehensive. Costco makes calls only for items identified as potentially serious or deadly Class 1 recalls by federal officials. Calls can only be made to consumers who provide accurate phone numbers and, in the case of Wegmans, only those who provide landlines.

Edit by NRV

Full article:

http://www.msnbc.msn.com/id/28802536/ 

* * * * *

Want more from the Homa Files?
Click link => The Homa Files Blog

Brands that win by a nose … huh?.

January 30, 2009

Excerpted from Brandchannel, “Branding by the Nose in Brazil,” By Ana Paula Palombo Terzi

* * * * *

An estimated 80% of brand communication is auditory or visual.  As competition for brand awareness intensifies and the battle for consumer attention becomes increasingly competitive, marketers in Brazil are developing strategies that appeal to another, just as powerful human sense: the sense of smell …

Branding experts have learned to tap into the powerful emotions triggered by the sense of smell…No other sense can revive experiences and recollections so vividly as the sense of smell…But does this olfactory fact present actual, viable and achievable branding opportunities and new areas for the branding industry to explore and benefit from? Absolutely…

Scent branding…is an important and growing marketing segment, particularly in Brazil—a nation and culture known for its sensuality. Scent branding highlights smell as an emotional cue that induces positive behavior, accentuates brand attributes and generates recall—that subconscious action sought by every ambitious brand strategy…

Brazilian brands are now creating their olfactive logo, a scent signature which helps generate brand recall…A wide variety of businesses have been adopting olfactive logos…Brazilian baked goods brand Bauducco also strategized with olfactive marketing to appeal to a younger demographic in Brazil. A chocolate fragrance was diffused into movie theaters at the same time they ran a preview commercial for its signature product, the panettone. The campaign was a success.

Part evidence, part theory and part science, scent marketing demonstrates that the category can be an important component for brand communication and can positively and dramatically impact sales, even though it is still hard to measure a direct correlation with return on investment…

Scent marketing…engages consumers to experience a brand on a deeper level and recall what the brand is offering them. Scent marketing aims to create emotional content and stir these emotions…in a multi-sensorial context that exploits the complex inner workings of the human mind that bind physical sensation with emotions, attitudes and perceptions.

It is not surprising that strategies that capitalize on the full spectrum of human sensuality are finding industry support, and branding success, in Brazil.

Edit by SAC

* * * * *

Full Article:
http://www.brandchannel.com/features_effect.asp?pf_id=453#more

* * * * *

Want more from the Homa Files?
Click link =>
The Homa Files Blog

Am I the only person on earth who didn’t watch the inauguration?

January 23, 2009

Excerpted from Ad Age, “How We Watched the Inauguration” By A. Hampp and A. Klaassen, Jan 20, 2009

* * * * *

By the time final numbers are crunched President Barack Obama’s inauguration likely will have been watched by more people and on more platforms than virtually any other televised event in U.S. history — including the Super Bowl. This year’s biggest winner: the web, with cable news, social networks and even sports leagues capturing a record share of viewers tuning in and live-blogging online throughout the afternoon.

The early winners in the battle for inauguration-media-coverage supremacy were CNN and Facebook, which teamed up for a unique live-streaming event that integrated CNN.com’s video player with Facebook status updates, so users could update their statuses with up-to-the-second commentary.

According to early data … CNN.com had generated more than 136 million page views, while CNN.com Live had served more than 21.3 million live video streams globally … easily surpassing its previous record of 5.3 million live streams on Election Night …

If CNN and Facebook were the biggest winners in terms of streams served, Starbucks was arguably the biggest winner on the marketing side, as its new video ad aired on CNN.com Live directly after President Obama left the stage. The ad … was a community-outreach “grass-roots initiative” that offered pledge cards and free cups of coffee to consumers who promised to do five hours of community service during 2009 at their local Starbucks between Jan. 21-25 …

Another marketer looking to benefit from Obama mania is Audi, the German automaker, which will sponsor the evening broadcasts’ recap of the swearing in of Mr. Obama on ABC, CBS, NBC; the automaker also ran ads during numerous streamed broadcasts of the event online …

The inauguration was available from multiple sources and on multiple platforms. MobiTV offered live coverage from ABC News, CNBC, C-Span, Fox News and MSNBC on its mobile services. On the web, the inauguration aired on sites as diverse as Major League Baseball’s mlb.com and MySpace, which streamed the inauguration on its MySpace Impact website … 

Other online broadcasters reported early success and record traffic. Hulu streamed live coverage of Fox News. The site wouldn’t report specific streaming numbers, but a spokesman said today’s inauguration “set a new record for us in terms of live streams, ahead of our previous events, which included the presidential debates, the acceptance speech in Grant Park and the Sarah Palin/Joe Biden debate.”

However, Fox is likely to gain a significant increase in new viewers thanks to its syndication on Hulu, which could boost its audience by as many as several million unique visitors. It attracted just more than 5 million to FoxNews.com on Election Night vs. the 10 million to 15 million who watched CNN.com and MSNBC.com.

Edit by SAC

* * * * *

Full Article:
http://adage.com/digital/article?article_id=133920

* * * * *

Want more from the Homa Files?
Click link =>
The Homa Files Blog

Am I the only person on earth who didn't watch the inauguration?

January 23, 2009

Excerpted from Ad Age, “How We Watched the Inauguration” By A. Hampp and A. Klaassen, Jan 20, 2009

* * * * *

By the time final numbers are crunched President Barack Obama’s inauguration likely will have been watched by more people and on more platforms than virtually any other televised event in U.S. history — including the Super Bowl. This year’s biggest winner: the web, with cable news, social networks and even sports leagues capturing a record share of viewers tuning in and live-blogging online throughout the afternoon.

The early winners in the battle for inauguration-media-coverage supremacy were CNN and Facebook, which teamed up for a unique live-streaming event that integrated CNN.com’s video player with Facebook status updates, so users could update their statuses with up-to-the-second commentary.

According to early data … CNN.com had generated more than 136 million page views, while CNN.com Live had served more than 21.3 million live video streams globally … easily surpassing its previous record of 5.3 million live streams on Election Night …

If CNN and Facebook were the biggest winners in terms of streams served, Starbucks was arguably the biggest winner on the marketing side, as its new video ad aired on CNN.com Live directly after President Obama left the stage. The ad … was a community-outreach “grass-roots initiative” that offered pledge cards and free cups of coffee to consumers who promised to do five hours of community service during 2009 at their local Starbucks between Jan. 21-25 …

Another marketer looking to benefit from Obama mania is Audi, the German automaker, which will sponsor the evening broadcasts’ recap of the swearing in of Mr. Obama on ABC, CBS, NBC; the automaker also ran ads during numerous streamed broadcasts of the event online …

The inauguration was available from multiple sources and on multiple platforms. MobiTV offered live coverage from ABC News, CNBC, C-Span, Fox News and MSNBC on its mobile services. On the web, the inauguration aired on sites as diverse as Major League Baseball’s mlb.com and MySpace, which streamed the inauguration on its MySpace Impact website … 

Other online broadcasters reported early success and record traffic. Hulu streamed live coverage of Fox News. The site wouldn’t report specific streaming numbers, but a spokesman said today’s inauguration “set a new record for us in terms of live streams, ahead of our previous events, which included the presidential debates, the acceptance speech in Grant Park and the Sarah Palin/Joe Biden debate.”

However, Fox is likely to gain a significant increase in new viewers thanks to its syndication on Hulu, which could boost its audience by as many as several million unique visitors. It attracted just more than 5 million to FoxNews.com on Election Night vs. the 10 million to 15 million who watched CNN.com and MSNBC.com.

Edit by SAC

* * * * *

Full Article:
http://adage.com/digital/article?article_id=133920

* * * * *

Want more from the Homa Files?
Click link =>
The Homa Files Blog

Online ads … customized on the fly

January 16, 2009

Excerpted from the New York Times, “Web Marketing That Hopes to Learn What Attracts a Click”, by Stephanie Clifford, December 3, 2008

* * * * 
Online advertisers are not lacking in choices: They can display their ads in any color, on any site, with any message, to any audience, with any image.

Now, a new breed of companies is trying to tackle all of those options and determine what ad works for a specific audience. They are creating hundreds of versions of clients’ online ads, changing elements like color, type font, message, and image to see what combination draws clicks on a particular site or from a specific audience.

It is technology that could cause a shift in the advertising world. The creators and designers of ads have long believed that a clever idea or emotional resonance drives an ad’s success. But that argument may be difficult to make when analysis suggests that it is not an ad’s brilliant tagline but its pale-yellow background and sans serif font that attracts customers.

Adisn, based in Long Beach, and Tumri, based in Mountain View, are working both sides of the ad equation. On one, they are trying to figure out who is looking at a page by using a mix of behavioral targeting and content analysis. On the other side, they are assembling an ad on the fly that is meant to appeal to that person.

* * * * *

Adisn’s approach has been to build a database of related words so it can assess the content of a Web site or blog based on the words on its pages.

Adisn then buys space on Web sites, and uses its information to find an appropriate ad to show visitors to those sites. If a visitor views pages about beaches, weather and Hawaii, it might suggest that the visitor is interested in Hawaiian travel.

Based on that analysis, Adisn’s system pulls different components — actors, fonts, background images — to make an ad. For example, it might show an ad with a blue background, an image of a beach, and a text about tickets to Hawaii.

Simple Green, the cleaning brand, began working with Adisn this year to advertise a new line of products called Simple Green Naturals.

“If it’s a woman looking at a kitchen with a stainless steel refrigerator, they can show a stainless steel product.”

* * * * *

Tumri’s approach is slightly different. It creates a template for ads, including slots for the message, the color, the image and other elements.

Unlike Adisn, it does not buy ad space, but lets clients choose and buy space on sites themselves. And rather than building a contextual database, Tumri uses whatever targeting approach advertisers are already using, whether it is behavioral or contextual or demographic, and assembles an ad on the fly based on that information.

“It’s reporting back to the advertiser and agency saying, ‘Guess what? The soccer mom in Indiana likes background three, which was pink, likes image four, which was the S.U.V., and likes marketing message 12, about room, safety and comfort.”

Edit by DAF

* * * * *

Full article:
http://www.nytimes.com/2008/12/03/business/media/03adco.html?_r=1&ref=media&pagewanted=print

* * * * *

Want more from the Homa Files?
Click link => 
The Homa Files Blog

Happy Holidays

December 24, 2008

May your holiday season be peaceful and happy …

Ken 

* * * * *

Want more from the Homa Files?
Click link =>
  The Homa Files Blog

Goldman: "Must pay to retain talent to insure continued success" … say, what?

December 24, 2008

Excerpted from IBD, “Bailing Out Bonuses”, December 22, 2008

Amid coast-to-coast cutbacks and layoffs by the thousands, bankers at the center of the financial crisis pay themselves $1.6 billion in taxpayer-funded bonuses .  In addition to the bonuses, they got club dues, financial planners, corporate jet travel, daily limousines and home security systems, courtesy of the taxpayers.

It’s obvious these banker bonuses had no correlation to productivity or performance. In the real world, enterprises provide such benefits only when executives produce results — that is, profits.

Goldman Sachs said it needed to retain and motivate its talent to ensure its “continued success,” not mentioning where this talent is threatening to migrate in a global and industry downturn.

Full article:
http://www.ibdeditorials.com/IBDArticles.aspx?id=314842162013024 

* * * * *

Want more from the Homa Files?
Click link =>
  The Homa Files Blog

As Detroit burns (figuratively), UAW gets a paid vacation …

December 19, 2008

When Chrysler plants are idled because they are not making vehicles, Chrysler is still required to pay its UAW workers 95 percent of their wages.
http://voices.washingtonpost.com/economy-watch/2008/11/corker_uaw_should_not_be_paid.html?hpid=topnews

image002

* * * * *

Want more from the Homa Files?
Click link =>
  The Homa Files Blog

Letting the Chicken Loose to Understand the Bottom of the Pyramid

December 11, 2008

Excerpted from WSJ, ” McCann Offers Peak Lives of Latin America’s Poor” By Antonio Regaldo, December 8, 2008

* * * * *

During presentations at McCann Worldgroup’s office in Bogotá, Colombia, staffers have taken to letting a chicken loose to hunt and peck around clients’ feet. Racks of potato chips and other products on display in McCann’s Mexico City conference room, which has been designed to look like a bodega…

The point of these exercises: to give big marketers some insight into the lifestyles of Latin America’s low-income consumer…McCann’s move comes as multinational companies increasingly consider such “emerging consumers” as a big opportunity. But these consumers’ tastes, habits and needs remain largely an enigma to global marketers…

McCann’s research is helping Nestlé market Nido Rindes Diario, a brand of fortified powdered-milk product…one of Nestlé’s challenges was to overcome the perception that milk powder is a specialized formula for babies, and too expensive for the whole family to drink. McCann says its research helped position the product…

The idea of targeting low-income consumers may raise some eyebrows. But greater access to industrialized products like deodorant, and packaged food, can improve their physical and “psychological welfare…We do not pretend to be Mother Teresa”…

Advertisers say practical insights into low-income groups are hard to come by. “A lot of people talk about the emerging consumer, the bottom of the pyramid, but no one really has a structured approach…We have to do a lot for ourselves, and sometimes fall on our face doing it.”

In Mexico, Nestlé decided to sell Nido Rindes Diario exclusively through mom-and-pop stores, not supermarkets…That decision came after McCann found that local shopkeepers exert outsize influence in tightly knit, low-income neighborhoods. “It’s the shopkeeper who can recommend or disavow a product,” he says…

Some experts say marketing directly to low-income groups has yet to become a full-blown trend. “Usually multinationals just put out a Mexican version [of their product] that looks as American as possible”…But examples of products tailored to thin pocketbooks are increasing…

Edit by SAC

* * * * *

According to the theory of the bottom of the pyramid, there is a combination of profit opportunity and social responsibility to be had by marketing to consumers at the bottom of the economic pyramid. Critics of the theory argue that the benefits of marketing to this group are overstated and that marketing to this group can be exploitive.  Whether the profit opportunity is real or a mirage, McCann is taking the right steps to help Nestle benefit from this group by working to understand the group’s purchase desire and developing tailored solutions for the market to ensure that consumers are able to access the product.

* * * * *Full Article:

 

 

http://online.wsj.com/article/SB122824726034173129.html

* * * * *

Want more from the Homa Files?
Click link =>
The Homa Files Blog

Breaking through all that clutter …

December 8, 2008

Excerpted from The Wall Street Journal “Notice Me: Cutting Through the Clutter” by S. Balasubramnian and P. Bhardwaj, October 20, 2008

* * * * *

It’s hard to cut through the clutter.

Even as customers are constantly bombarded with advertising messages, they are getting progressively better at tuning out the endless stream of come-ons. Companies then typically up the ante and try to out-shout their competitors to draw attention. All of which just leads to more shouting, and everybody is drowned out…

Here are five questions marketers should ask themselves as they craft new strategies to capture customers’ attention in an increasingly noisy marketplace.

* * * * *

Can the marketing stimulus be delivered at a time when the customer has few other distractions?

Marketing messages should target customers at times when they are unoccupied, perhaps even actively seeking some sort of information to process. Consider, for example, an airplane on the landing path into an airport. Sitting upright, with in-flight entertainment and electronic devices switched off, passengers have little to do but to look out of the window and wait for the aircraft to land.

Seeking to capitalize on this opportunity, London-based Ad-Air Group PLC places advertisements flat on the ground over an area as large as five acres alongside flight paths in and out of the world’s busiest airports. Depending on their landing approach, passengers are provided with an unrestricted view of an ad for more than 10 seconds.

* * * * *

Can the marketing message be designed to pique the customer’s curiosity?

Piquing customers’ curiosity can be more effective than inundating them with information. Stimuli that are carefully placed, so that they are encountered in sequence, can be particularly successful at this task…

* * * * *

Can the marketing message piggyback on another brand?

With television and newsprint media being increasingly saturated, marketers need to seek out new and interesting formats and media for their messages.

Goodyear Tire & Rubber Co., for example, has teamed with Addidas AG on a range of motorsport-inspired driving and sports shoes. The soles of these shoes are made of rubber with tread patterns designed by Goodyear. If customers viewed the shoe purely as an Adidas product, Goodyear’s contribution would remain unnoticed. However, the Goodyear brand is prominently displayed on the outsoles of the shoes. The result is that every person wearing the shoes is now a messenger for the Goodyear brand.

* * * * *

Can the product or service occupy a piece of the physical environment that the customer frequently interfaces with?

Consumers today tend to spend inordinate amounts of time interfacing with just a few objects — for many, it is their computer screen at work. Marketers must consider how they can capture the customer’s attention when they interface with these objects. Customers, however, guard access to these objects zealously…

* * * * *

Can your company build into its messaging a consistent stimulus that affects one or more of the five physical senses?

Successful marketing messages excite customers not only when they first encounter them — they ingrain themselves into the customers’ permanent memory. Once a message is embedded, customer resistance to processing it drops when it is encountered in the future…

Not each of these five questions will necessarily generate a great idea for every company. But they do provide a common language for comparing, debating and improving managers’ proposals. 

Edit by SAC

* * * * *
Full article:
http://online.wsj.com/article/SB122427109679945225.html

Want more from the Homa Files?
Click link =>
The Homa Files Blog