More unionized government employees … here’s the so what.

Last week, we posted the increase in the number of government jobs (to over 2 million — not counting contractors) and the increase in unionization of government employees (to over 37% of the government payroll).  Here’s why you should care.

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Excerpted from: DC Examiner: Public-Sector Unions Bleed Taxpayers to Help Dems, February 8, 2010

But union membership is growing by leaps & bounds in the public sector. Last year, 37.4 percent of public sector employees were union members.  For the first time in history, a majority of union members are government employees.

In my view, the outlook for both private- and public-sector unionism is problematic.

Public-sector unionism is a very different animal from private-sector unionism. It is not adversarial but collusive.

Public-sector unions strive to elect their management, which in turn can extract money from taxpayers to increase wages and benefits — and can promise pensions that future taxpayers will have to fund.

The results are plain to see. States like New York, New Jersey and California, where public-sector unions are strong, now face enormous budget deficits and pension liabilities. In such states, the public sector has become a parasite sucking the life out of the private-sector economy. Not surprisingly, Americans have been steadily migrating out of such states and into states like Texas, where public-sector unions are weak and taxes are much lower.

President Obama is … doing his best to increase the power — and dues income — of public-sector unions.

Democrats have used the financial crisis to expand the public sector and the public-sector unions. One-third of last year’s $787 billion stimulus package was aid to state and local governments — an obvious attempt to bolster public-sector unions.

And it was a successful one: While the private sector has lost 7 million jobs, the number of public-sector jobs has risen. The number of federal government jobs has been increasing by 10,000 a month, and the percentage of federal employees earning over $100,000 has jumped to 19 percent during the recession.

Unions contributed something like $400,000,000 to Democrats in the 2008 campaign cycle. Public-sector unionism tends to be a self-perpetuating machine that extracts money from taxpayers and then puts it on a conveyor belt to the Democratic Party.

But it may not turn out to be a perpetual-motion machine. Public-sector employees are still heavily outnumbered by those who depend on the private sector for their livelihoods.

The next Congress may not be as willing as this one has been to bail out state governments dominated by public-sector unions.

Voters may bridle at the higher taxes needed to pay for $100,000-plus pensions for public employees who retire in their 50s. Or they may move, as so many have already done, to states like Texas.

Obama’s But voters seem to be saying, “Enough.”

Full article:
http://www.realclearpolitics.com/articles/2010/02/08/public-sector_unions_bleed_taxpayers_to_help_dems_100206.html

Tropicana customers squeeze more out of OJ

Takeaway: When consumers think of loyalty programs, airlines and credit card companies are usually top-of-mind. However, Pepsi recently launched a points program on its Tropicana brand.

Perhaps consumer products marketers should reexamine how these programs could reward them. 

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Excerpt from BrandWeek, “Tropicana Starts Offering ‘Juicy Rewards’” by Elaine Wong, February 1, 2010. 

Freebies are always appreciated, but even more so in a downturn. That’s why PepsiCo rolled out its Juicy Rewards program for Tropicana last week, a move the company characterizes as the largest marketing investment for its orange juice brand. The program offers incentives through a points-based system for every purchase of qualifying Tropicana juice. Rewards include Adidas shoes, TaylorMade golf balls and a trip to the local zoo, said Tropicana chief marketing officer Andy Horrow. In an interview with Brandweek, Harrow, the former global marketing officer for PepsiCo International, discussed how Tropicana hopes to shake up the OJ category with the new rewards program.

Brandweek: What are you looking to accomplish with Juicy Rewards?
Horrow: The campaign is a really big marketing platform for Tropicana. Juicy Rewards is a first of its kind opportunity to give consumers something more from their orange juice. We’re not only giving people the best opportunity to get the best-tasting and highest-quality orange juice, but 20,000 different ways they can get more value from their orange juice via healthy rewards. It’s an opportunity for us to really engage with our consumer and get them excited about Tropicana.

BW: Juicy Rewards, at its core, is an incentive-based marketing program. But how penny-pinched are consumers when it comes to buying OJ?
Horrow: I don’t know that it’s about getting people to buy more orange juice. It’s about giving people more value for the OJ they are buying. We’re already America’s favorite orange juice. We have been and always will be. It’s about giving consumers more value and that is what they want right now. We did a survey that helped inspire the development of this program, and 98 percent of participants said they wanted more value from the products and services that they buy. They expected more from us, and [programs like Juicy Rewards] are one of the ways that Tropicana will continue to go to market in the future. It’s not just about talking with consumers. It’s about engaging with them and building a relationship with them, which is important for any marketer.

BW: How much are you spending on this campaign for Tropicana?
Horrow: We’re taking a big bet on this. We think it’s the right way for us to go going forward and we’re putting a lot of marketing muscle behind it. We’re being very bold about it and very proud of what this program will stand for. That’s the view going forward. This is the biggest marketing campaign that this brand, I daresay, has ever had—certainly in recent memory—and I don’t like to think of it as a marketing campaign, but as a platform that supports everything we’re doing. It’s a great way for us to get our customers engaged and our retailers excited.

Edit by BHC 

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Full Article:

http://www.brandweek.com/bw/content_display/news-and-features/promotion-incentive/e3i757c960f9ac5b913ba87f344ecbb79ac

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Your tax dollars at work …

In case you missed it last nite, our government spent $2.5 million of our tax dollars (the equivalent of 50 firefighters for a year)on a ridiculous 30 second spot for the 2010 census … part of a $340 million ad campaign.  Ouch.

Click below to view.

For more details: Super Bowl spot kicks off debate over spending on 2010 Census ad campaign
http://thehill.com/homenews/administration/80113-super-bowl-spot-kicks-off-debate-about-census-ad-campaign

http://www.youtube.com/user/paytonschlewitt

Mobile loyalty program may destroy the competitive edge of shopper insights

Key Takeaway: Motorola is attempting to establish the new decade’s version of a customer loyalty program.

The service will allow the shopper to both receive and use coupons through his or her mobile phone.

The mobile phone will also act as a shopper ID card, eliminating the need for the shopper to carry around club cards for every retail outlet.

In addition to easing the shopping process for the consumer, this innovative system may benefit small retail outlets as well. Smaller chains that do not have the financial ability to lay down the infrastructure for their own loyalty programs will now have access to invaluable consumer information, allowing them to employ more effective product, pricing, and promotional strategies.

Will this upset the big boys, who already have strong shopper insights?

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Excerpted from Brandweek, “Motorola’s Loyalty Solution Targets Shoppers” by Noreen O’Leary, January 19, 2010

Recognizing consumers’ need to use mobile phones while shopping, Motorola launched a Mobile Loyalty Solution, which serves as an extension of existing loyalty card programs or as the basis for new digital ones.

The service, unveiled at the National Retail Federation’s annual convention in New York last week, enables retailers to send offers and incentives to customers’ mobile phones, eliminating the need for membership cards and paper coupons. At the same time, those merchants are using it to build a database of shopper product interests, purchase habits and preferences.

“With a growing number of smartphone users and the enhanced capability of their operating platforms, an era–where a constant digital connection via a mobile phone enhances the consumer’s shopping experience–has begun,” said Dana Warszona, global lead for the m-commerce portfolio, Enterprise Mobility Solutions. “From enabling consumers to easily search for product information to completing transactions, the mobile phone has become a business-critical tool that retailers must incorporate into their strategy to meet the needs of customers, now and in the future.”

Edit by JMZ

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Full Article:
http://www.brandweek.com/bw/content_display/news-and-features/shopper-marketing/e3id183d5e80b48e57c30e96d6a2b64073a

When political deals backfire … not the Cornhusker Kickback, the Pfizer Fiasco.

Bottom line: Rather than fight on principle, Pfizer decided to cut ObamaCare deals … and is now left holding the bag.  Talk about getting what you deserve !

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Excerpted from WSJ : Pfizer’s Bad Political Bet, Feb 4, 2010

The sight of ObamaCare on life support has many Democrats disappointed. It could be worse. They could be Pfizer CEO Jeffrey Kindler.

The twin events of an Obama presidency and a financial crisis rattled corporate America.

Public anger put companies on the defensive. A liberal president vowing to punish firms that didn’t aid his agenda got companies scared.Fortune 500 execs could stand up for a free market that benefits consumers and shareholders, or hitch their cart to the new Democratic majority.

Pfizer’s Mr. Kindler is a case study in the hitch-and-hope mentality—a CEO who became the motivating force behind Big Pharma’s $80 billion “deal” on reform, and industry support of ObamaCare.

With that health agenda burning, the choice isn’t looking so grand.

Pfizer was long a company that zealously guarded against government interference.The Pfizer board made Mr. Kindler CEO in 2006—picking a … a Democrat and political junkie.  Mr. Kindler was primed for the Obama ascendancy.

Mr. Kindler heeded congressional threats that companies would do well to have more Democrat-heavy lobby shops. Pfizer also aggressively shifted political giving. According to OpenSecrets.org, in the 2006 campaign cycle it gave 33% of its money to Democrats. In the 2008 cycle, 52%. In the 2010 cycle so far, 61%. In 2009 Pfizer became the fourth largest federal lobbyist, spending nearly $25 million. The year before it hadn’t even made the top 20.

With these gestures, Mr. Kindler surely believed Democrats would treat his industry gently.

The strategy: The industry would pledge $80 billion to reform. In return it would get greater volume and a requirement that people buy brand-name drugs. Democrats would also fight against drug reimportation and forgo price controls.

No one pushed harder than Mr. Kindler. The CEO made no fewer than five trips to the White House last year. He pressed the industry’s $150 million ad campaign promoting ObamaCare, rolled out with liberal activist groups.

Critics warned the legislation would lead to a government takeover and price controls. They warned Democrats would take the money and double-cross them.

None of it phased the industry, right up until ObamaCare imploded.

Having got this far (with Big Pharma’s help), Democrats are more desperate than ever to pass “something.” It won’t include any upside for drug companies. There is talk instead of “popular” stand-alone legislation, including reimportation, Medicare price controls, and slashing the industry’s 12-year patent exclusivity on biologics.

Big Pharma can’t count on former conservative protectors. Republicans were sympathetic to its decision to “sit at the table,” but grew furious when it engaged in active advocacy of the Democratic agenda.

One House Republican staffer predicts the next time drug companies “ask us to stand in front of the train,” the answer will be: “Since you were so happy to work with Democrats, call them. Go on, go: Call Rahm [Emanuel]. Call [Henry] Waxman.”

Public anger over ObamaCare doesn’t help the industry’s reputation. Many Americans now view drug companies in the same light as “crony capitalist” banks or energy firms.

Mr. Kindler might take solace that he’s not alone. Insurers, hospitals, utilities — many chose to accommodate a president whose health-care and climate agendas are now teetering.

There’s a lesson here for corporate America. Try standing up for the free markets and limited government that have always been the foundation of U.S. business. It might work out better.

http://online.wsj.com/article/SB10001424052748704041504575045702997683276.html?mod=djemEditorialPage_h#articleTabs%3Darticle

AdAge reveals seven truths behind successful brand management

Takeaway: Even top MBAs need a little help every now and then.

AdAge’s one-pager on the seven universal brand management truths may make for effective cubical flare, though some may want to keep it out of sight in a locked drawer to gain a competitive edge over their peers.
 
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Excerpt from AdvertisingAge, “The 7 Universal Brand Management Truths” by Nitish Gupta, January 5, 2010.
 
Coke has a market capitalization in excess of $100 billion because the perceived value of its brand is significantly higher than the sum total of all the assets of the company. By staying true to seven core principles, a marketer can weather economic highs and lows while building an iconic brand for target consumers.

1. Leverage information via hypothesis-led data analysis. This refers to leveraging information and converting it into a forceful rationale to take the right action for the brand. The key to this is understanding the issue at hand by anchoring the hypothesis and then looking at the data or information to prove the hypothesis right or wrong.

The pain-relief medicine brand Aleve had been struggling with single-digit market share. The team anchored two hypotheses: Consumers were not aware of the brand Aleve, and consumers were aware but didn’t want to try the brand. Through data mining, they found that 35% of heavy pain-relief medicine users had tried Aleve in the past year but had been using other brands as well. Thus the issue was clear that the brand had the awareness and trial but needed to drive loyalty. Then, based on the top attributes that drove preference for the brand (control over pain, and freedom to do things you want), they developed the “Dramatic Difference” campaign, resulting in an almost 10% to 20% increase in sales and shares hitting an all-time high.

2. Understand the competition and maintain your point of difference. Having a broader category-competitive understanding is important because that sets the context under which consumers will be viewing your brand. It’s critical to maintain the point of difference for your brand and play to its strengths.

When Coke managed to get sponsorship rights for the 1996 Cricket World Cup in India, Pepsi gauged the competitive threat and stuck to its point of difference (youthful rebellion brand positioning). It launched the “nothing official about it” campaign during the Cricket World Cup, which actually helped Pepsi strengthen its leadership position in India.

3. Be consistent with your positioning over time and across platforms. For any brand, it’s imperative to create a distinctive and meaningful position in the mind of consumers for the offering. So no matter what brand extension or innovation you are planning for your brand, ensure that it builds on and strengthens that distinctive positioning.

The Dove brand has extended across categories from skin care to hair care to others like deodorants by positioning itself on the soft/smooth platform and the fact that it contains moisturizing milk. Dove deodorants are positioned as leaving the underarms feeling soft and smooth. The brand has extended itself only in those categories where these soft/smooth and “contains moisturizing milk” equities are relevant, thus staying true to the positioning over time and across platforms, thus strengthening the brand.

4. Know what your target consumer wants. Evaluating all the marketing choices from the vantage point of the consumer will help you to connect with the consumer and genuinely make a positive difference in his or her life. It’s important to understand both the stated and unstated needs — the insights into your target consumers’ lives.

Louis Vuitton was launched in the late 1800s by supplying LV-branded suitcases to travelers. Travel then was a luxury afforded to only the wealthiest. Thus the brand became a symbol of status — it helped consumers showcase their differences from others. By leveraging this core human insight, LV was able to extend to shoes, apparel and bags. It has became one of the most extended brands but has suffered almost no diminishing returns. The brand was positioned not just on a functional need (like storage), but instead it tapped into deeper insights to connect with consumers.

5. Manage budgets with a “scarcity” mentality. Working with a scarcity mentality will help you maximize returns for every dollar spent by answering the question, “Is this the best way to spend dollars on marketing my brand, or is this money better spent elsewhere to generate greater returns?”

Starbucks, instead of spending money on TV advertising, clusters an area with its stores, increasing total revenue and market share. This was contrary to what established retailing houses did, which was to avoid placing stores near each other so as not to cannibalize sales at existing outlets. For Starbucks, doing so resulted in reduced supply costs and made management of the stores cheaper, which more than made up for sales lost to cannibalization. Thus, funding for expansion from internal cash flow was a judicious use of money. Until recently, Starbucks spent just 1% of its revenues on marketing and advertising (compared to more than 10% for companies of the same size).

6. Get the right pricing that offers value in the eyes of consumers. Pricing determines the value that your consumers get for your offering: Perceived consumer value equals perceived brand benefit/price. Thus it’s critical to decide the pricing strategy for your brand so that there is a net positive value for your consumers.

Gillette’s pricing strategy for its flagship men’s razors and blades brand focuses on regularly upgrading them, and hence pricing up on their newest offerings. The innovations are consumer significant, so that they are ready to pay a premium to upgrade to the latest offering. Right from their twin blade to triple-blade Mach3 to Mach3 Turbo (with vibrating motor) to Gillette Fusion (with an additional trimming blade), their upgrades have been significant, and as a result they’ve been able to charge a more than 10% premium with them.

7. Motivate the team via thought leadership. Building a successful brand requires dedicated support, not just from the leader but from the whole multifunctional team — sales, research, R&D, finance. To do the same, the brand leader needs to have a clear vision for the brand and enlist the team toward the same.

When it launched, Cosmopolitan had been positioned on a broad “for the family” platform. However by the mid-1950s it was suffering from declining readership. In the 1960s Helen Gurley Brown took charge. She sharply defined the target audience (progressive, career-oriented and open-minded women) and then rallied the team to deliver a product that would appeal to the target. They came up with innovations like a glossy format, inspirational articles and writings, and talking frankly and honestly about various issues and needs of women. The first print run of about 350,000 was sold out by the end of publication day, and the Cosmopolitan of today was born.
Edit by BHC
 
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Full Article:
http://adage.com/cmostrategy/article?article_id=141298

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More government employees … standing united: 37.4% unionized.

Bottom line: Two related articles with a combined chilling effect: Once government gets big (bigger ?), there’s no turning back … especially if the government employees are unionized.

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Excerpted from Washington Times: Largest-ever federal payroll to hit 2.15 million, Feb. 2, 2009 

The era of big government has returned with a vengeance, in the form of the largest federal work force in modern history.

The Federal government will grow to 2.15 million employees this year, topping 2 million for the first time since President Clinton declared that “the era of big government is over”.

Most of the increases are on the civilian side, which will grow by 153,000 workers, to 1.43 million people, in fiscal 2010. From 1981 through 2008, the civilian work force remained at about 1.1 million to 1.2 million, with a low of 1.07 million in 1986 and a high of more than 1.2 million in 1993 and in 2008. In 2009, the number jumped to 1.28 million.

“When you talk about big government, you’re talking about a big employer.”

Full article:
http://washingtontimes.com/news/2010/feb/02/burgeoning-federal-payroll-signals-return-of-big-g/

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Excerpted from WSJ: The Public-Union Ascendancy, Feb. 3, 2010

Unions once saw their main task as negotiating a bigger share of an individual firm’s profits.

Now the movement’s main goal is securing a larger share of the overall private economy’s wealth, which means pitting government employees against middle-class taxpayers.

It’s now official: In 2009 the number of unionized workers who work for the government surpassed those in the private economy for the first time: 51.4% of America’s 15.4 million union members, or about 7.91 million workers, were employed by the government in 2009.

Overall unionism keeps declining, however, with the loss of 771,000 union jobs amid last year’s recession.

In 2009 10.1% of private union jobs were eliminated, which was more than twice the 4.4% rate of overall private job losses.

Only one in eight workers (12.3%) now belongs to a union, with private union employment hitting a record low of 7.2% of all jobs, down from 7.6% in 2008.

In government, by contrast, the union employee share rose to 37.4% from 36.8% the year before.

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“The problem for democracy is that this creates a self-reinforcing cycle of higher spending and taxes. The unions help elect politicians, who repay the unions with more pay and benefits and dues-paying members, who in turn help to re-elect those politicians.”

Full article:

http://online.wsj.com/article/SB10001424052748703837004575013424060649464.html?mod=djemEditorialPage_h

Google looks for new ways to keep its lights on

Takeaway: In an unexpected move, Google has gone offline in an attempt to diversify its business. The company recently started an energy subsidiary with the goal of making renewable energy more affordable.

Taking such a large step away from its core business to enter a highly capital intensive industry will likely leave analysts wondering what Google’s ROI projections look like for its new division.

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Excerpt from FastCompany, “Google Expands Its Empire With Energy Subsidiary” by Ariel Schwartz, January 7, 2010.

It’s no secret that Google is interested in clean energy technology. The company has previously invested in enhanced geothermal technology, smart grid ventures, electric cars, and wind power. Now Google is forming its own energy subsidiary called Google Energy. The Delaware-based company was quietly formed in December, and earlier this week it put in a request to buy and sell electricity on wholesale markets. What, exactly, is Google up to?

The search giant is hoping to use its new venture as an aid in its quest for carbon neutrality. Presumably, that means Google Energy will help Google offset its power use by buying clean energy credits and selling excess power off to the grid. Google already has a 1.6 MW solar array at its Mountain View headquarters.

Knowing Google, however, the new energy subsidiary might be more than meets the eye. Company reps admit that there aren’t any concrete plans for Google Energy yet. That means Google isn’t ruling out the possibility of becoming a utility sometime in the future. It wouldn’t be all that surprising–Google has already stated its plans to make renewable energy cheaper than coal. The company says that its “over-arching vision is that one day a large portion of the world’s vehicles will plug into an electric grid fueled by renewable energy,” so why wouldn’t it also want to be in charge of doling out that energy?

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Full Article:

http://www.fastcompany.com/blog/ariel-schwartz/sustainability/google-expands-its-empire-energy-subsidiary

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Price hikes cause an avalanche in the U.S. beer market

TakeAway:  Despite significant volume declines and loud protest and cries for help from retailers, the biggest U.S. beer brewers continue to increase prices. 

It could be that the big brewers are trying to capitalize on the fact that consumers seem willing to pay higher prices for beer (evidence:  craft beers, typically the more expensive beers, posted great numbers).  However, the value proposition of craft beers is very different from that of mass market beers, and consumers are willing and able to pay a premium for the added benefits that craft beers offer. 

What benefits have mass market brewers added to their value proposition to close this gap and warrant price increases?

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Excerpted from WSJ, “Slump Has Beer Makers Over a Barrel,” By David Kesmodel. January 21, 2010

U.S. beer sales volumes fell 2.2% last year, the highest rate since the 1950s, with demand worsening late in the year … The decline, the industry’s first since 2003, raises demands for industry leaders Anheuser-Busch InBev and MillerCoors to come up with better advertising and to rethink recent price increases …

But they must tread carefully, balancing price moves against a need to drive profits in the wake of the mergers that created the two.

The two giants increased prices by about 5% last year, fresh off InBev’s acquisition of Anheuser-Busch and the move by SABMiller and Molson Coors Brewing to combine U.S. operations. Those increases, along with a weak job market and lackluster advertising, contributed to the sales drop …

Some retailers are pushing back against the industry’s price increases and calling for a new approach to marketing. “We need cost decreases or we think there will be declines in domestic beer purchases in total,” said a 7-Eleven spokeswoman. 7-Eleven unsuccessfully has sought lower prices from Anheuser and MillerCoors …

Anheuser and MillerCoors, which control nearly 80% of U.S. beer sales, posted strong profit gains in the first nine months of 2009, buoyed by higher prices and cost cuts that followed the 2008 mergers.

But longer-term, they’ll need to restore sales-volume growth because cost cuts and price hikes will be harder to come by …

“When you raise prices that much, there are going to be consequences,” said an analyst with Deutsche Bank. He said brewers failed to come up with a blockbuster new product akin to Anheuser’s 2008 success with Bud Light Lime.

While the U.S. economy showed signs of improvement in the second half of 2009, beer volumes cooled further. SABMiller said Tuesday that unit sales from distributors to retailers fell 3.6% in the fourth quarter, the weakest result since MillerCoors was formed. SABMiller cited a “challenging industry and economic environment.”

Anheuser, the No. 1 player in the U.S. by sales, and MillerCoors, No. 2, have signaled price increases this year in the range of 2% to 3%, said editor of industry newsletter Beer Marketer’s Insights.  Deutsche Bank analyst’s say they expects large retailers to insist that brewers offer more promotions to spur demand, resulting in pricing not “much better than flat.”

Anheuser posted a 2.1% decline in shipments last year, its biggest drop since 1976 … MillerCoors … had a 1.9% drop. Large suppliers specializing in imported beers fared worse, with Crown Imports showing a 5% drop. The small-batch “craft” beer industry continued to represent an industry bright spot, with the biggest among the craft brewers, Boston Beer, showing a 1.7% increase.

Edit by TJS

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Full Article
http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=114556

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It’s Olbermann’s ratings that are counting down … by 44%

Excerpted from Daily Finance: Is America Getting Over Keith Olbermann?, 01/29/10

There are creeping indications that the world may not have quite as much need of  Keith Olbermann and his shtick as it once did.

Ratings for Olbermann’s Countdown have been soft recently. In the important demographic of adults 25 to 54 — the group advertisers are looking to reach — Countdown was down 44% year-over-year in January. It averaged 268,000 viewers in that demo.  Fox News’s O’Reilly Factor dominated the hour with 964,000 viewers age 25 to 54, and was the only cable news show in the time period to increase its audience, by 55%.

But there are also more subjective signs that Olbermann’s stridency and lack of proportion are alienating some of his natural allies. Quite a few eyebrows elevated last week when Jon Stewart, in a parody of one of Olbermann’s “Special Comment” segments, called out the newsman for going way over the top in his denunciations of Republican Senator-elect Scott Brown of Massachusetts. 

MSNBC attributes Olbermann’s January ratings slip to a news cycle in which international news, rather than domestic politics, was the No. 1 story. “On big, breaking international news, CNN tends to do better than us.  “We’re the place for politics, and there are times when politics does great, and there are times when it doesn’t.  We’lI get our momentum back.”

Full article:
http://www.dailyfinance.com/story/media/is-america-getting-over-keith-olbermann/19337944/?icid=main|main|dl3|link1|http%3A%2F%2Fwww.dailyfinance.com%2Fstory%2Fmedia%2Fis-america-getting-over-keith-olbermann%2F19337944%2F

Losing your marketing budget is a losing strategy

Key Takeaway: Even in an economic downturn, marketing should be thought of as a necessary business component.

While many companies find it simple to slash marketing budgets during recessions, others use it as an opportunity to increase awareness, improve positioning, or steal share.

Marketers understand the business from all angles, making their input invaluable during a crisis.

GE focuses on a framework of “optimize today, build tomorrow” in which marketing serves a crucial role in the overall strategy and has contributed to the company’s continued success.

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Excerpted from BusinessWeek, “A Marketer Is a Terrible Thing To Waste” by Beth Comstock, September 21, 2009

As a result of the economic downturn, marketing budgets are being slashed and the stewards of many of the world’s largest and most prestigious brands have been forced into hibernation mode—waiting for the economy to turn around and the dollars to return to their function area.

But at GE, where I work, we’re trying to increase the volume on marketing, even in the face of these tough times.

In fact, once marketing was recognized and embraced as a potential growth driver at GE, we marketers were only too happy to hang our hats on good fortune—confident we could deliver for the company 8% or 10% growth year over year, more than double our historic rate.

Marketing budgets and resources can be an easy target because they tend to be more flexible—they’re not tied to fixed costs or capital expenditures. Some may even see marketing budgets as a good-times luxury. The reality, though, is that marketing serves as a hedge against economic crises. Good marketing minimizes negative impact and even slingshots the best ideas, innovations, and products forward.

In the current economic environment, those of us in marketing at GE have found that this framework—optimize today, build tomorrow—is incredibly useful to focus our efforts and to remind our colleagues of the vital role marketing plays in good times and bad. For most of GE’s businesses, our ambidextrous strategy unfolds as follows: 60% to 70% of our marketing efforts support today’s initiatives, with the remaining focus on building tomorrow’s initiatives. We think that’s a realistic alignment of energy and resources.

There are three core strategies we have adopted to help us Optimize Today:

• Understand the needs of customers like never before,

• Gain share, and

• Reexamine value and how to measure success.

A wide body of research indicates that companies that spend more time understanding their customers in a downturn are better positioned to do business with them when the economy recovers. On one level, it’s counterintuitive. You know your customers aren’t buying, so why bother? The reality is that there is no better time than now—no matter the environment—to listen for clues, discern insights, and refine value. Customers remember the partners who picked up the phone and called when times were tough and they were not in a position to buy.

In tough economic times, some companies will hunker down until the crisis passes. But winning organizations will take advantage of the opportunity presented to them, capture more share, and achieve lasting success.

We’ve increased our promotions spending at GE, using the current climate as an opportunity to remind customers and investors that we’re an innovative technology company with staying power—and we’ll be here when the recession is over, emerging stronger and smarter from the experience, just like we always have.

At GE, we’ve been particularly focused on understanding customer profitability. Do we understand the true cost of serving our customers? Which ones represent the highest value? Marketing can give you a laser focus on which customers are worth investing in—and which are destroying value for your company.

If your marketing radar is tuned to leading indicators and trends, maybe you were able to see signs of the downturn early enough to be prepared. It’s this ability to see the world in panoramic view that makes marketing so vital to an enterprise’s long-term viability. No other function focuses on and can integrate these key elements:

• Intelligence: What’s going on in the market, and how is the crisis affecting it?

• Customer insights: What do my customers need, and how do I serve them best?

• Value proposition: How do I articulate the value of my product or service and create differentiation?

• Commercial activation: How do I deliver via channel, marketing communications, training, etc.?

Ultimately, marketing is the key to sustainability and vitality—in good markets or economic crises.

Edit by JMZ 

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Full Article:
http://www.businessweek.com/innovate/content/sep2009/id20090921_471157.htm

When it comes to social media, Coke shifts direction to swim with the current

Takeaway: A recent change in Coke’s online strategy proves that even the largest global consumer brand needs help when it comes to social media.

To that end, the company plans to close its proprietary sites and take its act to Facebook and YouTube. Though these sites offer enormous audiences, the channels are cluttered with a nearly endless host of distractions.

Marketers stay tuned. Will Coke’s decision to forgo a captive few (relatively speaking) for a distracted many bubble Coke’s bottom line? 

* * * * *
Excerpt from HubSpot, “Coke Abandons Plan for Campaign Websites to Invest in Social Media” by Shannon Sweetser, January 13, 2010.

In an attempt to fish where the fish are, Coke has said goodbye to its one-off campaign websites in favor of building a presence on existing social media including YouTube, Facebook, and Twitter.

“We would like to place our activities and brands where people are, rather than dragging them to our platform,” said Coke’s interactive marketing manager.

Coke will now either completely forgo building a campaign website or simply create a landing page for that campaign with a call to subscribe to one of their existing social media communities.

What’s interesting is while the major B2C appears to be consolidating their efforts, Pepsi had decided to forego its 23^rd year of Super Bowl advertising in order to invest in a proprietary crowd-sourcing community called The Pepsi Refresh Project.

For a B2C company like Coke, this move might be a smart one.  Building a one-off website every single new campaign can be an expensive and slow process when you factor in build time and quality assurance reviews, then there’s the effort and man-power involved in up-keeping the community you have created. 

Right now Coke is charged with managing and maintains more than seven different domains including MyCoke.com and Live Positively, so really they’re just consolidating their resources into one common goal – to build the company’s reach using social media and drive brand enthusiasm through established channels. 

Edit by BHC

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Full Article:

http://blog.hubspot.com/blog/tabid/6307/bid/5487/Coke-Abandons-Plans-for-Campaign-Web%20sites-to-Invest-in-Social-Media.aspx

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MediCare & Seniors’ Rx Plans … either cut ‘em or shut the blank up!

Here are my pets from the Team Obama budget and the yak that romanced its announcement …

1. I’m officially tired of hearing the President whine that Bush created the deficit with his “costly prescription drug plan”.  If Team O doesn’t like it, then show some cahones and cut it.  Otherwise stop strolling down memory lane.  (Note: they don’t have the fortitude to kill it — it’s just a talking point.)
2. Half of ObamaCare ($50 billion per year) was to be funded with MediCare waste and fraud.  Why don’t they get cracking on the waste and fraud this afternoon?  They said it’s low hanging fruit, so let’s pick it !
3. Limit the itemized tax deductions high earners can claim for charitable donations.  Let me make sure I understand this: The Feds borrow $100 million from the Chinese to give to the Haitians … and then turn around to starve the Red Cross, Doctors Without Borders and other charitable groups that actually do something.
4. Repeal a widely ignored law that taxes the personal use of company-issued cell phones like other fringe benefits.  Have you ever looked at your phone bills to see how much is already paid in taxes ?
5. The budget is silent on the tanning salons’ excise tax. Nuts. That’s at the top of my list.

In the payments war, merchants signal to Visa: don’t discount us

Takeaway: A seemingly inconsequential payment decision by consumers may secretly cost them hundreds of dollars per year.

Merchants have become increasingly irritated by debit card fees, set by Visa and MasterCard and enjoyed by the card issuing banks. Retailers have responded by raising their prices in an effort to pass along these costs to their consumers.

The payment industry is dominated by a few major players and this dynamic has provided payment networks such as Visa with price-maker power. However, in a high stakes move, some businesses are now willing to sacrifice some sales in order to refuse certain types of plastic.

With billions of dollars on the line, only one thing is for sure – this battle of who cedes value to whom is unlike to be settled anytime soon.

* * * * *

Excerpt from New York Times, “How Visa, Using Card Fees, Dominates a Market” by Andrew Martin, January 4, 2010.

Every day, millions of Americans stand at store checkout counters and make a seemingly random decision: after swiping their debit card, they choose whether to punch in a code, or to sign their name.

It is a pointless distinction to most consumers, since the price is the same either way. But behind the scenes, billions of dollars are at stake.

When you sign a debit card receipt at a large retailer, the store pays your bank an average of 75 cents for every $100 spent, more than twice as much as when you punch in a four-digit code.

Despite all this, signature debit cards dominate debit use in this country, accounting for 61 percent of all such transactions, even though PIN debit cards are less expensive and less vulnerable to fraud.

Competition, of course, usually forces prices lower. But for payment networks like Visa and MasterCard, competition in the card business is more about winning over banks that actually issue the cards than consumers who use them. Visa and MasterCard set the fees that merchants must pay the cardholder’s bank. And higher fees mean higher profits for banks, even if it means that merchants shift the cost to consumers.

Seizing on this odd twist, Visa enticed banks to embrace signature debit — the higher-priced method of handling debit cards — and turned over the fees to banks as an incentive to issue more Visa cards.

Critics complain that Visa does not fight fair, and that it used its market power to force merchants to accept higher costs for debit cards. Merchants say they cannot refuse Visa cards because it would result in lower sales.

Visa officials say its critics are griping about debit products that have transformed the nation’s payment system, adding convenience for consumers and higher sales for merchants, while cutting the hassle and expense of dealing with cash and checks. In recent years, New York cabbies and McDonald’s are among those reporting higher sales as a result of accepting plastic.

Visa officials said the costs of debit for merchants had not gone down because the cards now provided greater value than they did five or 10 years ago. The costs must not be too onerous, they say, because merchant acceptance has doubled in the last decade.

The fees are “not a cost-based calculation, but a value-based calculation,” said a Visa executive.

Visa provides an electronic network that acts like a tollbooth, processing the transaction between merchants and banks and collecting a fee that averages 5 or 6 cents every time. For the financial year ended in June, Visa handled 40 billion transactions

An executive from retail giant Best Buy said: “Every additional dollar we are forced to pay credit card companies is another dollar we can’t use to hire employees, or pass along to our customers in the form of savings.”

Merchants said they had no choice but to continue taking the debit cards, despite the higher fees, because Visa’s rules required them to honor its debit cards if they chose to accept Visa’s credit cards.

Safeway, 7-Eleven and CVS drugstores automatically prompt consumers to do a less costly PIN debit transaction. The banks, however, still steer consumers toward the more expensive form of signature debit. Wells Fargo and Chase are among those that offer bonus points only on debit purchases completed with a signature.

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Full Article:

http://www.nytimes.com/2010/01/05/your-money/credit-and-debit-cards/05visa.html?em

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Digging itself out of a hole, can LinkedIn recapture users interest?

TakeAway:  Staring obsolescence in the face, LinkedIn is holding nothing back trying to regain/solidify its relevance as a professional networking tool (and make some money in the process).  LinkedIn is even replicating some of Facebook’s strategies in order to achieve its goals.  And, LinkedIn is offering premium services for a price. 

Will these moves reinvigorate LinkedIn’s users and create urgency to use its services or will they simply provide users with a replica of a tool that they already have?

* * * * *

Excerpted from WSJ, LinkedIn Wants Users to Connect More, By Scott Morrison, December 29, 2009

If LinkedIn . wants to avoid being swamped by social-networking giant Facebook it will have to convince users to log in more often they do now.

Users typically log in only a few times a month because they say the site lacks features … By contrast … users log in to Facebook every day to touch base with friends and professional contacts …

For the past year, LinkedIn has be focused on reinvigorating it six-year-old business. While it’s membership has continued to surge, reaching 53.6 million at the end of November from 31.5 million a year ago, it has been dwarfed by Facebook, which has surpassed 350 million members.

More importantly, the amount of time people devote to LinkedIn is a fraction of the time people spend on some other social sites. Visitors spent about 13 minutes on average at LinkedIn during October, while Facebook users logged about 213 minutes and MySpace users spent 87 minutes …

While Facebook doesn’t specifically target the professional market, hundreds of companies … use the site to highlight their firms and recruit new candidates …

LinkedIn recently took a page from Facebook’s playbook and opened LinkedIn’s site to third-party developers so they can create applications that will draw professional users to the site when they aren’t looking for work … [or] … target specific interest groups … Unlike Facebook, all apps must be professionally oriented …

Some analysts downplay the risk LinkedIn faces from sites like Facebook and highlight the recent growth the company has seen outside the U.S. market … the “clear delineation” between social and professional networking affords LinkedIn a fair degree of breathing room …

LinkedIn is also poised to announce a series of subscription “packages,” specially priced memberships that provide not-yet-disclosed products and services designed for job hunters, small-business owners or other groups …

Other partnerships are aimed at making LinkedIn more useful when members are working outside the network. For example, Microsoft’s upcoming version of Outlook will allow users to see people’s LinkedIn profiles when they are sending or receiving. Overlapping users will be able to sync their Outlook and LinkedIn contact lists, as well as use Outlook to expand their LinkedIn networks.

LinkedIn acknowledges that driving membership growth, while at the same time increasing the number of apps they can use to communicate with each other, poses significant challenges …

Edit by TJS

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Full Article
http://online.wsj.com/article/SB10001424052748704905704574622191027266548.html?mod=djemMM

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Why unemployment will stay high … at least until after the 2010 elections.

Quick & to the point. 

Excerpted from WSJ: Bonfire of the Populists , Jan. 28, 2010

The president’s anti-Wall Street rhetoric is not good for the economy, and may hurt his party politically.

FDR was re-elected in 1936 for many reasons, but among them was his fiery denunciations of “economic royalists,” “economic tyranny,” and “economic slavery.”

Business knew it was in the president’s crosshairs and put its capital on strike. The economy didn’t recover until the war.Team Obama is already witnessing a is already witnessing a repeat.

A venture capitalist recently remarked to me that the uncertainty the administration has created is “nothing short of paralyzing.”

Nobody will invest in an industry that might be the next to be overtaxed, overregulated, or publicly disemboweled.

Full article:
http://online.wsj.com/article/SB10001424052748704878904575031640091592622.html?mod=djemEditorialPage

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Ken’s Take:

Real business guys tell me that they are, in fact, holding off hiring until “things settle down”. Further, they fear draconian reprisals from Team O if they show any resistance to the anti-business initiatives or rhetoric.

So how can businesses fight back?

Easy.  Just ‘recast’ each potential new hire as a vote for Obama’s policies … and refuse to pull the lever.

It’s called passive aggressive behavior.

Tax dollars at work: DOJ shifts focus from KSM to BCS … again.

I may be an outlier, but I like gridlock in Congress and frivolous DOJ investigations … keeps the government from doing serious damage.  So, I’m an advocate of BCS and steroid investigations.

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Excerpted from The Hill: Obama administration contemplating probe into college football, 01/29/10

The Department of Justice is contemplating a wide variety of actions intended to reform the current college football championship system and is still determining whether or not to open a formal investigation into the Bowl Championship Series (BCS).

Assistant Attorney General Ronald Weich said “Importantly, and in addition, the administration also is exploring other options that might be available to address concerns with the college football post-season.”

Weich laid out a variety of options the administration and Congress could take to reform or break apart the BCS. He also opened the possibility of commissioning a study of the costs and benefits of the BCS and asking the Federal Trade Commission to examine the legality of the BCS.

Opponents of the BCS, a group that includes several members of Congress, say that the system is unfair to the five smaller BCS conferences that receive less bowl revenue and automatic bids to the four BCS bowls.

They say that because of this, it is almost impossible for “mid-major” colleges to play for the national championship (a group that has included several undefeated teams over the past several years. Thus, opponents contend that the BCS is a oligopoly intended to benefit large athletic conferences.

Supporters of the BCS say that smaller conferences still get sizable portions of the bowl revenue pool. Overall the five mid-major conferences received $24 million in revenue. By comparison, the six larger conferences received at least $17 million each.

BCS proponents also argue that the system matches up the first and second ranked teams in the national championship (though opponents question the complex ranking system to determine the contenders) and say that the system allows historic bowl games to continue to operate and thrive.

Full article:

http://thehill.com/blogs/blog-briefing-room/news/78849-obama-administration-contemplating-action-against-bcs

Lessons from Toyota’s quality snafu

Ken’s Take:

(1) Kudos to Toyota for stepping up with a J&J Tylenol-like response in the market … especially since the analogous Audi problem turned out to be bogus.  It’ll hurt Toyota  in the short-run, but pay dividends in the long-run

(2) Press reports have a tinge of “good for them, good for US” … seem to overlook that most of the vehicles are made in the U.S.  Hmmm

(3) GM will regret its direct attack during during Toyota’s sales cessation period.  I’m as competitive as the next guy (ok, more competitive), but what goes around comes around … Just watch and remember.

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Consumer Reports, the bible of the car-buying public, now rates Ford’s quality higher than Toyota’s.

Excerpted from WSJ:Toyota: Too Big, Too Fast, Jan. 28, 2010

Three or four years ago senior Honda executives demanded to know from their underlings how arch-rival Toyota could expand its production and sales so quickly and still keep its quality intact.

Now they’re getting the answer: Toyota’s once-vaunted quality actually was eroding.

In fact, Consumer Reports, the bible of the car-buying public, now rates Ford’s quality higher than Toyota’s.

General Motors held the title of “world’s largest car company” for decades before things began to go wrong there. Toyota grabbed the top spot last year, and things started going awry in just a matter of months.

This week the company suspended the sale of eight different models, including the popular Corolla, Camry and Avalon, for potential safety problems. Next week Toyota will halt production at the five North American factories that make those vehicles.

The company also expanded a recall that already was the largest in automotive history. Some 4.8 million Toyota cars and trucks might suffer from sticking accelerator pedals or faulty floor mats that seem to grab the accelerator and can cause the car to accelerate out of control. Several deaths have been attributed to the problem.

How could this possibly happen to the car company that was the undisputed leader in quality, the company that all the others from Germany and America and even Japan wanted to emulate? The answer is almost too simple.

Toyota is suffering from trying to get too big, too fast. It went on a headlong expansion spree around the world.

In doing this Toyota abandoned one of the pillars of its conservative culture: never building a new product in a new factory with a new workforce.

Any new Toyota factory, anywhere in the world, would first build a vehicle that Toyota was making at one of its existing plants. That approach minimized quality-control variables.

But in 2006 Toyota started building its first full-size pickup truck at a new factory with a new workforce in San Antonio, Texas. That truck, the Tundra, was recalled both for the gas-pedal issue and for another problem, potential corrosion of the vehicle’s frame.

In 2005 Toyota recalled 2.38 million vehicles in the U.S., which was slightly more than the number of cars and trucks the company sold in America that year. 

* * * * *

Another question is how quickly Toyota can resolve the unintended acceleration issue. It’s a problem with a curious history.

In the mid-1980s Audi was accused of having a similar problem, and its U.S. sales almost evaporated. But the issue, fed by media hysteria, turned out to be bogus.

Toyota’s acceleration problem appears to be the real thing. The company has pinpointed specific likely causes—linkages in the gas-pedal mechanism and the size of the floor mats.

In an era when cars have more microchips than many desktop computers, these things are amazingly low tech.

Reports yesterday said Toyota was zeroing in on a repair: inserting a “spacer” in the pedal mechanism that would increase the tension in a spring and help prevent sticking.

* * * * *

The company remains the leader in gas-electric hybrid technology. Toyota is reversing its overexpansion and reducing excess capacity by closing a plant in California, and postponing plans to build another plant in Tupelo, Miss.

Because it is Japan’s biggest auto maker by far, Toyota tends to be insular. One pressing need is for Toyota to develop a new generation of talented and trusted local leadership in the many countries where it operates. It’s impossible for a small inner circle in Japan to run a global company effectively in the long run. 

* * * * *

The immediate question is what Toyota’s dramatic moves will do to its reputation.

Consumers might (and should) give the company credit for taking unprecedented and costly action in the interest of protecting their safety. But many Toyota owners are worried, and brand-loyalty ratings have begun to drop.

In last year’s J.D. Power Customer Retention Survey, Toyota lost the top spot to Honda for the first time since the poll began six years ago. Toyota and Lexus still hold the second and third positions in the survey, but the trend has to be discomfiting.

General Motors, meanwhile, has begun offering special discounts to Toyota owners who trade in their cars, a marketing move that might backfire the next time GM has a big recall.

http://online.wsj.com/article/SB10001424052748704878904575031082583154198.html?mod=WSJ_newsreel_opinion

Uh-oh … the President’s lines have crossed.

For the first time, Pollster.com’s poll-of-polls has more folks disapproving of President Obama’s job performance than approving.

These numbers are post-Massachusetts, but pre-State of the Union address.

http://www.pollster.com/polls/us/jobapproval-obama.php?xml=http://www.pollster.com/flashcharts/content/xml/Obama44JobApproval.xml&choices=Disapprove,Approve&phone=&ivr=&internet=&mail=&smoothing=&from_date=&to_date=&min_pct=&max_pct=&grid=&points=1&lines=1&colors=Disapprove-BF0014,Approve-000000,Undecided-68228B

While Pepsi pushes health, Wall Street is still on a sugar high

Key Takeaway: PepsiCo, a company whose only ties to health come through the athletes in its advertisements, is trying to make a push for a more balanced portfolio.

Throughout this period, the company has seen a sharp decline in sales for many of its hero brands. PepsiCo is still staying true to its healthy vision, as the R&D budget has increased by nearly 40% over a three year period.

As delicious as Pepsi Apple Slices may sound to some, Wall Street does not seem to be as favorable to the strategy as it holds PepsiCo’s stock price well below the soft drink giant, Coca-Cola 

* * * * *
Excerpted from BusinessWeek, “Pepsi Brings In the Health Police” by Nanette Byrnes, January 14, 2010

Over the past two years, Pepsi has hired a dozen physicians and PhDs, many of whom built their reputations at the Mayo Clinic, WHO, and like-minded institutions. Some researched diabetes and heart disease, the sort of ailments that can result in part from eating too much of what Pepsi sells.

Last year, technological improvements to an all-natural zero-calorie sweetener derived from a plant called stevia allowed Pepsi to devise several fast-growing brands, including Trop50, a variation on its Tropicana orange juice that has half the calories of the breakfast standby. Introduced in March, Trop50 has become a $100 million brand.

Chief Executive Nooyi says she has no choice but to move in healthier directions. For more than 15 years, consumers have gradually defected from the carbonated soft drinks that once comprised 90% of Pepsi’s beverage business. Many switched to bottled water. Meanwhile, the cloud of criticism shadowing Pepsi’s largest business, oil- and salt-laden Frito Lay snacks, grew steadily.

Coming off a tough 2009, during which once high-flying brands such as Gatorade slipped, Pepsi hasn’t convinced Wall Street that Nooyi’s plans will pay off. The company trades at a significant discount to its rival, Coca-Cola . While securities analysts say that healthier foods look like a good long-term market, for now, the slowdown in the company’s far larger traditional snack-and-soda portfolio cannot be ignored. “The consumer can move to baked chips, or pretzels, or Sun Chips, but they’re not yet giving up their chips for an apple or carrot stick,” says Bill Pecoriello, CEO of Consumer Edge Research, an independent stock-research firm in Stamford, Conn.

Pepsi built its empire on the manufacture and distribution of instantly recognizable products. It could get a bag of Lay’s or a can of Mountain Dew to customers practically anywhere in the world. So far, healthier options have produced only modest hits, including TrueNorth nut snacks and SoBe Lifewater.

Edit by JMZ

 

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Full Article:
http://www.businessweek.com/magazine/content/10_04/b4164050511214.htm?chan=innovation_branding_top+stories

Trust me: Fox is the most trusted name in news … here’s the data

Punch line: A poll finds that 49 percent of Americans trust Fox News, 10 percentage points more than any other network.

Note: the polling organization PPP is the one that hit Scott Brown’s election margin on the button.

* * * * *

From Politico: Poll says Fox most trusted name in news, 1/27/10

Fox is the most trusted television news network in the country, according to a new poll out Tuesday.

A Public Policy Polling nationwide survey of 1,151 registered voters found that 49 percent of Americans trusted Fox News, 10 percentage points more than any other network.

Thirty-seven percent said they didn’t trust Fox, also the lowest level of distrust that any of the networks recorded.

CNN was the second-most-trusted network, getting the trust of 39 percent of those polled. Forty-one percent said they didn’t trust CNN.

Each of the three major networks was trusted by 35 percent or less of those surveyed, with NBC ranking highest at 35 percent. Forty-four percent said they did not trust NBC, which was combined with its sister cable station MSNBC.

Thirty-two percent of respondents said they trusted CBS, while 31 percent trusted ABC. Both CBS and ABC were not trusted by 46 percent of those polled.

Full article:
http://www.politico.com/news/stories/0110/32039.html

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In a separate WSJ/NBC survey, almost 1 in 4 of all registered voters get most of their political information from Fox. 

That compares to 37% for the big 3 networks combined, and 18% for CNN.  Only 8% rely on MSNBC (whew !)

I guess the 12% “none of these” track to Jon Stewart & Steven Colbert.  (Yipes.)

http://msnbcmedia.msn.com/i/MSNBC/Sections/NEWS/A_Politics/___Politics_Today_Stories_Teases/10049NBCWSJ.pdf

Apple’s tablet to be the savior for lagging industries

Key Takeaway: Apple is back to its incredibly innovative ways as it prepares for the launch of the iPad in 2010.

This device will allow consumers to have a more interactive experience with print media, give people the ability to host two-way video discussions anywhere and anytime, and may finally jumpstart telecommuting.

Talk about benefit-overload; this product’s unique attributes show that there are ways to revive and improve stagnant, or even declining, categories.

* * * * *

Excerpted from BusinessWeek, “Five Ways Apple’s Tablet May Change the World” by Ben Kunz, December 30, 2009

Speculation about Apple’s one-device-to-rule-them-all iPad reached fever pitch this month when Yair Reiner, an analyst at Oppenheimer (OPY), dug through Steve Jobs’ production pipeline and found evidence that the tablet was being readied for an April 2010 launch.

…the iPad will change the world in at least five ways.

• Magazine and newspaper publishing will bounce back as consumers rediscover paid subscriptions…Expect to see publishers launch visually stunning versions of their magazines with swooping typography, video insets, CNN iReporter-style news uploads, social media overlays—whatever it takes to make you think you’re seeing a magazine or newspaper like never before, so much so you’ll even want to pay for it.

• Television and radio ratings will continue to fall. Unlike print, TV and radio won’t fit easily into the Apple tablet’s format. Sure, U.S. consumers still watch 5 hours and 9 minutes of live television a day, but the problem is ratings don’t hold when commercials actually air…Rather than being a device to watch television, the Apple tablet is more likely to be an interactive distraction when real TV ads come on your basement set.

• Augmented-reality views of the world will increase. If you missed this trend, it’s simple: Augmented reality puts computer graphics on top of live video feeds, similar to the yellow line you see on the field in NFL games.

• Two-way video on tablets will push communication costs even lower…Add a tablet with built-in Webcam, and suddenly video calls are as easy as holding up a mirror.

• Telecommuting may finally take off…when Apple tablets make portable video truly accessible, plane ticets and poor coffee in cars may become things of the past.

Edit by JMZ

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Full Article:
http://www.businessweek.com/technology/content/dec2009/tc20091229_795528.htm

Remember the $787 billion Stimulus … oops, make that $862 billion.

Yesterday the CBO released a new budget outlook for 2010 and beyond.  The highlights (or,  lowlights):

• ” … if current laws and policies remained unchanged, the federal budget would show a deficit of about $1.3 trillion for fiscal year 2010.”
• The unemployment rate is projected to fall to 9.5% by 2011, 8% by 2012 and about 6% by election day 2012 (hmmm)
  
    

 

• Somewhat buried in the details is a re-estimation of the cost of the 2009 stimulus bill (officially known as ARRA – American Recovery and Reinvestment Act).
  
  CBO originally estimated that ARRA would cost $787 billion from 2009 through 2019. Its new estimate is $862 billion, about $75 billion (9.5%) higher than previously forecast.
  
  Roughly 75% of the overage is attributable to “safety net” programs — food stamps and unemployment benefits.  Logical since the Stimulus program was going to be the silver bullet that kept unemployment below 8%.  Oops.Below is a chart summarizing all of the costs.

  Note that $258 billion hasn’t been spent yet (bank it ?) and that, so far,  a whopping 3% of the budget ($28 billion) has been spent to rebuild our roads and bridges.  Wasn’t that supposed to be the main event?

  Side note: if CBO estimate is off by 10%  in the current year of a budgeted program, how much confidence should we have in a trillion dollar healthcare estimate ?  Yipes.

  Click the chart to enlarge it

See Appendix A of the CBO Report:
http://www.cbo.gov/ftpdocs/108xx/doc10871/01-26-Outlook.pdf

Clinically speaking, is Pres. Obama a narcissist ?

Anti-Obamanites often characterize the President as a narcissist.  Is he?

Below is one clinician’s criteria for slotting somebody as a narcissist.  All are narcissistic tendencies.

A score of 10 out of 13 slots somebody as an “overt maladaptive narcissist”.  That sounds pretty bad.

If the State of the Union gets boring tonight, pull out the list and score the President along these criteria.
 

Source: Disarming the Narcissist: Surviving & Thriving With the Self-Absorbed by Wendy T. Behary

Haitian crisis highlights need to find new ways of gathering data … social networking to the rescue

Takeaway: The crisis in Haiti proves that necessity is the mother of innovation as volunteers turn to new platforms to aggregate data from cell phones and social networks in order to decide where to focus their efforts.

As the dust from this tragedy settles, will these new methods for composing tweets into tunes find other applications?

* * * * *

Excerpt from Washington Post, “Crisis mapping brings online tool to Haitian disaster relief effort” by Monica Hesse, January 16, 2010.

The site Ushahidi.com allows users to submit eyewitness accounts or other relevant information for disaster zones via e-mail, text or Twitter — and then visualize the frequency of these events on a map. By Friday, Ushahidi, which means “testimony” in Swahili, had received nearly 33,000 unique visitors, and several hundred personal reports in Haiti that mainstream news organizations might not hear about.

Taken individually, these bits of data might not be terribly useful. The goal is that by aggregating the incidents in a visual format, people and organizations using the site will be able to see patterns of destruction, to determine where services should be concentrated. A red dot on the map, for example, signifies that looting is happening near a town called Pétionville; another shows that Hotel Villa Creole has become a site of medical triage.

The practice is known as crisis mapping, a newer field of disaster analysis using geography-based data sets, employed by organizations like Ushahidi and Arlington-based GeoCommons. Although individuals have used Twitter and Facebook to share anecdotes for a few years — notably, during 2009’s contested Iranian elections — crisis mapping brings many data points together, making meaning out of randomness and spreading information about areas lacking well-developed records. “We’re providing a repository for all kinds of organizations,” says Ushahidi’s director of strategic operations and founded the International Network of Crisis Mappers.

Ushahidi was originally founded in 2008 to map reports of violence in post-election Kenya. A Kenyan blogger had been trying to keep track of these incidents, “but got swamped by how much information was coming in and wanted to have a larger context of what was happening.” She appealed to the blogosphere for help, and soon had a site that allowed the entire Kenyan population to catalogue the injustices and atrocities they were witnessing — a real-time encyclopedia of unrest. Since then, the Ushahidi platform has been employed in many smaller projects, from monitoring elections in India to tracking medicine in various African countries.

In Haiti, it’s too early to tell what impact Ushahidi might have on relief efforts.

Some of the rescue workers for whom Ushahidi was intended are currently too besieged by the chaos of the situation to attempt incorporating it into their work: “Our colleagues are not feeding information into crowd-sourcing platforms for now,” writes one crisis responder. “I don’t think they have the time.”

Crisis mappers hope that their analytics will gain greater use in coming days, as rescue workers attempt to navigate the changed landscape.

“Being one of the poorest countries in the Western Hemisphere, Haiti doesn’t have the infrastructure that a more developed country would have,” such as extensive Global Positioning System equipment that would aid in mapping the terrain, says chief technology officer of GeoCommons, which has also been producing Haiti-related maps. “Now you have all of these people needing to know how to get from here to there. You need to know where the triage centers are, and the food and water. An old map would be irrelevant with road closings.”

The crowd-sourcing represents the future of crisis response. “We’re going to need to collaborate, we’re going to need to share data,” a Ushahidi contributor said. “The best way to provide humanitarian response is to be able to provide platforms and tools that allow people to share on-the-ground information quickly.”

Edit by BHC

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Full Article:

http://www.washingtonpost.com/wp-dyn/content/article/2010/01/15/AR2010011502650.html?hpid=topnews

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The "Supreme" effect of Brown’s win …

Pundits have been so riveted on the impact Scott Brown’s election is having on ObamaCare that they are overlooking a bigger deal: Supreme Court appointments … likely to be a relatively frequent happening since the average age of Supreme Court justices is about 90 years old.

Pre-Brown, Pres Obama could name practically any wingnut he wanted when a Supreme Court vacancy occurred … tilting the Court further left. 

Now, #41 can join his GOP colleagues to block anybody designee who leans too far out of the mainstream.

This could come back to haunt Pres Obama since he voted against Alito, saying that he was “qualified but too conservative”. 

Those words will come back to haunt the President.   

A picture is worth a thousand words on the teleprompter…

While speaking to a crowd (?) of 6th graders … cue the teleprompter.

 Here’s Jon Stweart’s take
http://www.realclearpolitics.com/video/2010/01/26/jon_stewart_mocks_obama_for_teleprompter_in_classroom.html

http://news.yahoo.com/nphotos/Obama-Cabinet-Picks-Education-Secretary-Arne-Duncan/ss/events/pl/110508obamacabinet/im:/100119/480/9131bc77c7534185bdbf267bb4ab8497/

Slow and steady wins the pricing game

Key Takeaway: We all know that a pricing increase, when performed properly, has the potential to exponentially increase profits.

As the economy begins to pick up, it will be important for companies to extract greater value out of their current portfolio, which may be heavily discounted.

The most effective price-increasing strategy may be “Steadily Decreasing Discounting” (SDD), which was found to increase both sales and profitability for the companies using this method. Unlike typical strategies, SDD involves slowly raising prices from the sale price back to the initial level rather than all at once.

This will continually create incentive for a consumer to purchase the product right now, and won’t leave the consumer with a sense of regret if she missed the lowest price.

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Excerpted from NACS Online, “Study: Retailers Can Increase Profits by Changing Pricing Strategy” by The University of Miami School of Business Administration, January 7, 2010

The University of Miami School of Business Administration released results of a study this week that shows retailers can substantially increase sales and profits if they increase the price of a sale item to its original cost in gradual steps rather than in one swift move.

Over a 30-week field study, the school reported a 200 percent increase in sales and a 55 percent increase in profits by using this strategy, which it calls “Steadily Decreasing Discounting” or “SDD.”

“SDD starts like Hi-Lo pricing in that you have a big sale, but the main difference comes after the initial sale when you progressively increase the price back to its regular level versus in one shot,” explained Michael Tsiros, an associate professor and chair of the Marketing Department at the University of Miami School of Business and the study’s lead author. “By doing so, SDD avoids a key problem of the Hi-Lo strategy – the big dive in sales at the end of the promotion that results from people stocking up on the item during the promotion or because they perceive the price to be too high because it was recently much lower.”

“SDD could be particularly effective in the current economic downturn,” Tsiros said. “Many retailers have been offering discounts of 60 percent or even 80 percent, and stores can’t offer those prices forever. But if they bring prices back up in increments, consumers will have time to adjust.”

 

Edit by JMZ

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Full Article:
http://www.nacsonline.com/NACS/News/Daily/Pages/ND0107107.aspx

Of course he’s anti-business … so say 77% of investors

Ken’s Take: Let’s see, unemployment is over 10% and businesses provide jobs … so, go to war with banks and business.  Hmmm.  Might work.

Bernanke gets the highest approval ratings — by far — so don’t reappoint him.  Hmmm again.

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Excerpted from Bloomberg: Obama Seen as Anti-Business by 77% , Jan 21,2010

U.S. investors overwhelmingly see President Barack Obama as anti-business and question his ability to manage a financial crisis, according to a Bloomberg survey.

• 77 percent of U.S. respondents believe Obama is too anti-business.
• Four-out-of-five are only somewhat confident or not confident of his ability to handle a financial emergency.
• Only 27 percent of U.S. investors view the President favorably.

“Investors no longer feel they can take risks,” citing Obama’s efforts to trim bonuses and earnings, make health care his top priority over jobs and plans to tax “the rich or advantaged.”

Investors say Obama has been in a “constant war” with the banking system, using “fat-cat bankers and other misnomers to describe a business model which supports a large portion of America.”

The U.S. investors’ perceptions of Obama stand in contrast to those of their European counterparts, most of whom say the president strikes the right balance when it comes to managing business interests. Europeans, however, are more confident in Obama’s leadership on financial matters than Asians.

U.S. respondents give Geithner a 63 percent unfavorable rating and Summers 67 percent. One financial figure to find favor among U.S. respondents is Federal Reserve Board Chairman Ben S. Bernanke, who garners a 68 percent approval rating.

Unlike other recent presidents, Obama hasn’t selected a leading business executive for his cabinet or a top advisory role.

http://news.yahoo.com/s/bloomberg/20100121/pl_bloomberg/a8uii1bcrdmy

The UAW … California style.

Punch line: The pension liability created by lucrative union contracts was no problem … until folks started to retire … and live a lot longer than expected.

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Excerpted from WSJ: Public Employee Unions Are Sinking California,  Jan,22, 2010

Months after closing its last budget gap, the Golden State’s $83 billion budget is $20 billion in the red.

“This year alone, $3 billion was diverted to union pension costs from other programs.”

To balance the budget, California needs to take on its public employee unions.

Approximately 85% of the state’s 235,000 employees (not including higher education employees) are unionized.

Over the past decade pension costs for public employees increased 2,000%. State revenues increased only 24% over the same period.

There are now more than 15,000 government retirees statewide who receive pensions that exceed $100,000 a year.

Many of these retirees get a pension that equals 90% of their final year’s pay. The pensions for these (and all other retirees) increase each year with inflation and are guaranteed by taxpayers forever—regardless of what happens in the economy or whether the state’s pensions funds have been fully funded (which they haven’t been).

Note: Many of the retirees are former police officers, firefighters, and prison guards who can retire at age 50 with full benefits.

Full article:

http://online.wsj.com/article/SB10001424052748703699204575017182296077118.html?mod=djemEditorialPage

Loss leader pricing – why do it?

TakeAway:  Though it’s facing a lot of resistance from its franchisees, Burger is mandating a profit killing price for the double cheeseburger. 

Why in the world would a global franchisor want to force it’s franchisees to lose money.  The answer is, of course the franchisor doesn’t want the franchisee to lose money.  The franchisor wants to use the item as bait to bring in customers and increase the sales of other, and most likely, higher margin products. 

If Burger King franchisees do not get this logic or have proof that this logic is false, then Burger King may have bigger problems to worry about.

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Excerpted from WSJ, “Burger King Franchisees Can’t Have It Their Way,” By Richard Gibson, January 21, 2010

The price of a double cheeseburger is generating a lot of heat among Burger King franchisees.

In an ongoing dispute that could affect how the nation’s hundreds of franchise organizations set prices, the burger chain is insisting that its two beef-patty sandwich be sold for no more than $1—in line with other items on its “Value Menu.”

But the company’s franchisees claim that at that price, they lose money.

Although the loss on each sandwich may only be a few cents, a typical restaurant might sell several hundred of the burgers each week.

Most franchisees are following orders for now, but the National Franchisee Association for Burger King, which represents restaurant operators across the U.S., filed a lawsuit last fall in U.S. District Court in Florida, asserting that the company’s franchise agreements don’t allow it to dictate prices.

Burger King … says it sees the value promotion as key to competing effectively in the current consumer environment …

A court ruling that’s favorable to Burger King could embolden other franchisers to mandate prices. Many franchisees have long regarded their power to set prices as testament to their independence.

Burger King’s arch rival, McDonald’s, faced a similar issue, when its franchisees rebelled against a $1 double cheeseburger. The matter was defused when the fast-food giant removed one of the sandwich’s two slices of cheese and renamed it the McDouble, cutting the cost of ingredients …

Burger King’s franchisees say they usually get the chance to sign off on price changes, and that they’ve twice rejected a $1 double cheeseburger. Burger King confirms that it previously didn’t dictate prices on individual items, though it did require a $1 maximum price on Value Menu items.

The company won a separate case in 2008 requiring franchisees to offer the Value Menu, which is core to its efforts to attract price-conscious consumers.

A company might choose to set prices if it thinks the stores are charging so much that its royalties—and its reputation—are being diminished. But most companies don’t like to rile their franchisees …

Some franchises … say they recommend prices, especially in connection with national marketing campaigns.  For example, Papa John’s is offering a special Super Bowl pizza for $11.99, though it notes in advertisements that the price is valid only at “participating” restaurants.

“Most franchisees follow our recommended national offers,” says Burger King’s SVP … since customers might argue with the store’s workers if they’re charged more.”

Edit by TJS

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Full Article
http://online.wsj.com/article/SB20001424052748704320104575014941842011972.html#mod=todays_us_section_b

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Conan gets $32 million … where’s the outrage? or the pay czar?

Punch line: Conan fails at 11:30 and gets $32 million to go away.  Where’s the pay czar when you need him ? 

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FBN: Conan, $40 Million & The TARP Takers by Brian Sullivan, January 19, 2010

Where’s the outrage?

Polls show the public is furious over the expected record bonuses being paid to wall streeters this year.   

Meantime, another large-font headline these days is the very public battle between Jay Leno, Conan O’Brien and NBC.   After trading public barbs (advantage: Conan) for a few weeks, that fight appears over.   Leno gets his show back and Mr. O’Brien reportedly gets $40 million to walk away.

Good for him.   But where’s the bonus bruhaha?

NBC is owned (until the Comcast deal closes) by General Electric.  Like many big banks, GE benefited from taxpayer handouts through backstops of debt for its GE Capital divison.   Not once, but a couple of times.  Imagine the headlines if a stock trader at a TARP-taking bank was paid anywhere close to that to walk away.   The AFL-CIO would issue a press release, Congress would hold another hearing and many TV news types would trip over themselves to out-populist each other.

If we’re going to browbeat the traders for getting their contractually-mandated percentage of business (which is what most of the bonuses are), then we must also be fair and hand out the same criticism for other TARP-takers with large payouts, regardless of the business they’re in.    We don’t have to like the bonuses.   We don’t have to like the banks or the bailouts.   We shouldn’t.   But we should at least follow the money.

Full article:

http://briansullivan.blogs.foxbusiness.com/2010/01/19/conan-40-million-the-tarp-takers/

Nuts and Creeps … both endangered species

Punch line: tax payers are no longer going to tolerate lying, cheating, secret-dealing, ineffective government operatives.

Nelson’s Cornhusker Kickback was a defining moment — even the people of Nebraska — the beneficiaries of the special deal — rejected it as just plain wrong.

Imagine … a constituency that can’t be bought off.

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WSJ: The New Political Rumbling Massachusetts may signal an end to old ways of fighting , Peggy Noonan, Jan. 21, 2010

In the 2006 and 2008 elections, and at some point during the past decade, the ancestral war between Democrats and the Republicans began to take on a new look.

If you were a normal human sitting at home … chances are pretty good you came to see the two major parties not as the Dems versus the Reps, or the blue versus the bed, but as the Nuts versus the Creeps.

The Nuts were for high spending and taxing and the expansion of government no matter what. The Creeps were hypocrites who talked one thing and did another, who went along on the spending spree while lecturing on fiscal solvency.

In 2008, the voters went for Mr. Obama thinking he was not a Nut but a cool and sober moderate of the center-left sort.

In 2009 and 2010, they looked at Obama’s general governing attitudes as reflected in his preoccupations — health care, cap and trade — and their hidden, potential and obvious costs, and thought, “Uh-oh, he’s a Nut!”

Which meant they were left with the Creeps.

The contest between the Nuts and the Creeps may be ending.

The Nuts just got handed three big losses, and will have to have a meeting in Washington to discuss whether they’ve gotten too nutty.

But the Creeps have kind of had their meetings — in Virginia, New Jersey and Massachusetts. And what seems to be emerging from that is a new and nonsnarling Republicanism.

We’ll see …

Full article:
http://online.wsj.com/article/SB10001424052748703699204575017503811443526.html?mod=djemEditorialPage

FOX soars … Air America crashes.

Punch line: Everything has been coming up roses for Fox since the White House declared war on the network last year.

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RCP: Media Wars: FNC Keeps Rising, Air America Crashes, January 21, 2010

On Tuesday, liberal Air America radio declared bankruptcy and will cease live broadcasts immediately.

On the same day Neilsen reported competition-dwarfing numbers for Fox News’s coverage of the special election in Massachusetts on Tuesday night. 

According to Neilsen, Fox News drew an 6.2 million total viewers during primetime Tuesday night, compared to only 1.5 million for CNN and 1.1 million for MSNBC.

Clearly, those numbers are driven in part by the fact that Fox’s right-leaning audience was intensely interested in the outcome of this race. But it also had to do with the fact that Fox simply provided more, and better, coverage of the event. Fox was the only network to cover Coakley and Brown’s speeches in their entirety.

And as  Miami Herald TV critic Glenn Garvin noted “MSNBC’s Keith Olbermann and Rachel Maddow, positively enraged that Massachusetts dared to elect a Republican, delivered two hours of nonstop bilious rage toward the state’s voters, calling them “irrational” and “teabaggers,” engaged in “a total divorce from reality, and hinting that they’re vicious racists to boot.”  Good thing nobody was listening.

Full article:

http://realclearpolitics.blogs.time.com/2010/01/21/media-wars-fnc-keeps-rising-air-america-crashes/

Tanning salons sigh relief as bullseye shifts to big banks

Big winner from Mass results are tanning salons since taxing them was going to fund part of ObamaCare.  Maybe, just maybe, they dodged a bullet.

Now, the administration is picking on somebody its own size — the Wall street banks.

Since the announced “fee” on big banks got some populace traction, why not put on a full court press?

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WSJ: Proposal Set to Curb Bank Giants, Jan. 21, 2010
 
President Barack Obama is expected to propose new limits on the size and risk taken by the country’s biggest banks, marking the administration’s latest assault on Wall Street in what could mark a return, at least in spirit, to some of the curbs on finance put in place during the Great Depression.

The past decade saw widespread consolidation among large financial institutions to create huge banking titans. If Congress approves the proposal, the White House plan could permanently impose government constraints on the size and nature of banking.

The goal would be to deter banks from becoming so large they put the broader economy at risk and to also prevent banks from becoming so large they distort normal competitive forces.

Mr. Obama is also expected to endorse measures which would place restrictions on the proprietary trading done by commercial banks, essentially limiting the way banks bet with their own capital.

The proposal could have the biggest effect on Bank of America Corp., Wells Fargo & Co., and J.P. Morgan Chase & Co., which control a large amount of U.S. deposits, as well as Goldman Sachs, Morgan Stanley and Citigroup Inc., which have a large presence on Wall Street.

The rules could also keep banks out of the business of running hedge funds, investing in real estate or private equity, all businesses that have become important, profitable parts of these banks.

If investors believe the new rules could take effect, they could sell off the shares of most of the big financial stocks in the belief these companies would be facing years of turmoil and potentially lower profits.

The White House proposal would seek to return the “spirit of Glass Steagall,” meant to limit large banks from becoming too big and complex that create enormous risk.

Full article:

http://online.wsj.com/article/SB10001424052748704320104575015910344117800.html?mod=WSJ_hps_LEFTWhatsNews

Did SNL & the Daily Show start the ball rolling?

No pundits are saying it, but I think that video loop of candidate Obama promising to “put the negotiations on C-Span” caused the recent tipping point in voter angst.

And, it’s no secret that many folks get most of their news from the Daily Show and other comedy venues.  So, when they turned their guns on the President, you had to know that trouble was brewing.

Here are the two prime culprits: SNL’s “Jack & Squat” skit … and John Stewart on “Jobs Created or Saved”

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Video: SNL goofs on Obama for accomplishing nothing — except jack & squat
http://hotair.com/archives/2009/10/04/video-snl-goofs-on-obama-for-accomplishing-nothing/

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Video: Jon Stewart spoofs jobs saved or created.
http://vodpod.com/watch/2655813-the-daily-show-with-jon-stewartamerican-idle?pod=

WARNING: for mature audiences.

click picture or link to view

http://vodpod.com/watch/2655813-the-daily-show-with-jon-stewartamerican-idle?pod=

Holding on for dear life, Nokia attempts to re-enter the handset market

TakeAway: Like 66% of companies out there, Nokia suffered from the first mover disadvantage.  Then throw some complacency on top of that and you will have the current day Nokia – losing market share by the minute and watching its stock price tumble. 

Now Nokia it is trying to crawl back.  Blaming customer focus, carrier demands, etc. for its dwindling success, Nokia is hoping that a suite of killer apps and new distribution channels will renew its position as a credible competitor in the handset market.

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Excerpted from NYTimes, “Can Nokia Recapture Its Glory Days?” By Nelson D. Schwartz, December 13, 2009

If there’s anywhere left in the world where it’s still impolite to flash a BlackBerry or an iPhone, it’s Nokia’s annual analyst meeting.

But earlier this month, as executives talked up the company’s plans for 2010, the optimistic message from the stage was belied by the behavior of the audience. In the back of the room, one money manager after another distractedly toyed with a competing device … one analyst announced to the room, “I don’t think anyone in this room is expecting an improvement in earnings next year” …

Although Nokia still commands 37% of the world’s handset market, it’s facing bruising competition in the lucrative high end of the industry, where the iPhone and BlackBerry have grabbed the cool factor in smartphones that can surf the Web and handle e-mail …

Nokia’s problems are especially acute in North America, where its hold on smartphones equals 3.9%, compared with 51% for Blackberry and 29.5% for iPhone … 

“We made wrong decisions in the American market,” says Nokia’s EVP for devices. For example, Nokia was slow to make the change to so-called clamshell phones, sticking with “monoblock” models even as consumers abandoned them.

And while Nokia first offered touch-screen technology in 2004 — three years before the debut of the iPhone — Apple’s models quickly made Nokia’s competing products look stodgy. Most of Nokia’s touch-screen phones can’t quickly transform their screen with the jab of a finger, which is among the factors that make the iPhone seem so much more slick.

Until recently … the company didn’t want to produce phones specifically tailored for American consumer tastes, and it resisted demands from the major carriers to come up with phones based around their brands and individual specifications …

Nokia has also been hobbled by its traditional weakness in phones employing C.D.M.A., the wireless technology offered by Sprint and Verizon Wireless that’s used by about 50% of American consumers … Nokia focuses instead on G.S.M. phones for AT&T and T-Mobile. However, AT&T’s exclusive deal with Apple has hurt Nokia in the high-end smartphone market …

Nokia is finally responding — its lithe, BlackBerry-like E72 appeared in the United States on Tuesday — but it is facing looming threats in other segments.

Google is offering Android, a rival to Nokia’s own operating system, which has been picked up by competitors like HTC, Motorola and Dell, while Asian manufacturers are turning up the heat with low-priced handsets in emerging economies where Nokia has long enjoyed outsize market share … 

“The market believes this is a management team that can’t and won’t execute,” …

Despite the pessimism outside, Mr. Kallasvuo insists spirits are still high inside the company …

Indeed, for all the new competition in smartphones, Nokia remains the dominant player in conventional handsets, selling roughly 15 phones a second worldwide …

And while market share might be minuscule in North America, the company commands a whopping 62.3% of the market in the Middle East and Africa, as well as 48.5% in Eastern Europe and 41.8% in Asia …

What’s more, Nokia has been written off before.  Citing past crises in 1998 (the advent of smaller phones), 2001 (the bursting of the tech bubble) and 2004 (the sudden popularity of flip phones) … “we’ve always had points where technology hit a plateau and had to be reconfigured.”

So why didn’t Nokia move more quickly to counter Apple and Research in Motion in smartphones? “We didn’t execute; we were aiming at too geeky a community,” he says. “Apple is made for the common man. It’s more for Joe Six-Pack than techno-geeks. But we understand Joe Six-Pack too” …

Nokia executives say new offerings like the N900, which is as much a mobile computer as it is a phone, or the N97 Mini, which combines touch-screen technology with a qwerty keyboard, will win back buzz from Apple and BlackBerry while appealing to the company’s 1.1 billion customers …

Another crucial development in 2010 will be a bigger push for North American market share, as Nokia works more closely with carriers and brings out more smartphones … Nokia executives are promising a smartphone for next year that will update the company’s aging Symbian operating system, combining the touch-screen coolness of the iPhone with a BlackBerry-like e-mail solution …

And though Nokia’s flagship outlets in the United States may be folding, the Finnish giant is still trying to compete directly with Apple online, opening Ovi in May to compete with Apple’s hugely successful Apps Store …

Edit by TJS

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Full Article
http://www.nytimes.com/2009/12/13/business/13nokia.html?_r=1&scp=2&sq=nokia&st=cse

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Day-after-pills: Dow 11,000 … rats jumping … Hillary smiling

OK, couple of morning after the election thoughts …

Dow Soars

I’m on record with friends and on the blog that the Dow would head to 7,500 if ObamaCare passed … and I expected that it would.

Now that the odds have shifted — at least temporarily — the market should get a huge boost.

I’m not a big Jim Cramer fan, but I agree with him on this one:

Former Barack Obama supporter Jim Cramer on Friday said the stock market would have a huge rally if Scott Brown defeats Martha Coakley in Tuesday’s special senatorial election in Massachusetts.
 http://newsbusters.org/blogs/noel-sheppard/2010/01/17/jim-cramer-brown-win-causes-huge-stock-rally-investors-nervous-about-#ixzz0d9GKbCfp

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Rats Jumping Ship

Last week I opined that some Dems might be secretly wishing for a Brown victory since it would take them off the hook re: ObamaCare.  They could let it die without casting a no vote.

Well, Democratic Senator Jim Webb of VA stepped up last night, pointing out the obvious:

In many ways the campaign in Massachusetts became a referendum not only on health care reform but also on the openness and integrity of our government process. It is vital that we restore the respect of the American people in our system of government and in our leaders. To that end, I believe it would only be fair and prudent that we suspend further votes on health care legislation until Senator-elect Brown is seated.
http://tpmdc.talkingpointsmemo.com/2010/01/health-care-comes-to-screeching-halt-sen-webb-no-hcr-votes-until-brown-seated.php

If Webb doesn’t get squashed by Reid and the White House today, watch for a flurry of “save my own hide” defections. 

* * * * *

Hillary Smiles

Soon after Obama’s inauguration, a plugged-in politico friend of mine told me that Hillary expected the Obama presidency to implode and was informally keeping part of her organization in place to be prepared to challenge Obama in 2012.  At the time. I dismissed the possibility as wishful thinking.

Well, now an implosion doesn’t appear to be such a wild possibility.

And, no less the the National Enquirer says:

A furious Michelle Obama has declared war on Oprah Winfrey – saying she has proof the talk-show titan is plotting with Hillary Clinton to take the White House from her husband.
http://www.nationalenquirer.com/michelle_obama_war_with_oprah_hillary_clinton/celebrity/67983

Remember, the Enquirer was right on Tiger and John Edwards. 

Hard to bet against them.

Brownisms … that weren’t on CNN or MSNBC

I was flipping channels last night to see what the different networks were saying and showing.

Olberman and the MSNBC team were deriding Brown and Mass voters for being stupid, and advocating full steam ahead on ObamaCare 

Blitzer and the CNN team was just sad about the turn of events, and suggesting scaling back ObamaCare.

Both MSNBC and CNN stopped showing Brown’s victory speech when he got into the meat of his campaign points.  Really.

So, if your were watching those networks, you missed his classic line that “It’s not Ted Kennedy’s seat, it’s not the Democrats seat, it’s the people’s seat.”

On ObamaCare: “It will raise taxes, it will hurt Medicare, it will destroy jobs and run our nation deeper into debt.” 

On terrorist rights: “Our tax dollars should go towards weapons that destroy terrorists, not lawyers to defend them.”

For a stupid guy, he seem to make a lot of sense.

* * * * *

P.S. Oh yeah, Hannity and the Fox team were gloating …

From ‘coffee’ to ‘ignoranus’ … some uncommon definitions.

The Washington Post has published the winning submissions to its yearly neologism contest, in which readers are asked to supply alternative meanings for common words … and common definitions to not so common words:

The winners are:

1. Coffee (n.), the person upon whom one coughs.

2. Flabbergasted (adj.), appalled over how much weight you have gained.

3. Abdicate (v.), to give up all hope of ever having a flat stomach.

4. Negligent (adj.), describes a condition in which you absentmindedly answer the door in your nightgown.

5. Flatulence (n.) emergency vehicle that picks you up after you are run over by a steamroller.

6. Balderdash (n.), a rapidly receding hairline.

7. Testicle (n.), a humorous question on an exam.

8. Frisbeetarianism (n.), the belief that, when you die, your soul flies up onto the roof and gets stuck there.

9. Bozone (n.): The substance surrounding stupid people that stops bright ideas from penetrating. The bozone layer, unfortunately, shows little sign of breaking down in the near future.

10. Cashtration (n.): The act of buying a house, which renders the subject financially impotent for an indefinite period.

11. Sarchasm (n): The gulf between the author of sarcastic wit and the person who doesn’t get it.

12. Inoculatte (v): To take coffee intravenously when you are running late.

13. Decafalon (n.): The grueling event of getting through the day consuming only things that are good for you.

12. Glibido (v): All talk and no action.

13. Dopeler effect (n): The tendency of stupid ideas to seem smarter when they come at you rapidly.

14. Ignoranus (n): A person who’s both stupid and an #@$!**#@.

PLC regeneration – board games are back and better than before

TakeAway:  Board game manufacturers are taking advantage of technology to not only breathe new life into the board game market, but also to enjoy enormous price increases.

* * * * *

Excerpted from WSJ, “New Twists to the Games People Play,” By Ann Zimmerman and Joseph Pereira, December 9, 2009

Mattel and other makers of traditional games these days are increasingly turning to technology to attract a new generation of players. Hasbro has updated the classic Clue with a Secrets and Spies edition … Monopoly became the No. 1 paid application in the iPhone app store … One of the hottest games this holiday season owes its life to medical science.  Part high-tech Ouija board, part Mousetrap, Mattel’s Mindflex purports to allow you to move objects with your mind through the technology in an EEG … 

Toys “R” Us, which chose the Mindflex as a hot Christmas toy, is also selling a similar product, Star Wars The Force Trainer, by toy maker Uncle Milton Industries , which claims that players can levitate a ball inside a clear plastic 10-inch tower with their minds. It sells for $100.

“It is the first time you actually can use the force,” says VP merchandising at Toys “R” Us, adding that the toy is selling well despite its steep price tag.

With titles like these, toy manufacturers are experiencing something of a game renaissance. While sales of toys in the first nine months of the year were down 2%, board-games sales rose 8%, ahead of almost every category …

It’s unclear if high-tech board games will have staying power, but they’ve definitely created a certain buzz. Despite its $80 price tag, Mindflex is almost sold out. Panicked parents have been writing pleading messages on Twitter and other social-media sites, followed by triumphant posts when they secure a game … The mother of a 9-year-old girl says she didn’t mind paying $110, or a 38% premium, for the game online …

The recession has given a big boost to board games in general—even low-tech ones—as families forgo vacations and costly outings in favor of spending more time at home. Hasbro, the largest board-game seller with 53% share of the market, has capitalized on the hunkering-down effect, partnering with food companies and retailers in 120 countries to sell products as part of a “Family Game Night” promotion in the past year.

To entice new sales of traditional games, Hasbro has tried to spice them up with modern features …

The board-game business is also getting a boost from some parents who resent the growing popularity of electronic games …

At $10 to $35 a pop for most traditional games, board games are cheaper alternatives to vacations, ski-trips or even visits to the movies …

“To tell you the truth,” says Mrs. Murphy, a real estate agent, “we had forgotten how much fun games like Clue and Scrabble and Uno can be—not to mention how much money we saved.”

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Full Article
http://online.wsj.com/article/SB20001424052748703558004574583922534512310.html#mod=todays_us_personal_journal

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Obama: "Cambridge Police behave stupidly, again"

Well, the President didn’t really say that, but he must be thinking it.

Remember when Obama started a bruhaha over the the arrest of his buddy Harvard Prof. Louis Gates Jr. ? 

Obama said he ‘didn’t know all the facts’  of the case and then declared that the Cambridge police had acted ’stupidly.’

Well, what goes around comes around, I guess.

At the time, a few Cambridge officers said they would never vote for Obama again.  Who cares, right?

Well, it’s payback time.

The Cambridge Police Patrol Officers union endorsed Republican Scott Brown in the Mass Senate race.

To add salt to the wound, Martha Coakley’s husband is a retired Cambridge cop, and a member of the union.

http://www.wickedlocal.com/cambridge/news/x1409379713/In-dig-at-Coakley-Cambridge-Police-Patrol-Officers-union-endorses-Republican-Brown-in-Senate-race

Adidas plans to extend its product line from the ground up

Takeaway: Adidas, a company well-known for shoe production, is going to enter Europe’s growing outdoor apparel market.

Market attractiveness certainly exists in this category, as outdoor gear has been outperforming other sporting goods categories.

The bigger question, however, relates to Adidas’ competitiveness in this market.

With a huge player in North Face and niche competitors, such as Patagonia, does Adidas stand a chance?

Most likely this will come down to Adidas’ brand equity in the eye of the consumer. Does Adidas stand for all outdoor activity? Or is it stuck, like a double-knotted tie, to the shoe industry?

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Excerpted from BusinessWeek, “Adidas Leaps from Hot Sneakers to Warm Jackets” by Holger Elfes, December 9, 2009

Adidas has long been one of the world’s premier brands in fashion sport shoes. Now the German sporting-goods company plans to begin selling high-end mountaineering jackets next year, muscling in on North Face’s turf as outdoor gear grows faster than traditional sporting goods.

Sales of outdoor gear will rise about 0.7% in Europe this year, outperforming the declining sporting-goods market, according to industry body European Outdoor Group.

In Europe, Adidas increased its spending on marketing this year by running TV commercials with Alexander and Thomas Huber, brothers who are known for extreme Alpine climbing. The sporting-goods maker also started sponsoring Reinhold Messner, who made the first solo ascent of Mount Everest without bottled oxygen.

Adidas Chief Executive Herbert Hainer has said his company would build its outdoor-sports division using its own brand name and without resorting to acquisitions.

“Adidas is doing a seriously good job as the company tries to take advantage of the increasing interest for outdoor gear,” says Mark Held, secretary general of European Outdoor Group. He expects the industry’s growth to continue into next year. “Even in hard times, people continue buying outdoor gear to escape for a while from the seriousness of life.”

Edit by JMZ

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Full Article:
http://www.businessweek.com/innovate/content/dec2009/id2009129_588770.htm?campaign_id=innovation_related

Bumper sticker says it all …

Viral marketing at a whole new level

TakeAway:  The beauty of online ads is that companies can let consumers do most of the work. 

Once a consumer finds an interesting ad, he or she will do the company’s dirty work of spreading that puppy around to hundreds to thousands of their friends. 

Now, companies are upping the game by offering videos. This could be the best viral marketing has ever seen.

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Excerpted from NYTimes, “Online Ads Are Booming, if They’re Attached to a Video,” By Brian Stelter, November 11, 2009

News Web sites are starting to look a lot less like newspapers and a lot more like television.  CNN.com and ESPN.com are featuring video much more prominently on their home pages, often prompting visitors to press play before they begin to read … news Web sites are not the only Web sites jumping on this trend …

A major reason is commercial. At a time when other categories of advertising dollars are shrinking, video ads are booming. News sites are adding more video inventory to keep pace with the demands of advertisers, and benefiting from the higher cost-per-thousands, or C.P.M.’s, that ads on those videos command …

Video is now the fastest-growing segment of the Internet advertising market … and video ads will be the “main channel” for major advertisers seeking to increase their online spending in the next 5 years …

Some companies think of online video as an extension of TV, and others think of it as an enhancement — one that allows for interactive messages and instant feedback from viewers.

Companies acknowledge that the medium is still in many ways immature. Sites continue to disagree about the legitimacy of “autoplay,” a setting that starts videos automatically when a Web page loads, increasing the number of streams without necessarily knowing that the Web user is watching.  And, ads next to “serious” news dispatches normally cannot draw the same C.P.M.’s as lighter fare …

“The Web is fulfilling this promise of being a medium where you can enjoy video as much as you can see it on TV,” … “The difference online is, if you want to do something with it — share it, stick it on a blog, post it on a Facebook page, or mark it and save it — you can do all that. And that was never possible before.”

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Full Article
http://www.nytimes.com/2009/11/11/business/media/11adco.html?_r=1&ref=media

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If you’re an Amish union member living in Nebraska (with elderly parents living in Florida) … this plan’s for you.

If you’re keeping track of the special ObamaCare deals:

States have to pay for extended Medicaid — except Nebraska. 

Seniors lose Medicare Advantage — except in Florida. 

Everybody must buy healthcare insurance — unless they’re Amish — since the Amish have a religious objection to insurance.

And, in the latest backroom deal, Cadillac health insurance plans face a 40% excise tax — unless the insured is in a union … at least until 2018.

I figure that by the time all of the special deals are cut and  this junk law is passed,  Lloyd Blankfein (CEO of Goldman Sachs) and Jamie Dimon (CEO of JP Morgan) will only two people in America without a special deal –  and will be paying  for the entirety of the ObamaCare program.

Maybe that’s a good thing.

Here are details …

Source: NY Post: Another Rank Deal, January 15, 2010

What happens when the irresistible force of the Democratic urge to tax runs up against the immovable object of Democratic loyalty to the labor unions?

Another ugly deal in a health-care bill that already was a grotesquerie of pay offs to favored politicians and interests. The levy in question is a 40 percent excise tax on high-end employer-provided insurance plans that – typically – has been sold as a tax on “the rich.” It’s called the “Cadillac tax,” a name redolent of corporate executives cackling in their Escalades over their cushy benefits.

The unions, which make it a point to negotiate generous insurance plans with their employers (to the point of bankrupting them), were chagrined to learn that for purposes of this tax, they’re among the rich. They howled in terms that could have been drawn from Henry Hazlitt’s free-market classic, Economics in One Lesson: The Shortest and Surest Way to Understand Basic Economics.

The excise tax is supposed to be paid by evil insurers and employers. Except in this one case affecting their self-interest directly, the unions see through the fiction and understand that the tax will trickle down onto them. How disorienting to hear unions implicitly recognize that corporations ultimately don’t pay taxes, their customers and employees do.

“While the excise tax is slated to be imposed on the insurers on so-called high cost plans, the tax will be passed on to enrollees in the form of higher premiums, co-pays or reduced benefits,” a coalition of public-employee unions wrote congressional leaders. “Characterizing this tax proposal as a ‘Cadillac tax’ is a misnomer. It hits the average blue collar and white collar employee.”

The unions also bristled at a fairly typical trick of liberal taxation – bracket creep. The Cadillac tax affects few people when it begins in 2013. Since it’s not indexed to account for the ever-rising expense of health care, though, it will catch more and more people over time.

This is why New York Times columnist Bob Herbert called it “a middle-class tax time bomb,” and Nancy Pelosi made an oblique reference to Pres. Barack Obama breaking his promise not to increase taxes for anyone making less than $250,000 a year. Obama’s support for the Cadillac tax not only violates that forlorn pledge, but directly contradicts one of his chief lines of attack against John McCain in the 2008 campaign.

McCain wanted to end the tax exemption for employer-provided insurance coverage and compensate people with a tax credit to buy their own plans, a systematic approach to controlling costs and increasing choice. Obama’s plan will increase costs and reduce choice, but he needs $150 billion in revenue over ten years to try to make it look deficit-neutral, so he’s – as he put it in his unrelenting anti-McCain ads – “taxing health benefits for the first time in history.”

But pressure from the unions has now forced the White House to agree to raise the $23,000-per-household threshold of the tax slightly and – more importantly – exempt insurance plans that are the product of collective-bargaining agreements until 2018. This Labor Loophole stands in the finest tradition of the Louisiana Purchase and the Cornhusker Kickback. With no possible public-policy justification, it puts the awesome power to tax and spend at the service of nakedly political ends.

Oliver Wendell Holmes famously said that taxes are the price of civilization. In this case, taxes are the price of not belonging to a group that pours countless millions of dollars into the Democratic coffers. Under the Cadillac tax, there’s one set of rules for the Service Employees International Union and another for everyone else.

Obama is currently haranguing the banks so he doesn’t get pegged as a “Wall Street Liberal.” The more dangerous rubric for him is a “Washington Liberal,” a politician knee-deep in the special-interest politics of the Beltway as he pushes an unpopular agenda of rapid government expansion. Obama’s style of politics has gone from inspiring to revolting in the space of a year.

http://www.realclearpolitics.com/articles/2010/01/15/another_rank_deal_99912.html

Patois and attitude ? Nope, give us wisdom and competence.

Ken’s Note: “Patois” — a great word — is any nonstandard language that draws class distinctions between those who speak it and those who speak the common or dominant language or dialect.  “Patois” could become this year’s “gravitas”.

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The public has turned decisively against the “educated classes”, many of their works, and many of their ideas.

Perhaps, our “educated class” is educated beyond its intelligence, and mistakes mastery of its patois and attitude for wisdom and competence.

It is full of itself, and values too highly its skill sets, which are entertaining, but not on the optimum level of consequence.

On this optimum level are resolution, moral clarity, and an ability to understand and connect with a great many people, things for which the educated class is not known.

This class fooled itself, and much of the country, for which the country will not soon forgive it.

Excerpted from Washington Examiner: Obama’s education of little use to his presidency, January 13, 2010
http://www.washingtonexaminer.com/opinion/columns/Obama_s-education-of-little-use-to-his-presidency-8756295-81272472.html

Mass Senate Race: Will the winner be the winner or the loser ?

I’m really intrigued by the Senate race is Mass.

Though I haven’t heard any pundits say it, I’m betting that some current Democratic Senators are silently hoping that Coakley (the Dem) loses.  Think Bayh, Webb, Lincoln, Landrieu. 

Why?

Now, these folks have to vote in lockstep on the bill or get pulverized by the Reid-Pelosi-Obama machine.  If Brown gets elected to break the super-majority, all the pressure is off the lemmings.  They won’t be blamed if the bill flames out.

On the other hand, GOPers are probably better off if Brown loses.  If he wins and ObamaCare goes away, the Repubs lose their major 2010 talking point and get accused of being obstructionists.

Perhaps, the best case for the Republicans would be a Brown victory but a slimey delay to keep him from being sworn in until after ObamaCare passes.  Then the GOP breaks the super-majority and still has the healthcare talking point for the elections.

The only loser in that case: well, all of us.

This is better than the last week of the NFL when play-off spots are still up for grabs.

Companies turn to product-specific soap operas to engage consumers

TakeAway:  I’m not sure if product-specific soap operas or webisodes are aimed at providing work for struggling actors and actresses, creating another way for studios to get advertising revenue, or engaging consumers. 

While I do think there is some benefit offering enhanced versions of commercials online so that consumers that want more info can get it, I think it is farfetched to say that products require actors in order for consumers to engage with the brand. 

And, if that is the case, maybe the brand may need more than a webisode to solve the problem.

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Excerpted from NYTimes, “Shows Online, Brought to You by …,” By Stuart Elliott, November 24, 2009

… Actors are finding new ways to stay in the public eye in the form of Web series, also known as webisodes. Almost all such Web series are being created specifically for advertisers, borrowing a strategy from the early days of radio and television when shows like “The Kraft Music Hall,” “The Bell Telephone Hour” … that entertained Americans while selling cheese, phone service …

Webisodes — part of a trend called branded entertainment — are growing because marketers feel compelled to find new methods to reach consumers in an era when the traditional media are losing eyeballs, ears, hearts, minds and perhaps other body parts to the Internet …

Among the major brands proclaiming “brought to you by … ” online are Maybelline cosmetics, which is sponsoring Ms. Bushnell’s Web series, “The Broadroom,” available at maybelline.com/thebroadroom, and ConAgra Foods, which is sponsoring a daily show, “What’s So Funny?,” on yahoo.com, peddling products like Healthy Choice and Marie Callender’s!

The goal is to “extend our reach,” said media director at Clorox, and attain “a higher level of engagement” than is possible through tactics like running 30-second commercials that interrupt episodes of conventional TV series …

When developing branded entertainment, “the entertainment part has to come first” … otherwise consumers will dismiss it as “pushing a product” …

Shows should have an episodic, TV feel but be digestible, in portions sized appropriately for online viewing — typically three to seven minutes each …

Some consider webisodes “the flavor du jour” … but sponsors are signed “before we shoot a frame” of a Web series …

Edit by TJS

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Full Article
http://www.nytimes.com/2009/11/24/business/media/24adcol.html?_r=1&ref=media

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The perils of ‘free’ …

Punch line: Economists have shown that if a good’s price is zero or decreasing, then the demand for this good will likely increase. And, that applies to healthcare.

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Excerpted from American.com: The High Cost of No Price, January 12, 2010

A simple chart shows why healthcare spending has gone out of control. The graph shows out-of-pocket payments by consumers and spending by Medicaid, Medicare, and private insurers on healthcare from 1965 to 2008.

 

In 2008, consumers were only directly responsible for 11.9 percent of total national healthcare expenditures, down from 43 percent in 1965.   This means that someone other than consumers pays roughly 88 percent of all healthcare costs, giving consumers little incentive to mind costs and much incentive to over-consume.

Since the passage of Medicare in 1965, consumers’ out-of pocket spending on healthcare has decreased steadily as a percentage of overall U.S. healthcare spending. While real and nominal out-of-pocket healthcare payments increased over the period, growth in these costs was dwarfed by a much more rapid growth in overall spending. On average, consumers’ out-of pocket healthcare costs increased 6.7 percent each year, while national healthcare expenditures increased by an average 9.8 percent each year.

By contrast, increases in expenditures by private insurers, Medicaid, and Medicare accounted for the majority of this excess cost growth — since 1965, private insurers’ spending has increased by an average 10.8 percent annually, Medicaid spending has increased by an average 15.4 percent, and Medicare spending has increased by an average of 15.6 percent each year. The rate of growth in both Medicare and Medicaid spending far outpaces the rate of growth in out-of-pocket and private insurance costs.

When people aren’t exposed to the true cost of their care — even if they pay for it in foregone wages and higher taxes — they consume more.

It’s that simple.

Full article:
http://www.american.com/archive/2010/january/the-high-cost-of-no-price