Posts tagged with: marketing

smile-curveThe smile curve is an idea came from the computer industry, but it applies broadly. It’s a recognition, in graph form, that there is good money to be made (or more value to be added) in research and development, and, at the other end, in marketing and retailing.

It’s also a recognition that there is almost no profit to be made, except in high volumes, in the middle areas of manufacturing (assembly or shipping). This has hurt the American middle class because we used to be a manufacturing nation. Yet today, even where manufacturing is strong, it does not usually pay well.

It’s one reason so much factory work has gone overseas (especially textiles and assembly). In the early stages of a product, there is good money in the middle, but when it becomes common to make a car or a computer or a vacuum cleaner, then the value of manufacturing goes down, as we all know. (more…)

cogIn a recent piece for the Wall Street Journal, Rachel Feintzeig sets her sights on the latest trends in corporate “mission statements,” focusing on a variety of employer campaigns to “inject meaning into the daily grind, connecting profit-driven endeavors to grand consequences for mankind.”

Companies have long cited lofty mission statements as proof they have concerns beyond the bottom line, and in the past decade tech firms like Google Inc. attracted some of the economy’s brightest workers by inviting recruits to come and change the world by writing lines of code or managing projects.

Now, nearly every product or service from motorcycles to Big Macs seems capable of transforming humanity, at least according to some corporations. The words “mission,” “higher purpose,” “change the world” or “changing the world” were mentioned on earnings calls, in investor meetings and industry conferences 3,243 times in 2014, up from 2,318 five years ago, according to a Factiva search.


black-friday1For many, Black Friday epitomizes everything nasty American hyper-consumerism. Stores everywhere are plagued with overly aggressive shoppers, each stuffed to the brim with carb-laden Thanksgiving chow and yet ever-more hungry for the next delicious deal.

It’s all rather disgusting, no?

Quite the contrary, argues Chris Horst over at OnFaith. “Black Friday may have its warts, but let’s not forget the reason for the Black Friday season,” he writes. “The DNA of Black Friday is generosity.”

Wielding a fine mix of basic economics, Christian history, and some good old nostalgia, Horst encourages us to not get caught up in anti-consumerist dismay and instead kick off the holiday season with charity and cheer:

Black Friday commences the Christmas season. This year, Sunday commemorates the official start of the Advent season, but for most Americans, Black Friday initiates the nostalgia and cheer we love most about December. It orients our imaginations toward others and away from ourselves…It’s when Americans turn their attention away from turkey and football and toward buying gifts for one another. We move from Thanksgiving to generosity, shifting from gratefulness for what we have to open-handedness toward those around us…

…Even more, this event is good news for more than just festive shoppers. Black Friday is a big deal for our economy and, consequently, a big deal for all of us…The $600 billion we spend on FitBits, Patagonia ski jackets, and hand-thrown pottery doesn’t just evaporate when we spend it. Those purchases create and sustain livelihoods in garage workshops in our neighborhoods and in warehouses across the globe. They help hobbyists turn their handiwork into employment and give many around the world a shot at a decent job.

This Black Friday, suppress your inner Grinch when you’re tempted to share the story of yet another crazy person fighting over a scarce number of flat screen TVs. Embrace the redemptive side of Black Friday, one that celebrates this season of family and generosity and one that propels our economy forward.


chick-fil-a-truett-cathy-closed-sundayWhenever I get a craving for a chicken sandwich and waffle fries, it’s invariably on Sunday—the one day a week when Chick-fil-A is closed. Rather than become frustrated by the closure, though, I appreciate that Truett Cathy, the founder of Chick-fil-A, was motivated by his religious beliefs to give his employees a day of rest.

It turns out I’m not the only one. “I am from the South and there is a company called Chick-fil-A, and they are known for their religious affiliation — they even have it posted on their wall,” says Kelly Cowart, assistant professor of marketing at Grand Valley State University. “What does that mean to the people that come there? What does that mean for the employees? What does that mean when a company has a religious affiliation? Nothing had really been done looking at that effect.”

A new study led by Cowart and published in the Journal of Services Marketing shows religious affiliation can safeguard companies against negative reactions to store policies, such as limited hours of operation or a temporary store closing:



The Ballors went with a live tree this year. We bought it at Flowerland and I do not know the name of the farm whence it came.

Over at the American Conservative, Micah Mattix reflects on the Christmas tree market, which in his neck of the woods is “notoriously unstable.” In Ashe County, North Carolina, says Mattix, a dilemma faces the small tree farmer: “It is not sell or starve, but it is sell or go without a new septic tank, a repaired roof, a mended this or that.” Although not specifically about Christmas trees, the difficult choice faced by the poet in the Robert Frost poem Mattix engages at length is also reminiscent of the dynamic of poverty in Winter’s Bone.

Mattix explores some valid concerns about the human cost of low prices: “When we look for ‘deals’ at Christmas, I doubt many of us think about the labor another human being expended to make a certain object and whether the price we pay for it is a fair one. We think, rather, of big corporations and highly paid CEOs who can afford a dollar to two less and who have probably already calculated the discount into the cost of production.”

In the context of a market transaction, particularly in a globalized marketplace where we cannot possibly know all the people that have been involved in bringing a commodity to market, there is a kind of anonymity that is inherent in the system. Thus, writes Mattix, “But an anonymous market economy can obscure the relational aspect of trade—it can obscure the fact that transactions are always, ultimately, between people. And when we look to buy objects for as little as possible without any consideration of the labor of others, we are acting no differently than CEOs who look to maximize profit, whatever the human expense.” Perhaps. Perhaps.

Blog author: jballor
Friday, September 27, 2013

I’m not an aficionado of the show Extreme Couponing, but I have seen it a couple times, and have been amazed at the industriousness of the people on the show. It shouldn’t be surprising, perhaps, that in the midst of economic downturn more generally the practice of clipping coupons has become more widespread as well as more extreme.

It makes sense that when times are tight and you are looking to scrimp and save every penny in your budget that increased use of coupons can be a way to make each dollar stretch a bit farther. Companies originally offered coupons as incentives to try new products, and so it is appropriate to see coupons as a form of advertising. The first company to offer coupons was Coca-Cola, and here we can see the similarities between coupons and the free samples, which is part of what makes Costco so popular, as product promotion.


But it never really occurred to me until I read this short profile of an extreme couponer that coupons should also really be seen as a kind of private welfare, reaching a high of roughly $4 billion in total savings in the US in 2011.

Blog author: jsunde
Wednesday, April 17, 2013

sale-sign1J.C. Penney recently gave up on last year’s strategy to abandon sales and coupons in favor of “everyday low pricing.” As an article in the New York Times points out, “simplifying pricing, it turns out, is not that simple”:

“It may be a decent deal to buy that item for $5,” said Ms. Fobes, who runs Penny Pinchin’ Mom, a blog about couponing strategies. “But for someone like me, who’s always looking for a sale or a coupon — seeing that something is marked down 20 percent off, then being able to hand over the coupon to save, it just entices me,” she said. “It’s a rush.”

Devoted coupon users like Ms. Fobes may be more frugal than the typical consumer. But most shoppers, coupon collectors or not, want the thrill of getting a great deal, even if it’s an illusion.

The article goes on to indicate  that this type of illusion-seeking and the corresponding “rush” are sometimes due to certain levels of conditioning:

Even Walmart, which actually does pull off the trick of “everyday low prices” in its domestic stores, is finding it hard to convert consumers to a single-price model in countries like Brazil and China, where retailers give deep discounts on a few main products, then mark up the rest, said Mark Wiltamuth, an analyst at Morgan Stanley.

The problem, economists and marketing experts say, is that consumers are conditioned to wait for deals and sales, partly because they do not have a good sense of how much an item should be worth to them and need cues to figure that out.

Just having a generically fair or low price, as Penney did, said Alexander Chernev, a marketing professor at the Kellogg School of Management at Northwestern University, assumes that consumers have some context for how much items should cost. But they don’t.

Yet as AEI’s Mark Perry notes, from a producer and seller’s perspective, such schemes come in response to the ever-evolving and unpredictable demands of the consumer—in this case, particular shopping preferences. This is “not an enviable position to be in,” Perry writes, “to be at the mercy of fickle and unpredictable consumers.” (more…)