Coordinated Marketing

Oil Prices Continue to Hurt Economy

The sad part about the state of economic affairs is that the economy is still a disaster and yet there is actually positive media coverage as if things have improved.  Oil prices have more than doubled since the winter and that is on the back of horrible demand and millions of jobs being lost.  It is basically the exact opposite of this stage in earlier recessions.

Our main problem now is the fall of the dollar but to be realistic speculators are again hurting the average consumer.  By most estimates oil prices are inflated by about twenty dollars due to the weak dollar.  The other $25 added to the price since March is the result of money flowing into the oil markets from fund managers. 

We have updated the look of the site and expect to get back to posting much more frequently.

Do the Right Thing by your Pet

While typing out the previous entry I was watching a DVR rerun of "Flip This House."  In the episode "Brotherly Love" JD and Paul are up to their old antics renovating and flipping a home in Connecticut.  Apparently the home was previously occupied by tenants that were tied to the previous owners.  Unfortunately when they go to inspect the property they find an abandoned dog nearly starved to death on the property.

After doing the right thing and calling Animal Control the dog is taken away to be adopted by another owner.  The officer responding to the scene thanks the crew for "doing the right thing" and calling animal control.  I did not notice any official designation on the vehicle nor a State ID Plate so I am going to guess doing the right thing in this case cost the crew some money.  It was nice to see as these guys do seem to be legitimate on the order of Trademark Properties down in South Carolina before they bailed for another network.

With that said I figured it was worth a minute to mention that almost all shelters will take your pet for free or for a minimal donation.  Although it may seem that leaving your pet is the best idea or letting it go wild those are horrible solutions.  Roaming free pets live a horrible life and can do damage to the environment around them before often succumbing to a miserable death.  If you are forced to give up your pet do the right thing and leave it at a local shelter.

A great place to start your search would be the ASPCA and from there you should be able to find a list of local shelters if there is not a state branch of the ASPCA in your area.  You can search your favorite search engine with your state and SPCA to find your local branch.  For those looking for a pet you can help significantly reduce the population and financial strain of unwanted pets by adopting.  There are thousands of local and state organizations such as Animal Shelter and PetFinder that help in both the search for a pet you want to adopt and a pet you need to drop off.  Do the right thing with your pet and leave it with responsible individuals, not abandoned and starving. 

My Orbit Appears to be Shrinking

File this under "sign of the times."  Has anyone else noticed the ever decreasing portion size of goods during this economic slide?  Heading out today to meet a friend for brunch I stopped to grab a pack of gum.  After picking up my favorite brand and flavor of Orbit gum I headed off to meet my friend.   All was well up to this point.

After eating I popped a piece of gum into my mouth which much to my surprise is about 20% smaller than the last pack I had purchased.  Is this really what it has come to?  The economy is so bad that even gum is being downsized?  I understand that during the last year with the price spikes in oil and transportation manufacturers had no choice but to raise prices or downsize the products but chewing gum?  As it is now the new pieces are so small they are almost useless and this is a perfect example of how not to market your product.  The extra ten cents they could have applied to the product cost would not have forced me to switch brands, needing to chew twice the gum has and will and they have now lost a customer.

This trend seems to be accelerating.  Everything from toilet paper to Tide detergent is showing up on the shelves in smaller and smaller portions.  Has anyone else noticed that almost all laundry detergents are now only available in "2x" versions that offer 50-75% less actual detergent?  The idea is that cleaning performance has increased by an equal amount but is that really the case?  In cleaning my own clothes I am noticing that the supposedly more powerful products are often anything but more powerful.  What is also discouraging is the fact that despite the brilliant exterior packaging manufacturers seem to make it almost impossible to see the correct portion side inside the cap.  Tide for instance as well as Arm & Hammer use a tone on tone setup inside the cap and use print that even someone with 20/20 vision has a hard time seeing with anything but a flashlight.  The result I am sure is that we all end up using more than what is required and as a result end up back in the stores buying more detergent sooner.  The net result for the environment is even worse as we are now dumping more nutrients into the environment.   Tide, Arm & Hammer and the rest should clearly mark the measuring cups using white on dark or dark on white printing so we all can easily measure out the correct portions.  With a detergent bottle now costing $7 to $15 the extra 1 penny in ink costs should be part of the process.

Customers need to speak with their dollars and demand these types of changes.  Otherwise the trend will continue and these stealth 20 and 30% price increases will become the normal state of affairs.  You can contact Tide via their Tide Contact Us page and let them know what you think of their new measuring caps.

Oil Prices Going Up As Economy Falters

Oil prices are again rising and prices at the pump are back up over $2.00 per gallon in many parts of the country.  This despite a report this morning from ADP indicating 742,000 jobs were lost in the United States during March 2009.  With the economy effectively in a free fall you have to wonder how oil prices can continue to rise.

Looking at the supply side it was reported this morning that OPEC countries did not even come close to fully complying with requests to cut production.  Instead some 3 million barrels of oil above the quota were produced recently.  Here in the United States crude oil supplies rose by 2.8 million barrels topping expert opinions by 500,000 barrels.  Inventories are up for the last month which only supports the fact that our economy is in shambles.  Hammering the point home further gasoline stocks were up 2.2 million barrels when they were expected to fall by 1.2.  So much for expert predictions as they were once again clueless.  Heating oil and other products increased by 200,000 barrels versus an expected drop of almost a half million barrels.  The full EIA Inventories Report is available on-line.

This begs the question of how in the world we are seeing rising prices in the heating oil and gasoline markets?  The answer is simple as speculators and fund managers flock to commodities to make money.  There is no economic basis for what we are seeing, supplies continue to rise capacities at our refineries are nowhere near maximum and worldwide demand is weak.  GasBuddy.com among other sites will help you save a few dollars as you find lower priced alternatives.

Prices are down across the board today but I wonder how long it will take those in power to realize oil prices and in the end gas prices had a huge hand in the economic collapse in terms of consumer spending which coupled with the financial meltdown made a bad problem a historic problem.

Staying Competitive in The New Economy

Actual competitiveness is a process rather than a static state.  Staying competitive requires an organization to not rest on one's laurels but to continue seeking strategic advantage.  In order to stay competitive an organization must actively promote and market the particular goods or services offered.  Increasingly that requires a broad spectrum of both domestic and international marketing.  Even if your organization is not engaged in marketing goods or services abroad you will still be affected by the marketing activities of foreign entities including your suppliers or competitors.

The American Marketing Association continues to revise the definition with the most recent change coming in early 2008.  Back almost 25 years ago the American Marketing Association defined marketing as "the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives."   This in theory defines the entire process of the marketing manager circa 1990.  It is interesting that the newest definitions have diverged significantly from the earlier held idea that marketing was more of a creative process than organizational.   With the actual definition aside it's important to understand that potential customers should be viewed as information seekers who evaluate your efforts in terms of their own motivations and needs.  When your offering is consistent with their needs they tend to choose your product or service, if it is not they choose alternatives.  Your key task in order to remain competitive is to recognize the ever changing nature of needs and wants in addition to take into consideration the long term needs of society.  Increasingly the long term needs of society are being served by eco-initiatives and green marketing programs.

There are many things working against the small business owner as we approach 2009.  Consumer spending has collapsed, the equity markets have shed almost 30% of their value since 2007, the unemployment rate is up and we have the uncertainty of oil prices and domestic politics to further destabalize the situation.  The National Debt continues to spiral skyward while actual savings continues to nosedive.  Businesses have been feeling the pinch of higher fuel costs and the crashing fuel prices are indicative of the tremendous problems our economy faces as transportation has fallen off so quickly demand dove driving prices into the floor.  With all of this said there is no better time for the successful small business owner to gain market share as competitors stumble over themselves trying to cut costs by cutting service.  They key to remaining competitive is not only a successful marketing plan but precise execution of that plan which we'll discuss over the coming days.

The Role Gas Prices Played In The Global Crash

For some unknown reason the role gas prices played in the global crash are still being discounted.  Despite the blame everyone wants to give the "subprime" crisis for the current crash some blame needs to go to the oil and gas speculators who just three months ago were arguing the "fundamentals" for oil prices hitting $200 a barrel by the winter.  Here we are entering the winter heating season with oil prices falling below $80 and gas prices following suit.  People didn't just wake up one day and decide not to pay for their homes, it took a culmination of a collapse in the auto industry coupled with the higher costs associated with high gas prices to put the squeeze on the economy.

Consider that on this date last year the price of oil was roughly $81 a barrel while gas was hovering around $2.75 a gallon.  A year later oil is under $80 but yet gas is still averaging almost $3.28 a gallon.   We are paying a 50 cent premium in a depressed economy simply because the gas and oil conglomerate can get away with it.  There was never any justifiable reasoning for the high oil prices, if anything any of these experts said had half a truth to them the fall of both oil demand and oil prices wouldn't have been nearly so steep.  Consider the repeated statements and presumed long positions of none other than Morgan Stanley.  Analysts from the company led the charge for $150 and later $200 a barrel predictions citing demand in Asia and elsewhere.  It was always stated that demand in Asia would rapidly decrease immediately following the Olympics and in fact for the first time in ages China has failed to import gasoline for two successive months.  The global demand destruction of oil is now becoming a self fulfilling prophecy much like the earlier meteoric rise helped perpetuate the speculative rise. 

What isn't being discussed is how much damage the speculation did to the global economy.  It was the final straw for many consumers in having to make the decision to drive to work or stop paying their credit card or home loan.  It was the final straw for many businesses in deciding to lay off workers or not being able to meet supplier payments.  Prices rose so fast not one auto manufacturer had time to adjust their offerings and the result has been a devastating hit to bottom lines with Ford trading under $2 a share yesterday and GM dispelling rumors of bankruptcy.  With approximately one in six jobs in this economy somehow tied to the auto industry the impact of the financial calamity being suffered by the automakers will continue to ravage the economy.  The airline industry has also been pummeled with costs increasing for all types of travel further stymieing the bottom line of businesses.  There is no greater pressure point in the global economy than fuel prices and our elected leaders sat on their hands while the market was manipulated for the last year by rampant speculation on foreign exchanges.  They did nothing and are as usual passing the buck on the consumer when their own inability to understand the global marketplace in the end leveled the crippling blow to the economies of many nations.

Lost also in all the non-sensical ramblings of the talking heads is an explanation of why gas prices are 50 cents higher today than they have been on the same historical oil prices in the recent past.  Prices increase almost instantly as oil prices rose yet here we are a month after prices have fallen precipitously and we're still at an average of $3.28 instead of the $2.75 we were at on this day last year at the same oil price.  Amazing how that works isn't it? 

Did Oil Prices Force The Bailout?

Mostly forgotten as the financial markets have melted down over the past two months is the impact of record high oil prices on the global economy.  The EIA announced today a domestic crude stock increase of 8.1 million barrels today to near 303 million barrels last week.  That was more than 8 times the expectations of investors and indicative of the "off the cliff" plummet our economy took in the last few weeks.

Oil prices are now back to levels seen around this time last year however gas prices are still 70 to 80 cents higher than last October.  That effectively is an additional tax on citizens that prevents expenditures elsewhere.  In light of the current situation on Wall Street and with current earnings reports coming in showing a precipitous fall in retail activity at the end of last month every dollar counts.  The issues on Wall Street are running cover for big oil, without the minute by minute coverage of Wall Street someone may actually ask why we are still paying so much for gas when demand has collapsed and prices of oil are back to where they were when we were paying $2.70 a gallon.  More to come on this situation as the gap between past oil prices/fuel prices and the current spread are detailed.

CBS News ran a provocative story Sunday detailing the "shadow" market that is the CDS or credit default swaps.  Some estimates put the value of this market at nearly a quadrillion dollars which would explain how a few million foreclosures on an average home value of $200,000 has turned into a multi-trillion dollar bailout.  The subprime crisis is being blamed on homeowners not paying their bills when in reality the rampant gambling on the derivative products is to blame.  Check out the story on CBS News.  Essentially mortgages were packaged up into mortgage instruments and or derivatives.  Insurance was then sold on these products but it is not called insurance because that term would require regulation.  Instead the term "swap" was used.  When these assets turned bad the swaps were triggered but unlike traditional insurance that is regulated companies like AIG were not required to maintain capital to cover losses and as a result became illiquid.  Why should we be concerned?  Because they have done the same thing with other forms of debt including credit cards which could trigger a new crisis in the coming months as credit card defaults continue to skyrocket.