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Teri Bernstein, MBA, CPA has been teaching full time in the Business Department of Santa Monica College since 1985.  Prior to that, she worked in Internal Audit and Special Financial Projects for the 1984 Los Angeles Olympics, CBS, Inc., and Coopers & Lybrand (which is now part of PricewaterhouseCoopers).  She attended the University of Michigan and Wayne State University.


  • Tiny Hachette publishing is taking on Amazon

    image from the prnewswire Michael Pietsch (rhymes with "beach"), the CEO of the Hachette Book Group, is in a battle with Amazon over pricing and availability issues regarding manipulation of the market for books. All of the other book publishers are waiting to see what happens. Other publishers have been afraid to take a stand against Amazon, because of Amazon's tremendous clout. Amazon has huge volume and it is willing to sacrifice profits in pursuit of market share. Not every publisher can afford to pursue that strategy. But Pietsch seems willing to get the issues on the table in order to not lose everything in the long run. Unfortunately, because Amazon and Hachette have signed confidentiality agreements, the nitty-gritty details of their dispute remain secret. Nevertheless, other publishers guess that Amazon is trying to sell Hachette e-books at bargain prices, and Hachette is trying to maintain their profit margins. One tactic that Amazon is using to prevail in this fight is to deliver this message to potential customers wanting to buy a Hachette title: Image from Amazon...when they are trying to delay shipping your book, whether they have it or not... This is a risky strategy for Amazon, because delays tend to annoy customers. Amazon's "branding" includes being customer-friendly, so any delay tactic might tarnish their image. Nevertheless, it also thwarts sales of Hachette titles--especially for those customers who are loyal to Amazon via their Amazon Prime relationship, or those who have an Amazon gift card to spend. Other customers take the bait and switch to another title recommended by Amazon when they are on a Hachette author's pages. The "currently unavailable" strategy is also used by Amazon in dealing with independent, single-book-inventory booksellers (who know they have delivered inventory to Amazon's warehouses). Even if the titles are somewhere in Amazon's inventory, Amazon can put these low volume items on the back burner without tarnishing their reputation for delivery within two days...if they say the title is "currently unavailable." The roots of this dispute go back to before the 2012 Justice Department anti-trust lawsuit against book publishers. Five publishers were found to have conspired to raise e-book prices. They'd banded together to try to maintain their profits in the face of the Amazon undercutting of prices. [See: " Can eBooks get past the price-fixing scandal? "] The settlement included a two-year period where Amazon was allowed to discount e-book prices. That agreement has expired, and now Hachette is stepping up and bargaining on principle. Pietsch insists that books are a special kind of product and cannot be treated like some of the other mass-produced items sold by Amazon. A major Hachette author, James Patterson, supports Pietsch and has said, " Amazon also, as you know, wants to control bookselling, book buying, and even book publishing, and that is a national tragedy. ” Other booksellers may want Hachette to win, but like scared schoolchildren in the face of a bully, they are standing quietly on the sidelines, fearful of the retaliation that has already been directed at Hachette. Meanwhile, some customers are upset by Amazon's policies. " If Amazon thinks I don't care about its silence, it's wrong. I take it personally that the company doesn't think it owes me even a half-baked explanation for why I can't buy some books from it, " complained Jack Shafer, writing for Reuters .In addition, some legal observers think that Amazon is risking government anti-trust action. Who will "win" in the long run? Source: " Hachette Chief Leads Book Publishers in Amazon Fight " by Jonathan Mahler, the New York Times, June 1, 2014. " Amazon Absorbing Price Fight Punches ," by David Carr, the New York Times, June 1, 2014. F ollow up: Read the articles and previous post linked above. In hindsight, do you think that the anti-trust suit brought against the publishers in 2012 may have had the unintended consequence of creating a better environment for an Amazon monopoly? Give your reasons. What do some established authors think are the risks of this stand-off? How might this affect sales? What are the marketing and potential sales issues for Amazon, and for the publishing industry as a whole?
  • Apple bites Beats: will it get its groove back?

    Image above of The Beats by Dr Dre headphones cradling the Apple logo , signifying the new merger Jimmy Iovine has agreed to sell Beats Electronics to Apple Inc . for $3 billion. Beats Electronics, the maker of Beats by Dr. Dre premium headphones, currently has a contract with Hewlett Packard to integrate Beats hardware with their machines. (The HP contract will not be renewed when it runs out in 2015.) Apple seems to be buying a company that brings to the table some attitudes and features that Apple lacks. "Human curation" (rather than algorithms) drive the music selection of Beats' streaming music services. The Beats headphones couldn't be more unlike the Apple ear buds--they deliver sound quality far superior to what the tiny ear buds even attempt to offer. But Jimmy Iovine does share the key quality of showmanship coupled with "reality distortion" that Steve Jobs used to create a memorable business story. One claim that Jimmy Iovine makes about Beats is that it it built its $500 million business over three years while spending "zero dollars" on marketing--just by using their ability to "harness the media." They can talk all they want. It will still be a treat to see what products evolve from this partnership. Source: " A New Irreverent Spirit at Apple " by Vindu Goel, the New York Times BITS, May 29, 2014. F ollow up: Have you listened to music using Beats Electronics headphones? What are the pros and cons, compared to Apple ear buds? Compare and contrast this new acquisition by Apple with Beats Electronics' partnership with Hewlett Packard.
  • Brainstorm: harnessing the amazing and wonderful adolescent brain

    [View:http://community.cengage.com/GECResource/themes/gew/ utility/ :550:0] Full length video via YouTube If you are between the ages of 12 and 24--this book can empower you and help you become more effective in your business life and in your personal life. If you are an educator or a manager, it can provide guidelines about motivating students or employees. If you a public policy wonk, it can provide you with the template for an incubator that could solve the world's problems. But if you are an entrepreneur looking to make a fast buck, there is no magic bullet here. A classic way to make money is to create a problem or a need and sell a product or a service that will fix that problem or assuage that need. Demonizing "the teenage brain" and naming diseases and syndromes to identify as a "problem" what may in fact be a natural evolutionary necessity creates business opportunities. Therapists, counselors, pharmaceutical companies, testing laboratories and departments in institutions of higher learning can all profit. If the characteristics of the adolescent brain are hard-wired as part of human growth--making this a problem to be solved is, from a marketing perspective, a huge and unending potential source of revenue. The author of this book takes a different perspective. He argues that the human brain is infinitely "programmable," and that each individual is the best programmer for their own brain. He also argues that the years between 12 and 24 are like a Silicon Valley incubator (or "start-up accelerator") . Any effort during this time period can bring greater life-time rewards. And some of the most effective tools are totally free. The investment requires a small amount of time daily, and the willingness to be in charge of one's own personal brain development. Source: " Brainstorm " by Dan Siegel, M.D., published by Tarcher, 2014. F ollow up: Are the approaches suggested by Dr. Siegel low-risk or high-risk investments? If you were managing a department with individuals in their first jobs out of college, how could you apply some of these principles in a practical way?
  • "Chef": social media meets career path crossroads

    [View:http://community.cengage.com/GECResource/themes/gew/utility / :550:0] trailer of the movie "CHEF" from YouTube By most accounts, "Chef" is not a profound film, but it is an engaging story that coincidentally highlights several aspects relevant to business and career realities. Here are some of the highlights (spoiler alert): a chef is at odds with his boss: the boss wants a conservative menu; the chef wants to be creative the boss gives the chef an ultimatum a food critic uses Twitter to soundly criticize the chef the chef learns about Twitter from his son, but responds to a tweet in what he thinks is a personal environment, but what is in fact, the Twitter universe emotional outburst gets viral attention, leading to the end of the chef's employment career path crossroads: chef starts a food truck the best-of-all-possible outcomes evolves For business students, this stream of events produces some obvious questions: Can being fired be the best of all possible events? Is Twitter a profound and effective marketing medium for a restaurant? What are the regulatory requirements for setting up a food truck in various states or other jurisdictions? Is being an entrepreneur the answer to every worker's dreams of real fulfillment and financial success? Can financial backing realistically materialize in the way it does in this movie? However these questions are answered, "Chef" remains an engaging and inspirational advocate for the entrepreneurial spirit. Sources: "‘ Chef’ movie review: Jon Favreau makes a satisfying return to his indie roots , " by Michael O'Sullivan, Washington Post , May 15, 2014. F ollow up: What would you do if you were in a job where you felt your best qualities were not appreciated by your boss? What are the pros and cons of taking action--either for the character in the movie, or as you would imagine in your own situation? Are you a Twitter user? Have you ever been a part of a communication situation that has spiraled out of control? What examples from fairly current events can you cite where Twitter users did not understand the way that Twitter works...with unfortunate and unforeseen consequences?
  • Dealflicks: selling seats nobody wants is a valuable business

    image from wefunder.com Dealflicks is like Priceline: it tries to match moviegoers with seats that are not otherwise going to be used --and offers big discounts. According to Sean Wycliffe, CEO of Dealflicks, the statistics show that 88% of movie theater seats go empty. This is a marketing niche that was crying to be filled! Entrepreneur Kevin Hong teamed up with Wycliff and website whiz Zachary Cancio to start the business with venture capital funding. Wong and his sales teams have traveled the U.S. in their minivan trying to woo theaters across America into signing up with their service. image from article linked below Dealflicks is very flexible--letting the theaters set prices and determine which shows get discounted. Moviegoers access the deals via phone apps or the Dealflicks website. Dealflicks makes its money by taking 10% to 20% of the ticket price. Last year, sales were $245,000...but they are projected to be more than $2 million this year. Source: " Dealflicks aims to put movie fans in cheaper seats, " by Richard Verrier, the Los Angeles Times , May 6, 2014. F ollow up: According to the article, when do discounted tickets really work for the theater owners? What are the downsides? Who funded Dealflicks? What was their motivation? Why does Wong make sales calls by minivan rather than by phone?
  • Millennials trash privacy rights...and so do those controlling "big data"

    from blog.insideview.com " Your personal information is yours ." According to the LA Times, "A new report, written by a group led by White House counselor John Podesta , says that big data — the various entities that benefit from knowing all there is to know about you — is growing out of control." What does this mean? It means that sensors are everywhere: in our homes on city streets on wearable devices embedded in credit cards on our computers on our phones in our doctors' offices with our insurance companies at our places of business Business and government agencies are not going to be restrained from using this data if only "voluntary codes of conduct" are in place. Regulations and audited compliance will be the only things that protect us. "Consumer data" is personal data. NSA monitoring and widespread (but withheld) knowledge of the Heartbleed Virus means that businesses are not acknowledging personal rights. The business perspective might be: WE NEED this data to efficiently MARKET to our target demographics. But if Verizon is selling to third parties information about websites you are visiting and purchases you are making online, shouldn't you have a say? Or at least get a financial piece of the action? "We are concerned," says Jeff Chester, executive director of the Center for Digital Democracy, "that the principle is collect first and worry about privacy and consumer protection later." Maybe we should take the lead from Europe, where they set the line of scrimmage with this principle: "all people have a right to privacy." In U.S. law that right is only implied. Moreover, the EU has taken the following step: "In response to the NSA spying revelations, the European Parliament passed even stricter privacy rules in March. They still have to be approved by the European Union's 28 member countries, but represent the region's commitment to individual rights. The new rules wouldn't just give people more control over who can obtain their personal info but also grant a right to have online data erased — a so-called right to be forgotten." Wouldn't that be a right we could appreciate. Source: " Ownership of personal data still appears up for grabs , " by David Lazarus, the Los Angeles Times , May 6, 2014. F ollow up: Do you read the privacy disclosures before you agree to them? Why or why not? Reminder: have you changed your passwords in response to the Heartbleed virus? Remember: the passwords you have "out there" may be a ticking time-bomb. Would you value the European protections with respect to privacy? Would you like to be able to have your online data erased? Why do businesses support the loss of personal privacy? What are the pros and cons of this from a business perspective?
  • #backlash: a lession in social media for the NYPD

    J images from article linked below The New York Police Department had a Good Idea: set up a Twitter site, #myNYPD , so that people could tweet their smiling selfies with heroic police officers, and other happy pictures. Things did not go well. Instead of happy photos good for public relations, they got photos of NYPD officers abusing citizens in various ways. Oops. Marketing experts don't seem to be surprised by the nasty tweets. McDonald' s had run into the same problem. Said Ann Handley, co-author of Content Rules , " You can't get people to talk about how great you are on Twitter . ” Source: " The NYPD learns about #backlash " by Dan Bobkoff, Marketplace American Public Media , April 23, 2014. F ollow up: What is the "law of unintended consequences"? How might the NYPD avoided this social media debacle? Are such problems part of what is to be expected in the fast-moving social media-sphere?
  • One really good bank for small businesses; Where is YOUR money?

    image from www.cleveland.com What makes a bank a "good bank" from the standpoint of supporting business growth and providing excellent service to customers? According to Steve Steinour, chairman and CEO of Huntington Bank: " Small businesses are the foundation of our Main Street economies throughout the United States. These businesses generate two-thirds of all of new jobs and help keep our neighborhoods healthy. Huntington is committed to supporting small-business growth as a key way to strengthen our communities as they continue through the economic recovery." Huntington Bank--a regional bank in Ohio--is the 33rd largest bank in the U.S. and has branches in Ohio, Michigan, Pennsylvania, Indiana, West Virginia and Kentucky. Nevertheless, Huntington Bank will probably be the number one small-business lender in the United States this year. For the first six months of federal fiscal year 2014 (which ends June 30, 2014), Huntington has the largest number of SBA loans. The classic business model for a traditional bank (as opposed to an investment bank) is to take depositors money, on which one interest rate is paid, and loan it out to regional businesses at a higher rate, thereby generating a profit. Investing in local businesses is the way to build strong business communities. On a side note, first quarter profits were down for Huntington, so a buy-back of shares is planned to help investor returns. First-quarter profits were $149 million, a declined of $4 million from a year ago. Per share, profits were unchanged at 17 cents. Sources: " Huntington Bank on track to become nation's largest small-business lender, but profits dip in first quarter, " by Teresa Dixon Murray, the Plain Dealer , April 16, 2014. F ollow up: What does "pent up demand" mean? Give another arena where this phenomenon has been observed. Where is YOUR money? In a mega-bank like Bank of American or Wells Fargo? Or in a bank with high numbers of small business loans? Watch the film " It's a Wonderful Life. " How does the Savings and Loan depicted in that film exhibit the characteristics of a bank that is important to small businesses? How does buying back shares help the returns for the bank's investors (as opposed to the banks depositors or creditors)?
  • "bots" pretending to be humans is a new form of ID theft

    image from pandodaily Bots pretending to be human is a new form of ID theft...but instead of targeting you and me and our credit cards online...the arena is "digital ad theft." Internet researchers believe that at least a third (and in some arenas up to 60%) of all internet traffic is not human. It is trained computers working those mouse buttons. Computers are clicking on the Eye Creams and Diet Miracles and other products appearing in ads online. So, if an advertiser thinks they are getting 500,000 hits on their ad that appears in the Facebook margin...they are not getting their money's worth if the ad "viewer" is a robot trained to click ads.The computers don't represent potential sales. Of course, software has been developed to detect non-human mouse movements or click timing. But then more sophisticated robot ad clickers are developed. It escalates. One company specializing in spotting digital ad theft is White Ops . Tamar Hassan, Chief Tech officer of White Ops, says that digital ad fraud can be more lucrative because there is a cost to obtaining the credit card number and the high risk of being prosecuted for fraud, because there are real human beings who are harmed. These risks are less with digital ad fraud, so ad fraud presents a "business opportunity" for the criminally minded. Sources: " Digital advertisers losing the 'bot arms race' ," by David Weinberg, Marketplace American Public Media , April 14, 2014. F ollow up: What are the marketing issues for the "big box" company mentioned in the article? How does the digital ad criminal make money?
  • Lobbying community leaders to work against their communities

    Wouldn't millions of Americans be happy to have the choice to use pre-filled-in tax returns? Even according to the IRS, tax filing is expensive: Why would religious leaders, small town politicians, and a state NAACP official write letters to newspaper editors and op-ed pieces that spoke against such an option. The arguments they used was that the option would hurt low-income people and create a conflict of interest for the IRS, who could misuse their power against vulnerable taxpayers. As it turns out, the indignant individuals arguing against the implementation of the super-simplified tax system had been lobbied by individuals like Emily Pflaster, who works for Intuit's public relations firm, JCI Worldwide . Intuit makes the tax preparation software called Turbo Tax . Intuit's public relations reps did not point out some of these particulars, which were articulated by ProPublica : return-free filing would allow million of taxpayers to do their returns in minutes returns could be filed for free the IRS would use information that is already submitted by banks and employers...and taxpayers could review the items and make adjustments this program has been endorsed by former President Reagan and President Obama Also, according to ProPublica's research, Intuit spent over $2.6 million last year on lobbying. Sources: " TurboTax Maker Linked to 'Grassroots' Campaign Against Free, Simple Tax Filing ," Liz Day, ProPublica via Mother Jones , April 14, 2014. F ollow up: Describe the difference between "Grassroots" campaigns and "Grasstops" campaigns Would you take advantage of a pre-filled-in tax return option? Why or why not? Who are the ideal candidates for this option?
  • Peeps all year: too much of a "good" thing?

    photo of the formerly seasonal Marshmallow Peeps; image from the radio article linked below Just Born , the maker of the polarizing marshmallow snack called "Peeps," recently announced that Peeps will be available all year round beginning May 1, 2014. Of course (Peeps fans already know this), the Peeps season--springtime: for the festive and secular side of Easter--has already begun. A company spokesperson said, " We're making every day into a holiday. " I think I'm more aligned with the comment made by Marketplace host Kai Ryssdal: " It is this week's sign that the apocalypse is upon us ." I'm wondering if the marketing people have really thought this through--will Peeps lose its market niche as a seasonal treat if it is always in the candy or treat aisle? Or, like Oreos , are Peeps so beloved by their fan base that sales will increase? Sources: " Peeps year-round: Harbinger of apocalypse ," by Kai Ryssdal, Marketplace.com , April 9, 2014. F ollow up: What are the risks of the decision to produce Peeps year-round, from a marketing and sales point of view? What are the possible rewards? Very few folks are neutral when it comes to Peeps. Where do you stand?
  • Oculus: what I don't understand might make a fortune for others

    This image of "The Rift" by Oculus was taken by Christina Ascani for Mashable (linked below) When I read the news that Facebook had purchased Oculus VR , a "virtual reality" start-up, my first thought was, "Huh? What does this have to do with Facebook?" The Oculus "Rift" device lets a user experience a video game as though they were inside it. Moving your head can result in dodging a virtual bullet, and turning your head gives a different view of your video game environment, as though you were really inside that environment. This device is still what I like to refer to as " vaporware "--it doesn't exist yet. Oculus developers were trying to raise enough money through Kickstarter to continue development (they'd already raised $2.4 million). Then Facebook came along...and for $2 billion bought the whole operation. While this solved the Oculus developer's cash problem, it didn't make some of the Kickstarter supporters very happy. David Prosser writes about those concerns in an online Forbes article . [View:http://community.cengage.com/GECResource/themes/gew/utility/ :550:0] from vimeo Still--what is in this for Facebook? Do they just want a piece of the video game action? Or do they foresee the Rift device as a way that Facebook friends can also interact? We'll see... Source: " What is Oculus Rift--And Why You Should Care ," by Samantha Murphy Reilly, Mashable online , March 26, 2014. Follow up: What is "virtual reality" and what makes it different from other media experiences? How do the potential users of Rift use Facebook now? Who might eventually be the users? What potential might this product have as an educational tool? Read the Forbes article written by David Prosser. What might be the issues for the original Kickstarter supporters, and what bigger concerns might that mean for Kickstarter?
  • Social media manipulates General Motors' reputation

    [View:http://community.cengage.com/GECResource/themes/gew/ utility/ :550:0] Mary Barra, CEO of General Motors talking to her employees about the vehicle recall in a recent video If video does not appear above, see link to video here . "Damage control" looks different in the modern age of social networking. General Motors' recent problems with the ignition switches of several of its vehicles has created a public relations problem. GM's response has utilized social media on at least three fronts. First, a video--supposedly a speech to GM employees--is available in the public domain. Second--the Facebook page of GM is responding to customer issues--maybe not always successfully: image from www.nytimes.com Third, GM is at least listening in to Twitter complaints...and responding. One Alaskan mother, Lauren Munhoven, tweeted a complaint. GM listened and helped her with her Saturn Ion by paying the ferry cost to get her car fixed, and getting her a rental car. Munhoven posted her thanks on Twitter. GM is also using old school methods of snail-mail notices of recalls, and call centers to help with customer problems. I found it quite compelling that part of the message was that the cars were safe to drive IF there were no other items attached to the keys--like no key ring. These apparently could be bumped or could weight the ignition switch in a way that the problems ensued. The mixed message--that there is an ignition problem but that the customer might be partly to blame because they use a key ring--might not be the best message to be putting out to the public. In this modern age of social media, customers who are outraged can "flame" GM's service--that is, negatively report their experience to as many others as might be tantalized by the customer message. It remains to be seen how this plays out in GM sales. By the way, there is another Facebook page called GM Recall Survivors . From what I've read on it, it seems more to be about those who have not survived. Source: " G.M. Uses Social Media to Manage Customers and Its Reputation ," by Vindu Goel, New York Times , March 23, 2013. Follow up: What effect would a text message from GM Customer Care have on your confidence level if you were a Cobalt owner? Evaluate Mary Barra's video as a communication vehicle to GM employees, and as as public relations piece "spinning" the defective part debacle.
  • The "Income Upshot" tool--what does it say about Homer Simpson and one of the Two Broke Girls?

    the income upshot tool link This article specifically addresses two fictional incomes--that of Homer Simpson and that of one of the "two broke girls" living in Brooklyn. It is fascinating to adopt several different personas to see what "big data" might say about some basic demographic data. I input my personal data and found myself to be riding with the majority on all parameters that were reported. Am I deceiving myself to think that I would NOT have been with the majority on other parameters? Source: " Income Upshot: Homer Simpson Edition ," by Jolie Myers, Marketplace-- American Public Media , September 12, 2013. Follow up: Did you use the link to fill in your income? Is the assessment of this tool relevant to your personal situation? What do you think this link is trying to sell or monetize? What information can "big data" analyzers provide? What are the most relevant parameters, in your opinion, to marketers of various products? What other parameters might be important to marketers? Do you think the selected parameters were relevant and appropriate?
  • The Samsung Selfie

    [View:http://community.cengage.com/GECResource/themes/gew /utility/ :550:0] video of original selfie from YouTube One of Oscar host Ellen DeGeneres' trademarks is her ability to make everything look casual, impromptu, and unplanned--as though the next event was just an outgrowth of her natural curiosity. But it seems as though the "impromptu" selfie that was taken at the March 2nd Academy Awards was planned...and the smartphone that Ellen handed to Bradley Cooper (which he used to take the photo) was no accident. According to the Wall Street Journal , and as reported in US Weekly , "As part of its sponsorship and ad pact for the Oscars with ABC, the TV network airing the show, Samsung and its media buying firm Starcom MediaVest negotiated to have its Galaxy smartphone integrated into the show." Samsung also arranged for a group of young film makers who were touring Disney as part of the Oscar broadcast to have Samsung phones. In addition, Samsung trained Ellen in how to use the phone prior to the broadcast. Samsung had placed at least $18 million of ads in this year's telecast. image from phandroid.com Sources: " Ellen DeGeneres' Oscar Selfie Part of Samsung Phone Product Placement: Report ," by Rachel Mcrady, US Magazine Weekly , March 7, 2014. Follow us: @usweekly on Twitter | usweekly on Facebook " Behind the Pre-planned Oscar Selfie: Samsung's Ad Strategy; Marketer Spent Nearly $20 Million on Ad Time and Got Product Placement of Galaxy Phone ," by Samantha Vranica, Wall Street Journal , March 3, 2014. Follow up: Did you watch the Oscar broadcast? Were you aware of the Samsung Galaxy Note during the broadcast? What effect has the subsequent social media reaction and press had on your awareness of this product?
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