• Behaviors that hamper mental strength


     image from mentalitywod.com

    Mental strength is a behavioral quality that is useful in addressing business challenges of all kinds. Luckily, it is an attribute that can be developed. There are two sides to becoming more mentally strong--practicing "good" behaviors (gratitude, self-acceptance), and avoiding behaviors that sap mental strength.

    The article linked below focuses on behaviors to avoid:

    • Feeling sorry for yourself
    • Giving away your power (e.g. letting others "cause" your bad mood)
    • Being afraid of change
    • Focusing on that which is out of your control
    • Trying to please everyone
    • Fearing to take calculated risks
    • Dwelling on the past
    • Making the same mistakes again and again (expecting things to turn out differently)
    • Resenting the success of others (or gloating when others fail)
    • Giving up after a setback
    • Being afraid to be alone
    • Feeling like the world "owes" you something (entitlement)
    • Expecting immediate results (Success is a marathon, not a sprint.)

    Source: "13 Things You'll Almost Never See a Mentally Strong Person Do," by Amy Morin, TheMuse.com, in partnership with Inc. magazine, 2017. 

    Follow up

    • Which of the behaviors listed in this article do you avoid? Which behaviors are weaknesses that you experience in yourself?
    • Give one concrete example of an occasion in which one of these behaviors caused you trouble. What would you do differently?
    • In which area do you want to make improvement? How will you go about it?
  • Roads built from plastic waste by British start-up


    image from the Daily Mail

    Asphalt in roads is made of oil...a diminishing natural resource. But a waste product that is growing in volume is plastic--clogging landfills and oceans...and taking its time to decompose. A start-up company in Britain, MacRebur Limited, has made inroads in solving both of these problems by recycling plastic to build roads. This works because plastic is a petroleum product as well.  

    Pellets made from household and commercial plastic waste are used as substitutes for materials in asphalt. The result is a road that is cheaper, stronger and more sustainable.

    I wonder what the roadblocks are to the widespread use of this technology?

    Sources:

    Follow up

    • Could this work in the U.S.?  Why or why not? Is it a viable start-up business? What other products can be made of recycled plastics? Would you invest in a company like this?
    • Watch the linked video. What is bitumen? How are plastics incorporated into road materials? How big are the recycled pellets? Describe the process of building roads with recycled plastic.
    • What question is asked at the end of the video? How would you answer it?

    .

  • Jimmy Choo is for sale


     Jimmy Choo shoe craftsmanship via YouTube

    Jimmy Choo shoes are the favorites of many celebrities, as they make a well-designed, well-constructed, top-of-the-line and glamorous high-heeled shoe. The company was started in London by Malaysian Jimmy Choo and former journalist Tamara Melon, but ownership is has not been in the hands of Mr. Choo since 2001. The majority stockholder of Jimmy Choo (now publicly traded on the London Stock Exchange) is JAB Luxury GmbH, a German company. Share price jumped 10.68% on the news that the Jimmy Choo's board is seeking a possible buyer. 

    Will Louboutin or another high-end brand be interested in a merger or a buyout? Some analysts speculate that Asian and Russian buyers will be interested. 

    Source: "Jimmy Choo seeks well-heeled buyer," by Dan Macadam, BBC News, April 24, 2017. 

    Follow up:

    • The article states that this recent move is intended to maximize value to the Jimmy Choo shareholder. What does this mean, and how will that be accomplished? Why would JAB Luxury GmbH think that divesting itself from this investment would be wise?
    • What shoe companies compete with Jimmy Choo? Where are those companies based, and by whom are they owned? Are any of those companies considered possible buyers?

    .

  • Flying car prototype announced by start-up company

    video from YouTube

    Finally--the flying cars that were promised by the Jetsons and Bladerunner are in development. Larry Page (a Google founder) has funded a start-up, Kitty Hawk, that has announced progress on this staple of future fantasies. Its demo video shows it flying about 15 feet above the surface for about five minutes. 

    Believe it or not, Larry Page says they plan to sell the car by the end of the year. The company has a marketing plan that will first appeal to "hobbyists", but it is likely that their business plan intends to expand far beyond that market. 

    Source: "No Longer a Dream: Silicon Valley Takes on the Flying Car," by John Markoff, New York Times, April 24, 2017.

    Follow up:

    • What are some analysts saying about this being a flying "car"? Discuss the marketing and branding reasons for presenting it as such. 
    • Is this a good time to launch this project, given the current environment regarding government regulation? Support your position with current sources. 
    • What companies will most likely compete with Kitty Hawk regarding this product line? What products are already in the development stage? 

    .

  • IRS is hiring private collection agencies to prey on delinquent taxpayers


    From the W. Cotton Mather, CPA website

    A few months ago, Congress authorized the IRS to use private collection agencies to collect overdue taxes. The plan is to turn over 1,000 accounts a month to businesses who will pocket 25% of the amounts that they collect. This has been tried before--and the government has lost money. But privatization of other services--author Adam Chodorow cites garbage collection--has been successful at the local level, so (like many individuals) the government is going to try the private tax collection option AGAIN in the hopes that it will turn out differently than it did before. 

    Chodorow, a lawyer, makes the argument that tax collection is a more central function of government than garbage collection. Collecting taxes is a fundamental way that government and individuals directly interact. The concept of taxation and representation is key. With private, profit-centered collection agencies, there exists the possibility of fraud, as well as privacy issues. 

    Also, a key tactic of collection agencies is persistent phone calls. In the current environment, this is particularly problematic. As Chodorow describes a prevalent scam:

    "Currently, private parties pretending to be the IRS harass innocent taxpayers and pressure them into paying debts they don't actually owe. The IRS never calls taxpayers, but most people don’t know this. With this new program, fraudsters won’t have to pretend to be the IRS—they can credibly claim to be private firms—and phone calls taxpayers receive might actually be legitimate. How are taxpayers supposed to distinguish between real and bogus calls from purported debt collectors?"

    Another solution to the tax collection problem may be to fund and staff the IRS so that previous levels of audits can be conducted, and that collectors who are tasked with collections have been trained to follow laws and regulations. Even Steven Mnuchin wants a stronger IRS. Maybe this is because every dollar spent on enforcement brings in ten dollars of revenue---a 1,000% return-on-investment.

    Source: "The IRS Is Using Private Debt Collectors Again...and it may not end well," by Adam Chodorow, Slate Magazine, April 14, 2017.

    Follow up:

    • What do you think of privatizing debt collection? What regulations should be in place if tax debt is privatized? How should debt collection be prioritized and what methods should be allowed?
    • How should corporate or business tax collections be handled by private collection agencies? Should there be different rules than those for individuals?

    .

  • Writers Guild holding a strike-authorization vote


    i
    mage from the last Writers Guild strike, in 2007. Monica Almeida NYT

    There are some arenas where unions still wield power--and the film and television business is one of them. There are guilds and contracts for directors, writers, editors, actors, production workers, post-production workers and more. The 12,000-member Writers Guild of America has been negotiating a new contract for the last several months, but both sides have suspended negotiations this week. This has led to a strike vote which began Wednesday, April 16th and will continue through April 24. Talks are scheduled to resume on April 25th, and a vote to strike may give the union's side some clout. The contract expires at the end of the month. 

    Issues include salary as well as health benefits and the adequate funding of pensions.

    If there is a strike, the likely consequences could include:

    • Late night talk shows, which rely on writers to come up with topical monologue material and sketch ideas, would show only re-runs. 
    • Scripted series for the fall season would probably be delayed.
    • Daily weekday soap operas would cease production.
    • More viewers might switch to Netflix and other streaming services.

    Reality-TV writers are paid under a different contract, so summer-replacement reality shows would not be affected.

    Sources:

    Follow up

    • What are the plusses and minuses of being a union member, especially in an industry where people work project-to-project? Consider the experience of union members during the 2007100-day strike (or 1988 155-day strike) when you are listing the minuses. 
    • What other stakeholders were affected by the previous Writers Guild strikes? How much can a long strike cost the Los Angeles economy?
    • What other professions and jobs still have strong unions in the United States? Why did unions evolve? How do corporate profits and executive salaries relate to union existence and contract negotiations?

    .

  • Taking charge of your corporate career


     Michael Jordan--an example of good career management

    Mike Guggemos, CIO of Insight Enterprises, writing for Fortune Magazine, has three career tips for those that want to be pro-active about their career progress. He describes them in this way:

    "Despite being simple, these are generation-agnostic, can be tested by any person at any point in their career, and, for the most part, are universally applicable across companies and industries."

    The visibility-enhancing tips are:

    • Take control of your own advancement: network, and seek out higher-ups in areas that interest you.
    • Learn the art of strategic exposure: volunteer, speak up in meetings, give presentations.
    • Make sure you show up: Don't take advantage of every opportunity to telecommute--make sure that you are making personal contact on at least a weekly basis. 

    Guggemos also offers a few behaviors to avoid:

    "Don’t take too much of people’s time, don’t over-communicate—less is more when you are striking up that initial conversation—and do your homework so that you have the right information to be brief, but effective."

    Source: "Stop Relying on Your Company for Career Development," by Mike Guggemos, Fortune Magazine, March 12, 2017.

    Follow up:

    • List specific ways that you are already following this advice. For example, when was the last time you introduced yourself to someone who might be important to your career? Identify pathways for training in areas in which you might benefit from additional skills.
    • Watch the Michael Jordan video. Summarize the significant strategies he used to obtain business success.

    .

  • Credit cards are changing to meet needs of millennials

    image from a credit card review by The Points Guy

    American Express credit cards have long been positioned as the high-end credit card. Its various metal colors have conveyed different levels of prestige. The attached perks have come with annual fees--fees that bank cards such as Visa and MasterCard rarely charge. 

    There is a new card vying for this niche in the credit card market. The Chase Sapphire Reserve card has been in high demand by millennials, due to its many features...and in spite of its $450 annual fee. Because some of the benefits come up front, it will be interesting to see if millennials stay with the credit card. They may opt for a different card as newer deals catch their interest. Paying off the balance in full each month (which many millennials are doing) maintains this flexibility.

    As a side note, an interesting structural difference between the classic American Express (Amex) card and the Chase Sapphire Reserve card is the relationship between the credit card company and the retailer. "Bank" credit cards are processed by retailers as cash or checks, and are recorded as "Cash." They are deposited with the day's receipts--but a fee is deducted off the top that goes directly to the credit card company.  Bank cards have a separate revenue stream generated by the interest they charge customers on card balances that are carried month-to-month. The bank card company records this an "Account Receivable" from the customer that made the purchase.

    American Express credit card transactions, however, are accounted for by the retailer as an "Account Receivable"--they don't get their money right away. Amex cardholders, for high-end cards, are required to pay off their balances in full each month to maintain their standing (though interest is charged on unpaid balances). When Amex gets around to paying the retailer for the purchase, Amex deducts a fee for its service from the amount that the customer was charged.

    Source: "Millennials Teach Credit Card Companies a New Lesson," [podcast], by Dan Gorenstein, Marketplace: American Public Media, April 19, 2017.

    Follow up:

    • The issue of "loyalty" is mentioned in the podcast. Research and discuss the value that millennials tend to place on loyalty, vis a vis other generational groups. To get started, here are two views:  LOYAL    NOT LOYAL.   Expand your search before you answer, and consider other arenas where loyalty may be a factor. 
    • What are the perks of a Chase Sapphire Reserve card?  Would your existing spending habits justify the $450 annual fee, or would you have to change what you spent money on to make it worth while?

    .

  • Bill Gates wants to tax "income earned" by robots


      Bill Gates via YouTube

    When a robot replaces a human who used to be paid for doing the same job, the "winners" include: 

    • the trained engineers who have designed the robots, and who maintain and improve them over time;
    • the corporation, which saves money (see below);
    • the stockholders of the corporation, which benefit from the increased profits. 

    The corporations save money in several ways:

    • Once the fixed costs of the robot development and installation are paid, the operating costs of maintenance and repair are controllable and stable.
    • Robots do not negotiate contracts for benefits like health care, life insurance, pension benefits, and vacation time. 
    • Morale is not (currently) a problem with robots. Productivity does not sag after a long weekend. Robots don't call in sick.
    • Preventative care is controlled by the corporation, and can prevent more costly problems. 
    • Robots are not paid a salary. 
    • Corporations do not have to pay social security tax, unemployment taxes, medicare taxes, or any other taxes related to robots. 

    There are, of course, "losers" when robots replace humans in jobs:

    • The workers themselves lose salaries that they used to support themselves and their families, as well as the sense of purpose that a job provides.
    • Social service systems are overburdened when an increasing percentage of individuals in a community need food, shelter and other help.
    • The revenue stream to both the federal and state governments decreases, because the employees are no longer paying the income taxes that were being deducted from their paychecks. 
    • Other taxpayers have to pick up the slack in terms of maintaining government revenue, so tax percentages may rise for others who are still employed. 

    Bill Gates has proposed that some of the problems of the "losers" in this shift toward automation could be mitigated by taxing the robots as though they were making the $50,000 (or whatever) the workers they displaced were making. The tax would be paid by corporations, but the corporations and their stockholders would still come out ahead. This tax would provide funds for general government spending as well as Social Security and Medicare. He also thinks that programs could be put in place to help workers as well. The author of the article linked below disagrees. 

    By the way, I used to do a job that robots have been doing for a while now.  I worked for a year in the body shop of the Dodge Main auto plant in Hamtramck, Michigan.  I spot-welded the roofs onto Plymouth Volare and Dodge Aspen station wagons (driver side). I used a huge welding machine to put 67 welds to hold the roof onto the metal framing the windows and doors. About 100 people worked in my area

    This is a photo of how the job in a similar plant is done now:


     image from the International Federation of Robotics

    Source: "What's wrong with Bill Gates' robot tax, " by Noah Smith, Bloomberg News, February 28, 2017.

    Follow up

    • Do you think that workers displaced by robots should be compensated for their lost income? Explain your position, and how you think the system should work. 
    • Who is Bill Gates? What does he spend his time on these days? Does he have the perspective, wisdom and authority to weigh in on this problem? Do you agree with him? 

    .

  • Exporting Irish pubs across the globe


     Image from Murphy's Irish Pub

    Mel McNally is the entrepreneur behind The Irish Pub Company of Dublin, Ireland. Guinness--the world famous Irish brewing company--uses McNally's company as its only pub designer. To ensure that everything is authentic, the pub, as designed, is shipped anywhere in the world...all of the components in a shipping container. There are choices to be made--Victorian or cottage-style, for example. But the branding of "Irish Pub" is important enough to Guinness (and to aficionados of the pub ambience) that the product is true to the marketing niche it serves. 

    McNally and his associates did their research in the form of an architectural pub crawl--measuring spaces and divining the unwritten rules that make an Irish pub an Irish pub. These unspoken rules include:

    • No matter where a customers sits in the bar, they have to be able to see the alcohol--that is, see the center of the bar.
    • "Snugs" have to be available where 1 or 2 people can have some privacy.
    • A long bar is usually separated into spaces with screening dividers, so that people can feel the intimacy of a small group. 
    • Very heavy chairs and tables are a requirement.
    • The Irish environment includes Irish food, Irish music, and employees trained to provide excellent but relaxed service.

    McNally has installed thousands of bars worldwide, including Hong Kong (several), Mauritius, Vancouver, Dubai, Marseilles, Moscow, Berlin, Switzerland, hundreds in the United States, several dozen in airports, and one currently being installed in Kazakhstan.

    Source: "Episode 764: Pub in a Box" [podcast], by Robert Smith and Ailsa Chang, NPR: Planet Money, April 12, 2017. [transcript]

    Follow up:

    • Listen to the podcast. Where did the interview take place, and why? Check out images of the place via online research. What "product features" can you see in the images that are also described in the podcast?
    • What is the "Irish hoarder" as it applies to this concept?  Why are these types of details important in branding? How does storytelling figure into the success of the Irish pub?
    • What companies compete with the Irish Pub Company? What do they do differently?

    .

  • KPMG fires five partners for violation of ethical standards

    In these days when egregious ethical violations by businesses, complicated by cover-ups, often make headlines--here is some good news: KPMG (one of the Big Four auditing firms), has taken immediate action to fire five partners and one other individual due to ethical violations. One of the partners, Scott Marcello, was the head of audit operations in the United States. KPMG had hired an individual away from the PCAOB, which is responsible for oversight of accounting firms. This individual informed KPMG partners of regulatory oversight operations that had been in the planning stages at the PCAOB. 

    The termination of the auditors was required under KPMG's code of conduct, the AICPA's professional standards, and Federal law (Sarbanes-Oxley). Regulatory oversight is supposed to observe auditing practices on a "random testing" basis--not under conditions in which behaviors had been cleaned up and readied for inspection. A whistleblower brought this issue to the attention of senior partners at KPMG.

    Source: "KPMG Fires Six Over Ethics Breach on Audit Warnings," by Chad Bray, New York Times, April 12, 2017.

    Follow up

    • What two other situations involving professional standards or ethical issues have come up for KPMG within the last year? Describe the situations and the issues for the stakeholders.
    • What is a whistleblower? How are they (supposed to be) protected by Federal laws?

    .

  • Bots: the future of investing


     image by Chelsea Beck for NPR

    "Last week, the biggest investment firm in the world laid off a bunch of its top stock pickers and replaced them with computer programs. This is happening all over Wall Street. Firms are moving away from having humans decide what stocks to buy and sell and towards having humans program computers and then letting the computers decide what to buy and sell." --from the Planet Money podcast linked below.

    Why use "bots" in place of human traders? First of all, they are cheaper. Second, they are faster. Third, their outcomes are better. Analysts know that to stay ahead, the bots only have to be right about 52% of the time. With extremely rapid trading, the money can pile up. Mani Mahjouri of Tradeworx, a bot-building and trading consulting company, says that artificial intelligence can help determine the nuances of announcements as well as the words used, and correlate those with stock performance of individual companies. This allows them to make a better-than-average bet in the market.

    Planet Money got Tradeworx to help them build its own trading bot, which bears the Twitter handle "@BOTUS", a play on the term POTUS (President of the United States). Staffers have invested a total of $1000 of their own money. Will their bot algorithm beat the market? I'll be looking for their follow-up report.

    Source: "Episode #763: BOTUS," by Jacob Goldstein and host Alex Goldmark, NPR:Planet Money, April 7, 2017. [transcript]

    Follow up:

    • According to the podcast, what variables do computers have trouble with. How do the algorithms adjust for those problems? 
    • Summarize the general game plan for the Planet Money investments using @BOTUS. What outside factors could influence their plan in a negative way?
    • Listen to the podcast. Then follow Planet Money's trading bot on Twitter. Who is @BOTUS following, as a major input to their algorithm? How are they doing? Compare their gains and/or losses with the change in the Dow Jones averages over the same time period, moving forward (use percentage change).
  • Unethical behavior begins at the top: United Airlines and Wells Fargo


     from HipHollywood via YouTube

    People working for corporations rarely act publicly in ways that contradict what they perceive is acceptable by the corporation. Attitudes filter down. If profit-driven sales quotas are a priority at the top, the end-justifies-the-means attitude will filter down to low-level sales employees. If there is disrespect for customers' needs, and a policy of outsourcing requests to law enforcement personal who use physical force, employees are not going to stand up for customer rights to prevent injury and embarrassment to customers who have not done anything wrong. 

    Lately Wells Fargo and United Airlines have been in the news for their unethical treatment of customers. At Wells Fargo they were sales people trying to meet quotas for new accounts, under orders from Carrie Tolstedt, head of the retail bank division. Tolstedt reported directly to CEO John Stumpf, who has left his position as CEO as a result of the scandal. Certainly Stumpf was aware that there was employee turnover of 30% to 41% PER MONTH for more than two years in Tolstedt's division. But the division was producing a profit, which, in top management's value system, was the only thing that mattered. 

    At United, a passenger was forcibly removed from his seat to make room for a crew member that needed to get to another destination. United needed to get 4 crew members onto the full flight...but no one was willing to give up their seat for the $800, a hotel for the night, and a substitute flight within 24 hours. Instead of offering a better deal, United chose passengers by lottery and demanded that they leave the plane. When one physician refused to be displaced, he was forcibly removed by airport security (see video). The CEO's response was not sympathetic. 

    Maybe it should not be surprising that a company who has been chasing profit margins for the last few years by making the customer experience less pleasant would also have a policy like this. Less room between rows, narrower seats, more cancelled flights, more charges for services and higher prices have been trending with all airlines, but United has had more problems than most. According to the Department of Transportation Air Travel Consumer report it had the 2nd highest number of consumer complaints among U.S. airlines in January of this year. Fortune magazine rated United as 8th best out of 13 last year. There does not seem to be a corporate culture at United that is customer-centered, as there are limited ways that employees are allowed to respond to customer needs because of written procedures. 

    Source: "At United Airlines and Wells Fargo, toxic corporate culture starts with the CEO," by Michael Hiltzik, Los Angeles Times, April 10, 2017. 

    Follow up:

    • Describe the issues with sexual harassment at Fox that have involved top management and on-air personalities. Explain how those situations are alike and how they are different. 
    • How would you have handled the situation with the crew members needing seats on the flight? (Read the article for some suggestions) If you were CEO Oscar Munoz, would you have responded as he did after-the-fact? Write a different letter as an internal memo, and write a letter as a press release. 
    • If you have flown Southwest or Virgin--as well as United--compare and contrast your customer experience. 

            .

  • Robot-proof jobs


     image from pbs.com

    Is your job robot-proof? More than 800 U.S. job activities were analyzed by The McKinsey Global Institute to determine if the jobs could be automated based on existing technology. Here are a few of their findings:

    Robot-proof jobs               Jobs that robots can do now
    Ambulance driver    Emergency Medical Technician
    Animal trainer Logging equipment operators
    Dancer Motion picture projectionist
    Composers  Plasterers
    Religious workers, clergy      Agricultural product sorters
    Models Ophthalmic lab technicians

    Take the quiz linked in the article below to see if you can predict what jobs may be "susceptible to automation."

    Source: "Robot-Proof Jobs," by David Brancaccio and  Katie Long, Marketplace, American Public Media, April 10, 2017.

    Follow up:

    • Is your current or dream job on the list? How do you imagine the job changing over the course of your working life? Explore futurism. What would you like to know about the future?
    • Take the quiz to see whether your predictions about what jobs will withstand technology may be accurate.
    • Listen to the podcast. What are the factors that affect the future of various jobs?

    .

  • Tax reform to make your life easier


     image from Calbuzz

    Joe Bankman (a Stanford professor) has a tax reform idea that would simplify the process of reporting and paying taxes. The idea is simple, and is modeled after the practices in several European countries and Australia. Since the government already knows about most of a taxpayer's income because of electronic reporting, the government could send the taxpayer a tax form that already contains all of this data as a starting point. Bankman calls it Ready Return

    When Bankman beta-tested Ready Return as a California state tax return option with real taxpayers, he discovered that it had an unheard-of 99% approval rating. One survey participant noted in the comments section:

    "Finally, government's doing something to make my life better for a change."

    As Bankman tried to get Sacramento legislators on board with this idea, he found that Intuit (the company behind Turbo Tax) also began lobbying key Ready Return congressional decision makers. Intuit lobbyists spent about a million dollars, as they felt that Ready Return "minimized taxpayer engagement," which they saw as a negative. Bankman then hired his own lobbyist, which got him access to politicians. A Republican legislator said that he would be in favor of Ready Return, except that Grover Norquist, an avid anti-tax policymaker, opposed it. Norquist felt that such a form would result in individuals paying higher taxes. He wanted tax filing to be difficult, so that people would hate paying taxes. 

    Long story short, Ready Return lost by one vote in the California legislature. But the idea remains alive and has been discussed at the national level. A form of it is still available on the California state government website, and is known as "Cal File". 

    Source: "Episode 760: Tax Hero," with Joe Bankman, Alex Mayyasi and host Stacey Vanek Smith, Marketplace: America Public Media, March 22, 2017 (podcast). [Transcript]

    Follow up:

    • What is the Norquist Tax Pledge? What are the pros and cons of this pledge?
    • Have you done your taxes yet? It is April 7th. Usually your taxes would be due April 15, but in 2017, because the 15th is on a Saturday and Monday the 17th is a holiday in Washington D.C., taxes are due April 18, 2017.  Do your taxes, then answer the following questions. What is your marginal tax rate (the rate at which the highest tier of your income is taxed)? What is your effective tax rate [Your income tax (line 56 of Form 1040) divided by your Adjusted Gross Income (line 37 of Form 1040)]? The marginal tax rate is also know as your "tax bracket", but the effective tax rate is a fairer representation of how much you are taxed. 
    • Given the political realities made apparent in this podcast, do you think that there will ever be tax reform that will simplify taxpaying in a fair way? Is that something that you would be in favor of? How might it come about?

  • What were they thinking? Ads that insult


     controversial Pepsi ad with Kylie Jenner via YouTube

    Advertisers are in the business of understanding their target audience. They are also in the business of communicating a message. Of course, many actions taken by individuals and businesses have unforeseen consequences. Nevertheless, it is paramount to avoid insulting others. There have been several recent examples in which advertisers have egregiously misjudged the effects of their advertisements. 

    Since a video ad is so expensive and undergoes considerable oversight and editing, it is baffling that no one on the team thought (or had the courage) to raise the issues that the general public raised once each of these advertisements were aired:

    • Pepsi ad (above)
    • Nivea (White is Purity)
    • Snickers (making fun of a runner's virility)
    • Dunkin' Donuts (Thailand ad using blackface to introduce a "charcoal" donut)
    • Ford Motor Company (an ad in India featured bound and gagged women in the trunk of a car driven by Italian Prime Minister Silvio Berlusconi)

    The linked article mentions other instances as well.

    Individuals familiar with any creative production process might note that once in production, making big changes might be problematic. Comic/late night host Seth Myers presented a (fake) alternate ending to the Pepsi commercial...with the comment that he didn't think it was much better. Nevertheless, if a similar alternate had been produced by a subordinate who saw the potential problems, it could have been aired in a review meeting. Then, at least, the problems would have been up for discussion.

    Source: "From Pepsi to Nivea: Some of the worst advertising fails," by Leisha Chi, BBC News, April 6, 2017. 

    Follow up:

    • Pick one of the ads in the linked article. If you were in a meeting where one this ad was being reviewed, would you speak up if you identified a potential problem with the ad? If so, what issues would you identify, and how would you suggest that they be resolved? Would your reaction be different or the same if your boss and her boss were also present? Explain your answer and at least two different ways that you could handle the situation...or not.
    • What message do you think that the Pepsi ad was trying to communicate? Why might they have thought that the ad would be successful?
    • Evaluate some of the responses of the advertisers to the negative reactions to their ads.

    .

  • Employee microchipping comes to the workplace


     microchipping process at Epicenter; photo: Paul Mitchell, Wikipedia

    It had to happen sooner or later--the microchipping technology that can help an owner re-connect with their dog is now being used as a convenient way to authenticate employee activities at work. 

    Epicenter, a Swedish networking and office space company, has microchipped 150 employees so far. The chips are designed to authenticate employees' entry into its workspaces, use of copy machines and other electronic devices, and purchase of items in the cafeteria. Other uses are also envisioned, according to Epicenter co-founder Patrick Mesterton.

    I wonder if this technology will have an impact on white collar crime. 

    The following video addresses several uses of this microchip...as well as some issues its use raises: 


    From The Know via YouTube

    Source: "Swedish company implants microchips in employees," by Ed Adamczyk, United Press International, April 4, 2017. 

    Follow up:

    • What does "RFID" stand for? Describe how it looks and how it is used in this context.
    • Make a list of the pros and cons of this technology in the workplace.
    • To what other uses could this technology be put? Discuss the ethical implications, if any.

    .

  • Ronco: A chance to invest in more than just a Pocket Fisherman or a fancy kitchen gadget


      the Rhinestone Stud Setter...as seen on TV; other examples linked

    Ronco is famous for kitchen gadgets...and for its marketing innovation, the infomercial. If you have ever been up late channel-surfing, you have probably seen or heard one of their demonstration ad lines:

    • "The following is a paid program is brought to you by Ronco."
    • "Ronco Rotisseries...the #1 selling rotisserie in the world!"
    • "Not $400, not $375, not $350, not $325, not $300..." 
    • "Call now!"
    • "But wait...There's more!"

    Now there is a new tag line being promoted by Ronco: "Join the Ronco legacy by becoming an investor."

    Raising capital to expand actually does make sense in this industry--there is a direct relationship between the amount of purchased ad time and sales. “'The idea here is volume, that you record the program and then you run it over and over and over again, so long as you get the sales that you have targeted,' said Lars Perner, who teaches marketing at the Marshall School of Business at the University of Southern California." Not only do these ads now run on TV--they also run on the internet. 

    Of course, Ronco is taking a unique approach in selling its stock--appealing directly to the consumer/investor.  They offer rewards at various investment levels--something that isn't usually offered by a brokerage firm handling an IPO. 

    Yes, that's right!...Even YOU can be part of the growing Ronco business! The minimum investment, by the way, is $120...

    Source: "But wait, there's more! Ronco now wants to sell you company shares," by Jed Kim, Marketplace, America Public Media, April 3, 2017. 

    Follow up

    • What is an infomercial? What is the marketing strategy behind infomercial gadget sales?
    • What will Ronco throw in as an add-on at various levels of share purchases? Are these attractive incentives for most investors? Why or why not? How many shares will YOU be buying?

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  • As some shopping malls struggle, others re-brand or invest in improvements

    Online shopping has made "shopping at the mall" less appealing to many consumers. Retail stores and shopping malls are struggling...or failing. One shopping mall that has taken a pro-active approach to this trend is Westfield Santa Anita. It has re-branded its mall to appeal to Asian customers, the primary demographic of its Arcadia, California location. Since 2015, the mall has added 16 stores and restaurants which originated in Asia or specialize in Asian trends. Here are a few examples of the mall's stores that feature Asian goods: 

    • Muji (Japanese design store)
    • Din Tai Fung (Taiwanese soup dumpling chain)
    • Bibigo (Korean food)
    • Daiso Japan (household goods and small items)
    • Dong Po (Chinese food)
    • Hai Di Lao (Asian hot pot restaurant)
    • Jins (Japanese eyewear)

    Other malls have also bucked the trend of less foot traffic and falling sales. These tend to be malls in very affluent areas with high tourist traffic. What sets them apart as well are large investments by the mall operators to keep the stores and properties ultra current and sophisticated. These mall properties include:

    Source: "As other malls die off, this one in Arcadia focuses on Asian shoppers," by Shan Li, Los Angeles Times, April 2, 2017.

    Follow up:

    • Compare and contrast the plusses and minuses of mall shopping versus online shopping. Specifically identify what is unique to each arena. What are your personal shopping habits with respect to malls and online purchases?
    • Read about the 20th-century developments in shopping malls. What legislation and sociological factors encouraged the building and development of large shopping malls? What has changed this business environment?

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