• Yankees Admit "Evil" Intentions

    Back in 2002 when the term "Evil Empire" was first used by Red Sox management to describe the Yankees, the Red Sox hadn't won a world series for almost a century. Thus it was easy to see why many people from Boston saw the Yankees in that light, considering how consistently dominant the team has been over the years. In much the same way that the Oakland Raiders have embraced their unique image, it appears that the Yankees want to protect their brand identity (as an evil empire) as well.

    A panel of trademark judges recently ruled against a private entrepreneur who wanted to trademark the phrase "Baseball's Evil Empire". The panel ruled that the Yankees own that particular piece of intellectual property, and that a non-affiliated individual could not trademark the phrase. The company initially applied for the trademark back in 2008, and the Yankees objected. It is clear that the words "Evil Empire" themselves belong to the Star Wars franchise (now owned by Disney), from whence the term came, but inserting the word "baseball's" in front of "evil empire" makes it clear that the term is associated with the Yankees. Further, the Yankees said that they had embraced the moniker by playing the Star Wars music during their home games.

    This is a pretty cut and dried case, but it still took five years to sort it all out. Intellectual property can be a very important part of a marketer's brand portfolio, and one could hardly blame the Yankees for objecting, or the panel for ruling in their favor. As a result the "entrepreneur" will have to come up with his own idea.

    -DDS

  • Penny's Struggles With Arrogance

    Since when did JC Penney's get so full of itself? Dispensing with discounts, reducing direct marketing efforts, re-merchandising, and re-branding has done nothing to help the venerable retailer in its turnaround efforts. And the guy they brought over from Apple, who planned and implemented these dramatic changes, isn't helping much either.

    Sales continue to plummet, and at this point it's hard to see the company turning itself around. So it's no wonder the 54-year old ex-Apple retail guru behind the new strategy is under fire for failing to do his homework prior to or during the early stages of the re-branding. Early on in the game, numerous executives urged him to conduct market testing in certain geographic areas to assess consumer reactions. He decided instead to go ahead with a complete roll out saying, "A lot of times people don't know what they want until you show it to them." Even if this is true, and I don't think that it is most of the time, why not show it to just some of them rather than risking the whole farm on a gut feeling?

    Despite the fact that Penny's may already have been doomed before he took over, there is a lesson here for marketers. The primary purpose of market research is to reduce risk by getting pertinent information for decision making, and in doing this, top management has thus far failed miserably. Just because something worked at Apple, doesn't mean it will work anywhere else. Apple is a very successful company and a very special kind of brand, but we must be careful not to extrapolate the lessons we learn from this juggernaut to less powerful brands. Brand equity is funny like that.

    Apple has a storied history of making something cool and then saying, "Here. This is cool. We think you should buy this." This strategy has been successful for decades. But, remember that it is the "marketing concept:" that dominates contemporary marketing strategy, wherein we assess market needs first and then deliver the goods (or services!).

    The former Penney CEO summed it up nicely, "The customer has said she's very much into value, and coupons and sales are very much a part of her vocabulary. It's hard to tell people another way to do something when they like to do it a certain way."  Not only is it hard, but it is also ill advised most of the time. Apple and a few other tech companies can get away with it, but JC Penney's? Please.

    DDS

  • Oscars Win Big

    The last two years haven't been very good for the nation's biggest awards show, but all of that turned around this year with Seth McFarland (of Family Guy fame) hosting. In addition to attracting just over 40 million viewers,the show played well in the 18-49 year-old category, a favorite with advertisers, as it grew by 11% from last year. This is good news indeed for the participants, the producers, and the advertisers themselves.

    The Academy Awards are a lot like the Super Bowl when it comes to advertising. The audience is huge, captive for several hours, and is almost entirely watching live, so it's no wonder that advertisers paid $1.8 million for a 30 second spot this year. This may seem like nothing compared to the $3.8 million advertisers paid during the Super Bowl, but the situation bears a closer look.

    The vast majority of the audience consists of females, who as we know make the vast majority of household purchasing decisions. Advertisers like addressing household decision-makers. In addition, most of these women are watching by themselves (90%), which means that the party atmosphere experienced by most who watch the Super Bowl (only 10% watch by themselves) won't impede the ability for a person to receive the marketing message. In communication, noise matters.

    The fact of the matter is, the cost to reach a thousand people is actually higher than that of the Super Bowl, making the Oscars ad more expensive, relatively speaking. It is far cheaper to reach 110 million people at $3.8 million a spot than it is to reach 40 million people at $1.8 million a spot. Thus, the market value of the Oscars ad reflects the reality that the cost per thousand (CPM) is actually higher than the much-hyped Super Bowl, and so advertisers pay more, relatively speaking. And considering the demographics of the viewer, the situational factors involved during watching as well as the level of involvement  for many viewers (high), Perhaps advertisers and the media should pay more attention to the Oscars in the future, but then again maybe we are still burned out by the Super Bowl advertising hype.

    . DDS

  • Swiss Still Successful

    The Swiss have a knack for weathering difficult environments, whether it's avoiding world wars fought around them, stoically outlasting harsh Alpine winters, or defying the contracting market for wrist watches. Indeed the availability of two dollar watches from China (which tell time perfectly, by the way) as well as a shift to using smartphones as a means to tell the time has made the industry difficult. So how in the world can Swiss companies continue to charge an average of $685 for a watch?

    Part of the answer is the Swiss reputation for watchmaking. It is unparalleled. The rest of the answer lies in the marketer's appeal to status (the fourth tier of Maslow's Hierarchy of Needs) executed through prestige branding and pricing. A watch can only be so well made, but well-heeled consumers around the world continue to consume the Swiss timepieces at a healthy clip. Swatch, the dominant player and owner of several high end brands reported a 15% increase from last year.

    So, while those with less disposable and discretionary income face the prospect of again tightening their belts, the more lofty classes have the ability to spend on luxury items. But this may not last forever. Appealing to status can be risky business, especially since what constitutes "status" can change quickly. And the shift to smartphones as purveyors of the time may ultimately prove to be too much for the category to handle. We shall see.

    DDS

  • Marketers React To New Economic Downturn

    Just when you thought we were in an economic recovery, Gross Domestic Product  (GDP) actually contracted last quarter, and this was the crucial hoiliday season quarter where everyone is supposed to be spending. If the next quarter ending March 31st  shows negative growth, then we will officially be in another recession. This is bad news for spending, and bad news for many marketers. Add to this expensive gasoline, stagnant wages, pervasively high unemployment, and the fact that consumers now take home smaller paychecks as a result of the recently-reinstated payroll tax ($1,300/ann. for the average household), and this may be a tough year.

    Marketers have already reacted. Wal-mart has begun stocking cheaper items and smaller size packages of consumer goods such as diapers, toilet paper, and junk food. Burger King, Kraft and other big players have lowered sales forecasts, expecting consumers to eat out less often and trade down to lower price offerings.

    This sort of thing happens during every recession, and most of us can only hope that this one, if it happens at all, will be short-lived. In the spirit of making tasty lemonade from sour lemons, there are numerous opportunities for lower end brands and retailers to capture market share from higher priced competitors in stagnant economic times. Consumers have endured almost six years of substandard growth, and the cumulative effect could indeed force some permanent shifts in consumer preferences. A consumer who trades down from Cheer to Gain, for example, might find that Gain isn't such a bad detergent after all. And Proctor and Gamble won't mind too terribly since they own both brands.

    DDS

  • GED No Longer Good Enough?

    Dozens of states are considering getting rid of the GED (general educational development) "degree", and instead choosing amongst a list of growing competitors. The GED is much like Kleenex or Band-Aid in that it is a brand name and not a generic one. The test, often viewed as a second chance for drop outs and adult immigrant students, has been so dominant over its 70 year history that competitors, if any, remain unknown. No longer.

    The American Council On Education, founder of the GED, has teamed up with academic publishing giant Pearson to overhaul the antiquated system in order to reflect the contemporary academic environment. The result has been a shift to a fully computerized battery of tests, which will apparently be more expensive for states already struggling with unbalanced budgets.

    So some competitors have emerged, including both McGraw Hill, another publishing giant, and the well-established  Educational Testing Service, both of which are offering less expensive tests. While competition is always a tantalizing prospect, there is the inconvenient matter of whether or not other "brand names" can compete with a well-established brand, as well as whether or not states really want to spend the time and money to re-orient students toward a different kind of test. Either way, we can all agree that these types of tests probably need to be updated every now and then, and that any improvements enhanced by market competition will help people live better lives.

    DDS

  • OJ Sales Boosted By Flu

    Last month U.S. orange juice sales rose for the first time in two years, reflecting increasing demand during an unusually brutal cold and flu season. The product category enjoyed an almost 6% year-over-year increase, and almost all of this can be attributed to the fact that consumers see OJ as a healthy way to address a cold or flu on a daily basis. Generally prices fluctuate due to the natural environment, as freezes and droughts can affect supply.

    Who are the biggest buyers of orange juice? The elderly, who are particularly susceptible to severe strains of flu, purchased 22% of the stuff in 2009, so it isn't surprising to see why the category is enjoying such growth. Elderly people sometimes die from severe flu, so by all means if I'm over 65, bring on the juice!.

    Marketers must always ask why these things happen because there are usually easily-identifiable reasons for category growth and contraction. Market trends, economic factors, competition and substitutes are just a few of these.

    DDS

  • Modern Media Measurement

    Measurement, according to the big boss at Viacom, is the number one issue facing television today. Programmers are constantly battling for Nielsen ratings because these ratings determine in part where advertisers put the $75 billion they spend on television each year. And with more and more viewers "cutting the cord" and switching to non-traditional mediums, this competition is becoming increasingly desperate. Add the fact that 40% of all viewers now have Digital Video Recorders (DVR's) and can easily record and zip through the commercials, and it bears the question, "Can anyone really know who is watching what and when?"

    The decades-old Nielsen ratings are archaic at best, with ratings based on monitoring 22,000 viewers who agree to have their viewing behavior tracked on traditional televisions. Even a casual observer can see the obvious limitations with such a model, and for some reason it hasn't been changed despite the fact that the results have become less credible over the past 10 years. Thus audiences are now more "time-shifted" and "fragmented" than ever before, but measurement technology has yet to catch up with the market shift. And a major industry change isn't exactly in the wind at this point.

    The likely future outcome is that Nielsen or some other entity will begin to utilize multiple measurements and larger sample sizes (millions instead of thousands) to better estimate viewership and insure that advertising rates are based on more realistic numbers. Most industry observers feel that Nielsen is resting on its laurels, and that a competitor might either provide a better system or perhaps startle Nielsen out of its monopolistic tendencies. Yet all of this is probably years away, illustrating how difficult it is to change an established industry from within. Outside technologies (creative destruction) as well as shifts in market tastes (web TV and DVR's) can alter industries rather rapidly, but without such outside influences (such as an advertiser mutiny, for example), the status quo is well...the status quo.

    -DDS

     

  • Watching You While You Shop

    It was simply a matter of time before some smart marketer figured out that security cameras, now standard equipment for just about every retailer, can also be used to study shopping behavior. Studying online shoppers has always been easy, and it is getting easier by the day. Almost everything that a person does online can be counted, measured and monitored, but researching shopping behavior in stores (where the vast majority of buying happens) has traditionally been more complex.

    Observation studies have been used by market researchers for years, but these often require a person actually watching people while they shop. Creepy. Not Burger King "King" Creepy, but still creepy. Brand marketers need the cooperation of store personnel, and in general people don't like to be stalked. But we have become accustomed to the presence of security cameras, and there is no legal expectation of privacy when you go to a shopping mall.

    Simply counting shoppers is useful enough, but marketers can do so much more with video evidence. For example, we can determine which displays (floor and counter) are working better than others. We can also better calculate the "bounce rate", the rate at which consumers come into the store and then leave immediately, and we can better study the effects of long lines and store crowding. Management can also better assess the performance of store personnel, the quality of which is a key factor in consumer decision-making. There will be some privacy concerns, and these will have to be addressed carefully despite the fact that laws would not likely be broken; however, the fact that consumers are already used to being watched and monitored should help the medicine go down when CNN does its investigative report for the television news-consuming masses.

    DDS

  • The King of Coffee?

    From the Department of "It's Never Too Late To Get In The Game", we have heard rumor that Burger King, purveyor of both flame-broiled and fried culinary delights, is making yet another attempt to broaden its appeal beyond the 20-something males the company has traditionally targeted. In addition to adding foods like salads and smoothies a few years back, something competitors had already done, the company has now decided to get into the specialty coffee game. Is this too little, too late?

    McDonalds' specialty coffee play, called McCafe, has been a source of growth for the brand for several years now. I saw the European format back in 2005 in Ireland well before I saw anything out here in the States. Last year, Wendy's launched its own Redhead Roasters coffee blend as well as a more upscale breakfast menu that has had limited success thus far. Today, Burger King is teaming up with Seattle's Best ( a division of Starbucks) to offer the popular brand in Burger King locations. So rather than a Burger King-branded coffee, Burger King has decided to leverage the equity that has been built in the Seattle's Best brand and introduce a co-branded product (and Seattle's Best is already known for for coffee). McDonald's and Wendy's didn't do that.

    This strategy could work, but the questions always remain, "How many specialty coffee options do we really need? At what point does the market become saturated?" Either way, the burger wars continue to be fought farther and farther away from the actual burgers and now involve a proliferation of many other types of menu offerings. The competition in this space and the health/wellness trend necessitate constant change on the part of organizations. Let's see if Burger King can reclaim its number two spot with this latest strategic shift.

    DDS

  • Companies Cut Salt...Voluntarily

    Michael Bloomberg, mayor of New York, is at it again. On the heels of the NYC large soda ban in some retail formats, a Bloomberg-led effort to encourage companies to voluntarily reduce the salt content of their products has gained traction. So far, 21 U.S. companies have reduced salt content in prepackaged and restaurant foods in an effort to improve the health of the nation's citizens. The National Salt Reduction Initiative, a coalition of 90 city and state health organizations, was launched in 2008 with the specific objective of reducing sodium in foods by 25% by 2014.

    While this objective is thoroughly unachievable, it does illustrate the power of doing things on a local and regional level, rather than a national one. Surely the federal government could make a law forcing this reduction, but for many reasons this hasn't happened and is very unlikely to happen anytime soon. Industry groups would rather their members set and follow voluntary "guidelines" rather than enforceable "laws" so regulation is never something their members want to see. The general idea is that it is much better for businesses, their employees, and consumers if these efforts begin by encouraging companies to adjust their formulas proactively. If enough organizations do this, the rest of the pack will follow suit. Or so the common wisdom goes.

    The bottom line is that the FDA and other regulatory bodies will eventually have to set new labeling requirements so that consumers can better assess the nutritional value of what they eat and drink. We can all read labels, but it's tough for the average person to know what all of it really means. New laws could include limits on the amounts of "unhealthy" ingredients per serving, outright bans of certain compounds such as trans fats, the labeling of "junk food", and a number or color chart telling consumers what "grade of healthy" a particular product is. One way or another, the obesity epidemic, the driver of all of this concern, will be addressed by the federal government. The question is how and when? Unitl that time, look for more acts of industry self-regulation as well as efforts to regulate on a local and regional level.

    DDS

     

  • The Return of the Gap

    Since the company's heydey in the 80's and 90's, Gap Inc. has struggled for years to achieve meaningful growth rates. The once-trendsetting retailer went through a period of creative malaise coupled with a surge in competition from fashion-forward brands like Forever 21 and Zara. After the recession did its brutal work in 2008, the Gap was in need of some major attention.

    Today, the story seems to be changing. Boosted by a change in product mix, featuring colorful jeans and Mad Men-style suits to name just a few items, sales are up over 6% from the previous year, and the retailer appears to be approaching pre-recession sales levels. After closing underperforming stores, making stores smaller and reducing unnecessary costs, all that was left to do was alter the product mix to reflect more "fashion-forward" styles as well as specialty lines such as designer Diane von Furstenburg's clothing for babies.

    Time will tell whether or not these changes will sustain the Gap over time, but you have to admit it's a good start. The turnaround has been abrupt and the sky is indeed the limit for a brand that has as much equity as does the Gap.

    DDS

  • Apple's New Smart Watch?

    From the Institute for Very Cool Gadgets:

    Rumor has it that Apple, in conjunction with a major Chinese supplier,  is in the process of testing prototype designs for a watch-like device that would act very much like a smartphone. The resulting platform could be the basis of an entirely new category of products, one that is different from other devices within the mobile category. This is good news for Apple, as skeptics have questioned the long-term viability of their business model without its traditional Steve Jobs-driven product development. Can Apple still innovate?

    The unmet consumer need that this category or product would theoretically meet is still unclear. The device would most likely work very closely with the iPhone and could have all kinds of functions. Will it meet a new need or simply be another cool gadget that Apple wants you to add to your collection? One thing we do know, however, is that the wearable gadget category is beginning to take off, with companies like Nike and Jawbone already selling activity-monitoring devices. If Apple can do to this category what it did for mobile music (the iPod and iTunes), telecommunications (the iPhone), and mobile computing (iPad), then watch out! The company may be poised to reap success from yet another revolutionary category-destroying product. Or not.

    -DDS

  • The Flu Is Good Business

    This flu season, which has been well publicized as particularly ugly, has been pretty good for U.S. drug store/pharmacy chains. Pretty, pretty, pretty...pretty good.

     

    Patient visits to CVS's MinuteClinic hit all time highs and fueled a nice sales increase, beating Wall St. estimates and boosting the stock. Flu shots carry margins of 50% or more, and cough drops and nasal sprays have margins of more than 40%. Throw in toothbrushes, thermomenters, OTC remedies, and other goodies, and you have quite the racket going. This is profitable stuff, especially with the Centers for Disease Control and Prevention kicking off the marketing campaign.

    Cynical? You bet. Despite best efforts, this year's flu shots were only predicted to be 60% effective (actual results may vary) and of course flu shots do nothing for the common cold, which I believe is fairly common. It's not like this is some sort of conspiracy or anything, but it is important to recognize how an entire industry can be boosted by a change in the marketing environment, the benign efforts of government to promote public health, and a huge assist by the increasingly hysterical 24-7 media (see the over done coverage of the recent East Coast storms). CVS has been so thrilled with the results that it purchased a 44-store Brazilian drug store chain just last week. Here's to your health!

    DDS

  • Newsstand Sales Falling

    While paid subscriptions saw growth of just under one percent, the print versions of consumer magazines bought at retailers around the country fell dramatically (8.2%) in the second half of 2012 versus a year earlier. Nearly 65% of the magazines counted in the report conducted by the Alliance for Audited Media have digital editions of their publications as part of total circulation, but the digital versions account for only 2.4% of the industry's circulation (up from 1% a year earlier). So some of the drop can be explained by consumers switching to digitial versions as they proliferate, but it doesn't account for much of the decrease.

    So we know that paid subscriptions, which reflect a more loyal reader base, actually rose slightly. Buying a "newsstand" version every week or month can be an expensive proposition, so loyal readers naturally prefer a cheaper, more convenient subscription plan. Plus, magazines have upped their efforts to grow and secure this loyal reader base in recent years so that advertisers can be guaranteed a certain level of audience. Perhaps more of the casual, newsstand readers are moving to subscriptions. This explanation, however, still doesn't adequately account for the huge drop.

    The third factor in play is that there are far too many magazines out there vying for a shrinking audience. In the future, total readership will continue to drop despite increases in U.S. population because consumers are consuming media in so many different ways. In many ways reading is going out of style. It will be interesting to see what the numbers are in 2013. The report could also reflect some sort of weird anomaly, and the numbers could bounce back up next year.

    One thing is for sure, however. The number of digital versions will continue to proliferate, as the category increased by about 15% from 2011. E-readers and tablets will make the digital formats more appealing and the print versions will become increasingly obsolete. None of this will happen quickly, as we will watch publications (such as Newsweek and the Onion) drop their print offerings one by one.

    DDS

     

  • Superbowl Ads Mediocre

    This year's lineup of Superbowl ads, priced at an average of $3.8 million per 30 second spot, failed to excite most observers this year.  Ads produced by Audi, VW, Taco Bell, Go Daddy, Dodge, Jeep and many others were deemed as successful, but the excitement that is usually generated by consumers and marketing experts alike just wasn't there this year. Why?

    First, many companies are achieving all kinds of communications objectives by releasing ads several days before the game. This allows for pre-game buzz generation, testing of ad effectiveness before airing, as well as the ability for marketers to measure results in the form of views, hits, and "likes". This "letting the cat out of the bag" probably affects the delight that many viewers feel when they view a great ad for the first time.

    Second, there was quite a bit of emphasis placed on social media tie ins this year (particularly  the use of Twitter hash tags), so much so that some critics believe that marketers are spending too much time on this rather than on developing and executing a first-class advertisement. This may or may not be true, but I have been writing about a "creative malaise" in the industry for quite a few years now.

    Third, I believe that there is too much emphasis placed on target marketing. Since the Superbowl boasts 111 million viewers, this is a good opportunity for a marketer to develop more of a mass market message rather than take the risk of insulting or alienating those who are not in the intended ad target. Lots of people either loved or hated a certain ad (think Go daddy), and this polarization has increased each year. Over-targeting and over-reliance on shocking creative are the culprits here.

    What will next year bring? Who knows. I'm just glad it's all over for now.

    DDS

  • Fido Goes Natural

    Colgate-Palmolive, owner of numerous consumer brands, is struggling with the pet food category. A mature industry segment, pet food sales topped $18 billion in 2011 up 15% from 2006, and are expected to hit $21 billion by 2016. This is steady growth for sure, and it now appears that some positioning strategies are working better than others.

    The company's Science Diet line, which represents about 13% of Colgate's total sales and profits, has lost market share since its peak in 2008 (from 10.7% to 9.4%). Though not a huge drop, the numbers are trending in the opposite direction of what marketers desire, and so a change in strategy is needed. It appears that the consumer preferences have changed as a result of the large-scale proliferation of natural and certified organic products. And pet owners increasingly want their pets to eat what they themselves are eating. Since Science Diet is positioned as a more "clinical" product, a pet food that is engineered and backed by science, it has been tough to re-position the brand as more natural.

    The first attempt was a product called 'Science Diet Nature's Best", an ill-fated attempt to be both science based AND natural. Not surprisingly, this did not go over well in the consumer market as science and nature don't always get along that well. Is the product scientifically engineered or is it natural? This isn't the type of question that marketers want their customers asking.

    The result? An entirely new brand called Ideal Balance, which will be available in March. One of the problems is that the product will not carry over the brand equity inherent in the "Science Diet" brand (which didn't work before...), and the new product may cannibalize the existing Science Diet product as loyal users switch products. Obviously, Colgate-Palmolive hopes that customers that dig the science angle stick with the Science Diet product and that the natural line attracts an entirely new customer base. We shall see...

    -DDS

  • Internet Originals

    It will clearly be quite some time before the world of Pay TV and the world of internet programming collide to create a single seamless customer experience. Marketers know that producing and airing quality content isn't cheap, and as of right now, the Pay TV industry views the internet as a major threat to its well being. The bottom line is that the revenue model for TV programming (pay for channels and watch commercials) does not work so well online. Few people are willing to pay for content (somehow many of us expect to get good quality stuff for free), and internet advertising has been very slow to produce results over the past 20 years. If not enough people are willing to pay for the content (through an access fee or subscription, for example) and we aren't clicking on the ads, obviously there is no sustainable revenue model.

    So until the day comes where we can see the same stuff on both traditional TV and the internet, it seems logical that firms would see some opportunity in creating original, high-end television programming for the internet exclusively. My guess is that people will watch the commercials and perhaps pay a fee if the content is good enough. We don't know whether or not it will work because we haven't seen evidence of it so far, but perhaps some cutting edge, exclusive, original content (such as what we are used to seeing from HBO and Showtime) will encourage consumers to help make the revenue model work.

    Enter Netflix, Amazon, Hulu, Google, and other on-line players, who are busy creating original content as we speak! This time next year the landscape will look very different, as folks who have cut the cord, so to speak, decide how badly they want programming. The major advantage is that the content will not be available through broadcast media, so the online format will be offering something different. Will enough people migrate online to justify the expense of producing high quality programming? Will the people who do migrate online pay for the content? Will they watch the ads? It hasn't worked out all that well yet, but we can assume that things will be different now, and that traditional TV producers will eventually have to find a better way to do business. But you know what they say about assumptions....

    DDS

  • Detroit Is On the Rebound

    No, I don't mean the Pistons, Lions, Red Wings or Tigers. I don't even mean that the city itself, which looks like a bombed out demilitarized zone in some places, is demonstrably on the mend. But it is clear that the automotive industry is accelerating just a few years after a government bailout was accepted by all but Ford Motors. The 2013 North American Automotive Show as buzzing with activity, and experts predict an almost 7% increase from 2012. This good news is spread quite evenly across many vehicle categories...except for one.

    The notable exception in the alternative-fuel vehicle category, which remains heavily subsidized by the federal government. Consumers aren't flocking to these vehicles in the numbers expected despite the environmental trend that has become so prevalent in American culture. The federal government spent $10 billion of the 2009 stimulus bill on the electric car segment, and today there are barley 30,000 on the road. The Nissan Leaf, Ford Focus, Chevy Volt, and Fisker Karma have all failed to meet sales forecasts. What gives?

    First off, consumers don't always do what they say they will do and concern for the environment doesn't always translate into actual purchase behavior. Secondly, who can afford these things? Tax credits and rebates notwithstanding, the Karma runs at $100,000 and the Focus at $40,000. Ouch. Thirdly, ask yourself if electric cars are really better for the environment than alternatives? I think not. The vast majority of electricity is generated by coal, a dirtier fuel than petroleum. Besides, the $20,000 Cruze Eco, a non-electric vehicle, gets 42 mpg on the highway on a 1.4 liter turbocharged gas engine. Not too shabby.

    Perhaps subsidies will continue to prop up this industry. Perhaps laws will be enacted that make these vehicles more desirable to consumers. Maybe a large-scale adoption of natural gas-powered vehicles will be a complete game-changer. But at least for now, it looks like the consumer has decided to stick with the vehicles that they perceive as a better value. The Leaf, Focus, Volt, Karma, and others don't appear to be in this "evoked set".

    DDS