November 25, 2008 • 4:07 am
Joe White at the Wall Street Journal reports on the fact that Americans drove less and starting switching into more fuel efficient vehicles as gas prices rose to close to $4 a gallon over the summer.
The article covers several points, two of which we want to address here: The similarity to the oil crisis of the late 1970’s and the short term versus long term choice consumers make.
In the late 70’s when oil prices rose, interest in electric vehicles, solar panels and windmills rose dramatically, as the crisis was mitigated by conservation and new discoveries interest faded fast and consumers bought what they always had – big performance based vehicles. The same will probably happen now, unless there is a restructuring of the financial underpinnings of the major automakers, that allows them to significantly retool their factories and realign worker skill and get ready for the alternative fuel economy that is hopefully coming.
And on the short-term vs long-term issue: Two weeks ago, when a client of ours pointed out that gasoline was now less than $2 in their area at most stations and that no one cared for the hybrids all of a sudden, we knew that we would soon see what we saw in the 70’s: A quick reversal back to larger more powerful vehicles. We also spoke to a young family that had just bought a small sedan. They looked at all the hybrids for ideological reasons, but argued that they hoped to buy a new car within 5 years, so the additional cost of a hybrid could not be recouped at $2 or $3 a gallon.
Consumers memory is terribly short and the future is almost always anticipated to be brighter. The economy is still in the tanker, but at least gasoline is cheap (and probably will be for a while is the reasoning). We’ll see how it all shakes out, tomorrow and the next day millions of American’s will get back on the road and enjoy “normal” gas prices again.
Filed under: Automotive, Market Research, Marketing , Cars, Consumers, Driving, Gasoline, Research
November 24, 2008 • 11:07 am
A story in the Wall Street Journal outlines some of the cost cutting measures at GM as they face the worst crisis in their history.
The story starts out with wall clocks that now have the wrong time or stop working since GM has stopped replacing batteries to save cost of replacement and disposal (Insert: “How many union workers does it take to replace a battery?” joke here).
While not replacing batteries might seem extreme, some of the other measures GM is now employing (reducing number of copiers, stopping escalators at a certain hour, not using voice mail) have for a long time been part of standard operating procedure at many companies we have come in contact with. Successful companies – rich companies.
The point is – being thoughtful of cost should been part of your DNA from day one whether you are GM or Susan’s Bakery down the street. Saving money is much easier than making it for the simple reason you have more control.
Preview of article:
Over the past several weeks, engineers and technicians working at General Motors Corp.’s sprawling proving grounds west of Detroit started noticing a curiosity: an increasing number of wall clocks had the wrong time, or stopped working altogether.
The reason: As part of a drive to cut $15 billion in costs, GM is no longer keeping the 562 clocks in working order, which will eliminate the expense of replacing and disposing of the clock’s batteries and the cost of resetting them twice a year for daylight-saving time.
It’s not the only new measure GM is taking to save every last nickel. In its Renaissance Center headquarters, employees working late have to climb stairs when navigating its labyrinth of lower floors — the company now stops the escalators at 7 p.m. In designated cleanup areas of certain offices, the company has changed the type of wipe-up towels it buys. In a memo to employees, a staffer explained this will lower GM’s “cost per wipe.”
Rest on wsj.com
Filed under: Automotive, Information , Automotive, Cost, Crisis, GM
Companies make mistakes: They launch offensive ads (Motrin anyone?), they omit declarations on packaging, they might even sell a faulty product. Like humans (well not quite) they are not perfect. An interesting post today from Jason Bear about a customer service experience with Nissan.
In short Jason buys car, car does not have roll over sensor as advertised, Nissan sends Jason letter offering $2,000 or to buy the car back, Jason blogs about Nissan’s motivation for the “bribe” or if it might be a social media experiment (we are talking about it aren’t we?) Peter commented on Jason’s blog and we are posting the comment below (for the record – we are not currently employed by Nissan):
Jason,
Having had some experience working inside and consulting to several of the Japanese OEMs I think what you saw was a sincere effort. Yes – we live in a litigious society and so companies want to protect themselves. But, the key here is they got to you first.
Let’s say you had an accident and a roll over sensor might have avoided injury to you or your vehicle. What are the chances that you would think of that, find out about it online, sue, etc. They are present, but in reality not something firms take a proactive stance on.
Nissan happens (like some other firms) to keep good tabs on who buys what and so are able to send you offers to buy more later. Nissan and a few others we know of are more focused on giving you a great customer experience so you come back voluntarily (which ends up being less expensive for them as well in the long run).
Most people do not blog about good experiences with companies and brands – so I commend you for doing so – and your points are relevant – what was their motivation? I honestly think they wanted to do right by their customer first and safeguard second.
Filed under: Automotive, Information, Legal, Marketing , Customer Service, Nissan, Social Media
November 23, 2008 • 1:49 am
Happy people spend more free hours socializing, reading and participating in religious activities, while unhappy people watch 30 percent more television, according to new research on American life.
In a study that is among the first to compare daily free-time activities with perceptions of personal contentment, researchers found that television hours were elevated for people who described themselves as “not too happy.” On average, the down-and-out reported an extra 5.6 hours of tube time a week, compared with their happiest counterparts. Full article
Filed under: Information, Market Research, Science , Consumer, Happiness, Research, TV
November 20, 2008 • 12:02 pm
This is an excellent example of consumer research results shared with your core target. Although it relates to bras and the consumer group here is Japanese women, you will quickly understand how powerful their approach is
http://www.uniqlo.com/try/
Filed under: Information, Market Research, Marketing , Consumer, Research, Targeting, Women
November 18, 2008 • 1:28 pm
In continuing to try to understand the root causes of the financial crisis, we find that the whole story just keeps getting more interesting. While lots of folks are trying to blame one single thing (free markets, regulations, greed, poor people, rich people, bankers, mortgage lenders, hedge funds, short sellers, the President, Congress, etc.), the truth is that almost all of those explanations aren’t just wrong, they’re highly misleading. The problems involve a whole bunch of different things that combined to create the incentives that resulted in this situation – and preventing it from happening again is hardly an easy proposition.
Earlier this year, in talking about a highly questionable investment firm that was investing in startups, we wrote about how the venture capital game has always been about finding the last sucker to invest.
Read rest on techdirt
Filed under: Information , Bailout, Crisis, Financial, VC
This carbon fiber child’s safety car seat, created by Rory Craig of the Art Center College of Design, is not an official Sparco product but rather a clever prototype. Meant to appeal to racing enthusiasts, the carbon fiber isn’t even the best part. The child seat adjusts from an infant seat to a toddler model to a booster seat, which allows the buyer to save some of the money they just forked over for a safety device made of an outrageously expensive material. Craig is trying to pitch the idea to Sparco and has fictitiously named it the “Sparco Wingman” in order to grab their attention. We think they should do it, if only to encourage Lewis Hamilton and his Pussycat Dolls girlfriend to make sexy fast babies. From Jalopnik
Filed under: Automotive, Marketing , Automotive
November 17, 2008 • 4:18 pm
From Terry Fitzgerald at the Minneapolis Fed:
The U.S. Census Bureau reports that median household income stagnated from 1976 to 2006, growing by only 18 percent. In contrast, data from the Bureau of Economic Analysis indicate that income per person was up 80 percent.
Three data issues adversely impact reported median household income gains: the choice of price index, a change in the mix of household types and the measure of income used.
After adjusting the Census data for these three issues, inflation-adjusted median household income for most household types is seen to have increased by 44 percent to 62 percent from 1976 to 2006.
Full article
Filed under: Information , Economics, Federal Reserve, Income
November 16, 2008 • 4:15 pm
A symphony of light-emitting diodes, smartphones, global positioning systems and mobile sensors may soon work together to help drivers avoid traffic jams.
Researchers from different universities are working on ways for cars to better communicate with each other and relay crucial driver information such as traffic speed, weather and road conditions. The data could be used to decipher faster routes. In the meantime, there are options for residents of big cities to check out live traffic feeds on their cellphones.
The aim is to address the growing problem of traffic congestion through improved communications between cars. more….
Filed under: Automotive, Science , Automotive, Cars, Traffic
November 14, 2008 • 12:32 am
Computers are getting smaller and smaller. And as hand-held devices – from mobile phones and cameras to music players and laptops – get more powerful, the race is on to develop memory formats that can satisfy the ever-growing demand for information storage on tiny formats.
Researchers at The University of Nottingham are now exploring ways of exploiting the unique properties of carbon nanotubes to create a cheap and compact memory cell that uses little power and writes information at high speeds.
Miniaturization of computer devices involves continual improvement and shrinking of their basic element, the transistor. This process could soon reach its fundamental limit. As transistors approach nanoscales their operation is disrupted by quantum phenomena, such as electrons tunnelling through the barriers between wires.
More info: Dr. Elena Bichoutskaia at the University of Nottingham
Filed under: Information, Innovation, Science , Data, Devices, Innovation, Nano, Storage
