Wal-Mart's New Gas Price Campaign

I was watching some network television last night and saw a Wal-Mart commercial in which actors talk about the price of gasoline but then say how they won't let it dictate their lives - and, presumably, going to Wal-Mart is one of those life choices.

The commercial seems quite peculiar to me, and I wonder if this isn't a sign that something is seriously wrong with Wal-Mart's marketing and business strategy. First, gas prices have come down, oh, a good 30 to 40 cents a gallon here from the spike earlier this year. I suspect they're down around the country as well - and I also think that consumers have made their peace with prices. Certianly they're not giving up shopping for what they need. (In fact, last night I heard a number on NPR that pegged it at 40 cents overall since spring.)

So you'd think that the commercials are runnning at least a month late, and are really negatively-based. They argue not to give up life style choices - no matter what the price, which, I guess, is easy enough to do if your annual business equals many national GNPs. But there is no reason to go to Wal-Mart. If gas was such a problem, why not roll out Wal-Mart gas stations with subsidized prices to get people to the stores? And other stores, like Target, seem to be weathering the economic issues, which hit most equally.

But Wal-Mart has been blaming gas prices for recent poor performance. Maybe the problem is not gas prices, but strategic decisions. Perhaps they've gained too much bad will through their own actions in dealing with labor issues. Perhaps people are angry about outsourcing and see Wal-Mart as selling out to China. Maybe the idea of having superstores apart from malls, where people can more efficiently shop, is the real problem. (I wonder what the company's same store sales are in mall locations versus standalone.)

Whatever the issue is, I don't believe it's largely driven by petroleum. Yet the commercial, along with Wal-Mart's remarks to Wall Street, show this as an officially adopted excuse. Maybe it's time for upper management to look and see whether there might not be more serious issues - for example, the well-publicized internal company report on mistakes in moving outside the existing brand. There is something more going on inside the company. Trying to find the logical explanation for investors won't solve anything and will only get management more determined to keep the blinders on.

Google Wants to Know Everything - About You

According to a piece in the Financial Times (I'm not sure how this got to be a free link, but who am I to complain?), Google wants to know everything about everybody. Literally:

Asked how Google might look in five years’ time, Mr Schmidt said: "We are very early in the total information we have within Google. The algorithms will get better and we will get better at personalisation. The goal is to enable Google users to be able to ask the question such as 'What shall I do tomorrow?' and 'What job shall I take?'"

There you have it - Google with the gloves off. Aside from questions of privacy, civil liberty, and propriety this naturally raises, there are some serious business issues.

To the degree that Google succeeds, it puts virtually all businesses in its debt. Depending on how it decides to analyze and answer such questions, it directs people in their choices. If your company is on the outs with Google, might there be a chance that it freezes out your chances with customers? Will you have to - eventually - pay a fee to remain in the running, if not with the current management, then with a future team? People who think that all the tumult over Google and Yahoo and Microsoft is solely about online advertising aren't looking at the bigger pictures. In a society where an increasing number of people want to be told what to do, having an ever-increasing collection of information on them as well as an ability to be a front end to the Internet means controlling business beyond what can happen even in a monopoly.

Cocaine Energy Drink Un-Shelved

Redux Beverages, makers of the energy drink Cocaine, is withdrawing the product from the market, at least until it can devise a new name and packaging, according to the New York Times. This is the sort of business story that makes you wonder what in the hell these people were thinking. Ah, yes, here's what they were thinking according to Clegg Ivey, a partner in the venture:

“Of course, we intended for Cocaine energy drink to be a legal alternative the same way that celibacy is an alternative to premarital sex,” Mr. Ivey said. “It’s not the same thing and no one thinks it is. Our product doesn’t have any cocaine in it. No one thinks that it does.”

“We like to think we have a great sense of humor,” he said. “And our market, primarily folks from ages 20 to 30, they love the ideas, they love the name, they love the whole campaign. These are not drug users.”

Sure they love the campaign. They probably also enjoy the red and white design of the can with the quasi-printed looking logo running vertically, a clear take-off on Coca-Cola. But, again, what in the hell were they thinking? Of course a business wants to make money, but people do have responsibilities beyond financial gain. Generating to the backslide of the collective mentality does no one any good in the long run. We've seen this recently in talk radio with Imus getting booted for racist remarks. There's plenty of criticism of the more destructive and misogynistic practicioners of hiphop and rap. We have so-called teen television channels pouring forth an alarming amount of sex, drugs, and other uncontrolled behavior, all to garner ratings and higher advertising prices. There should be some thiings that people are ashamed to do for money, and such activities are at the top of the list. By trading on sex or drugs, for example, they are simply legal forms of prostitution and drug dealing, except not as straightforward and honest.

Chocolate Manufacturers Want to Change Brand

Normally when companies talk about changing brand, they mean an advertising campaign. Real brand change is organic and involves changing the entire company to some degree or other. That could mean what Delta Song did when it deliberately engineered a specific customer experience before going to market or as companies do when they refine a brand by focusing on what they really do best. But some large members of the U.S. chocolate industry - through the industry trade group Chocolate Manufacturers of America - are petitioning the FDA to change the definition of chocolate so they can reduce their costs. (You can see a quick rundown on this with some links at my food blog.)

Certainly lowering costs is important, but when it requires a wholesale redefinition of what you make, you really enter the dangerous waters of trying to create a new type of business. Drop the cocoa butter and replace it with vegetable fat and no matter what the FDA allows you to call it, the result isn't chocolate as people understand it. Perhaps such manufacturers as Hershey, Nestle, and Archer Daniels Midland (ADM) think that people won't notice. Many might not, but some percentage of the population will. Think candy sales can't go down? They have at times for some manufacturers, as these companies all know. Making more money is great, but not if you potentially endanger your future business. Why do I get the sense that the CEOs of these companies, or even the presidents of the relevant divisions, haven't talked to a single customer in years?

Blackberry Outages and R.I.M. Points the Finger

R.I.M. has finally blamed insufficiently tested software on the Blackberry outage that cause such executive outrage. You'd think that the managers would have been happy to have a short period in which they didn't have to jump through hoops. But the story may be a bit more complex. I heard an albeit second-hand explanation/rumor that R.I.M was warned the that software wasn't ready to go live, but that no one listened.

Conversation on Disability and Politics

I was speaking with someone who has 25 years as a disability case worker for Social Security. This person mentioned that at the beginning of every Republican adminstration, the organization staffs up to brace for the onslaught of disability applications that will follow from people who are poor.

"But why would disability go up?"

"Because there will be fewer jobs at the lower end and disability gives extended benefits."

"I'd think that such a big change in the number of unemployed would be noticeable."

"They aren't unemployed."

"But they don't have jobs? How are they not unemployed?"

"It's all part of how unemployment is counted. If you're not looking for work or are disabled, then you're not unemployed."

"Let me get this straight. The number of jobs drops which pushes people who can't find work into looking for disability if it's remotely possible. But the minute this happens, they are no longer unemployed."

"That's it. The unemployment figures are garbage."

"And then Social Security immediately hires?"

"Nope. The administration always puts on a freeze at the start, but then they find a way to hire a few months later because there aren't enough people to do the work."

It makes me wonder two things: how many unemployed people there really are, and what a real pro-business politician might look like. I suspect the person would be less solicitous of business wish lists and more interested in creating conditions that would encourage fundamentally strong business - with employment up and down the scale.