In US Food Industry, Cheap Can Be Tricky

Grocery Shopping
Any American can tell you that competition is key in a strained economy – for jobs, for the lowest prices, etc.  The claws are out as people across the country go to extremes to make and save money.  It’s not just the individuals who are competing, but the American businesses, as well.

Recently, competitive juices have been poisoning the ethics of the food industry.  The issue of “food fraud” is on the rise as aggressive strategies turn to deceit.  Food fraud is when food items are sold under false claims.  A number of reputable publications including the Washington Post and Newsweek have explored the aggravation of the issue during the recession.  An eye-opening article by Lyndsey Layton in the Washington Post highlights a few sneaky examples:

“The expensive ‘sheep’s milk’ cheese in a Manhattan market was really made from cow’s milk. And a jar of ‘Sturgeon caviar’ was, in fact, Mississippi paddlefish. Some honey makers dilute their honey with sugar beets or corn syrup, their competitors say, but still market it as 100 percent pure at a premium price.”

(image courtesy of http://www.dreamstime.com/royalty-free-stock-photo-gourmet-food-collage-image3333785)
(image courtesy of http://www.dreamstime.com/royalty-free-stock-photo-gourmet-food-collage-image3333785)

According to Helena Bottemiller of Food Safety News, Food scammers have tricked not only shoppers, and but also big distribution companies like Heinz USA.  According to Brandon Glenn of Med City News, an estimated 5 to 7 percent of US food supply is involved in food fraud.

Fast-paced global trade and the growing demand for cheaper food have intensified the problem, and the FDA is feeling the heat as American urge them to crackdown on product labeling and authentification.  This is where technology comes in: advanced DNA testing allows scientists to compare products to a database of samples to prove their legitimacy.  Unfortunately, Newsweek reports, the FDA doesn’t have the resources to inspect the majority of the foods in the American supply.  Looks like we as consumers have to stay on our toes.

So don’t let your bargain obsession impair your judgment – if that sweet deal for gourmet treats looks too good to be true, it probably is.

Is Buying a 3-D TV Worth the Dent in Your Wallet?

3-D TV is back! And electronic manufacturers are pumping millions into marketing the new technology.

The New York Times reported:

“Samsung is spending about $100 million this year on marketing and advertising its 3-D products. That included promoting its 3-D line with a Black Eyed Peas concert in Times Square on March 10.”

I guess Samsung and other television manufacturers think the more money they spend on advertising the 3-d technology, the more consumers will be willing to spend on the three dimensional television sets.

You don’t need 3-D glasses to see the zeros on the price tags for the new 3-D TVs. Initially, at least, going 3-D will cost a U.S. household $3,000 or more, and thats not including the $150 glasses and the estimated $400 blue ray dvd player to play 3-D DVDs.

3-D Television Manufacturers

  • Samsung
  • Sony
  • Vizio
  • Panasonic
  • LG
  • Toshiba

Research Alert reported that consumer spending on technology slumped in 2009…. which leads me to one question: Have television manufacturers forgotten we are in a recession?

If consumers are slow to pull out their wallets for groceries and other necessities, why would Samsung think they are going to spring to the closest Best Buy and invest their cash in a television that shows images in three dimensions? It seems like states are having enough problems trying to implement the digital tv transition!

I’ll leave you with a clip from Samsung’s first commercial advertising the new 3-D TV: [kml_flashembed movie="http://www.youtube.com/v/JwI_8WPerWM" width="425" height="350" wmode="transparent" /]

Cashing in on Convergence: Apple is a Winner

As the music industry struggles with CD sales, file sharing, etc., one company has seemed to overcome all obstacles to keep its sales in the black. Who could it be?

Surprise surprise, Apple has managed to create such a successful product, it actually does a lot of the work in selling the rest of Apple’s products. I, of course, am referring to the iPod.

While the iPod is nothing new, it has gone under significant improvements and in many different directions, offering something for everyone. There is now the Classic, Nano, Video, Shuffle, and the latest addition to the family: Touch, which might as well be an iPhone. Apple’s major marketing campaign began with and is being held up by the iPod. Why? Because there’s an iPod for everyone.

With prices as low as $59 for the cheapest one, almost anyone can afford to own one. But that’s not the point I’m trying to make. iPods are making it so easy for Apple to converge all of their devices together. All of them are compatible with each other, as well as Microsoft software. iPods can even be integrated with your shoes. iPods are everywhere! Their convergence with all of Apple’s other products makes things seem so simple.

And iPods, as well as the iTunes music store, are helping convert PC users to Apple. According to Arik Hesseldahl of BusinessWeek,

Perhaps the iPod’s biggest benefit to Apple these days is in helping it sell Macintosh computers. People who use PCs with Microsoft’s (MSFT) Windows operating system tend to be more likely to switch to Macs after they use one of Apple’s music players, a phenomenon that has been called the iPod Halo Effect.

So while other companies in the music business are trying to stay afloat in this tough economy, Apple can sit back and let its iPod lead the way. Thanks to convergence, Apple has made itself stand out not only for its roles as a music giant and computer empire; it has secured its safety during this recession.

View From The Cheap Seats

The scalping of sports tickets around countless venues across the country has been going on for years. Since authorities have cracked down on scalpers, fans looking for a cheaper ticket have had to search for other means of finding such goods. The emergence of such entities as ticketmaster.com and stubhub.com have revolutionized the business of ticket sales and ticket resales. Fans now have the opportunity to buy tickets at not only cheaper prices but they can get tickets that are sold out in box offices and on team websites.

“The convergence of sports and entertainment has been occurring for quite some time,” said David Carter, executive director of the Sports Business Institute. “But there’s been very little research about the implications of this convergence for companies and consumers, especially sports fans. Our project will address these implications and demonstrate where the business opportunities will be going forward.”

The project will feature a series of briefings to update founding partners, institute advisory board members, and others on the progress of research, capped by a two-day summit laying out findings and implications of the work.

06apr_entr_stubhub

Such sites like stubhub.com have seen substantial rises in sales due to the economic recession and have provided the casual fan with more of an opportunity to go out and watch their heroes play our pastimes in some of the greatest venues in all the world. Stubhub.com is an entity and a phenomenon that has changed the way people access the sporting world and will continue to allow the pedestrian fan to enjoy the entertainment provided us by American sports.

Online Travel

20070619_expedia_logo_18Planning your next trip? Do you first open up the internet browser and google cheep flights? Or log into Expedia or Travelocity and plan your flights, rental cars, and hotel all in one? Today, technology and increased internet capabilities travel online has become fast, easy, and cheep. All things us Americans are looking for now! We have a limited attention span so the travel industry has to keep up with our habits. Meaning they have to constantly adjust to our changing ideas and demographics. User friendly websites  help the everyday customer. According to Biz Travel Trends the demographics of Americans have changed significantly over the last ten years:

“In part, this shift in demographics is attributed to the ease of technological accessibility. According to the census bureau, 42 percent of Americans have a computer with internet access in their homes”.

travelocity_logo_0-1

Internet technologies and its effectiveness have driven the convergence trend. We should now expect online travel searches to be commonplace. People love the fact that they can see pictures of hotels, read reviews, and book their reservations all at the same place. Also, these websites connect directly with the hotels and airlines to get you the best deal! Travel agencies are marketing to the customer:

“A strong impression(of the site) translates to repeat business. The millennium travel trend equates to a forward-thinking corporation continuously evolving alongside swift marketing strategy and implementation…”

[kml_flashembed movie="http://www.youtube.com/v/CNr5jVKYZ5E" width="425" height="350" wmode="transparent" /]

According to the U.S. Travel Association the internet was used by about 90 million American adults to plan travel during the past year .  76 percent of these were online travelers planning leisure trips online. Most online travel planners are somewhat or extremely satisfied with their experiences when using the internet to plan their trips. Also, many see the internet as a very useful or essential tool for planning many aspects of a trip. The internet makes travel easy and cheeper!

Fast Food Banks on Cheap and Fun

Fast food is famous for being quick and cheap.  And these days, cheap is chic.  So fast food companies like Burger King and Taco Bell are rolling out the bargains and highlighting these money-saving specials any way that they can.  Taco Bell called in Charles Barkley in their recent “Five Buck Box” commercials to entice consumers to try out their meal deal:

[kml_flashembed movie="http://www.youtube.com/v/Jf5KfRaZShs" width="425" height="350" wmode="transparent" /]

While fast food companies initially saw profits in the economic downturn, they are now facing sales dips in conjunction with higher unemployment rates.  As Ron Paul, the president of consulting firm Technomic explains to USA Today, people are getting more food from grocery stores and choosing to cook at home.

“Now, as the U.S. unemployment rate remains uncomfortably high, chains are struggling to keep Americans eating out at all.”
– Ben Steverman, BusinessWeek

Mac Snack Wrap

But the fast food leaders aren’t giving up.  Research from Consumer and Market Demand Network Papers proves that when fast food businesses promote low prices, demand increases, so these guys are persistent.  McDonald’s recently premiered their new Mac Snack Wrap for $1.59 to appeal to Big Mac Lovers.  They converted the famous sandwich into a tortilla form and made it cheaper.  Yum!

bkdouble

Burger King is also playing up the deals with their vast array of choices on the $1 Value Menu which includes the BK Double Cheeseburger and Crown-Shaped Chicken Tenders (yes, they went there).  I decided to check out the BK website to see how the company is promoting these tasty treats and stumbled upon their unique promotional tools.  For instance, BK is hosting the “$1 Talent Show” in which they ask consumers to upload videos of their $1 party tricks to receive Virtual Gift Cards for items off of the Value Menu.  They also have a homepage feature that allows users to customize their experience on the site through three different controls: Fun, Food, and King.  You can adjust the levels of each so if you want more food information than interactive games and contests, you can “have it your way.”  The company is having a blast with convergence and interactivity by getting consumers to play on their website and, hopefully, pay for their grub.

Billboard’s just don’t cut it anymore.  Digital is delicious.

Will 3D Films Continue to Top the Box Office Charts?

James Cameron “So much has already been written about how Avatar was made–how it took nearly five years and a reported $300 million to complete, how Cameron shot nearly the whole thing in a barren airplane hangar he nicknamed the Volume, how he invented his own ‘performance capture’ cameras that could seamlessly sew human actors into a CGI world in real time” Benjamin Svetkey, Entertainment Weekly

An appreciation of these breakthrough technological techniques described by Svetkey in the quotation above is a large reason why 3D movies like Avatar and Alice and Wonderland have been such hits at the box office. But during a recession, is an appreciation of the art form of making 3D films (film literacy) going to keep attracting so many people to the movie theaters? In otherwords, will film literacy continue to result in box office success for the rest of the 3D films coming out in 2010?

film literacy: the ability to appreciate movie making as an art form with unique-to-the-medium techniques that add impact or facilitate the telling of a story

There is a lot that can be said about the impact Avatar’s chart topping success will have on the rest of the entertainment industry. But it is going to be very interesting to see how consumers respond to the other twenty-something movies set to be released in 3D in 2010. With the price of movie tickets going up, will 3D movies continue to top the box office charts during the recession? Or will Americans start looking for escape and leisure outside the third dimension of film?

The (Mis)behavior of Music Consumers

p2p-governance_id3929961_size480It’s unlikely to hear of music consumers who have never downloaded at least one song illegally. Whether through P2P networks such as the old Napster or Kazaa, through bit-torrent programs, or from some random website hosting download-able mp3s.

However, there are those few who are still loyal to the bands they hear. But even so, there is still free music out there, online. And it is legal. Streaming music has become highly popular over the last decade. With almost any song available for free on-demand, how can one resist listening?

In a tough economy, people must choose their luxuries carefully. And when free alternatives present themselves, especially those of the legal variety, people are bound to respond, and in a big way. Consumers have jumped on the streaming music bandwagon like it’s their job, myself included. Websites such as MySpace and the newly created Grooveshark are just a couple of the countless websites that offer free online streaming of millions of songs. Why do they offer this? Consumer traffic. While they don’t make money from music sales, they receive ad revenues from companies trying to benefit from all the traffic the websites generate.

The response: making subscription services more appealing. Not just to the music listener, but to the site hosting the music as well. According to Anthony Bruno of Billboard,

…expect to see the music industry increase its efforts to make paid services more compelling than free ones. The high rates charged today for ad-supported music are designed to make it less compelling for the service provider.

As for illegally downloading music, the debate is still heated on whether it hurts the music industry or not. While the RIAA estimated a loss of 4.2 billion dollars a year in music sales due to piracy, Chia-chen Wang et al. state,

…file sharing does not have a significant effect on music sales from an economical perspective… more than half the people who have listened to pirated music would buy licensed CDs. Therefore, downloading serves as a means of sampling before purchase.

I’ll let you be the judge…

The Burden of Advertising Through Major Sporting Events

This summer, the 2010 Fifa World Cup will take place in South Africa for the first time. ESPN, with the help of many others, will begin to study consumer behavior as it relates to consumer consumption of major sporting events. The hope is to one day find a way to help advertisers grow their companies in more efficient ways and help lessen the burden of heavy spending. The World Cup will be the first of major sporting events that will be observed by ESPN XP, The Nielsen Co., etc. and will likely view such events like the World Series, Superbowl, Stanley Cup Finals, March Madness and so on.

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Consider the fact that companies spend anywhere from $1-2 million on Superbowl ads that may appear for only 15-30 seconds! This is truly remarkable and this research by ESPN and its fellow conglomerates are going to try and find out how frequently consumers watch certain events along with the duration in which they do so.

As we near the end of March, we see the NCAA March Madness tournament enter the Sweet 16 round. Brackets are being studied all over the country and even other countries as men, women and children alike hope pray that their picks will make them a winner in the end. March Madness is a HUGE sporting event for our country and is advertised everywhere you look. Numerous networks and business fight to promote their name on anything that has to do with the tournament knowing full well that the majority of the country is tuning in. All it takes is one appealing advertisement to make a good a hit seller. ESPN XP is going to try and study how this phenomenon takes place and hopefully improve advertising efficiency for all parties involved.

march madness online

Worth the tank?

high-gas-prices-photoHow many times do you fill up your tank of gas? Most American’s fill up their cars at least once a week. Between daily commutes, errands, and vacations we use our cars all the time. A Professor from the University of Southern California has investigated how the price of gas effects our spending habits. In the short run we could:

– eliminate driving vacations

-carpool or ride public transportation

-buy cars with better gas millage

But all of these options are either expensive or inconvenient. That is why we make cuts in other areas:

“In 2007, Wal-Mart estimated that the then current higher gasoline prices take away $7.00 per week from an average family budget. Since then, this figure has certainly increased significantly”.

It is clear that gas prices effect consumer spending. Instead of cutting back on gas consumption, we cut back on eating out, vacations, and entreatment, and shopping:

“Some economists estimate that for every one cent increase in the price of gas, spending in other areas will decline by one billion dollars”.heavy-traffic-i95

Our reliance on gas shows how we narrow minded we are. We are willing to hurt all the other industries just as long as we don’t have to give up driving. Other industries are feeling the effects too. Consumers are noticing higher prices in grocery stores because the goods have to be transported. Warehouse stores or discount retail stores are seeing more action. Consumers want to get all their shopping done at one place for the best price possible.  Gas prices effect everything!