Tuesday, April 21, 2009

Motorcyclist to the back of the bus

Motorcyclists to the back of the bus
James Hicks
September 16, 2008
Weston, Wisconsin

Pissed at the pump, thinking about waiting in line for a pricey hybrid with an incentive? Why not keep your Hemi Ram, and ride a 65 mile-per-gallon Buell motorcycle? The Energy Act of 2005, (U.S. 2008) began pedaling tax incentives to hybrid vehicles without complete regard for fuel economy. The downside is fuel sipping motorcycles are seated at the back of the Department of Energy’s bus.

As fuel prices go up and down, SUV drivers are just driving less and taking the pain as good Americans. To a humble few, the motorcycle became the answer to making it to work, for one cannot afford to drive. The basis of the energy program was class and conservation. Cars and light trucks are compared in classes, and then conservation is factored over running time. However some standard powered, fuel efficient cars and motorcycles are completely ignored. One reason may be is that motorcycles have emission requirements, but there is no mpg required rating
standard, which, in most cases, meets or beats a hybrid vehicle. For example, a 2006 hybrid Honda Accord gets one mpg better in city driving than a same year Accord V6, yet the hybrid version was rewarded with a tax break (fuel economy.gov, 2008). The government needs to reform the way it views fuel efficiency, from crediting
expensive hybrid technology, which in some cases doesn’t return the fuel economy to flat out fuel efficiency.

In most places in the United States, motorcycles are misunderstood and under utilized. Not so in California. It was my experience while living in the 31st state that motorcyclists were allowed hypermobility, (which is lane splitting) and often had free parking, such as at LAX. For the majority of the country, if one were to leave an impending hurricane in bumper-to–bumper traffic and share a lane using a motorcycle, it would be viewed as violating the law and punishable. Yet, it is ok to crawl along in a car, often times running out of gas, compounding the transportation problem. Now, too many riders, the view of the bike is recreation, just for riding on weekends and a storm is brewing where now the bike is used as daily transportation. Thus, the current scrutiny of transportation is congestion over mobility and a few tax breaks to the special. At this moment, factor in the initial price and the operating cost of a car or truck and ask yourself: Can a motorcycle do the job better?

Many motorcycle buyers look for horsepower or nostalgia when shopping, and some look for fuel economy. Those who choose fuel economy may be in for a surprise when a scooter like a Suzuki Bergman, that gets 38 mpg (Suzuki, 2008), and a motorcycle such as Yamaha’s WR 250X, has a tag posted at 71 mpg (Yamaha, 2008)! As you may know, motorcycles do not have mandated mpg ratings on them. Motorcycle manufacturers do test their bikes in accordance with the Environmental Protection Agency (EPA) and Federal Testing Procedure (FTP), which does ball park fuel economy and focuses on tailpipe emissions. Some manufacturers do put MPG ratings on the bikes, but they are a reference only. I would ask the government to standardize the MPG requirement, to take the surprise out of bike shopping and prepare the industry for the much needed kickstand up Department of Energy’s transportation reform.

In racing and sales, the American giant Harley-Davidson & Buell, has bent and changed numerous rules to keep the fuel efficient, tractable push rod motor competing- no complaints here. It could be in racing’s Formula Extreme class where the standard inline powered 600 cc bikes had allowed the diverse v-twin 1200cc Buell to compete. Or, in flat track racing in the eighties, Honda’s RS 750 challenged the famous XR 750, requiring the American Motorcycle Association running to punch out the rules in favor of HD (Girdler, 2008). Take for instance, in 1983; President Regan imposed duties on imported Japanese motorcycles thus, favoring sales of the American heavy weight champion (Bryan Times, 1983). Now here is the question. Wouldn’t you thing the ultra efficient Buell’s and the fuel sipping Harley’s should be asking for tax credits, in a declining market? The auto industries, lending and financially strapped banks, have no problems asking for help.

This all may sound like affirmative action for the motorcycle industry, and it would be. Acting affirmatively has only been used to promote good ideas in troubled times. Today’s transportation choices favor the affluent buyer over real world fuel efficiency. Motorcycles are marginalized in many parts of the country, thought of as tool of choice for the outlaw biker, or to those having a death wish. However, these antiquated ideas don’t take a way the opportunity for tremendous fuel savings and a way to reduce congestion, and still allow one to still own a pick-up truck. All I’m asking for is a fair tax break for motorcyclists. A bike is better for the economy and the environment. Who wants to wait for a bus to depart an impending hurricane?

A balanced world starts on two wheels.


References
Buell (2008) Specs/Lighting. Retrieved September 16, 2008 from http://www.buell.com/en_us/bikes/street/XB12Ss/specifications.asp
Carpender, S., (2008). The measure of motorcycles’ mpg. Retrieved September 15, 2008 from http://www.latimes.com/classified/automotive/highway1/la-hy- throttle2apr02,0,4178645.story
*Formula Extreme- found blogs, no AMA or Lockhart Phillips reference for allowing Buell to compete with 600’s. I know they did, maybe you would have an old AMA magazine available to verify?(Contacted the AMA, awaiting to get back to me)
Fuel Economy.Gov (2008). 2006 Honda Accord Hybrid compared with the Honda Accord V6 fuel economy. Accord Hybrid is 22mpg city and 31mpg highway, 2006 Accord V6 is 21mpg city and 31mpg highway. The standards were updated to the new 2008 standards-noted on site. Retrieved October 6, 2008 from http://www.fueleconomy.gov/Feg/noframes/22676.shtml and http://www.fueleconomy.gov/Feg/noframes/21960.shtml
Girdler, A., (2008). The unsinkable Harley XR-750, doesn’t anyone remember the rules of this here game? Cycle World. Retrieved October 6, 2008 from ://www.cycleworld.com/article.asp?section_id=4&article_id=315

UPI (1983). Regan slaps duty tax on motorcycle imports. The Bryan Times, April 2, 1983. Retrieved October 7, 2008 from http://news.google.com/newspapers?nid=799&dat=19830402&id=qykLAAAAIBAJ&sji d=mVEDAAAAIBAJ&pg=4822,145731
*Note if the Bryan Times(Arkansas), isn’t reliable enough, go with the CATO institute: Taking America for a motorcycle ride: the politics of motorcycle tariffs by Daniel klein, retrieved from http://www.cato.org/pubs/pas/pa032.html

U.S. Department of Energy, (2008). Alternate fuels and advanced data center. State and Federal incentives & laws. Recovered September 15, 2008 from:
http://www.eere.energy.gov/afdc/progs/fed_summary.php/afdc/US/0

Suzuki (2008) Scooters: Bergman 650. Retrieved September 15, 2008 from
http://www.suzukicycles.com/Products/AN650K8



Yamaha (2008) Sport Models 2009: WR250X. Retrieved September 15, 2008 from
http://www.yamaha-motor.com/sport/products/modelhome/596/0/home.asp

Monday, April 20, 2009

Hitwise the site

Neat site, a great way to monitor internet usage. Interesting company history.

Week Eight Ch. 18 and 19

Week eight, Chapter 18
1.1
A manufacturer of office furniture decides to produce antique-style roll top desks reconfigured to accommodate personal computers. The desks will have built-in surge protectors, a platform for raising or lowering the monitor, and a number of other features. The high quality, solid-oak desks will be priced far below comparable products. The marketing manager says, ‘We’ll charge a low price and plan on a high volume to reduce our risks. Comment:

The manufacturer is using penetration pricing. The low price is designed to capture a big share of the market. The predicted high volume is associated with lowering production costs. Product development costs will take a longer time to recover with the penetration strategy. I wonder if the manufacturer has done some serious pricing research. This desk seems very savvy, and will this pricing strategy be effective given the market that would purchase this type of furniture?

2.1 What are the three basic defenses that a seller can use if accused under the Robinson-Patman Act?

The Robinson-Patman Act of 1936 is designed to stop a company from selling to two or more buyers, with a specific timeframe, selling commodities of like grade and quality at different prices. Or in other words, it’s designed to level the playing field.

The three defenses that a seller can use are: One, cost. The different prices reflect a manufacturing or quantity discount savings. Two, is market conditions. The price often times moves with the conditions of the market. An example could be perishable food, Christmas items, in January or if forced sales occur (going out of business sale). Third is competition. This is where prices are leveled if necessary to contend with rivals.

3.5 How is the ‘information age’ changing the nature of pricing?

I have not found on-line pricing these days to be that effective. Unfortunately, there are a lot of online scams out there, or selling defective, repaired products. Often, you will find a fabulous price and you may click on it and find there is no product available. Online prices are a good reference point and help make buyers more informed when they are going to make major purchases.

5.1 During a recession, what pricing strategies would you consider using to gain or maintain market share? Explain your answer.

I would use creative strategies. Hyundai is offering reassurance plus, if one would lose their job and purchase a new car, you may return that vehicle. Back to the text, value-based prices is often used. Retailers often lower the profit margin and still offer a good value to a consumer. An example would be macaroni and cheese featuring commercials saying you can feed your family for under a dollar. Nice value there. Another example would be bundling products and businesses sharing some of the pain by lowering margins. An example would be ski packages, cruise lines and vacation resorts have been offering fabulous deals that have a high perceived value.



1.1 Identify the six componenChapter 19ts of the CRM process.

The Customer Relationship Management system is a way unique way that businesses acquire, grow and hold on to customers. Everyone wants products and services. Where the rubber meets the road is for customers to be recognized (Harley Davidson, has a HOG group for owners), and they also want convenience (they don’t want to wait two years for the new Smart car). Customers need the right amount of information before they pull the trigger on a big purchase and CRM’s can help. When CRM’s come to play is with customer bases, they can tailor programs to suit the customer’s needs - based on what customers do, buy, history, and demographic information.

4.1 Assume you are the manager for a Hard Rock Café. Your boss has asked you to evaluate how the company is using its web site to gather customer data. Go to the site, and provide a detailed critique on how the site is used for capturing customer data. Comment on the types of customer data the web site is designed to capture, and explain how that data would benefit your local Hard Rock operation.

The Hard rock site has a membership area to capture potential customer information. In addition, they have an All Access card that has a value package discount on a dinner and reward program that also obtains customer information. HRC does have a CRM program for private parties and it also does require entering customer information. A survey is offered on the site, which allows for input on improving the customer service.

The data captured on the HRC site would benefit my local hard rock by knowing how many past or hard core customers are in the region. For example, All Access members would be the premium customers especially if they live near by. The All Access pass has a rewards program based on how much is spent. So HRC would have some understanding or tracking on what is hot and what is selling. Also, members are updated on current events and specials that their local rock and roll café is offering.

Sunday, April 19, 2009

Price Elasticity

Can you see why one might say that the ultimate measure of effective marketing is to achieve price inelasticity for a brand or product? Think about it and let's explain it in class.

Monday, April 13, 2009

Chapter 12, 14 and 17

Chapter 12
2.1 What kind of marketing channel functions can be performed over the internet? Why do you think so?

The direct channel is synonymous with the internet. The direct channel has a market from stocks and bonds, to the home shopping network to even the farmers’ market. There are limits to the direct method. For example, not every item fits in this channel. Cars require a much different channel, and, on the other end of the scale, so does chewing gum. Products and services that can avoid intermediaries are prime targets for the direct channel.

3.1 Describe the most likely marketing channel structure for each of these consumer products: candy bars, Tupperware products, nonfiction books, new automobiles, farmers’ market produce, and stereo equipment. Now construct alternative channels for these same products.

Candy bars are widely available, inexpensive, frequently purchased and not complex. A wholesaler channel is most likely used if a big order is needed. A direct channel could be used. Tupperware uses an agent/broker for a consumer channel focus. The role of the intermediaries fits here too. Nonfiction books may go from the producer to a retailer channel and then finally into the consumer’s hand. An alternative for books may be print on demand books, where the direct method would be used. Automobiles are complex, require service and are pricey. The car industry uses a retail channel that is producer (manufacturer) to dealer (retailer) to the consumer. An alternate method for cars could be the direct channel. I would use a Scion brand and the internet for a new way of sales. Again, the farmers’ market is a direct action. If a farmer were to use a grocery store, he would use the retail channel. Car stereos use a retailer channel and possibly a wholesaler involvement could be used as an alternative.

Chapter 14

3.1 Why is understanding the target market a crucial aspect of the communication process?
• So prospective customers can reach your product, such as Subway
• Awareness/promotional campaigns
• So that an appropriate message is used
• New methods in marketing communication are occurring , such as blogging which is very personal minded

4.1 Why might a marketing manager choose to promote his or her product using persuasion? Give some current examples of persuasive promotion.

Persuasive promotion is associated with the growth stage of a product, and the public is familiar with what the product or service can do. Persuasive marketing pushes the ‘real’ product advantages, and often encourages the consumer to switch brands. To answer the question, I went with a relatively new beer called Miller Chill and visited MillerCoors Beer.com. I found this quote: “So well received by consumers that it alone accounted for more volume than the next 14 biggest new beer brands of 2007 combined.” I found the statement’s message was that the new beer belongs, it is well received and appeals to good taste and the ego.

5.1 Discuss the AIDA concept. How do these different stages of consumer involvement affect the promotional mix?

First off, to define AIDA is ‘attention, interest, desire, and action’ that corresponds to consumer involvement and stages of a product. A good example of how AIDA can affect the promotional mix is being able to reach a customer with a message. Personal selling has a limited audience, whereas drawing upon a big advertising campaign- attention - information stage- would make the potential outcome of a sale easier.

An example of the desire stage would be a new product in a grocery store. Coupons often are used to encourage shoppers to purchase a new cleaning product.

To keep customers coming back (the action stage), airlines use frequent flier programs. Grocery stores use member discount cards.

5.2 How does a Web site’s ease of use affect its ability to create attention, interest, desire, and action? Visit the kitchen and bath pages of Kohler’s web site and determine how successful the company is at moving consumers through the AIDA process.

The “Bold Look of Kohler” creates attention and interest from modern looking sinks bathrooms and kitchens. The site switches from modern bathroom sinks, to kitchen sinks in a colorful manner. One only has to view the site to start the desire for Kohler products, especially when compared with one’s own bathroom or kitchen. Kohler’s site features two action areas to purchase called the ‘online store’ and a link ‘where to buy’.

Chapter 17

2.1 Give an example of each major type of pricing objective.

Of course, price is what is exchanged for goods or services. The object of market share is based on the dollar or unit sales. An example is a big leader in the market often uses unit sales. On the other hand, small players in the market tend to shoot for largest revenue share.

3.1 Explain the role of supply and demand in determining price.

I found demand is the price and time factored over the amount sold. The traditional supply and demand is based on price. The more units one has that are not selling in a given time, the price will usually go down. Shortages of products tend to put pressure on prices to increase.


3.2 If a firm can increase its total revenue by raising its price, shouldn’t it do so?

Sure, if you plan on growing in business. However, there is a balance point where consumers may not elect to purchase one’s product, especially if the demand is relatively elastic.

3.3 Explain the concepts of elastic and inelastic demand. Why should managers understand these concepts?

Elastic prices are associated with consumers being very careful or mindful of prices. An example is when a price goes down, while revenues go up for a company.
Inelastic demand is when a product’s price goes down and so does the revenue. That is, it doesn’t bounce back.
Now, for managers, this becomes a balance point between products and price. If a manager doesn’t price an item right and there is a lot of competition in the market, a customer can choose a similar product from the competition, especially if there is a lot of availability of substitutes. If prices are low, so low that the cost doesn’t even matter in the equation, elastic or inelastic pricing has no effect. Inflation factors into price. For example, in a country where there is decreasing inflation (prices going down), demand becomes inelastic, and shoppers are less price sensitive. However, the opposite can be true.

From my personal experience, I found the example of the yield management system (in the text) at my past airline employer is not full proof. The Minneapolis hometown airline hasn’t made a noticeable profit in eight years.

Friday, April 3, 2009

Chapter 11 Review and Application

1.1 I went to the Bureau of Labor statistics and found some interesting information. The consumer price index is up + .04 % in February, 2009. On the other hand unemployment was down 8.5 % and so was payroll. An upside is average employment earnings are up + .03 %. To answer the chapter question, is ‘Yes’ the government statistics are in line, in touch with the markets. For example, many car companies are allowing a time of forgiveness if a customer gets laid off and can’t make a payment.

2.1 Bank’s have intangible product and services. Often customers have a hard time understanding products, especially when they can’t see it with their own eyes. For example, overdraft protection on ones account. Only when a customer writes a check out for more than they have in an account does the fee’s and the pain catch up to the consumer.. Another example is a certificate of deposit, when compared with the returns on a booming stock market years ago. The CD offers a little more piece of mind today, than loosing upwards of fifty percent on Wall Street investment and that again is hard to relate to.

3.1 Today my wife and I went for a tour ride with Conch Air. I called the owner and found that he has eight years of air tour experience. The operator booked me and my wife for 5 P.M and was ready and waiting. Assurances were given that if you don’t make it back you don’t have to pay and made some small talk to see how strong out stomachs were. The operator assured us that the ride was worth the money. In the end, the bi-plane ride gave us a fabulous view of a Florida Key, and a lifetime of memories. The motto here was ‘If you’ve got the time to spare, fly Conch Air’. The five components of service quality were all here, reliable, responsiveness, assurance, empathy and tangibility.

Chapter 10 Review and Application

5.1 In 2006, when the fuel prices were extremely high, Volkswagen offered a TDI Jetta that wasn’t well received by fuel minded shoppers. Adoption rates of products to consumers can be affected by all sorts of items, such as complexity, relative advantages, and more. The 30 miles-per-gallon city, 40 on the highway government rated Jetta wasn’t listed in as a fuel miser in many auto and consumer publications because it was oddly classes as a polluter. Where the Jetta TDI among the competition is on paper, the mpg is rated 20 percent low, from my experience. Now the smaller and popular Prius, had fuel economy ratings that were very optimistic. The complex fuel economy rating system, doesn’t factor the hybrids or the diesels well. American consumers remember 1080’s Oldsmobile’s and old VW Rabbits emitting toxic smoke and hit or miss reliability. This left many consumers, without all of the facts to make an informed decision.

5.2 I’m an early majority, when it comes to adoption rates. Recently, I had a birthday and received the ITouch by Apple. I was thrilled. Of course the phone was a big hit last fall, and saw the many features of the phone were on the ITouch, minus the monthly digital phone service plan.

6.1 Cheerios are going after a host of age groups on www.cheerios.com. They were attracting older or traditional Cheerios buyers by hosting a healthy life style page. “It’s never too late to make being healthy a habit” was Cheerio’s motto. Cheerios is good for the heart, cholesterol and offered tips on starting an exercise plan.