Thursday, January 26, 2006

59. Sales have him seeing red

Experienced shoppers (which I do not claim to be) know that retailers play a lot of games when it comes to sale promotions. Retailers may use advertising, product placement, the "suggested" retail price or discounts to gain an advantage in its pursuit of customers. Examples include promoting "loss leaders," products sold at a loss just to get people into the store in hopes that they will purchase additional items. Another is placing the sale item in the back of the store, forcing consumers to walk through their stores to get to it. Again, the idea is that consumers will consider other products along the way. A retail favorite is the "bait and switch," the offering of an item in insufficient quantities for demand, in hopes that the consumer will settle for a similar, more profitable alternative.

Retailer may also play with the numbers, either through pricing, negotiation or "tricky math." For example, a furniture store may normally sell a couch for $500 that retails for $700. To begin, there should be some attention to the idea that some "retail prices" are ridiculous and represent, in the market of supply and demand, a price that the merchandise rarely, if ever, actually sells for. If the furniture store offers a 50 % off sale, and considering that I know the couch normally sells for $500, my reasonable expectation would be that the price of the couch would be $250. However, to my disappointment, I will soon learn that the 50 % off is off the suggested retail price of $700, not the store's normal price of $500. It says that too, usually in the small print. The sale is 50 % off of the retail price, a price that the couch never actually sells for. Thus the price of the couch will be $350.

The same game is played with the discount promotions, such as a 40% off sale, followed by the "take an extra/additional 10% off." The total discount is not obtained by adding the 40% off to the 10 % off. In other words, it is not a 50% off discount. If a product retails for $100, then the first 40% off makes it $60. The "additional 10% off" is then taken off that price for another $6 discount, making the actual sales price $54, not the $50 shoppers might be expecting.

I found one shopping experience, however, to be a bit different. I was in the market for a new pair of eyeglasses. The insurance/ vision discount program is pretty simple. For the price of my premiums, I was to receive $100 for the cost of the frames. Ignoring, for now, the costs of the lens and extras, I began looking for frames. In this case, the math is simple. If I choose frames that cost $100 or less, I pay nothing. If I splurge and choose a $200 pair, I pay the difference- $100. Fair enough.

I found several retail/department stores promoting "40-50% off" sales on their frames. I found this quite exciting and working backwards reasoned that now I could purchase a frame that normally retails at $200 for the cost of my insurance. The $200 frames (say) at 50% off would now sell for $100- just what my insurance will cover.

However, my excitement was quickly squashed, for looming large was the small print. The sale (or offer) does not apply to those individuals with insurance or a discount vision plan. So if I have insurance, the $200 frames cost my insurance company $100 and me $100. If I do not have insurance, the $200 frames are 50% off and cost me $100. Either way, it costs me $100!

Noticing that a "1" had been handwritten in front of a $89.00 price tag, I asked about the normal retail price in lieu of the current sale. The salesperson informed me that it really was the retail price; but that they have a sale each and every week and that the retail price may fluctuate from month to month. My first question was that if you only sell one product and that product is on sale, through one promotion or another, every week, is it still a sale? A sale promotion is usually defined as an activity to boost the sale of a product through a number of mechanisms, most notably a "temporary price reduction."

My opinion is that if you are selling a product and you are willing to accept $100 for it, then it should not matter who is paying that $100. Because an individual has obtained insurance, at a cost to either him or her self, the company they work for, or both, what is the justification in no longer agreeing to sell that product at the same price the company would agree to sell it to an individual that does not have insurance? It appears that eyeglass pricing is working across two markets, the supply and demand of customers that have insurance and those that do not have insurance.

In a way, I appreciate the concept- I mean consider the possibilities. We might then be able to control the markets of products based on personal financial situations or inherent opportunity. We might even include individual merits. Let us say that I am in the business of selling cars. I propose then that I can sell one to a hard working individual, maybe somebody with three kids working two jobs, for $10,000 and then the same car to an individual who inherited a large amount of money for $20,000.

What is the thought process behind not offering the sale price to those that have insurance? Speaking statistically, one idea might be that those that do not have insurance would not be able to afford frames at retail price. Lowering the price not only makes them affordable, the expense probably finds its way onto the department store's credit card at 21% interest. Those that have insurance are probably more inclined, and better able, to pay the higher prices- perhaps also using the charge card to pay the difference (there's a reason every department store cashier asks, "Can we put that on your charge card?").

As for offering a sale every week, my guess is that retailers realize that consumers feel good when they purchase something on sale and the fact that eyeglasses are such an infrequent purchase, few realize that they are almost always on sale. A sale now defined as a market-driven permanent type of temporary price reduction- that is, unless you have a vision discount plan.

Thursday, January 19, 2006

58. Is Petro replaying Bush?

We recently, no less than one week ago, traded in our traditional cable box for a digital video recorder. The luxury is two-fold, easy digital recording and the ability to pause and replay live television. No more running around the house at the last moment looking for a clean video tape to record evening events. And no more phone calls interrupting the most important part of a movie, or the news segment we have waited an hour to view.

My first use of the replaying of live television came Sunday morning when during breakfast I thought I was listening to a church commercial promoting marriage between a man and a woman and a stance on pro-life. I thought it was perhaps a bit bold on behalf of the church, but did not find it to be a big deal. Then Jim Petro, Republican candidate for Ohio governor, appeared and said that his faith and worship guide his decision-making. I turned around, replayed the political commercial and watched it from the beginning. In the commercial, the camera pans over a pair of wedding rings and The Bible, before Petro appears with his message.

The political message captures only three ideas: Jim Petro supports marriage between a man and a woman, he is pro-life and that God guides his decision-making. What he is also doing, of course, and unoriginally, is playing the religion card. I do not have a problem with his beliefs, he is entitled to them like anyone else; I do, however, have a problem with the quality of his message.

Petro's stance on gay marriage is completely irrelevant. Last year Ohio passed the discrimination amendment that prohibits marriage between homosexuals. He is a year late; the amendment is now in the Ohio Constitution, so who really cares? Republicans used the amendment last year to both solidify a law that already existed and to bring out the religious voters.

That Petro is pro-life is also completely irrelevant since the decisions surrounding abortion are made at the judicial level, most notably the Supreme Court. I realize that the attempt is to show Ohio voters his religious character, but even if he believed differently, he could do little about. And in fact, he did believe differently, he was a pro-choice candidate for about 25 years.

Finally, Petro tells voters that faith and worship guide his decision-making. I really wonder if this is the best stance to take. President Bush also makes his decisions on the inspiration of God, and currently God is not doing so well with the American voters as the President's 36% approval rating would indicate.

It seems that Petro took Bush's campaign literature from last year, erased his name and penciled in his. The President, however, was a bit more tactful and, more importantly, he could actually push a national marriage amendment or nominate pro-life judges. The only thing left for Petro to do in rerunning Bush's campaign is to get a little help at the ballot box, but considering his opponent, the chance of that is a bit unlikely.

I would rather have heard about the things Petro wants to do for Ohio, such as his plan for economic development and education. I want to hear about those things that he can actually do something about. I do not care if his decision-making inspiration is drawn from Swedish green fire ants, as long as the decisions are in the best interest of Ohioans. The entire content of his commercial is about religion and things he has no control over.

Petro's website acknowledges that he is down about 10-12 percentage points to Kenneth Blackwell for the Republican nomination. It also notes that his campaign has just engaged in a one million dollar advertising promotion to build name recognition. It is obvious that the name recognition he is looking for is synonymous with the conservative movement. He is not wearing his religion on his sleeve; he has a whole suit made out of it.

Thursday, January 5, 2006

57. Do anti-American claims add up?

Connecting the dots...can be a measure of perception. Drawing a causal relationship to an event or the prediction of an event can often be manipulated, especially in light of premeditated outcomes. Such a reflection was considered in the wake of Bill O'Reilly's latest attacks on the American Civil Liberties Union (ACLU), broadcasted on December 8, 2005, in which he labeled it as an "anti-American organization," and then listed its "agenda."

On the list is the fact that the ACLU, under the Freedom of Information Act, asked that additional photographs from Abu Ghraib be released to the public. O'Reilly claims that such a request "puts all of us in danger," tarnishes the American image, and risks the lives of American soldiers.

O'Reilly is right; the release of these photographs may tarnish the American image and place Americans in dangers. The government, in its memorandum to the court, admits the same; as well as to possible violations of the Geneva Convention. It argues, "public release of these records could reasonably be expected to endanger the safety and lives of individuals, including soldiers and civilians in Iraq." The Department of Defense, furthermore, wants to "invoke these privacy exemptions in light of the United States' international treaty obligation under the Third and Fourth Geneva Conventions, which prohibit subjecting detainees to public curiosity and humiliation." The Department of Defense even admits later in the memorandum that, "the detainees in the images are often naked or otherwise inappropriately clothed, posed in ways designed to embarrass and humiliate the individuals in the pictures." (Source, ACLU vs. Department of Defense, et al).

The ACLU argues in its July 29, 2005 press release regarding the memorandum to the court that, "The government's recent actions are making a mockery of the Freedom of Information Act." And since much of the memorandum was redacted, including the conclusion that, "Not only is the government denying public access to records of critical significance, it is also withholding its reasons for doing so."

However, my argument is with the conclusion drawn by O'Reilly that, upon release of the photographs, it would be the ACLU who is responsible for American endangerment. Was it the ACLU that detained prisoners and interrogated them outside of agreed upon international treaties? Was it the ACLU that not only humiliated prisoners, but also photographed and video taped the event? Was the ACLU responsible for military tactic and supervision in detainee interrogation? Was it the ACLU that passed the Freedom of Information Act? If there are repressions to be endured over the actions of the Department of Defense, how is it that the ACLU is found accountable?

It is true that the release of additional photographs of detainees undergoing torture and humiliation, as requested by the ACLU, may lead to an increase in anti-American sentiment. Anti-American sentiment, in turn, may then lead to further attacks on American soldiers and terrorist attacks on American citizens by religious extremists. But the act that may lead to this endangerment was committed by the American government and Department of Defense when took part in the embarrassing and illegal interrogation that led to the photographs and videos now in question. To place the blame on the ACLU deflects this point.

It is the current administration that has engaged in the global war on terror. Was it ignorant of the ideology that American imposition in Muslim countries might invoke American resentment- especially when detainees are humiliated? Attempting to hold the ACLU responsible for any American resentment is like trying to hold the Sierra Club accountable for global warming. Why does O'Reilly not hold ultimate accountability with the administration and its military? Who here really has the agenda?

The same logic of deduction and assumptions can be applied to O'Reilly's perceptions of the ACLU to conclude equally damaging and misrepresented premeditated conclusions. It is a relatively easy exercise to perform:

O'Reilly believes that the ACLU is anti-American.
The ACLU believes in the freedom of speech.
Therefore, O'Reilly believes that the freedom of speech is anti-American.

Is this a valid argument? Does O'Reilly take a stance against the freedom of speech? The answer is, of course not. Could the same exercise be used to draw conclusions on other issues such as religion freedom and torture? The answer is yes, very easily. The problem is that it is this type of reasoning that allows people like O'Reilly to make such ridiculous statements about people and organizations that disagree with his perspectives. And in my opinion, it is misleading, self-serving, dangerous and wrong. What O'Reilly is counting on is that his viewers will not do any research, that they will not consider the validity of his arguments...that, ultimately, they will not connect the dots.