Archive for the 'business' Category

Comfort Fit

Tuesday, May 31st, 2005

expandable waistline \'feature\'

Have you been to a department store lately? Have you noticed that 70% of the items to cover your legs come with like 8 pleats and elastic so you can eat more Hardees?

What has become of us? Does anyone else find this disgusting?

When I see these displays in department stores, I immediately envision legions of 40-pound overweight middle aged men, road raging to and from work 45 minutes each way, parking in a field of asphalt, working in a cubefarm, grabbing lunch at Chili’s in some retail hell strip-anchored-by-big-box, popping purple pills for indigestion, and developing diabetes from drinking soda all day.

Maybe next year these pants will come with a built-in diaper feature.

Car makers missing the market

Thursday, March 31st, 2005

According to this Consumer Reports / Wall Street Journal article, the line up for hybrid vehicles seems to be filled with SUVs as far as the eye can see, especially for the US automakers.

It makes no sense to me that they focus so much on the big sedans and SUVs when those models are completely against the value system driving the hybridization. People that value fuel efficiency do not drive those cars.

The only company that seems to have a clue is Toyota/Lexus. By offering a hybrid luxury sedan, Lexus is appealing to the upmarket status symbol of being environmentally conscious. Though this car perhaps too big and un-svelte to really appeal to the blue-state elite, it is a step in the right direction.

Lexus LS

Additionally, Toyota is rumored to create a hybrid Sienna minivan. This makes sense to me because it appeals economically to a potentially cash-strapped family. However it will depend on Toyota’s pricing strategy. I doubt a Prius-level premium will play well on the minivan.

Toyota Sienna

Finally, the more hybrid sedans on the market, the better. However, I was overall disappointed to see which sedans were selected. The Altima and Camry, while popular, are not the most vibrant cars. (Although Altima has come a long way in recent years due to Nissan refreshing its entire lineup.) When the car companies only hybridize their most boring models, they are forfeiting the entire hip factor. Prius is sucessful in part because it is extremely well done, and in part because it is hip and distinctive. I was pleasantly surprised to see Chevy Malibu on the list. This makes sense to me because it plays a solid value for a mid-sized, somewhat stylish car.

The folks who are really blowing it are Mazda, Volvo, and Subaru - I know many a liberal who drive these cars and love em for their practicality and image. Driving a hybrid car would be the perfect alignment of interests. If Honda could make the Civic and Accord look decent, they’d probably absorb this segment.

Marketing is the art of aligning perceived attributes with consumer desires. Focusing on the boring cars, the big sedans, the SUVs - only the most mass-market popular models - proves to me that the car companies only know how to market on demographics but haven’t a clue about psychographics. Therefore my guess is that the current slate of proposed hybrids will not align with the hybrid-interested buyers’ interests and these entrants will underperform.

What a racket

Monday, December 20th, 2004

I keep a jar where spare change accumulates. After about 2 years, the jar fills, I take it to the bank, and cash it in.

Until now. It turns out that none of the Bank of America branches have coin counting machines. I found that to be ridiculous. They all referred me to the grocery store where I could use the Coinstar machine.

Coinstar, of course, takes 8.9% of your cash to give you cash. On my $72.05 saved over 2 years, they charged a whopping $6.41 service charge. That’s quite an ATM fee.

As I look at their website, I noticed that just last week, they announced their IPO at an astounding $25 / per share. Surprise, surprise - Bank of America is one of the underwriters along with JP Morgan. (I know, I know - the investment bank is supposed to be separate from the consumer bank. But we’ve seen hints that the separation isn’t very strong.)

So, what’s the best way for me to recoup my 8.9%? I could either buy my own coin counter or I could buy some shares of their stock.

At my current savings rate ($6.41 every 2 years), it would take me 17 years to pay off a personal coin counter. On the other hand, Coinstar’s latest financials show a significant accumulated deficit so it may be a while before my $6.41 would come back to me as a dividend.

Conjoint analysis

Tuesday, February 10th, 2004

Perhaps the coolest thing I’ve learned so far in business school is conjoint analysis for market research.

It is a technique that allows you to simultaneously segment your customers based on preference groups while measuring the comparative value of attributes to the customer.

Most market surveys convey little if any real, useful data to the product design. Conjoint analysis (and more generally, choice analysis) enables you to determine whether a feature makes any difference to customer choices and how much the customer is willing to pay for such a feature.

Some web software has been developed to conduct such surveys. Currently, I’m trying out the software at QuestionPro.