The economics of Junk Mail

Trash, rubbish, garbage, crap- whatever you throw away, do so. Bury it deep in a landfill or send it off to sea. It's not your problem, you did the right thing taking out your trash. The country isn't in a garbage crisis: At least not yet.

The Trash Crisis of the millennium is not an acute problem; it can't be solved by simply changing behaviour. For crisis prevention a systematic initiative needs to be addressed. The average North American produces 1.3 tons of garbage each year (about 7 pounds per day).  Once our trash is collected the discarded waste is out of mind. Remember, there is plenty of room in the landfills for decades of trash to collect.

Of course I am being facetious, the crap we through away is not exactly environmental healthy. Nor is it cheep. Waste is a cost; and wastefulness is just a ridiculously stupid economical strategy. Waste is bad for business, customers, and the environment.

More than half of the mail carried by the US postal Service and Canada Post is junk mail. In 2011; 85 billion pieced of junk mail were sent via the US Postal Service. 4 million tons of junk mail were distributed and disposed of without thought. As taxpayers; we all subsidize federal post systems that carry  junk mail.

 A typical flyer cost 2-10 cents to print; at a small run of 2000 flyers the person sending the flyers in only losing about $400 from pocket. Though to get the true cost of the flyer transportation and disposal cost need be considered. From a consumer perspective, NOTHING annoys me more that a flyer placed on my windshield or in my mail box. I don't want irrelevant junk mail. As a customer, junk mail annoys me- and in receiving junk mail I am less likely to support the company who was trying to get my attention with a silly piece of paper.  Of the 4 million tons of junk mail floating around the US it is estimated that only 1 million ton will be recycled.

The brilliance of social networking and marketing is that it allows customers and business to interact on a personal and mutually beneficial platform. Business now have the ability to directly interact with their target market. There is no need for junk mail and flyers. Junk mail is just a waste of  primary, secondary, tertiary and capital resources.

French Woman Don't Get Fat

 Mireille Guiliano has received literary praise for her best selling non-diet, diet book: "French Woman Don't Get Fat"(2004). Guiliano was inspired to pen "French woman Don't Get Fat," after she spent a year living in America as an exchange student. Mireille left France thin and petite, and returned home plump and round.

French woman seem to live a life of effortless beauty. They eat: bread, cheese, and desert. They drink: wine, champagne, and milk. French woman claim to lead a wholesome life void of sacrifices. Mireilles book may have been the health champion of 2004 as french lifestyle tips were grossly adopted by North Americans. Fast Forward to 2011, and a new world trade imbalance takes center stage among French product imports.  The biggest American import into France is now Jenny Craig. One of the leading diet programs in the US, and the world. If French woman don't get fat why is Jenny Craig so popular in France?

From 2006 to 2009 adult obesity rate rose in France by 11%. Roughly one in three French Adults is estimated to be overweight. In 2006 Jenny Craig was purchased by Nestle, the worlds largest food company. Nestle purchased Jenny Craig in an effort to inspire an image shift from sugary junk foods to positive lifestyle snacks.

The Jenny Craig product in France, has been made-over to appear more tech savvy and trend relevant. The company is working with classic french chefs to create gourmet meals at fractional calories. The company has also been working with contemporary dance and exercise specialist to create more playful and fun to follow exercise videos. French participants of Jenny Craig are encourage to engage in a specially designed social media site where participants can share feed back and encouragement.

The average French Jenny Craig participant is 46 years old and overweight. A person is considered overweight if there body mass index (BMI) is above 25.


In the past 10 years the cuisine of France has been Americanized. Fast food chains are a common sight and have forced a change in diet for the French people. Nestle is excited by and for the growth of Jenny Craig en Francais. The company notes that French woman have desire to engage in the sport of seduction- In France when a woman gets married she aims to increase her lure. French woman like us battle weight, unlike us they use their vanity to fight frumpy temptations.

Beauty is about loving your curves, and embracing womanhood. The product modifications Jenny Craig has had to make to appeal to the French market are aimed at building body confidence and respect. Life is to be enjoyed; in moderation.

Waterproofed Tech: Liquipel!

I have ruined, many electronic devices by over familiarizing them with water/liquid. I have a bowl of rice permanently on call for my tech emergencies. I'm not sure if placing your soaked phone in a bowl of rice is anything more than IT myth...but the placebo effect comforts me in a strange way. Fortunately my clumsiness is being saved by a company who has master the ultimate cell phone life-jacket.

A company called "Liquipel," out of Southern California has found a viable solution for preventing phone amnesia from water damage. The company has developed an innovative water proof coating for electronic devices. The coating is unnoticeable. With it on, an electronic devices is protected from the elements. No hard protective case required. The Liquipel casing protects the entire electronic device; including all the vital cellular organs. 

Liquipel technology is available for all makes of cell phones, and the enhanced durability of your devices will virtually erase all tech related worries. Currently Liquipel is only available for devices through their website. However the company is looking to align itself with smart phone manufactures to further innovate the durability of electronic devices and to gain a consumer presence in the smart phone market. 

To waterproof your device with Liquipel is surprisingly inexpensive. The spa treatment for your phone has a starting price of $60 dollars. The only downside is a forced hiatus between you and your phone.   

Personally, I see Liquipel as a consumer and manufacturer asset; the company is in a growth stage and as the need for super durable electronic devices heightens so will the demand for Liquipel. A company I am eager to follow. 

Careful Now, Chiquita

Chiquita Brand is the worlds largest supplier of Bananas. Chiquita Brand has an enormous bank of capital resources; large enough to attempt a fiscal war with the multi billion dollar Canadian Oil Sands project. Chiquita Bananas ironically is defaming the Canadian Oil sands as an unethical venture. Chiquita brands is boisterously boycotting the canadian oil sands. The company stated that they would no longer use canadian oil. Unfortunately for Chiquita, you can't shop for oil the same was as you can for food. When you fuel up the oil in any given tank is a commercial mixture, making it difficult to trace the origins of the fuel. In addition the extensive pipe lines used to transport North American oil are a cleaner and less energy intensive shipping method. Chiquita's desire to only use middle eastern oil is a hypocritical and energy intensive unrealistic initiative.

Chiquita's animosity towards the Canadian Oil Sands is an attempt from Chiquita to reinvent their brand as environmentally and communally sound. The only problem with Chiquita's new brand strategy is the massive continuity discrepancies between Chiquita Brands public relation strategy and their actual business practices. Chiquita Bananas is an empire built on controversy and has been awarded multiple times by Forbes magazine as one of the worst multi-national companies.

Chiquita Bananas unethical business practices begins with a cartel of fruit trade. Chiquita secretly owns dozens of "supposedly" independent banana and fruit companies. Chiquita has a cost leadership strategy, in an attempt to keep trade prices low and profits high, Chiquita will use dangerous pesticides that often burn plantation workers skins. These pesticides often penetrate past the banana peel and into the flesh of the fruit. Since 1980 Banana, a fruit protected by it's thick peel, has been climbing it's way up the list of dirty fruits and vegetables. The pesticides that Chiquita Bananas use threaten the health of it's workers, and nearby communities.

The pesticides that Chiquita uses in South and Central America have long been banned in Canada, The EU and The United States. The cost leadership production strategy of Chiquita does not coincide with the companies "declaration" of only supporting drilled oil. The production and shipping costs of the oil favored by Chiquita far surpasses that of the oil sands. In addition, I believe that Chiquita's boycott of Canadian oil is rooted in a much deeper and unethical monopolistic endeavor.

Chiquita Brand, and Chiquita executives in 1998 were involved in a drug and weapon trade in Columbia.The actions of Chiquita were halted by the SEC. Two senior executives were forced to retire as a result. The company was forced to restructure their brand and brand affiliations. In 2011 a BBC investigation discovered that the restructured parent company of Chiquita still engaged in terrorism activities. Chiquita Brand is one of the largest cocaine smugglers into Canada, Europe, and The US. In 2008, Authorities seized a metric ton of pure cocaine (worth over $33 million dollars). The 2008 Chiquita drug bust was not the first for Chiquita. In 1998 a similar amount of cocaine was seized coming in to Europe, and in the 1980's Chiquita was busted for smuggling drugs through a Texas border.

Chiquita Brand employees military guards and slave labour to work the fields. The military guards use brute force to manage fruit pickers. Chiquita Bananas is not an eco friendly or community driven organization. The company in a multi billion dollar fruit trading company with a history of unethical, and illegal business practices. In 2007 Chiquita was accused of trading death for profits. 

Why Chiquita would boycott the oil sands in beyond me. In my opinion Chiquita in only putting gas on the fire of their consumer volatile brand. The amount of controversial and eco-terrorism arguments that can be used against the brand surpasses that of the Oil Sands. In a time of unlimited information; consumer have an increased ability to spot the inconstancy of a brand or product. These discrepancy can easily wreak havoc on any organization.

All is fair in Price Wars

Price wars, are an economic term to indicated a state of extreme price rivalry within a sector. Price wars are battled by competitors through a series of price reductions in aims of undercutting competitors.  Price wars are enticing at first to consumers who can be lured in to shopping for obscure items at the premise of a sale. Once the novelty of the war has subsided consumer feel remorse or dissatisfaction toward the "super low priced product/service," they've purchased.

Price wars are a bullying strategy enacted by massive corporations. Companies like Wal-Mart, Target, Sara Lee, Coke, Pepsi, The Marriott, etc...Can afford to drop their prices/rate below or equal to the cost; The industry bullies can afford to eliminating short run profits. These massive corporations have a large bargaining power with suppliers which enables them to reduce their production/service costs while fighting a price war. The competitors with more modest bargaining power do not have the ability to reduce inventory, product, or service costs; nor can the scrawny small business afford to operate on a skimpy diet: short run negative cash flows.

An easy way to understand price wars is to think about a party being thrown by a very likable but somewhat dorky dude. You want to go to his party cause you like him, and you know it will be fun; but at the last minute as you leave the house you get an invite to the coolest party ever with Cirque Du Soleil performers and houte couture goody-bags. The choice is simple; you attend the glamorous event.

The trouble of price wars, is that they are all in fact an illusion. The prices are cut temporarily to gain customers and to eliminate competition. Once the war has proven victorious the winning entity raises prices, without raising the service or quality.

Price wars are a dangerous tactic that make numerous casualties of small and locally owned business. This in turn increases an areas unemployment and reliance on credit. Ironically the victor of a price war is supported and raised to a monopolistic leadership position through the purchasing votes (dollars) of the people (consumers). As consumers we perpetuate the growth of multi national organizations by allowing ourselves to be bought by the premise of "everyday low prices." The concept spawns the occupy movement. If consumers shop at only 1% of the businesses of course that 1% is going to grow and account for 99% of the market.

As a civilian in a price war; ask your self what are the hidden costs, and opportunity costs associated with the battle.

Net and flix

On Monday, I received an email from Reed Hasting co-founder and CEO of Netflix. The email was a mass publication responding to the less than ideal customer reactions to Netflix's new pricing strategy. 

Hasting introduces the email with; "I messed up, and owe you an apology." I have an appreciated for people who can admit to making mistakes. So, I approach Hastings letter with an open mind; curious about his reasoning.

As I read through the letter I could feel my head shake in disagreement. Hasting's decided that streaming video content and renting DVDs are two completely different products and there for should be two different businesses. The decision Hasting decided on: LETS SPIT THE COMPANY! 

DVD renters will continue to rent on line, through a new site, qwickster.com. Streamers will continue to watch on line through Netflix. 

In my analogy, Netflix (online streaming) is the crazy trophy wife who is taking her husband to curb for all he's got. "Quickster,"The original concept of Netflix is the loser husband who has just been played. 

In irony, neither of the services are likely to come out clean. The amount of cash spent, and continuing to be spent/lost in this nasty divorce is astronomical. As a customer, I don't want complications- I want consolidation of services. I want easy one click access to either streaming or renting. I think by separating the services Netflix is loosing focus of their mission statement and organizational objectives. 

On Tuesday, after Reed Hastings announcement, stock fell another 10%. Obviously, I am not alone in frustration towards Netflix. 

The Karma of Netflix

Lazy nights have not been the same since the birth of Netflix. Lazy nights,  once reserved for: ordering take out and browsing the shelves of your local Blockbuster/movie store. It was great; you could compare and contrast covers, find obscure titles, laugh at the straight to DVD releases, and force a compromise with your boy, family, friends on the movies in question. 

The tangibility of holding potentials, and choosing the next 90 minutes, or so, of entertainment was fiercely competitive/enjoyable in its own right. 

Now I'm lost on the online shuffle of "Recommended Features, according to my viewing history." I'm sorry, but I am not a one genera lady, I crave variety.  I miss the isles of the movie stores. I miss my eye catching a fun display, I miss trying earnestly to win the "Black Gumball," and I miss loading up for the evening with shitty candy. 

Netflix; and their immense database of online entertainment ruthlessly climbed the social ladder of customer appeal. In a last unicorn type story: one by one movie rental stores disappeared as Netflix become lord of lazy nights. The Netflix kingdom grew in riches.

 Entitlement to industry leadership became evident in the strategic operations of the company. Since Netflix (NFLX) IPO of $15 per stock in 2002 the value has sky scraped to $304.  In July of this year (2011) Netflix announced an increased subscription price. The rise in price was not accompanied by an explanation or with increased services. 

In reaction; an army of Netflix subscribers became livid. Subscription casualties are now on the rise. 600,000 have already been accounted for September 2011. On Sept 15 NFLX fell from over $211 per share to $155-  Netflix accumulated a loss of 26%  value in just two days.  

With increased competition offering online streaming and more RedBox's popping up round the neighbourhood, I question the future of Netflix.