Recession...

Economic Recession, Consumer Depression

By Rick Newman


What's eating consumers? The latest numbers show that consumer confidence is close to 40-year lows, suggesting the economy is in worse shape now than in times that seemed far darker, like in the early 1980s, when inflation and unemployment both crept into double digits. Yet inflation—despite record gas prices—remains at a manageable 5 percent. And unemployment is a modest 5.5 percent. So I asked Dan Ariely, a behavioral economist at Duke University and the author of Predictably Irrational, to help explain why a modest economic slowdown has produced such dismal public attitudes. Excerpts:

Why are consumers so gloomy even though the economy, by traditional measures, isn't all that bad? Is it $4 gas? Or falling home values? Or something else altogether?
I think there are three reasons. First, cars are very important to the American psyche. Think about James Dean and his motorcycle, "On the Road Again," and all that. The American psyche has associated freedom with cars, and now it costs a lot more just to use your car and get this feeling of freedom.

Second, bankers have told us for years, "Your house is your most important asset. You should stretch and buy as much house as you can." Now, it looks like they lied to us in terms of how much we should borrow. And they personally made money in the process!

Third, I think the American people are really losing trust in our institutions. Think about all the meltdowns. First, it was the Internet. Then, Enron. Then, a banking crisis. Then, housing. Now, oil. All of these disasters are coming relatively close to each other. To people, it seems like there's something incredibly wrong with the way markets and institutions operate. Bankers giving crazy loans to people who can't pay them back, then they turn around and sell the same mortgages to people who know even less about them. It's incredible. It's a new version of the Wild West, and it's causing incredible distrust in the markets and institutions.

So, is the gloomy outlook justified?
I think the psychology is justified. If you thought you lived in a world where you understood the forces at work, and all of a sudden you didn't understand what's going on, your trust in the system all of a sudden becomes pretty low. Bankers can give loans to people who don't deserve them... It's not a world we understand or can predict.

Yet a lot of people aren't really that bad off. For all the foreclosures, most homeowners are still doing OK, especially those who bought before the bubble. Gas is expensive, but other things are cheaper, and overall inflation isn't that bad.
In general, you are right, but I think these problems are signals. Going into the stock market, for example. We've been told for years that's where you should put your money for the best return, but it turns out that's not the best thing to do. People told us: Housing is the best investment we can make. It turns out not to be such a good deal—and not because of anything we did wrong. It's the bankers who went wild.

Right now, it's the oil crisis. We went into Iraq in 2003 partly because of oil. And then we see a rapid sequence of events like this, and we have no control over the price of oil. Even for people who are doing OK, the problem is their inability to know what's right and wrong, and know where the next hit is going to come from.

What about market forces? One way or another, the markets would correct themselves, even if it's ugly. Doesn't that give people any confidence? That sooner or later this will end?
The only force I think can bring back consumer trust is regulatory force. People talk about market corrections. OK, there will be some price reductions but still, there are all these crazy people who made these stupid decisions. And they're still part of the market forces! Without serious regulations, there are good reasons not to trust the system. And, on top of the people involved, it turns out some of these sophisticated financial products were too sophisticated. Even the bankers didn't understand them.

So when all of these meltdowns are over, will consumers end up scarred in some way?
I think so. If you look at some of our experiments with cheating, what happens is, when people are a step removed from cash, that makes it much easier for them to cheat. So, think about stock options, and some of these complex derivatives and other securities. They're many steps removed from actual cash, and I think that makes it easier for people to do bad things with them. They're using ambiguity to color reality in a way that suits them. This is why I think that most of these meltdowns come from these complex financial products.

Isn't healthy skepticism a good thing?
If we're overworried, it will create a huge deficit to the economy. Trust is an incredible lubricant to the economy, and erosion of trust is hugely important. Yet the level of trust in the United States is sliding.

Will this new mistrust change the way consumers actually behave? Or the way we spend money? It's not like there's some alternative economy where we can spend our money instead.
Over the long term, I think we'll end up less trusting, and this will play out in small bits. The next generation will be unlikely to invest in the stock market at the same level, for example. It's true that most people's financial lives have not been affected by all these events as much as the news suggests. And it's true that in some sense we're talking way too much about all of these issues. But, in another sense, we're not talking enough about the real problem, which is the erosion of trust.

Have we become a nation of whiners, like Phil Gramm said recently? I don't think so. In some ways, we don't whine enough. When was the last big public demonstration? Or the last big public outcry? Yet these are issues that deserve an outcry. There ought to be consequences. People should get fired or go to jail. These are things that do deserve high-level attention.

Relationship marketing to face with the recession!

My own article

by: TT

In crisis period relationship marketing or one to one marketing can be very useful. Indeed, Relationship Marketing can be defined as direct individualized communication methods to establish individualized and interactive value added relationships with clients on the long term.

A good communication associated with a rich database can allow to:

- increase commitment & trust and exit barriers.

- precise: fine segmentation with precise knowledge about customers which have the most important probability to response (database)
- Increase transactions by client (repurchase behavior, cross selling, up selling)
- Controllable and measurable: Redemption rates

I note that we forget to remind there is some consumers (most of them are rich) which are not really affected by the recession and to leave them aside would be a mistake. That is why some companies rely on the individualization of the relationship and the offer to target these special consumers. This strategy allows to capture and to retain upper class consumer and this in despite of the crisis.

Sure, we can take the example of the Ferrari group is a very good example of this success. Indeed, in the late of 2008 Ferrari has increased its sales by 17, 6 %.( http://www.autoevolution.com/news/ferrari-reports-record-2008-sales-figures-4047.html)

The crisis does not really seem to affect Ferrari and the excitement for the brand is still present. Actually, for years Ferrari has understood that decreasing price is not a good solution for their segment but offering new services or new processes to make business can be a good tool in order to increase the loyalty of the customers. Thus, the “One to One Personalisation Program” has appeared which enables his rich customer to build their own and unique model. This program is essentially for the aesthetics that is to say the colour, interior lining, and for the finishing equipment. Thus luxury, exclusivity of the product in line with the market demands, higher range and niche model can be good weapons against the crisis for Ferrari’s segment.

In one-to-one marketing, the company establishes new relationships with customers by personalizing both his speech and his offer. This strategy enables customer feel recognized and increase their loyalty to the brand. All companies which are targeting upper class should follow the example of Ferrari and continue to maintain a particular relation with their customers through the one-to-one marketing strategy. As we have already said not everyone are affected by the crisis and concentrating efforts on most valued customers’ guarantees revenues and in some extent can be a solution to face with the crisis.

No risks if you customize your offer!

The Store of YOU
Why buy off the rack when you can customize? Shoppers design clothes, candy, even credit cards

By Kimberly Palmer

Posted October 27, 2008

Here's some good news for the nonconformists among us: Soon, it may be impossible to follow the latest fashion trends. The days of True Religion jeans and Jimmy Choo shoes will be over. While retailers have long made money by selling multiple copies of the same pair of pants or mass-produced sneakers, we're on the verge of a world where every individual merits his or her own production line—call it the Store of You.

Driven by increasingly demanding consumers empowered by the Internet and new technology such as digital printing and online ordering systems, the shift to personalized production represents such a departure from tradition that the retail industry has been forced to come up with new terminology to describe it. Consumers are "information omnivores" who like "überobscure" products in the new "meconomy."

Owning one-of-a-kind sneakers, clothes, jewelry, wine, and even credit cards that reflect one's taste, personality, and lifestyle is the new sign of success and luxury. At the same time, it's a form of frugality well suited to the current economic downturn. By customizing, shoppers can get the most out of less frequent splurges. And the trend is not restricted to those with money—it spans ages, income groups, and regions.

Hard to please. "In the context of a postindustrial age where everything looks the same—you walk through the parking lot and have a hard time picking out Hondas from Jaguars—the customization process offers a sense of difference," says retail consultant Paco Underhill. One recent Yankelovich survey found that because consumers at all income levels have more options and access to information, they are less willing to compromise. More than half of respondents said an essential consideration when choosing a brand is how well it represents their unique tastes and individuality. While the number of retailers offering customized products is hard to come by, industry experts say it is quickly growing as retailers struggle to attract consumers who are hesitant to part with their cash.

The new production methods make the creation of one-of-a-kind items more affordable than ever, says Joseph Pine. He popularized the industry's term for the trend—mass customization—in a series of articles for Harvard Business Review and a book by that name in the 1990s. Pine says there are now hundreds and possibly thousands of retailers offering customization. Custom-made products were once so labor intensive, he says, that only the wealthy could afford them. While the printing and ordering technologies to customize for "the masses" have been available for at least a decade, only now is the trend really taking off as customers have come to realize it's available. "Customers are saying, 'I can get custom M&Ms, custom shoes—why am I putting up with the off-the-rack stuff over there?' " Pine says.

At Reebok, customers can design their own sneakers, mixing various colors, styles, and materials. In early 2009, a new program created by designer
John Maeda will transform customers' photos into designs that decorate their shoes. "It's not just about us offering a set of tools that you can use, but we're saying to the consumer, 'What is important to you?'" says Rich Prenderville, Reebok's head of global brand marketing.

Murphy Burch, 39, an airline pilot and hockey fan in Cooper City, Fla., spent $105 on customized sneakers from Reebok that not only reflect the bright yellow, red, and navy colors of the NHL's Florida Panthers but also have his nickname—Murph—emblazoned on the back and a panther on the side. He plans to wear the shoes to all 41 games he attends this season. "I could buy a comparable shoe for $30, but I designed them, and they're exactly what I wanted," he says.

At the CafePress website, users can design and buy custom-made T-shirts, many of which focus on niche interests, political beliefs, or strange combinations, such as donuts with robots or pink llamas. "We're a huge destination for self-expression," says Amy Maniatis, vice president of marketing. "There's a huge trend toward 'I want it my way' and 'I want something that's unique and right just for me,'" she says. The company refers to it as "me-tailing." CafePress was founded in 1999 after digital technology made print-on-demand T-shirts possible. Today, 40,000 new products are added each day. The company generated over $100 million in revenue last year.

(...)

Source: http://www.blogger.com/post-create.g?blogID=4932790766668172965

My commentary:

One to One Marketing or personalized offer/service enables customers to build their own and unique model. This program is essentially for the aesthetics that is to say the colour, the design, and the general look.

In one-to-one marketing, the company establishes new relationships with customers by personalizing both his speech and his offer. This strategy enables customer feel recognized and increase their loyalty to the brand.

A healthy life to become a centenarian, do you believe it !?!

Healthy Lifestyle Boosts Women's Longevity
Good living can reduce the risk of dying from heart disease and cancer, study shows

By Steven ReinbergHealthDay Reporter (09/17/2008)

TUESDAY, Sept. 16 (HealthDay News) -- Women who don't smoke, maintain a healthy weight, eat a healthful diet, and get regular physical exercise significantly reduce their risk of dying from any cause, and particularly from heart disease and cancer, Harvard University researchers report.

Although the finding seems obvious, the scientists hope that by showing the long-term results of healthy living, people will see lifestyle changes can reduce the risk of dying from diseases such as heart disease and cancer.

"Our findings suggest that the combination of lifestyle factors has a substantially larger impact on survival than any single factor," said lead researcher Rob M. van Dam, an assistant professor of medicine at Channing Laboratory, Brigham and Women's Hospital, and Harvard Medical School.

Clearly, avoiding smoking is of major importance for health, but regular physical activity, a healthy diet and weight management can result in large additional health benefits, van Dam said. "The results of the study reinforces the need to strengthen public health efforts targeting smoking, as well as efforts that make it easier for people to maintain a healthy weight and diet and to perform regular physical activity," he said.

The report was published in the Sept. 17 online edition of the British Medical Journal.

For the study, van Dam's team collected data on 77,782 women who participated in the Brigham and Women's Hospital-based Nurses Health Study. Over 24 years starting in 1980, the women in the study responded to yearly questions about lifestyle and health. Over that time, 8,882 women died, 1,790 from heart disease and 4,527 from cancer.

For women who never smoked, ate a healthy diet, did not become overweight, and remained physically active, the researchers estimated the overall risk of death was reduced by 55 percent. In addition, these women had a 44 percent reduced risk of dying from cancer and a 72 percent lower risk of dying from heart disease, van Dam's group found.

Looking at individual risk factors, the researchers calculated that 28 percent of the deaths were from smoking, 14 percent were from being overweight, 17 percent were due to lack of physical activity, and 13 percent to not eating a healthy diet. Among women who didn't smoke, 22 percent of the deaths were due to being overweight, the researchers noted.

In addition, 7 percent of the deaths were attributed to not drinking a light to moderate amount of alcohol, which was associated with a lower risk of dying from heart disease. However, heavy alcohol use was associated with a greater risk of dying from cancer.

"Adhering to advice regarding a combination of lifestyle factors -- nonsmoking, healthy diet and weight, regular physical activity -- can have a large impact on avoiding premature death," van Dam said. "This is true even for modest lifestyle changes such as 30 minutes a day of moderate intensity physical activity, such as brisk walking."

Dr. Suzanne Steinbaum, director of Women & Heart Disease at Lenox Hill Hospital in New York City, said the message of this study is that women can take control of their health.

"In this study, we see the huge impact that these five aspects of life have on causes of death," Steinbaum said. "It's empowering. It allows us to understand that we have control of our lives, of our destiny," she said. "If you really do these things, you can live healthier, you can live longer, and your medical expenditures will actually be less."

It is important for women to understand the amount of control they have over their health, Steinbaum said. "You are not a victim. You don't age and go through menopause and become a sick old woman. That's not how it has to work. We have to understand that aging doesn't have to be associated with illness," she said.

Another expert thinks doctors need to do more to promote healthy living. "These findings are not novel," Dr. Jeffrey S. Berger, from the Department of Cardiovascular Medicine at Duke University, said. "But it really sends a very strong message to physicians and the community of the importance of routine activities that influence mortality."

The message is particularly important for doctors, Berger said. "Physicians have to see this and read this, and make it a part of their daily practice," he said.

In addition to writing prescriptions, in addition to talking about the latest drug, it is paramount for every physician to spend a significant amount of time with their patients discussing these facts, which are often overlooked, Berger added.

Source: http://health.usnews.com/articles/health/healthday/2008/09/17/healthy-lifestyle-boosts-womens-longevity.html?PageNr=1

My commentary:
If healthy life is equal or means less money spending in medical, better mood, and i accept it! But if healthy life means also stop drinking and making party, practicing sport everyday, and eating only vegetables (hoo so hard for me!), I refuse!!

No more seriously, everybody should know above all in USA, that a healthy life is not a luxury but a necessity. Indeed, remaining a physical activity or eating a healthy diet is not only good for your body and appearance, but it also has very positive impacts on your behavior and as surveys show on your longevity... Thus if parents can assum this education role for children, certainly it is the role of the government to inform and to encourage people to have a healthier life, and it should first take measures to stop the ads on the bad food and on alcoholic drinks, should not it?!! So LIVE MORE with a BETTER LIFE!

!!! I love you Crisis !!!

How Consumers Can Take Smart Advantage of Falling Prices
Hotels and cereal are cheap, but hold off on the new shoes

By Kimberly Palmer , Kirk Shinkle

The Consumer Price Index, which measures how much people pay for typical goods and services, dropped 0.4 percent over the past year. That's the first time the government has recorded a 12-month price decline since 1955. While economists typically see that kind of drop as bad news for the nation's economic growth, it's also partly good news for consumers, at least in the short term, because it means they can buy cheaper food, clothes, and other items.
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Some items have fallen in price more than others. Falling energy prices, including those for natural gas and motor fuel, helped drive the March price drop. Food also sold for less last month, so a typical shopping trip in March cost about the same as it would have back in October. Dairy products were especially discounted, but the prices for meat, poultry, fish and eggs also went down. Used cars and trucks, airline tickets, and hotels became cheaper, as well.

Not everyone found their wallets surprisingly full, however. Smokers had an especially hard time. Tobacco and smoking products rose in price by 11 percent. New vehicles cost more -- about 0.6 percent. Those who prefer the produce aisle had to pay extra; the prices of fruits and vegetables went up. Over the last three months, the cost of clothing went up over 5 percent. Medical care also became more expensive, so it might not be the best time to have an appendectomy or get those tonsils removed (Unless a doctor tells you to, of course!)

Here's a guide to what products you can get a good deal on and which haven't come down in price -- at least not yet.

Food and beverages. While the food and beverages index has gone up by 4.3 percent over the past year, how much consumers pay depends a lot on whether they are eating out or cooking for themselves at home. In March, the cost of food eaten at home -- everything from pasta to cereal to olive oil -- fell by 0.4 percent. But food eaten away from home, at restaurants or other places, went up, as did the price of alcoholic drinks. That's one reason why personal finance experts say cooking at home is one of the best decisions you can make for your bottom line. Based on the fact that the price of eggs and cereal have been falling, you might want to consider Cheerios for breakfast and a frittata for dinner. The Verdict: You can get a good deal on food, as long as you're willing to cook it yourself, and say no to that pre-dinner drink.

Housing. The price of housing, which includes rent, hotels, household insurance, and home furnishings, edged up 1.4 percent for the year, but March saw a slight decline. So if you've been putting off buying that trip that requires a hotel stay, now could be your time to make a move. Just be sure to shop around, because prices vary by region, and some establishments are more eager to get your business than others. As for that new sofa that you've had your eye on, you might want to hold off, since the home furnishings index inched upwards in March. The Verdict: Now is the time to take advantage of cheap hotels, but wait to redecorate your living room.

Apparel. The clothing index, which covers clothes as well as footwear, has been edging up in recent months, but fell slightly in March. For the year, prices are up about 1.5 percent. If you're willing to wait it out and hope last month's trend continues, then don't buy those new Nikes yet. The Verdict: The cost of clothes appears to be dropping, but it's still up for the year -- so try to delay that shopping spree.

Gas. The gas index rose 8.3 percent in February and then fell 4 percent in March, so now is a much better time to fill up the tank than a couple months ago -- and much, much better than last summer, when soaring gas prices kept people close to home. The Verdict: Gas is cheap, but it may not stay that way for long.

Transportation. The transportation index involves much more than just car purchases; it includes gas and public transportation, too. It saw the biggest decline in price of any other category over the last year, dropping just over 13 percent. While the drop in gas prices drove that trend, the pump isn't the only place to find deals. Airfares have declined for seven months in a row, and prices of used cars and trucks have also dropped a bit. The Verdict: Now is a great time to buy that used Prius or fly to visit family in another city, but hold off on new car purchases.

Education and communication. The cost of tuition, personal computers and other educational supplies went up 3.6 percent for the year, just as many workers frustrated with a sluggish job market hope to ride it out by going back to school. The Verdict: College and graduate degrees haven't gotten any cheaper, but they might still be your best option, especially if you are looking to retrain for a new career.

Source: http://www.usnews.com/articles/business/your-money/2009/04/15/how-consumers-can-take-smart-advantage-of-falling-prices.html?PageNr=2

My commentary: During a crisis period the purchase power falls, and we note companies adapt their price policy in order to be in line with this new environment. So Crisis can aslso mean: "a good time to spend and take advantage of good prices!!.

Indeed, the economic situation contribute to create new opportunities for consumers who always try to gather information before making a purchase, to find the best deal and, in some extent, it's more than just price comparisons. They just take the time to understand what they buy too.

Concerning me, the crisis has allowed to make very good purchases, especially on the purchase of clothes. Once I bought GUESS jeans at $ 45 instead of $ 120, more than 70% off... SO I REALLY LIKE TO MAKE A GOOD DEAL LIKE THAT!!! However, my bank account NOT!!

Psychology + marketing = Consumer Behavior

Before starting on my articles, it may be interesting to define what we are going to talk about: CONSUMER BEHAVIOR:

We can define Consumer Behavior as "the dynamic interaction of affect and cognition, behavior, and environmental events by which human beings conduct the exchange aspects of their lives." More generally, Consumer Behavior is the psychology behind Marketing and the behavior of consumers in the Maketing environment.

IN CONSUMER & DIFFERENT BEHAVIOR WE TRUST!!!!

Unknown language:

Welcome to my blog, here i will try to share with

all phenomena in line with consumer behavior

and more... So i hope you will enjoy!


TRANSLATION:

Welcome to my blog, here i will try to share with you all phenomena in line with consumer behavior and more... So i hope you will enjoy!