A rant on where the consumer money is going. (Full Version)

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DarkSteven -> A rant on where the consumer money is going. (4/1/2011 7:45:29 AM)

I'm an engineer.  As such, I tend to think of "value" as cost of production.

For hard goods, that's the case.  Cars, computers, etc.

But there's been a push toward items that have tiny production costs and big markups.  Sodas, breakfast cereal, rap music, perfumes... you get the idea.  In most cases, the consumer is buying an image - a "brand", if you were - as opposed to the actual product itself.  With the large markups, there's lots of money to spend in marketing/advertising.

So the US is moving away from a production-oriented economy to a marketing based one.  Less jobs for factory workers and more for admen in cubicles.

Obviously, that is a seismic shift in employment.  But in addition... I just feel like it's somehow unethical to have a consumer pay for the marketing that makes him buy, as opposed to the value that's intrinsic in the product itself.

Thoughts?



Termyn8or -> RE: A rant on where the consumer money is going. (4/1/2011 8:01:33 AM)

It's an image based society. Advertising has a negative effect on my buying - of that product anyway. I don't need image and I don't need to share the cost of millions it takes to advertise. When they say buy something on TV, that says to me - DON'T buy.

But advertising works, that's why they do it. People don't realize the markup on things because they have no idea what it really costs to produce. The $500 food processor is really worth about thirty bucks. That new car has about twelve bucks worth of steel in it and the rest is all plastic and electronics.

People have no idea of priorities either. Long time ago we moved a few cars. Buy them, fix them and sell them. The more work it needed the more we wanted it. So I have this beater, a Dodge Omni IIRC. Typical shitcan, rusty trusty beater with a heater. The ad said "4 cyl. 4 speed 4 door $400". People are calling to ask if it has a cassette player !

The fact is anything you need usually doesn't have to be advertised, it sells itself. Until people wake up, this shit will go on and money will hemmorage out of this country like water. All this garbage people buy creates jobs - in China.

If I were a millionaire I would not buy a new car, or even a TV set. I don't think I would even get a newer computer, well maybe a MAC to play with......... I just don't need all that junk.

T^T



Edwynn -> RE: A rant on where the consumer money is going. (4/1/2011 12:44:00 PM)





I think that a lot of this has to do with marketing being so much more effective now than was possible in times past.

People are actively tuned in to media outlets on a near ongoing basis thanks to computers, 'smart phones,' and cable TV's provision for a multitude of channels vs. the 2-4 channels available years ago. Think bout the great increase in advertising slots available from all that as compared to before, and how that translates directly to low cost advertising being available to small specialized  trinket and useless gadget sellers. And the ads can be much more cost effective for these small sellers because the intended demographic can be more readily targeted, ergo higher percentage response within a selected audience.  Contrast that to having to pay hundreds of thousands to a national broadcaster or several thousands to a local affiliate for an ad pushing a product that only 5% of the viewers would be interested in at all. Most of the time, you would not see such a product advertised, so in many cases that meant the product not being offered at all.

Now a marketer can track down where those 5% roam on the different cable channels and on the internet and once thus confined, that 5% now becomes 20-80%. The ad rates are lower, the 'hits' are much greater, so now there are many useless items whose total seller cost is ~ 90% ad/marketing cost that are a profitable venture that did not used to be due to previous prohibitive ad cost structure. The inevitable result is that there are indeed quite a lot more useless and savings-eating nick-nacks and especially 'image' related items than there used to be.

Even if this does not result by cumulative substitution in someone not buying a more useful and more durable (and likely greater employment enhancing) item in every case, it still cuts down on the funds available for such 'noble' purchases, so now everybody's hell bent on finding ever cheaper options on these goods, which eventually leads to producers/manufacturers doing whatever they can to reduce costs, which more increasingly means ...  finding the cheapest place in the world to get it done, and badgering US workers to shush about pay or benefits. We do not import so many items because US companies can't make them, we import so much because we don't have enough left after buying all this useless dreck to pay US companies for better quality products.


Some people keep opining that we need to place more import tariffs and quotas, 'buy American,' and other shoot-self-in-foot propositions. Fine. If we want to see a big drop in our substantial exports (# 3 in the world) as result of our trading partners doing likewise (which is guaranteed), then by all means. But if you want to do something that will unquestionably help the US current account balance then try to save just a little bit, so that there will be enough savings that we can actually own the factors of production ourselves rather than foreign companies having to fill the void. And it doesn't matter if that cheap perfume or costume jewelry or other disposable is made in America or not (the employment involved for such items is minuscule, wherever it's made), the more you spend on that the more you will have to cut personal expenses some other way, so you'll have to always search for the lowest price for needed and necessary items.

Just like the manufactures have to.

Because we forced them to.


 






stellauk -> RE: A rant on where the consumer money is going. (4/1/2011 7:18:38 PM)

Exactly.

It's style over substance. But without investment in culture, technology and education there's no emphasis on creativity and no real emphasis on what is necessary - sustainable occupations and employment.

Welfare was originally a short term solution to tide people over between occupations but now increasingly so it's the only source of income for an increasing number of people.

In a little over 10 years the number of people over 60, thank to the baby boomers, may well exceed the working population.

Rather than cutting welfare and forcing people to find jobs which simply don't exist we need to be investing more heavily in effective welfare schemes which do far more than give people a pittance on which to survive, but instead effectively get people back into some sort of sustainable occupation.



Brain -> RE: A rant on where the consumer money is going. (4/1/2011 7:56:20 PM)

Ethics are not involved in determining the cost of a manufactured product. Whether it is ethical or not, marketing costs are a part of the cost of sales and this has been going on for a long time. Nike does it with their advertising for running shoes and so do the drug companies that spend a lot more money on advertising/marketing than they do on research. I think it’s unlikely this is going to change any time soon. I don’t see the government or the courts getting involved in this matter. People are going to object to government telling private businesses how to run the Corporation and the same goes for the courts that will be reluctant to get involved.



rulemylife -> RE: A rant on where the consumer money is going. (4/1/2011 8:23:02 PM)

quote:

ORIGINAL: DarkSteven

I'm an engineer.  As such, I tend to think of "value" as cost of production.

For hard goods, that's the case.  Cars, computers, etc.

But there's been a push toward items that have tiny production costs and big markups.  Sodas, breakfast cereal, rap music, perfumes... you get the idea.  In most cases, the consumer is buying an image - a "brand", if you were - as opposed to the actual product itself.  With the large markups, there's lots of money to spend in marketing/advertising.

So the US is moving away from a production-oriented economy to a marketing based one.  Less jobs for factory workers and more for admen in cubicles.

Obviously, that is a seismic shift in employment.  But in addition... I just feel like it's somehow unethical to have a consumer pay for the marketing that makes him buy, as opposed to the value that's intrinsic in the product itself.

Thoughts?



You just realized this?

It has been going on for years.

Want to talk about outsourcing?



Aneirin -> RE: A rant on where the consumer money is going. (4/1/2011 8:51:44 PM)


quote:

ORIGINAL: stellauk

Exactly.

It's style over substance. But without investment in culture, technology and education there's no emphasis on creativity and no real emphasis on what is necessary - sustainable occupations and employment.

Welfare was originally a short term solution to tide people over between occupations but now increasingly so it's the only source of income for an increasing number of people.

In a little over 10 years the number of people over 60, thank to the baby boomers, may well exceed the working population.

Rather than cutting welfare and forcing people to find jobs which simply don't exist we need to be investing more heavily in effective welfare schemes which do far more than give people a pittance on which to survive, but instead effectively get people back into some sort of sustainable occupation.


The trouble is Stella those at the top do not know the truth as it applies to much of the population, because they have never known anything other than their own lives. A cabinet made up of public school boys and millionaires is not exactly going help matters. What was cameron's profession, what was he into, marketing wasn't it.

Because of my financial situation which is a lot better than it was a few years ago, hang on a minute, I am on less than a few years ago, so financially worse off, but I feel better off, because poverty has taught me how to live, what is necessary for life and what is not, that being no advertising works on me. What I have learned is much of what is advertised I don't need and if I find I do, then I seek something similar and second hand, but never the advertised product.

My thoughts are people of today do not know the value of products, they buy, get bored and then forget about it and that I put down to effective advertising, for society it seems has created almost a list of must haves. One bright shiny product leads to another then another and not because it is broken, but because it is older than the new item out, nothing seems to satisfy people now. All my stuff, my audio, optical and mechanical is termed obsolete, but it all works and does what it was designed to do and what's scary, is most of it is no older than six years old. The other observation, is of my stuff, none of it is made in Britain, or Europe for that matter, it is all Far Eastern, oh and a bit of American. Of the stuff I have that is British Made, ( remember that logo ?) or European, is my ancient stuff, the seventy year old razors and other antiquities I use on a day to day basis, because they were built to last and still work today and can be found for minute amounts of money on the secondhand market if one knows where to look.

So where is consumer money going, well i suppose right out of the country as very little is made here anymore, we are a population of consumers, not the makers we were in the past.





pahunkboy -> RE: A rant on where the consumer money is going. (4/1/2011 10:06:34 PM)

Well-  maybe this is good.  While people are so worried about keeping up with the Joneses- I can get basic needs met for cheap.

When they can barely afford the basics- and all shop at teh surplus store- then that is competition to me.



popeye1250 -> RE: A rant on where the consumer money is going. (4/2/2011 12:28:01 AM)


quote:

ORIGINAL: pahunkboy

Well-  maybe this is good.  While people are so worried about keeping up with the Joneses- I can get basic needs met for cheap.

When they can barely afford the basics- and all shop at teh surplus store- then that is competition to me.



PaHunk, I buy the store brands, they're just as good! You can't tell the differance between Kellogs or POst raisin bran and "Southern Home" like we have here except at the cash register.



Termyn8or -> RE: A rant on where the consumer money is going. (4/2/2011 12:49:53 AM)

Bullshit, maybe not everybody can tell. There is a difference - but is it bad ? . I can tell you this, el cheapo Aldi's real mayonaisse is as good, posssibly even better than the top brands like Hellman's and such. And I like the cheap hot sauce as well, and of all things on the tri-yearly braunschweiger binge, the cheap stuff is DEFINITELY better.

Buy a major brand piece of junk electronics and you have to send it to Butte, Montana for service. Buy the cheapest thing and full schematics and shit are at their website, sometimes even buy parts. But the high end shit, oh, that's a Mercedes, the AC compressor is a grand. How much better is that than a compressor in a Mazda ? Pay for those names, don't bother looking the horse in the mouth and things will be just fine.

It's all a bunch of shit, and I have seen it from both sides.

And at the heart of the problem, if I can find a way to put it strongly enough.........

TOO MANY MFS MAKING MONEY WITHOUT PRODUCING SHIT !

Now to connect the dots, ask this - Is any of the money in your fund in advertising ? When retirement comes, check out that check. That's right, Grampa's check is exactly that. Harsh judgement ? Is it really ? Or reality.

T^T



popeye1250 -> RE: A rant on where the consumer money is going. (4/2/2011 12:55:43 AM)

Termy, correct, there's only one way to make mayonaise or ketchup!



Aneirin -> RE: A rant on where the consumer money is going. (4/2/2011 4:33:14 AM)


quote:

ORIGINAL: popeye1250


quote:

ORIGINAL: pahunkboy

Well-  maybe this is good.  While people are so worried about keeping up with the Joneses- I can get basic needs met for cheap.

When they can barely afford the basics- and all shop at teh surplus store- then that is competition to me.



PaHunk, I buy the store brands, they're just as good! You can't tell the differance between Kellogs or POst raisin bran and "Southern Home" like we have here except at the cash register.


Dead right you can't tell the difference, for it is only food to fill a hole, perhaps it has less sugar in it or less salt , but it amazes me the top brands who proudly advertise their brand has vitamins added, my thoiughts are one shouldn't be advertising such a thing, for having to add vitamins is revealing the fact that their brand is overprocessed and overpriced crap, only good enough to quell hunger and that is about it, oh and profiteer out of the gullible consumer.



Moonhead -> RE: A rant on where the consumer money is going. (4/2/2011 5:34:55 AM)

It's more likely to have more HFCS than less sugar, sadly. Actual cane sugar is being pushed as a snob thing for prestige brands at the moment in the 'States: like using a Swiss pen with a snowflake on the cap rather than a disposable biro...



DarkSteven -> RE: A rant on where the consumer money is going. (4/2/2011 5:40:28 AM)

quote:

ORIGINAL: rulemylife

quote:

ORIGINAL: DarkSteven

I'm an engineer.  As such, I tend to think of "value" as cost of production.

For hard goods, that's the case.  Cars, computers, etc.

But there's been a push toward items that have tiny production costs and big markups.  Sodas, breakfast cereal, rap music, perfumes... you get the idea.  In most cases, the consumer is buying an image - a "brand", if you were - as opposed to the actual product itself.  With the large markups, there's lots of money to spend in marketing/advertising.

So the US is moving away from a production-oriented economy to a marketing based one.  Less jobs for factory workers and more for admen in cubicles.

Obviously, that is a seismic shift in employment.  But in addition... I just feel like it's somehow unethical to have a consumer pay for the marketing that makes him buy, as opposed to the value that's intrinsic in the product itself.

Thoughts?



You just realized this?

It has been going on for years.

Want to talk about outsourcing?



You're addressing a different issue.  You're talking about the process to squeeze every last nanopenny out of hard good manufacturing.  I'm talking about the process to shift consumer preference to higher-margin articles.

As examples:
Breakfast cereal is grains, cooked somehow and then sugar is added.
Soda is distilled water, and then sugar, colorings and flavorings are added.
Rap music is produced by a single man or two, no instruments.

The common denominator is that they are extremely cheap to produce and yet sell for just as much as competing items that cost much more to produce (breakfast meats in the case of cereal, milk and fruit juice in the case of soda, and carefully written songs performed with trained vocalists and musicians with instruments in the case of rap).

To me, it's almost as though someone sold a box of cardboard under a bridge for the same price as a house, after a careful advertising campaign for it.




TheHeretic -> RE: A rant on where the consumer money is going. (4/2/2011 7:09:25 AM)

I'm not sure if the issue is so much the old idea that a fool and his money are soon parted, Steve, as one of there being entirely too many fools running around with money in their pockets.




Aneirin -> RE: A rant on where the consumer money is going. (4/2/2011 7:23:36 AM)

Fashion could well be to blame, create a fashionbable thing and then those tuned into the fashion buy whatever is saaid to be the fashion to be fashionable.

Perhaps it a snob thing, an elitist thing a game of one up man's ship maybe.

But I notice the word 'cool' is used rather a lot these days and there also seems to be an advertising cliche about coolness.



popeye1250 -> RE: A rant on where the consumer money is going. (4/2/2011 10:55:04 AM)

"A Rule and his money are soon parted."



Moonhead -> RE: A rant on where the consumer money is going. (4/2/2011 11:43:32 AM)


quote:

ORIGINAL: DarkSteven

quote:

ORIGINAL: rulemylife

quote:

ORIGINAL: DarkSteven

I'm an engineer.  As such, I tend to think of "value" as cost of production.

For hard goods, that's the case.  Cars, computers, etc.

But there's been a push toward items that have tiny production costs and big markups.  Sodas, breakfast cereal, rap music, perfumes... you get the idea.  In most cases, the consumer is buying an image - a "brand", if you were - as opposed to the actual product itself.  With the large markups, there's lots of money to spend in marketing/advertising.

So the US is moving away from a production-oriented economy to a marketing based one.  Less jobs for factory workers and more for admen in cubicles.

Obviously, that is a seismic shift in employment.  But in addition... I just feel like it's somehow unethical to have a consumer pay for the marketing that makes him buy, as opposed to the value that's intrinsic in the product itself.

Thoughts?



You just realized this?

It has been going on for years.

Want to talk about outsourcing?



You're addressing a different issue.  You're talking about the process to squeeze every last nanopenny out of hard good manufacturing.  I'm talking about the process to shift consumer preference to higher-margin articles.

As examples:
Breakfast cereal is grains, cooked somehow and then sugar is added.
Soda is distilled water, and then sugar, colorings and flavorings are added.
Rap music is produced by a single man or two, no instruments.

The common denominator is that they are extremely cheap to produce and yet sell for just as much as competing items that cost much more to produce (breakfast meats in the case of cereal, milk and fruit juice in the case of soda, and carefully written songs performed with trained vocalists and musicians with instruments in the case of rap).

To me, it's almost as though someone sold a box of cardboard under a bridge for the same price as a house, after a careful advertising campaign for it.


I think you're being overly harsh on rap: plenty of hip hop and R&B bands use live instrumentation, and there are some excellent producers working there (the repugnantly smug and largely talentless Timbaland impersonator Pharrel Williams isn't one of these, whatever he claims) particularly at the R&B end of things.

The same criticism could just as fairly be applied to (say) Devandra Banhart, who spends most of his albums playing the guitar so badly he sounds like somebody's broken his fingers before he started recording, and shouting like a bad tempered drunk, only a bit less coherently. I'll take an Outkast or Missy Elliot album over dreck like that any day, thank you.



FullCircle -> RE: A rant on where the consumer money is going. (4/2/2011 11:54:16 AM)


quote:

ORIGINAL: DarkSteven
Obviously, that is a seismic shift in employment. But in addition... I just feel like it's somehow unethical to have a consumer pay for the marketing that makes him buy, as opposed to the value that's intrinsic in the product itself.

Thoughts?

Add to that it's practically impossible for those with a new innovative product to compete with those that spend fortunes on advertising. People will not notice it amongst all the well publicised mediocrity that is out there already.

It took Dyson ages just to convince people they didn't need a bag in their vacuum cleaner. Now he's just as guilty of repackaging olds ideas as something new.



Termyn8or -> RE: A rant on where the consumer money is going. (4/3/2011 12:12:06 AM)

"Some people keep opining that we need to place more import tariffs and quotas, 'buy American,' and other shoot-self-in-foot propositions."

So what do you want to do ? Count the money the Chinese are making ? I'll shoot everybody in the foot if it can get us out of this bulshit your politicians have gotten us into.

T^T



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