A black day for Christmas shopping

Thursday is one of the biggest days of the year in the US, Thanksgiving Day. I observed a Thanksgiving Day when I was there a few years ago, an interesting fly on the wall type experience (as a lot of my time in the US was).

It’s not just a big day in the US, it is a big long weekend (although only some states make it a public holiday for state employees).

They launch major Christmas shopping marketing on the Friday after Thanksgiving Day. It is the biggest shopping day of their year. They call it Black Friday for some reason. It’s never on the 13th. Maybe it’s a black day for many people’s finances (but yeah, that would make it a red day).

This is recent in the US. It started in 1952 but did not become known as ‘Black Friday’ until the 1980s.

Now it seems that New Zealand marketers are trying to make it a thing. Without Thanksgiving Day (I’m surprised turkey marketers haven’t tried that yet).

The whole front page of today’s ODT is plastered with ‘Black Friday’ advertising. Cringe. I’m not going to touch it – I have already been warned that black ink hands are worse than usual, but I am avoiding getting sucked into this commercial crap.

I guess it’s just another name for yet another sale. In the not too distant past sales were one week a year, not they seem to be once a week. Or all week, just with a different name for marketing purposes.

I’m opting out, but it’s hard to avoid the media pollution.

 

Anti-competitive tobacco marketing tactics alleged

Despite significant reductions in the number of people smoking tobacco in new Zealand, and the increasing restrictions on marketing and escalating prices due to annual tax increases, the tobacco market is still worth $2.5 billion a year.

Market share:

  • British American Tobacco (New Zealand) – cigarettes 65%, roll-your-own 63.7%
  •  Imperial Tobacco New Zealand – cigarettes 23%, roll-your-own 31%
  •  Philip Morris (New Zealand) – cigarettes 12%, roll-your-own 5.4%

In 2016  government received a total of $1.7 billion in duty on tobacco sales.

About 605,000 adults smoke 2 billion cigarettes a year in New Zealand. That’s an average of about 3300 cigarettes per person per year, an average of 9 cigarettes a day, at an average cost of about $4,000 per year.

A statement of claim by Philip Morris that alleges anti-competitive marketing practices has been made public, with a significant number of redactions. However an unedited version had already been revealed.

Scoop Businessdesk: What big tobacco didn’t want you to read

Philip Morris (New Zealand) is suing British American Tobacco (New Zealand) in the Auckland High Court, alleging its larger rival is breaching the Commerce Act in the way it ties up retailers.

They want to publicise the dispute but leave out details that show the lengths tobacco companies will go to protect market share and how the industry organises itself. A redacted statement of claims was released this week. Unfortunately for big tobacco, which has a $2.5 billion market in New Zealand, the original statement of claim was sent to BusinessDesk last week by a PR company.

The biggest slabs of blacked-out text in the redacted claim set out in detail BATNZ’s trading terms with retailers and show how much control it commands in the market it dominates.

The original release from PMNZ says the suit is an attempt to stop BATNZ “from engaging in anti-competitive conduct” such as “unlawfully incentivising and compelling retailers to restrict the availability of competitor products.” PMNZ general manager Jason Erickson said BATNZ’s “conduct restricts consumer choice, and we think it constitutes a clear breach of the law.”

In the lawsuit, filed in the High Court in Auckland, PMNZ alleges BATNZ “is unlawfully incentivising and compelling retailers to restrict the availability of competitor products.” PMNZ is seeking unspecified damages in five causes of action for alleged breaches of the Commerce Act. BATNZ has said in a separate statement that it “categorically denies the allegations.”

PMNZ also says the BATNZ rules have implications for the availability of so-called e-cigarettes

Tobacco advertising and branding has effectively been banned in New Zealand via the Smoke-free Environments Act 1990 and the Smoke-free Environments Regulations 2007, and rules on plain packaging have just come into force. But this doesn’t stop tobacco companies from finding ways to compete over marker share.

BATNZ dominates the market, and according to PMNZ does that in part through unfair practices. They allege:

  • For a retailer stocking BATNZ brands BATNZ’s trading terms give the company the first option on installing any new or additional unitry and the right to remove them at any time, according to the redacted paragraph 36 of the claim.
  • The retailer is required to keep the “primary units”, which are the top area of cabinet, “fully stocked with 100% BATNZ products at all times.”
  • The retailer must stock the BATNZ unitry with tobacco products “in accordance with ‘planograms’ – diagrams supplied by the company “showing which tobacco products must be placed in specified unitry spaces.”
  • Paragraph 39 refers to cash inducements offered to retailers provided they ensure at least “70% of the retailer’s tobacco products available for sale within the outlet are BAT” brands. It also requires that 70% of “low value” tobacco products on offer are from BATNZ.
  • BATNZ’s trading terms require the retailer to “ensure BATNZ is aware of” all rival brands sold instore.
  • The retailer has to agree to compliance spot checks by the company including allowing a BATNZ representative “to enter and inspect the outlet for that purpose as often as is reasonably necessary.”
  • The retailer must show consumers (upon request) the BATNZ price list and that must be done before any other firm’s price list is shown.
  • The retailer must keep the unitry clean and free “of any advertising material unless agreed with BATNZ in writing.
  • Retailers are required to accept and “range” new products, accepting an auto-allocation of a carton of tailor-made cigarettes.

Non-compliance means the loss of the cash inducements,  if the retailer gets two non-compliance notices in a three-month period or three in any 12 months.

Rebates are only given for sales to consumers. The payment is by way of a credit against BATNZ invoices and the company asserts the right to deduct it from any sums it is owed, the document says.

PMNZ says the rules are anti-competitive, breach the Commerce Act and have caused it to suffer loss and damage. The statement of claim alleges BATNZ’s conduct “shows flagrant disregard for its Commerce Act 1986 obligations.”

A BATNZ spokeswoman said in an emailed statement that her company is “confident that we are not engaging in anti-competitive conduct and will defend our position when the case is heard.”

“We are strongly committed, and have actively engaged for some time, to have reduced risk products regulated and legally available to adult New Zealand smokers as soon as possible,” she said.

Marketing practices of tobacco companies have been criticised for a long time, which isn’t surprising given their marketing of dangerous products, the sales of which rely on getting customers addicted.

Surplus production a flaw of capitalism

Food for thought from this quote, posted by Blazer a couple of days ago.

“We must agree that we need to produce as of our requirement and not for corporate profit. Surplus production does not serve any purpose of human welfare other than creating surplus value for capitalists. We must reduce the eight-hour work-day according to our needs.”

Prem Mathrani is based in Dubai (UAE). He has written more than 50 articles in Sindhi on “Economic Dictatorship and Exploitation in Capitalist Business Organisations”.

There’s little doubt that variations of capitalist systems over the last couple of centuries have driven huge technological innovations and have lifted the standard of living and life expectancy of billions of people.

But the modern application of capitalism has a major flaw – to keep expanding business and making profits when many people have plenty of everything they need, corporations in particular have turned to pushing people through sophisticated marketing to buy and consume more and more of what they don’t need.

This creates two major problems. It puts increasing strains on limited resources, exacerbated by a growing world population and the shift by a bigger proportion of that population into higher standards of living and higher consumption.

And it has resulted in overconsumption that is unhealthy for individuals who succumb to the temptations and the marketing.

Two much food and two much drink are obvious examples. Heart disease and diabetes and other afflictions of the over-imbibing are a growing problem. Tools for a sedentary lifestyle is another example – it is perverse that so many people drive their cars to a gym to try to maintain their fitness. But far more people are encouraged to buy cars, to drive to malls to buy more things they don’t need.

An alarming modern marketing malaise is the advertising of products as healthy that are the opposite. Things like anti-bacterial soaps, wipes, sprays etc have legitimate uses, like in hospitals, but over cleaning homes is unhealthy as well as expensive.

Drug pushers are particularly insidious capitalists supplying a market that destroys lives. Worse, they often actively seek to hook victims in order to replace their imprisoned or dying clientèle. Pushing to many legal drugs to supposedly overcome illnesses are ethically suspect.

Surplus production – producing things we don’t need, straining finite resources, is a problem that is growing with the population.

This is something ‘the market’ won’t fix, because the market is the problem.

Capitalism has helped the human race make a lot of progress, but it has always had it’s flaws. And one of those flaws is in promoting an increasingly urgent problem – over consumption.

This is why some governments, including New Zealand’s, of looking to incorporating more of a social conscience into our capitalist system.

If marketed well modest consumption could become popular, but who would make money out of that?

Food marketing criticism tainted by political slogans

Food marketing which promotes junk food to children is a real problem, but raising the issue with ‘neoliberal’ labels taints the message of Darren Powell, a lecturer in health education at the University of Auckland.

NZ Herald: Needs of children, not Big Food, must win out

It looks as though our Advertising Standards Authority will, once again, fail to adopt a strict code of food advertising to children and young people. This is hardly surprising.

In neoliberal societies such as our own, the wants of the private sector frequently take priority over the needs of citizens, including children. This is especially true for the “Big Food” industry which includes the multinational food and drink producers with massive marketing power.

The marketing of multinationals, especially when it involves the promotion of unhealthy eating, should be addressed, but including vague political slogans doesn’t help Powell’s case. Labelling it a neoliberal problem may please a few political activists but it will turn off ordinary people, and also those with the power to do something about the problem.

The ‘Big Food’ label doesn’t help either, that smacks of us against them.

A raft of public health experts, journalists, researchers and the public blame Big Food products, lobbying and marketing practices for the childhood obesity “crisis”.

Claiming the support of ‘the public’ is a common and lame political practice. Without any substantiation it is poor coming from an academic.

Powell does make some important points.

Although on the surface it looks as if corporations are promoting healthy lifestyles and health products, at the same time they are stealthily creating and profiting from a new market – advertising “health” to children.

An example of how devious and successful fast food companies can be is the association of Ronald MacDonald with child health in Auckland (and nationally).

This is where the narrow focus on “junk” food advertising restrictions is naive, even dangerous: all advertising to children is potentially “unhealthy”.

But it’s totally unrealistic to protect all children for advertising – and futile when it is parents that make diet decisions for their children.

Children are being conditioned to believe attaining good health is as simple as listening to advertising and consuming the right products. This deflects attention from complex and powerful determinants of health, such as genetics, poverty, colonisation and inequality.

Should children be educated on complex determinants of health such as genetics, poverty, colonisation and inequality? Should they have Politics 101 at pre-school?

Through marketing, children’s understanding of health is being altered. It is moving away from traditional and cultural perspectives of well-being and towards a corporate-friendly version of health that emphasises individual consumption.

My traditional and cultural diet, relatively uninfluenced by advertising, was later slammed as unhealthy – too much meat, supposedly bad fats, sugar loaded baking, and even our vegetables were

Rather than being shaped by culture, biological needs or family income, children’s choices are increasingly being guided by mascots, cartoon characters, product placement, free toys, free educational resources, sponsorship, philanthropy, and the promise of a fit, non-fat, socially acceptable body.

Those are important and serious issues.

This must stop – our policymakers must introduce controls that prevent children being advertising targets. And it can be done. Brazil, for example, has made it illegal to market any products to children on the basis that it is equivalent to child abuse.

Unless all food advertising was banned – and this should include useless health supplements, diet fads, exercise fads, and products that cause more problems than they are purported to solve like disinfectants – then it’s an uphill and probably futile battle.

We must challenge the assumption that marketing healthy lifestyles and healthy choices is inherently “healthy” and examine how marketing tactics may actually shape children’s thoughts and actions in unhealthy ways.

Yes, but that should be done with research and fact based information.

Further, we must find better ways to make advertising – of both “healthy” and “unhealthy” products – abnormal and help children to become critical consumers, aware of marketing strategies and stealthy tactics such as sponsorship, product placement and “educational”, “health-promoting” programmes.

No suggestions at all of how that could be done. Ban all advertising? Ban all sponsorship? Implement state enforced diets and state controlled media?

Food (and other) marketing is a real issue, but politically tainted rants will more likely detract from rather than contribute to effective solutions.

Food (and other marketing) and sponsorship is a complex issue that creates difficult to resolve problems.

Powell has raised issues, tainted them with political slogans, and has failed to offer realistic alternatives. He means well but seems to be sheltered by an idealistic academic bubble.

Online advertising failing

Onlune users who have become skilled at ignoring advertising won’t be surprised by this article from Fortune – Brands are using social media more than ever, and users are ignoring them more than ever.

Engagement is falling, despite increased activity from brands.

a new study shows that, ten years into the social media phenomenon, the noise has increased, but engagement has decreased.

According to Forrester, brands are using more social media than ever. At least 80% of the top 50 global brands actively post to the top five social media platforms, and their followings on those platforms has increased. But engagement is down over last year. Despite increasing their volume of posting on just about every social media platform, the percentage of posts that garnered interactions with users fell.

The rates at which users interact with branded social media posts has always been low, but Forrester’s 2014 study and this year’s, they’re looking even worse.

In order words, brands are doing more work and getting less attention for it

This is apparent locally, whith Whale Oil acknowledging that their onslaught of advertising hadn’t delivered the revenue they need so they are looking at a different way of generating revenue – see Whale Oil proposes new revenue model.

Mainstream media are continually struggling to find ways of stemming their revenue losses.

A slight drop is to be expected to some degree – early adopters will always get the most attention, and over time, users will become desensitized to ads.

Social networks should worry about the desensitization, though. There was once a time when banner ads were tolerated. Then people started ignoring and the term “banner blindness” was coined. Social networks like Facebook and Twitter have long touted the superiority of their ads over banner ads, which have miserable click-through rates of less than 0.1%. But if Forrester’s study is to be believed, the interaction rates on social media aren’t much better, and they’re only getting worse.

Maybe an era of marketing dominance is over. It won’t disappear, but perhaps the heaping of hype has done it’s dash.

People are getting better at ignoring bullshit.

We may be getting better at finding and consuming what suits us rather than being duped by marketing.

This could mean a victory for the market model as opposed to the marketing model – the best products and services will earn the most attention.