Saturday, November 15, 2008

When you move... a new home you don't really know if it will be home until you've had some time to meet your neighbours and experience events together.
We've been doubly blessed.
The family sharing the western side of our semi - the Tomlinsons (Keith, Karen and Ryan) - have been so incredibly welcoming. That's Keith on the far left and Karen waving. Ryan is hidden somewhere behind Karen. The first night we moved in we had dinner with them and ever since we've spent many delightful occasions in their company. Across the street live Dave and Caroline and their kids Lauren, Catty and Cal (you can see Caroline and Catty in this photo). They're here 'temporarily' from England (yes, the neighbourhood is lousy with Brits - you might note Keith's Arsenal scarf). Anyway, you can have a great house and all of the wonderful amenities you might desire but if you don't have great neighbours and friends you've got nothing much at all.
Impromptu gatherings on the front porch. Sudden bursts of joint 'gardening' activity and now Caroline figures we should build a float for next year's Santa Claus parade.
We've also done our bit to support the Ontario, Italian, French, Californian, Spanish, Portugese, British Columbian, Argentinian, Chilean, Lebanese and Nigerian wine industry and with the help of another British neighbour Matthew will soon have done a wine tour of all member nations of the United Nations.
Anyway, I am now a reborn believer in Santa Claus. We saw him just today in the company of our great neighbours. I'm so glad Gabriel is growing up in this place.

Monday, November 10, 2008

From the L.A. Times - Caveat Emptor

On store shelves, stealthy shrinking of containers keeps prices from rising

Steven Senne / Associated Press
A tape measure shows the depth of the indentation of a 16.3 ounce jar of Skippy peanut butter next to an 18 ounce jar of the same product.
Quantities of peanut butter, soap and other products are reduced to keep up with rising costs. Shoppers may not know they're getting less for their money.
By Jerry Hirsch November 9, 2008
It is hard to spot what happened this year in the peanut butter aisles of local supermarkets.But a careful look at the jars of Skippy on the shelves may reveal a surprise. The prices are about the same, but the jars are getting smaller.
They don't look different in size or shape. But recently, the jars developed a dimple in the bottom that slices the contents to 16.3 ounces from 18 ounces -- about 10% less peanut butter.The only way to know you are buying less is to look at the weight on the label and recognize it's lighter than before Unilever, owner of the Skippy brand, switched out containers.Across the supermarket, manufacturers are trimming packages, nipping a half-ounce off that bar of soap, narrowing the width of toilet paper and shrinking the size of ice cream containers.Often the changes are so subtle that they create "the illusion that you are buying the same amount," explained Frank Luby, a pricing consultant with Simon-Kucher & Partners of Cambridge, Mass.To shoppers it may seem like getting less, but companies say cutting quantity is a common way to avoid raising prices.It's an age-old dilemma for manufacturers juggling prices, container sizes and profits -- at the same time coping with rising prices for ingredients and greater competition on supermarket shelves.At international food giant Unilever, "we have chosen to reduce package sizes as one of our responses" to rising commodity and business expenses, said spokesman Dean Mastrojohn. He said the new smaller sizes are clearly marked on labels.Shoppers understand the manufacturers' dilemma but also say they feel deceived at times.Kathy Yukl of La Crescenta says she's tired of going to the store and finding dimples in the bottoms of jars -- she buys Skippy only when she has a coupon. She is annoyed that containers that once held half a gallon of ice cream, or 64 ounces, now have only 48 ounces. And she's frustrated that cereal boxes are shrinking."What these companies don't realize is that their chronically deceptive marketing ploys tell us loud and clear that we absolutely cannot trust them for anything," Yukl said.Other shoppers agree. "I think the whole thing is deceitful, and yes, it does irritate me, and I do feel they are tricking the consumer," said Bill Stone of Long Beach. "This practice, however, has been going on for many years and apparently the manufacturers feel it is to their advantage to try to slip these changes by the customer rather than announcing it."Asked whether the new packaging is deceptive, Mastrojohn said only that the lower weight is clearly listed on the package.Unilever also changed the shape of its Breyers ice cream containers, reducing the contents to 1.5 quarts from 1.75 quarts. Competitor Dreyer's Grand Ice Cream did the same, shortening its carton.Reducing the size of the Dreyer's and Edy's Grand Ice Cream cartons was not an easy decision, spokeswoman Kim Goeller-Johnson said."We understand that consumers don't like to pay the same price for a smaller container," she said.But the division of food giant Nestle had seen large increases in the cost of milk, cocoa, sweeteners and energy during a period when the average price of ice cream had "not really changed much," she said."We looked at raising prices to cover these costs, but at some point it just doesn't make sense to raise prices too high. . . . The ongoing feedback from our customers is that they aren't ready to pay $7 or more for a carton of ice cream," Goeller-Johnson said.In June, Kellogg Co. reduced the weight of many popular cereals -- including Cocoa Krispies, Corn Pops, Apple Jacks, Froot Loops and Honey Smacks -- an average of 2.4 ounces per box to offset rising grain and energy expenses.The reduction wouldn't be obvious to shoppers walking down the cereal row. From the front, the size of the box remains the same; only the depth was reduced, Kellogg told The Times.Dial shaved its soap bars to 4 ounces from 4.5 ounces but kept the size and look of its packaging the same, spokeswoman Natalie Violi said.Dial didn't want to increase the price of its soap but needed to do something to maintain its profits because of the skyrocketing cost of tallow. Made from beef and chicken fat, tallow is one of the primary raw materials of bar soap. Its price has doubled over the last 18 months, in part because of increased demand for it as a component of biodiesel fuel, Violi said.Consumers are confronting similar packaging changes in the toilet paper aisle.In its promotional materials, the Quilted Northern brand likes to talk about its history of innovation. In the 1920s, it was among the first bath-tissue brands to be sterilized. Quilted Northern went "splinter-free" a decade later and upgraded to two layers in the 1960s.This year's innovation was to shave half an inch off the width of its Ultra Plush product. Quilted Northern owner Georgia-Pacific said the savings allowed it to make the tissue three-ply instead of two, but it means consumers are getting fewer square inches of paper.Shoppers on the candy aisle will find that the formerly 8-ounce Hershey's chocolate bar is now 6.8 ounces, a 15% reduction.Luby, the pricing consultant, said the move allowed Hershey's to keep the price from rising above 99 cents. The company worries that crossing the $1 threshold could hurt sales, he said.Many of these changes were made when food commodity and oil prices were surging to record highs. It's not clear what the companies will do now that the cost pressures have eased. Oil has fallen from more than $145 a barrel in July to about $61 now. Wheat futures are down from $12.82 a bushel in March to $5.21 now.They're not likely to go back to the larger sizes because of the expense involved in changing packaging. And they are not interested in setting off a price war with competitors, Luby said."If the focus is on profit, food companies would be better off accepting flat volume or even a slight loss in market share in their more stable, mature products in order to make money," Luby said.The big question is whether consumers who notice they are getting less for their money will stop buying the product. Any backlash is likely to be small, Luby said."Many people notice the change but they don't protest and stop buying their favorite brand of cereal," he said. "These brands are strong enough to overcome any backlash."Stone, the shopper from Long Beach, agreed."If it is an old favorite, maybe from a highly reliable source, you will probably continue to buy it, especially if the price has not changed," he said. "In the case of bathroom tissue, one has to have a decent-quality product or else your hand goes right through it, and no one really wants that."Hirsch is a Times staff writer.

Is affordable luxury really gone?

Goodbye Seduction, Hello Coupons
SASHA TSYRLIN is a location scout who has spent decades finding sites to film television commercials. He used to spend his days in mansions and gated estates.
“You would go to big houses and pretend this is how the average American lived,” he said.
These days, his job is significantly less glamorous. Now, advertisers want their commercials filmed in homes meant for middle-class or even blue-collar families, Mr. Tsyrlin said.
“The client always seems to have an emphasis on, ‘A house is too fancy,’ ” he added. “They say, ‘Well, we don’t want the audience to think that only rich people can afford our product.’ ”
As the economy rapidly deteriorates from flourishing to floundering, marketers are scrambling to remake their advertising so products seem affordable and sensible rather than indulgent and fabulous. For many big marketers, including automakers, retailers, consumer product companies and even financial services, a major shift in consumer psychology spells an end to the aspirational advertising that has dominated their campaigns for the last decade.
There is a sense that expensive purchases — even if consumers can afford them — have become gauche, said Stephen J. Hoch, professor of marketing and director of the Jay H. Baker Retailing Initiative at the Wharton School of the University of Pennsylvania.
“At times like this, you don’t want to be as conspicuous,” Mr. Hoch said. “It’s really rude.”
“Since when is overpaying a status symbol?” asks a magazine ad for the 2009 Borrego sport utility sold by Kia Motors America. Prices for the Borrego, proclaimed to be “a new kind of luxury S.U.V.,” begin at under $27,000.
A campaign from
Procter & Gamble compares a product that is part of its Olay line of skin care products with more costly alternatives.
Olay Regenerist Micro-Sculpting Cream, which costs less than $30, is “more effective than the department store cream costing $350,” an ad asserts. “(You just don’t get a chic shopping bag.)”
In the recent boom times, Mr. Hoch said, “marketers were hesitant to bring up value overtly because they were worried about it diluting the aspirational aspect of the product,” he added, but now they “have to try something, because nothing else is really working.”
That was a reference to economic data that included the reports last week from the nation’s largest retailers for sales in October. Almost every chain, from purveyors of haute couture to practitioners of the philosophy of piling it high and selling it cheaply, suffered percentage declines that reached double digits.
“We’re starting to see people trade down, cut back on quantities, cut back on quality,” said George John, the chairman of the marketing department at the Carlson School of Management at the
University of Minnesota.
Some brands seem to recognize their plight. The
Target retail chain, for instance, is striving to play up the “Pay less” part of its long-time slogan, “Expect more. Pay less.”
New television commercials look like the familiar Target spots that feature chic consumers reveling in their cool Target purchases. Now, though, there are paeans to the new reality, complete with price tags.
Watching a $13 DVD on the living room sofa is celebrated as “the new movie night.” A $59.99 bicycle is presented as “the new commute.” There are similar salutes to people who eat in rather than dine out, cut their children’s hair and turn a backyard tent into “the new family room.”
Consumer Reports magazine plans to take advantage of that behavioral shift by running ads on Nov. 24 — timed for the start of the holiday shopping season — that will offer a blunt warning about how much times have changed.
“Dear shopper,” the ads will begin, “There is no ‘bailout clause’ in your credit card contract.” The ads are to conclude by urging consumers to avoid “credit card trouble” by consulting the magazine’s Web site (
The trend toward frugality is sweeping along even wealthier Americans, or those Americans who still consider themselves wealthy after the last few months.
The well-to-do are “making lists, they’re planning, they’re comparison shopping, they’re starting to think more strategically,” said Pam Danziger, president of Unity Marketing, a market research company in Stevens, Pa.
Even so, she added, “many are simply staying out of the stores.”
So rather than pitch seduction, the perfume Tabu Forbidden is pitching a coupon for $5 off the purchase price. The drugstore remedy Emergen-C is not only about staying “healthy year-round,” it’s about a $1 coupon. Reddi-wip is no longer about creamy indulgence, it’s about saving 75 cents.
On the higher end, Bloomingdale’s is advertising 50 percent off furs. Lord & Taylor is taking 60 percent off the price of diamonds.
Expedia is offering a $200 discount to people taking trips around Christmas.
Another sign of the new austerity is a campaign for New York Life that began on Sunday. The ads strongly suggest that the perfect gift for the holidays is not mink or jewelry or a vacation, but rather life insurance, which the ads call “the selfless gift.”
For example, a print ad shows a range of gifts from an ice cream cone (“I like you”) to a necklace (“I love you”) to a wedding ring (“I will always love you”). Under them all is the square blue and white logo of New York Life, wrapped like a present with a ribbon, and these words: “You mean more to me than anything else in the world.”
“As your love has evolved, so have your gifts,” the ad says. “One hundred sixty-three years of experience and the highest possible ratings for financial strength help ensure that your loved ones will always be taken care of.”
In “uncertain times, you stop and think about what matters to you,” said Steven Rautenberg, senior vice president for corporate communications at the New York Life Insurance Company. “People are looking for safety and protection and security and long-term guarantees.”
The campaign, which includes television, radio, print, online and outdoor ads, promotes life insurance “in a way that doesn’t denigrate the other nice things you can do for your family,” Mr. Rautenberg said, but presents it as better than more material gifts.
“This is a message that has special value in times like these,” he added, “but does not fade when the economic clouds clear.”
New York Life plans to increase its ad budget by 25 percent in 2009 compared with what will be spent this year, Mr. Rautenberg said, to get across the idea of “the selfless gift.” The company will probably spend almost $30 million in 2008.
“Consumers right now are feeling very insecure,” said Daniel Rabinowicz, president of the New York office of Taxi, the agency for New York Life.
“We don’t expect President-elect Obama to come out and say, ‘C’mon, America, go shopping for life insurance,’ ” he added. “But we think they’ll be receptive because it has to do with one of the pillars of a family’s financial security.”
To spread the concept of giving life insurance as a gift, Mr. Rabinowicz said, New York Life will do something it has not done before: buy space to run the campaign in the holiday gift guide advertising sections that magazines and newspapers carry in December.
Not all brands can play up value and thrift and expect good results, academics warned.
“Consumers are feeling very differently about their purchases, and they’re feeling very differently about their economic situation, than they did months ago,” said Tim Calkins, clinical professor of marketing at
Northwestern University’s Kellogg School of Management.
“The brands that will do well in this environment are your low-priced brands, brands that are very cheap and value-driven,” he added. “The brands that will struggle are the brands that ask people to step up, because people are not inspired to do that right now.”
That means brands hovering between cheap and luxe are “in a really tough spot,” Mr. Calkins said. He and other marketing professors pointed to Coach,
Macy’s, Target and Whole Foods Market.
“It’s easy to compete on the low end because you just focus on very aggressive pricing and selling a fairly good product,” he explained. “The top will be O.K., too, because there’s always people in this world with a lot of money.”
“If you’re in the middle, though, that’s where people are going to get crunched,” he added, because “that’s where it gets pretty easy to trade down to the lower-end stuff.”
Will this new mood on Madison Avenue become permanent? After all, ads turned austere during previous recessions, and even during
the Great Depression, and subsequently bounced back when better times returned.
“I don’t think that’ll last,” said Professor Hoch of the Wharton School. “We live in a very commercial, consumption-oriented world today, for good and bad, and I think it’ll come back.”